Document:

EXHIBIT 10.7 (c)
                                                                  EXECUTION COPY

                               AMENDMENT Number 3 dated as of August 3, 1999, to
                        the Credit Agreement dated as of September 18, 1997, as
                        amended (the "Credit Agreement"), among FOOTSTAR, INC.
                        (the "Company"), the BANKS party thereto, THE BANK OF
                        NEW YORK, as Issuing Bank, and MORGAN GUARANTY TRUST
                        COMPANY OF NEW YORK, as Administrative Agent and
                        Swingline Lender. Capitalized terms used herein and not
                        defined herein shall have the meanings assigned thereto
                        in the Credit Agreement.

      A. The Company, the Banks and the Agent have heretofore entered into the
Credit Agreement and the Amendments thereto dated as of April 30, 1998 and
October 23, 1998.

      B. The Company, wishes, and the undersigned Banks and the Agent are
willing, upon the terms and subject to the conditions set forth herein, to amend
Section 5.15 of the Credit Agreement as set forth herein.

      Accordingly, in consideration of the mutual agreements herein contained
and other good and valuable consideration, receipt of which is hereby
acknowledged, the Company, the Banks and the Agent hereby agree as follows:

      SECTION 1. Amendment of the Credit Agreement. Section 5.15 of the Credit
Agreement is hereby amended as of the Amendment Effective Date (as defined
below) by replacing the amount "$205,000,000" in clause (d) thereof with the
amount "$305,000,000."

      SECTION 2. Representations and Warranties. The Company hereby represents
and warrants on and as of the Amendment Effective Date that (i) the
representations and warranties of the Company contained in the Credit Agreement
and the other Loan Documents are true in all material respects and (ii) no
Default has occurred and is continuing.

      SECTION 3. Effectiveness. This Amendment shall become effective on the
date (the "Amendment Effective Date") of receipt by the Agent (or its counsel)
of counterparts hereof signed by the Company and the Required Banks or, in the
case of any such party as to which an executed counterpart shall not have been
received, receipt by the Agent in form satisfactory to it of telegraphic, telex
or other written confirmation from such party of execution of a counterpart
hereof by such party.

      SECTION 4. New York Law. THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

      SECTION 5. Counterparts. This Amendment may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.

<PAGE>

                                                                               2

      SECTION 6. Headings. The headings of this Amendment are for convenience of
reference only and are not part of this Amendment and are not to be taken into
consideration in interpreting this Amendment.

      SECTION 7. Effect of Amendment. Unless and until this Amendment becomes
effective, the Credit Agreement shall continue in effect on the terms thereof in
effect on the date hereof.

      IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed by their respective authorized officers as of the day and year
first above written.

                                     FOOTSTAR, INC.,

                                     By:

                                     /s/ MARC A. COMITO
                                     --------------------------
                                     Name:  Marc A. Comito
                                     Title: Assistant Treasurer

                                     MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
                                     individually and as
                                     Administrative Agent and
                                     Swingline Lender,

                                     By:

                                     /s/ SOVONNA L. DAY
                                     --------------------------
                                     Name:  Sovonna L. Day
                                     Title: Vice President

                                     THE BANK OF NEW YORK,
                                     individually and as Issuing Bank,

                                     By:

                                     /s/ HOWARD F. BASCOM, JR.
                                     --------------------------
                                     Name:  Howard F. Bascom, Jr.
                                     Title: Vice President

                                     THE ASAHI BANK, LTD.,

                                     By:

                                     /s/ DOUGLAS PRICE
                                     --------------------------
                                     Name:  Douglas Price
                                     Title: Senior Vice President

<PAGE>

                                                                               3

                                     BANK OF AMERICA NATIONAL TRUST & SAVINGS
                                     ASSOCIATION,

                                     By:

                                     /s/ TIMOTHY H. SPANOS
                                     --------------------------
                                     Name:  Timothy H. Spanos
                                     Title: Senior Vice President

                                     BANKBOSTON, N.A.,

                                     By:

                                     /s/ NANCY E. FULLER
                                     --------------------------
                                     Name:  Nancy E. Fuller
                                     Title: Director

                                     CIBC, INC.

                                     By:

                                     /s/ GERALD GIRARDI
                                     --------------------------
                                     Name:  Gerald Girardi
                                     Title: Executive Director

                                     CREDIT LYONNAIS NEW YORK BRANCH,

                                     By:

                                     /s/ DEBORAH E. BRADLEY
                                     --------------------------
                                     Name:  Deborah E. Bradley
                                     Title: First Vice President

                                     CREDIT SUISSE FIRST BOSTON,

                                     By:

                                     /s/ CHRIS T. HORGAN
                                     --------------------------
                                     Name:  Chris T. Horgan
                                     Title: Vice President

                                     By:

                                     /s/ KRISTIN LEPRI
                                     --------------------------
                                     Name:  Kristin Lepri
                                     Title: Associate

<PAGE>

                                                                               4

                                     FLEET NATIONAL BANK,

                                     By:

                                     /s/ THOMAS J. BULLARD
                                     --------------------------
                                     Name:  Thomas J. Bullard
                                     Title: Vice President

                                     FIRST UNION NATIONAL BANK,

                                     By:

                                     /s/ IRENE ROSEN MARKS
                                     --------------------------
                                     Name:  Irene Rosen Marks
                                     Title: Vice President

                                     NATIONAL AUSTRALIA BANK LIMITED,

                                     By:

                                     /s/ BILL SCHMID
                                     --------------------------
                                     Name:  Bill Schmid
                                     Title: Vice President

                                     PNC BANK, NATIONAL ASSOCIATION,

                                     By:

                                     /s/ MICHAEL RICHARDS
                                     --------------------------
                                     Name:  Michael Richards
                                     Title: Vice President

                                     THE SAKURA BANK, LTD.,

                                     By:

                                     /s/ YOSHIKAZU NAGURA
                                     --------------------------
                                     Name:  Yoshikazu Nagura
                                     Title: Vice President

<PAGE>

                                                                               5

                                     STANDARD CHARTERED BANK,

                                     By:

                                     --------------------------
                                     Name:
                                     Title:

                                     By:

                                     --------------------------
                                     Name:
                                     Title:

                                     UNION BANK OF CALIFORNIA, N.A.,

                                     By:

                                     --------------------------
                                     Name:
                                     Title:

7958sEXHIBIT 10.11

                                 FOOTSTAR, INC.

--------------------------------------------------------------------------------

                           2000 Equity Incentive Plan

--------------------------------------------------------------------------------

      1. Purpose. The purpose of this 2000 Equity Incentive Plan (the "Plan") is
to assist  Footstar,  Inc.,  a Delaware  corporation  (the  "Company"),  and its
subsidiaries in attracting,  retaining,  and rewarding  high-quality  employees,
enabling  such  persons to acquire or  increase a  proprietary  interest  in the
Company in order to strengthen  the mutuality of interests  between such persons
and the Company's stockholders,  and providing such persons with annual and long
term  performance  incentives to expend their maximum efforts in the creation of
shareholder  value.  The Plan is intended to be classified and administered as a
"broadly-based"  plan  within the  meaning of Section  312 of the New York Stock
Exchange Listing Rules as in effect on the Effective Date.

      2.  Definitions.  For purposes of the Plan,  the following  terms shall be
defined as set forth  below,  in  addition  to such  terms  defined in Section 1
hereof:

            (a)  "Award"  means  any  Option,   SAR  (including   Limited  SAR),
      Restricted Stock,  Deferred Stock,  Stock granted as a bonus or in lieu of
      another award, Dividend Equivalent,  Other Stock-Based Award,  Performance
      Award or Annual Incentive Award, together with any other right or interest
      granted to an Eligible Person under the Plan.

            (b) "Beneficiary"  means the person,  persons,  trust or trusts
      whom or which have been  designated  by a  Participant  in his or her most
      recent written beneficiary designation filed with the Committee to receive
      the benefits specified under the Plan upon such Participant's  death or to
      whom or which Awards or other rights are  transferred if and to the extent
      permitted  under  Section 10(b) hereof.  If, upon a  Participant's  death,
      there is no designated  Beneficiary or surviving  designated  Beneficiary,
      then the term Beneficiary means person,  persons, trust or trusts entitled
      by will or the laws of descent and distribution to receive such benefits.

            (c)  "Beneficial  Owner,"   "Beneficially  Owning"  and  "Beneficial
      Ownership"  shall have the  meanings  ascribed to such terms in Rule 13d-3
      under the Exchange Act and any successor to such Rule.

            (d) "Board" means the Company's Board of Directors.

<PAGE>

            (e)  "Change in  Control"  means  Change in Control as defined  with
      related terms in Section 9 of the Plan.

            (f)  "Change  in  Control  Price"  means the  amount  calculated  in
      accordance with Section 9(c) of the Plan.

            (g) "Code" means the Internal  Revenue Code of 1986, as amended from
      time to time,  including  regulations  thereunder and successor provisions
      and regulations thereto.

            (h)  "Committee"  means the  Compensation  Committee of the Board or
      such other Committee designated by the Board to administer the Plan.

            (i) "Corporate Transaction" means a Corporate Transaction as defined
      in Section 9(b) of the Plan.

            (j) "Deferred  Stock" means a right,  granted to an Eligible  Person
      under Section 6(e) hereof, to receive Stock, cash or a combination thereof
      at the end of a specified deferral period.

            (k)  "Dividend  Equivalent"  means a right,  granted to an  Eligible
      Person under Section 6(g), to receive cash,  Stock,  other Awards or other
      property  equal in value to  dividends  paid with  respect to a  specified
      number of shares of Stock, or other periodic payments.

            (l) "Effective Date" means the date set forth in Section 10(k)

            (m) "Eligible Person" means each full-time  salaried employee of the
      Company,  except that such term shall not include any individual who is an
      executive  officer  who  would  be  designated  at  such  time  as a named
      executive  officer in the proxy  statement to be filed with the Securities
      and Exchange  Commission  in  connection  with the annual  meeting for the
      applicable year.

            (n)  "Exchange  Act" means the  Securities  Exchange Act of 1934, as
      amended  from  time to time,  including  rules  thereunder  and  successor
      provisions and rules thereto.

            (o) "Fair Market Value" means the fair market value of Stock, Awards
      or other  property as  determined  by the  Committee  or under  procedures
      established  by  the  Committee.   Unless  otherwise   determined  by  the
      Committee,  the Fair  Market  Value of Stock as of any given date shall be
      the  closing  sale price per share  reported on a  consolidated  basis for
      stock listed on the principal  stock  exchange or market on which Stock is
      traded on the date as of which such value is being determined or, if there
      is no sale on that date, then on the last previous day on which a sale was
      reported.

            (p)  "Incumbent  Board"  means the  Incumbent  Board as  defined  in
      Section 9(b) of the Plan.

                                       2
<PAGE>

            (q) "Limited SAR" means a right granted to an Eligible  Person under
      Section 6(c) hereof.

            (r)  "Option"  means a right,  granted to an Eligible  Person  under
      Section  6(b)  hereof,  to purchase  Stock or other  Awards at a specified
      price during specified time periods.

            (s) "Other  Stock-Based  Awards" means Awards granted to an Eligible
      Person under Section 6(h) hereof.

            (t)  "Participant"  means an Eligible Person who has been granted an
      Award under the Plan, which Award remains outstanding.

            (u) "Person" shall have the meaning ascribed to such term in Section
      3(a)(9) of the Exchange Act and used in Sections  13(d) and 14(d) thereof,
      and shall include a "group" as defined in Section 13(d) thereof.

            (v)  "Restricted  Stock" means Stock  granted to an Eligible  Person
      under Section 6(d) hereof, that is subject to certain  restrictions and to
      a risk of forfeiture.

            (w) "Rule  16b-3"  and "Rule  16a-1(c)(3)"  mean Rule 16b-3 and Rule
      16a-1(c)(3), as from time to time in effect and applicable to the Plan and
      Participants,  promulgated by the Securities and Exchange Commission under
      Section 16 of the Exchange Act.

            (x)  "Stock"  means  the  Company's  Common  Stock  and  such  other
      securities as may be substituted (or  resubstituted) for Stock pursuant to
      Section 10(c) hereof.

            (y) "Stock Appreciation Rights" or "SAR" means a right granted to an
      Eligible Person under Section 6(c) hereof.

      3. Administration.

      (a)  Authority of the  Committee.  The Plan shall be  administered  by the
Committee.  The  Committee  shall  have full and final  authority,  in each case
subject to and consistent  with the  provisions of the Plan, to select  Eligible
Persons to become  Participants,  grant Awards,  determine the type,  number and
other  terms and  conditions  of, and all other  matters  relating  to,  Awards,
prescribe Award  agreements  (which need not be identical for each  Participant)
and rules and  regulations  for the  administration  of the Plan,  construe  and
interpret the Plan and Award agreements and correct defects, supply omissions or
reconcile   inconsistencies  therein,  and  to  make  all  other  decisions  and
determinations  as the  Committee  may  deem  necessary  or  advisable  for  the
administration of the Plan.

      (b)  Manner of  Exercise  of  Committee  Authority.  The  Committee  shall
exercise sole and exclusive  discretion on any matter relating to a Participant,
including, without limitation,  actions deemed necessary to

                                       3
<PAGE>

ensure in order that transactions by such Participant shall be exempt under Rule
16b-3  under the  Exchange  Act.  Any  action of the  Committee  shall be final,
conclusive and binding on all persons,  including the Company, its subsidiaries,
Participants,  Beneficiaries,  transferees  under  Section 10(b) hereof or other
persons  claiming rights from or through a Participant,  and stockholders of the
Company.  The express  grant of any  specific  power to the  Committee,  and the
taking of any action by the  Committee,  shall not be  construed as limiting any
power or authority of the  Committee.  The Committee may delegate to officers or
managers of the Company or any subsidiary, or committees thereof, the authority,
subject  to  such  terms  as the  Committee  shall  determine,  (i)  to  perform
administrative  functions,  and (ii) to  perform  such  other  functions  of the
Committee as the  Committee may  determine,  to the extent  performance  of such
functions will not result in the loss of an exemption under Rule 16b-3 otherwise
available,  for  transactions  by  such  persons,  in each  case  to the  extent
permitted under applicable law. The Committee may appoint agents to assist it in
administering the Plan.

      (c)  Limitation of Liability.  The Committee and each member thereof shall
be entitled to, in good faith,  rely or act upon any report or other information
furnished to him or her by any executive  officer,  other officer or employee of
the Company or a subsidiary, the Company's independent auditors,  consultants or
any other agents  assisting in the  administration  of the Plan.  Members of the
Committee  and any officer or employee of the Company or a subsidiary  acting at
the direction or on behalf of the Committee  shall not be personally  liable for
any action or  determination  taken or made in good  faith  with  respect to the
Plan,  and shall,  to the extent  permitted  by law,  be fully  indemnified  and
protected by the Company with respect to any such action or determination.

      (d) NYSE Compliance.  The Plan will be administered in accordance with the
"broad based" plan  requirements  of Section 312 of the New York Stock  Exchange
Listing Rules as in effect on the Effective Date.

      4. Stock Subject to Plan.

      (a) Overall Number of Shares Available for Delivery. Subject to adjustment
as  provided  in  Section  10(c)  hereof,  the  total  number of shares of Stock
reserved and  available  for delivery in  connection  with Awards under the Plan
shall be two (2)  million.  Any  shares  of Stock  delivered  under the Plan may
consist,  in whole or in part,  of  authorized  and unissued  shares or treasury
shares.

      (b) Application of Limitation to Grants of Awards. No Award may be granted
if the number of shares of Stock to be delivered in  connection  with such Award
or, in the case of an Award relating to shares of Stock but  settleable  only in
cash (such as cash-only SARs), the number of shares to which such Award relates,
exceeds the number of shares of Stock  remaining  available under the Plan minus
the  number  of  shares  of Stock  issuable  in  settlement  of or  relating  to
then-outstanding  Awards. The Committee may adopt reasonable counting procedures
to ensure appropriate  counting,  avoid double counting (as, for example, in the
case of tandem or  substitute  awards)  and make  adjustments  if the  number of
shares of Stock actually  delivered differs from the number of shares previously
counted in connection with an Award.

                                       4
<PAGE>

      (c)  Availability  of Shares Not Delivered  Under Awards.  Shares of Stock
subject to an Award under the Plan that is canceled, expired, forfeited, settled
in cash or  otherwise  terminated  without  a  delivery  of such  shares  to the
Participant,  including  (i) the  number of shares  withheld  in  payment of any
exercise or purchase price of an Award or taxes relating to Awards, and (ii) the
number of shares  surrendered in payment of any exercise or purchase price of an
Award or taxes  relating to any Award,  will again be available for Awards under
the Plan, except that if any such shares could not again be available for Awards
to a particular  Eligible  Person under any applicable  law or regulation,  such
shares shall be available exclusively for Awards to Eligible Persons who are not
subject to such limitation.

      5. Eligibility. Awards may be granted under the Plan only to Eligible
Persons.

      6. Specific Terms of Awards.

      (a) General.  Awards may be granted on the terms and  conditions set forth
in this Section 6. In  addition,  the  Committee  may impose on any Award or the
exercise thereof, at the date of grant or thereafter (subject to Section 10(e)),
such additional terms and conditions,  not  inconsistent  with the provisions of
the Plan, as the Committee shall determine, including terms requiring forfeiture
of Awards in the event of termination of employment by the Participant and terms
permitting a Participant  to make  elections  relating to his or her Award.  The
Committee shall retain full power and discretion to accelerate, waive or modify,
at any time,  any term or condition of an Award that is not mandatory  under the
Plan.

      (b) Options.  The  Committee is  authorized  to grant  Options to Eligible
Persons on the following terms and conditions:

            (i)  Exercise   Price.   The  exercise  price  per  share  of  Stock
      purchasable under an Option shall be determined by the Committee, provided
      that such exercise price shall be not less than the Fair Market Value of a
      share of Stock on the date of  grant of such  Option  except  as  provided
      under Section 7(a) hereof.

            (ii) Time and Method of Exercise.  The Committee shall determine the
      time or times at which or the  circumstances  under which an Option may be
      exercised  in  whole  or  in  part  (including  based  on  achievement  of
      performance  goals and/or  future  service  requirements),  the methods by
      which such  exercise  price may be paid or deemed to be paid,  the form of
      such payment, including,  without limitation, cash, Stock, other Awards or
      awards  granted  under other plans of the  Company or any  subsidiary,  or
      other  property  (including  notes or  other  contractual  obligations  of
      Participants to make payment on a deferred  basis),  and the methods by or
      forms in which  Stock  will be  delivered  or  deemed to be  delivered  to
      Participants.

      (c) Stock Appreciation  Rights.. The Committee is authorized to grant SARs
to Eligible Persons on the following terms and conditions:

                                       5
<PAGE>

            (i) Right to Payment. An SAR shall confer on the Participant to whom
      it is granted a right to receive, upon exercise thereof, the excess of (A)
      the Fair Market  Value of one share of Stock on the date of exercise  (or,
      in the  case of a  Limited  SAR,  the  Fair  Market  Value  determined  by
      reference to the Change in Control  Price,  as defined  under Section 9(c)
      hereof),  over  (B)  the  grant  price  of the  SAR as  determined  by the
      Committee.

            (ii) Other Terms. The Committee shall determine at the date of grant
      or  thereafter,  the time or times at which  and the  circumstances  under
      which an SAR may be  exercised  in whole  or in part  (including  based on
      achievement of performance goals and/or future service requirements),  the
      method of exercise, method of settlement, form of consideration payable in
      settlement,  method by or forms in which Stock will be delivered or deemed
      to be delivered to Participants,  whether or not an SAR shall be in tandem
      or in combination with any other Award, and any other terms and conditions
      of any SAR.  Limited SARs that may only be exercised in connection  with a
      Change in Control or other  event as  specified  by the  Committee  may be
      granted on such terms,  not  inconsistent  with this Section  6(c), as the
      Committee may determine.  SARs and Limited SARs may be either freestanding
      or in tandem with other Awards.

      (d)  Restricted  Stock.  The Committee is  authorized to grant  Restricted
Stock to Eligible Persons on the following terms and conditions:

            (i) Grant and  Restrictions.  Restricted  Stock  shall be subject to
      such  restrictions  on  transferability,  risk  of  forfeiture  and  other
      restrictions,  if any, as the Committee may impose, which restrictions may
      lapse separately or in combination at such times, under such circumstances
      (including based on achievement of performance goals and/or future service
      requirements),  in such  installments  or otherwise,  as the Committee may
      determine  at the  date of  grant  or  thereafter.  Except  to the  extent
      restricted under the terms of the Plan and any Award agreement relating to
      the Restricted  Stock, a Participant  granted  Restricted Stock shall have
      all of the  rights  of a  stockholder,  including  the  right  to vote the
      Restricted  Stock and the right to receive  dividends  thereon (subject to
      any mandatory reinvestment or other requirement imposed by the Committee).
      During the restricted period  applicable to the Restricted Stock,  subject
      to Section 10(b) below, the Restricted Stock may not be sold, transferred,
      pledged,   hypothecated,   margined  or   otherwise   encumbered   by  the
      Participant.

            (ii)  Forfeiture.  Except as otherwise  determined by the Committee,
      upon termination of employment during the applicable  restriction  period,
      Restricted  Stock that is at that time  subject to  restrictions  shall be
      forfeited and  reacquired by the Company;  provided that the Committee may
      provide, by rule or regulation or in any Award agreement, or may determine
      in  any  individual  case,  that  restrictions  or  forfeiture  conditions
      relating  to  Restricted

                                       6
<PAGE>

      Stock  shall be waived  in whole or in part in the  event of  terminations
      resulting  from  specified  causes,  and the  Committee may in other cases
      waive in whole or in part the forfeiture of Restricted Stock.

            (iii)  Certificates  for Stock.  Restricted  Stock granted under the
      Plan may be evidenced in such manner as the Committee shall determine.  If
      certificates  representing  Restricted Stock are registered in the name of
      the Participant,  the Committee may require that such certificates bear an
      appropriate  legend  referring to the terms,  conditions and  restrictions
      applicable to such  Restricted  Stock,  that the Company  retain  physical
      possession of the certificates,  and that the Participant  deliver a stock
      power to the Company, endorsed in blank, relating to the Restricted Stock.

            (iv)  Dividends and Splits.  As a condition to the grant of an Award
      of Restricted  Stock,  the  Committee may require that any cash  dividends
      paid on a  share  of  Restricted  Stock  be  automatically  reinvested  in
      additional  shares of  Restricted  Stock or  applied  to the  purchase  of
      additional  Awards  under the Plan.  Unless  otherwise  determined  by the
      Committee,  Stock  distributed  in connection  with a Stock split or Stock
      dividend,  and other property distributed as a dividend,  shall be subject
      to  restrictions  and a risk  of  forfeiture  to the  same  extent  as the
      Restricted  Stock with  respect to which such Stock or other  property has
      been distributed.

      (e)  Deferred  Stock.  The  Committee is  authorized  to grant to Eligible
Persons  Deferred  Stock,  which  are  rights  to  receive  Stock,  cash,  or  a
combination  thereof at the end of a specified  deferral period,  subject to the
following terms and conditions:

            (i) Award and  Restrictions.  Satisfaction  of an Award of  Deferred
      Stock shall occur upon  expiration  of the deferral  period  specified for
      such Deferred  Stock by the Committee  (or, if permitted by the Committee,
      as elected by the  Participant).  In  addition,  Deferred  Stock  shall be
      subject to such  restrictions  (which may include a risk of forfeiture) as
      the  Committee may impose,  if any,  which  restrictions  may lapse at the
      expiration of the deferral period or at earlier specified times (including
      based  on  achievement   of   performance   goals  and/or  future  service
      requirements), separately or in combination, in installments or otherwise,
      as the  Committee  may  determine.  Deferred  Stock  may be  satisfied  by
      delivery of Stock,  cash equal to the Fair Market  Value of the  specified
      number of shares of Stock covered by the Deferred  Stock, or a combination
      thereof,  as  determined  by  the  Committee  at  the  date  of  grant  or
      thereafter.

            (ii)  Forfeiture.  Except as otherwise  determined by the Committee,
      upon  termination of employment  during the applicable  deferral period or
      portion thereof to which  forfeiture  conditions apply (as provided in the
      Award agreement evidencing the Deferred Stock), all Deferred Stock that is
      at that time subject to

                                       7
<PAGE>

      deferral (other than a deferral at the election of the Participant)  shall
      be  forfeited;  provided  that  the  Committee  may  provide,  by  rule or
      regulation or in any Award  agreement,  or may determine in any individual
      case,  that  restrictions  or forfeiture  conditions  relating to Deferred
      Stock  shall be waived  in whole or in part in the  event of  terminations
      resulting  from  specified  causes,  and the  Committee may in other cases
      waive in whole or in part the forfeiture of Deferred Stock.

            (iii)  Dividend  Equivalents.  Unless  otherwise  determined  by the
      Committee at date of grant,  Dividend  Equivalents on the specified number
      of shares of Stock  covered by an Award of Deferred  Stock shall be either
      (A) paid with respect to such Deferred Stock at the dividend  payment date
      in cash or in shares of  unrestricted  Stock  having a Fair  Market  Value
      equal to the amount of such  dividends,  or (B)  deferred  with respect to
      such Deferred Stock and the amount or value thereof  automatically  deemed
      reinvested in additional  Deferred Stock, other Awards or other investment
      vehicles,  as the Committee  shall  determine or permit the Participant to
      elect.

      (f)  Bonus  Stock and  Awards in Lieu of  Obligations.  The  Committee  is
authorized to grant Stock as a bonus,  or to grant Stock or other Awards in lieu
of Company  obligations  to pay cash or deliver other property under the Plan or
under other plans or  compensatory  arrangements,  provided that, in the case of
Participants  subject  to  Section 16 of the  Exchange  Act,  the amount of such
grants remains within the discretion of the Committee to the extent necessary to
ensure that  acquisitions  of Stock or other  Awards are exempt  from  liability
under Section 16(b) of the Exchange Act. Stock or Awards granted hereunder shall
be subject to such other terms as shall be determined by the Committee.

      (g) Dividend  Equivalents.  The Committee is authorized to grant  Dividend
Equivalents  to an Eligible  Person,  entitling  the Eligible  Person to receive
cash,  Stock,  other Awards,  or other property equal in value to dividends paid
with  respect  to a  specified  number of shares  of  Stock,  or other  periodic
payments.  Dividend  Equivalents may be awarded on a  free-standing  basis or in
connection  with  another  Award.   The  Committee  may  provide  that  Dividend
Equivalents shall be paid or distributed when accrued or shall be deemed to have
been reinvested in additional Stock, Awards, or other investment  vehicles,  and
subject to such restrictions on transferability and risks of forfeiture,  as the
Committee may specify.

      (h) Other  Stock-Based  Awards.  The Committee is  authorized,  subject to
limitations under applicable law, to grant to Eligible Persons such other Awards
that may be  denominated  or payable in, valued in whole or in part by reference
to, or otherwise  based on, or related to, Stock,  as deemed by the Committee to
be  consistent  with the purposes of the Plan,  including,  without  limitation,
convertible  or  exchangeable  debt  securities,  other  rights  convertible  or
exchangeable  into  Stock,  purchase  rights  for Stock,  Awards  with value and
payment  contingent  upon  performance  of  the  Company  or any  other  factors
designated by the Committee, and Awards valued by reference to the book value of
Stock  or  the  value  of  securities  of  or  the   performance   of  specified
subsidiaries.  The Committee  shall  determine the

                                       8
<PAGE>

      terms and conditions of such Awards.  Stock delivered pursuant to an Award
      in the nature of a purchase right granted under this Section 6(h) shall be
      purchased for such consideration, paid for at such times, by such methods,
      and in such forms,  including,  without  limitation,  cash,  Stock,  other
      Awards, or other property, as the Committee shall determine.  Cash awards,
      as an element of or supplement to any other Award under the Plan, may also
      be granted pursuant to this Section 6(h).

      7. Certain Provisions Applicable to Awards.

      (a) Stand-Alone, Additional, Tandem, and Substitute Awards. Awards granted
under the Plan may, in the discretion of the Committee,  be granted either alone
or in addition to, in tandem with, or in substitution or exchange for, any other
Award or any award granted under another plan of the Company, any subsidiary, or
any business entity to be acquired by the Company or a subsidiary,  or any other
right  of an  Eligible  Person  to  receive  payment  from  the  Company  or any
subsidiary.  Such additional,  tandem,  and substitute or exchange Awards may be
granted at any time.  If an Award is granted in  substitution  or  exchange  for
another Award or award,  the Committee shall require the surrender of such other
Award or award in  consideration  for the grant of the new Award.  In  addition,
Awards may be granted in lieu of cash  compensation,  including  in lieu of cash
amounts payable under other plans of the Company or any subsidiary, in which the
value  of  Stock  subject  to the  Award  is  equivalent  in  value  to the cash
compensation (for example,  Deferred Stock or Restricted Stock), or in which the
exercise  price,  grant price or purchase  price of the Award in the nature of a
right that may be exercised is equal to the Fair Market Value of the  underlying
Stock minus the value of the cash compensation surrendered (for example, Options
granted  with  an  exercise  price  "discounted"  by  the  amount  of  the  cash
compensation surrendered).

      (b) Term of Awards. The term of each Award shall be for such period as may
be determined by the Committee;  provided that in no event shall the term of any
Option or SAR exceed a period of ten (10) years from the date of grant.

      (c) Form and Timing of Payment  Under  Awards;  Deferrals.  Subject to the
terms of the Plan and any applicable Award agreement,  payments to be made to or
by the Company or a subsidiary  upon the exercise of an Option or other Award or
settlement  of an  Award  may be made  in  such  forms  as the  Committee  shall
determine,  including,  without  limitation,  cash, Stock, other Awards or other
property,  and may be made in a single payment or transfer, in installments,  or
on a deferred basis.  The settlement of any Award may be  accelerated,  and cash
paid in lieu of Stock in connection with such  settlement,  in the discretion of
the  Committee  or  upon  occurrence  of one (1) or more  specified  events  (in
addition  to a Change in  Control).  Installment  or  deferred  payments  may be
required by the Committee (subject to Section 10(e) of the Plan) or permitted at
the  election of the  Participant  on terms and  conditions  established  by the
Committee. Payments may include, without limitation,  provisions for the payment
or crediting of reasonable  interest on installment or deferred  payments or the
grant or  crediting  of  Dividend  Equivalents  or other  amounts  in respect of
installment or deferred payments denominated in Stock.

                                       9
<PAGE>

      (d)  Exemptions  from  Section  16(b)  Liability.  It is the intent of the
Company that this Plan comply in all respects with applicable provisions of Rule
16b-3 or Rule  16a-1(c)(3)  to the extent  necessary  to ensure that neither the
grant of any  Awards to nor  other  transaction  by an  Eligible  Person  who is
subject to Section 16 of the Exchange Act is subject to liability  under Section
16(b) thereof (except for transactions  acknowledged in writing to be non-exempt
by such  Participant).  Accordingly,  if any provision of this Plan or any Award
agreement  does  not  comply  with  the  requirements  of  Rule  16b-3  or  Rule
16a-1(c)(3) as then applicable to any such  transaction,  such provision will be
construed or deemed amended to the extent necessary to conform to the applicable
requirements of Rule 16b-3 or Rule  16a-1(c)(3) so that such  Participant  shall
avoid liability under Section 16(b) of the Exchange Act.

      (e)  Cancellation  and  Rescission of Awards.  Unless the Award  agreement
specifies otherwise, the Committee may cancel any unexpired, unpaid, or deferred
Awards at any time if the  Participant is not in compliance  with all applicable
provisions  of  the  Award  agreement  and  the  Plan  including  the  following
conditions:

            (i) A Participant  shall not render services for any organization or
      engage  directly or indirectly in any business  which,  in the judgment of
      the  Chief  Executive  Officer  of the  Company  or other  senior  officer
      designated by the Committee,  is or becomes  competitive with the Company.
      For  Participants  whose  employment has  terminated,  the judgment of the
      Chief  Executive  Officer  or  other  senior  officer  designated  by  the
      Committee   shall   be   based   on   the   Participant's   position   and
      responsibilities   while  employed  by  the  Company,   the  Participant's
      post-employment  responsibilities and position with the other organization
      or business,  the extent of past,  current and  potential  competition  or
      conflict between the Company and the other  organization or business,  the
      effect on the Company's stockholders, customers, suppliers and competitors
      of the Participant  assuming the  post-employment  position and such other
      considerations  as are  deemed  relevant  given the  applicable  facts and
      circumstances.  A Participant who has retired shall be free,  however,  to
      purchase as an investment or otherwise,  stock or other securities of such
      organization  or  business  so long as they are listed  upon a  recognized
      securities exchange or traded  over-the-counter,  and such investment does
      not represent a substantial  investment  to the  Participant  or a greater
      than five percent equity  interest in the  organization  or business.  For
      purposes of this Section 7(e)(i),  an organization  shall be considered to
      be competitive with the Company if it is engaged directly or indirectly in
      the  retail  footwear  business  (including  the  e-commerce-based  retail
      footwear business).

            (ii) A Participant  shall not,  without prior written  authorization
      from the Company,  disclose to anyone outside the Company, or use in other
      than the Company's  business,  any  confidential  information  or material
      relating  to  the  business  of  the  Company  that  is  acquired  by  the
      Participant either during or after employment with the Company.

                                       10
<PAGE>

            (iii) A  Participant  shall  disclose  promptly  and  assign  to the
      Company  all  right,  title,  and  interest  in  any  invention  or  idea,
      patentable or not, made or conceived by the Participant  during employment
      by the  Company,  relating  in any  manner to the  actual  or  anticipated
      business,  research  or  development  work of the  Company  and  shall  do
      anything  reasonably  necessary  to enable the  Company to secure a patent
      where appropriate in the United States and in foreign countries.

            (iv) Upon exercise,  payment or delivery  pursuant to an Award,  the
      Participant shall certify on a form acceptable to the Committee that he or
      she is in compliance with the terms and conditions of the Plan. Failure to
      comply with the  provisions  of this  Section 7(e) prior to, or during the
      six (6) months  after,  any exercise,  payment or delivery  pursuant to an
      Award shall cause such exercise,  payment or delivery to be rescinded. The
      Company  shall notify the  Participant  in writing of any such  rescission
      within two (2) years after such exercise,  payment or delivery. Within ten
      (10) days after receiving such a notice from the Company,  the Participant
      shall pay to the  Company  the  amount  of any gain  realized  or  payment
      received  as a result  of the  rescinded  exercise,  payment  or  delivery
      pursuant  to an Award.  Such  payment  shall be made  either in cash or by
      returning  to  the  Company  the  number  of  shares  of  Stock  that  the
      Participant received in connection with the rescinded exercise, payment or
      delivery.

      8. Performance  Awards. The right of an Eligible Person to receive a grant
of or a  Participant  to exercise or receive a grant or settlement of any Award,
and the timing thereof, may be subject to such performance  conditions as may be
specified by the  Committee.  The Committee  may use such business  criteria and
other  measures of performance as it may deem  appropriate in  establishing  any
performance  conditions,  and may exercise its  discretion to reduce or increase
the amounts payable under any Award subject to performance conditions.

      9. Change in Control.

      (a) Effect of Change in Control.  In the event of a Change in Control,  as
defined in Section 9(b), the following  provisions  shall apply unless otherwise
provided in the Award agreement:

            (i) Any Award  carrying a right to exercise that was not  previously
      exercisable and vested shall become fully exercisable and vested as of the
      time of the Change in Control and shall remain  exercisable and vested for
      the  balance  of the  stated  term of such  Award  without  regard  to any
      termination of employment by the  Participant,  subject only to applicable
      restrictions set forth in Section 10(a) hereof;

            (ii) Any  optionee  who holds an Option  shall be entitled to elect,
      during the 60-day  period  immediately  following a Change in Control,  in
      lieu of acquiring the shares of Stock covered by such

                                       11
<PAGE>

      Option, to receive, and the Company shall be obligated to pay, in cash the
      excess of the Change in  Control  Price  over the  exercise  price of such
      Option,  multiplied  by the  number  of shares  of Stock  covered  by such
      Option;  provided,  however, that no optionee who is subject to Section 16
      of the  Exchange Act with respect to the Company at the time of the Change
      in Control  shall be entitled to make such an election if the  acquisition
      of the right to make such election would  represent a non-exempt  purchase
      under Section 16(b) of the Exchange Act by such optionee;

            (iii) The  restrictions,  deferral  of  settlement,  and  forfeiture
      conditions  applicable  to any other  Award  granted  under the Plan shall
      lapse and such Awards  shall be deemed  fully vested as of the time of the
      Change in Control,  except to the extent of any waiver by the  Participant
      and subject to applicable  restrictions set forth in Section 10(a) hereof;
      and

            (iv) With respect to any outstanding Award subject to achievement of
      performance  goals and conditions under the Plan, such  performance  goals
      and other  conditions  will be  deemed  to be met if and to the  extent so
      provided by the Committee in the Award agreement relating to such Award.

      (b)  Definition of Change in Control.  A Change in Control shall be deemed
to have occurred upon:

            (i) An  acquisition  by any Person of  Beneficial  Ownership  of the
      shares of Common  Stock of the  Company  then  outstanding  (the  "Company
      Common Stock  Outstanding")  or the voting  securities of the Company then
      outstanding  entitled to vote  generally in the election of directors (the
      "Company Voting Securities Outstanding") if such acquisition of Beneficial
      Ownership results in the Person's  Beneficially Owning twenty-five percent
      (25%) or more of the  Company  Common  Stock  Outstanding  or  twenty-five
      percent (25%) or more of the combined  voting power of the Company  Voting
      Securities Outstanding; or

            (ii)  The  approval  by  the   stockholders  of  the  Company  of  a
      reorganization, merger, consolidation, complete liquidation or dissolution
      of the Company,  sale or  disposition of all or  substantially  all of the
      assets of the  Company,  or similar  corporate  transaction  (in each case
      referred to in this  Section  9(b) as a  "Corporate  Transaction")  or, if
      consummation of such Corporate Transaction is subject, at the time of such
      approval by stockholders, to the consent of any government or governmental
      agency,  the obtaining of such consent (either  explicitly or implicitly);
      provided,  however, that any merger,  consolidation,  sale, disposition or
      other  similar  transaction  to or with  one (1) or more  Participants  or
      entities controlled by one (1) or more Participants shall not constitute a
      Corporate Transaction in respect of such Participant(s); or

                                       12
<PAGE>

            (iii) A  change  in the  composition  of the  Board  such  that  the
      individuals  who, as of the  Effective  Date,  constitute  the Board (such
      Board shall be hereinafter referred to as the "Incumbent Board") cease for
      any  reason to  constitute  at least a majority  of the  Board;  provided,
      however,  for  purposes of this  Section  9(b),  that any  individual  who
      becomes a member of the  Board  subsequent  to the  Effective  Date  whose
      election,  or nomination for election by the Company's  stockholders,  was
      approved  by a vote of at least a majority  of those  individuals  who are
      members of the Board and who were also members of the Incumbent  Board (or
      deemed to be such pursuant to this proviso)  shall be considered as though
      such  individual  were a member of the  Incumbent  Board;  and,  provided,
      further,  that any such  individual  whose  initial  assumption  of office
      occurs as a result of either an actual or threatened  election contest (as
      such terms are used in Rule 14a-11 of  Regulation  14A under the  Exchange
      Act,  including  any successor to such Rule) or other actual or threatened
      solicitation of proxies or consents by or on behalf of a Person other than
      the Board  shall in no event be  considered  as a member of the  Incumbent
      Board.

Notwithstanding  the provisions set forth in subparagraphs  (i) and (ii) of this
Section  9(b),  the  following  shall not  constitute  a Change in  Control  for
purposes of the Plan:  (1) any  acquisition  by or  consummation  of a Corporate
Transaction  with any entity that was a  subsidiary  of the Company  immediately
prior  to the  transaction  or an  employee  benefit  plan  (or  related  trust)
sponsored or maintained by the Company or an entity that was a subsidiary of the
Company  immediately  prior  to  the  transaction  if,  immediately  after  such
transaction (including consummation of all related transactions),  the surviving
entity is  controlled  by no Person  other than such  employee  benefit plan (or
related trust) and/or other Persons who controlled the Company immediately prior
to such  transaction;  or (2) any  acquisition  or  consummation  of a Corporate
Transaction  following which more than fifty (50%) of, respectively,  the shares
then  outstanding  of  common  stock  of the  corporation  resulting  from  such
acquisition or Corporate Transaction and the combined voting power of the voting
securities then  outstanding of such  corporation  entitled to vote generally in
the election of directors is then beneficially owned, directly or indirectly, by
all or  substantially  all of the  individuals  and entities who were Beneficial
Owners, respectively, of the Company Common Stock Outstanding and Company Voting
Securities  Outstanding  immediately  prior  to such  acquisition  or  Corporate
Transaction  in   substantially   the  same   proportions  as  their  ownership,
immediately prior to such acquisition or Corporate  Transaction,  of the Company
Common Stock Outstanding and Company Voting Securities Outstanding,  as the case
may be.

      (c)  Definition  of Change in Control  Price.  The Change in Control Price
means an amount in cash  equal to the  higher of (i) the amount of cash and fair
market  value of property  that is the highest  price per share paid  (including
extraordinary  dividends) in any Corporate Transaction  triggering the Change in
Control under Section  9(b)(ii) hereof or any liquidation of shares  following a
sale of substantially all assets of the Company, or (ii) the highest Fair Market
Value per share at any time during the 60-day period preceding and 60-day period
following the Change in Control.

                                       13
<PAGE>

      10. General Provisions.

      (a) Compliance With Legal and Other Requirements.  The Company may, to the
extent deemed necessary or advisable by the Committee,  postpone the issuance or
delivery of Stock or payment of other benefits under any Award until  completion
of such  registration  or  qualification  of such Stock or other required action
under any federal or state law, rule or  regulation,  listing or other  required
action with  respect to any stock  exchange or automated  quotation  system upon
which the Stock or other Company  securities are listed or quoted, or compliance
with  any  other  obligation  of the  Company,  as the  Committee  may  consider
appropriate,  and may  require  any  Participant  to make such  representations,
furnish such  information and comply with or be subject to such other conditions
as it may consider  appropriate  in connection  with the issuance or delivery of
Stock or payment of other benefits in compliance  with applicable  laws,  rules,
and  regulations,  listing  requirements,  or other  obligations.  The foregoing
notwithstanding,  in connection with a Change in Control, the Company shall take
or cause to be taken no action,  and shall undertake or permit to arise no legal
or contractual  obligation,  that results or would result in any postponement of
the issuance or delivery of Stock or payment of benefits  under any Award or the
imposition of any other conditions on such issuance, delivery or payment, to the
extent  that such  postponement  or other  condition  would  represent a greater
burden on a  Participant  than existed on the 90th day  preceding  the Change in
Control.

      (b) Limits on Transferability;  Beneficiaries.  No Award or other right or
interest of a  Participant  under the Plan,  including  any Award or right which
constitutes a derivative  security as generally  defined in Rule 16a-1(c)  under
the Exchange  Act,  shall be pledged,  hypothecated  or otherwise  encumbered or
subject to any lien,  obligation or liability of such  Participant  to any party
(other than the Company or a  subsidiary),  or assigned or  transferred  by such
Participant otherwise than by will or the laws of descent and distribution or to
a Beneficiary  upon the death of a  Participant,  and such Awards or rights that
may be  exercisable  shall be exercised  during the lifetime of the  Participant
only by the Participant or his or her guardian or legal  representative,  except
that Awards and other rights may be transferred to one or more  Beneficiaries or
other transferees  during the lifetime of the Participant,  and may be exercised
by such  transferees in accordance with the terms of such Award, but only if and
to the extent such  transfers  are  permitted by the  Committee  pursuant to the
express terms of an Award agreement  (subject to any terms and conditions  which
the Committee may impose thereon).  A Beneficiary,  transferee,  or other person
claiming  any rights  under the Plan from or through  any  Participant  shall be
subject  to all  terms  and  conditions  of the  Plan  and any  Award  agreement
applicable to such Participant, except as otherwise determined by the Committee,
and to any additional  terms and conditions  deemed  necessary or appropriate by
the Committee.

      (c)  Adjustments.  In the event that any  dividend  or other  distribution
(whether  in the form of cash,  Stock,  or  other  property),  recapitalization,
forward or  reverse  split,  reorganization,  merger,  consolidation,  spin-off,
combination,  repurchase,  share  exchange,  liquidation,  dissolution  or other
similar corporate transaction or event affects the Stock such that an adjustment
is determined by the Committee to be appropriate in order to prevent dilution or
enlargement  of the rights of

                                       14
<PAGE>

Participants  under the Plan, then the Committee shall, in such manner as it may
deem equitable,  adjust any or all of (i) the number and kind of shares of Stock
which may be delivered in connection  with Awards granted  thereafter,  (ii) the
number  and kind of shares of Stock  subject  to or  deliverable  in  respect of
outstanding  Awards, and (iii) the exercise price, grant price or purchase price
relating  to any  Award  and/or  make  provision  for  payment  of cash or other
property in respect of any  outstanding  Award.  In addition,  the  Committee is
authorized to make  adjustments in the terms and conditions of, and the criteria
included in, Awards (including  performance  goals) in recognition of unusual or
nonrecurring  events  (including,  without  limitation,  events described in the
preceding  sentence,  as well as acquisitions and dispositions of businesses and
assets)  affecting  the Company,  any  subsidiary  or any business  unit, or the
financial statements of the Company or any subsidiary, or in response to changes
in  applicable  laws,   regulations,   accounting  principles,   tax  rates  and
regulations or business  conditions or in view of the Committee's  assessment of
the business  strategy of the Company,  any subsidiary or business unit thereof,
performance  of  comparable  organizations,  economic and  business  conditions,
personal  performance  of a  Participant,  and any  other  circumstances  deemed
relevant.

      (d)  Taxes.  The  Company  and any  subsidiary  thereof is  authorized  to
withhold  from any Award  granted,  any  payment  relating to an Award under the
Plan, including from a distribution of Stock, or any payroll or other payment to
a Participant, amounts of withholding and other taxes due or potentially payable
in connection  with any transaction  involving an Award,  and to take such other
action  as  the  Committee  may  deem   advisable  to  enable  the  Company  and
Participants  to satisfy  obligations  for the payment of withholding  taxes and
other tax  obligations  relating  to any Award.  This  authority  shall  include
authority  to  withhold  or  receive  Stock or other  property  and to make cash
payments in respect thereof in satisfaction of a Participant's  tax obligations,
either on a mandatory or elective basis in the discretion of the Committee.

      (e) Changes to the Plan and Awards. The Board may amend,  alter,  suspend,
discontinue or terminate the Plan or the  Committee's  authority to grant Awards
under the Plan without the consent of the Company's stockholders or any Eligible
Persons or  Participants,  except that any  amendment or  alteration to the Plan
shall be subject to the approval of the  Company's  stockholders  not later than
the annual meeting next following such Board action if such stockholder approval
is required by any federal or state law or  regulation or the rules of any stock
exchange or automated  quotation system on which the Stock may then be listed or
quoted,  and the Board may  otherwise,  in its  discretion,  determine to submit
other such changes to the Plan to  stockholders  for  approval;  provided  that,
without  the  consent  of an  affected  Participant,  no such  Board  action may
materially  and  adversely  affect  the  rights  of such  Participant  under any
previously granted and outstanding Award. The Committee may waive any conditions
or rights under, or amend,  alter,  suspend,  discontinue or terminate any Award
theretofore  granted  and  any  Award  agreement  relating  thereto,  except  as
otherwise  provided  in the Plan;  provided  that,  without  the  consent  of an
affected  Participant,  no such  Committee  action may  materially and adversely
affect the rights of such Participant under such Award. Notwithstanding anything
in the  Plan to the  contrary,  if any  right  under  this  Plan  would  cause a
transaction to be ineligible for pooling of interest  accounting that would, but
for the  right  hereunder,  be  eligible  for  such  accounting  treatment,  the
Committee may modify or adjust the right so that pooling of interest  accounting
shall be

                                       15
<PAGE>

available,  including the substitution of Stock having a Fair Market Value equal
to the  cash  otherwise  payable  hereunder  for  the  right  which  caused  the
transaction to be ineligible for pooling of interest accounting.

      (f) Limitation on Rights  Conferred  Under Plan.  Neither the Plan nor any
action taken  hereunder  shall be construed as (i) giving any Eligible Person or
Participant the right to continue as an Eligible Person or Participant or in the
employ of the  Company or a  subsidiary,  (ii)  interfering  in any way with the
right of the Company or a  subsidiary  to  terminate  any  Eligible  Person's or
Participant's  employment  at any  time,  (iii)  giving  an  Eligible  Person or
Participant  any claim to be granted  any Award  under the Plan or to be treated
uniformly  with  other  Participants  and  employees,  or (iv)  conferring  on a
Participant  any of the rights of a stockholder  of the Company unless and until
the Participant is duly issued or transferred shares of Stock in accordance with
the terms of an Award.

      (g) Unfunded Status of Awards; Creation of Trusts. 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  or obligation to deliver
Stock  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;  provided that the Committee may authorize the creation
of trusts and deposit therein cash,  Stock,  other Awards or other property,  or
make other  arrangements to meet the Company's  obligations under the Plan. Such
trusts or other  arrangements  shall be consistent with the "unfunded" status of
the Plan  unless the  Committee  otherwise  determines  with the consent of each
affected Participant. The trustee of such trusts may be authorized to dispose of
trust assets and reinvest the proceeds in  alternative  investments,  subject to
such terms and  conditions as the  Committee may specify and in accordance  with
applicable law.

      (h)  Nonexclusivity  of the Plan.  Neither the adoption of the Plan by the
Board nor its submission to the  stockholders  of the Company for approval shall
be  construed  as  creating  any  limitations  on the  power  of the  Board or a
committee  thereof  to adopt such other  incentive  arrangements  as it may deem
desirable.

      (i)  Payments  in the  Event of  Forfeitures;  Fractional  Shares.  Unless
otherwise determined by the Committee,  in the event of a forfeiture of an Award
with  respect  to which a  Participant  paid  cash or other  consideration,  the
Participant shall be repaid the amount of such cash or other  consideration.  No
fractional shares of Stock shall be issued or delivered  pursuant to the Plan or
any Award.  The Committee  shall determine  whether cash,  other Awards or other
property  shall be issued or paid in lieu of such  fractional  shares or whether
such  fractional  shares or any rights  thereto  shall be forfeited or otherwise
eliminated.

      (j) Governing Law. The validity,  construction and effect of the Plan, any
rules  and  regulations  under  the  Plan,  and any  Award  agreement  shall  be
determined  in  accordance  with the laws of the  State of New  Jersey,  without
giving effect to principles of conflicts of laws, and applicable federal law.

                                       16
<PAGE>

      (k) Termination.  The Plan shall terminate upon the earlier  occurrence of
the following, unless further extended by the Board:

            (i) the adoption of a resolution by the Board  terminating the Plan;
      or

            (ii) February 9, 2010.

      (l) Plan  Effective  Date. The Plan has been approved by the Board on, and
is to be effective on and as of, March 10, 2000.

                                       17

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