Exhibit 10.1


FOOT
LOCKER 2007 STOCK INCENTIVE PLAN


 (Amended
and Restated as of May 19, 2010)


	
 

	
 


	
1.

	
Purpose.





          The
purpose of the Foot Locker 2007 Stock Incentive Plan (Amended and Restated as
of May 19, 2010) (the “Plan”) is to align the interests of officers, other
employees and nonemployee directors, of Foot Locker, Inc. and its subsidiaries
(collectively, the “Company”) with those of the shareholders of Foot Locker,
Inc. (“Foot Locker”); to reinforce corporate, organizational and business development
goals; to promote the achievement of year to year and long range financial and
other business objectives; and to reward the performance of individual
officers, other employees and nonemployee directors in fulfilling their
personal responsibilities for long range achievements. 


          The
Plan, in the form set forth herein, is effective as of May 19, 2010, subject
    to the requisite approval of the shareholders at Foot Locker’s 2010 annual
shareholders’ meeting, and is an amendment and restatement of the Foot Locker
2007 Stock Incentive Plan (the “Initial Plan”), which was originally effective
May 30, 2007.


	
 

	
 


	
2.

	
Definitions.





          The
following terms, as used herein, shall have the following meanings: 


          (a) “Account” means the total of the Interest Account
and the Deferred Stock Unit Account to which a Nonemployee Director’s deferred
Annual Retainer shall be credited. A separate Account shall be established with
respect to the deferred Annual Retainer for each Plan Year. 


          (b) 
“Annual Retainer” shall mean the annual retainer payable for
services on the Board as a Nonemployee Director, in any capacity, including the
annual retainer payable to a Nonemployee Director for service as a committee
chair. Annual Retainer shall not include expense reimbursements, meeting
attendance fees, amounts realized upon the exercise of Options, or any other
amount paid to a Nonemployee Director.


          (c) 
“Appreciation Award” shall mean any Award under the Plan of
any Option, SAR or Other Stock-Based Award, provided that such Other
Stock-Based Award is based on the appreciation in value of a share of Stock in
excess of an amount equal to at least the Fair Market Value of the Stock on the
date such Other Stock-Based Award is granted.


          (d) “Award”  shall mean any Option, Restricted Stock, SAR, Stock Unit or Other
Stock-Based Award granted pursuant to the Plan. 





          (e) “Award
Agreement”  shall mean any
written agreement, contract, or other instrument or document between Foot
Locker and a Participant evidencing an Award. 


          (f) “Beneficiary”
shall mean the individual
designated by the Participant, on a form acceptable to the Committee, to
receive benefits payable under the Plan in the event of the Participant’s
death. If no Beneficiary designation is in effect at the time of a
Participant’s death, or if no designated Beneficiary survives the Participant,
or if such designation conflicts with law, the payment of the amount, if any,
payable under the Plan upon his or her death shall be made to the Participant’s
estate, or with respect to an applicable Award, the person given authority to
exercise such Award by his or her will or by operation of law. Upon the
acceptance by the Committee of a new Beneficiary designation, all Beneficiary
designations previously filed shall be canceled. The Committee shall be
entitled to rely on the last Beneficiary designation filed by the Participant
and accepted by the Committee prior to the Participant’s death. Notwithstanding
the foregoing, no Beneficiary designation, or change or revocation thereof,
shall be effective unless received by the Committee prior to the Participant’s
death. 


          (g) “Board” shall mean the Board of Directors of Foot
Locker. 


          (h) “Cause” shall mean, with respect to a Termination of
a Participant other than a Nonemployee Director, (i) in the case where there is
no employment agreement between the Company and the Participant, or where there
is an employment agreement, but such agreement does not define cause (or words
of like import), termination due to a Participant’s dishonesty, fraud, material
insubordination or refusal to perform for any reason other than illness or
incapacity or materially unsatisfactory performance of his or her duties for
the Company, or (ii) in the case where there is an employment agreement between
the Company and the Participant, termination that is or would be deemed to be
for cause (or words of like import) as defined under such employment agreement.
With respect to a Termination of a Nonemployee Director, “cause” shall mean an
act or failure to act that constitutes cause for removal of a director under
applicable New York law. 


          (i) “Change in
Control” shall mean the
earliest to occur of the following: 


                    (1)
(i) solely with respect to an Award granted prior to the date of Foot Locker’s
2010 annual shareholders’ meeting, the making of a tender or exchange offer by
any person or entity or group of associated persons or entities (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a “Person”)
(other than Foot Locker or its subsidiaries) for shares of Stock pursuant to
which purchases are made of securities representing at least twenty percent
(20%) of the total combined voting power of Foot Locker’s then issued and outstanding voting securities; (ii)
the merger or consolidation of Foot Locker with, or the sale or disposition of
all or substantially all of the assets of Foot Locker to, any Person other than
(A) a merger or consolidation which would result in the voting securities of
Foot Locker outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting securities
of the surviving or parent entity) fifty percent (50%) or more of the combined
voting power 






of the voting securities of Foot Locker or such surviving or
parent entity outstanding immediately after such merger or consolidation; or
(B) a merger or capitalization effected to implement a recapitalization of Foot
Locker (or similar transaction) in which no Person is or becomes the beneficial
owner, directly or indirectly (as determined under Rule 13d-3 promulgated under
the Exchange Act), of securities representing more than the amounts set forth
in (iii) below; (iii) the acquisition of direct or indirect beneficial
ownership (as determined under Rule 13d-3 promulgated under the Exchange Act),
in the aggregate, of securities of Foot Locker representing twenty percent
(20%) or more of the total combined voting power of Foot Locker’s then issued
and outstanding voting securities by any Person acting in concert as of the
date of the Plan; provided, however, that the Board may at any time and from
time to time and in the sole discretion of the Board, as the case may be, increase
the voting security ownership percentage threshold of this item (iii) to an
amount not exceeding forty percent (40%); or (iv) the approval by the
shareholders of Foot Locker of any plan or proposal for the complete
liquidation or dissolution of Foot Locker or solely with respect to an Award
granted prior to the date of Foot Locker’s 2010 annual shareholders’ meeting,
the approval by the shareholders of Foot Locker for the sale of all or
substantially all of the assets of Foot Locker; or


                    (2)
during any period of not more than two (2) consecutive years, individuals who
at the beginning of such period constitute the Board, and any new director
(other than a director designated by a person who has entered into agreement with
the Company to effect a transaction described in clause (1)) whose election by
the Board or nomination for election by Foot Locker’s shareholders was approved
by a vote of at least two thirds (2/3) 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 previously so approved, cease for any reason to
constitute at least a majority thereof. 


Notwithstanding anything herein to the contrary, for Awards that are
subject to Section 409A of the Code, the Committee may, in its sole discretion,
prescribe in an applicable Award Agreement or other written agreement approved
by the Committee, an alternative definition of “Change in Control” that is
intended to satisfy the requirements of Section 409A of the Code and provides
that a Change in Control shall not be deemed to occur unless such event
constitutes a “change in control event” within the meaning of Section 409A of
the Code. 


          (j) “Code” shall mean the Internal Revenue Code of 1986,
as amended. 


          (k) “Committee” shall mean the Compensation and Management
Resources Committee of the Board, or a subcommittee thereof, appointed from
time to time by the Board, which committee or subcommittee shall be intended to
consist of two (2) or more non-employee directors, each of whom shall be a
“non-employee director” as defined in Rule 16b-3, an “outside director” as
defined under Section 162(m) of the Code, and an “independent director” as
defined under Section 303A.02 of the NYSE Listed Company Manual or such other
applicable stock exchange rule. If for any reason the appointed Committee does
not meet the requirements of Rule 16b or Section 162(m) of the Code, such
noncompliance shall not affect the validity of the awards, grants, interpretations
or other actions of the Committee. With respect to the application of the Plan
to 





Nonemployee Directors, the Committee shall refer to the Board.
Notwithstanding the foregoing, if and to the extent that no Committee exists
which has the authority to administer the Plan, the functions of the Committee
shall be exercised by the Board and all references herein to the Committee
shall be deemed to be references to the Board.


          (l) “Company” shall mean, collectively, Foot Locker and its
successors by operation of law and all of its subsidiaries now held or
hereafter acquired. 


          (m) “Deferral
Agreement” shall mean an
irrevocable agreement entered into between a Nonemployee Director and the
Company to authorize the Company to reduce the amount of the Nonemployee
Director’s Annual Retainer and credit the amount of such reduction to the Plan
consistent with the requirements of Section 409A of the Code. A Deferral
Agreement shall contain such provisions, consistent with the provisions of the
Plan, as may be established from time to time by the Company or the Board,
including without limitation: 


                    (1)
the dollar amount of the cash component and the stock component of the Annual
Retainer to be deferred or the amount to be deferred in whole percentages; 


                    (2)
the amount of Deferred Annual Retainer to be credited to the Interest Account
and to the Deferred Stock Unit Account; 


                    (3)
the form of payment in which the Nonemployee Director’s distribution from his
Deferred Stock Unit Account shall be distributed pursuant to Section 11(f); and



                    (4)
any provisions which may be advisable to comply with applicable laws,
regulations, rulings, or guidelines of any government authority. 


A Deferral Agreement, once made, shall be irrevocable in all respects.
A Deferral Agreement may, to the extent permitted by the Board and by
applicable law, be made by paper or electronic means.


          (n) “Deferral
Period” shall mean, with
regard to the Nonemployee Director’s Deferred Annual Retainer for each Plan
Year in which a Deferral Agreement is in effect, the period commencing upon the
effective date of a deferral election and ending on date of the Participant’s
Termination.


          (o) “Deferred
Annual Retainer”  shall mean
the amount of Annual Retainer deferred by a Nonemployee Director pursuant to
Section 11. 


          (p) “Deferred
Stock Unit Account”  shall
mean an account established and maintained by the Company for each Nonemployee
Director who receives Stock Units under the Plan. 


          (q) “Disability”  shall mean a disability which would qualify
as such under Foot Locker’s Long Term Disability Plan. Notwithstanding the
foregoing, for Awards 





that are subject to Section 409A of the Code, Disability shall mean
that a Participant is disabled within the meaning of Section 409A(a)(2)(C)(i)
or (ii) of the Code. 


          (r) “Exchange
Act” shall mean the
Securities Exchange Act of 1934, as amended. 


          (s) “Fair Market
Value” of a share of Stock
shall mean, as of any date, the closing price of a share of such Stock as
reported for such date on the Composite Tape for New York Stock Exchange-Listed
Stocks, or, if Stock was not traded on the New York Stock Exchange on such
date, the “Fair Market Value” of a share of Stock as of such date shall be the
closing price of a share of such Stock as reported on said Composite Tape on
the next preceding date on which such trades were reported on said Composite
Tape. 


          (t) “Foot Locker”
shall mean Foot Locker,
Inc., a New York corporation, or any successor corporation by operation of law.


          (u) “Good
Reason” shall mean, with
respect to the Termination of a Participant other than a Nonemployee Director,
(1) in the case where there is no employment agreement between the Company and
the Participant, or where there is an employment agreement, but such agreement
does not define good reason (or words of like import), a voluntary termination
due to “good reason,” as the Committee, in its sole discretion, decides to
treat as a Good Reason termination; or (2) in the case where there is an
employment agreement between the Company and the Participant, a termination due
to “good reason” (or words of like import), as specifically provided in such
employment agreement. 


          (v) “Incentive
Stock Option” shall mean an
Option that meets the requirements of Section 422 of the Code, or any successor
provision, and that is designated by the Committee as an Incentive Stock
Option. 


          (w) “Interest
Account” shall mean a
hypothetical investment account bearing interest at the rate of one hundred and
twenty percent (120%) of the applicable federal long-term rate, compounded
annually, and set as of the first day of each Plan Year. 


          (x) “Key
Employee” shall mean a
Participant who is a “specified employee” as defined in Section
409A(a)(2)(B)(i) of the Code, and as determined in accordance with the rules
and procedures specified by the Committee in accordance with the requirements
of Section 409A of the Code. 


          (y) “Nonemployee
Director”  shall mean a
member of the Board who is not an employee of the Company or any subsidiary or
affiliate of the Company. 


          (z) “Nonqualified
Stock Option”  shall mean an
Option other than an Incentive Stock Option. 





          (aa) “Option” shall mean the right, granted pursuant to the
Plan, of a holder to purchase shares of Stock under Sections 6 and 7 hereof at
a price and upon the terms to be specified by the Committee. 


          (bb) “Other
Stock-Based Award” shall mean an award, granted pursuant to the Plan, that is
valued in whole or in part by reference to, or is payable in or otherwise based
on Stock. 


          (cc)
“Participant” shall mean an
officer or other employee of the Company who is, pursuant to Section 4 of the
Plan, selected to participate herein, or a Nonemployee Director. 


          (dd) “Plan” shall mean the Foot Locker 2007 Stock
Incentive Plan (Amended and Restated as of May 19, 2010).


          (ee) “Plan Year” shall mean Foot Locker’s fiscal year, except
that for purposes of Section 11 hereof, the Plan Year shall mean the calendar
year. 


          (ff) “Restricted
Stock” shall mean any shares
of Stock issued to a Participant, without payment to the Company to the extent
permitted by applicable law, pursuant to Section 8(a) of the Plan. 


          (gg) “Restriction
Period” shall have the
meaning set forth in Section 8(b)(4). 


          (hh) “Retirement”
shall mean: (A) the
Termination of a Participant other than a Nonemployee Director, following
attainment of (1) Normal Retirement Age or, if earlier, Early Retirement Date,
as such terms are defined in the Foot Locker Retirement Plan, if such
Participant is a member of such plan or any successor plan thereto or any other
tax-qualified, tax-registered or tax-favored retirement plan or scheme
sponsored or maintained by any member of the Company, or (2) his or her 65th
birthday, if such Participant is not a member of any such plan, or (B) the
Termination of a Nonemployee Director pursuant to Foot Locker’s retirement
policy for directors or, with the consent of the Board, provided that the
exercise of such discretion does not make the applicable Award subject to
Section 409A of the Code, before age 72 but after age 65. 


          (ii) “Rule 16b-3”
shall mean Rule 16b-3 under
Section 16(b) of the Exchange Act as then in effect or any successor
provisions. 


          (jj) “SAR” shall mean a tandem or freestanding stock
appreciation right, granted to a Participant under Section 6(a)(7) or 6(b), as
the case may be, to be paid an amount measured by the appreciation in the Fair
Market Value of Stock from the date of grant to the date of exercise of the
right. 


          (kk) “Stock” shall mean shares of common stock, par value
$.01 per share, of Foot Locker. 


          (ll) “Stock
Option and SAR Program” shall
mean the program set forth in Section 6 hereof. 





          (mm) “Stock
Payment Date” shall mean
July 1 (or if such date is not a business day, the next succeeding business day)
in any calendar year.


          (nn) “Stock Unit”
shall mean the equivalent of
one share of Stock. 


          (oo) “Ten Percent
Shareholder” shall mean a
Participant who, at the time an Incentive Stock Option is to be granted to such
Participant, owns (within the meaning of Section 422(b)(6) of the Code) stock
possessing more than ten percent (10%) of the total combined voting power of
all classes of stock of the Company or a parent corporation or subsidiary
corporation within the meaning of Code Sections 424(e) or 424(f), respectively.



          (pp) “Termination”
shall mean: (1) a
termination of service for reasons other than a military or personal leave of
absence granted by the Company or a transfer of a Participant from or among the
Company and a parent corporation or subsidiary corporation, as defined under
Code Sections 424(e) or 424(f), respectively, or (2) when a subsidiary, which
is employing a Participant, ceases to be a subsidiary corporation, as defined
under Section 424(f) of the Code. Notwithstanding the foregoing, with respect
to any Award or amount subject to the requirements of Section 409A of the Code,
a Termination will not occur until the Participant has a “separation from
service” within the meaning of Section 409A of the Code. Notwithstanding
anything herein to the contrary, unless otherwise specified in an employment
agreement or other agreement, a Termination will not occur until the
Participant is no longer an officer, employee and Nonemployee Director. 


          (qq) “Transfer”  or “Transferred” or “Transferable” shall mean anticipate, alienate, attach, sell, assign, pledge, encumber,
charge, hypothecate or otherwise transfer. 


          (rr) “Valuation” shall mean valuation of a Deferred Stock Unit
based on changes in the Fair Market Value of the Stock, as determined by the
Board or the Administrator pursuant to the Plan. 


          (ss) “Valuation
Date”  shall mean the day of
any Plan Year on which a Nonemployee Director’s Deferral Period ends. 


	
 

	
 


	
3.

	
Administration.





          (a)
The Committee. The
Plan shall be administered and interpreted by the Committee. The Committee
shall have the authority in its sole discretion, subject to and not
inconsistent with the express provisions of the Plan, to administer the Plan
and to exercise all the powers and authorities either specifically granted to
it under the Plan or necessary or advisable in the administration of the Plan,
including, without limitation, the authority to grant Awards; to determine the
persons to whom and the time or times at which Awards shall be granted; to
determine the type and number of Awards to be granted and the number of shares
of Stock to which an Award may relate; to determine the terms, conditions,
restrictions and performance criteria, not inconsistent with the terms of the
Plan, relating to any Award (including, but not limited to, the share price,
any restriction or limitation, any vesting schedule or acceleration thereof, or
any 





forfeiture or waiver thereof, based on such factors, if any, as the
Committee shall determine in its sole discretion); to determine whether, to
what extent and under what circumstances grants of Awards are to operate on a
tandem basis and/or in conjunction with or apart from other awards made by the
Company outside the Plan; to determine whether, to what extent and under what
circumstances an Award may be settled, cancelled, forfeited, exchanged or
surrendered (provided that in no event shall the foregoing be construed to
permit the repricing of an Option or SAR (whether by amendment, cancellation
and regrant or otherwise) to a lower exercise price); to make adjustments in
recognition of unusual or non recurring events affecting the Company or the
financial statements of the Company, or in response to changes in applicable laws,
regulations, or accounting principles; to construe and interpret the Plan and
any Award; to determine whether to require, as a condition of the granting of
any Award, a Participant to not sell or otherwise dispose of Stock acquired
pursuant to the exercise of an Option or Award for a period of time as
determined by the Committee, in its sole discretion, following the date of the
acquisition of such Option or Award; to prescribe, amend and rescind rules and
regulations relating to the Plan; to determine the terms and provisions of
Award Agreements; and to make all other determinations deemed necessary or
advisable for the administration of the Plan. 


          Subject to
Section 12(f) hereof, the Committee shall have the authority to adopt, alter
and repeal such administrative rules, guidelines and practices governing the
Plan and perform all acts, including the delegation of its administrative
responsibilities, as it shall, from time to time, deem advisable; to construe
and interpret the terms and provisions of the Plan and any Award issued under
the Plan (and any agreements relating thereto); and to otherwise supervise the
administration of the Plan. The Committee may correct any defect, supply any
omission or reconcile any inconsistency in the Plan or in any agreement
relating thereto in the manner and to the extent it shall deem necessary to
carry the Plan into effect but only to the extent any such action would be
permitted under the applicable provisions of both Rule 16b-3 and Section 162(m)
of the Code. The Committee may adopt special guidelines for persons who are
residing in, or subject to taxes of, countries other than the United States to
comply with applicable tax and securities laws. 


          The
Committee may appoint a chairperson and a secretary and may make such rules and
regulations for the conduct of its business as it shall deem advisable, and
shall keep minutes of its meetings. All determinations of the Committee shall
be made by a majority of its members either present in person or participating
by conference telephone at a meeting or by written consent. The Committee may
delegate to one or more of its members or to one or more agents such
administrative duties as it may deem advisable, and the Committee or any person
to whom it has delegated duties as aforesaid may employ one or more persons to
render advice with respect to any responsibility the Committee or such person
may have under the Plan. All decisions, determinations and interpretations of
the Committee shall be final, conclusive and binding on all persons, including
the Company, the Participant (or any person claiming any rights under the Plan
from or through any Participant) and any shareholder. 





          The Company, the Board or the Committee may consult with legal counsel,
who may be counsel for the Company or other counsel, with respect to its
obligations or duties hereunder, or with respect to any action or proceeding or
any question of law, and shall not be liable with respect to any action taken
or omitted by it in good faith pursuant to the advice of such counsel. 


                    (b) Designation of Consultants/Liability. The Committee may designate employees of the Company and professional
advisors to assist the Committee in the administration of the Plan and may
grant authority to employees to execute agreements or other documents on behalf
of the Committee. 


          The
Committee may employ such legal counsel, consultants and agents as it may deem
desirable for the administration of the Plan and may rely upon any opinion
received from any such counsel or consultant and any computation received from
any such consultant or agent. Expenses incurred by the Committee or Board in
the engagement of any such counsel, consultant or agent shall be paid by the
Company. The Committee, its members and any person designated pursuant to this
Section 3(b) shall not be liable for any action or determination made in good
faith with respect to the Plan. To the maximum extent permitted by applicable
law, no current or former officer of the Company or current or former member of
the Committee or of the Board shall be liable for any action or determination
made in good faith with respect to the Plan or any Award granted hereunder. To
the maximum extent permitted by applicable law and the Certificate of
Incorporation and By-Laws of the Company and to the extent not covered by
insurance, each current or former officer and each current or former member of
the Committee or of the Board shall be indemnified and held harmless by the
Company against any cost or expense (including reasonable fees of counsel
reasonably acceptable to the Company) or liability (including any sum paid in
settlement of a claim with the approval of the Company), and advanced amounts
necessary to pay the foregoing at the earliest time and to the fullest extent
permitted, arising out of any act or omission to act in connection with the
Plan, except to the extent arising out of such officer’s, member’s or former
member’s own fraud or bad faith. Such indemnification shall be in addition to
any rights of indemnification the current and former officers and current and
former members of the Committee and of the Board may have under applicable law
or under the Certificate of Incorporation or By-Laws of the Company or
Subsidiary. Notwithstanding anything else herein, this indemnification will not
apply to the actions or determinations made by an individual with regard to
Awards granted to him or her under the Plan. 


	
 

	
 


	
4.

	
Eligibility.





          Awards may
be granted to officers, other employees and Nonemployee Directors of the
Company in the sole discretion of the Committee. In determining the persons to
whom Awards shall be granted and the type of Award, the Committee shall take
into account such factors as the Committee shall deem relevant in connection
with accomplishing the purposes of the Plan. Notwithstanding the foregoing,
Incentive Stock Options may not be granted to Nonemployee Directors. 







	
  

 	
  

 
	
 5.

 	
 Stock Subject to
 the Plan; Limitation on Grants.

 



          (a) The
maximum number of shares of Stock reserved for issuance pursuant to the Plan or
with respect to which Awards may be granted shall be twelve million
(12,000,000) shares, subject to adjustment as provided herein. Such shares may,
in whole or in part, be authorized but unissued shares or shares that shall
have been or may be reacquired by the Company in the open market, in private
transactions or otherwise. Solely with respect to Awards granted on or after
the date of Foot Locker’s 2010 annual shareholders’ meeting, any shares of
Stock that are subject to Restricted Stock or Other Stock-Based Awards that are
not Appreciation Awards shall be counted against this limit as two and one-half
(2.5) shares for every one share granted; provided, however, that the foregoing
shall not apply to payments made to Nonemployee Directors in connection with
their Annual Retainer in Stock in accordance with Section 10 or Deferred Stock
Units pursuant to Section 11 (collectively, “Director Awards”), in which case
each share subject to Director Awards shall be counted against this limit as
one share for every one share granted. If any shares subject to an Award are
forfeited, cancelled, exchanged or surrendered, or if an Award otherwise
terminates or expires without a distribution of shares to the Participant, the
shares of Stock with respect to such Award shall, to the extent of any such
forfeiture, cancellation, exchange, surrender, termination or expiration, again
be available for Awards under the Plan. Notwithstanding the foregoing, solely
with respect to Awards other than Director Awards that are granted on or after
the date of Foot Locker’s 2010 annual shareholders’ meeting, if any shares of
Stock that are subject to Restricted Stock or Other Stock-Based Awards that are
not Appreciation Awards are forfeited, cancelled, exchanged or surrendered, or
if an Award otherwise terminates or expires without a distribution of shares to
the Participant, two and one-half (2.5) shares of Stock with respect to such
Award shall, to the extent of any such forfeiture, cancellation, exchange,
surrender, termination or expiration, again be available for Awards under the
Plan. Upon the exercise of any Award granted in tandem with any other Awards,
such related Awards shall be cancelled to the extent of the number of shares of
Stock as to which the Award is exercised and, notwithstanding the foregoing,
such number of shares shall no longer be available for Awards under the Plan. The
number of shares of Stock available for the purpose of Awards under the Plan
shall be reduced by: (i) the total number of Options or SARs exercised,
regardless of whether any of the shares of Stock underlying such Awards are not
actually issued to the Participant as the result of a net settlement; and (ii)
any shares of Stock used to pay any exercise price or tax withholding
obligation with respect to any Award. In addition, the Company may not use the
cash proceeds it receives from Option exercises to repurchase shares of Stock
on the open market for reuse under the Plan. Awards that may be settled solely
in cash shall not be deemed to use any shares of Stock which may be issued
under the Plan. Notwithstanding any provision of the Plan to the contrary, if
authorized but previously unissued shares of Stock are issued under the Plan,
such shares shall not be issued for a consideration which is less than as
permitted by applicable law.


          (b) With
respect to Options and SARs, the maximum number of shares of Stock subject to
Awards of Options or SARs which may be granted under the Plan to each
Participant shall not exceed one million five hundred thousand (1,500,000)
shares (subject to any adjustment as provided herein) during each fiscal year
of the Company





during the entire term of the Plan. Solely with respect to Restricted
Stock and Other Stock-Based Awards that are intended to be “performance-based”
compensation under Section 162(m) of the Code, the maximum number of shares of
Stock subject to Awards of Restricted Stock or Other Stock-Based Awards which
may be granted under the Plan to each Participant shall not exceed one million
five hundred thousand (1,500,000) shares (subject to any adjustment as provided
herein) during each fiscal year of the Company during the entire term of the
Plan.


          (c) The
maximum number of shares of Stock subject to any Award of Options, Restricted
Stock, SARs or Other Stock-Based Awards which may be granted under the Plan
during each fiscal year of the Company to each Nonemployee Director shall be
fifty thousand (50,000) shares (subject to any adjustment as provided herein). 


          (d) The
existence of the Plan and the Awards granted hereunder shall not affect in any
way the right or power of the Board or the shareholders of Foot Locker to make
or authorize any adjustment, recapitalization, reorganization or other change
in Foot Locker’s capital structure or its business, any merger or consolidation
of the Company or any part thereof, any issue of bonds, debentures, preferred
or prior preference stock ahead of or affecting Stock, the dissolution or
liquidation of the Company or any part thereof, any sale or transfer of all or
part of its assets or business or any other corporate act or proceeding. 


          (e) In the
event of any dividend or other distribution (whether in the form of cash, Stock
or other property), recapitalization, Stock split, reverse Stock split,
reorganization, merger, consolidation, spin-off, combination, repurchase, or
share exchange, reclassification of any capital stock, issuance of warrants or
options to purchase Stock or securities convertible into Stock, or other
similar corporate transaction or event, affects the Stock such that an
adjustment is appropriate in order to prevent dilution or enlargement of the
rights of Participants under the Plan, the Committee shall in good faith make
such equitable changes or adjustments as it deems necessary or appropriate to
any or all of (i) the number and kind of shares of Stock which may thereafter
be issued in connection with Awards, (ii) the number and kind of shares of
Stock issued or issuable in respect of outstanding Awards, and (iii) the
exercise price, grant price or purchase price relating to any Award; provided
that, with respect to Incentive Stock Options, such adjustment shall be made in
accordance with Section 424 of the Code. 


          (f)
Fractional shares of Stock resulting from any adjustment in Options and other
Awards pursuant to this Section shall be aggregated until, and eliminated at,
the time of exercise by rounding down for fractions less than one half (1⁄2) and
rounding up for fractions equal to or greater than one half (1⁄2). No cash
settlements shall be made with respect to fractional shares of Stock eliminated
by rounding. Notice of any adjustment shall be given by the Committee to each
Participant whose Option or other Award has been adjusted and such adjustment
(whether or not such notice is given) shall be effective and binding for all
purposes of the Plan. 





          (g) In the
event of a merger or consolidation in which Foot Locker is not the surviving
entity or in the event of any transaction that results in the acquisition of
substantially all of Foot Locker’s outstanding Stock by a single person or
entity or by a group of persons and/or entities acting in concert, or in the
event of the sale or transfer of all of Foot Locker’s assets (all of the
foregoing being referred to as “Acquisition Events”), then the Committee may,
in its sole discretion, terminate all outstanding Options and/or any Award,
effective as of the date of the Acquisition Event, by delivering notice of
termination to each Participant at least twenty (20) days prior to the date of
consummation of the Acquisition Event; provided, that during the period from
the date on which such notice of termination is delivered to the consummation
of the Acquisition Event, each Participant shall have the right to exercise in
full all of his or her Options and Awards (to the extent any such Award is
exercisable) that are then outstanding (without regard to any limitations on
exercisability otherwise contained in the Option or Award Agreements) but
contingent on occurrence of the Acquisition Event, and, provided that, if the
Acquisition Event does not take place within a specified period after giving
such notice for any reason whatsoever, the notice and exercise shall be null
and void. 


	
  

 	
  

 
	
 6.

 	
 Stock Option and
 SAR Program for Participants other than Nonemployee Directors. 

 



          No Option
or freestanding SAR shall be granted to a Nonemployee Director pursuant to this
Section 6. Each Option or freestanding SAR granted pursuant to this Section 6
shall be evidenced by an Award Agreement, in such form and containing such
terms and conditions as the Committee shall from time to time approve, which
Award Agreement shall comply with and be subject to the following terms and
conditions, as applicable: 


	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 Stock Options. 

 



                    (1) Number of Shares. Each Award Agreement shall state the number
of shares of Stock to which the Option relates. 


                    (2) Type of Option. Each Award Agreement shall specifically
state that the Option constitutes an Incentive Stock Option or a Nonqualified
Stock Option. To the extent that any Option does not qualify as an Incentive
Stock Option (whether because of its provisions or the time or manner of
exercise or otherwise), such Option or portion thereof which does not qualify,
shall constitute a separate Nonqualified Stock Option. 


                    (3) Option Price. Except as set forth in Section 6(a)(8)(ii)
herein relating to Incentive Stock Options granted to a Ten Percent
Shareholder, each Award Agreement shall state the Option price, which shall not
be less than one hundred percent (100%) of the Fair Market Value of the shares
of Stock covered by the Option on the date of grant. The Option price shall be
subject to adjustment as provided in Section 5 hereof. The date on which the
Committee adopts a resolution expressly granting an option shall be considered
the date on which such Option is granted.





                    (4) Method and Time of Payment. The Option price shall be paid in full, at
the time of exercise, as follows: (i) in cash or by check, bank draft or money
order payable to the order of Foot Locker, (ii) a cashless exercise through a
broker (in accordance with a methodology determined by the Committee and
consistent with the Sarbanes-Oxley Act of 2002 and any other applicable law),
(iii) in shares of Stock by means of a Stock Swap (as described below), or (iv)
in a combination of cash and Stock. Options may contain provisions permitting
the use of shares of Stock to exercise and settle an Option (“Stock Swaps”).
With respect to Stock Swaps, shares of Stock that are used to exercise and
settle an Option shall (i) be free and clear of any liens and encumbrances,
(ii) be valued at the Fair Market Value on the date of exercise, and (iii) be
on such other terms and conditions as may be acceptable to the Committee. 


                    (5) Term and Exercisability of Options. Each Award Agreement shall provide that each
Option shall become exercisable in substantially equal annual installments over
a three-year period, beginning with the first anniversary of the date of grant
of the Option, unless the Committee prescribes an exercise schedule of shorter
or longer duration; provided, that, the Committee shall have the authority to
accelerate the exercisability of any outstanding Option at such time and under
such circumstances as it, in its sole discretion, deems appropriate. Except as
set forth in Section 6(a)(8)(ii) herein, the exercise period shall be ten (10)
years from the date of the grant of the Option or such shorter period as is
determined by the Committee. The exercise period shall be subject to earlier
termination as provided in Section 6(a)(6) hereof. An Option may be exercised,
as to any or all full shares of Stock as to which the Option has become
exercisable, by written notice delivered in person or by mail to the Secretary
of Foot Locker, specifying the number of shares of Stock with respect to which
the Option is being exercised. For purposes of the preceding sentence, the date
of exercise will be deemed to be the date upon which the Secretary of Foot
Locker receives such notification. 


                    (6) Termination. Unless otherwise determined by the Committee
at grant (or, if no rights of the Participant are reduced thereafter), upon a
Participant’s Termination, Options granted to such Participant prior to such
Termination shall remain exercisable following the effective date of such
Termination as follows: 


                              (i) Cause. If a Participant’s Termination is for Cause,
all Options granted to such Participant shall be cancelled as of the effective
date of such Termination. 


                              (ii) Retirement,
Termination for Good Reason or Disability. Upon a Participant’s Retirement, Termination for Good Reason or
Disability, all Options granted to such Participant that are “deemed
exercisable” (as defined in the following sentence) on the effective date of
such Participant’s Retirement, Termination for Good Reason or Disability shall
remain exercisable for a period of three (3) years following such effective
date (or for such longer period as may be prescribed by the Committee, but in
no event beyond the expiration date of such Option). Those Options that are
“deemed exercisable” on and after the effective date of a Participant’s
Retirement, Termination for Good Reason or Disability, as provided above, shall
consist of all unexercised Options (or 





portions thereof) that are immediately exercisable on such date plus
those Options (or portions thereof) that would have become exercisable had such
Participant not retired or had his employment not terminated until after the
next succeeding anniversary of the date of grant of each such Option. 


                              (iii) Other
Terminations of Employment.
If a Participant’s Termination by the Company is for any reason other than
those described in subsections (i) or (ii) above, his “deemed exercisable”
Options, which, for purposes of this subsection, shall mean all Options (or
portions thereof) granted to such Participant that are immediately exercisable
on the effective date of such Termination shall remain exercisable as follows:
(A) if such Participant has ten (10) or more years of service with the Company,
such period of service to be determined as of such effective date of
termination, for a period of one year from the effective date of such Termination
(or for such longer period as may be prescribed by the Committee, but in no
event beyond the expiration date of such Option), or (B) if a Participant has
less than ten (10) years of service with the Company, for a period of three (3)
months from the effective date of such Termination (or for such longer period
as may be prescribed by the Committee, but in no event beyond the expiration
date of such Option). 


                              (iv)    Death. 


                                        (A)
If a Participant dies during the applicable Option exercise period following
the effective date of his Retirement, Disability or other Termination, as
described in subsections (ii) or (iii) above, his Beneficiary shall have a
period expiring on the date one year from the date of his death (or for such
longer period as may be prescribed by the Committee, but in no event beyond the
expiration date of such Option) within which to exercise his “deemed
exercisable” Options, as described in such applicable subsection. 


                                        (B)
If a Participant dies while employed by the Company, his Beneficiary shall have
a period expiring on the date one year from the date of his death (or for such
longer period as may be prescribed by the Committee, but in no event beyond the
expiration date of such Option) within which to exercise his “deemed
exercisable” Options, which shall consist of all unexercised Options (or
portions thereof) that are immediately exercisable on such date of death plus
those Options (or portions thereof) that would have become exercisable had such
Participant not died until after the next succeeding anniversary of the date of
grant of each such Option. 


                    (7) Tandem
Stock Appreciation Rights.
The Committee shall have authority to grant a tandem SAR to the grantee of any
Option under the Plan with respect to all or some of the shares of Stock
covered by such related Option. A tandem SAR shall, except as provided in this
paragraph (7), be subject to the same terms and conditions as the related
Option. Each tandem SAR granted pursuant to the Plan shall be reflected in the
Award Agreement relating to the related Option. 


                              
(i) Time of Grant. A
tandem SAR may be granted either at the time of grant, or at any time
thereafter during the term of the Option; provided,





however that tandem SARs related to Incentive Stock Options may only be
granted at the time of grant of the related Option. 


                              (ii) Payment. A tandem SAR shall entitle the holder
thereof, upon exercise of the tandem SAR or any portion thereof, to receive
payment of an amount computed pursuant to paragraph (iv) below. 


                              (iii) Exercise. A tandem SAR shall be exercisable at such time
or times and only to the extent that the related Option is exercisable, and
will not be Transferable except to the extent the related Option may be
Transferable. A tandem SAR granted in connection with an Incentive Stock Option
shall be exercisable only if the Fair Market Value of a share of Stock on the
date of exercise exceeds the purchase price specified in the related Incentive
Stock Option. Upon the exercise of a tandem SAR, the related Option or part
thereof to which such SAR relates, shall be deemed to have been exercised for
the purpose of the limitations set forth in Section 5(a) of the Plan on the
number of shares of Stock to be issued under the Plan. 


                              (iv) Amount
Payable. Upon the exercise
of a tandem SAR, the Participant shall be entitled to receive an amount
determined by multiplying (A) the excess of the Fair Market Value of a share of
Stock on the date of exercise of such SAR over the price of the Option, by (B)
the number of shares of Stock as to which such tandem SAR is being exercised.
Notwithstanding the foregoing, the Committee may limit in any manner the amount
payable with respect to any tandem SAR by including such a limit at the time it
is granted. 


                              (v) Treatment
of Related Options and Tandem SARs Upon Exercise. Upon the exercise of a tandem SAR, the
related Option shall be cancelled to the extent of the number of shares of
Stock as to which the tandem SAR is exercised and upon the exercise of an
Option granted in connection with a tandem SAR, the tandem SAR shall be
cancelled to the extent of the number of shares of Stock as to which the Option
is exercised. 


                              (vi) Method of
Exercise. Tandem SARs shall
be exercised by a Participant only by a written notice delivered in person or
by mail to the Secretary of Foot Locker, specifying the number of shares of
Stock with respect to which the tandem SAR is being exercised. If requested by
the Committee, the Participant shall deliver the Award Agreement evidencing the
tandem SAR and the related Option to the Secretary of Foot Locker, who shall
endorse thereon a notation of such exercise and return such Award Agreement to
the Participant. For purposes of this paragraph (vi), the date of exercise will
be deemed to be the date upon which the Secretary of Foot Locker receives such
notification. 


                              (vii) Form of
Payment. Payment of the
amount determined under paragraph (iv) above may be made solely in whole shares
of Stock in a number determined based upon their Fair Market Value on the date
of exercise of the tandem SAR or, alternatively, at the sole discretion of the
Committee, solely in cash, or in a combination of cash and shares of Stock as
the Committee deems advisable. 





                              (viii) Limited
SARs. The Committee may, in
its sole discretion, grant tandem SARs or freestanding SARs either as general
SARs or as limited SARs. Limited SARs may be exercised only upon the occurrence
of a Change in Control or such other event as the Committee may, in its sole
discretion, designate at the time of grant or thereafter. 


                    (8) Incentive
Stock Options. Options
granted as Incentive Stock Options shall be subject to the following special
terms and conditions, in addition to the general terms and conditions specified
in this Section 6. 


                              (i) Value of
Shares. The aggregate Fair
Market Value (determined as of the date the Incentive Stock Option is granted)
of the shares of Stock with respect to which Incentive Stock Options granted
under the Plan and all other Plans of the Company become exercisable for the
first time by each Participant during any calendar year shall not exceed one
hundred thousand dollars ($100,000). To the extent that such aggregate Fair
Market Value exceeds such one hundred thousand dollars ($100,000) limitation,
such Options shall be treated as Options which are not Incentive Stock Options
and shall be treated as Nonqualified Stock Options. 


                              (ii) Ten Percent
Shareholder. In the case of
an Incentive Stock Option granted to a Ten Percent Shareholder, (x) the Option
Price shall not be less than one hundred ten percent (110%) of the Fair Market
Value of the shares of Stock on the date of grant of such Incentive Stock
Option, and (y) the exercise period shall not exceed five (5) years from the
date of grant of such Incentive Stock Option. 


                              (iii) Exercise
Following Termination. If an
Eligible Employee does not remain employed by the Company, any parent
corporation or subsidiary corporation (within the meaning of Code Sections
424(e) and 424(f), respectively) at all times from the time the Option is
granted until three (3) months prior to the date of exercise (or such other
period as required by applicable law), such Option shall be treated as a
Nonqualified Stock Option. 


                              (iv)
Should either (i), (ii) or (iii) above not be necessary in order for the
Options to qualify as Incentive Stock Options, or should any additional
provisions be required, the Committee may amend the Plan accordingly, without
the necessity of obtaining the approval of the shareholders of Foot Locker. 


	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 Freestanding Stock Appreciation Rights. 

 



          The
Committee shall have authority to grant a freestanding SAR which is not related
to any Option. Freestanding SARs shall be subject to the following terms and
conditions: 


                    (1)
Number of Shares. Each
Award Agreement relating to freestanding SARs shall state the number of shares
of Stock to which the freestanding SARs relate. 





                    (2)
Exercise Price. Each
Award Agreement shall state the exercise price, which shall not be less than
one hundred percent (100%) of the Fair Market Value of the shares of Stock (to
which the freestanding SARs relate) on the date of grant. The exercise price
shall be subject to adjustment as provided in Section 5 hereof. 


                    (3)
Term and Exercisability of Freestanding SARs. Each Award Agreement shall provide the
exercise schedule for the freestanding SAR as determined by the Committee,
provided that the Committee shall have the authority to accelerate the
exercisability of any freestanding SAR at such time and under such circumstances
as it, in its sole discretion, deems appropriate. The exercise period shall be
ten (10) years from the date of the grant of the freestanding SAR or such
shorter period as is determined by the Committee. The exercise period shall be
subject to earlier termination as provided in paragraph (b)(7) hereof. A
freestanding SAR may be exercised, as to any or all full shares of Stock as to
which the freestanding SAR has become exercisable, by written notice delivered
in person or by mail to the Secretary of Foot Locker, specifying the number of
shares of Stock with respect to which the freestanding SAR is being exercised.
For purposes of the preceding sentence, the date of exercise will be deemed to
be the date upon which the Secretary of Foot Locker receives such notification.



                    (4)
Payment. A
freestanding SAR shall entitle the holder thereof, upon exercise of the
freestanding SAR or any portion thereof, to receive payment of an amount
computed pursuant to paragraph (5) below. 


                    (5)
Amount Payable. Upon
the exercise of a freestanding SAR, the Participant shall be entitled to
receive an amount determined by multiplying (i) the excess of the Fair Market
Value of a share of Stock on the date of exercise of such SAR over the exercise
price of such SAR, by (ii) the number of shares of Stock as to which such
freestanding SAR is being exercised. Notwithstanding the foregoing, the
Committee may limit in any manner the amount payable with respect to any
freestanding SAR by including such a limit at the time it is granted. 


                    (6)
Form of Payment.
Payment of the amount determined under paragraph (5) above may be made solely
in whole shares of Stock in a number determined based upon their Fair Market
Value on the date of exercise of the freestanding SAR or, alternatively, at the
sole discretion of the Committee, solely in cash, or in a combination of cash
and shares of Stock as the Committee deems advisable. 


                    (7)
Termination. The terms
and conditions set forth in Section 6(a)(6) hereof, relating to exercisability
of Options in the event of Termination with the Company, shall apply equally
with respect to the exercisability of freestanding SARs following Termination. 


	
  

 	
  

 
	
 7.

 	
 Stock Option
 Grants to Nonemployee Directors 

 






	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 Number of
Shares. 

 










                    (1)
Options shall be granted to Nonemployee Directors at such times, in such
amounts and subject to such terms as may be determined by the Board in its sole
discretion. 


                    (2)
In no event shall any Nonemployee Director receive more than one Option grant
under the Plan in any fiscal year.


          (b) Type of
Option. Each Award Agreement
granted to a Nonemployee Director under this Section 7 shall state that the
Option constitutes a Nonqualified Stock Option not intended to qualify under
Section 422 of the Code and shall have the following terms and conditions: 


                    (1)
Option Price. Each
Award Agreement shall state the Option price, which shall not be less than one
hundred percent (100%) of the Fair Market Value of the shares of Stock covered
by the Option on the date of grant.


                    (2)
Method and Time of Payment. The Option price shall be paid in full, at the time of exercise, as
follows: (i) in cash or by check, bank draft or money order payable to the
order of Foot Locker, (ii) a cashless exercise through a broker (in accordance
with a methodology determined by the Committee and consistent with the
Sarbanes-Oxley Act of 2002 and any other applicable law), (iii) in shares of
Stock by means of a Stock Swap, or (iv) in a combination of cash and Stock. 


                    (3)
Term and Exercisability of Options. Unless otherwise specified in the applicable Award Agreement, Options
granted to Nonemployee Directors shall fully vest one year following the date
of grant, provided that the holder of such Option is a Nonemployee Director on
such date. Options shall be exercisable until the earlier of ten years from the
date of grant or the expiration of the one-year period following the date of
Termination as provided in Section 7(b)(4). 


                    (4)
Termination. If a
Nonemployee Director’s Termination is for Cause, all Options granted to such
Nonemployee Director shall be cancelled as of the effective date of such
Termination. Upon Termination other than for Cause, all outstanding Options
held by such Nonemployee Director, to the extent then exercisable, shall be
exercisable in whole or in part for a period of one year from the date of Termination.
If a Nonemployee Director’s Termination is by reason of death, all Options, to
the extent exercisable, shall remain exercisable by the Nonemployee Director’s
Beneficiary for a period of one year following the Nonemployee Director’s date
of death. In no event, however, shall any Option be exercisable beyond ten
years from its date of grant.


	
  

 	
  

 
	
 8.

 	
 Restricted Stock.

 



          Awards
granted pursuant to this Section 8 shall be evidenced by an Award Agreement in
such form as the Committee shall from time to time approve and the terms and
conditions of such Awards shall be set forth therein. Shares of Restricted
Stock may be issued either alone or in addition to other Awards granted under
the Plan. 





          (a) Restricted
Stock. The Committee shall
determine the eligible persons to whom, and the time or times at which, grants
of Restricted Stock will be made, the number of shares to be awarded, the price
(if any) to be paid by the recipient, the time or times within which such
Awards may be subject to forfeiture, the vesting schedule and rights to
acceleration thereof, and all other terms and conditions of the Awards. The
Committee may condition the grant or vesting of Restricted Stock upon the
attainment of specified performance goals (including without limitation, the
Performance Goals set forth in Exhibit A hereto) or such other factors as the
Committee may determine, in its sole discretion, which comply with the
requirements of Section 162(m) of the Code.


          (b) Objective
Performance Goals, Formulae or Standards. Notwithstanding the foregoing, if the Award of Restricted Stock is
intended to comply with the “performance based” compensation exception under
Section 162(m) of the Code and if the grant of such Award or the lapse of
restrictions is based on the attainment of Performance Goals, the Committee
shall establish the objective Performance Goals and the applicable number of
shares of Restricted Stock to be granted or the applicable vesting percentage
of the Restricted Stock applicable to each Participant or class of Participants
in writing prior to the beginning of the applicable fiscal year or at such
later date as otherwise determined by the Committee in accordance with Section
162(m) of the Code, and while the outcome of the Performance Goals are
substantially uncertain. Such Performance Goals may incorporate provisions for
disregarding (or adjusting for) changes in accounting methods, corporate
transactions (including, without limitation, dispositions and acquisitions) and
other similar type events or circumstances. With respect to a Restricted Stock
Award that is intended to comply with Section 162(m) of the Code, to the extent
any such provision would create impermissible discretion under Section 162(m)
of the Code or otherwise violate Section 162(m) of the Code, such provision
shall be of no force or effect. The Performance Goals are set forth in Exhibit
A hereto. 


          (c) Awards and
Certificates. The
prospective Participant selected to receive Restricted Stock shall not have any
rights with respect to such Award, unless and until such Participant has
delivered a fully executed copy of the Award Agreement to the Company and has
otherwise complied with the applicable terms and conditions of such Award.
Further, such Award shall be subject to the following conditions: 


                    (1)
Purchase Price.
Subject to the last sentence of Section 5(a), the purchase price for shares of
Restricted Stock may be less than their par value and may be zero, to the
extent permitted by applicable law. 


                    (2)
Acceptance. Awards of
Restricted Stock must be accepted within a period of sixty (60) days (or such
shorter period as the Committee may specify at grant) after the Award date, by
executing a Restricted Stock Award Agreement and by paying whatever price (if
any) the Committee has designated thereunder. 


                    (3)
Certificates/Legend.
Upon an Award of Restricted Stock, the Committee may, in its sole discretion,
decide to either have the Company or other escrow agent appointed by the
Committee hold the share certificates representing such shares of






Restricted
Stock in escrow or issue share certificates to the Participant. Regardless of
whether the certificates are held in escrow or are given to Participants, each
certificate shall be registered in the name of such Participant, and shall bear
an appropriate legend referring to the terms, conditions and restrictions
applicable to such Award, substantially in the following form: 


	
  

 	
  

 
	
  

 	
 “The
 anticipation, alienation, attachment, sale, transfer, assignment, pledge,
 encumbrance or charge of the shares of stock represented hereby are subject
 to the terms and conditions (including forfeiture) of the Foot Locker (the
 “Company”) 2007 Stock Incentive Plan (Amended and Restated as of May 19,
 2010) and an Agreement entered into between the registered owner and the Company
 dated ________________. Copies of such Plan and Agreement are on file at the
 principal office of the Company.” 

 



                    (4)
Custody. If stock certificates are
issued in respect of shares of Restricted Stock, the Committee may require that
any stock certificates evidencing such shares be held in custody by the Company
until the restrictions thereon shall have lapsed, and that, as a condition of
any grant of Restricted Stock, the Participant shall have delivered a duly
signed stock power, endorsed in blank, relating to the Stock covered by such
Award. The Company may determine in its sole discretion, to evidence such
shares of Restricted Stock by uncertificated book entry. 


                    (5)
Restrictions. During a period set
by the Committee commencing with the date of an Award of Restricted Stock (the
“Restriction Period”), shares of Restricted Stock may not be sold, assigned,
Transferred, pledged, hypothecated or otherwise disposed of, except by will or
the laws of descent and distribution, as set forth in the Award Agreement and
such Award Agreement shall set forth a vesting schedule and any events which
would accelerate vesting of the shares of Restricted Stock. Any attempt to
dispose of any such shares of Stock in contravention of such restrictions shall
be null and void and without effect. Notwithstanding the foregoing, no vesting
limitation shall apply, and the Participant’s interest in such shares shall be
fully vested, in the event of a Change in Control which occurs prior to the
expiration of the vesting period set forth in the Award Agreement. Within these
limits, based on service, performance and/or such other factors or criteria as
the Committee may determine in its sole discretion, the Committee may provide
for the lapse of such restrictions in installments in whole or in part, or may
accelerate the vesting of all or any part of any Restricted Stock Award and/or
waive the deferral limitations for all or any part of such Award (including,
without limitation, any deferral of dividends). 


                    (6)
Forfeiture. Subject to such
exceptions as may be determined by the Committee, if the Participant’s
continuous employment with the Company shall terminate for any reason prior to
the expiration of the Restriction Period of an Award, or to the extent any
goals for the Restriction Period are not met, any shares of Stock remaining
subject to restrictions shall thereupon be forfeited by the Participant and
Transferred to, and reacquired by, Foot Locker at no cost to Foot Locker. 





                    (7)
Ownership. Except to the extent
otherwise set forth in the Award Agreement, during the Restriction Period the
Participant shall possess all incidents of ownership of such shares, subject to
Section 8(c)(5), including the right to receive dividends with respect to such
shares and to vote such shares and, subject to and conditioned upon the full
vesting of shares of Restricted Stock, the right to tender such shares. The
Committee, in its sole discretion, as determined at the time of the Award, may
permit or require the payment of dividends to be deferred. Notwithstanding
anything to the contrary herein, the payment of dividends shall be deferred
until, and conditioned upon, the expiration of the applicable Restriction
Period with respect to a Restricted Stock Award that vests based upon the
attainment of Performance Goals.


                    (8)
Lapse of Restrictions. If and when
the Restriction Period expires without a prior forfeiture of the Restricted
Stock subject to such Restriction Period, the certificates for such shares
shall be delivered to the Participant. All legends shall be removed from said
certificates at the time of delivery to the Participant, except as otherwise
required by applicable law or other limitations imposed by the Committee. 


9.       Other
Stock-Based Awards.


          (a) Other Awards. Other Awards of
Stock and other Awards that are valued in whole or in part by reference to, or
are payable in or otherwise based on, Stock (“Other Stock-Based Awards”), including,
without limitation, Awards valued by reference to performance of a subsidiary,
may be granted either alone or in addition to or in tandem with Stock Options,
SARs or Restricted Stock.


          Subject
to the provisions of the Plan, the Committee shall have authority to determine
the persons to whom and the time or times at which such Awards shall be made,
the number of shares of Stock to be awarded pursuant to such Awards, and all
other conditions of the Awards. The Committee may also provide for the grant of
Stock under such Awards upon the completion of a specified performance goal or
period. 


          The
Committee may condition the grant or vesting of Other Stock-Based Awards upon
the attainment of specified Performance Goals set forth on Exhibit A as the
Committee may determine, in its sole discretion; provided that to the extent
that such Other Stock-Based Awards are intended to comply with Section 162(m)
of the Code, the Committee shall establish the objective Performance Goals for
the vesting of such Other Stock-Based Awards based on a performance period
applicable to each Participant or class of Participants in writing prior to the
beginning of the applicable performance period or at such later date as
permitted under Section 162(m) of the Code and while the outcome of the
Performance Goals are substantially uncertain. Such Performance Goals may
incorporate, if and only to the extent permitted under Section 162(m) of the
Code, provisions for disregarding (or adjusting for) changes in accounting
methods, corporate transactions (including, without limitation, dispositions
and acquisitions) and other similar type events or circumstances. To the extent
any such provision would create impermissible discretion under Section 162(m)
of the Code or otherwise violate Section 162(m) of the Code, such provision
shall be of no force or effect. The applicable






Performance
Goals shall be based on one or more of the performance criteria set forth on
Exhibit A hereto. 


          (b)     Terms and Conditions. Other Stock-Based
Awards made pursuant to this Section 9 shall be subject to the following terms
and conditions: 


                    (1)
Dividends. Unless otherwise
determined by the Committee at the time of Award, subject to the provisions of
the Award Agreement and the Plan, the recipient of an Award under this Section
9 shall be entitled to receive, currently or on a deferred basis, dividends or
dividend equivalents with respect to the number of shares of Stock covered by
the Award, as determined at the time of the Award by the Committee, in its sole
discretion. Notwithstanding the foregoing, (i) no dividends or dividend
equivalents shall be paid on any Other Stock-Based Award for which the value
thereof is based solely on the appreciation of the Stock and (ii) the payment
of dividends and dividend equivalents shall be deferred until, and conditioned
upon, the expiration of the vesting period with respect to an Other Stock-Based
Award that vests based upon the attainment of Performance Goals. In the event
that the dividend or dividend equivalent constitutes a nonqualified deferred
compensation arrangement under Section 409A of the Code, it is intended that
such dividend or dividend equivalent arrangement complies with Section 409A of
the Code.


                    (2)
Vesting. Any Award under this
Section 9 and any Stock covered by any such Award shall vest or be forfeited to
the extent so provided in the Award Agreement, as determined by the Committee,
in its sole discretion. 


                    (3)
Waiver of Limitation. In the event
of the Participant’s Retirement, Termination for Good Reason, Disability or
death, or in cases of special circumstances, the Committee may, in its sole
discretion, to the extent consistent with Section 409A of the Code, waive in
whole or in part any or all of the limitations imposed hereunder (if any) with
respect to any or all of an Award under this Section 9.


                    (4)
Price. Stock issued on a bonus
basis under this Section 9 may be issued for no cash consideration; Stock purchased
pursuant to a purchase right awarded under this Section shall be priced as
determined by the Committee, provided that any Other Stock-Based Award for
which the value thereof is based solely on the appreciation of the Stock shall
be priced at the Fair Market Value of the Stock on the date of grant. 


10.       Payment of
Nonemployee Director’s Annual Retainer in Stock


          (a)
Mandatory Portion. For each
calendar year commencing with the calendar year beginning January 1, 2007, each
Nonemployee Director who is a director of the Company on or before the date of
an annual meeting of shareholders in any calendar year shall receive a whole
number of shares of Stock equal in value to 50 percent of his or her Annual
Retainer payable for services as a director during such calendar year in lieu
of payment of such percentage of such director’s Annual Retainer in cash. Such
shares shall be issued to each such Nonemployee Director on the Stock Payment
Date. Each such share of Stock shall be valued at the Fair Market Value on the





last business
day preceding the Stock Payment Date. Notwithstanding any other provision
herein, the value of fractional shares shall be paid to the Nonemployee
Director in cash. 


          (b)
Elective Portion. For each
calendar year commencing with the calendar year beginning January 1, 2007, each
person who will be a Nonemployee Director on January 1 of such year may elect
to receive, in addition to the mandatory stock portion of his or her Annual
Retainer provided under (a) above, a whole number of shares of Stock equal in
value (based on the Fair Market Value on the Stock Payment Date) of up to the
remaining 50 percent of his or her Annual Retainer in lieu of payment of such
percentage in cash so that, if such election is exercised in full, 100 percent
of his or her Annual Retainer would be paid in shares of Stock. Such election
may be made in incremental amounts of five percent of the total Annual
Retainer. Such shares shall be delivered to each Nonemployee Director on the Stock
Payment Date. Notwithstanding any other provision herein, the value of
fractional shares shall be paid to the Nonemployee Director in cash. Any such
election shall be irrevocable and shall be made in writing no later than
December 31 of the year preceding such year. Any such elections made by
Nonemployee Directors under any prior plan of the Company for the calendar year
beginning January 1, 2007 shall remain in effect under the Plan. 


11.       Deferral of
Nonemployee Director’s Annual Retainer


          (a)
Deferral Election. During the term
of the Plan, a Nonemployee Director may elect to defer all or any specified
portion of the cash component of his or her Annual Retainer in the form of
Deferred Stock Units or to have such amounts placed in an Interest Account.
During the term of the Plan, a Nonemployee Director may also elect to defer all
or part of the stock component of his or her Annual Retainer in the form of
Deferred Stock Units. A Nonemployee Director’s election to defer his or her
Annual Retainer hereunder pursuant to a Deferral Agreement is irrevocable and
is valid only for the Plan Year following the election. If no new Deferral
Agreement is timely executed and delivered with respect to any subsequent Plan
Year, the Annual Retainer earned in such Plan Year shall not be deferred under
the Plan. Once a Nonemployee Director designates the allocation of his or her
Deferred Annual Retainer, the Nonemployee Director may not change the
allocation. Any election made by a Nonemployee Director during 2006 to defer
all or any portion of his or her 2007 Annual Retainer made under the Foot
Locker 2002 Directors Stock Plan shall be transferred to the Plan and shall be
governed by the terms of such deferral agreement. 


          (b)
Timing and Manner of Deferral. Any
election to defer all or a portion of the Annual Retainer, as provided in this
Section 11, shall be made by the Nonemployee Director in writing on a Deferral
Agreement and provided to the Secretary of the Company on or before the
December 31 preceding the Plan Year in which the Annual Retainer is earned, and
shall apply on a pro rata basis with respect to the entire amount of the Annual
Retainer earned for such Plan Year, whenever payable. Any such election made by
December 31 shall become effective on the following January 1.


          (c)
Book Entry of Deferred Fees. The
amount of the Annual Retainer that is deferred shall be credited as a book
entry to an Account in the name of the 





Nonemployee
Director not later than the date such amount would otherwise be payable to the
Nonemployee Director. 


          (d)    
Vesting.


                    (1)
Interest Account. A Nonemployee
Director’s Interest Account shall be fully vested at all times. Each Interest
Account shall be the record of the cash amounts of the Annual Retainer deferred
by the Nonemployee Director, together with interest thereon, is maintained
solely for accounting purposes, and shall not require a segregation of any
Company assets.


                    (2)
Deferred Stock Units. A Nonemployee
Director’s Deferred Stock Unit Account shall be fully vested at all times.


          (e)    
Deferred Stock Units.


                    (1)
Number. The number of Deferred
Stock Units to be granted in connection with an election pursuant to Section
11(a) shall equal the portion of the Annual Retainer being deferred into Stock
Units divided by the Fair Market Value on the scheduled payment date of the
amount deferred or, in the case of the stock portion of the Annual Retainer,
the Stock Payment Date.


                    (2)
Deferred Stock Unit Account. A
Deferred Stock Unit Account shall be established and maintained by the Company
for each Nonemployee Director who elects to defer his or her Annual Retainer in
the form of Deferred Stock Units under the Plan. As the value of each Deferred
Stock Unit changes pursuant to Section 11(e), the Nonemployee Director’s
Deferred Stock Unit Account shall be adjusted accordingly. Each Deferred Stock
Unit Account shall be the record of the Deferred Stock Units acquired by the
Nonemployee Director on each applicable acquisition date, is maintained solely
for accounting purposes, and shall not require a segregation of any Company
assets.


                    (3)
Value. Each Deferred Stock Unit
shall have an initial value that is equal to the Fair Market Value determined
in accordance with Section 11(e)(1). Subsequent to such date of acquisition,
the value of each Deferred Stock Unit shall change in direct relationship to
changes in the value of a share of Stock as determined pursuant to a Valuation.


                    (4)
Dividend Equivalents. In the event
the Company pays dividends on the Stock, dividend equivalents shall be earned
on Deferred Stock Units acquired under the Plan. Such dividend equivalents
shall be converted into an equivalent amount of Deferred Stock Units based upon
the Valuation of a Deferred Stock Unit on the date the dividend equivalents are
converted into Deferred Stock Units. The converted Deferred Stock Units will be
fully vested upon conversion. 


                    (5)
Amount of Payout. Subject to
Section 11(f)(2), the payout of the amount in the Nonemployee Director’s
Deferred Stock Unit Account shall be made in a lump sum in Stock. The number of
shares of Stock to be so distributed to the 





Nonemployee
Director shall equal the number of Stock Units then in his or her Deferred
Stock Unit Account.


          (f)    
Distribution.


                    (1)
Upon the first business day of the month coincident with or next following the
end of the Deferral Period (or as soon as administratively feasible
thereafter), the Nonemployee Director shall receive a cash lump sum
distribution equal to any balance of the Deferred Annual Retainer allocated to
his or her Interest Account, as calculated on the Valuation Date, plus a
distribution in shares of Stock equal to the value of the balance of the
Deferred Annual Retainer allocated to his or her Deferred Stock Unit Account,
based on the Fair Market Value on the Valuation Date.


                    (2)
In the event the Nonemployee Director elected in his Deferral Agreement to
receive the distribution from his or her Deferred Stock Unit Account in the
form of three annual installments, payments will commence on the first business
day of the month coincident with or next following the end of the Deferral
Period (or as soon as administratively feasible thereafter). The amount of each
installment payment, including the number of shares to be distributed with
respect to the Deferred Stock Unit Account, shall be frozen as of the date of
distribution of the first installment payment, so that the Nonemployee
Director’s balance in his or her Account shall not be subject to increase or
decrease.


          (g)
Death. If a Nonemployee Director
dies prior to receiving the total amount of his or her Account, the unpaid
portion of his or her Account shall be paid to the Nonemployee Director’s
Beneficiary upon the first business day of the month coincident with or next
following the Nonemployee Director’s death (or as soon as administratively feasible
thereafter). If the Administrator is in doubt as to the right of any person to
receive any amount, the Administrator may retain such amount, without liability
for any interest thereon, until the rights thereto are determined, or the
Administrator may pay such amount into any court of appropriate jurisdiction,
and such payment shall be a complete discharge of the liability of the Plan,
the Administrator and the Company therefor. 


          (h)
No Transfer of Deferred Annual Retainer.
A Nonemployee Director shall have no right to transfer all or any portion of
his or her Deferred Annual Retainer between the Interest Account and the
Deferred Stock Unit Account. 


          (i)
Employee Directors. If a
Nonemployee Director becomes an employee of the Company, he or she may not make
any future deferrals under the Plan and the Nonemployee Director’s Deferral
Agreement shall terminate. Amounts already deferred under the Plan shall
continue to be deferred until such employee incurs a “separation of service” within
the meaning of Section 409A of the Code. Notwithstanding the foregoing, if such
employee is a Key Employee, payment of amounts deferred hereunder shall be
delayed in accordance with the requirements of Section 409A of the Code until
the day immediately following the six month anniversary of such employee’s
“separation from service.” 






          (j)
Cessation of Future Deferrals. The
Board may direct at any time that Nonemployee Directors shall no longer be
permitted to make future deferrals of Annual Retainer Fees under the Plan. 


          (k)
Rights of Nonemployee Directors; No Funding
Obligation. Nothing contained in the Plan and no action taken
pursuant to the Plan shall create or be construed to create a trust of any
kind, or a fiduciary relationship, among the Company and any Nonemployee
Director or his or her Beneficiary, or any other persons. Funds allocated to a
Deferred Stock Unit Account or an Interest Account established by the Company
in connection with the Plan shall continue to be a part of the general funds of
the Company, and no individual or entity other than the Company shall have any
interest in such funds until paid to a Nonemployee Director or his or her
Beneficiary. If and to the extent that any Nonemployee Director or his or her
executor, administrator, or other personal representative or Beneficiary, as
the case may be, acquires a right to receive any payment from the Company
pursuant to the Plan, such right shall be no greater than the right of an
unsecured general creditor of the Company. The Company may, in its sole
discretion, establish a “rabbi trust” to pay amounts payable hereunder. If the
Company decides to establish any accrued reserve on its books against the
future expense of benefits payable hereunder, or if the Company establishes a
rabbi trust under the Plan, such reserve or trust shall not under any circumstances
be deemed to be an asset of the Plan. 


	
  

 	
  

 
	
 12.

 	
 General
 Provisions. 

 



          (a)
Plan Provisions Control. A
Participant shall not be entitled to, and the Company shall not be obligated to
pay to such Participant, the whole or any part of the amounts deferred under
the Plan, except as provided in the Plan.


          (b)
Compliance with Legal Requirements. The
Plan and the granting and exercising of Awards, and the other obligations of
the Company under the Plan and any Award Agreement or other agreement shall be
subject to all applicable federal and state laws, rules and regulations, and to
such approvals by any regulatory or governmental agency as may be required. The
Company, in its discretion, may postpone the issuance or delivery of Stock under
any Award as the Company may consider appropriate, and may require any
Participant to make such representations and furnish such information as it may
consider appropriate in connection with the issuance or delivery of Stock in
compliance with applicable laws, rules and regulations. 


          (c)
Nontransferability. No Award shall
be Transferred by the Participant otherwise than by will or by the laws of
descent and distribution. All Awards shall be exercisable, during the
Participant’s lifetime, only by the Participant. No Award shall, except as
otherwise specifically provided by law or herein, be Transferred in any manner,
and any attempt to Transfer any such Award shall be void, and no such Award
shall in any manner be used for the payment of, subject to, or otherwise
encumbered by or hypothecated for the debts, contracts, liabilities,
engagements or torts of any person who shall be entitled to such Award, nor
shall it be subject to attachment or legal process for or against such person.
Notwithstanding the foregoing, the Committee may determine at the time of grant
or thereafter, that an Award, other than an Incentive Stock Option or 





Restricted
Stock, that is otherwise not Transferable pursuant to this Section 12(c) is
Transferable to a “family member” (as such term is defined in Form S-8 of the
Securities Act of 1933) in whole or part and in such circumstances, and under
such conditions, as specified by the Committee. 


          (d)
No Right to Continued Employment. Nothing
in the Plan or in any Award granted or any Award Agreement or other agreement
entered into pursuant hereto shall confer upon any Participant the right to
continue in the employ of the Company or to be entitled to any remuneration or
benefits not set forth in the Plan or such Award Agreement or other agreement
or to interfere with or limit in any way the right of the Company to terminate
such Participant’s employment. 


          (e)
Withholding Taxes. Where a
Participant or other person is entitled to receive shares of Stock pursuant to
the exercise of an Option or is otherwise entitled to receive shares of Stock
or cash pursuant to an Award hereunder, the Company shall have the right to
require the Participant or such other person to pay to the Company the amount
of any taxes which the Company may be required to withhold before delivery to
such Participant or other person of cash or a certificate or certificates
representing such shares, or otherwise upon the grant, vesting, exercise or
disposition of shares pursuant to an Option or Award.


          Unless
otherwise prohibited by the Committee or by applicable law, a Participant may
satisfy any such withholding tax obligation by any of the following methods, or
by a combination of such methods: (a) tendering a cash payment; (b) authorizing
the Company to withhold from the shares of Stock or cash otherwise payable to
such Participant (1) one or more of such shares having an aggregate Fair Market
Value, determined as of the date the withholding tax obligation arises, less
than or equal to the amount of the total withholding tax obligation or (2) cash
in an amount less than or equal to the amount of the total withholding tax
obligation; or (c) delivering to the Company previously acquired shares of
Stock (none of which shares may be subject to any claim, lien, security
interest, community property right or other right of spouses or present or
former family members, pledge, option, voting agreement or other restriction or
encumbrance of any nature whatsoever) having an aggregate Fair Market Value,
determined as of the date the withholding tax obligation arises, less than or
equal to the amount of the total withholding tax obligation. A Participant’s
election to pay his or her withholding tax obligation (in whole or in part) by
the method described in (b)(1) above is irrevocable once it is made. 


          (f)
Amendment and Termination of the Plan. Notwithstanding
any other provision of the Plan, the Board or the Committee may at any time and
from time to time alter, amend, suspend, or terminate the Plan in whole or in
part; provided that, no amendment which requires shareholder approval under
applicable New York law or in order for the Plan to continue to comply with
Rule 16b-3, Section 162(m) of the Code, or applicable stock exchange requirements
shall be effective unless the same shall be approved by the requisite vote of
the shareholders of the Company. Notwithstanding the foregoing, no amendment
shall affect adversely any of the rights of any Participant, without such
Participant’s consent, under any Award theretofore granted under the Plan. 





Notwithstanding
any other provision of the Plan to the contrary, unless such action is approved
by the shareholders of the Company, (i) the terms of outstanding Options and
SARs shall not be amended to reduce the exercise price thereof and (ii)
outstanding Options and SARs shall not be replaced or canceled (where prior to
the replacement, reduction or cancellation the exercise price equals or exceeds
the fair market value of the shares of Stock underlying such Awards) in
exchange for cash, other Awards or Options or SARs with an exercise price that
is less than the exercise price of the original Options or SARs, in each case,
other than adjustments or substitutions in accordance with Section 5.


          The
power to grant Options under the Plan will automatically terminate ten years
after the adoption of the Initial Plan by the shareholders, but Awards granted
prior to such date may, and the Committee’s authority to administer the terms
of such Awards, extend beyond that date; provided that no Award (other than a
Stock Option or Stock Appreciation Right) that is intended to be
“performance-based” under Section 162(m) of the Code shall be granted on or
after the fifth anniversary of the later of the shareholder approval of the
Initial Plan or the Plan, as amended and restated as of May 19, 2010, the
Performance Goals set forth on Exhibit A are reapproved (or other designated
performance goals are approved) by the shareholders no later than the first
shareholder meeting that occurs in the fifth year following the year in which
shareholders approve the Performance Goals set forth on Exhibit A. 


          Notwithstanding
anything herein to the contrary, the Board or the Committee may amend the Plan
or any Award granted hereunder at any time without a Participant’s consent to
comply with Section 409A of the Code or any other applicable law. 


          (g)
Section 409A of the Code. Although
the Company does not guarantee the particular tax treatment of an Award granted
under the Plan, Awards made under the Plan are intended to comply with, or be
exempt from, the applicable requirements of Section 409A of the Code and the
Plan and any Award agreement hereunder shall be limited, construed and
interpreted in accordance with such intent. In no event whatsoever shall the
Company or any of its affiliates be liable for any additional tax, interest or
penalties that may be imposed on a Participant by Section 409A of the Code or
any damages for failing to comply with Section 409A of the Code.


          Notwithstanding
anything herein or in any Award Agreement to the contrary, in the event that a
Participant is a “specified employee” within the meaning of Section 409A of the
Code as of the date of such Participant’s separation from service (as
determined pursuant to Section 409A of the Code and any procedure set by the
Company), any Awards subject to Section 409A of the Code payable to such
Participant as a result of separation from service shall be paid on the first
business day following the six (6) month anniversary of the date of the
Participant’s separation from service, or, if earlier, the date of the
Participant’s death.


          (h)
Change in Control. Notwithstanding
any other provision of the Plan to the contrary, if, while any Awards remain
outstanding under the Plan, a Change in Control of Foot Locker shall occur,
unless the Committee determines otherwise at the 





time of grant
pursuant to an Award Agreement or other arrangement or plan granting such
Award, (1) all Options and freestanding SARs granted under the Plan that are
outstanding at the time of such Change in Control shall become immediately
exercisable in full, without regard to the years that have elapsed from the
date of grant; (2) all restrictions with respect to shares of Restricted Stock
shall lapse, and such shares shall be fully vested and nonforfeitable; and (3)
with respect to Other Stock-Based Awards, any performance periods or goals
outstanding at the time of a Change in Control shall be deemed to have been
attained or any restrictions outstanding at the time of a Change in Control
shall lapse. 


          The
Committee, in its sole discretion, may provide for the purchase of any Awards
by the Company (or the cancellation and extinguishment thereof pursuant to the
terms of a merger agreement entered into by the Company) for an amount of cash
equal to the excess of the Change in Control Price (as defined below) of the
shares of Stock covered by such Awards, over the aggregate exercise price of
such Awards. “Change in Control Price” shall mean the highest price per share
of Stock paid in any transaction related to a Change in Control of the Company.



          The
Committee may, in its sole discretion, provide for the cancellation of any
particular Award or Awards without payment, if the Change in Control Price is
less than the Fair Market Value of such Award(s) on the date of grant. 


          (i)
Participant Rights. No Participant
shall have any claim to be granted any Award under the Plan, and there is no
obligation for uniformity of treatment for Participants. Except as provided
specifically herein, a Participant or a transferee of an Award shall have no
rights as a shareholder with respect to any shares covered by any Award until
the date of the issuance of a Stock certificate to him for such shares. 


          (j)
Unfunded Status of Awards. The
Plan is intended to constitute an “unfunded” plan for incentive and deferred
compensation. With respect to any payments not yet made to a Participant
pursuant to an Award, nothing contained in the Plan or any Award shall give any
such Participant any rights that are greater than those of a general creditor
of the Company. 


          (k)
No Fractional Shares. Except with
respect to fractional shares resulting from any adjustment in Awards pursuant
to Section 5, no fractional shares of Stock shall be issued or delivered
pursuant to the Plan or any Award. 


          (l)
Legend. The Committee may require
each person purchasing shares pursuant to a Stock Option or other Award under
the Plan to represent to and agree with the Company in writing that the
Participant is acquiring the shares without a view to distribution thereof. In
addition to any legend required by the Plan, the certificates for such shares
may include any legend which the Committee deems appropriate to reflect any
restrictions on Transfer. 


          All
certificates for shares of Stock delivered under the Plan shall be subject to
such stop transfer orders and other restrictions as the Committee may deem
advisable 





under the
rules, regulations and other requirements of the Securities and Exchange
Commission, any stock exchange upon which the Stock is then listed or any
national securities association system upon whose system the Stock is then
quoted, any applicable Federal or state securities law, and any applicable
corporate law, and the Committee may cause a legend or legends to be put on any
such certificates to make appropriate reference to such restrictions. 


          (m)
Other Plans. Nothing contained in
the Plan shall prevent the Board from adopting other or additional compensation
arrangements, subject to shareholder approval if such approval is required; and
such arrangements may be either generally applicable or applicable only in
specific cases. 


          (n)    
    Listing and Other Conditions.  


                    (1)
As long as the Stock is listed on a national securities exchange or system
sponsored by a national securities association, the issue of any shares of
Stock pursuant to an Option or other Award shall be conditioned upon such
shares being listed on such exchange or system. The Company shall have no
obligation to issue such shares unless and until such shares are so listed, and
the right to exercise any Option or other Award with respect to such shares
shall be suspended until such listing has been effected. 


                    (2)
If at any time counsel to the Company shall be of the opinion that any sale or
delivery of shares of Stock pursuant to an Option or other Award is or may in
the circumstances be unlawful or result in the imposition of excise taxes under
the statutes, rules or regulations of any applicable jurisdiction, the Company
shall have no obligation to make such sale or delivery, or to make any
application or to effect or to maintain any qualification or registration under
the Securities Act of 1933, as amended, or otherwise with respect to shares of
Stock or Awards, and the right to exercise any Option or other Award shall be
suspended until, in the opinion of said counsel, such sale or delivery shall be
lawful or will not result in the imposition of excise taxes. 


                    (3)
Upon termination of any period of suspension under this Section, any Award
affected by such suspension which shall not then have expired or terminated
shall be reinstated as to all shares available before such suspension and as to
shares which would otherwise have become available during the period of such
suspension, but no such suspension shall extend the term of any Option. 


          (o)
Governing Law. The Plan and all
determinations made and actions taken pursuant hereto shall be governed by the
laws of the State of New York without giving effect to the conflict of laws
principles thereof. 


          (p)
Effective Date. The Initial Plan
was originally adopted by the Board in its resolution adopting the Initial Plan
on March 31, 2007 and was thereafter approved by the shareholders of the
Company on May 30, 2007. The Board subsequently approved this amendment and
restatement of the Initial Plan in the form set forth herein (the “Amended and
Restated Plan”) subject to, and to be effective upon, the requisite approval of
the shareholders of the Company at Foot Locker’s 2010 annual shareholders’
meeting 





to be held on
May 19, 2010. If the Amended and Restated Plan is not so approved by the
shareholders, all provisions of the Initial Plan shall remain effective. 


          (q)
Death. The Committee may in its
sole discretion require the transferee of a Participant to supply it with
written notice of the Participant’s death or Disability and to supply it with a
copy of the will (in the case of the Participant’s death) or such other
evidence as the Committee deems necessary to establish the validity of the
Transfer of an Option. The Committee may also require that the agreement of the
transferee to be bound by all of the terms and conditions of the Plan. 


          (r)
Interpretation. The Plan is
designed and intended to comply with Rule 16b-3 promulgated under the Exchange
Act and, to the extent applicable, with Section 162(m) of the Code, and all
provisions hereof shall be construed in a manner to so comply. 


          (s)
Severability of Provisions. If any
provision of the Plan shall be held invalid or unenforceable, such invalidity
or unenforceability shall not affect any other provisions hereof, and the Plan
shall be construed and enforced as if such provisions had not been included. 


          (t)
Headings and Captions. The
headings and captions herein are provided for reference and convenience only,
shall not be considered part of the Plan, and shall not be employed in the
construction of the Plan.






EXHIBIT A


PERFORMANCE GOALS


	
 

	
 

	
 


	
1.

	
Performance
goals established for purposes of the grant or vesting of Awards of
Restricted Stock and/or Other Stock-Based Awards, each intended to be
“performance-based” under Section 162(m) of the Code, shall be based on the
attainment of certain target levels of, or a specified increase or decrease
(as applicable) in one or more of the following performance goals
(“Performance Goals”): 


	
 

	
 

	
 


	
 

	
(a)

	
the
attainment of certain target levels of, or percentage increase in, Consolidated
Net Income, 


	
 

	
 

	
 


	
 

	
(b)

	
the
attainment of certain target levels of, or a specified increase in, return on
invested capital or return on investment;


	
 

	
 

	
 


	
 

	
(c)

	
the
attainment of certain target levels of, or percentage increase in, pre-tax
profit;


	
 

	
 

	
 


	
 

	
(d)

	
the
attainment of certain target levels of, or a percentage increase in,
after-tax profits of Foot Locker (or a subsidiary, division, or other
operational unit of Foot Locker)’


	
 

	
 

	
 


	
 

	
(e)

	
the
attainment of certain target levels of, or a specified increase in,
operational cash flow of Foot Locker (or a subsidiary, division, or other
operational unit of Foot Locker); 


	
 

	
 

	
 


	
 

	
(f)

	
the
achievement of a certain level of, reduction of, or other specified
objectives with regard to limiting the level of increase in, all or a portion
of, Foot Locker’s bank debt or other long-term or short-term public or
private debt or other similar financial obligations of Foot Locker, if any,
which may be calculated net of such cash balances and/or other offsets and
adjustments as may be established by the Committee; 


	
 

	
 

	
 


	
 

	
(g)

	
the
attainment of a specified percentage increase in earnings per share or
earnings per share from continuing operations of Foot Locker (or a
subsidiary, division or other operational unit of Foot Locker);


	
 

	
 

	
 


	
 

	
(h)

	
the
attainment of certain target levels of, or a specified percentage increase
in, revenues, net income, or earnings before (A) interest, (B) taxes, (C)
depreciation and/or (D) amortization, of Foot Locker (or a subsidiary,
division, or other operational unit of Foot Locker); 















	
 

	
 

	
 


	
 

	
(i)

	
the
attainment of certain target levels of, or a percentage increase in,
after-tax or pre-tax return on shareholders’ equity of Foot Locker (or any
subsidiary, division or other operational unit of Foot Locker); or 


	
 

	
 

	
 


	
 

	
(j)

	
the
attainment of a certain target level of, or reduction in, selling, general
and administrative expense as a percentage of revenue of Foot Locker (or any
subsidiary, division or other operational unit of Foot Locker). 


	
 

	
 

	
 


	
2.

	
To the extent
permitted under Section 162(m) of the Code, the Committee may, in its sole
discretion, also exclude, or adjust to reflect, the impact of an event or
occurrence which the Committee determines should be appropriately excluded or
adjusted, including:


	
 

	
 

	
 


	
 

	
(a)

	
restructurings,
discontinued operations, extraordinary items or events, and other unusual or
non-recurring charges as described in Accounting Principles Board Opinion No.
30 and/or management’s discussion and analysis of financial condition and
results of operations appearing or incorporated by reference in the Company’s
Form 10-K for the applicable year;


	
 

	
 

	
 


	
 

	
(b)

	
an event
either not directly related to the operations of the Company or not within
the reasonable control of the Company’s management; or 


	
 

	
 

	
 


	
 

	
(c)

	
a change in
tax law or accounting standards required by generally accepted accounting
principles. 


	
 

	
 

	
 


	
3.

	
Performance
goals may also be based upon individual Participant performance goals, as
determined by the Committee, in its sole discretion. 


	
 

	
 

	
 


	
4.

	
In addition,
such Performance Goals may be based upon the attainment of specified levels
of Company (or subsidiary, division, other operational unit or administrative
department of the Company) performance under one or more of the measures
described above relative to the performance of other corporations. To the
extent permitted under Section 162(m) of the Code, but only to the extent
permitted under Section 162(m) of the Code (including, without limitation,
compliance with any requirements for shareholder approval), the Committee
may: 


	
 

	
 

	
 


	
 

	
(a)

	
designate
additional business criteria on which the performance goals may be based; or 


	
 

	
 

	
 


	
 

	
(b)

	
adjust,
modify or amend the aforementioned business criteria.