EMPLOYMENT AGREEMENT

 

      This  AGREEMENT  (the  "Agreement")  is made as of  November  4, 1999 (the

"Agreement  Date"), by and between The Stride Rite Corporation,  a Massachusetts

corporation  with its  headquarters  located in  Lexington,  Massachusetts  (the

"Employer"), and David M. Chamberlain (the "Executive"). In consideration of the

mutual  covenants  contained in this  Agreement,  the Employer and the Executive

agree as follows:

 

      1.    Employment.  The Employer  agrees to employ the  Executive and the

Executive  agrees to be employed by the  Employer on the terms and  conditions

set  forth  in  this  Agreement.   The  Executive's  active  employment  shall

commence on November 15, 1999 (the "Start Date").

 

      2. Capacity/Duties. The Executive shall serve the Employer as Chairman and

Chief  Executive  Officer of the Employer.  The  Executive  shall also serve the

Employer  in such  other or  additional  related  offices as the  Executive  may

reasonably be requested to serve by the Board.  The Executive  shall be based at

the  Employer's  headquarters  in  Lexington,   Massachusetts,   or  such  other

headquarters  as may be  established by the Employer.  The Executive  shall have

overall  responsibility for the general  management of the Employer,  subject to

the  direction  and  authority of the Board of  Directors  of the Employer  (the

"Board").  The Executive shall preside at all meetings of the Board and shall be

responsible  for  formulating  and  submitting  to the Board  matters of general

policy for the Employer. The Executive additionally shall be responsible for the

general  supervision  and control of the business  and affairs of the  Employer,

subject in each case to the direction and authority of the Board.  The Executive

shall be responsible  for  developing,  maintaining and enhancing the Employer's

relationships and reputation with investors,  customers, suppliers, analysts and

the public at large.  The  Executive  shall also  perform  such other  duties as

normally are incident to the office of Chief  Executive  Officer.  The Executive

acknowledges  that his  responsibilities  in these  capacities  will  require  a

substantial time commitment,  frequent travel,  and availability at any time the

needs of the  business so require.  The  Executive  acknowledges  the  foregoing

requirements  of the  position  and  represents  that  he is  fully  capable  of

performing  the  responsibilities  from and after the Start Date.  The Executive

agrees that during his  employment  with the Employer his primary  residence and

that of his family will be in the greater Boston, Massachusetts area.

 

      3.    Term.  Subject  to the  provisions  of  Section  6,  the  term  of

employment  pursuant to this  Agreement  shall  commence on the Start Date and

end on November 30, 2002 (the "Term").

 

      4.    Compensation and Benefits.  The regular  compensation and benefits

payable to the Executive under this Agreement shall be as follows:

 

      (a)   Salary.  For all  services  rendered by the  Executive  under this

      Agreement,  the Employer shall pay the Executive a salary (the "Salary")

      at the annual rate of Six Hundred Thousand Dollars  ($600,000),  subject

      to  increase  from  time to time in the  discretion  of the Board or the

      Compensation  Committee  of the Board  (the  "Compensation  Committee"),

      which will review the Salary at least annually.  The

 

 

 

      Salary shall be payable in periodic  installments  in accordance  with the

      Employer's usual practice for its senior  executives.  Any increase in the

      Executive's Salary shall not serve to limit or reduce any other obligation

      of the Employer  hereunder and, after any such increase,  the  Executive's

      Salary shall not be reduced.

 

      (b)  Bonus.  Commencing  during  the  Employer's  2000  fiscal  year,  the

      Executive  shall be an "Eligible  Employee" as that term is defined in the

      Employer's  Annual  Incentive  Compensation  Plan (the  "Annual  Incentive

      Plan") and may receive  incentive  compensation  as provided by its terms.

      Pursuant to the Annual Incentive Compensation Plan, the Executive's "Bonus

      Percentage"  (as defined) will be fifty  percent  (50%).  The  Executive's

      participation  in the  Annual  Incentive  Plan is subject to the terms and

      conditions  of such  plan,  or any  amended  version  of such  plan or any

      successor or other annual incentive compensation plan which may be adopted

      and become  legally  effective  during  the Term.  The  Executive  is also

      eligible to  participate  in the 1999  Executive  Long-Term  Bonus Plan in

      accordance  with the terms and  provisions of such plan.  The  Executive's

      level of participation  will be as stated for the previous Chief Executive

      Officer  of the  Employer,  pro-rated  for the  number of months of actual

      service of the Executive.

 

      (c) Stock Options.  Effective as of the Start Date, the Executive is being

      awarded a  non-qualified  stock  option  to  purchase  up to Five  Hundred

      Thousand  (500,000)  shares of the Employer's  common stock at fair market

      value,  which  shall be the price at the close of  trading on the New York

      Stock Exchange - Composite Index on the trading day  immediately  prior to

      the Employer's public  announcement of the Executive's  appointment to the

      position of Chairman and Chief Executive Officer.  The non-qualified stock

      option as set forth herein  shall vest upon  issuance on the Start Date as

      to one hundred thousand (100,000) shares, with the balance to vest ratably

      in annual  increments  over a period of three  (3)  years,  with the first

      deferred  vesting date being the first  anniversary  of the Start Date. At

      the Board's discretion,  additional grants of stock options may be awarded

      to the  Executive,  from  time to time,  under  the  prevailing  terms and

      conditions of the Employer's current Stock Option Plan(s) or any successor

      plan.

 

      (d) Regular  Benefits.  The Executive  shall be entitled to participate in

      any employee benefit plans, medical insurance plans, life insurance plans,

      disability  income plans,  retirement  plans and other benefit plans which

      the  Employer  may from time to time have in effect for all or most of its

      senior executives. Such participation shall be subject to the terms of the

      applicable plan documents,  generally applicable policies of the Employer,

      applicable law and the discretion of the Board, the Compensation Committee

      or any  administrative or other committee  provided for in or contemplated

      by any such plan.  Nothing  contained in this Agreement shall be construed

      to create any obligation on the part of the Employer to establish any such

      plan or to  maintain  the  effectiveness  of any such plan which may be in

      effect from time to time.

 

      (e)   Car  Allowance.  The  Executive  shall  receive a car allowance of

      Ten  Thousand  Dollars  ($10,000)  per year,  prorated  and  payable  in

      regular

 

 

 

      installments  coinciding  with the  Employer's  normal pay  periods  for

      senior executives.

 

      (f)  Vacation.  The  Executive  shall be  entitled  to four (4) weeks paid

      vacation per year. Any carryover of unused vacation from one annual period

      to the next shall be subject to the policies and  practices  applicable to

      other senior executives of the Employer.

 

      (g) Relocation.  The Executive shall be entitled to the benefits  relating

      to the relocation of his residence from San Francisco,  California, to the

      greater Boston,  Massachusetts area, as provided in Exhibit A, Relocation,

      attached hereto and incorporated by reference.

 

      (h)  Expenses.  During  the  Employment  Period,  the  Executive  shall be

      entitled  to receive  prompt  reimbursement  for all  reasonable  expenses

      incurred by the Executive in accordance with the policies and practices of

      the  Employer  as in effect from time to time with  respect to  executives

      employed by the Employer.

 

      (i) Taxation of Payments and  Benefits.  The Employer  shall  undertake to

      make deductions, withholdings and tax reports with respect to payments and

      benefits under this Agreement to the extent that it reasonably and in good

      faith believes that it is required to make such  deductions,  withholdings

      and tax reports.  Payments under this Agreement shall be in amounts net of

      any such deductions or  withholdings.  Except as provided in Exhibit A and

      as  provided  in the CoC  Agreement,  nothing in this  Agreement  shall be

      construed to require the Employer to make any payments to  compensate  the

      Executive  for any  adverse  tax effect  associated  with any  payments or

      benefits or for any deduction or withholding from any payment or benefit.

 

      (j)  Exclusivity  of  Salary  and  Benefits.  The  Executive  shall not be

      entitled to any payments or benefits  other than those provided under this

      Agreement.

 

      5.  Extent of  Service.  During  the  Executive's  employment  under  this

Agreement,  the Executive shall, subject to the direction and supervision of the

Board,  devote the  Executive's  full business  time,  best efforts and business

judgment, skill and knowledge to the advancement of the Employer's interests and

to the  discharge  of the  Executive's  duties and  responsibilities  under this

Agreement. The Executive shall not engage in any other business activity, except

as may be approved by the Board;  provided that nothing in this Agreement  shall

be construed as preventing the Executive from:

 

      (a) investing the  Executive's  assets in any company or other entity in a

      manner not  prohibited by Section 7(d) and in such form or manner as shall

      not require any material  activities on the Executive's part in connection

      with the operations or affairs of the companies or other entities in which

      such investments are made;

 

      (b) engaging in  religious,  charitable  or other  community or non-profit

      activities  that do not impair  the  Executive's  ability  to fulfill  the

      Executive's duties and responsibilities under this Agreement; or

 

 

 

      (c)   serving  as  a  director  on  the  board  of  directors  of  Keeco

      Corporation,   Guckenheimer  Enterprises,   Inc.,  Wild  Oats,  Inc.  or

      Hugger-Mugger,  Inc., or of other  companies  with the prior  reasonable

      approval of the Board.

 

      6.    Termination  and   Termination   Benefits.   Notwithstanding   the

provisions  of  Section 3, the  Executive's  employment  under this  Agreement

shall terminate under the following circumstances set forth in this Section 6.

 

      (a) Termination by the Employer for Cause.  The Employer may terminate the

      Executive's  employment  for  "Cause"  upon a vote of the  majority of the

      members of the Board and written notice to the Executive.  For purposes of

      this  Agreement,   the  following  shall   constitute   "Cause"  for  such

      termination:

 

            (i)   conviction  of or  plea of no  contest  to a  felony  or any

            crime of moral turpitude or admitting the commission of same;

 

            (ii)  fraudulent  conduct in connection with the business or affairs

            of the Employer or any  affiliate  of the  Employer,  regardless  of

            whether said conduct is designed to defraud the Employer or others;

 

            (iii) the willful and continued  failure of the Executive to perform

            substantially  the Executive's  duties with the Employer (other than

            any such failure resulting from incapacity due to physical or mental

            illness),  not cured  within  fifteen  (15)  business  days  after a

            written  demand for  substantial  performance  is  delivered  to the

            Executive by the Board which  specifically  identifies the manner in

            which the Board  believes that the  Executive has not  substantially

            performed the Executive's duties;

 

            (iv)  willful   engagement   by  the   Executive   in  conduct  or

            misconduct  which  is  substantially  injurious  to the  Employer,

            monetarily or otherwise; or

 

            (v) any intentional use or intentional  appropriation for his use or

            benefit of any funds or properties of the Employer not authorized by

            the  Board,   or  any  material  breach  by  the  Executive  of  the

            Executive's  obligations  under the Employer's  Conflict of Interest

            Policy or similar conflicts or self-dealing  policies promulgated in

            writing from time to time, or his  fiduciary  duty of loyalty to the

            Employer.

 

      For  purposes  of  this  paragraph,  no act,  or  failure  to act,  on the

      Executive's part shall be considered  "willful" unless done, or omitted to

      be done, by the Executive in bad faith without  reasonable belief that his

      action or omission was in the best interests of the Employer.

 

      (b) Termination by the Executive.  The Executive's  employment  under this

      Agreement  may be  terminated  by the  Executive by written  notice to the

      Board at least ninety (90) days prior to such termination.

 

 

 

      (c) Termination by the Employer Without Cause. The Executive's  employment

      under this Agreement may be terminated by the Employer  without Cause upon

      a vote of the  majority of the members of the Board and written  notice to

      the Executive.

 

      (d)  Termination  by the  Executive  for Good Reason.  The  Executive  may

      terminate his employment at any time for Good Reason. For purposes of this

      Agreement,  "Good  Reason"  means  the  good  faith  determination  by the

      Executive that any one or more of the following have occurred:

 

            (i)  without  the  express  written  consent of the  Executive,  the

            Employer  effects  any  material  change(s)  in any  of the  duties,

            authority,  or  responsibilities  of the  Executive  which  is (are)

            inconsistent  in  any  substantial   respect  with  the  Executive's

            position,  authority, duties, or responsibilities as contemplated by

            Section 2 of this  Agreement,  which  action is not  remedied by the

            Employer  promptly  after  receipt  of notice  thereof  given by the

            Executive; or

 

            (ii)  any  failure  by  the  Employer  to  comply  with  any  of the

            provisions   of  Section  4  of  this   Agreement,   other  than  an

            insubstantial  and  inadvertent  failure  remedied  by the  Employer

            promptly after receipt of notice thereof given by the Executive.

 

      (e) Certain Termination Benefits.  Unless otherwise  specifically provided

      in this  Agreement or  otherwise  required by law,  all  compensation  and

      benefits  payable to the  Executive  under this  Agreement  shall cease to

      accrue on the date of termination of the Executive's employment under this

      Agreement.  Notwithstanding the foregoing,  in the event of termination of

      the Executive's  employment with the Employer  pursuant to Section 6(c) or

      Section 6(d) above and subject to the  Executive's  execution and delivery

      to the Employer of an irrevocable  release of claims, in a form reasonably

      satisfactory to the Employer and the Executive, the Employer shall provide

      to  the  Executive  the  following   termination  benefits   ("Termination

      Benefits"):

 

            (i)   continuation of the  Executive's  Salary at the rate then in

            effect pursuant to Section 4(a);

 

            (ii) an amount equal to the bonus (prorated as provided herein) that

            would  have  been  paid the  Executive  pursuant  to the  Employer's

            current Annual Incentive Plan or its successor,  had the Executive's

            employment  not  been  terminated  prior  to the  end  of  the  then

            applicable  Annual Incentive Plan period,  provided,  however,  that

            such amount shall be prorated to reflect the period  ending with the

            fiscal  quarter in which the Date of Termination  occurred,  and the

            said  resulting  amount is to be paid to the Executive no later than

            such time as the Employer pays its other executives under the Annual

            Incentive Plan;

 

            (iii) continuation  of group  health  plan  benefits to the extent

            authorized  by and  consistent  with  29  U.S.C.ss. 1161  et  seq.

            (commonly known as "COBRA"), with the cost of the regular

 

 

 

            premium for such benefits  shared in the same relative  proportion

            by the  Employer  and the  Executive  as in  effect on the Date of

            Termination; and

 

            (iv)  provided  the  date  of the  termination  of  the  Executive's

            employment  with the Employer is prior to the first  anniversary  of

            the Start  Date,  the  benefits  set forth in Section 3 of Exhibit A

            relating to the relocation of his residence from the greater Boston,

            Massachusetts area to San Francisco, California or another residence

            location  within  the  contiguous  United  States  selected  by  the

            Executive in the Termination Benefits Period.

 

      The  Termination  Benefits set forth in (i) and (iii) above shall continue

      after the date of termination for a period of twelve (12) months; provided

      that  in  the  event  that  the  Executive  commences  any  employment  or

      self-employment  during the period  during which the Executive is entitled

      to receive Termination Benefits (the "Termination  Benefits Period"),  the

      remaining  amount of Salary due pursuant to Section 6(e)(i) for the period

      from the commencement of such employment or  self-employment to the end of

      the  Termination  Benefits  Period shall be reduced by the amount of gross

      compensation  which the  Executive  is  entitled  to receive  from the new

      employer  or  self-employment  and the  payments  provided  under  Section

      6(e)(iii)  shall cease  effective as of the date of  commencement  of such

      employment or self-employment.  Notwithstanding the foregoing,  nothing in

      this Section 6(e) shall be  construed to affect the  Executive's  right to

      receive COBRA  continuation  entirely at the  Executive's  own cost to the

      extent  that  the   Executive   may  continue  to  be  entitled  to  COBRA

      continuation  after the  Executive's  right to cost sharing  under Section

      6(e)(iii)  ceases.  The Executive shall be obligated to give prompt notice

      of the date of  commencement of any employment or  self-employment  during

      the  Termination  Benefits  Period  and  shall  respond  promptly  to  any

      reasonable inquiries concerning any employment or self-employment in which

      the Executive engages during the Termination Benefits Period.

 

      (f) Disability.  The Employer may terminate this  Agreement,  after having

      established the Executive's  inability to perform the essential  functions

      of the  Executive's  then existing  position or positions  with or without

      reasonable  accommodation,  and if any  questions  arise as to whether the

      Executive is disabled so as to be unable to resume or continue performance

      and execution of such essential duties within a period not to exceed sixty

      (60) days in  duration,  the  Executive  may,  and at the  request  of the

      Employer  shall,  submit to the  Employer a  certification  in  reasonable

      detail by a physician  selected by the  Employer to whom the  Executive or

      the  Executive's  guardian has no  reasonable  objection as to whether the

      Executive  is so  disabled  or how long such  disability  is  expected  to

      continue,   and  such  certification  shall,  for  the  purposes  of  this

      Agreement,  be  conclusive of the issue.  The Executive  hereby agrees and

      acknowledges  that even relatively  short period of disability may prevent

      him from being able to perform the  essential  functions of his  position,

      particularly during the start-up phase of his employment and that it would

      not be  reasonable  for the Employer to  accommodate  such a disability by

      reducing  the  Executive's  duties or by allowing a leave of absence  that

      would extend for more than

 

 

 

      sixty (60) days.  The Executive  agrees to cooperate  with any  reasonable

      request of the physician in connection  with such  certification.  If such

      question  shall  arise  and the  Executive  shall  fail to  submit to such

      certification,  the Employer's  determination of such issue shall be final

      and binding on the Executive.  The Board may exercise the Employer's right

      to terminate the Agreement by giving to the  Executive  written  notice of

      termination  (the  "Disability  Notice"),  and  his  employment  with  the

      Employer shall  terminate  effective on the 30th day after receipt of such

      notice  (the  "Disability  Effective  Date").   Notwithstanding  any  such

      Termination,  the Executive shall continue to receive the Executive's full

      Salary  (less  any  disability  pay or sick  pay  benefits  to  which  the

      Executive  may be entitled  under the  Employer's  policies)  and benefits

      under  Section  4(d) of this  Agreement  (except  to the  extent  that the

      Executive may be ineligible for one or more such benefits under applicable

      plan terms) for a period of one year dating from the Disability  Effective

      Date.

 

      (g) Termination Pursuant to a Change of Control. Effective as of the Start

      Date,  the Employer and the  Executive  are entering  into the  Employer's

      standard  Change of Control  Employment  Agreement  ("CoC  Agreement")  as

      previously approved by the Board. Notwithstanding anything to the contrary

      contained herein,  in the event of a Change of Control,  as defined in the

      CoC  Agreement,  the terms of the CoC  Agreement  shall  govern.  Absent a

      Change  of  Control,  as so  defined,  the terms of this  Agreement  shall

      govern.

 

      (h) Non-exclusivity of Rights.  Nothing in this Agreement shall prevent or

      limit the Executive's  continuing or future  participation in any benefit,

      bonus, incentive or other plan or program provided by the Employer and for

      which  the  Executive  qualifies,  nor  shall  anything  herein  limit  or

      otherwise  affect  such rights as the  Executive  may have under any stock

      option or other  agreement  with the  Employer  or any of its  affiliates.

      Except as otherwise provided herein,  amounts which are vested benefits or

      which the  Executive  is otherwise  entitled to receive  under any plan or

      program of the Employer at or subsequent to the Date of Termination  shall

      be payable in accordance with such plan or program.

 

      (i) Date of Termination.  "Date of  Termination"  means the date of actual

      receipt of the Notice of Termination  or any later date specified  therein

      (but not more than  fifteen  (15) days  after the  giving of the Notice of

      Termination),  as the case may be;  provided  that (i) if the  Executive's

      employment  is  terminated by the Employer for any reason other than Cause

      or  Disability,  the Date of Termination is the date on which the Employer

      notifies  the  Executive  of such  termination;  (ii)  if the  Executive's

      employment is terminated due to Disability, the Date of Termination is the

      Disability  Effective  Date;  and (iii) if the  Executive's  employment is

      terminated due to the Executive's  death, the Date of Termination shall be

      the date of death.

 

7.    Confidential Information, Noncompetition and Cooperation.

 

      (a)   Confidential    Information.    As   used   in   this   Agreement,

      "Confidential  Information" means information  belonging to the Employer

      which is of value to the Employer in the course of conducting its

 

 

 

      business  and the  disclosure  of which could result in a  competitive  or

      other  disadvantage to the Employer.  Confidential  Information  includes,

      without  limitation,   financial  information,   reports,  and  forecasts;

      inventions,  improvements and other intellectual property;  trade secrets;

      know-how;  designs,  processes  or  formulae;  software;  market  or sales

      information or plans;  customer lists;  and business plans,  prospects and

      opportunities (such as possible acquisitions or dispositions of businesses

      or  facilities)  which have been discussed or considered by the management

      of the Employer.  Confidential  Information includes information developed

      by the  Executive  in the  course  of the  Executive's  employment  by the

      Employer,  as well as other  information  to which the  Executive may have

      access  in  connection  with  the  Executive's  employment.   Confidential

      Information  also  includes the  confidential  information  of others with

      which  the  Employer  has a  business  relationship.  Notwithstanding  the

      foregoing,  Confidential  Information does not include  information in the

      public  domain,  unless  due to breach  of the  Executive's  duties  under

      Section 7(b), or information known to the Executive prior to the Agreement

      Date.

 

      (b)  Confidentiality.  The  Executive  understands  and  agrees  that  the

      Executive's  employment  creates a  relationship  of confidence  and trust

      between the Executive  and the Employer  with respect to all  Confidential

      Information. At all times, both during the Executive's employment with the

      Employer and after its termination,  the Executive will keep in confidence

      and trust all such Confidential Information,  and will not use or disclose

      any such  Confidential  Information  without  the  written  consent of the

      Employer,  except as may be necessary in the ordinary course of performing

      the Executive's duties to the Employer.

 

      (c) Documents,  Records,  etc. All documents,  records,  data,  apparatus,

      equipment  and other  physical  property,  whether  or not  pertaining  to

      Confidential  Information,  which are  furnished  to the  Executive by the

      Employer  or  are  produced  by  the  Executive  in  connection  with  the

      Executive's  employment  will  be and  remain  the  sole  property  of the

      Employer. The Executive will return to the Employer all such materials and

      property  as and  when  requested  by the  Employer.  In  any  event,  the

      Executive  will return all such  materials and property  immediately  upon

      termination of the  Executive's  employment for any reason.  The Executive

      will not retain with the  Executive  any such  material or property or any

      copies thereof after such termination.

 

      (d)  Noncompetition  and  Nonsolicitation.  During the Term and for twelve

      (12)  months   thereafter,   the  Executive  (i)  will  not,  directly  or

      indirectly,  whether as owner, partner,  shareholder,  consultant,  agent,

      employee, co-venturer or otherwise, engage, participate,  assist or invest

      in any Competing Business (as hereinafter defined); (ii) will refrain from

      directly or  indirectly  employing,  attempting  to employ,  recruiting or

      otherwise  soliciting,   inducing  or  influencing  any  person  to  leave

      employment  with the Employer  (other than  terminations  of employment of

      subordinate   employees  undertaken  in  the  course  of  the  Executive's

      employment  with the Employer);  and (iii) will refrain from soliciting or

      encouraging  any customer or supplier to  terminate  or  otherwise  modify

      adversely  its business  relationship  with the  Employer.  The  Executive

      understands that the restrictions set forth in this

 

 

 

      Section  7(d) are  intended  to protect  the  Employer's  interest  in its

      Confidential  Information and established employee,  customer and supplier

      relationships  and  goodwill,   and  agrees  that  such  restrictions  are

      reasonable  and  appropriate  for  this  purpose.  For  purposes  of  this

      Agreement,  the term "Competing  Business" shall mean a business conducted

      anywhere in the United States which is competitive with any business which

      the Employer or any of its subsidiaries conducts or proposes to conduct at

      any time  during  the  employment  of the  Executive,  including,  but not

      limited to,  specialty  retailing of infant's,  toddler's  and  children's

      footwear,  the  design  or  manufacture  of  footwear  of any  type on the

      wholesale   level,   and  any  and  all   components  of  the   foregoing.

      Notwithstanding the foregoing, the Executive may (i) own up to one percent

      (1%)  of the  outstanding  stock  of a  publicly  held  corporation  which

      constitutes or is affiliated with a Competing Business and (ii) retain and

      exercise any and all stock, stock options and other  stock-related  rights

      presently  held  by him in  Genesco  Inc.  Notwithstanding  the  foregoing

      provisions  of  this  Section  7(d),  if  the  Executive's  employment  is

      terminated by the Employer other than for Cause or  disability,  or if the

      Executive  terminates  his  employment  pursuant to Section 6(d),  Section

      7(d)(i) will not apply if, within thirty (30) days after such termination,

      the Executive elects in writing to waive any further Termination  Benefits

      under Section 6(e).

 

      (e) Third-Party Agreements and Rights. The Executive hereby confirms that,

      to the best of his knowledge and belief, the Executive is not bound by the

      terms of any written  agreement with any previous  employer or other party

      which   restricts  in  any  way  the  Executive's  use  or  disclosure  of

      information or the Executive's  engagement in any business.  The Executive

      represents  to  the  Employer  that  the  Executive's  execution  of  this

      Agreement,   the   Executive's   employment  with  the  Employer  and  the

      performance of the  Executive's  proposed duties for the Employer will not

      violate  any  obligations  the  Executive  may have to any  such  previous

      employer or other party.  In the  Executive's  work for the Employer,  the

      Executive will not disclose or make use of any information in violation of

      any  agreements  with or rights  of any such  previous  employer  or other

      party,  and the  Executive  will not bring to the premises of the Employer

      any  copies  or  other  tangible  embodiments  of  non-public  information

      belonging to or obtained from any such previous employment or other party.

 

      (f)  Litigation  and   Regulatory   Cooperation.   During  and  after  the

      Executive's employment,  the Executive shall cooperate reasonably with the

      Employer  in the  defense or  prosecution  of any claims or actions now in

      existence  or which may be brought  in the future  against or on behalf of

      the Employer which relate to events or occurrences  that transpired  while

      the Executive was employed by the Employer. The Executive's cooperation in

      connection  with such claims or actions shall include,  but not be limited

      to,  being  reasonably  available  to meet with  counsel  to  prepare  for

      discovery  or trial and to act as a witness on behalf of the  Employer  at

      mutually  convenient times.  During and after the Executive's  employment,

      the  Executive  also  shall  cooperate  reasonably  with the  Employer  in

      connection with any investigation or review of any federal, state or local

      regulatory authority as any such investigation or review relates to events

      or occurrences that transpired while the Executive was

 

 

 

      employed by the Employer.  The Employer shall  reimburse the Executive for

      any  reasonable  out-of-pocket  expenses  incurred in connection  with the

      Executive's  performance of obligations pursuant to this Section 7(f). The

      Employer  shall  compensate  the Executive  for services  pursuant to this

      Section 7(f) rendered after the first  anniversary  of the  termination of

      the  Executive's  employment  with the Employer,  at a reasonable per diem

      rate.

 

      (g) Nondisparagement.  During the Executive's  employment and for a period

      of twelve  (12)  months from the date of  termination  of the  Executive's

      employment with the Employer,  the Executive agrees not to take any action

      or make any statement,  written or oral, to any current or former employee

      of the Employer or to any other person which disparages the Employer,  its

      officers,  directors,   management,   business  practices,  or  harms  the

      reputation of the Employer with its customers, suppliers, or the public.

 

      (h)  Standstill  Agreement  . For a period of twelve  (12) months from the

      date of termination of the Executive's  employment with the Employer,  the

      Executive agrees not to, directly or indirectly: (a) effect or seek, offer

      or  propose  (whether  publicly  or  otherwise)  to  effect,  or  cause to

      participate  in or in any way assist  any other  person to effect or seek,

      offer or propose  (whether  publicly or otherwise) to effect,  or cause or

      participate  in, (i) any  acquisition  of any  securities  (or  beneficial

      ownership thereof) or assets of the Employer;  (ii) any tender or exchange

      offer, merger or other business combination involving the Employer;  (iii)

      any  recapitalization,  restructuring,  liquidation,  dissolution or other

      extraordinary  transaction  with  respect  to the  Employer;  or (iv)  any

      "solicitation"  of "proxies" (as such terms are used in the proxy rules of

      the Securities and Exchange  Commission) to vote any voting  securities of

      the Employer;  (b) form,  join or in any way  participate in a "group" (as

      defined  in the 1934  Act) or  otherwise  act,  alone or in  concert  with

      others, to seek to control or influence the management, Board of Directors

      or policies  of the  Employer;  (c) take any action  which might force the

      Employer  to make a  public  announcement  regarding  any of the  types of

      matters  set  forth  in  subsection  (a)  above;  or (d)  enter  into  any

      discussions  or  arrangements  with any third party with respect to any of

      the foregoing.  The restrictions  contained in this paragraph shall not be

      applicable to purchases  solely for investment  purposes  aggregating less

      then 5% of the Employer's outstanding voting securities.

 

      (i)  Injunction.  The parties  agree that it would be difficult to measure

      any damages  caused which might result from any breach by the Executive or

      the  Employer of the promises set forth in this Section 7, and that in any

      event money  damages  would be an  inadequate  remedy for any such breach.

      Accordingly,  subject to Section 8 of this  Agreement,  the parties  agree

      that if one of the parties breaches, or proposes to breach, any portion of

      this  Agreement,  the other  party shall be  entitled,  in addition to all

      other  remedies that it may have,  to an  injunction or other  appropriate

      equitable  relief to restrain any such breach  without  showing or proving

      any actual damage to such party.

 

 

 

            8. Arbitration of Disputes.  Any controversy or claim arising out of

or relating to this Agreement or the breach thereof or otherwise  arising out of

the  Executive's  hiring,  employment  or the  termination  of  that  employment

(including, without limitation, any claims of unlawful employment discrimination

whether based on age or otherwise)  shall,  to the fullest  extent  permitted by

law, be settled by  arbitration in any forum and form agreed upon by the parties

or, in the absence of such an  agreement,  under the  auspices  of the  American

Arbitration Association ("AAA") in Boston,  Massachusetts in accordance with the

Employment Dispute Resolution Rules of the AAA,  including,  but not limited to,

the rules and  procedures  applicable  to the selection of  arbitrators.  In the

event that any person or entity other than the  Executive or the Employer may be

a party with regard to any such controversy or claim,  such controversy or claim

shall be  submitted  to  arbitration  subject to such other  person or  entity's

agreement.  Judgment upon the award rendered by the arbitrator may be entered in

any court having  jurisdiction  thereof.  This  Section 8 shall be  specifically

enforceable.  Notwithstanding  the foregoing,  this Section 8 shall not preclude

either  party from  pursuing a court  action for the sole purpose of obtaining a

temporary  restraining  order or a preliminary  injunction in  circumstances  in

which  such  relief is  appropriate;  provided  that any other  relief  shall be

pursued through an arbitration proceeding pursuant to this Section 8.

 

      9.  Consent  to  Jurisdiction.  To the  extent  that any  court  action is

permitted consistent with or to enforce Section 8 of this Agreement, the parties

hereby consent to the  jurisdiction of the Superior Court of the Commonwealth of

Massachusetts  and  the  United  States  District  Court  for  the  District  of

Massachusetts. Accordingly, with respect to any such court action, the Executive

(a) submits to the personal jurisdiction of such courts; (b) consents to service

of process;  and (c) waives any other  requirement  (whether imposed by statute,

rule of court, or otherwise) with respect to personal jurisdiction or service of

process.

 

      10.   Integration.  This  Agreement  constitutes  the  entire  agreement

between the parties with respect to the subject  matter hereof and  supersedes

all prior  agreements  between the parties with respect to any related subject

matter.

 

      11. Assignment;  Successors and Assigns, etc. Neither the Employer nor the

Executive may make any assignment of this Agreement or any interest  herein,  by

operation of law or otherwise,  without the prior  written  consent of the other

party;  provided  that the Employer  may assign its rights under this  Agreement

without the consent of the Executive in the event that the Employer shall effect

a  reorganization,  consolidate  with  or  merge  into  any  other  corporation,

partnership,  organization or other entity, or transfer all or substantially all

of its properties or assets to any other corporation,  partnership, organization

or other  entity.  This  Agreement  shall inure to the benefit of and be binding

upon the Employer and the Executive,  their  respective  successors,  executors,

administrators, heirs and permitted assigns.

 

      12.   Enforceability.  If any  portion or  provision  of this  Agreement

(including,  without  limitation,  any portion or  provision of any section of

this Agreement)  shall to any extent be declared illegal or unenforceable by a

court of competent jurisdiction,  such portion or provision may be reformed by

a court of competent jurisdiction to the extent necessary to render it legal

 

 

 

or  enforceable,  and in any event shall be  enforced to the extent  permissible

under the law, and the remainder of this  Agreement,  or the application of such

portion  or  provision  in  circumstances  other than those as to which it is so

declared  illegal or  unenforceable,  shall not be  affected  thereby,  and each

portion and provision of this  Agreement  shall be valid and  enforceable to the

fullest extent permitted by law.

 

      13. Waiver.  No waiver of any provision  hereof shall be effective  unless

made in writing  and signed by the  waiving  party.  The failure of any party to

require the  performance  of any term or  obligation of this  Agreement,  or the

waiver  by any party of any  breach of this  Agreement,  shall not  prevent  any

subsequent  enforcement  of such term or obligation or be deemed a waiver of any

subsequent breach.

 

      14.  Notices.  Any  notices,  requests,  demands and other  communications

provided for by this  Agreement  shall be sufficient if in writing and delivered

in person or sent by a nationally  recognized  overnight  courier  service or by

registered or certified mail, postage prepaid,  return receipt requested, to the

Executive  at the last  address  the  Executive  has filed in  writing  with the

Employer or, in the case of the Employer, at its main offices,  attention of the

General Counsel,  and shall be effective on the date of delivery in person or by

courier or three (3) days after the date mailed.

 

      15.   Amendment.  This  Agreement  may be amended or modified  only by a

written   instrument  signed  by  the  Executive  and  by  a  duly  authorized

representative of the Employer.

 

      16. Governing Law. This is a Massachusetts contract and shall be construed

under  and be  governed  in all  respects  by the  laws of the  Commonwealth  of

Massachusetts,  without giving effect to the conflict of laws principles of such

Commonwealth. With respect to any disputes concerning federal law, such disputes

shall be determined in accordance  with the law as it would be  interpreted  and

applied by the United States Court of Appeals for the First Circuit.

 

      17.   Counterparts.  This  Agreement  may be  executed  in any number of

counterparts,  each of which when so executed and delivered  shall be taken to

be an original;  but such counterparts  shall together  constitute one and the

same document.

 

      18. Public  Announcements.  Neither the  Executive nor the Employer  shall

make any public announcement,  including,  without limitation, press releases or

media interviews, with respect to the terms of this Agreement or, if applicable,

the  termination of the Executive's  employment with the Employer,  except as is

mutually approved by the parties (such approval not to be unreasonably withheld)

and except as may be required by applicable law.

 

 

 

      IN  WITNESS  WHEREOF,  this  Agreement  has  been  executed  as  a  sealed

instrument  by  the  Employer,  by  its  duly  authorized  officer,  and  by the

Executive, as of the Agreement Date.

 

EXECUTIVE                                 THE STRIDE RITE CORPORATION

 

 

 

      /s/ David M. Chamberlain            By:   /s/ Myles J. Slosberg

David M. Chamberlain                            Myles J. Slosberg

an individual                                   Chairman and CEO