Document:

<PAGE>   1

                                                                 EXHIBIT 10.40

                    AMENDMENT NO. 2 TO 1997 STOCK OPTION PLAN

         The Iron Age Holdings Corporation 1997 Stock Option Plan, originally
effective February 26, 1997, and as amended by Amendment No. 1 effective April
8, 1999 (the "Plan"), is hereby further amended by this Amendment No. 2
effective as of January 29, 2000 as follows:

                  (1) Section 6(c)(1)(iv) of the Plan is amended to read in its
entirety as follows:

                           (iv) YEAR 2000 SERIES B OPTIONS

                                    (A) This clause (iv) shall apply solely to
                  the Basic B Options Shares subject to Vesting for the fiscal
                  year of the Company ending on the last Saturday in January,
                  2000 ("Year 2000 Options"). This clause (iv) shall be the
                  exclusive means of Vesting any of the Year 2000 Options and
                  shall apply notwithstanding anything to the contrary in
                  Section 6(c)(1)(ii)(A)(I).

                                    (B) With respect to the Year 2000 Options
                  (exclusive of such Options granted to the Chairman of the
                  Company (the "Chairman")), 50% of such Options for the fiscal
                  year ending the last Saturday in January, 2000 ("Fiscal Year
                  2000") shall Vest on the Release Date (as defined in Section
                  10) with respect to Fiscal Year 2000 without regard to the
                  amount of the Actual Earnings (as defined in Section 10) for
                  such fiscal year.

                                    If the Actual Earnings for the fiscal year
                  ending on the last Saturday in January, 2001 ("Fiscal Year
                  2001") equal or exceed the Target Earnings for Fiscal Year
                  2001 of $21,900,000, 50% (100% with respect to any such
                  Options granted to the Chairman) of the Year 2000 Options
                  shall Vest on the Release Date for Fiscal Year 2001 in
                  increments of one-fifth of such Option Shares for each 1% (or
                  portion thereof) by which Actual Earnings for Fiscal Year 2001
                  in excess of the Target Earnings for Fiscal Year 2001, when
                  added to Actual Earnings for Fiscal Year 2000, exceed 95% of
                  the Target Earnings for Fiscal Year 2000. In no event shall
                  such Year 2000 Options Vest with respect to all fiscal years
                  as to more than the aggregate of all Option Shares represented
                  by the Year 2000 Options.

<PAGE>   2

                  (2) A new paragraph is added to Section 5 of the Plan
following the fourth paragraph thereof:

                           In the event of a Sale Transaction (as defined
                  below), any Option Shares which have not been awarded to
                  participants as of the date of the Sale Transaction shall be
                  deemed awarded to participants (exclusive of the Chairman) on
                  a pro-rata basis calculated by dividing each such
                  participant's Option Shares (calculated separately for Basic B
                  Options Shares and Extra B Option Shares (as defined below))
                  (i) by the total number of Basic B Option Shares outstanding
                  at the time of the Sale Transaction (reduced by the number
                  then held by the Chairman), or (ii) by the total number of
                  Extra B Option Shares (reduced by the number then held by the
                  Chairman), whichever is applicable.

January 29, 2000

                                      -2-<PAGE>   1

                                                                 EXHIBIT 10.41

                              CONSULTING AGREEMENT

                  THIS CONSULTING AGREEMENT made and entered this 1st day of
February, 2000, by and between FALCON SHOE MFG. CO., a Maine corporation (the
"Company") and THEODORE C. JOHANSON, an individual residing in Auburn, Maine
(the "Consultant");

                  WHEREAS, subject to the terms and conditions hereinafter set
forth, the Company wishes to retain the services of the Consultant and the
Consultant is willing to provide consulting services to the Company.

                  NOW, THEREFORE, in consideration of the premises and the
mutual promises and covenants contained herein, and intending to be legally
bound hereby, the parties hereto agree as follows:

1. Engagement and Term. Subject to the provisions for termination hereinafter
set forth, the Company hereby engages the Consultant, and the Consultant hereby
accepts such engagement by the Company, as a consultant, on the basis as an
independent contractor, for a term of five years commencing on February 1, 2000
and ending on January 31, 2005 (the "Term").

2. Duties. The Consultant shall perform such duties and tasks as the Chairman or
President of the Company or their respective designees shall assign from time to
time during the Term. The minimum number of hours which shall be worked by the
Consultant under this Agreement is 200 during the first year of the term
beginning February 1, 2000. For the remaining four years of the Term, the
Consultant will be on-call to provide such services as are mutually
satisfactory. The Consultant shall be generally available to perform any
reasonable assignments during the first year of the Term upon reasonable notice.

3. Fees and Expenses. For the due and faithful performance of the services
contemplated by this Agreement, the Company will pay to the Consultant during
the first year of the Term beginning February 1, 2000 a consulting fee in the
amount of $10,000, payable monthly. In the event the Consultant works more than
200 hours in the first year of the Term and for all services rendered in any
subsequent year of the Term, he shall be paid $50 per hour payable monthly
following the performance of such additional hours. The Company will also pay
rent for the Consultant's office at a cost of $500 per month. The Company will
also reimburse the Consultant for his reasonable and necessary business expenses
related to the performance of his duties hereunder.

<PAGE>   2

                  4. Termination of Agreement. The Agreement shall be terminated
upon the first to occur of the following: (a) any failure or inability of the
Consultant to observe or perform the agreements, obligations or covenants herein
contained, (b) the death of the Consultant, or (c) expiration of the Term.

                  5. Independent Contractor. The Consultant shall be and remain
only an independent contractor. Nothing contained herein shall be deemed or
construed to create an employer/employee relationship.

                  6. Fringe Benefits. The Consultant shall not be entitled to
coverage under any other welfare or insurance benefit plans of the Company or
under the Company's profit sharing or 401(k) plan.

                  7. Company Car. The Consultant shall be provided the Company
car that he is currently provided under his Employment Agreement; provided,
however, that the Company will transfer without additional consideration full
title to such car at Consultant's request at which time Consultant will be
liable for all further operating and maintenance costs, including insurance.

                  8. Stock Options. The Consultant shall return and release
without exercise his 200 Series B Stock Options (vested and nonvested) to
purchase 200 shares of common stock of Iron Age Holdings Corporation.

                  9. Non-Competition. The Consultant shall not engage, directly
or indirectly, in any employment, ownership or consultant relationship with any
competitor of the Company or any of its affiliated companies in any state or
Puerto Rico during the Term. The Consultant acknowledges that any violation of
this non-competition clause shall entitle the Company to injunctive relief.

                  10. Confidentiality. The Consultant shall maintain strict
confidentiality of all proprietary information or documents of the Company and
its affiliated companies. Upon termination of this Agreement, the Consultant
shall return the original and all copies of all such information to the Company.

                  11. Notices. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if delivered by hand or mailed within the continental United States
by first class certified mail, return receipt requested, postage prepaid,
addressed as follows:

                  (a)      If to the Company, to:

                               William J. Mills, President and CEO
                               Iron Age Corporation
                               Robinson Plaza Three, Suite 400
                               Pittsburgh, PA  15205

                                      -2-
<PAGE>   3

                  (b)      to the Consultant, to

                               P. O. Box 897
                               Auburn, ME  04212

Such addresses may be changed by written notice sent to the other party at the
last recorded address of that party.

                  12. Prior Agreements. This Agreement shall supersede effective
February 1, 2000 the Employment Agreement and Non-Competition Agreement dated
August 1, 1994 entered into between the Company and the Consultant. Upon the
commencement of the Term of this Agreement, said Agreements shall become null
and void.

                  13. Governing Law. This Agreement shall interpreted under the
laws of the Commonwealth of Pennsylvania.

                  WITNESS the due execution as of the day and year above
written.

                                       FALCON SHOE MFG. CO.

                                       By:
                                           -----------------------------------
                                                       Chairman

                                       CONSULTANT

                                       ---------------------------------------
                                                  Theodore C. Johanson

                                      -3-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00008-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00008-of-00352.parquet"}]]