Foot Locker (FL)

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We increased the annual base salary of one of the named executive officers (Mr. Halls) by $100,000—$50,000 at the time of annual salary reviews and an additional $50,000 later in the year when he assumed additional responsibilities. The base salaries of the other named executive officers remained unchanged from 2007.

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We paid an annual bonus to Matthew D. Serra, our Chief Executive Officer, of $1,728,300, or 115 percent of his base salary, compared to a target pay-out of 125 percent of base salary. We paid annual bonuses for 2008 to the senior vice presidents of 72 percent of base salary, compared to a target pay-out of 75 percent of base salary. These pay-outs were made at a level slightly below target bonus, and were the result of the Company’s pre-tax income and return-on-

invested-capital performance in 2008 compared to performance targets established by the Compensation and Management Resources Committee for that year.

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We paid an annual bonus to Mr. Halls of $312,700, or 44 percent of base salary, compared to a target of 75 percent of base salary. This pay-out was made at a level between threshold and target bonus, and was the result of the divisional profit of the divisions for which Mr. Halls had responsibility in 2008 compared to performance targets established by the Compensation Committee. Mr. Mina’s employment with the Company terminated prior to the end of 2008, and he was therefore not eligible to receive an annual bonus payment.

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As the Company did not achieve the performance targets established by the Compensation Committee in 2006 under the Long-Term Incentive Compensation Plan for the 2006-2008 performance period, we did not pay long-term bonuses to any of our named executive officers.

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For 2008, as we did in 2007, we provided for an increased target pay-out under the annual bonus plan for all of the named executive officers, other than the Chief Executive Officer, of 75 percent of base salary. The Chief Executive Officer’s target pay-out remained 125 percent of base salary.

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We made stock option awards to five of the named executive officers—100,000 shares to the Chief Executive Officer, and 25,000 shares to each of the President—International and the three senior vice presidents. These options were priced at fair market value on the date of grant ($11.66 per share). With regard to all of the executive officers other than Mr. Serra, these options vest in three equal installments on the first, second, and third anniversary of the grant date, subject to continued employment with us through each date. The options granted to Mr. Serra vest in two equal installments on the first anniversary of the grant date and on January 30, 2010, the final day of the term of his current employment contract, provided he continues to be employed by us on that date. In light of the 2007 performance of the U.S. retail store operations, for which he had responsibility, we did not make a stock option grant to Mr. Mina in 2008.

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We made restricted stock awards to five of the named executive officers—50,000 shares to the Chief Executive Officer; 20,000 shares to the President—International; and 10,000 shares to each of the senior vice presidents. With regard to all of the named executive officers other than Mr. Serra, the restrictions on these shares lapse if the executive continues to be employed by us for three years from the date of grant. The restrictions on Mr. Serra’s shares lapse on January 30, 2010, the final day of the term of his current employment contract, provided he continues to be employed by us on that date. We did not make a restricted stock grant to Mr. Mina in 2008.

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We increased the annual base salaries of two of the named executive officers (Mr. Mina and Mr. McHugh) by $25,000 each. The base salaries of the other named executive officers remained unchanged from 2006.

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As the Company did not achieve the performance targets for 2007 established by the Compensation and Management Resources Committee (“Compensation Committee”) under the Annual Incentive Compensation Plan, we did not pay annual bonuses to any of our named executive officers.

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As the Company did not achieve the performance targets established by the Compensation Committee in 2005 under the Long-Term Incentive Compensation Plan for the 2005-2007 performance period, we did not pay long-term bonuses to any of our named executive officers.

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For 2007, we increased the target pay-out under the annual bonus plan for all of the named executive officers other than the Chief Executive Officer from 50 percent to 75 percent of base salary. The Chief Executive Officer’s target pay-out remained 125 percent of base salary.

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We made stock option awards to each of the named executive officers—48,500 shares to the Chief Executive Officer; 30,000 shares to each of the President—U.S.A. and the President—International; and 20,000 shares to each of the two senior vice presidents. These options were priced at fair market value on the date of grant ($23.42 per share) and vest in three equal installments on the first, second, and third anniversary of the grant date.

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We made restricted stock awards to each of the named executive officers—100,000 shares to the Chief Executive Officer; 40,000 shares to the President—U.S.A. and 20,000 shares to the President—International (who had received a restricted stock grant in late 2006 at the time of his promotion to that position); and 40,000 shares to each of the senior vice presidents. With regard to all of the named executive officers other than Mr. Serra, the restrictions on these shares lapse if the executive continues to be employed by us for three years from the date of grant. The restrictions on Mr. Serra’s shares lapse on January 30, 2010, the final day of the term of his current employment contract, provided he continues to be employed by us on that date.