(1)

Description of Plan

The following description of the Plan provides only general information. Participants should refer to the Plan document for a more complete description of the Plan’s provisions. In September 2004, the Foot Locker Puerto Rico 1165(e) Plan (the “Plan”) was established with an effective date of January 1, 2004.

The Board of Directors of Foot Locker, Inc. (the “Parent Company”) and the Parent Company’s Retirement Plan Committee appointed Oriental Trust as the trustee for the Plan. MG Trust Company serves as the trading agent. BISYS Retirement Services serves as the recordkeeper and Frontier Trust Company serves as cashiering agent and custodian. Foot Locker Inc. is the parent company of Foot Locker Retail, Inc. (the “Company”), which is the employer of the Plan.

Caribbean Pension Consultants provides administrative services to the Plan related to translating documents, distributing information to employees, processing loans, performing employer match calculations and Plan testing, among other services.

(a)

General

The Plan is a defined contribution plan covering generally all employees of the Company whose primary place of employment is in Puerto Rico. Eligible employees are those who have attained age twenty-one and completed one year of service consisting of at least 1,000 hours.  The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”).

(b)

Contributions

The Plan provides for automatic revocable enrollment in the Plan at a contribution rate of 2% of pre-tax annual compensation for participants who meet the eligibility requirements. The maximum allowable salary reduction contribution is 10% of pre-tax annual compensation, as defined in the Plan.  Participants may elect to change their contribution rate and salary reduction agreement as often as daily. Pre-tax contributions may be made up to the Puerto Rico Department of Treasury limit of $8,000 in 2005 and 2004, or 10% of the participant’s annual compensation, whichever is less. Participants may also roll over certain amounts representing distributions from other qualified retirement plans in Puerto Rico prior to becoming eligible to participate in the Plan, however, additional contributions cannot be made until the completion of one year of service. For any participant who (i) has completed 1,000 hours of service during the Plan year and is actively employed by the Company on the last day of the Plan year or (ii) during the Plan year, has died, has become disabled or retired on or after normal retirement age, the Parent Company also contributes 25% of such participant’s pre-tax contributions to the Plan up to the first 4% of the participant’s compensation earned during the Plan year. The first employee contributions were withheld during September 2004, however, employees were allowed the option of contributing the maximum withholding of $8,000 or 10% of their annual compensation as the Plan was effective as of the beginning of 2004. Matching contributions, at the Parent Company’s option, are made either in shares of the Parent Company’s common stock (“Foot Locker Shares”) or in cash to be invested in Foot Locker Shares, to be held in the Foot Locker Stock Fund. Matching contributions for 2005 were made in June 2006, and for 2004 were made in April 2005, entirely in Foot Locker Shares and recorded at fair market value on the date of the Plan’s year-end. Additional contributions may be made at the discretion of the Parent Company and are subject to certain limitations. No additional contributions were made in 2005 or 2004.