Document:

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                                                                    EXHIBIT 10.1

                                                   April 12, 2000

Mr. Roger N. Farah
Venator Group, Inc.
112 West 34 Street
New York, New York 10120

Dear Roger:

You serve as Chairman of the Board of Venator Group, Inc. (the "COMPANY")
pursuant to the provisions of an Employment Agreement between you and the
Company dated as of August 16, 1999 (the "EMPLOYMENT AGREEMENT") and as a member
of the Board of Directors. You have submitted your resignation as Chairman of
the Board and as a director, effective April 12, 2000, and the Board of
Directors has accepted your resignation. This letter sets forth the agreement
between you and the Company with regard to certain matters related to the
termination of your employment. Capitalized terms used herein that are not
otherwise defined herein shall have the meaning provided for in the Employment
Agreement.

1. EMPLOYMENT. Your employment as Chairman of the Board of the Company shall end
as of April 12, 2000 (the "TERMINATION DATE").

2. COMPENSATION AND BENEFITS.

         (a) BASE SALARY. The Company shall pay you your Base Salary through the
Termination Date.

         (b) BONUS PLANS. You shall be entitled to receive a payment under the
Annual Plan for 2000 and under the Long-Term Plan for the 1999-2000 performance
period, prorated as of the Termination Date, in accordance with the terms of
your participation in such plans, if and when payments are made under such plans
for such periods to other executives of the Company participating therein. You
shall not be entitled to payments under the Annual Plan or the Long-Term Plan
for any other periods.

         (c) STOCK OPTIONS. The vesting of that portion of the stock option
grant made to you on February 10, 1999 (the "FEBRUARY OPTION GRANT") that vests
on February 10, 2001 shall be accelerated to the Termination Date. The vesting
of the portions of the stock option grant made to you on April 14, 1999 (the
"APRIL OPTION GRANT") that vest on April 14, 2000 and on April 14, 2001 shall be
accelerated to the Termination Date. You shall have until April 11, 2002 to
exercise those portions of the February Option Grant and the April Option Grant
that are vested on the Termination Date, whereupon, if unexercised, such stock
options shall expire. The balance of the February Option Grant and the April
Option Grant are hereby cancelled. You shall have until July 11, 2000 to
exercise the stock options granted to you on December 11, 1994, whereupon, if
unexercised, such stock options shall expire.

<PAGE>   2

         (d) RESTRICTED STOCK. The portion of the grant of restricted stock made
to you pursuant to the terms of the Restricted Stock Agreement dated April 26,
1999 that vest on January 31, 2001 shall vest on the Termination Date, and the
balance of such restricted stock grant is hereby forfeited.

         (e) PENSION. You have been a participant in the Venator Group
Retirement Plan and the Venator Group Excess Cash Balance Plan, and you shall be
eligible to receive benefits under those plans in accordance with their terms.
You shall not be entitled to receive any payment or other benefit under the
Supplemental Executive Retirement Plan.

         3. CONFIDENTIAL INFORMATION; NON-DISPARAGEMENT; NON-COMPETITION. After
the Termination Date, you shall continue to be bound by the provisions of
Section 10 of the Employment Agreement in accordance with the terms thereof. The
two-year period referred to in sub-sections (b) and (c) of such Section 10 shall
be the period from the Termination Date to and including April 11, 2002.

         4. INDEMNIFICATION. The provisions of Section 11 of the Employment
Agreement shall continue to be binding upon the Company for the period following
the Termination Date in accordance with the terms thereof.

         5. RELEASE. In consideration of all of the foregoing, you, for yourself
and for your heirs, executors, administrators, successors, and assigns, hereby
agree to release and forever discharge the Company and its subsidiaries and
affiliates, and their respective officers and directors, from any and all
actions, causes of action, claims, demands, and liabilities of whatsoever nature
arising out of, or in connection with, your employment with the Company and any
of its subsidiaries and affiliates, or otherwise, whether arising before or
after the date hereof. The foregoing shall include, but not be limited to, any
claim of employment discrimination under the Age Discrimination in Employment
Act of 1967, the New York State Human Rights Law, or any other federal or state
labor relation law, equal employment opportunity law, or civil rights law,
regulation or order. Federal law requires that we advise you to consult with an
attorney of your choice (at your own cost). In addition, federal law also
provides that you have 21 days from the date of this letter to consider your
decision to agree to the terms of this agreement, including any release of the
Company and its subsidiaries from liability as provided in this paragraph.
Furthermore, you have the right to change your mind at any time within one week
after signing. In addition, you hereby acknowledge that you have been given full
opportunity to review this letter, including sufficient opportunity for
appropriate review with any advisors selected by you. The foregoing shall not
constitute a release of any and all claims you may have against the Company for
breach of any of the provisions of this letter agreement.

         You understand and agree that the payments and benefits provided for in
this agreement shall be in lieu of any and all amounts that would be payable to
you, and that no other amounts will be paid to you for any reason whatsoever.

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<PAGE>   3

         6. NOTICE. Any notice to the Company under the Employment Agreement or
hereunder shall be addressed to: Venator Group, Inc., 112 West 34 Street, New
York, New York 10120, Attention: General Counsel. Any notice to you under the
Employment Agreement or hereunder shall be addressed to your home address as
shown in the records of the Company. Either party may change the address to
which such notices are to be sent by written notice of such new address given to
the other party hereto.

         7. TERMINATION OF EMPLOYMENT AGREEMENT. The Employment Agreement is
hereby terminated as of the Termination Date; provided, however, that those
provisions of the Employment Agreement that survive termination, whether
pursuant to their terms or pursuant to the provisions hereof, shall continue in
effect.

         8. MISCELLANEOUS. This letter agreement shall be governed by, and
construed in accordance with, the laws of the State of New York applicable to
contracts to be performed therein. This agreement, along with those provisions
of the Employment Agreement that survive its termination, whether pursuant to
their terms or pursuant to the provisions hereof, represents the entire
understanding of the parties hereto with respect to the subject matter hereof
and supersedes any prior agreements or understandings between the parties. The
terms and provisions of this letter agreement may not be modified or amended
except in a writing signed by both parties.

         We would appreciate it if you would indicate your agreement to the
provisions of this letter by signing and returning the copy of this letter
enclosed for that purpose, whereupon this letter shall become a binding
agreement between us.

                                   Yours truly,
                                   VENATOR GROUP, INC.
                                   By: /s/ Dennis M. Lee

                                   Dennis M. Lee
                                   Sr. Vice President - Human Resources

ACCEPTED AND AGREED:

/s/ Roger N. Farah
Roger N. Farah

Date:  April 12, 2000

/s/ Patricia A. Peck
(Witness)

                                       3<PAGE>   1
                                                                    EXHIBIT 10.2

                               AMENDING AGREEMENT

         THIS AMENDING AGREEMENT made February 9, 2000, between VENATOR GROUP,
INC., a New York corporation having its principal office at 233 Broadway, New
York, New York 10279 (the "Company") and Matthew D. Serra, residing at 8 Glenby
Lane, Brookville, New York 11545 (the "Executive").

         WHEREAS, the Company and the Executive are parties to an Employment
Agreement dated September 8, 1998, a copy of which is annexed hereto as
Attachment A (the "Employment Agreement"); and

         WHEREAS, the Company and the Executive are parties to a Restricted
Stock Award Agreement dated September 21, 1998, a copy of which is annexed
hereto as Attachment B (the "1998 Restricted Stock Agreement") and a Restricted
Stock Award Agreement dated November 10, 1999, a copy of which is annexed hereto
as Attachment C (the "1999 Restricted Stock Agreement");

         WHEREAS, the Company desires Executive to serve as its Chief Operating
Officer and Executive is willing to serve in such capacity; and

         WHEREAS, in connection with this change in the title and
responsibilities of the Executive, the Company and Executive desire to amend the
Employment Agreement, the 1998 Restricted Stock Agreement, and the 1999
Restricted Stock Agreement, as hereinafter provided;

         NOW, THEREFORE, in consideration of these premises and of the mutual
covenants and agreements herein contained, the Company and the Executive hereby
agree as follows:

         1.  Amendment of Employment Agreement. The Employment Agreement is
    hereby amended, effective the date hereof, as follows:
<PAGE>   2
    (a) Section 1 of the Employment Agreement is amended to read in its entirety
    as follows:

    "Employment and Term. The Company hereby agrees to employ Executive, and
    Executive hereby agrees to serve, as its Chief Operating Officer, subject to
    the terms and conditions set forth herein, for a period commencing February
    9, 2000 (the "Renewal Date") and ending February 2, 2002 (the "Employment
    Period"), unless otherwise provided herein."

    (b) Section 2 of the Employment Agreement is amended to read in its entirety
    as follows:

    "Executive shall serve as the Chief Operating Officer of the Company and
    shall report directly to the Chief Executive Officer of the Company.
    Executive shall have such responsibilities, duties, and authority as are
    appropriate to such position, and as may be assigned to him from time to
    time by the Chief Executive Officer of the Company. Executive shall devote
    substantially all of his working time and efforts to the business and
    affairs of the Company and its respective subsidiaries and affiliates."

    (c) The first sentence of Section 3 of the Employment Agreement is amended
    to read in its entirety as follows:

    "In connection with his employment by the Company, Executive shall be based
    at the principal executive offices of the Company in the New York
    metropolitan area, or such other place in the United States to which the
    Company may hereafter relocate its principal executive offices, it being
    understood by the parties that the Company is in the process of relocating
    its principal executive offices and that, until such relocation is
    completed, Executive shall remain based in the executive offices of the Foot
    Locker Worldwide division of the Company."

    (d) Section 4(a) of the Employment Agreement is amended to read in its
    entirety as follows:

    "During the period from the Renewal Date to January 31, 2001, the Company
    shall pay Executive a base salary at the rate of $850,000 per year, and
    during the period from February 1, 2001 to February 2, 2002, the Company
    shall pay Executive a base salary at the rate of $900,000 per year, to be
    paid in substantially equal monthly installments in accordance with the
    normal payroll practices of the Company (the "Base Salary")."

    (e) The third sentence of Section 4(b) of the Employment Agreement is
    amended to read in its entirety as follows:

    "During each year of the Employment Period, the annual bonus payable to
    Executive at target shall be 75 percent of Executive's then-current Base
    Salary."

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    (f) The third, fourth, and fifth sentences of Section 4(f) of the Employment
    Agreement ("Executive will not be eligible . . .shall be deemed to have been
    October 1, 1998") are deleted and the following is added in their place:

    "Effective on the Renewal Date, Executive shall be granted stock options
    under, and pursuant to the provisions of, the 1995 Stock Option and Award
    Plan or the 1998 Plan (the applicable plan being hereinafter referred to as
    the "Option Plan") to purchase 250,000 shares of Common Stock of the Company
    at fair market value on the date of grant, as defined in the Option Plan.
    Such stock option shall vest on February 1, 2002, and shall be subject to
    the provisions of the Option Plan and the Stock Option Award Certificate.
    Executive shall not be eligible to receive additional stock option grants
    during the Employment Period."

    (g) The following is added to Section 4(g) of the Employment Agreement:

    "Within 30 days of the Renewal Date, Executive shall be granted 100,000
    shares of restricted stock under, and pursuant to the provisions of, the
    Option Plan and the terms of a Restricted Stock Agreement essentially in the
    form of Attachment D hereto."

    (h) Section 4(j), reading as follows, is added to the Employment Agreement:

    (j) In the event the Company does not offer to renew the employment of the
    Executive beyond February 2, 2002, for reasons other than Cause, upon
    essentially the same terms and conditions provided for herein (other than
    the compensation provided for in Sections 4(f), 4(g), 4(h), 4(i), and 4(j),
    and the provisions of Section 9), then the Company shall pay Executive,
    within 30 days of the date on which his employment with the Company
    terminates, the amount of $900,000."

    (i) Clauses (A) and (B) in clause (i) of the definition of "Competition"
    contained in the fourth sentence of Section 8(b) of the Employment Agreement
    are amended to read as follows:

    ". . . (A) a business in competition with the retail, catalog, or on-line
    sale of athletic footwear, athletic apparel, and sporting goods conducted by
    the Company or any of its subsidiaries or affiliates (the "Athletic
    Business") or (B) a business that in the prior fiscal year supplied product
    to the Company or any of its subsidiaries or affiliates for the Athletic
    Business having a value of $20 million or more at cost to the Company or any
    of its subsidiaries or affiliates; . . ."

     2.  Amendment of Restricted Stock Agreements.

    (a) Section 3.3 of the 1998 Restricted Stock Agreement is hereby amended,
    effective on the date hereof, to read in its entirety as follows:

    "Vesting. The Restricted Stock shall become vested and shall cease to be
    Restricted Stock (but still subject to the other terms of the Plan and this
    Agreement) as follows if the Executive has been continuously employed by the
    Company or its subsidiaries within the meaning of Section 424 of the
    Internal Revenue Code of 1986, as amended (the "Control Group") until such
    date:

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<TABLE>
<S>                                                              <C>
     On the first anniversary of the Commencement Date           12,000 shares
     On the second anniversary of the Commencement Date          12,000 shares
     On the third anniversary of the Commencement Date           12,000 shares
     On February 1, 2002                                         24,000 shares
</TABLE>

     "There shall be no proportional or partial vesting in the period prior to
     each vesting date and all vesting shall occur only on the appropriate
     vesting date, provided that, if the Executive if terminated without cause
     or terminated for Good Reason, both as provided in Executive's Employment
     Agreement with the Company dated September 8, 1998, as amended, the
     unvested portion of the Executive's Restricted Stock will become vested as
     of the last date of his employment.

     "When any Restricted Stock becomes vested, the Company shall promptly issue
         and deliver to the Executive a new stock certificate registered in the
         name of the Executive for such shares without the legend set forth in
         Section 4 hereof and deliver to the Executive any related other RS
         Property.

     "In addition, all shares of Restricted Stock shall become immediately
         vested and cease to be Restricted Stock upon any Change in Control as
         defined in Appendix A hereto."

         (b) The 1999 Restricted Stock Agreement is hereby amended, effective on
         the date hereof, as follows:

         (i) Section 3.3(a) of the 1999 Restricted Stock Agreement is amended to
         read in its entirety as follows:

         "The Restricted Stock shall become 100 percent vested and cease to be
         Restricted Stock (but still subject to the terms of the Plan and this
         Agreement) on February 1, 2002 if the Executive has been continuously
         employed by the Company or its subsidiaries within the meaning of
         Section 424 of the Internal Revenue Code of 1986, as amended (the
         "Control Group") until such date. There shall be no proportional or
         partial vesting in the period prior to the vesting date and all vesting
         shall occur on the vesting date."

         (ii) The first paragraph of Section 3.3(b) of the 1999 Restricted Stock
         Agreement is deleted.

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<PAGE>   5
         3. Confirmation of Prior Agreements. Except as amended hereby, in all
other respects the terms and provisions of the Employment Agreement, the 1998
Restricted Stock Agreement, and the 1999 Restricted Stock Agreement are hereby
ratified and confirmed.

         4. Miscellaneous. This Amending Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors,
heirs, and permitted assigns. This Amending Agreement, along with the Employment
Agreement, the 1998 Restricted Stock Agreement, and the 1999 Restricted Stock
Agreement, as amended hereby, represent the entire understanding of the parties
hereto with regard to the subject matter hereof, and the terms and provisions of
this agreement may not be modified or amended except in a writing signed by both
parties. This Amending Agreement shall be governed by and construed and enforced
in accordance with the laws of the State of New York applicable to contracts
between residents of such state to be performed therein. Any controversy or
claim arising out of or relating to this Amending Agreement or the breach
thereof shall be settled in accordance with the provisions of Section 11 of the
Employment Agreement.

         IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Amending Agreement as of the day and year first above written.

                                            VENATOR GROUP, INC.
                                            By: /s/ Dennis M. Lee
                                               ---------------------------
                                            Dennis M. Lee
                                            Sr. Vice President

                                            /s/ Matthew D. Serra
                                            ------------------------------
                                            Matthew D. Serra

                                       5
<PAGE>   6
                                                        ATTACHMENT A

                              EMPLOYMENT AGREEMENT

         THIS AGREEMENT made September 8, 1998, between VENATOR GROUP, INC., a
New York corporation with its principal office at 233 Broadway, New York, New
York 10279 (the "Company") and Matthew D. Serra, residing at 8 Glenby Lane,
Brookville, New York 11545 (the "Executive").

         WHEREAS, the Company desires to employ Executive as the President and
Chief Executive Officer of its Foot Locker Worldwide division and Executive is
willing to serve in such capacity; and

         WHEREAS, the Company and Executive desire to set forth the terms and
conditions of such employment;

         NOW, THEREFORE, in consideration of these premises and of the mutual
covenants and agreements herein contained, the Company and Executive hereby
agree as follows:

         1.  Employment and Term. (a) The Company hereby agrees to employ
             Executive, and Executive hereby agrees to serve, as the President
             and Chief Executive Officer of its Foot Locker Worldwide division,
             subject to the terms and conditions set forth herein, for a period
             commencing October 1, 1998 (the "Commencement Date") and ending on
             September 30, 2001 (the "Employment Period"), unless otherwise
             provided herein.

                  (b) The Company will notify Executive no later than September
                      30, 2000 whether it is prepared to extend the Employment
                      Period, and, if so, on what terms and conditions.

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<PAGE>   7
         2.  Position and Duties. Executive shall serve as President and Chief
             Executive Officer of the Foot Locker Worldwide division and shall
             report directly to the Chairman of the Board and Chief Executive
             Officer of the Company. Executive shall have such responsibilities,
             duties and authority as are appropriate to such position, and as
             may be assigned to him from time to time by the Chairman of the
             Board and Chief Executive Officer of the Company. Executive shall
             devote substantially all of his working time and efforts to the
             business and affairs of the Company and its respective subsidiaries
             and affiliates.

         3.  Place of Performance. In connection with his employment by the
             Company, Executive shall be based at the principal executive
             offices of the Foot Locker Worldwide division of the Company in the
             New York metropolitan area, or such other place in the United
             States to which the Company may hereafter relocate its principal
             executive offices. In the event of such relocation outside of the
             New York metropolitan area, the Company will pay the reasonable
             costs of the relocation of the principal residence of Executive,
             and provide such other relocation assistance as the Company then
             provides to its comparably situated senior executive employees.

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

         (a) During the Employment Period, the Company shall pay Executive a
             base salary at the rate of $800,000 per year, to be paid in
             substantially equal monthly installments, in accordance with the
             normal payroll practices of the Company (the "Base Salary").
             Executive's rate of Base Salary shall be reviewed annually during
             the Employment Period (with the first such review occurring no
             earlier than in connection with salary increases effective May 1,
             2000) in accordance with the Company's normal salary review
             practices for its senior executives, and in no

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             event shall the Base Salary be less than $800,000 per year.

         (b) During the Employment Period, Executive shall be entitled to
             participate in all bonus, incentive, and equity plans that are
             maintained by the Company from time to time during the Employment
             Period for its comparably situated senior executive employees in
             accordance with the terms of such plans at the time of
             participation. The Company may, during the Employment Period, amend
             or terminate any such plan, to the extent permitted by the
             respective plan, if such termination or amendment occurs pursuant
             to a program applicable to all comparably situated executives of
             the Company and does not result in a proportionally greater
             reduction in the rights or benefits of Executive as compared with
             any other comparably situated executives of the Company. During
             each year of the Employment Period, the annual bonus payable to
             Executive at target shall be 50 percent of Executive's then-current
             Base Salary; provided, however, that (i) for the first full fiscal
             year of the Company included in the Employment Period, the bonus
             payable to Executive under the annual bonus plan shall not be less
             than $400,000, and (ii) for the last fiscal year included in the
             Employment Period, the annual bonus shall be prorated if the
             Employment Period is not extended. Notwithstanding the foregoing to
             the contrary, if Executive is legally prohibited from accepting
             employment with the Company until after January 31, 1999,
             Executive's annual bonus for the period beginning with the
             Commencement Date through and including the last day of the fiscal
             year during which he commences employment shall be $33,300 times
             the number of months between the Commencement Date and the last day
             of such fiscal year, and the annual bonus for the balance of the
             Employment Period shall be in accordance with the above formula,
             prorated for any partial fiscal year. Executive shall participate,
             on a pro rata basis, in any performance periods in the Company's
             Long Term Incentive Compensation Plan that are open on the
             Commencement Date.

         (c) During the Employment Period, Executive shall be eligible to
             participate in all

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             pension, welfare, and fringe benefit plans, as well as perquisites,
             maintained by the Company from time to time for its comparably
             situated senior executive employees in accordance with their
             respective terms as in effect from time to time. These shall
             include (i) Company-paid life insurance in the amount of
             Executive's annual Base Salary, (ii) long-term disability insurance
             coverage of $25,000 per month; (iii) annual out-of-pocket medical
             expense reimbursement of up to $5,000 per year; (iv) reimbursement
             of financial planning expense of up to $5,000 per year; (v)
             participation in the Supplemental Executive Retirement Plan
             (prorated for any partial plan year included in the Employment
             Period); and (vi) eligibility to participate in the Deferred
             Compensation Plan. Executive shall, upon the commencement of his
             employment with the Company, be treated as if he has been credited
             with five years of service credit under the provisions of the
             Venator Group Retirement Plan, and Executive acknowledges that any
             increased amount of pension payable to him as a result of such
             credit may be payable from the Venator Group Excess Cash Balance
             Plan or a similar non-qualified plan of the Company.

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

         (e) Executive shall be entitled to 20 vacation days in each calendar
             year. Unused vacation shall be forfeited.

         (f) On the Commencement Date, Executive will be granted stock options
             under, and pursuant to the provisions of, the 1998 Stock Option and
             Award Plan (the "1998 Plan") to purchase 250,000 shares of Common
             Stock of the Company at fair market value on the date of grant, as
             defined in the 1998 Plan. Subject to the

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<PAGE>   10
             provisions of the 1998 Plan and the Stock Option Award Certificate
             and except as otherwise provided herein, such stock option shall
             vest in three equal annual installments on the first, second, and
             third anniversaries of the date of grant. Executive will not be
             eligible to receive additional stock option grants during the
             Employment Period. In the event the Company does not offer to renew
             the employment of Executive for at least a two year period beyond
             September 30, 2001, for reasons other than Cause, upon essentially
             the same terms and conditions as provided for herein (other than
             with respect to the compensation provided for in Sections 4(f),
             4(g), 4(h), and 4(i), and the provisions of Section 9) then any
             unvested portion of such stock options shall vest on September 30,
             2001. Subject to the approval of the Compensation Committee of the
             Company's Board of Directors and to the extent permissible under
             the terms of the 1998 Plan, in the event Executive is prohibited in
             any legal proceeding from commencing his employment with the
             Company on or before October 1, 1998, then, for the purposes of
             determining the vesting schedule for options that are exercisable
             after the Commencement Date, the date of grant of the options shall
             be deemed to have been October 1, 1998. Subject to the approval of
             the Compensation Committee of the Company's Board of Directors and
             to the extent permissible under the terms of the 1998 Plan, all
             options shall become immediately exercisable upon any Change in
             Control.

         (g) On the Commencement Date, Executive will be granted 60,000 shares
             of restricted stock under, and pursuant to the provisions of, the
             1998 Plan and the terms of a Restricted Stock Agreement essentially
             in the form of Attachment A hereto.

         (h) As a bonus in connection with the execution of this agreement, the
             Company shall pay Executive, subject to withholding, $1,000,000
             plus the amount, if any, specified in Section 9(b) hereof. Such
             amount shall be paid within five business days after the
             Commencement Date.

                                       10
<PAGE>   11
         (i) The Company shall reimburse Executive for the monthly lease cost of
             the vehicle presently leased by Executive, through the termination
             date of such lease or the end of the Employment Period, whichever
             first occurs, in an amount not to exceed $975 per month.

         5.  Termination.

         (a)      The Employment Period shall terminate upon the earliest of the
                  following:

                  (i)      the death of Executive;

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

                  (iii)    if the Company terminates the employment of Executive
                           hereunder for Cause. For purposes of this agreement,
                           the Company shall have "Cause" to terminate the
                           employment of Executive hereunder upon (A) his
                           willful and continued failure to substantially
                           perform his duties hereunder (other than any such
                           failure resulting from his incapacity due to physical
                           or mental illness) (B) his willful engagement in
                           misconduct that is materially injurious to the
                           Company, monetarily or otherwise or (C) his failure
                           to commence the performance of his duties hereunder
                           on the Commencement Date.

         (b)      If the Company shall terminate the employment of Executive
                  pursuant to the provisions of paragraph (a) above, it shall
                  have no further liability or obligation hereunder except (i)
                  to pay promptly to Executive his then-current Base Salary

                                       11
<PAGE>   12
                  through the effective date of such termination, and (ii)
                  Executive shall receive benefits, if any, and have the rights
                  afforded by the Company, under its then-existing policies, to
                  employees whose employment is terminated for death,
                  disability, or cause, as the case may be, or under the
                  specific terms of any welfare, fringe benefit, or incentive
                  plan.

         (c)      If the employment of Executive is terminated for any other
                  reason during the Employment Period, or if the Company
                  breaches any material provision of this agreement, which
                  breach is not corrected within 30 days following written
                  notice to the Company, the Company shall make the following
                  payments to Executive: Until the earliest of (i) the end of
                  the Employment Period (ii) his death, or (iii) his breach of
                  the provisions of Section 8 hereof, (A) the Company shall make
                  payments to Executive, no less frequently than monthly,
                  calculated at his then-applicable annual rate of Base Salary;
                  (B) the Company shall pay to Executive (at the same time as
                  other annual bonuses are paid), with respect to the fiscal
                  year in which such termination occurs, the annual bonus that
                  Executive would otherwise have earned under the annual bonus
                  plan applicable to Executive if such termination had not
                  occurred, prorated as of the date of the termination of
                  Executive's employment; (C) with respect to the performance
                  period under the Long-Term Incentive Compensation Plan that
                  ends on the last day of the fiscal year in which the
                  employment of Executive is terminated, the Company shall pay
                  to Executive the payment under the Long-Term Incentive
                  Compensation Plan that Executive would otherwise have earned
                  with respect to such performance period if such termination
                  had not occurred, prorated as of the date of the termination
                  of Executive's employment, payment of such amount to be made
                  at the same time and in the same manner as other awards are
                  paid for such period; and (D) the Company shall provide
                  Executive for a period of one year following such termination
                  of employment, at no cost to Executive, with out-placement at
                  a level commensurate with that provided by the Company to
                  other comparably situated executives. Executive

                                       12
<PAGE>   13
                  shall not be required to mitigate the amount of any payment
                  provided for in the preceding sentence by seeking other
                  employment, nor shall any amounts to be received by Executive
                  hereunder be reduced by any other compensation earned.

         (d)      Notwithstanding anything herein to the contrary, in the event
                  that within one year following a "Change in Control" of the
                  Company, (including one which occurs prior to Executive's
                  Commencement Date, if such Commencement Date occurs after
                  October 1, 1998) or if such Change in Control occurs prior to
                  Executive's Commencement Date, within one year after
                  Executive's Commencement Date, whichever period runs later (i)
                  the employment of Executive is terminated for any reason not
                  specified in paragraph (a) hereof or (ii) Executive terminates
                  his employment with the Company for "Good Reason", the amount
                  payable to Executive under paragraph (c) (A) through (D) above
                  shall be not less than 1.5 times the sum of his Base Salary
                  and annual bonus at target, such amount to be paid in a lump
                  sum within 10 days following such termination of the
                  employment of Executive, and all of the restricted stock
                  granted to Executive pursuant to Section 4(g) and all of the
                  stock options granted to Executive pursuant to Section 4(f)
                  shall immediately become fully vested. For purposes of this
                  paragraph, (i) "Change in Control" shall have the meaning
                  specified in Attachment B hereto and (ii) "Good Reason" shall
                  mean (A) any material demotion of Executive or any material
                  reduction in Executive's authority or responsibility, except
                  in each case in connection with the termination of Executive's
                  employment for Cause or disability or as a result of
                  Executive's death, or temporarily as a result of Executive's
                  illness or other absence; (B) any reduction in Executive's
                  rate of Base Salary as payable from time to time; (C) a
                  reduction in Executive's annual bonus classification level
                  other than in connection with a redesign of the applicable
                  bonus plan that affects all employees at Executive's bonus
                  level; (D) a failure of the Company to continue in effect the
                  benefits applicable to, or the Company's reduction of the
                  benefits applicable to, Executive under any benefit plan or
                  arrangement

                                       13
<PAGE>   14
                  (including without limitation, any pension, life insurance,
                  health or disability plan) in which Executive participates as
                  of the date of the Change in Control without implementation of
                  a substitute plan(s) providing materially similar benefits in
                  the aggregate to those discontinued or reduced, except for a
                  discontinuance of, or reduction under, any such plan or
                  arrangement that is legally required or generally applies to
                  all executives of the Company of a similar level, provided
                  that in either such event the Company provides similar
                  benefits (or the economic effect thereof) to Executive in any
                  manner determined by the Company; or (E) failure of any
                  successor to the Company to assume in writing the obligations
                  hereunder, or (F) a breach of any other material provision of
                  this Employment Agreement, which breach is not corrected
                  within 30 days following written notice to the Company.

         6.       Gross-up. (a) In the event that Executive shall become
                  entitled to the payments and/or benefits provided by Section 5
                  or any other amounts (whether pursuant to the terms of this
                  Employment Agreement or any other plan, arrangement or
                  agreement with the Company, any person whose actions result in
                  a change of ownership covered by Code Section 280G(b)(2) or
                  any person affiliated with the Company or such person) as a
                  result of a Change in Control as defined in Attachment B
                  (collectively the "Company Payments"), and such Company
                  Payments will be subject to the tax (the "Excise Tax") imposed
                  by Section 4999 of the Code (and any similar tax that may
                  hereafter be imposed), subject to paragraph (f) below, the
                  Company shall pay to Executive at the time specified in
                  paragraph (d) below an additional amount (the "Gross-up
                  Payment") such that the net amount retained by Executive,
                  after deduction of any Excise Tax on the Company Payments and
                  any federal, state and local income tax and Excise Tax upon
                  the Gross-up Payment provided for by this paragraph (a), but
                  before deduction for any federal, state or local income tax on
                  the Company Payments, shall be equal to the Company Payments.

                                       14
<PAGE>   15
         (b)      For purposes of determining whether any of the Company
                  Payments and Gross-up Payments (collectively the "Total
                  Payments") will be subject to the Excise Tax and the amount of
                  such Excise Tax, (a) the Total Payments shall be treated as
                  "parachute payments" within the meaning of Section 280G(b)(2)
                  of the Code, and all "parachute payments" in excess of the
                  "base amount" (as defined under Code Section 280G(b)(3) of the
                  Code) shall be treated as subject to the Excise Tax, unless
                  and except to the extent that, in the opinion of the Company's
                  independent certified public accountants appointed prior to
                  any change in ownership (as defined under Code Section
                  280G(b)(2)) or tax counsel selected by such accountants (the
                  "Accountants") such Total Payments (in whole or in part)
                  either do not constitute "parachute payments," represent
                  reasonable compensation for services actually rendered within
                  the meaning of Section 280G(b)(2) of the Code in excess of the
                  "base amount" or are otherwise not subject to the Excise Tax,
                  and (b) the value of any non-cash benefits or any deferred
                  payment or benefit shall be determined by the Accountants in
                  accordance with the principles of Section 280 of the Code.

         (c)      For purposes of determining the amount of the Gross-up
                  Payment, Executive shall be deemed to pay federal income taxes
                  at the highest marginal rate of federal income taxation in the
                  calendar year in which the Gross-up Payment is to be made and
                  state and local income taxes at the highest marginal rate of
                  taxation in the state and locality of Executive's residence
                  for the calendar year in which the Company Payment is to be
                  made, net of the maximum reduction in federal income taxes
                  which could be obtained from deduction of such state and local
                  taxes if paid in such year. In the event that the Excise tax
                  is subsequently determined by the Accountants to be less than
                  the amount taken into account hereunder at the time the
                  Gross-up payment is made, Executive shall repay to the
                  Company, at the time that the amount of such reduction in
                  Excise Tax is finally determined, the portion of the prior
                  Gross-up Payment attributable to such reduction (plus the
                  portion of the Gross-up Payment

                                       15
<PAGE>   16
                  attributable to the Excise tax and federal and state and local
                  income tax imposed on the portion of the Gross-up Payment
                  being repaid by Executive if such repayment results in a
                  reduction in Excise Tax or a federal and state and local
                  income tax deduction), plus interest on the amount of such
                  repayment at the rate provided in Section 1274(b)(2)(B) of the
                  Code. Notwithstanding the foregoing, in the event any portion
                  of the Gross-up Payment to be refunded to the Company has been
                  paid to any federal, state or local tax authority, repayment
                  thereof (and related amounts) shall not be required until
                  actual refund or credit of such portion has been made to
                  Executive, and interest payable to the Company shall not be
                  required until actual refund or credit of such portion has
                  been made to Executive, and interest payable to the Company
                  shall not exceed the interest received or credited to
                  Executive by such tax authority for the period it held such
                  portion. Executive and the Company shall mutually agree upon
                  the course of action to be pursued (and the method of
                  allocating the expense thereof) if Executive's claim for
                  refund or credit is denied.

                  In the event that the Excise Tax is later determined by the
                  Accountants or the Internal Revenue Service to exceed the
                  amount taken into account hereunder at the time the Gross-up
                  Payment is made (including by reason of any payment the
                  existence or amount of which cannot be determined at the time
                  of the Gross-up Payment), the Company shall make an additional
                  Gross-up Payment in respect of such excess (plus any interest
                  or penalties payable with respect to such excess) at the time
                  that the amount of such excess is finally determined.

         (d)      The Gross-up Payment or portion thereof provided for in
                  paragraph (c) above shall be paid not later than the thirtieth
                  day following an event occurring which subjects Executive to
                  the Excise Tax; provided, however, that if the amount of such
                  Gross-up Payment or portion thereof cannot be finally
                  determined on or before such day, the Company shall pay to
                  Executive on such day an estimate,

                                       16
<PAGE>   17
                  as determined in good faith by the Accountants, of the minimum
                  amount of such payments and shall pay the remainder of such
                  payments (together with interest at the rate provided in Code
                  Section 1274(b)(2)(B) of the Code), subject to further
                  payments pursuant to paragraph (c) hereof, as soon as the
                  amount thereof can reasonably be determined, but in no event
                  later than the ninetieth day after the occurrence of the event
                  subjecting Executive to the Excise Tax. In the event that the
                  amount of the estimated payments exceeds the amount
                  subsequently determined to have been due, such excess shall
                  constitute a loan by the Company to Executive, payable on the
                  fifth day after demand by the Company (together with interest
                  at the rate provided in Section 1274(b)(2)(B) of the Code).

         (e)      The Company shall be responsible for all charges of the
                  Accountants.

         7.       Indemnification and Legal Fees. The Company shall defend,
                  indemnify, and hold Executive harmless of or from any and all
                  claims asserted against Executive arising out of his entering
                  into this agreement or the performance of his duties
                  hereunder, in accordance with the indemnification provisions
                  of the Certificate of Incorporation and By-laws of the Company
                  applicable to its officers, as if Executive were an officer of
                  the Company. Executive shall promptly notify the Company of
                  any claim giving rise to indemnification and shall cooperate
                  fully with the Company in the defense of the claim. The
                  Company shall have the right to retain counsel of its choice
                  to defend the claim and to enter into any good faith
                  settlement or compromise of the claim. The Company shall
                  reimburse Executive for reasonable legal costs and expenses
                  incurred by him if it is necessary for Executive to retain
                  separate counsel. The Company shall reimburse Executive the
                  reasonable legal fees (based on hourly rates and
                  disbursements) incurred by him in connection with negotiating
                  and preparing this employment agreement, provided that in no
                  event shall such reimbursement exceed $15,000.

                                       17
<PAGE>   18
          8.      Confidential Information and Non-Competition.

         (a) Executive agrees that during the Employment Period and thereafter
             he shall not disclose, at any time, to any person, or use for his
             own account, nonpublic information of any kind concerning the
             Company or any of its subsidiaries or affiliates, including, but
             not limited to, nonpublic information concerning finances,
             financial plans, accounting methods, strategic plans, operations,
             personnel, organizational structure, methods of distribution,
             suppliers, customers, client relationships, marketing strategies,
             store lists, real estate strategies, or the like ("Confidential
             Information"). During such period, Executive shall not, without the
             prior written consent of the Company, unless compelled pursuant to
             the order of a court or other body having jurisdiction over such
             matter and unless required by lawful process or subpoena,
             communicate or divulge any Confidential Information to anyone other
             than the Company and those designated by the Company. Executive
             agrees that during the Employment Period he will not breach his
             obligations to comply with the provisions of the Code of Corporate
             Conduct of the Company, as in effect on the date hereof and as may
             be amended from time to time.

         (b) Executive recognizes that Confidential Information has been
             developed by the Company and its affiliates at substantial cost and
             constitute valuable and unique property of the Company. Executive
             acknowledges that the foregoing makes it reasonably necessary for
             the protection of the Company's interests that Executive not
             compete with the Company or its affiliates during the Employment
             Period and for a reasonable and limited period thereafter.
             Therefore, Executive agrees that during the term of this agreement
             and for a period of two years thereafter, Executive shall not
             engage in Competition. As used herein, "Competition" shall mean (i)
             participating, directly or indirectly, as an individual proprietor,
             stockholder, officer, employee, director, joint venturer, investor,
             lender, consultant,

                                       18
<PAGE>   19
             or in any capacity whatsoever (within the United States of America,
             or in any country where the Company or any of its subsidiaries or
             affiliates does business) in (A) a business in competition with any
             business conducted by the Company or any of its subsidiaries or
             affiliates for which Executive worked at any time, or (B) a
             business that supplies merchandise for sale at retail by the
             Company having a value of $20 million or more at cost annually to
             the Company or any of its subsidiaries or affiliates; provided,
             however, that (X) such participation shall not include the mere
             ownership of not more than 1 percent of the total outstanding stock
             of a publicly traded company and (Y) a department store or general
             or merchandise store shall not be a business in competition with
             any business conducted by the Company; or (ii) the intentional
             recruiting, soliciting or inducing of any employee or employees of
             the Company or any of its subsidiaries or affiliates to terminate
             their employment with, or otherwise cease their relationship with,
             the Company or any of its subsidiaries or affiliates where such
             employee or employees do in fact so terminate their employment.

         (c) Executive agrees (i) that his services are special and
             extraordinary, (ii) that a violation of his commitment not to
             disclose Confidential Information or otherwise to engage in acts of
             Competition would immediately and irreparably harm the Company, and
             (iii) that such harm would be incapable of adequate remediation by
             money damages. Accordingly, Executive agrees that this paragraph 8
             may be enforced by injunction, and that he will interpose no
             objection or defense to such enforcement. Enforcement by injunction
             shall not bar the Company from any other legal or equitable
             remedies to which it may be entitled for such violation. If any
             restriction set forth with regard to Competition is found by any
             court of competent jurisdiction to be unenforceable because it
             extends for too long a period of time or over too great a range of
             activities or in too broad a geographic area, it is the intention
             of the parties that the court should interpret and enforce such
             restriction to its fullest lawful extent.

                                       19
<PAGE>   20
         9.  Other Agreements. (a) Executive represents to the Company that (i)
             he has fully disclosed to the Company all prior employment
             agreements or understandings to which he is a party; (ii) he will
             satisfy all financial obligations under all prior employment
             agreements or understandings to which he is a party or by which he
             is bound; and (iii) he will not disclose to the Company or use for
             its benefit any trade secrets or proprietary information of any
             prior employer. Executive has advised that he desires and intends
             to terminate his current employment prior to October 1, 1998.

         (b) In the event Executive is legally prohibited from accepting
             employment with the Company on October 1, 1998, then (i) Executive
             shall so notify the Company and the Commencement Date, as specified
             in Section 1(a), shall be the fifth business day following the date
             Executive is no longer so legally prohibited; (ii) the Company
             shall pay Executive, as an additional bonus in connection with the
             execution of this agreement, $100,000 multiplied by the number of
             full months between October 1, 1998 and the Commencement Date, less
             any amount Executive receives from his prior employer as
             compensation related to such months (including salary, the prorated
             portion of any annual or long-term bonus payment, and any severance
             payment); and (iii) this agreement shall be automatically, and
             without further action by either party, amended to provide that the
             position for which Executive is being employed is President and
             Chief Executive Officer of the Foot Locker Worldwide division of
             the Company, or such other comparable position as the Company may
             specify.

         10. Assignment. This agreement shall be binding upon and inure to the
             benefit of the parties hereto and their respective successors,
             heirs, and permitted assigns. This agreement is personal to
             Executive and neither this agreement or any rights hereunder may be
             assigned by him. No rights or obligations of the Company under this
             agreement may be assigned or transferred by the Company except that
             such rights or obligations may be assigned or transferred pursuant
             to a merger or

                                       20
<PAGE>   21
             consolidation in which the Company is not the continuing entity, or
             pursuant to a sale of all or substantially all of the assets of the
             Company, provided that the assignee or transferee is the successor
             to all or substantially all of the assets of the Company and such
             assignee or transferee assumes the liabilities, obligations and
             duties of the Company, as contained in this agreement, either
             contractually or as a matter of law.

         11. Arbitration. Any controversy or claim arising out of or relating to
             this agreement, or the breach thereof, shall be settled by
             arbitration in the City of New York, in accordance with the rules
             of the American Arbitration Association (the "AAA"); provided,
             however, that this Section shall not apply to Section 8 herein. The
             decision of the arbitrator(s) shall be final and binding on the
             parties hereto and judgment upon the award rendered by the
             arbitrator(s) may be entered in any court having jurisdiction
             thereof. The costs assessed by the AAA for arbitration shall be
             borne equally by both parties.

         12. Notice. Any notice to either party hereunder shall be in writing,
             and shall be deemed to be sufficiently given to or served on such
             party, for all purposes, if the same shall be personally delivered
             to such party, or sent to such party by registered mail, postage
             prepaid, in the case of Executive, at the address first given
             above, and in the case of the Company, to the General Counsel,
             Venator Group, Inc., 233 Broadway, New York, New York 10279. Either
             party hereto may change the address to which notices are to be sent
             to such party hereunder by written notice of such new address given
             to the other party hereto. Notices shall be deemed given when
             received if delivered personally or three (3) days after mailing if
             mailed as aforesaid.

         13. Applicable Law. This agreement shall be governed by and construed
             and enforced in accordance with the laws of the State of New York
             applicable to contracts between residents of such state to be
             performed therein.

                                       21
<PAGE>   22
         14.   Miscellaneous.

             (a)  This agreement represents the entire understanding of the
                  parties hereto, supersedes any prior understandings or
                  agreements between the parties, and the terms and provisions
                  of this agreement may not be modified or amended except in a
                  writing signed by both parties.

             (b)  No waiver by either party of any breach by the other party of
                  any condition or provision contained in this agreement to be
                  fulfilled or performed by such other party shall be deemed a
                  waiver of a similar or dissimilar condition or provision at
                  the same or any prior or subsequent time. Except to the extent
                  otherwise specifically provided herein, any waiver must be in
                  writing and signed by you or an authorized officer of the
                  Company, as the case may be.

                                       22
<PAGE>   23
         IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Employment Agreement as of the day and year first above written.

                                           VENATOR GROUP, INC.
                                           By: /s/ Roger N. Farah
                                              -----------------------------

                                               /s/ Matthew D. Serra
                                              -----------------------------
                                                   Matthew D. Serra

                                       23
<PAGE>   24
                                  Attachment B

                                Change in Control

         A Change in Control shall mean any of the following: (i) (A) the making
of a tender or exchange offer by any person or entity or group of associated
persons or entities (within the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934) (a "Person") (other than the Company or its
Affiliates) for shares of common stock pursuant to which purchases are made of
securities representing at least twenty percent (20%) of the total combined
voting power of the Company's then issued and outstanding voting securities; (B)
the merger or consolidation of the Company with, or the sale or disposition of
all or substantially all of the assets of the Company to, any Person other than
(a) a merger or consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving or parent entity) fifty percent (50%) or more of the combined voting
power of the voting securities of the Company or such surviving or parent entity
outstanding immediately after such merger or consolidation; or (b) a merger or
capitalization effected to implement a recapitalization of the Company (or
similar transaction) in which no Person is or becomes the beneficial owner,
directly or indirectly (as determined under Rule 13d-3 promulgated under the
Securities Exchange Act of 1934), of securities representing more than the
amounts set forth in (C) below; (C) the acquisition of direct or indirect
beneficial ownership (as determined under Rule 13d-3 promulgated under the
Securities Exchange Act of 1934), in the aggregate, of securities of the Company
representing twenty percent (20%) or more of the total combined voting power of
the Company's then issued and outstanding voting securities by any Person acting
in concert as of the date of this Agreement; provided, however, that the Board
may at any time and from time to time and in the sole discretion of the Board,
as the case may be, increase the voting security ownership percentage threshold
of this item (C) to an amount not exceeding forty percent (40%); or (D) the
approval by the shareholders of the Company of any plan or proposal for the
complete liquidation or dissolution of the Company or for the sale of all or
substantially all of the assets of the Company; or (ii) during any period of not
more than two (2) consecutive years,

                                       24
<PAGE>   25
individuals who at the beginning of such period constitute the Board, any new
director (other than a director designated by a person who has entered into
agreement with the Company to effect a transaction described in clause (i))
whose election by the Board or nomination for election by the Company's
stockholders was approved by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors at the beginning of the
period or whose election or nomination for election was previously so approved,
cease for any reason to constitute at least a majority thereof.

                                       25
<PAGE>   26

                                                      ATTACHMENT B

                        RESTRICTED STOCK AWARD AGREEMENT
                             UNDER THE VENATOR GROUP
                        1998 STOCK OPTION AND AWARD PLAN

         This Restricted Stock Award Agreement (the "Agreement") made under the
Venator Group 1998 Stock Option and Award Plan (the "Plan") on this 21st day of
September 1998 by and between Venator Group, Inc., a New York corporation with
its principal office located at 233 Broadway, New York, New York 10279 (the
"Company") and Matthew D. Serra, residing at 8 Glenby Lane, Brookville, New York
11545 (the "Executive").

         Effective September 21, 1998, the Compensation Committee of the Board
of Directors of the Company has granted the Executive an award of 60,000 shares
of Restricted Stock under the Plan, subject to the terms of the Plan and the
restrictions set forth in this Agreement.

1.       Grant of Shares

         The Company is transferring to the Executive 60,000 shares of validly
issued Common Stock of the Company, par value $.01 per share. Such shares are
fully paid and nonassessable and upon transfer shall be validly issued and
outstanding. The shares are subject to certain restrictions pursuant to Section
3 hereof, which restrictions shall expire at various times with regard to
portions of the Restricted Stock.

2.       Restrictions on Transfer

         The Employee shall not sell, transfer, pledge, hypothecate, assign or
otherwise dispose of the Restricted Stock, except as set forth in this
Agreement. Any attempted sale, transfer, pledge, hypothecation, assignment or
other disposition of the shares in violation of this Agreement shall be void and
of no effect and the Company shall have the right to disregard the same on its
books and records and to issue "stop transfer" instructions to its transfer
agent.

3.       Restricted Stock

3.1      Deposit of Certificates.

          The Executive will deposit with and deliver to the Company the stock
certificates representing the Restricted Stock, each duly endorsed in blank or
accompanied by stock powers duly executed in blank. In the event the Executive
receives a stock dividend on the Restricted Stock or the Restricted Stock is
split or the Executive receives any other shares, securities, monies, or
property representing a dividend on the Restricted Stock (other than regular
cash dividends on and after the date of this Agreement) or representing a

                                       26
<PAGE>   27

distribution or return of capital upon or in respect of the Restricted Stock or
any part thereof, or resulting from a split-up, reclassification or other like
changes of the Restricted Stock, or otherwise received in exchange therefor, and
any warrants, rights or options issued to the Executive in respect of the
Restricted Stock (collectively the "RS Property"), the Executive will also
immediately deposit with and deliver to the Company any of such RS Property,
including any certificates representing shares duly endorsed in blank or
accompanied by stock powers duly executed in blank, and such RS Property shall
be subject to the same restrictions, including that of this Section 3.1, as the
Restricted Stock with regard to which they are issued and shall herein be
encompassed within the term "Restricted Stock."

3.2      Rights with Regard to the Restricted Stock.

          The Restricted Stock has been transferred from either the Company's
treasury or newly issued stock and, therefore, upon delivery to the Executive
will constitute issued and outstanding shares of Common Stock for all corporate
purposes. From and after the date of transfer, the Executive will have the right
to vote the Restricted Stock, to receive and retain all regular cash dividends
payable to record holders of Common Stock on and after the transfer of the
Restricted Stock (although such dividends shall be treated, to the extent
required by law, as additional compensation for tax purposes if paid on
Restricted Stock), and to exercise all other rights, powers and privileges of a
holder of Common Stock with respect to the Restricted Stock, with the exceptions
that (i) the Executive will not be entitled to delivery of the stock certificate
or certificates representing the Restricted Stock until the restriction period
shall have expired and unless all other vesting requirements with respect
thereto shall have been fulfilled, (ii) the Company will retain custody of the
stock certificate or certificates representing the Restricted Stock and the
other RS Property during the restriction period, (iii) no RS Property shall bear
interest or be segregated in separate accounts during the restriction period and
(iv) the Executive may not sell, assign, transfer, pledge, exchange, encumber or
dispose of the Restricted Stock during the restriction period.

3.3      Vesting.

          If the Executive commences his employment with the Company on or prior
to October 1, 1998, the Restricted Stock shall become vested and cease to be
Restricted Stock (but still subject to the other terms of the Plan and this
Agreement) as follows if the Executive has been continuously employed by the
Company or its subsidiaries within the meaning of Section 424 of the Internal
Revenue Code of 1986, as amended (the "Control Group") until such date:

<TABLE>
<S>                                                              <C>
On the first anniversary of Commencement Date                    12,000 shares
On the second anniversary of Commencement Date                   12,000 shares
On the third anniversary of Commencement Date                    12,000 shares
On the fourth anniversary of Commencement Date                   12,000 shares
On the fifth anniversary of Commencement Date                    12,000 shares
</TABLE>

                                       27
<PAGE>   28

         There shall be no proportionate or partial vesting in the periods prior
to each vesting date and all vesting shall occur only on the appropriate vesting
date, provided that, if the Executive is terminated without cause or terminated
for Good Reason, both as provided in the Executive's employment agreement with
the Company dated September 8, 1998 (the "Employment Agreement"), or if at the
end of the three year period covered by the Employment Agreement, the Company
does not offer to extend the Employment Agreement for at least a two year period
immediately following September 30, 2001 under the same terms and conditions
then existing (other than with respect to the compensation provided for in
Sections 4(b), 4(g), and 4(k) and 4(i)), for reasons other than Cause (as
defined in the Employment Agreement), the unvested portion of the Executive's
Restricted Stock will become vested as of the last date of his employment.

         Subject to the approval of the Compensation Committee of the Company's
Board of Directors and the provisions of the Plan, if the Executive is
prohibited in any legal proceeding from commencing his employment with the
Company on or before October 1, 1998, then for purposes of the vesting schedule
referred to in the preceding paragraph, Executive shall be deemed to have been
continuously employed by the Company from October 1, 1998 to Executive's actual
Commencement Date (as defined in the Employment Agreement). When any Restricted
Stock becomes vested, the Company shall promptly issue and deliver to the
Executive a new stock certificate registered in the name of the Executive for
such shares without the legend set forth in Section 4 hereof and deliver to the
Executive any related other RS Property.

         In addition, all shares of Restricted Stock shall become immediately
vested and cease to be Restricted Stock upon any Change in Control as defined in
Appendix A hereto.

3.4      Forfeiture.

          In the event of the Executive's death, disability, or resignation, the
Executive shall forfeit to the Company, without compensation, all unvested
shares of Restricted Stock; provided that, in the event of death or disability
of the Executive, the Compensation Committee of the Board of Directors of the
Company may, in its sole discretion, but shall not be obligated to, fully vest
and not forfeit all or any portion of the Executive's Restricted Stock.

3.5      Adjustments.

         In the event of any stock dividend, split up, split-off, spin-off,
distribution, recapitalization, combination or exchange of shares, merger,
consolidation, reorganization or liquidation or the like, the Restricted Stock
shall, where appropriate in the sole discretion of the Compensation Committee of
the Board of Directors of the Company, receive the same distributions as other
shares of Common Stock or on some other basis as determined by the Compensation
Committee of the Board of Directors. In any such event, the Compensation
Committee of the Board of Directors may, in its sole discretion,

                                       28
<PAGE>   29

determine to award additional Restricted Stock in lieu of the distribution or
adjustment being made with respect to other shares of Common Stock. In any such
event, the determination made by the Compensation Committee of the Board of
Directors shall be conclusive. The Compensation Committee of the Board of
Directors may, in its sole discretion, at any time fully vest and not forfeit
all or any portion of the Executive's Restricted Stock.

3.6      Withholding.

          The Employee agrees that, subject to subsection 3.7 below,

         (a) No later than the date on which any Restricted Stock shall have
         become vested, the Executive will pay to the Company, or make
         arrangements satisfactory to the Company regarding payment of, any
         federal, state or local taxes of any kind required by law to be
         withheld with respect to any Restricted Stock which shall have become
         so vested;

                                       29
<PAGE>   30
         (b) The Company shall, to the extent permitted by law, have the right
         to deduct from any payment of any kind otherwise due to the Executive
         any federal, state or local taxes of any kind required by law to be
         withheld with respect to any Restricted Stock which shall have become
         so vested; and

         (c) In the event the Executive does not satisfy (a) above on a timely
         basis, the Company may, but shall not be required to, pay such required
         withholding and treat such amount as a demand loan to the Employee at
         the maximum rate permitted by law, with such loan, at the Company's
         sole discretion and provided the Company so notifies the Employee
         within thirty (30) days of the making of the loan, secured by the
         shares of Common Stock and any failure by the Executive to pay the loan
         upon demand shall entitle the Company to all of the rights at law of a
         creditor secured by the shares of Common Stock. The Company may hold as
         security any certificates representing any shares of Common Stock and,
         upon demand of the Company, the Executive shall deliver to the Company
         any certificates in his possession representing shares of Common Stock
         together with a stock power duly endorsed in blank.

3.7      Section 83(b).

         If the Executive properly elects (as required by Section 83(b) of the
Internal Revenue Code of 1986, as amended) within thirty (30) days after the
issuance of the Restricted Stock to include in gross income for federal income
tax purposes in the year of issuance the fair market value of such Restricted
Stock, the Executive shall pay to the Company or make arrangements satisfactory
to the Company to pay to the Company upon such election, any federal, state or
local taxes required to be withheld with respect to such Restricted Stock. If
the Executive shall fail to make such payment, the Company shall, to the extent
permitted by law, have the right to deduct from any payment of any kind
otherwise due to the Executive any federal, state or local taxes of any kind
required by law to be withheld with respect to such Restricted Stock, as well as
the rights set forth in Section 3.6(c) hereof. The Executive acknowledges that
it is his sole responsibility, and not the Company's, to file timely the
election under Section 83(b) of the Internal Revenue Code of 1986, as amended,
and any corresponding provisions of state tax laws if he elects to utilize such
election.

3.8      Special Incentive Compensation.

         The Executive agrees that the award of the Restricted Stock hereunder
is special incentive compensation and that it, any dividends paid thereon (even
if treated as compensation for tax purposes) and any other RS Property will not
be taken into account as "salary" or "compensation" or "bonus" in determining
the amount of any payment under any pension, retirement or profit-sharing plan
of the Company or any life insurance, disability or other benefit plan of the
Company.

                                       30
<PAGE>   31

3.9      Delivery Delay.

         The delivery of any certificate representing Restricted Stock or other
RS Property may be postponed by the Company for such period as may be required
for it to comply with any applicable federal or state securities law, or any
national securities exchange listing requirements and the Company is not
obligated to issue or deliver any securities if, in the opinion of counsel for
the Company, the issuance of such shares shall constitute a violation by the
Executive or the Company of any provisions of any law or of any regulations of
any governmental authority or any national securities exchange.

4.       Legend.

         All certificates representing shares of Restricted Stock shall have
endorsed thereon a legend referring to the terms, conditions and restrictions
applicable to such Restricted Stock, substantially in the following form:

"The anticipation, alienation, attachment, sale, transfer, assignment, pledge,
encumbrance or charge of the shares of stock represented hereby are subject to
the terms and conditions (including forfeiture) of the Venator Group (the
"Company") 1998 Stock Option and Award Plan and an Agreement entered into
between the registered owner and the Company dated as of September 21, 1998.
Copies of such Plan and Agreement are on file at the principal office of the
Company."

5.       Not an Employment Agreement.

         The issuance of the shares of Restricted Stock hereunder does not
constitute an agreement by the Company to continue to employ the Executive
during the entire, or any portion of the, term of this Agreement, including but
not limited to any period during which the Restricted Stock is outstanding.

6.       Power of Attorney.

         The Company, its successors and assigns, is hereby appointed the
attorney-in-fact, with full power of substitution, of the Executive for the
purpose of carrying out the provisions of this Agreement and taking any action
and executing any instruments which such attorney-in-fact may deem necessary or
advisable to accomplish the purposes hereof, which appointment as
attorney-in-fact is irrevocable and coupled with an interest. The Company, as
attorney-in-fact for the Executive, may, in the name and stead of the Executive,
make and execute all conveyances, assignments and transfers of the Restricted
Stock, shares and property provided for herein, and the Executive hereby
ratifies and confirms all that the Company, as said attorney-in-fact, shall do
by virtue hereof. Nevertheless, the Executive shall, if so requested by the
Company, execute and deliver to the Company all such instruments as may, in the
judgment of the Company, be advisable for the purpose.

                                       31
<PAGE>   32

7.       Miscellaneous.

7.1 This Agreement shall inure to the benefit of and be binding upon all parties
hereto and their respective heirs, legal representatives, successors and
assigns.

7.2 This Agreement constitutes the entire agreement between the parties and
cannot be changed or terminated orally. No modification or waiver of any of the
provisions hereof shall be effective unless in writing and signed by the party
against whom it is sought to be enforced.

7.3 This Agreement may be executed in one or more counterparts, all of which
taken together shall constitute one contract.

7.4 The failure of any party hereto at any time to require performance by
another party of any provision of this Agreement shall not affect the right of
such party to require performance of that provision, and any waiver by any party
of any breach of any provision of this Agreement shall not be construed as a
waiver of any continuing or succeeding breach of such provision, a waiver of the
provision itself, or a waiver of any right under this Agreement.

7.5 The headings of the sections of this Agreement have been inserted for
convenience of reference only and shall in no way restrict or modify any of the
terms or provisions hereof.

7.6 All notices, consents, requests, approvals, instructions and other
communications provided for herein shall be in writing and validly given or made
when delivered, or on the second succeeding business day after being mailed by
registered or certified mail, whichever is earlier, to the persons entitled or
required to receive the same, at the addresses set forth at the heading of this
Agreement or to such other address as either party may designate by like notice.
Notices to the Company shall be addressed to the Chairman of the Compensation
Committee with a copy similarly sent to the General Counsel.

7.7 This Agreement shall be governed and construed and the legal relationships
of the parties determined in accordance with the internal laws of the State of
New York.

7.8 To indicate your acceptance of the terms of this Restricted Stock Award
Agreement, you must sign and deliver or mail not later than November 20, 1998 a
copy of this Agreement to the General Counsel of the Company at the address
provided in the heading of this Agreement.

                                       32
<PAGE>   33

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.

                                                       VENATOR GROUP, INC.

                                                       By:/s/ Roger N. Farah
                                                          ------------------

                                                         /s/ Matthew D. Serra
                                                         --------------------
                                                             Matthew D. Serra

                                       33
<PAGE>   34

                                 ACKNOWLEDGMENT

STATE OF  NEW YORK     )
                       ) s.s.:
COUNTY OF  NEW YORK    )

         On this 13th day of October, 1998 before me personally appeared
Matthew Serra, to me known to be the person described in and who executed the
foregoing agreement, and acknowledged that he executed the same as his free act
and deed.

                                           /s/ Kathryn M. Kress
                                           -----------------------------------
                                           Notary Public
                                           KATHRYN M. KRESS
                                           Notary Public, State of New York
                                           No. 43-4742328
                                           Qualified in Richmond County
                                           Certificate Filed in New York County
                                           Commission Expires Feb. 28, 2000

                                       34
<PAGE>   35
                                   APPENDIX A

                                CHANGE IN CONTROL

         A Change in Control shall mean any of the following: (i) (A) the making
of a tender or exchange offer by any person or entity or group of associated
persons or entities (within the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934) (a "Person") (other than the Company or its
Affiliates) for shares of Common Stock pursuant to which purchases are made of
securities representing at least twenty percent (20%) of the total combined
voting power of the Company's then issued and outstanding voting securities; (B)
the merger or consolidation of the Company with, or the sale or disposition of
all or substantially all of the assets of the Company to, any Person other than
(a) a merger or consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving or parent entity) fifty percent (50%) or more of the combined voting
power of the voting securities of the Company or such surviving or parent entity
outstanding immediately after such merger or consolidation; or (b) a merger or
capitalization effected to implement a recapitalization of the Company (or
similar transaction) in which no Person is or becomes the beneficial owner,
directly or indirectly (as determined under Rule 13d-3 promulgated under the
Securities Exchange Act of 1934), of securities representing more than the
amounts set forth in (C) below; (C) the acquisition of direct or indirect
beneficial ownership (as determined under Rule 13d-3 promulgated under the
Securities Exchange Act of 1934), in the aggregate, of securities of the Company
representing twenty percent (20%) or more of the total combined voting power of
the Company's then issued and outstanding voting securities by any Person acting
in concert as of the date of this Agreement; provided, however, that the Board
of Directors of the Company (referred to herein as the "Board") may at any time
and from time to time and in the sole discretion of the Board, as the case may
be, increase the voting security ownership percentage threshold of this item (C)
to an amount not exceeding forty percent (40%); or (D) the approval by the
shareholders of the Company of any plan or proposal for the complete liquidation
or dissolution of the Company or for the sale of all or substantially all of the
assets of the Company; or (ii) during any period of not more than two (2)
consecutive years, individuals who at the beginning of such period constitute
the Board, and any new director (other than a director designated by a person
who has entered into agreement with the Company to effect a transaction
described in clause (i)) whose election by the Board or nomination for election
by the Company's shareholders was approved by a vote of at least two-thirds (")
of the directors then still in office who either were directors at the beginning
of the period or whose election or nomination for election was previously so
approved, cease for any reason to constitute at least a majority thereof.

                                       35
<PAGE>   36

                                                ATTACHMENT C

                        RESTRICTED STOCK AWARD AGREEMENT
                             UNDER THE VENATOR GROUP
                        1995 STOCK OPTION AND AWARD PLAN

         This Restricted Stock Award Agreement (the "Agreement") made under the
Venator Group 1995 Stock Option and Award Plan (the "Plan") as of the 9th day of
February 2000 by and between Venator Group, Inc., a New York corporation with
its principal office located at 233 Broadway, New York, New York 10279 (the
"Company") and Matthew D. Serra, residing at 8 Glenby Lane, Brookville, New York
11545 (the "Executive").

         Effective February 9, 2000, the Compensation Committee of the Board of
Directors of the Company has granted the Executive an award of 100,000 shares of
Restricted Stock under the Plan, subject to the terms of the Plan and the
restrictions set forth in this Agreement.

1.       Grant of Shares

         The Company is transferring to the Executive 100,000 shares of validly
issued Common Stock of the Company, par value $.01 per share. Such shares are
fully paid and nonassessable and upon transfer shall be validly issued and
outstanding. The shares are subject to certain restrictions pursuant to Section
3 hereof, which restrictions shall expire as provided in Section 3.3 hereof.

2.       Restrictions on Transfer

         The Executive shall not sell, transfer, pledge, hypothecate, assign or
otherwise dispose of the Restricted Stock, except as set forth in this
Agreement. Any attempted sale, transfer, pledge, hypothecation, assignment or
other disposition of the shares in violation of this Agreement shall be void and
of no effect and the Company shall have the right to disregard the same on its
books and records and to issue "stop transfer" instructions to its transfer
agent.

3.       Restricted Stock

3.1      Deposit of Certificates.

         The Executive will deposit with and deliver to the Company the stock
certificates representing the Restricted Stock, each duly endorsed in blank or
accompanied by stock powers duly executed in blank. In the event the Executive
receives a stock dividend on the

                                       36
<PAGE>   37

Restricted Stock or the Restricted Stock is split or the Executive receives any
other shares, securities, monies, or property representing a dividend on the
Restricted Stock (other than regular cash dividends on and after the date of
this Agreement) or representing a distribution or return of capital upon or in
respect of the Restricted Stock or any part thereof, or resulting from a
split-up, reclassification or other like changes of the Restricted Stock, or
otherwise received in exchange therefor, and any warrants, rights or options
issued to the Executive in respect of the Restricted Stock (collectively the "RS
Property"), the Executive will also immediately deposit with and deliver to the
Company any of such RS Property, including any certificates representing shares
duly endorsed in blank or accompanied by stock powers duly executed in blank,
and such RS Property shall be subject to the same restrictions, including that
of this Section 3.1, as the Restricted Stock with regard to which they are
issued and shall herein be encompassed within the term "Restricted Stock."

3.2      Rights with Regard to the Restricted Stock.

         The Restricted Stock has been transferred from either the Company's
treasury or newly issued stock and, therefore, upon delivery to the Executive
will constitute issued and outstanding shares of Common Stock for all corporate
purposes. From and after the date of transfer, the Executive will have the right
to vote the Restricted Stock, to receive and retain all regular cash dividends
payable to record holders of Common Stock on and after the transfer of the
Restricted Stock (although such dividends shall be treated, to the extent
required by law, as additional compensation for tax purposes if paid on
Restricted Stock), and to exercise all other rights, powers and privileges of a
holder of Common Stock with respect to the Restricted Stock, with the exceptions
that (i) the Executive will not be entitled to delivery of the stock certificate
or certificates representing the Restricted Stock until the restriction period
shall have expired and unless all other vesting requirements with respect
thereto shall have been fulfilled, (ii) the Company will retain custody of the
stock certificate or certificates representing the Restricted Stock and the
other RS Property during the restriction period, (iii) no RS Property shall bear
interest or be segregated in separate accounts during the restriction period and
(iv) the Executive may not sell, assign, transfer, pledge, exchange, encumber or
dispose of the Restricted Stock during the restriction period.

3.3      Vesting.

         The Restricted Stock shall become vested and cease to be Restricted
Stock (but still subject to the other terms of the Plan and this Agreement) on
February 1, 2002 if the Executive has been continuously employed by the Company
or its subsidiaries within the meaning of Section 424 of the Internal Revenue
Code of 1986, as amended (the "Control Group") until such date.

         Other than as may be provided for under Section 3.4 hereof, there shall
be no proportionate or partial vesting prior to the vesting date and all vesting
shall occur only on the appropriate vesting date.

                                       37
<PAGE>   38

         When any Restricted Stock becomes vested, the Company shall promptly
issue and deliver to the Executive a new stock certificate registered in the
name of the Executive for such shares without the legend set forth in Section 4
hereof and deliver to the Executive any related other RS Property.

         In addition, all shares of Restricted Stock shall become immediately
vested and cease to be Restricted Stock upon any Change in Control as defined in
Appendix A hereto.

3.4      Forfeiture.

         In the event of the Executive's death, disability, or resignation, the
Executive shall forfeit to the Company, without compensation, all unvested
shares of Restricted Stock; provided that (i) in the event of death or
disability of the Executive or (ii) in the event that the Executive ceases to be
employed by the Company or any subsidiary or affiliate of the Company as a
result of the closing, sale, spin-off or other divestiture of any operation of
the Company, the Compensation Committee of the Board of Directors of the Company
may, in its sole discretion, but shall not be obligated to, fully vest and not
forfeit all or any portion of the Executive's Restricted Stock.

3.5      Adjustments.

         In the event of any stock dividend, split up, split-off, spin-off,
distribution, recapitalization, combination or exchange of shares, merger,
consolidation, reorganization or liquidation or the like, the Restricted Stock
shall, where appropriate in the sole discretion of the Compensation Committee of
the Board of Directors of the Company, receive the same distributions as other
shares of Common Stock or on some other basis as determined by the Compensation
Committee of the Board of Directors. In any such event, the Compensation
Committee of the Board of Directors may, in its sole discretion, determine to
award additional Restricted Stock in lieu of the distribution or adjustment
being made with respect to other shares of Common Stock. In any such event, the
determination made by the Compensation Committee of the Board of Directors shall
be conclusive. The Compensation Committee of the Board of Directors may, in its
sole discretion, at any time fully vest and not forfeit all or any portion of
the Executive's Restricted Stock.

3.6      Withholding.

         The Employee agrees that, subject to subsection 3.7 below,

         (a) No later than the date on which any Restricted Stock shall have
become vested, the Executive will pay to the Company, or make arrangements
satisfactory to the Company regarding payment of, any federal, state or local
taxes of any kind required by law to be withheld with respect to any Restricted
Stock which shall have become so vested;

                                       38
<PAGE>   39

         (b) The Company shall, to the extent permitted by law, have the right
to deduct from any payment of any kind otherwise due to the Executive any
federal, state or local taxes of any kind required by law to be withheld with
respect to any Restricted Stock which shall have become so vested; and

         (c) In the event the Executive does not satisfy (a) above on a timely
basis, the Company may, but shall not be required to, pay such required
withholding and treat such amount as a demand loan to the Employee at the
maximum rate permitted by law, with such loan, at the Company's sole discretion
and provided the Company so notifies the Employee within thirty (30) days of the
making of the loan, secured by the shares of Common Stock and any failure by the
Executive to pay the loan upon demand shall entitle the Company to all of the
rights at law of a creditor secured by the shares of Common Stock. The Company
may hold as security any certificates representing any shares of Common Stock
and, upon demand of the Company, the Executive shall deliver to the Company any
certificates in his possession representing shares of Common Stock together with
a stock power duly endorsed in blank.

3.7      Section 83(b).

         If the Executive properly elects (as required by Section 83(b) of the
Internal Revenue Code of 1986, as amended) within thirty (30) days after the
issuance of the Restricted Stock to include in gross income for federal income
tax purposes in the year of issuance the fair market value of such Restricted
Stock, the Executive shall pay to the Company or make arrangements satisfactory
to the Company to pay to the Company upon such election, any federal, state or
local taxes required to be withheld with respect to such Restricted Stock. If
the Executive shall fail to make such payment, the Company shall, to the extent
permitted by law, have the right to deduct from any payment of any kind
otherwise due to the Executive any federal, state or local taxes of any kind
required by law to be withheld with respect to such Restricted Stock, as well as
the rights set forth in Section 3.6(c) hereof. The Executive acknowledges that
it is his sole responsibility, and not the Company's, to file timely the
election under Section 83(b) of the Internal Revenue Code of 1986, as amended,
and any corresponding provisions of state tax laws if he elects to utilize such
election.

3.8      Special Incentive Compensation.

         The Executive agrees that the award of the Restricted Stock hereunder
is special incentive compensation and that it, any dividends paid thereon (even
if treated as compensation for tax purposes) and any other RS Property will not
be taken into account as "salary" or "compensation" or "bonus" in determining
the amount of any payment under any pension, retirement or profit-sharing plan
of the Company or any life insurance, disability or other benefit plan of the
Company.

                                       39
<PAGE>   40

3.9      Delivery Delay.

         The delivery of any certificate representing Restricted Stock or other
RS Property may be postponed by the Company for such period as may be required
for it to comply with any applicable federal or state securities law, or any
national securities exchange listing requirements and the Company is not
obligated to issue or deliver any securities if, in the opinion of counsel for
the Company, the issuance of such shares shall constitute a violation by the
Executive or the Company of any provisions of any law or of any regulations of
any governmental authority or any national securities exchange.

4.       Legend.

         All certificates representing shares of Restricted Stock shall have
endorsed thereon a legend referring to the terms, conditions and restrictions
applicable to such Restricted Stock, substantially in the following form:

         "The anticipation, alienation, attachment, sale, transfer, assignment,
pledge, encumbrance or charge of the shares of stock represented hereby are
subject to the terms and conditions (including forfeiture) of the Venator Group
(the "Company") 1995 Stock Option and Award Plan and an Agreement entered into
between the registered owner and the Company dated as of February 9, 2000.
Copies of such Plan and Agreement are on file at the principal office of the
Company."

5.       Not an Employment Agreement.

         The issuance of the shares of Restricted Stock hereunder does not
constitute an agreement by the Company to continue to employ the Executive
during the entire, or any portion of the, term of this Agreement, including but
not limited to any period during which the Restricted Stock is outstanding.

6.       Power of Attorney.

         The Company, its successors and assigns, is hereby appointed the
attorney-in-fact, with full power of substitution, of the Executive for the
purpose of carrying out the provisions of this Agreement and taking any action
and executing any instruments which such attorney-in-fact may deem necessary or
advisable to accomplish the purposes hereof, which appointment as
attorney-in-fact is irrevocable and coupled with an interest. The Company, as
attorney-in-fact for the Executive, may, in the name and stead of the Executive,
make and execute all conveyances, assignments and transfers of the Restricted
Stock, shares and property provided for herein, and the Executive hereby
ratifies and confirms all that the Company, as said attorney-in-fact, shall do
by virtue hereof. Nevertheless, the Executive shall, if so requested by the
Company, execute and deliver to the Company all such instruments as may, in the
judgment of the Company, be advisable for the purpose.

                                       40
<PAGE>   41

7.       Miscellaneous.

7.1 This Agreement shall inure to the benefit of and be binding upon all parties
hereto and their respective heirs, legal representatives, successors and
assigns.

7.2 This Agreement constitutes the entire agreement between the parties and
cannot be changed or terminated orally. No modification or waiver of any of the
provisions hereof shall be effective unless in writing and signed by the party
against whom it is sought to be enforced.

7.3 This Agreement may be executed in one or more counterparts, all of which
taken together shall constitute one contract.

7.4 The failure of any party hereto at any time to require performance by
another party of any provision of this Agreement shall not affect the right of
such party to require performance of that provision, and any waiver by any party
of any breach of any provision of this Agreement shall not be construed as a
waiver of any continuing or succeeding breach of such provision, a waiver of the
provision itself, or a waiver of any right under this Agreement.

7.5 The headings of the sections of this Agreement have been inserted for
convenience of reference only and shall in no way restrict or modify any of the
terms or provisions hereof.

7.6 All notices, consents, requests, approvals, instructions and other
communications provided for herein shall be in writing and validly given or made
when delivered, or on the second succeeding business day after being mailed by
registered or certified mail, whichever is earlier, to the persons entitled or
required to receive the same, at the addresses set forth at the heading of this
Agreement or to such other address as either party may designate by like notice.
Notices to the Company shall be addressed to the Chairman of the Compensation
Committee with a copy similarly sent to the General Counsel.

7.7 This Agreement shall be governed and construed and the legal relationships
of the parties determined in accordance with the internal laws of the State of
New York.

7.8 To indicate your acceptance of the terms of this Restricted Stock Award
Agreement, you must sign and deliver or mail not later than March 9, 2000 a copy
of this Agreement to the General Counsel of the Company at the address provided
in the heading of this Agreement.

                                       41
<PAGE>   42

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.

                                           VENATOR GROUP, INC.

                                           By:/s/ Dennis M. Lee
                                              ---------------------
                                              Senior Vice President

                                              /s/ Matthew D. Serra
                                              ---------------------
                                                  Matthew D. Serra

                                       42
<PAGE>   43

                                 ACKNOWLEDGMENT

STATE OF NEW YORK      )
                       ) s.s.:
COUNTY OF  NEW YORK    )

                  On this 12th day of January, 2000 before me personally
appeared Matthew D. Serra, to me known to be the person described in and who
executed the foregoing agreement, and acknowledged that he executed the same as
his free act and deed.

                                              /s/ Shirley Camacho
                                              ---------------------
                                              Notary Public
                                              SHIRLEY A. CAMACHO
                                              Notary Public, State of New York
                                              No. 01CA5040447
                                              Qualified in Bronx County
                                              Commission Expires March 12, 2001

                                       43
<PAGE>   44

                                   APPENDIX A

                                CHANGE IN CONTROL

         A Change in Control shall mean any of the following: (i) (A) the making
of a tender or exchange offer by any person or entity or group of associated
persons or entities (within the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934) (a "Person") (other than the Company or its
Affiliates) for shares of Common Stock pursuant to which purchases are made of
securities representing at least twenty percent (20%) of the total combined
voting power of the Company's then issued and outstanding voting securities; (B)
the merger or consolidation of the Company with, or the sale or disposition of
all or substantially all of the assets of the Company to, any Person other than
(a) a merger or consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving or parent entity) fifty percent (50%) or more of the combined voting
power of the voting securities of the Company or such surviving or parent entity
outstanding immediately after such merger or consolidation; or (b) a merger or
capitalization effected to implement a recapitalization of the Company (or
similar transaction) in which no Person is or becomes the beneficial owner,
directly or indirectly (as determined under Rule 13d-3 promulgated under the
Securities Exchange Act of 1934), of securities representing more than the
amounts set forth in (C) below; (C) the acquisition of direct or indirect
beneficial ownership (as determined under Rule 13d-3 promulgated under the
Securities Exchange Act of 1934), in the aggregate, of securities of the Company
representing twenty percent (20%) or more of the total combined voting power of
the Company's then issued and outstanding voting securities by any Person acting
in concert as of the date of this Agreement; provided, however, that the Board
of Directors of the Company (referred to herein as the "Board") may at any time
and from time to time and in the sole discretion of the Board, as the case may
be, increase the voting security ownership percentage threshold of this item (C)
to an amount not exceeding forty percent (40%); or (D) the approval by the
shareholders of the Company of any plan or proposal for the complete liquidation
or dissolution of the Company or for the sale of all or substantially all of the
assets of the Company; or (ii) during any period of not more than two (2)
consecutive years, individuals who at the beginning of such period constitute
the Board, and any new director (other than a director designated by a person
who has entered into agreement with the Company to effect a transaction
described in clause (i)) whose election by the Board or nomination for election
by the Company's shareholders was approved by a vote of at least two-thirds (")
of the directors then still in office who either were directors at the beginning
of the period or whose election or nomination for election was previously so
approved, cease for any reason to constitute at least a majority thereof

                                       44

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