Settlement And Release Agreement, Dated 6/22/99

SETTLEMENT AND RELEASE AGREEMENT


This is an agreement between you, Charles J. Campbell, (on behalf of yourself, your spouse, your family, and anyone acting for you including attorneys, agents, representatives, heirs, executors, and assigns) ("You"or "Campbell"), and Florsheim Group, Inc. (on behalf of its present or former parents, subsidiaries, affiliates, companies, insurers, predecessors, successors, assigns, agents and each of them, and any and all Florsheim employees, officers, directors and attorneys acting on behalf of Florsheim or in their individual and personal capacities) (Collectively referred to as "Florsheim" of "The Company").


1. PAYMENTS AND OTHER CONSIDERATION. As consideration for the agreements and covenants set forth in this Settlement and Release Agreement ("Agreement"), you will be paid a total, gross amount equal to twelve months of severance at your current base salary ($500,000) less legally required withholdings. First, Florsheim will continue your salary payments for the next six months in the total, gross amount of two hundred fifty thousand dollars. The payments described in this paragraph will be made in the same manner in which you are currently compensated by the Company. Second, the remaining portion of two hundred fifty thousand dollars will be paid in twelve equal monthly amounts of twenty thousand eight hundred thirty three dollars ($20,833) beginning thirty days after the conclusion of the salary continuation period and concluding twelve months thereafter. In addition, Florsheim will maintain your current health insurance for twelve months commencing July 1, 1999 and ending June 30, 2000. Your eligibility for COBRA will commence on July 1, 2000. Florsheim also agrees to vest those options that would otherwise have vested on September 5, 1999 under the terms of the Company's Charles J. Campbell Stock Option Plan. Finally, you will retain the facsimile, notebook computer and cellular phone currently in your possession provided that you bear all ongoing expenses for these machines. You will continue to accrue credited service towards the Florsheim Group defined benefit pension plan until September 5, 2000. Florsheim will also provide, upon request, a mutually agreeable reference letter. You will immediately return all other company property, including all credit cards. The parties agree that this is sufficient and adequate consideration and does not represent any payment to which you are otherwise entitled.


The foregoing benefits are in addition to and exceed that to which you would be entitled to receive without signing this Agreement.


2. CONFIDENTIAL INFORMATION.


(a) Campbell acknowledges that, by reason of Campbell's employment by the Company, Campbell had access to confidential information and knowledge pertaining to products, inventions, discoveries, improvements, inventions, designs, ideas, trade secrets, proprietary information, manufacturing, packaging, advertising, distribution and sales methods, sales and profit figures, customer and client lists and relationships between Company and dealers, distributors, sales representatives, wholesalers, customers, clients, suppliers and others who have business dealings with them ("Confidential Information"). Employee acknowledges that such Confidential Information is a valuable and unique asset of Company and covenants that, both


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during and after the payment of severance to Campbell, Campbell will not disclose any Confidential Information to any person without the prior written authorization of the Company Board. The obligation of confidentiality imposed by this section shall not apply to information that becomes generally known in the industry through no act of Campbell in breach of this Agreement.


(b) Campbell acknowledges that all documents, files and other materials received from the Company during the Employment Term (with the exception of documents relating to Campbell's compensation or benefits to which Campbell is entitled following the Employment Term) were for use of Campbell solely in discharging Campbell's duties and responsibilities hereunder and that Campbell has no claim or right to the continued use or possession of such documents, files or other materials. Campbell agrees that he will not retain any such documents, files or other materials and will promptly return to the Company any documents, files or other materials in his possession or custody, except that Campbell shall be entitled to retain a copy of correspondence written by him so long as the Company also has a copy and such correspondence does not contain Confidential Information.


3. NON-COMPETITION. During the severance term and for six months thereafter Campbell shall not, unless acting pursuant hereto or with the prior written consent of the Company Board, directly or indirectly, own, manage, operate, finance, join, control or participate in the ownership, management, operation, financing or control of, or be connected as an officer, director, employee, partner, principal, agent, representative, consultant or otherwise with, or use or permit Campbell's name to be used in connection with any Competing Business (defined below); provided, however, that notwithstanding the foregoing, this provision shall not be construed to prohibit the ownership by Campbell of not more than 1% of the capital stock of any corporation which is engaged in any of the foregoing businesses having a class of securities registered pursuant to the Exchange Act.


The Term "Competing Business" shall mean any business or enterprise engaged in the business of designing, manufacturing, distributing, marketing or selling men's dress, dress casual or casual footwear within (i) any state of the United States or the District of Columbia or (ii) any foreign country in which Company or any of its subsidiaries engages in such business; provided, however, that if a business or enterprise has subsidiaries or units engaged in such business that provide less than five percent of the overall revenues of such business or enterprise, and Campbell is not directly involved in any aspect of the business of such subsidiaries or units, such business or enterprise shall not constitute a Competing Business for purposes of this Agreement.


In the event that the provisions of this paragraph should ever be adjudicated to exceed the time, geographic, product or other limitations permitted by applicable law in any jurisdiction, then such provisions shall be deemed reformed in such jurisdiction to the maximum time, geographic, product or other limitations permitted by applicable law.


4. EQUITABLE RELIEF. Employee acknowledges that the restrictions contained in paragraphs 2 and 3 hereof are, in view of the nature of the business of the Company and its subsidiaries, reasonable and necessary to protect the legitimate interests of the Company, and that any violation of any provision of those paragraphs may result in irreparable injury to the


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Company. Campbell also acknowledges that in the event of any such violations, the Company shall be entitled to preliminary and permanent injunctive relief, without the necessity of proving actual damages and to an equitable accounting of all earnings, profits and other benefits arising from any such violation, which rights shall be cumulative and in addition to any other rights or remedies to which the Company may be entitled. Campbell agrees that in the event of any such violation, an action may be commenced for any such preliminary and permanent injunctive relief and other equitable relief in any federal or state court of competent jurisdiction sitting in Chicago, Illinois or in any other court of competent jurisdiction. Campbell hereby waives, to the fullest extent permitted by law, any objection that Campbell may now or her ...