**Exhibit 10.13**EMPLOYMENT AGREEMENT     This EMPLOYMENT AGREEMENT (“Agreement”) is made and entered into as of August 28, 2006, by andbetween BAKERS FOOTWEAR GROUP, INC., a Missouri corporation (the “Company”), and Lawrence L.Spanley, Jr. (“Employee”).W I T N E S S E T H :     WHEREAS, the Company desires to retain the services of Employee as Chief Financial Officer andExecutive Vice President of the Company; and     WHEREAS, the Company and Employee desire to enter into this Agreement to set forth the termsand conditions of the employment relationship between the Company and Employee.     NOW, THEREFORE, in consideration of the mutual premises contained in this Agreement, and othergood and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, theparties agree as follows:     1. Term. Employee’s term of employment (the “Employment Term”) under this Agreementshall be one (1) year, commencing on August 25, 2006, and shall continue for a period through andincluding August 24, 2007, and shall automatically renew for successive one (1) year terms, unless(a) either party notifies the other in writing of its or his intention not to extend Employee’sEmployment Term at least sixty (60) calendar days prior to the end of the then Employment Term, or(b) the Employment Term is earlier terminated pursuant to the terms and conditions set forth inthis Agreement.     2. Duties. Employee shall perform all duties incident to the position of ChiefFinancial Officer/Executive Vice President as well as any other duties as may from time to time beassigned by the Chairman and Chief Executive Officer of the Company or his designee, and
 

 
agrees to abide by all By-laws, policies, practices, procedures or rules of the Company. Employeemay be reassigned or transferred to another management position, as designated by the Chairman andChief Executive Officer of the Company, which may or may not provide the same level ofresponsibility as the initial assignment, in accordance with the terms and conditions of thisAgreement.     3. Exclusive Services and Best Efforts. Employee agrees to devote his best efforts,energies and skill to the discharge of the duties and responsibilities attributable to hisposition, and to this end, he will devote his full time and attention exclusively to the businessand affairs of the Company. Employee also agrees that he shall not take personal advantage of anybusiness opportunities that arise during his employment and that may benefit the Company. Allmaterial facts regarding such opportunities must be promptly reported to the Chairman and ChiefExecutive Officer for consideration by the Company.     4. Base Salary. During the Employment Term, the Company shall pay Employee a salary,at a rate per annum to be determined from time to time by the Compensation Committee of the Boardof Directors, but at no time shall it be less than $100,000 per annum, payable in equalinstallments at such payment intervals as are the usual custom of the Company, but not less oftenthan monthly.     5. Bonus. Employee shall be eligible to participate in the Company Executive BonusPlan (the “Plan”) on the same basis as other participants at his level and pursuant to the terms ofthe Plan in effect on the date eligibility for a bonus is determined.     6. Benefit Plans. During the Employment Term and as otherwise provided herein,Employee shall be entitled to participate in any and all employee welfare and health benefit plans(including, but not limited to, medical insurance, dental insurance, and disability insuranceplans) and other employee benefit plans, including, but not limited to, the Company 401(k) plan,
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established by the Company from time to time for the benefit of all executives of the Company.Employee shall be entitled to paid vacation from work in accordance with the terms of the Company’svacation policy. Employee shall be required to comply with the conditions attendant to coverage bysuch plans and policies and shall comply with and be entitled to benefits only in accordance withthe terms and conditions of such plans and policies as they may be amended from time to time.Nothing herein contained shall be construed as requiring the Company to establish or continue anyparticular benefit plan in discharge of its obligations under this Employment Agreement.     7. Deduction from Salary and Benefits. The Company may withhold from any salary orbenefits payable to Employee all federal, state, local and other taxes and other amounts aspermitted or required pursuant to law or legal compulsion.     8. Reimbursement of Business Expenses. Employee shall be paid or reimbursed for allreasonable, ordinary and necessary business expenses incurred by Employee in the performance of hisresponsibilities and the promotion of the Company’s businesses, including any air travel, lodging,and automobile and related travel expenses. Employee shall submit to the Company periodicstatements of all expenses so incurred. Subject to such audits as the Company may deem necessary,the Company shall reimburse Employee the full amount of any such expenses advanced by him in theordinary course of business.     9. Change of Control. (a) In the event that (i) there is a Change of Control of theCompany, and (ii) such Change of Control results in (a) a material diminution of the nature andstatus of Employee’s duties and responsibilities or (b) the termination of Employee’s employmentwithout cause, Employee shall receive an aggregate payment in one lump sum within thirty (30) daysof such termination, totaling an amount equal to twelve (12) months of the Employee’s Base Salaryin effect at the time of Employee’s termination.
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          (b) For the purpose of this Agreement, a “Change of Control” shall mean there has been: (i) Asale by the stockholders of the Company of more than 50% of either the then outstanding shares ofcommon stock or the combined voting power of the Company’s then outstanding voting securitiesentitled to vote generally in the election of directors; (ii) A sale of all or substantially all ofthe assets of the Company; or (iii) A relocation of the Company’s home office to a location morethan 50 miles from its current location; or (iv) A reorganization, merger or consolidation,resulting in the stockholders of the Company immediately prior to such reorganization, merger orconsolidation, immediately thereafter owing, directly or indirectly, less than 50% of the combinedvoting power entitled to vote generally in the election of directors of the reorganized, merged orconsolidated company. Any transaction referred to in this paragraph must be to a party not relatedto a shareholder for the same to constitute a Change of Control.     10. Death. The Employment Term shall terminate on the date of Employee’s death, inwhich event Employee’s salary and benefits owing to Employee through the date of Employee’s deathshall be paid to his estate. Employee’s estate will not be entitled to any other compensationunder this Agreement.     11. Disability. If, during the Employment Term, in the opinion of the Company,Employee, because of physical or mental illness or incapacity, shall become unable to performsubstantially all of the duties and services required of him under this Agreement for a period ofsixty (60) days in the aggregate during any twelve-month period, the Company may, upon at least ten(10) days’ prior written notice given at any time after the expiration of such sixty (60) dayperiod, notify Employee of its intention to terminate the Employment Term under this Agreement asof the date set forth in the notice. In case of such termination, Employee shall be entitled toreceive salary, benefits and reimbursable expenses owing to Employee through the date oftermination. If the Employee is disabled as defined in the Company’s long-term
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disability plan and is still a valid member of the Company’s long-term disability plan, theEmployee shall be entitled to receive salary, benefits and reimbursable expenses owing to Employeeuntil Employee’s long-term disability coverage begins. Under no circumstances shall the Companypay more than six (6) months salary under these conditions. The Company shall have no furtherobligation or liability to Employee.     12. Termination For Cause. (a) The Company may immediately terminate the EmploymentTerm under this Agreement for cause. Upon such termination, the Company shall be released from anyand all further obligations under this Agreement, except for accrued salary and benefits owing toEmployee through the effective date of the termination of the Employment Term. Employee’s otherobligations under this Agreement, including but not limited to those under Paragraph 14(Non-Competition and Confidential Information) and Paragraph 16 (Other Post-EmploymentObligations), shall continue pursuant to the terms and conditions of this Agreement.          (b) For the purposes of this Agreement, “cause” shall include, without limitation, thefollowing: (1) failure or neglect by Employee to perform the duties of theEmployee’s position or meet the Company’s performance expectations;  (2) failure of Employee to obey orders given by the Company orsupervisors;  (3) misconduct in connection with the performance of any ofEmployee’s duties, including, without limitation, misappropriation of funds orproperty of the Company, securing or attempting to secure personally any profitin connection with any transaction entered into on behalf of the Company,misrepresentation to the Company, or any violation of law or regulations onCompany premises or while in the Company’s employ or to which the Company issubject;  (4) commission by Employee of an act involving moral turpitude,dishonesty, theft or unethical business conduct, or conduct that impairs orinjures the reputation of, or harms, the Company;  (5) disloyalty by Employee, including, without limitation, aiding acompetitor;
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 (6) failure by Employee to devote his full time and best efforts tothe Company’s business and affairs;  (7) failure by Employee to work exclusively for the Company;  (8) failure to fully cooperate in any investigation by the Company;  (9) any breach of this Agreement or Company rules;  (10) any other act of misconduct by Employee; or  (11) the elimination of Employee’s position.          (c) If the Company terminates the Employment Term under this Agreement for cause as providedin Paragraph 12(b)(11) above, Employee shall receive the equivalent of twelve (12) months ofEmployee’s annual salary, less deductions required by law, payable on a monthly basis, if, and onlyif, Employee signs a valid general release of all claims against the Company in a form provided bythe Company.     13.Expiration of Employment Agreement. If pursuant to Paragraph 1(a), the Company notifies the Employee of its intention not to extend the Employee’s Employment Term, at theexpiration of the Employee Employment term, the employee shall receive the equivalent of four (4)months of employee’s annual salary, less deductions required by law, payable on a monthly basis,if, and only if, Employee signs a valid general release of all claims against the Company in a formprovided by the Company.     14. Termination Without Cause. In the event of a Change of Control, as that term isdefined in Paragraph 9, Employee’s Employment Term maybe terminated without cause upon thirty (30)days written notice. Upon such termination, the Company shall be released from any and all furtherobligations under this Agreement, except that the Company shall be obligated to pay Employee (i)his salary and benefits owing to Employee through the day on which Employee’s employment isterminated, and (ii) the amount described in Paragraph 9. Any relocation of the Company’s homeoffice location to more than 50 miles from its current location
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shall entitle the Employee to six (6) months severance. Employee’s obligations under thisAgreement, including but not limited to those under Paragraphs 15 and 17, shall continue pursuantto the terms and conditions of this Agreement.     15. Non-Competition and Confidential Information.           (a) Non-Competition. The Company does business throughout the UnitedStates. The entities listed on Exhibit A, attached hereto and incorporated herein by reference,are competitors of the Company that also do business throughout the United States. During theEmployment Term and for a period of twelve (12) months after the termination for any reason ofEmployee’s employment with the Company, Employee will not, without the prior written consent of theChairman and CEO of the Company or Board, if Employee is then the Chairman and CEO, in any manner,directly or indirectly, either as an employee, owner, partner, consultant, shareholder, director orofficer, for himself or in behalf of any person, firm, partnership, entity or corporation, workfor, become employed by or interested directly or indirectly in, or in any other way becomeemployed by or interested directly or indirectly in, or in any other way become associated with,any of the entities listed in Exhibit A or any of their subsidiaries or affiliated or relatedentities, or any of their successors. The Board shall have the right to modify, add to, or deletefrom the list set forth in Exhibit A, and may do so from time to time until thirty (30) days afterthe end of the initial or any succeeding Employment Term, by written notice pursuant to Paragraph23 of this Agreement. The aforementioned twelve (12) month time period shall be extended for a timeperiod equal to the time period during which a violation of Paragraph 15(a) exists.          (b) Confidentiality. Employee acknowledges that he will have access to certainproprietary and confidential information and trade secrets (“Confidential Information”) of theCompany, including, but not limited to, Company store volume data, sales projections, profit data,lease terms, marketing and advertising strategies and plans, product information, cost information,and financial information of the Company. Employee will not use or disclose 
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any Confidential Information during the Employment Term or thereafter other than in connectionwith performing Employee’s services for the Company in accordance with this Agreement.          (c) Enforcement. (1) Employee agrees that the restrictions set forth in thisParagraph are reasonable and necessary to protect the Company’s goodwill and other legitimatebusiness interests. If any of the covenants set forth herein are deemed to be overbroad orunenforceable the parties contemplate that such provisions shall be modified to make themenforceable to the fullest extent permitted by law.               (2) In the event of a breach or threatened breach by Employee of any of the provisions of thisParagraph, (i) Employee acknowledges that the Company will be irreparably harmed and that moneydamages may be an insufficient remedy to the Company; and (ii) Employee shall pay all of theCompany’s costs and expenses incurred in enforcing this Agreement, whether or not litigation iscommenced. Employee acknowledges that enforcement of the provisions of this Paragraph by way ofinjunctive relief would not prevent Employee from earning a livelihood.          (d) The provisions of this Paragraph shall survive the termination of Employee’s employment,regardless of the reason for the termination. The provisions of this Paragraph shall be deemedindependent of the other provisions of this Agreement and shall be enforceable in all events,notwithstanding the termination of Employee’s employment or even a breach by the Company of anyprovision of this Agreement.     16. Representations and Warranties of Employee. Employee hereby represents andwarrants to the Company as follows: (a) Employee’s execution and delivery of this Agreement andthe performance of his obligations hereunder will not violate or be in conflict with any fiduciaryor other duty, instrument, agreement, document, arrangement or other understanding to whichEmployee is a party or by which he is or may be bound or subject; and
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(b) Employee is not a party to any instrument, agreement, document, arrangement or otherunderstanding with any person (other than the Company) requiring or restricting the use ordisclosure of any confidential information or the provision of any employment, consulting or otherservices.     17. Other Post-Employment Obligations.          (a) Company Property. All records, files, lists, including computer generated lists,documents, computers, computer software programs, equipment, telephones, telephone numbers, andsimilar items relating to the Company’s business that Employee shall prepare or receive from theCompany shall remain the Company’s sole and exclusive property. Upon termination of thisAgreement, Employee shall promptly return to the Company all property of the Company in hispossession. Employee further represents that he will not copy or cause to be copied, print out orcause to be printed out any software, documents or other materials originating with or belonging tothe Company. Employee additionally represents that, upon termination of his employment with theCompany, he will not retain in his possession any such software, documents or other materials.          (b) Cooperation. Employee agrees that both during and after his employment he shall,at the request of the Company, render all assistance and perform all lawful acts that the Companyconsiders necessary or advisable in connection with any litigation involving the Company or anydirector, officer, employee, shareholder, agent, representative, consultant, customer or vendor ofthe Company.          (c) The provisions of this Paragraph shall survive the termination of Employee’s employment,regardless of the reason for the termination. The provisions of this Paragraph shall be deemedindependent of the other provisions of this Agreement and shall be enforceable in all events,notwithstanding the termination of Employee’s employment or even a breach by the Company of anyprovision of this Agreement.
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     18. Arbitration. Any and all disputes arising under or relating to theinterpretation or application of this Agreement or concerning Employee’s employment with theCompany or termination thereof, including, but not limited to, claims under Title VII of the CivilRights Act of 1964, 42 U.S.C. Section 1981, the Age Discrimination in Employment Act, the EmployeeRetirement Income Security Act, the Family and Medical Leave Act, the Missouri Human Rights Act,the Missouri Service Letter Law, and any other federal, state, or local law, and the common law ofcontract or tort, shall be subject to arbitration in St. Louis County, Missouri, under the thenexisting rules of the American Arbitration Association. Judgment upon the award rendered may beentered in any court of competent jurisdiction. Nothing contained in this Paragraph shall limitthe right of the Company to enforce by court injunction or other equitable relief the Employee’sobligations under this Agreement, including but not limited to those under Paragraphs 15 and 17 ofthis Agreement.     19. Governing Law. This Agreement shall be governed by, construed and enforced inaccordance with the laws of the State of Missouri, without regard to the conflicts of law rulesthereof.     20. Jurisdiction. Each of the parties hereto hereby irrevocably consents and submitsto the jurisdiction of the Circuit Court of St. Louis County, Missouri, and of the United StatesDistrict Court for the Eastern District of Missouri in connection with any suit, action or otherproceeding concerning the interpretation or application of this Agreement, Employee’s employmentwith the Company or termination thereof, or enforcement of Paragraphs 15 or 17 of this Agreement.Employee waives and agrees not to assert any defense that the court lacks jurisdiction, that venueis improper, that the forum is inconvenient, or otherwise.     21. Successors and Assigns. Neither this Agreement, nor any of Employee’s rights,powers, duties or obligations hereunder, may be assigned by Employee. This Agreement shall
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be binding upon and inure to the benefit of Employee and his heirs and legal representatives andthe Company and its successor and assigns.     22. Waiver. Any waiver or consent from the Company with respect to any term orprovision of this Agreement or any other aspect of Employee’s conduct or employment shall beeffective only in the specific instance and for the specific purpose for which given and shall notbe deemed, regardless of frequency given, to be a further or continuing waiver or consent. Thefailure or delay of the Company at any time or times to require performance of, or to exercise anyof its powers, rights or remedies with respect to, any term or provision of this Agreement or anyother aspect of Employee’s conduct or employment shall not in any manner (except as otherwiseexpressly provided herein) affect the Company’s right at a later time to enforce any such term orprovision.     23. Notices. All notices under this Agreement must be in writing and shall be deemedto have been duly given if delivered by hand or mailed by first class mail, registered mail, returnreceipt requested, postage and registry fees prepaid, to the applicable party and addressed asfollows:           (a) The Company:Bakers Footwear Group, Inc.