8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED):  November 27, 2004

ICON HEALTH & FITNESS INC.
(Exact name of registrant as specified in its charter)

COMMISSION FILE NUMBER:  333-93711

DELAWARE	87-0531206
(State or other jurisdiction of incorporation)	(I.R.S. Employer Identification No.)

1500 South 1000 West

Logan, UT, 84321

(Address and zip code of principal executive offices)

(435) 750-5000
(Registrant's telephone number, including area code)

CHECK THE APPROPRIATE BOX BELOW IF THE FORM 8-K FILING IS INTENDED TO SIMULTANEOUSLY SATISFY THE FILING OBLIGATION OF THE REGISTRANT UNDER ANY OF THE FOLLOWING PROVISIONS:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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Item 1.01 Entry into a Material Definitive Agreement

During the second and third quarter of fiscal 2004 Icon Health and Fitness, Inc. (the “Company”) renegotiated, amended and restated the September 27, 1999 employment agreements (“restatement”) with each of Mr. Watterson and Mr. Stevenson. The restatement extends these agreements until July 31, 2008 and provide in each case Mr. Watterson and Mr. Stevenson may take a leave of absence (“leave of absence”) commencing July 1, 2004 and ending not later than July 31, 2007 as Mission Presidents for the Church of Jesus Christ of Latter Day Saints. Each of Mr. Watterson and Mr. Stevenson are relieved during the leave of absence of their day-to-day duties at the Company and from contractual restrictions that are not consistent with their full time service at the Company, but are not relieved from their obligations of non-competition and confidentiality. During the leave of absence, each of Mr. Watterson and Mr. Stevenson will continue to receive his annual base salary as well as participate in a bonus program providing for a bonus equal to a percentage of the Company’s consolidated EBIDTA (as defined in the Company’s credit facility) which percentage shall equal 1.25% for Mr. Watterson and 1.10% for Mr. Stevenson. Moreover, during the leave of absence the Company’s EBIDTA used to calculate the bonus will be the Company’s fiscal year EBIDTA for the year ending May 31, 2003. Based on the Company's May 31, 2003 EBITDA, Mr. Watterson's annual bonus will be $1,190,000 and Mr. Stevenson's annual bonus will be $1,047,000 during the leave of absence. The respective amounts of bonus paid during their leave of absence will not exceed the amounts of compensation that each would have received as a lump sum payment had they terminated their employment on May 31, 2004. Provisions for termination remain the same, except if the Company terminates either executive’s employment without the occurence of specified causal events or such executive terminates employment because of certain specified actions by the Company during the leave of absence, such executive will continue to receive his base salary and bonus through the end of the leave of absence and for an additional 12 months in the case the executive seeks, but is unable to, reach agreement with the Company to return to the Company to assume an executive position following the leave of absence. Each of Messrs. Watterson and Stevenson will remain directors of the Company during the leave of absence. Otherwise the employment agreements are substantially the same as the original agreements as amended by the second amendment.

Item 2.05 Costs Associated with Exit or Disposal Activities

Icon Health and Fitness, Inc. (the “Company”) filed a Current Report on Form 8-K on September 22, 2004 to report that management decided that it would discontinue the manufacture, marketing and distribution of trampolines (“trampoline operations”). As a result of management’s ongoing review of its business strategies, plans and operations, on November 27, 2004, management determined that the Company’s JumpKing, Inc. (“JumpKing”) subsidiary will discontinue the manufacture, marketing and distribution of all its outdoor recreational equipment (“outdoor recreational equipment operations”) which includes trampolines, spas and related products. As a result, approximately 550 additional jobs will be eliminated in the JumpKing plant in Mesquite, Texas. Approximately 415 jobs were eliminated with the discontinuance of trampoline operations. The Company expects the JumpKing plant to cease all operations by the end of the third quarter of fiscal 2005. At this time, the Company is unable in good faith to make a determination of the costs associated with discontinuing its outdoor recreational equipment operations or an estimate of the amount or the range of amounts expected to be incurred in connection with discontinuing its outdoor equipment operations or the amount or the range of amounts of charges that will result in future cash expenditures. The Company will file an amended report on Form 8-K within four business days after it makes a determination of such costs and estimates or range of estimates. The Company expects to complete this discontinuation of its outdoor recreational operations within twelve months. Neither the trampoline operations nor the outdoor recreational equipment operations were part of the Company’s core business operations or its strategic focus. The outdoor recreational operations were not making a positive contribution to the Company’s earnings.

This current report on Form 8-K includes certain forward-looking statements (as such term is defined in the Private Securities Litigation Reform Act of 1995) that involve a variety of business risks and other uncertainties that could cause actual results to differ materially. When used in this Form 8-K, the words “may,” “will,” “should,” “expect,” “intend,” “estimate,” “anticipate,” “believe,” “predict,” “potential” or “continue” or similar expressions identify forward-looking statements. These risks and uncertainties include the possibility of changes or fluctuations in global economic conditions; currency exchange rates; product demand and industry capacity; competitive products and pricing; availability and costs of critical components and materials; new product development and commercialization; order activity and demand from major customers; the mix of sales between high margin and low margin products; possible disruption in commercial activities due to terrorist activity and armed conflict; ability to obtain financing and capital on commercially reasonable terms; acquisition and divestiture activities; the level of excess or obsolete inventory; the ability to enforce patents; product and components performance issues; and litigation. These and other risk factors are identified in the Company’s filings with the Securities and Exchange Commission. Forward-looking statements speak only as of the day that they are made, and the Company undertakes no obligation to update them in light of new information or future events.

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SIGNATURE

ICON HEALTH & FITNESS, INC.

By: /s/ S. Fred Beck

Name: S. Fred Beck

Title:   Chief Financial Officer

Date:   December 2, 2004

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EXHIBIT INDEX

Exhibit
Number Description                                                                                                      

10.66	Amended and Restated Employment Agreement
10.67	Amended and Restated Employment Agreement

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EX-99

AMENDED AND RESTATED EMPLOYMENT AGREEMENT entered as of the 27th day of
February, 2004.

AMONG:                       HF HOLDINGS, INC., a Delaware corporation.

                             ("COMPANY")

                             ICON HEALTH & FITNESS, INC., a Delaware
                             corporation.

                             ("SUBSIDIARY")

                             SCOTT R. WATTERSON, acting in his personal
                             capacity, of the City of LOGAN, State of UTAH.

                             ("EMPLOYEE")

THE PARTIES AGREE AS FOLLOWS:

1 PREAMBLE
  1.1  The COMPANY and the SUBSIDIARY made an exchange offer for all
       outstanding 13% Senior Subordinated Notes due 2002 of the SUBSIDIARY,
       15% Senior Secured Discount Notes due 2004 of IHF Holdings, Inc. and
       14% Senior Discount Notes due 2006 of ICON Fitness Corporation,
       pursuant to an Exchange Offer and Consent Solicitation, dated July 30,
       1999, as supplemented (the "Exchange Offer").

  1.2  In connection with the Restructuring (as defined in the Equity Letter
       Agreement (the "Equity Letter"), dated July 8, 1999 and attached, as
       amended, to the Exchange Offer as Annex H) the COMPANY concluded an
       agreement for the employment of the EMPLOYEE as Chairman and Chief
       Executive Officer of the COMPANY, according to the terms and
       conditions set forth in such agreement, dated September 27, 1999.

  1.3  That agreement was amended by a First Amendment to Employment
       Agreement, dated April 29, 2002 and a Second Amendment to Employment
       Agreement, dated May 17, 2003 (as amended from time to time, the
       "Original Agreement").

  1.4  EMPLOYEE has informed the COMPANY of his intent to perform full-time
       church service, as contemplated in Section 9.3 of the Original
       Agreement, and to return to employment with the Company upon
       completion of such church service.

  1.5  The EMPLOYEE and the COMPANY want to provide for the EMPLOYEE's
       ability to perform such full-time church service for approximately
       three (3) years pursuant to a Leave of Absence (as hereinafter
       defined).

  1.6  The Original Agreement is hereby amended and restated in its entirety
       to record the terms and conditions which govern the mutual relations .
       of the parties hereto with respect to its subject matter and to
       expressly provide for EMPLOYEE's performance of full-time church
       service pursuant to the Leave of Absence and subsequent return to the
       Company (as hereby amended and restated, the "Agreement").

  1.7  In this Agreement, "BUSINESS" means the manufacture, sale and
       distribution of SPORTING GOODS as carried on by the COMPANY, the
       SUBSIDIARY, and their respective various divisions and subsidiaries,
       from time to time.  "SPORTING GOODS" means fitness equipment and
       accessories, which presently involve treadmills, home gyms, aerobic
       exercises, trampolines, weights and benches and exercise accessories,
       but the content of such product lines may vary from time to time.

  1.8  In this Agreement, AFFILIATES means any entity in which the COMPANY or
       the SUBSIDIARY holds more than a twenty percent (20%) voting interest
       direct or indirect.

2 EMPLOYMENT

  2.1  The Original Agreement came into effect on September 27, 1999
       ("Effective Date")

  2.2  Subject to earlier termination as hereinafter provided, the COMPANY
       hereby employs the EMPLOYEE and the EMPLOYEE agrees to serve the
       COMPANY in the positions of Chairman and Chief Executive Officer from
       the Effective Date until July 31, 2008, (the "TERM").  Except as
       expressly provided herein, the TERM shall include a one time leave of
       absence, during which the EMPLOYEE is relieved of his obligation to
       perform the duties, specified in Section 5.1 through 5.8 hereof,
       otherwise required pursuant to this Agreement for the COMPANY,
       including any current and future SUBSIDIARY commencing on July 1, 2004
       and ending not later than July 31, 2007 so that the EMPLOYEE can serve
       as a Mission President for The Church of Jesus Christ of Later-day
       Saints, which the Company acknowledges is full time church service
       (the "Leave of Absence").

  2.3  Although this agreement is concluded between the COMPANY and the
       EMPLOYEE, it is agreed that the duties and obligations of the EMPLOYEE
       hereunder extend to the SUBSIDIARY and to all of the COMPANY's other
       subsidiaries, present and future, although the EMPLOYEE will not
       necessarily be an employee of such entities.  The EMPLOYEE agrees to
       serve, if requested by the COMPANY, as an officer or director of the
       SUBSIDIARY and any other subsidiaries, in each case without additional
       consideration.

3 BASE SALARY, EXPENSES AND BENEFITS

  3.1  In consideration for the faithful performance of services, the other
       obligations of the Employee hereunder which continue during the Leave
       of Absence and the Employee's execution of this amended and restated
       Agreement, by the EMPLOYEE to be rendered to the COMPANY as herein
       provided during the TERM but not during the Leave of Absence, the
       COMPANY shall pay to the EMPLOYEE during the TERM (which shall include
       the Leave of Absence) an annual base salary of SIX HUNDRED TWENTY-FIVE
       THOUSAND DOLLARS ($625,000) payable in semi-monthly installments or in
       accordance with the general policy of the COMPANY which may change
       from time to time but in no event less frequently than monthly.

  3.2  The annual base salary mentioned in Section 3.1 above shall be
       reviewed by the Board of Directors of the COMPANY and may be adjusted
       upwards in the Board's discretion, annually for each year of the TERM,
       taking into account, among other things:

       (a) the performance by the EMPLOYEE of his duties and functions
           pursuant to this Agreement,

       (b) the general economic situation,

       (c) the development and performance of the BUSINESS, and

       (d) other matters deemed relevant by the Board of Directors such as an
           increase in shareholder equity and the rate on return on
           investment.

  3.3  The COMPANY shall reimburse the EMPLOYEE for all reasonable expenses
       which are incurred during the TERM by the EMPLOYEE in the performance
       of his duties hereunder and (i) subject to the COMPANY's annual budget
       or (ii) as authorized by the Board of Directors of the COMPANY or
       (iii) in accordance with the policies and procedures established from
       time to time by the Board of Directors of the COMPANY or a committee
       delegated for such purpose.

  3.4  During the TERM, but not during the Leave of Absence, the COMPANY
       shall provide the EMPLOYEE with the use of a new automobile of his
       choice, acting reasonably (and consistently with his past practice)
       every three (3) years for the purposes of his employment commensurate
       with the position of the EMPLOYEE and having regard to COMPANY policy
       in force from time to time.

       The COMPANY shall assume all costs and expenses of said automobile and
       its operation, including, without limitation, insurance, maintenance,
       gas and use of such automobile.  Upon the expiry of the TERM, the
       EMPLOYEE shall deliver such automobile to the COMPANY.

  3.5  During the TERM (including the Leave of Absence), the EMPLOYEE shall
       be entitled to participate in the COMPANY's life, welfare, and health
       insurance plans for senior executives on the same terms as those of
       other senior executives.

  3.6  During the TERM, the EMPLOYEE shall be entitled to participate in
       fringe benefit programs and general salary adjustment increases which
       are not less favorable than those extended by the COMPANY to its
       senior executives, including without limitation the deferred
       compensation plan previously established by the Board of Directors,
       but excluding for this purpose any such plan or program adopted
       exclusively for the benefit of junior management.

4 ANNUAL BONUS

  4.1  The EMPLOYEE shall receive (a) with respect to (i) each fiscal year
       ending during the TERM but not during the Leave of Absence, and (ii)
       that portion of any fiscal year ending after TERM but not during the
       Leave of Absence, during which he is employed hereunder, a bonus equal
       to one and one-half percent (1.50%) or one and one-quarter percent
       (1.25%) in the event of the application of the proviso set forth in
       Section 9.8 hereof, of the consolidated EBITDA (as that term is
       defined in the Credit Agreement, dated April 9, 2002, among the
       SUBSIDIARY, General Electric Capital Corporation and the other lenders
       thereunder, without regard to any amendments thereto) of the
       SUBSIDIARY and its subsidiaries (but not including the COMPANY) and
       (b) with respect to each fiscal year ending during the Leave of
       Absence, a bonus equal to one and one quarter percent (1.25%) of the
       consolidated EBITDA (as defined in Section 4.1(a) above) calculated
       using the Company's fiscal year ending May 31, 2003, which annual
       bonus shall be payable in equal monthly installments during each year
       of the Leave of Absence commencing (on an estimated basis if
       necessary) with the first pay period of the first month of the Leave
       of Absence; provided, however, that such bonus payments (i) shall, in
       the event of a Material Acquisition (as reasonably determined in good
       faith by the Board of Directors) by the COMPANY or the SUBSIDIARY and
       absent an agreement to the contrary between the COMPANY and the
       EMPLOYEE, be calculated without taking account of any EBITDA (as
       defined above) properly attributable to such Material Acquisition, and
       (ii) shall not be payable with respect to any such fiscal year unless
       such EBITDA for such fiscal year exceeds five and one-half percent
       (5.5%) of the consolidated net sales of the SUBSIDIARY and its
       subsidiaries (but not including the COMPANY) determined in accordance
       with generally accepted accounting principles and provided, further,
       that for purposes of this Agreement, EBITDA shall be calculated
       without regard to any bonuses payable hereunder.

  4.2  The sole basis for the bonus calculation shall be the audited
       financial statements of the SUBSIDIARY and its subsidiaries for the
       fiscal year in question.

  4.3  Any bonus to which EMPLOYEE is entitled under the provisions of this
       Agreement for any fiscal year shall be paid to him (regardless of
       whether the TERM has terminated) in accordance with the COMPANY's
       previous practice, with a first installment equal to forty percent
       (40%) of a good faith estimate of the bonus for such year, to be paid
       during the month of December of such year and a final installment to
       be paid as promptly as reasonably practicable after the end of, but
       not later than the 75th day after the end of each such fiscal year.

5 DUTIES

  5.1  During the TERM but not during the Leave of Absence, the EMPLOYEE
       shall perform those functions which are normally the functions of the
       Chairman and Chief Executive Officer of the COMPANY and such other
       offices as he may hold pursuant to Section 2.3, and shall further
       perform those functions which shall be reasonably determined from time
       to time by the Board of Directors of the COMPANY, such functions not
       to be inconsistent with those herein set forth.  The EMPLOYEE shall
       report to, and be subject to the authority of, the Board of Directors
       of the COMPANY.

  5.2  During the TERM but not during the Leave of Absence, the COMPANY shall
       give the EMPLOYEE a notice of six (6) months prior to any relocation
       of the EMPLOYEE (the COMPANY shall not relocate the EMPLOYEE during
       the Leave of Absence).

  5.3  During the TERM but not during the Leave of Absence, it is the
       specific responsibility of the EMPLOYEE, between regular meetings of
       the Board, to apprise Board Members of significant business matters.

  5.4  During the TERM but not during the Leave of Absence, EMPLOYEE shall
       devote his entire working time, attention and energies to the business
       of the COMPANY, the SUBSIDIARY, and their respective AFFILIATES.

  5.5  During the TERM but not during the Leave of Absence, the EMPLOYEE
       shall not, except under Section 5.6, be engaged in any other business
       activity, whether or not such business activity is pursued for gain, .
       profit or other pecuniary advantage.  Notwithstanding the prohibition
       contained in the present clause, the EMPLOYEE shall be entitled to
       continue to sit on the boards of directors of the companies listed on
       Schedule I hereto, and on the boards of directors of other companies
       if such activity is approved in writing by the Board of Directors of
       the COMPANY.  In the case of non-profit corporations or charities,
       such approval shall not be unreasonably withheld, but, in all other
       cases, the Board of Directors shall have sole discretion to grant,
       delay or withhold approval, with or without conditions.

  5.6  During the Term but not during the Leave of Absence, the EMPLOYEE
       shall not invest his personal assets in any business other than NON-
       COMPETING BUSINESSES, and even in the case of such investments:

       (a) No services are required or furnished on the part of the EMPLOYEE
           in the operations of the companies in which such investments are
           made and in which his participation is solely that of an investor
           provided that this subsection is not infringed by the EMPLOYEE's
           providing counseling (and not acting in a "line" capacity) on a
           non-remunerative basis to all such companies for a maximum of 5
           hours per week and 200 hours per year; and

       (b) If the EMPLOYEE purchases securities in any corporation whose
           securities are regularly traded in a recognized securities market,
           such purchases shall not result in his collectively owning
           beneficially at any time five percent (5%) or more of the equity
           securities of any corporation engaged in a business other than a
           NON-COMPETING BUSINESS.

       The foregoing restrictions shall not apply to any investment of
       whatever extent the EMPLOYEE may take in the shares of the COMPANY or
       of any successor company.

       For the purposes of this subsection, NON-COMPETING BUSINESSES are all
       businesses other than those which compete with:

       (a) the BUSINESS; or

       (b) any other business carried on in the future by the COMPANY, the
           SUBSIDIARY or any AFFILIATES, provided that the EMPLOYEE has
           access to confidential information concerning such business.

       Moreover, the EMPLOYEE shall not knowingly assist any RELATIVE to make
       any investment which the EMPLOYEE is not permitted to make by this
       section.

  5.7  The EMPLOYEE is a member of the Board of Directors and acknowledges
       that he has a significant interest in this Agreement and undertakes
       during the Term but not during the Leave of Absence, the following:

       5.7.1  To seek independent legal counsel at the COMPANY's expense to
              negotiate and review this Agreement on the EMPLOYEE's behalf;

       5.7.2  To disclose his interest in this Agreement to the other members
              of the Board of Directors; and

       5.7.3  To retire from and abstain from the discussion and vote at any
              meeting of the Board of Directors at which this Agreement or
              any default by EMPLOYEE or matter arising therefrom is the
              subject of a discussion or a vote.

  5.8  The EMPLOYEE also undertakes during the Term but not during the Leave
       of Absence, the following:

       5.8.1  To use every best effort (including the establishment of
              written procedures known to operation personnel) to promptly
              bring to the attention of the Board of Directors of the COMPANY
              any matter requiring the COMPANY's decision or action where his
              own interests or those of a RELATIVE are involved and to
              abstain from taking such decision or action until the Board of
              Directors decides.

       5.8.2  If requested, to be absent from and abstain from the discussion
              and vote at any meeting of the aforementioned Board of
              Directors where the subject matter being discussed and voted
              upon is any matter covered by Section 5.8.1.

       5.8.3  For the purposes of this Agreement, RELATIVE means the
              EMPLOYEE's spouse, parent, sibling, child or sibling's
              children, the spouses of the foregoing and any other person who
              could be claimed as a dependent on the EMPLOYEE's or RELATIVE's
              federal income tax return, any corporation or partnership in
              which a RELATIVE or the EMPLOYEE holds a five percent (5%)
              interest or of which a RELATIVE or the EMPLOYEE is an officer
              or director, and any trust of which any of the foregoing is a
              beneficiary.

       Notwithstanding anything contained herein to the contrary, no
provision of this Agreement shall be deemed to excuse the Executive during
the Leave of Absence of any and all fiduciary obligations imposed on a member
of the Board of Directors by applicable law.

6 EQUITY GRANT

  6.1  The COMPANY previously issued to the EMPLOYEE 375,000 shares of Common
       Stock of the COMPANY in connection with the execution of the Original
       Agreement, at no cost to EMPLOYEE, which the COMPANY represents and
       warrants is equal to 3.74893% of the COMPANY's Common Stock
       outstanding on a fully diluted basis upon closing of the
       Restructuring.

7 CONFIDENTIALITY, ETC.

  7.1  The EMPLOYEE recognizes and acknowledges that the confidential
       information, trade secrets and proprietary processes of the COMPANY,
       its AFFILIATES and subsidiaries as they may exist from time to time
       are valuable, special and unique assets of the BUSINESS of the
       COMPANY, its AFFILIATES and subsidiaries, access to and knowledge of
       which are essential to the performance of the EMPLOYEE's duties
       hereunder.  The EMPLOYEE will not, during the TERM or at any time
       within five (5) years following its termination, for any reason
       whatsoever, in whole or in part, disclose such confidential
       information, secrets or processes to any person, firm, corporation,
       association or other entity for any reason or purpose whatsoever, nor
       shall the EMPLOYEE make use of such property for his own purposes or
       for the benefit of any person, firm, corporation or other entity
       (except the COMPANY, its AFFILIATES and subsidiaries) under any
       circumstances whatsoever, except as may be required in the fulfillment
       of his function with the COMPANY within the terms of this Agreement or
       except as provided by law, provided these restrictions shall not apply
       to such information, secrets and processes which are then in the
       public domain (provided that the EMPLOYEE was not responsible,
       directly or indirectly, for permitting such secrets or process to
       enter the public domain without the COMPANY's consent).

  7.2  The EMPLOYEE furthermore agrees that upon termination of the TERM he
       will remit to the COMPANY all writings and materials, in his
       possession or under his control, which either belong to the COMPANY
       and AFFILIATES or which may contain confidential information
       concerning the COMPANY and AFFILIATES.  The EMPLOYEE may, however,
       retain his personal diary/agenda after removing or destroying all
       confidential COMPANY or AFFILIATES material therein.

  7.3  Any and all inventions, discoveries, development, methods, processes,
       compositions, works, concepts and ideas (whether or not patentable or
       copyrightable) conceived, made, developed, created or reduced to
       practice by the EMPLOYEE (whether at the request or suggestion of the
       COMPANY or otherwise, whether alone or in conjunction with others, and
       whether during regular hours of work or otherwise) during the TERM
       which may relate to the business, ventures or other activities of or
       products manufactured or sold by the COMPANY or any of its
       subsidiaries (collectively, "Proprietary Rights"), shall be promptly
       and fully disclosed by the EMPLOYEE to an appropriate executive
       officer of the COMPANY and shall be the COMPANY's exclusive property
       as against the EMPLOYEE and his heirs and personal representatives,
       and the EMPLOYEE hereby assigns to the COMPANY his entire right, title
       and interest therein and shall promptly deliver to an appropriate
       executive officer of the COMPANY all papers, drawings models, data and
       other material relating to any of the foregoing Proprietary Rights,
       conceived, made, developed, created or reduced to practice by him as
       aforesaid.  All copyrightable Proprietary Rights shall be considered
       "works made for hire."

       The EMPLOYEE shall, upon the COMPANY's request and without any payment
       therefor, execute any documents reasonably necessary or advisable in
       the opinion of the COMPANY's counsel to assign, and confirm the
       COMPANY's title in, his entire right, title and interest in the
       foregoing Proprietary Rights and to direct issuance of patents or
       copyrights to the COMPANY with respect to such Proprietary Rights as
       are the COMPANY's exclusive property as against the EMPLOYEE and his
       heirs and personal representatives under this Section 7.3 or to vest
       in the COMPANY title to such Proprietary Rights as against the
       EMPLOYEE and his heirs and personal representatives, the expense of
       securing any such patent or copyright, however, to be borne by the
       COMPANY.  In addition, the Company shall reimburse the EMPLOYEE for
       any reasonable expenses incurred in having such documents reviewed by
       EMPLOYEE's counsel.

8 VACATION

  8.1  During the TERM, but not during the Leave of Absence, the EMPLOYEE
       shall have the right to an annual paid vacation of no less duration
       than four (4) weeks.

9 TERMINATION OF EMPLOYMENT; LEAVE OF ABSENCE

  9.1  Notwithstanding any other provision contained herein, the COMPANY may
       on or after the Effective Date send to the EMPLOYEE notice of one of
       the following events and should the EMPLOYEE fail to cure the matter
       giving rise to the notice within thirty (30) days after receipt of
       such notice, the TERM shall terminate without any delay stipulated
       therein or any indemnity payable in lieu thereof:

       (a) EMPLOYEE's willful misconduct or gross negligence;

       (b) The commission of a criminal act by the EMPLOYEE against the
           COMPANY involving material harm (whether nor not charges are
           filed);

       (c) The commission by the EMPLOYEE of a criminal act of moral
           turpitude bringing the COMPANY into disrepute (whether or not
           charges are filed);

       (d) Willful insubordination to any directive of the Board of Directors
           provided reasonable prior notice of such directive is given; or

       (e) Actions contrary to Sections 5.4, 5.5, 5.6, 5.8, 7 or 10 causing
           COMPANY or AFFILIATES material harm; provided, however, during the
           Leave of Absence (i) in the case of paragraph "(d)" above, the
           Board of Directors shall not make any "directives" to the EMPLOYEE
           that are not consistent with the EMPLOYEE's actual circumstances
           during the Leave of Absence, and (ii) in the case of paragraph
           "(e)" above, the cross reference to Sections 5.4, 5.5,5.6, 5.7 and
           5.8 shall not apply.

  9.2  Notwithstanding any other provision contained herein (in which case
       the provisions of Section 9.9(d) shall apply), the TERM shall
       terminate automatically, without notice or indemnity in lieu thereof,
       upon the occurrence of one of the following events:

       (a) The bankruptcy or voluntary state insolvency filing of the
           EMPLOYEE; or

       (b) The death of the EMPLOYEE.

  9.3  Except during the Leave of Absence, the EMPLOYEE may terminate the
       TERM by sending his resignation in writing to the Board of Directors
       not less than six (6) months prior to the effective date of such
       resignation, failing which notice the EMPLOYEE may be subject to any
       and all damages incurred as a result of such failure.

  9.4  Except under the circumstances described in Section 9.6 and except
       during the Leave of Absence other than as provided in Section 9.9(c),
       the COMPANY may terminate the TERM by sending a notice in writing to
       the EMPLOYEE.  Notwithstanding the foregoing, the COMPANY may at any
       time following an occurrence of a "Change of Control" as defined in
       the Stockholders Agreement of HF Holdings, Inc. dated September 27,
       1999 terminate the TERM by sending notice in writing to EMPLOYEE.

  9.5  The EMPLOYEE may immediately terminate the TERM by sending a notice of
       termination to the Board of Directors with immediate effect following
       any material diminution of the EMPLOYEE's responsibilities or in the
       event that the EMPLOYEE is asked by the Board of Directors to perform
       any act which a reasonable person would consider illegal or unethical
       and the COMPANY has not withdrawn its request to the EMPLOYEE to
       perform such act within five (5) days of receiving a written notice
       from the EMPLOYEE to withdraw such a request.

  9.6  The COMPANY may immediately terminate the TERM, but not the Leave of
       Absence, by sending a notice in writing to the EMPLOYEE with immediate
       effect:

       9.6.1  after a period of six (6) consecutive months (or aggregating
              six (6) months in any twelve (12) month period) of absence by
              the EMPLOYEE from his employment as a result of sickness or
              disability, or

       9.6.2  after sixty (60) days of absence by the EMPLOYEE from his
              employment as a result of sickness or disability and a
              certification by three (3) physicians that the EMPLOYEE is
              likely to be disabled for a period of at least six (6) months
              from the initial date of sickness or disability.  One (1) such
              physician shall be chosen by the EMPLOYEE, one (1) shall be
              chosen by the COMPANY and the third shall be chosen by the
              other two (2) selected physicians.  The EMPLOYEE agrees that in
              the event of his sickness, he shall submit himself for
              examination by such physicians if reasonably requested to do so
              by the COMPANY.  For the purposes of this section, "disabled"
              or "disability" shall mean a temporary or permanent substantial
              inability because of a physical or mental illness to continue
              to discharge the EMPLOYEE's duties hereunder.

       Notwithstanding any other provision hereof, the EMPLOYEE's
       compensation during any period of the EMPLOYEE's disability shall be
       reduced to the extent of any payments to the EMPLOYEE for such period
       under any disability plan or program maintained for the EMPLOYEE by
       the COMPANY for his benefit.

  9.7  In the event of the termination of the TERM by virtue of section 9.6
       in addition to the payments described therein, the COMPANY shall pay
       to the EMPLOYEE a severance pay equal to one (1) month base salary in
       effect at termination for each calendar year, or part thereof, of the
       EMPLOYEE's employment with the COMPANY, the SUBSIDIARY, IHF Capital,
       Inc. or IHF Holdings, Inc. (or any predecessor companies of the
       COMPANY, the SUBSIDIARY, IHF Capital, Inc., or IHF Holdings, Inc.)
       after January 1, 1988.

  9.8  In the event of the termination of the TERM by virtue of Section 9.3,
       9.4 or 9.5, the COMPANY shall pay to the EMPLOYEE a severance payment
       equal to the EMPLOYEE's base salary then in effect and the bonus
       referred to in Section 4 hereof, pro-rated (meaning paid in equal
       monthly installments each year over the period of the payment), for
       (a) twelve (12) months following the termination of the TERM if such
       termination occurs after the date which is three (3) months after the
       Return Date or (b) the number of months remaining in the TERM if such
       Termination occurs prior to the date which is three (3) months after
       the Return Date; provided, however, that (i) if the EMPLOYEE's
       resignation is submitted by EMPLOYEE pursuant to Section 9.3, then the
       bonus referred to in Section 4.1 hereof shall be calculated at the
       rate of one and one-quarter percent (1.25%), (ii) the aggregate
       severance pay payable to the EMPLOYEE pursuant to this Section 9.8
       (irrespective and independent of any payments pursuant to Section 10.3
       hereof) shall not exceed (a) 36 months in the event that the EMPLOYEE
       elects not to return to employment with the Company following the
       Leave of Absence and (b) 48 months in the event that the EMPLOYEE is
       terminated by the Company for any reason and (iii) for purposes of the
       preceding clause (ii) in calculating the amount of severance pay,
       payments of base salary and bonus during the Leave of Absence shall be
       deemed to constitute severance pay.  For the purposes of this Section
       9.8, the bonus referred to in Section 4.1 hereof shall be determined
       using EBITDA (as defined in Section 4.1 hereof) for the fiscal year
       immediately preceding termination and shall be paid to the EMPLOYEE
       within ninety (90) days from the end of the COMPANY's applicable
       fiscal year, and the base salary shall be paid to the EMPLOYEE on the
       same payment schedule as was applicable to the EMPLOYEE during his
       employment; provided however if termination occurs during the Leave of
       Absence the bonus referred to in Section 4.1 shall be determined using
       EBITDA as of May 31, 2003.

  9.9  (a) Notwithstanding the foregoing, the COMPANY has agreed to the
           EMPLOYEE taking the Leave of Absence commencing not later than
           July 1, 2004 (the "Commencement Date") and ending not later than
           July 31, 2007 (the "Return Date"). In no event will the Leave of
           Absence by the EMPLOYEE be deemed a resignation by EMPLOYEE;
           provided, however, that if EMPLOYEE does not return to the COMPANY
           to resume his duties on or prior to the Return Date, the EMPLOYEE
           will be deemed to have terminated the TERM pursuant to Section 9.3
           hereof as of the Return Date but without being subject to any
           damages for lack of notice provided therein.
       (b) During the Leave of Absence, this Agreement shall remain in full
           force and effect and the COMPANY shall continue to pay EMPLOYEE
           his (i) base salary in effect on the date such Leave of Absence
           begins, payable on the same schedule as was payable to EMPLOYEE
           prior to the Leave of Absence, and (ii) the annual bonus payments
           referred to in Section 4.1 hereof.

       (c) At such time as the EMPLOYEE determines to end the Leave of
           Absence, EMPLOYEE shall provide the COMPANY not less than two (2)
           months prior written notice of his intent to return to the COMPANY
           to resume his full duties as its Chairman and Chief Executive
           Officer, as set forth in this Agreement, and state the Return
           Date. On the Return Date, the EMPLOYEE will be reinstated as the
           Company's Chairman and Chief Executive Officer for the duration of
           the TERM, subject to the provisions of this Agreement, and any
           bonus payments following the Leave of Absence shall be calculated
           pursuant to Section 4.1(b).

           (i) Notwithstanding the foregoing, in the event that during Leave
               of Absence David Watterson shall cease to be Chairman and
               Chief Executive Officer of the COMPANY, the COMPANY will give
               prompt notice thereof to the EMPLOYEE, asking the EMPLOYEE to
               return to the COMPANY as its Chairman and Chief Executive
               Officer.  In the event EMPLOYEE accepts the COMPANY's request,
               is able to cut short his Leave of Absence and actually does
               return to the COMPANY within 90 days of such notice, EMPLOYEE
               will thereupon be reinstated as the COMPANY's Chairman and
               Chief Executive Officer as provided above.  In the event the
               EMPLOYEE does not so return to the COMPANY, this Agreement
               shall continue in effect, however (i) Section 9.4 shall
               thereupon apply without the words "and except during the Leave
               of Absence", (ii) if the COMPANY during the remainder of the
               Leave of Absence terminates the TERM pursuant to Section 9.4
               as then applicable, EMPLOYEE shall have the right until
               September 30, 2007 to reemployment with the COMPANY, but only
               in an executive position, with salary and duties commensurate
               with such position, and for such term, in each case, as the
               EMPLOYEE and the Board of Directors shall then agree (subject
               to the Board of Directors' fiduciary duties), and (iii) if in
               the case of clause (ii) EMPLOYEE is unable to reach agreement
               with the Board of Directors on the executive position (whether
               because of the Board of Directors' exercise of its fiduciary
               duties or otherwise), then EMPLOYEE shall receive the
               remaining severance payments to which he would then be
               entitled to in Section 9.8 as a result of the prior
               termination of the TERM by the Company pursuant to Section
               9.4, which shall be EMPLOYEE's sole remedy under law, equity
               or otherwise.

          (ii) In the event that during the Leave of Absence the COMPANY
               shall have terminated the TERM pursuant the last sentence of
               Section 9.4 following the occurrence of a Change of Control,
               EMPLOYEE shall have no obligation to return to the COMPANY as
               Chairman and Chief Executive Officer or in any other executive
               position, but EMPLOYEE shall have the right until September
               30, 2007 to reemployment with the COMPANY but only in an
               executive position, with salary and duties commensurate with
               such position, and for such term, in each case, as the
               EMPLOYEE and the Board of Directors shall then agree (subject
               to the Board of Directors' fiduciary duties).  If EMPLOYEE is
               unable to reach agreement with the Board of Directors with
               respect to executive position (whether because of the Board of
               Directors' exercise of its fiduciary duties or otherwise),
               then EMPLOYEE shall receive the remaining severance payments
               to which he would then be entitled to in Section 9.8 as a
               result of the prior termination of the TERM by the Company
               pursuant to Section 9.4, which shall be EMPLOYEE's sole remedy
               under law, equity or otherwise.

       (d) In the event the Agreement is terminated pursuant to Section 9.2
           (b) during the Leave of Absence, the estate of the Employee shall
           be entitled to all payments that would otherwise have been due to
           the Employee hereunder during the Leave of Absence.

10 RESTRICTIVE COVENANT

 10.1  EMPLOYEE shall not, during the TERM and for a period of one (1) year
       from its termination, either directly or indirectly, individually or
       in partnership, carry on or be engaged in, or concerned with or
       interested in, in any capacity whatsoever (including that of
       principal, agent, shareholder (subject to section 5.6(b)), consultant,
       employee, lender or surety), any person, firm, association, syndicate
       or company engaged in or concerned with or interested in the
       conception, development, fabrication, transformation, marketing,
       distribution, advertising, franchising or sale in Canada, the United
       States or the European Economic Community, or any of them, of any
       products or services similar or identical to any of those
       manufactured, distributed, or sold by the COMPANY or any of its
       subsidiaries in the course of his employment with the COMPANY, its
       AFFILIATES and subsidiaries.

 10.2  (a) EMPLOYEE shall not, during the TERM hereunder and for a period of
           twelve (12) months from its termination, directly or indirectly,
           hire any Designated Employee.

       (b) EMPLOYEE shall not, during the TERM hereunder and for a period of
           eighteen (18) months from its termination, directly or indirectly,
           solicit, interfere with or endeavor to entice away, any Designated
           Employee.

       (c) For purposes of this Section 10.2, the term "Designated Employee"
           shall mean any person if that person is or was a Senior Employee
           of the COMPANY or any of its AFFILIATES or subsidiaries during the
           period beginning six (6) months prior to the termination of the
           TERM and ending (i) in the case of clause (a), twelve (12) months
           thereafter and (ii) in the case of clause (b), eighteen (18)
           months thereafter, but shall exclude Gary E. Stevenson or any
           RELATIVE.  For purposes of this Section 10.2 "Senior Employee"
           shall mean each of the two hundred (200) most highly compensated
           employees of the COMPANY or any of its subsidiaries or AFFILIATES.

 10.3  With respect to any termination, such period shall be extended by
       written notice to the EMPLOYEE within thirty (30) days of such
       termination by an additional two (2) years (i.e., for a total of three
       (3) years from the termination of EMPLOYEE's employment) if and to the
       extent that the COMPANY, at its option, pays to the EMPLOYEE
       additional severance pay equal to the EMPLOYEE's base salary then in
       effect and the bonus referred to in Section 4 hereof, pro-rated
       (meaning paid in equal monthly installments each year over the period
       of the payment) for the period of the payment, for an additional two
       (2) years beyond that required to be paid by the COMPANY to the
       EMPLOYEE under Section 9.8. If paid at the COMPANY's option, such
       bonuses, which shall be determined using EBITDA (as defined in Section
       4.1 hereof) for the fiscal year immediately preceding termination, are
       to be paid within ninety (90) days from the end of the COMPANY's
       applicable fiscal year, and the base salary shall be paid to the
       EMPLOYEE on the same payment schedule as was applicable to the
       EMPLOYEE during his employment.

11 REASONABLENESS AND REMEDIES

 11.1  The EMPLOYEE agrees that all the conditions and restrictions
       established in this Agreement are reasonable taking into account the
       circumstances surrounding this Agreement.

 11.2  The EMPLOYEE recognizes that in the view of the serious and
       irreparable harm which a violation hereof would have on the COMPANY,
       and without prejudice to the COMPANY's other remedies, injunctive
       relief would constitute an available and appropriate remedy and, to
       the extent permitted by law, the COMPANY shall not be required to
       furnish any security or bond in respect thereof.

12 [INTENTIONALLY OMITTED]

13 GENERAL LIMIT ON EMPLOYEE'S LIABILITY

 13.1  As a general and overall limitation of the EMPLOYEE's liability to the
       COMPANY and AFFILIATES, the COMPANY agrees that the EMPLOYEE shall not
       be liable, for any reason except as set forth below, to the COMPANY or
       any of its AFFILIATES for an amount in excess of the amount provided
       in the next sentence hereof.  Accordingly, as and for their sole
       remedy against the EMPLOYEE, the COMPANY agrees that for any claim or
       cause of action that the COMPANY or any of its AFFILIATES may have
       against the EMPLOYEE, whether past or future, their sole remedy shall
       be the forfeiture of the EMPLOYEE's salary, bonus and other
       compensation (but not the equity grant under Section 6.1 hereof, which
       shall not be subject to forfeiture) received by the EMPLOYEE during
       the COMPANY's fiscal year in which the EMPLOYEE's termination occurred
       plus subsequently accruing compensation.  In this regard, the COMPANY
       agrees, to the extent permitted by applicable law, to indemnify the
       EMPLOYEE from and against any liability the EMPLOYEE may have in
       excess of that provided in the immediately preceding sentence (i)
       hereunder or (ii) for any other claim the COMPANY or any of its
       AFFILIATES may have against the EMPLOYEE.  However, nothing in this
       Section 13 shall limit the EMPLOYEE's liability to the COMPANY or any
       of its AFFILIATES or provide the EMPLOYEE any indemnity (i) for any
       act by the EMPLOYEE involving theft, fraud or embezzlement against the
       COMPANY or any of its AFFILIATES, (ii) in respect of any equitable
       remedy against the EMPLOYEE, (iii) in respect of any agreement listed
       on Schedule I of the Old Employment Agreement (as defined in that
       separate Termination Agreement among IHF Capital, Inc., IHF Holdings,
       Inc., SUBSIDIARY and EMPLOYEE, dated September 27, 1999 (the
       "Termination Agreement")) or any agreement heretofore or hereafter
       entered into by the EMPLOYEE after the date of the Old Employment
       Agreement, (iv) in respect of any claim or cause of action asserted by
       the COMPANY or any of its AFFILIATES as a counterclaim (to the extent
       of any liability the COMPANY or any of its AFFILIATES may have by
       reason of the EMPLOYEE claim in question) or as a set off, or (v)
       under Section 7, 9.3 or 10 of this Agreement or under the Non-
       Competition Agreement (as defined in the First Amended and Restated
       Master Transaction Agreement dated as of October 12, 1994 among ICON
       Health & Fitness, Inc. and the other parties thereto (the "Master
       Transaction Agreement")); provided, however, that the aggregate of the
       liability of the EMPLOYEE to the COMPANY or any of its AFFILIATES,
       under Section 7, 9.3 or 10 of this Agreement or to the COMPANY, any of
       its AFFILIATES, IHF Capital, Inc. or any of its AFFILIATES (as defined
       in the Old Employment Agreement) under the Non-Competition Agreement
       and of the liability of the EMPLOYEE to IHF Capital, Inc. or any of
       its AFFILIATES (as so defined) in respect of claims subject to the
       $18,000,000 limits set forth in the third to last sentence of Section
       10.3.1.1 of the Master Transaction Agreement, shall not exceed
       $1,240,000.

14 AMENDMENTS

 14.1  This Agreement may be amended only by written instrument duly executed
       by all the parties hereby and approved by the Board of Directors of
       the COMPANY.

15 NO ASSIGNMENT

 15.1  No party hereto shall assign, in whole or in part, this agreement or
       any of its or his respective rights and obligations hereunder without
       the express prior written consent of the other parties hereto; for
       this purpose the merger or reorganization of the COMPANY or the
       SUBSIDIARY or any AFFILIATES shall not be considered an assignment.

16 NO WAIVER

 16.1  No waiver by any party of any breach of the obligations of any other
       party hereunder shall be a waiver of any subsequent breach or of any
       other obligation, nor shall any forbearance to seek a remedy for any
       breach be a waiver of any rights and remedies with respect to any
       subsequent breach.

17 SEVERABILITY

 17.1  The invalidity of one of the provisions of this Agreement shall not
       invalidate or otherwise affect any of the other provisions of this
       Agreement, which shall remain in full force and effect, and each such
       invalid provision shall be construed by limiting it so as to be valid
       for the maximum extent permitted by law.

18 CURRENCY, ETC.

 18.1  All references in this Agreement to dollar or $ mean lawful currency
       of the United States of America.

 18.2  The COMPANY shall have the right to withhold, from or in respect of
       any payment, benefit or other item of compensation due to the EMPLOYEE
       hereunder, any federal, state or local taxes of any kind required by
       law to be withheld with respect thereto.  In the event that at the
       time any withholding is required hereunder, the amount of cash
       payments from which the applicable withholding taxes may be deducted
       is less than the withholding taxes due, the EMPLOYEE shall pay to the
       COMPANY, in immediately available funds, an amount equal to such
       shortfall.

19 GOVERNING LAW; ARBITRATION

 19.1  This Agreement shall be governed by and construed in accordance with
       the domestic substantive laws of the State of Utah, without giving
       effect to any choice or conflict of law provision or rule that would
       cause the application of the domestic substantive laws of any other
       jurisdiction; provided, however, that any dispute relating to the
       provisions of Section 19.2 shall be governed by the United States
       Arbitration Act as then in force.

 19.2  Except solely as set forth in Section 19.4, each dispute, difference,
       controversy or claim arising in connection with or related or
       incidental to, or question occurring under, this Agreement or the
       subject matter hereof shall be finally settled under the Commercial
       Arbitration Rules of the American Arbitration Association (the "AAA")
       by an arbitral tribunal composed of three (3) arbitrators, at least
       one (1) of whom shall be an attorney experienced in corporate
       transactions, appointed by agreement of the parties in accordance with
       said Rules.  In the event the parties fail to agree upon a panel of
       arbitrators from the first list of potential arbitrators proposed by
       the AAA, the AAA will submit a second list in accordance with said
       Rules.  In the event the parties shall have failed to agree upon a
       full panel of arbitrators from the second list, any remaining
       arbitrators to be selected shall be appointed by the AAA in accordance
       with said Rules.  If, at the time of the arbitration, the parties
       agree in writing to submit the dispute to a single arbitrator, said
       single arbitrator shall be appointed by agreement of the parties in
       accordance with the foregoing procedure, or, failing such agreement,
       by the AAA in accordance with said Rules.  The foregoing arbitration
       proceedings may be commenced by any party by notice to all other
       parties.

 19.3  The place of arbitration shall be Salt Lake City, Utah.

 19.4  The parties hereto exclude any right of appeal to any court on the
       merits of the dispute.  The provisions of this Section 19 may be
       enforced in any court having jurisdiction over the award of any of the
       parties or any of their respective assets and judgment on the award
       (including without limitation equitable remedies) granted in any
       arbitration hereunder may be entered in any such court.  Nothing
       contained in this Section 19 shall prevent any party from seeking
       interim measures of protection in the form of pre-award attachment of
       assets or preliminary or temporary equitable relief.

 19.5  To the extent not prohibited by applicable law which cannot be waived,
       each of the parties hereto hereby waives, and covenants that he or it
       will not assert (whether as plaintiff, defendant, or otherwise), any
       right to trial by jury in any forum in respect of any issue, claim,
       demand, cause of action, action, suit or proceeding arising out of or
       based upon this Agreement or the subject matter hereof, in each case
       whether now existing or hereafter arising and whether in contract or
       tort or otherwise.  Any of the parties hereto may file an original
       counterpart or a copy of this Section 19.5 with any court as written
       evidence of the consent of each of the parties hereto to the waiver of
       his or its right to trial by jury.

 19.6  Each of the parties hereto acknowledges that he or it has been
       informed by each other party that the provisions of Section 19
       constitute a material inducement upon which such party is relying and
       will rely in entering into this Agreement and the transactions
       contemplated hereby.

20 BINDING ON HEIRS

 20.1  This Agreement binds and inures to the benefit of the parties, their
       heirs, executors, administrators, successors and permitted assigns
       (subject to Section 9.2(b)).

21 ENTIRE AGREEMENT

 21.1  This Agreement embodies the entire Agreement between the parties
       hereto concerning the subject matters mentioned herein and supersedes
       all previous discussions, correspondence, understandings or
       agreements, whether written or oral, with respect to such matters,
       except as provided in the Termination Agreement.  This Agreement shall
       constitute an agreement between employer and employee of the type
       referred to in Section 1, Chapter 28, Title 34 of the Utah Code,
       Annotated.

22 ATTORNEY'S FEES

 22.1  In the event that any party hereto shall be found in default or in
       breach of this Agreement pursuant to arbitral or judicial proceedings,
       such party shall be liable to pay all reasonable attorney's fees,
       court costs and other related collection costs and expenses incurred
       by the non-defaulting or non-breaching party in pursuing its rights
       hereunder.

23 NOTICES

 23.1  All notices and other communications necessary or contemplated under
       this Agreement shall be in writing and shall be delivered in the
       manner specified herein or, in the absence of such specification,
       shall be deemed to have been duly given three (3) business days after
       mailing by certified mail, when delivered by hand, or when delivered
       by facsimile upon confirmation of receipt, or one (1) day after
       sending by overnight delivery service, to the respective addresses of
       the parties set forth below:

       (a) for notices and communications to the COMPANY or the SUBSIDIARY:

           HF HOLDINGS, INC.
           ICON HEALTH & FITNESS, INC.
           1500 South 1000 East
           Logan, Utah  84321
           Fax:  435-750-5238
           Attn: Board of Directors

       (b) For notices and communications to the EMPLOYEE:

           Scott R. Watterson
           560 South 1000 East
           Logan, Utah  84321

       (c) With a copy in each case to:

           Weil, Gotshal & Manges LLP
           100 Federal Street
           34th Floor
           Boston, MA 02110
           Fax: 617-772-8333
           Attn: Charles W. Robins, Esq.

           and

           Ropes & Gray
           One International Place
           Boston, MA  02110
           Fax:  617-951-7050
           Attn:  R. Newcomb Stillwell, Esq.

24 JOINT AND SEVERAL LIABILITY

 24.1  The COMPANY and the SUBSIDIARY shall be jointly and severally liable
       in respect of all payment obligations of the COMPANY hereunder.

            [Remainder of Page Intentionally Left blank]





IN WITNESS WHEREOF the parties have hereto signed this Agreement as of the
date first written above.

                                  HF HOLDINGS, INC.



/s/ Debra Stephenson             By: /s/ S. Fred Beck
- --------------------             ---------------------
Witness                           Name:  S. Fred Beck
                                  Title:  Chief Financial Officer

                                  ICON HEALTH & FITNESS, INC.


/s/ Debra Stephenson             By: /s/ S. Fred Beck
- --------------------             ---------------------
Witness                           Name:  S. Fred Beck
                                  Title:  Chief Financial Officer


/s/ James W. Brackner             By: /s/ Scott R. Watterson
- ---------------------             --------------------------
Witness                              SCOTT R. WATTERSON




                                   SCHEDULE I
                                       To
                              EMPLOYMENT AGREEMENT
                                     Among
                                 HF HOLDINGS INC.
                            ICON HEALTH & FITNESS, INC.
                                      And
                                SCOTT R. WATTERSON

                                   ------------

                                    Board Seats

                                   ------------


                                       Ampad
                           Make-a-Wish Foundation of Utah
                                  Utah Foundation
                             Utah State Foundation Board
                                  Patient Link.com
                                 Cornerstone Capital

EX-99

AMENDED AND RESTATED EMPLOYMENT AGREEMENT entered as of the 27th day of
February, 2004.

AMONG:                HF HOLDINGS, INC., a Delaware corporation.

                      ("COMPANY")

                      ICON HEALTH & FITNESS, INC., a Delaware
                      corporation.

                      ("SUBSIDIARY")

                      GARY E. STEVENSON, acting in his personal capacity, of
                      the City of PROVIDENCE, State of UTAH.

                      ("EMPLOYEE")

THE PARTIES AGREE AS FOLLOWS:

1 PREAMBLE

  1.1   The COMPANY and the SUBSIDIARY made an exchange offer for all
        outstanding 13% Senior Subordinated Notes due 2002 of the SUBSIDIARY,
        15% Senior Secured Discount Notes due 2004 of IHF Holdings, Inc. and 14%
        Senior Discount Notes due 2006 of ICON Fitness Corporation, pursuant to
        an Exchange Offer and Consent Solicitation, dated July 30, 1999, as
        supplemented (the "Exchange Offer").

  1.2   In connection with the Restructuring (as defined in the Equity Letter
        Agreement (the "Equity Letter"), dated July 8, 1999 and attached, as
        amended, to the Exchange Offer as Annex H) the COMPANY concluded an
        agreement for the employment of the EMPLOYEE as President and Chief
        Operating Officer of the COMPANY, according to the terms and conditions
        set forth in such agreement, dated September 27, 1999.

  1.3   That agreement was amended by a First Amendment to Employment Agreement,
        dated April 29, 2002 and a Second Amendment to Employment Agreement,
        dated May 17, 2003 (as amended from time to time, the "Original
        Agreement").

  1.4   EMPLOYEE has informed the COMPANY of his intent to perform full-time
        church service, as contemplated in Section 9.3 of the Original
        Agreement, and to return to employment with the Company upon completion
        of such church service.

  1.5   The EMPLOYEE and the COMPANY want to provide for the EMPLOYEE's ability
        to perform such full-time church service for approximately three (3)
        years pursuant to a Leave of Absence (as hereinafter defined).

  1.6   The Original Agreement is hereby amended and restated in its entirety to
        record the terms and conditions which govern the mutual relations of the
        parties hereto with respect to its subject matter and to expressly
        provide for EMPLOYEE's performance of full-time church service pursuant
        to the Leave of Absence and subsequent return to the Company (as hereby
        amended and restated, the "Agreement").

  1.7   In this Agreement, "BUSINESS" means the manufacture, sale and
        distribution of SPORTING GOODS as carried on by the COMPANY, the
        SUBSIDIARY, and their respective various divisions and subsidiaries,
        from time to time. "SPORTING GOODS" means fitness equipment and
        accessories, which presently involve treadmills, home gyms, aerobic
        exercises, trampolines, weights and benches and exercise accessories,
        but the content of such product lines may vary from time to time.

  1.8   In this Agreement, AFFILIATES means any entity in which the COMPANY or
        the SUBSIDIARY holds more than a twenty percent (20%) voting interest
        direct or indirect.

2 EMPLOYMENT

  2.1   The Original Agreement came into effect on September 27, 1999
        ("Effective Date").

  2.2   Subject to earlier termination as hereinafter provided, the COMPANY
        hereby employs the EMPLOYEE and the EMPLOYEE agrees to serve the COMPANY
        in the positions of President and Chief Operating Officer from the
        Effective Date until July 31, 2008, (the "TERM"). Except as expressly
        provided herein, the TERM shall include a one time leave of absence,
        during which the EMPLOYEE is relieved of his obligation to perform the
        duties specified in Section 5.1 through 5.8 hereof, otherwise required
        pursuant to this Agreement for the COMPANY, including any current and
        future SUBSIDIARY, commencing on July 1, 2004 and ending not later than
        July 31, 2007 so that the EMPLOYEE can serve as a Mission President for
        The Church of Jesus Christ of Later- day Saints, which the Company
        acknowledges is full time church service (the "Leave of Absence").

  2.3   Although this agreement is concluded between the COMPANY and the
        EMPLOYEE, it is agreed that the duties and obligations of the EMPLOYEE
        hereunder extend to the SUBSIDIARY and to all of the COMPANY's other
        subsidiaries, present and future, although the EMPLOYEE will not
        necessarily be an employee of such entities. The EMPLOYEE agrees to
        serve, if requested by the COMPANY, as an officer or director of the
        SUBSIDIARY and any other subsidiaries, in each case without additional
        consideration.

3 BASE SALARY, EXPENSES AND BENEFITS

  3.1   In consideration for the faithful performance of services, the other
        obligations of the Employee hereunder which continue during the Leave of
        Absence and the Employee's execution of this amended and restated
        Agreement, by the EMPLOYEE to be rendered to the COMPANY as herein
        provided during the TERM but not during the Leave of Absence, the
        COMPANY shall pay to the EMPLOYEE during the TERM (which shall include
        the Leave of Absence) an annual base salary of FIVE HUNDRED SEVENTY-FIVE
        THOUSAND DOLLARS ($575,000) payable in semi-monthly installments or in
        accordance with the general policy of the COMPANY which may change from
        time to time but in no event less frequently . than monthly.

  3.2   The annual base salary mentioned in Section 3.1 above shall be reviewed
        by the Board of Directors of the COMPANY and may be adjusted upwards in
        the Board's discretion, annually for each year of the TERM, taking into
        account, among other things:

        (a) the performance by the EMPLOYEE of his duties and functions pursuant
            to this Agreement,

        (b) the general economic situation,

        (c) the development and performance of the BUSINESS, and

        (d) other matters deemed relevant by the Board of Directors such as an
            increase in shareholder equity and the rate on return on investment.

  3.3   The COMPANY shall reimburse the EMPLOYEE for all reasonable expenses
        which are incurred during the TERM by the EMPLOYEE in the performance of
        his duties hereunder and (i) subject to the COMPANY's annual budget or
        (ii) as authorized by the Board of Directors of the COMPANY or (iii) in
        accordance with the policies and procedures established from time to
        time by the Board of Directors of the COMPANY or a committee delegated
        for such purpose.

  3.4   During the TERM, but not during the Leave of Absence, the COMPANY shall
        provide the EMPLOYEE with the use of a new automobile of his choice,
        acting reasonably (and consistently with his past practice) every three
        (3) years for the purposes of his employment commensurate with the
        position of the EMPLOYEE and having regard to COMPANY policy in force
        from time to time.

        The COMPANY shall assume all costs and expenses of said automobile and
        its operation, including, without limitation, insurance, maintenance,
        gas and use of such automobile. Upon the expiry of the TERM, the
        EMPLOYEE shall deliver such automobile to the COMPANY.

  3.5   During the TERM (including the Leave of Absence), the EMPLOYEE shall be
        entitled to participate in the COMPANY's life, welfare, and health
        insurance plans for senior executives on the same terms as those of
        other senior executives.

  3.6   During the TERM, the EMPLOYEE shall be entitled to participate in fringe
        benefit programs and general salary adjustment increases which are not
        less favorable than those extended by the COMPANY to its senior
        executives, including without limitation the deferred compensation plan
        previously established by the Board of Directors, but excluding for this
        purpose any such plan or program adopted exclusively for the benefit of
        junior management.

4 ANNUAL BONUS

  4.1   The EMPLOYEE shall receive (a) with respect to (i) each fiscal year
        ending during the TERM but not during the Leave of Absence, and (ii)
        that portion of any fiscal year ending after TERM but not during the
        Leave of Absence, during which he is employed hereunder, a bonus equal
        to one and thirty-two hundredths percent (1.32%) or one and one-tenth
        percent (1.10%) in the event of the application of the proviso set forth
        in Section 9.8 hereof, of the consolidated EBITDA (as that term is
        defined in the Credit Agreement, dated April 9, 2002, among the
        SUBSIDIARY, General Electric Capital Corporation and the other lenders
        thereunder, without regard to any amendments thereto) of the SUBSIDIARY
        and its subsidiaries (but not including the COMPANY) and (b) with
        respect to each fiscal year ending during the Leave of Absence, a bonus
        equal to one and one-tenth percent (1.10%) of the consolidated EBITDA
        (as defined in Section 4.1(a) above) calculated using the Company's
        fiscal year ending May 31, 2003, which annual bonus shall be payable in
        equal monthly installments during each year of the Leave of Absence
        commencing (on an estimated basis if necessary) with the first pay
        period of the first month of the Leave of Absence; provided, however,
        that such bonus payments (i) shall, in the event of a Material
        Acquisition (as reasonably determined in good faith by the Board of
        Directors) by the COMPANY or the SUBSIDIARY and absent an agreement to
        the contrary between the COMPANY and the EMPLOYEE, be calculated without
        taking account of any EBITDA (as defined above) properly attributable to
        such Material Acquisition, and (ii) shall not be payable with respect to
        any such fiscal year unless such EBITDA for such fiscal year exceeds
        five and one half percent (5.5%) of the consolidated net sales of the
        SUBSIDIARY and its subsidiaries (but not including the COMPANY)
        determined in accordance with generally accepted accounting principles
        and provided, further, that for purposes of this Agreement, EBITDA shall
        be calculated without regard to any bonuses payable hereunder.

  4.2   The sole basis for the bonus calculation shall be the audited financial
        statements of the SUBSIDIARY and its subsidiaries for the fiscal year in
        question.

  4.3   Any bonus to which EMPLOYEE is entitled under the provisions of this
        Agreement for any fiscal year shall be paid to him (regardless of
        whether the TERM has terminated) in accordance with the COMPANY's
        previous practice, with a first installment equal to forty percent (40%)
        of a good faith estimate of the bonus for such year, to be paid during
        the month of December of such year and a final installment to be paid as
        promptly as reasonably practicable after the end of, but not later than
        the 75th day after the end of each such fiscal year.

5 DUTIES

  5.1   During the TERM but not during the Leave of Absence, the EMPLOYEE shall
        perform those functions which are normally the functions of the
        President and Chief Operating Officer of the COMPANY and such other
        offices as he may hold pursuant to Section 2.3, and shall further
        perform those functions which shall be reasonably determined from time
        to time by the Board of Directors of the COMPANY, such functions not to
        be inconsistent with those herein set forth. The EMPLOYEE shall report
        to, and be subject to the authority of, the Board of Directors of the
        COMPANY.

  5.2   During the TERM but not during the Leave of Absence, the COMPANY shall
        give the EMPLOYEE a notice of six (6) months prior to any relocation of
        the EMPLOYEE (the COMPANY shall not relocate the EMPLOYEE during the
        Leave of Absence).

  5.3   During the TERM but not during the Leave of Absence, it is the specific
        responsibility of the EMPLOYEE, between regular meetings of the Board,
        to apprise Board Members of significant business matters.

  5.4   During the TERM but not during the Leave of Absence, EMPLOYEE shall
        devote his entire working time, attention and energies to the business
        of the COMPANY, the SUBSIDIARY, and their respective AFFILIATES.

  5.5   During the TERM but not during the Leave of Absence, the EMPLOYEE shall
        not, except under Section 5.6, be engaged in any other business
        activity, whether or not such business activity is pursued for gain,
        profit or other pecuniary advantage. Notwithstanding the prohibition
        contained in the present clause, the EMPLOYEE shall be entitled to .
        continue to sit on the boards of directors of the companies listed on
        Schedule I hereto, and on the boards of directors of other companies if
        such activity is approved in writing by the Board of Directors of the
        COMPANY. In the case of non-profit corporations or charities, such
        approval shall not be unreasonably withheld, but, in all other cases,
        the Board of Directors shall have sole discretion to grant, delay or
        withhold approval, with or without conditions.

  5.6   During the Term but not during the Leave of Absence, the EMPLOYEE shall
        not invest his personal assets in any business other than NON- COMPETING
        BUSINESSES, and even in the case of such investments:

        (a) No services are required or furnished on the part of the EMPLOYEE in
            the operations of the companies in which such investments are made
            and in which his participation is solely that of an investor
            provided that this subsection is not infringed by the EMPLOYEE's
            providing counseling (and not acting in a "line" capacity) on a
            non-remunerative basis to all such companies for a maximum of 5
            hours per week and 200 hours per year; and

        (b) If the EMPLOYEE purchases securities in any corporation whose
            securities are regularly traded in a recognized securities market,
            such purchases shall not result in his collectively owning
            beneficially at any time five percent (5%) or more of the equity
            securities of any corporation engaged in a business other than a
            NON-COMPETING BUSINESS.

        The foregoing restrictions shall not apply to any investment of whatever
        extent the EMPLOYEE may take in the shares of the COMPANY or of any
        successor company.

        For the purposes of this subsection, NON-COMPETING BUSINESSES are all
        businesses other than those which compete with:

        (a) the BUSINESS; or

        (b) any other business carried on in the future by the COMPANY, the
            SUBSIDIARY or any AFFILIATES, provided that the EMPLOYEE has access
            to confidential information concerning such business.

        Moreover, the EMPLOYEE shall not knowingly assist any RELATIVE to make
        any investment which the EMPLOYEE is not permitted to make by this
        section.

  5.7   The EMPLOYEE is a member of the Board of Directors and acknowledges that
        he has a significant interest in this Agreement and undertakes during
        the Term but not during the Leave of Absence, the following:

        5.7.1  To seek independent legal counsel at the COMPANY's expense to
               negotiate and review this Agreement on the EMPLOYEE's behalf;

        5.7.2  To disclose his interest in this Agreement to the other
               members of the Board of Directors; and

        5.7.3  To retire from and abstain from the discussion and vote at any
               meeting of the Board of Directors at which this Agreement or any
               default by EMPLOYEE or matter arising therefrom is the subject of
               a discussion or a vote.

  5.8   The EMPLOYEE also undertakes during the Term but not during the Leave of
        Absence, the following:

        5.8.1  To use every best effort (including the establishment of written
               procedures known to operation personnel) to promptly bring to the
               attention of the Board of Directors of the COMPANY any matter
               requiring the COMPANY's decision or action where his own
               interests or those of a RELATIVE are involved and to abstain from
               taking such decision or action until the Board of Directors
               decides.

        5.8.2  If requested, to be absent from and abstain from the discussion
               and vote at any meeting of the aforementioned Board of Directors
               where the subject matter being discussed and voted upon is any
               matter covered by Section 5.8.1.

        5.8.3  For the purposes of this Agreement, RELATIVE means the EMPLOYEE's
               spouse, parent, sibling, child or sibling's children, the spouses
               of the foregoing and any other person who could be claimed as a
               dependent on the EMPLOYEE's or RELATIVE's federal income tax
               return, any corporation or partnership in which a RELATIVE or the
               EMPLOYEE holds a five percent (5%) interest or of which a
               RELATIVE or the EMPLOYEE is an officer or director, and any trust
               of which any of the foregoing is a beneficiary.

     Notwithstanding anything contained herein to the contrary, no provision of
this Agreement shall be deemed to excuse the Executive during the Leave of
Absence of any and all fiduciary obligations imposed on a member of the Board of
Directors by applicable law.

6 EQUITY GRANT

  6.1   The COMPANY previously issued to the EMPLOYEE 291,700 shares of Common
        Stock of the COMPANY in connection with the execution of the Original
        Agreement, at no cost to EMPLOYEE, which the COMPANY represents and
        warrants is equal to 2.91617% of the COMPANY's Common Stock outstanding
        on a fully diluted basis upon closing of the Restructuring.

7 CONFIDENTIALITY, ETC.

  7.1   The EMPLOYEE recognizes and acknowledges that the confidential
        information, trade secrets and proprietary processes of the COMPANY, its
        AFFILIATES and subsidiaries as they may exist from time to time are
        valuable, special and unique assets of the BUSINESS of the COMPANY, its
        AFFILIATES and subsidiaries, access to and knowledge of which are
        essential to the performance of the EMPLOYEE's duties hereunder. The
        EMPLOYEE will not, during the TERM or at any time 3 within five (5)
        years following its termination, for any reason whatsoever, in whole or
        in part, disclose such confidential information, secrets or processes to
        any person, firm, corporation, association or other entity for any
        reason or purpose whatsoever, nor shall the EMPLOYEE make use of such
        property for his own purposes or for the benefit of any person, firm,
        corporation or other entity (except the COMPANY, its AFFILIATES and
        subsidiaries) under any circumstances whatsoever, except as may be
        required in the fulfillment of his function with the COMPANY within the
        terms of this Agreement or except as provided by law, provided these
        restrictions shall not apply to such information, secrets and processes
        which are then in the public domain (provided that the EMPLOYEE was not
        responsible, directly or indirectly, for permitting such secrets or .
        process to enter the public domain without the COMPANY's consent).

  7.2   The EMPLOYEE furthermore agrees that upon termination of the TERM he
        will remit to the COMPANY all writings and materials, in his possession
        or under his control, which either belong to the COMPANY and AFFILIATES
        or which may contain confidential information concerning the COMPANY and
        AFFILIATES. The EMPLOYEE may, however, retain his personal diary/agenda
        after removing or destroying all confidential COMPANY or AFFILIATES
        material therein.

  7.3   Any and all inventions, discoveries, development, methods, processes,
        compositions, works, concepts and ideas (whether or not patentable or
        copyrightable) conceived, made, developed, created or reduced to
        practice by the EMPLOYEE (whether at the request or suggestion of the
        COMPANY or otherwise, whether alone or in conjunction with others, and
        whether during regular hours of work or otherwise) during the TERM which
        may relate to the business, ventures or other activities of or products
        manufactured or sold by the COMPANY or any of its subsidiaries
        (collectively, "Proprietary Rights"), shall be promptly and fully
        disclosed by the EMPLOYEE to an appropriate executive officer of the
        COMPANY and shall be the COMPANY's exclusive property as against the
        EMPLOYEE and his heirs and personal representatives, and the EMPLOYEE
        hereby assigns to the COMPANY his entire right, title and interest
        therein and shall promptly deliver to an appropriate executive officer
        of the COMPANY all papers, drawings models, data and other material
        relating to any of the foregoing Proprietary Rights, conceived, made,
        developed, created or reduced to practice by him as aforesaid. All
        copyrightable Proprietary Rights shall be considered "works made for
        hire."

        The EMPLOYEE shall, upon the COMPANY's request and without any payment
        therefor, execute any documents reasonably necessary or advisable in the
        opinion of the COMPANY's counsel to assign, and confirm the COMPANY's
        title in, his entire right, title and interest in the foregoing
        Proprietary Rights and to direct issuance of patents or copyrights to
        the COMPANY with respect to such Proprietary Rights as are the COMPANY's
        exclusive property as against the EMPLOYEE and his heirs and personal
        representatives under this Section 7.3 or to vest in the COMPANY title
        to such Proprietary Rights as against the EMPLOYEE and his heirs and
        personal representatives, the expense of securing any such patent or
        copyright, however, to be borne by the COMPANY. In addition, the Company
        shall reimburse the EMPLOYEE for any reasonable expenses incurred in
        having such documents reviewed by EMPLOYEE's counsel.

8 VACATION

  8.1   During the TERM but not during the Leave of Absence, the EMPLOYEE shall
        have the right to an annual paid vacation of no less duration than four
        (4) weeks.

9 TERMINATION OF EMPLOYMENT; LEAVE OF ABSENCE

  9.1   Notwithstanding any other provision contained herein, the COMPANY may on
        or after the Effective Date send to the EMPLOYEE notice of one of the
        following events and should the EMPLOYEE fail to cure the matter giving
        rise to the notice within thirty (30) days after receipt of such notice,
        the TERM shall terminate without any delay stipulated therein or any
        indemnity payable in lieu thereof:

        (a) EMPLOYEE's willful misconduct or gross negligence;

        (b) The commission of a criminal act by the EMPLOYEE against the COMPANY
            involving material harm (whether nor not charges are filed);

        (c) The commission by the EMPLOYEE of a criminal act of moral turpitude
            bringing the COMPANY into disrepute (whether or not charges are
            filed);

        (d) Willful insubordination to any directive of the Board of Directors
            provided reasonable prior notice of such directive is given; or

        (e) Actions contrary to Sections 5.4, 5.5, 5.6, 5.8, 7 or 10 causing
            COMPANY or AFFILIATES material harm; provided, however, during the
            Leave of Absence (i) in the case of paragraph "(d)" above, the Board
            of Directors shall not make any "directives" to the EMPLOYEE that
            are not consistent with the EMPLOYEE's actual circumstances during
            the Leave of Absence, and (ii) in the case of paragraph "(e)" above,
            the cross reference to Sections 5.4, 5.5,5.6, 5.7 and 5.8 shall not
            apply.

  9.2   Notwithstanding any other provision contained herein (in which case the
        provisions of Section 9.9(d) shall apply), the TERM shall terminate
        automatically, without notice or indemnity in lieu thereof, upon the
        occurrence of one of the following events:

        (a) The bankruptcy or voluntary state insolvency filing of the EMPLOYEE;
            or

        (b) The death of the EMPLOYEE.

  9.3   Except during the Leave of Absence, the EMPLOYEE may terminate the TERM
        by sending his resignation in writing to the Board of Directors not less
        than six (6) months prior to the effective date of such resignation,
        failing which notice the EMPLOYEE may be subject to any and all damages
        incurred as a result of such failure.

  9.4   Except under the circumstances described in Section 9.6 and except
        during the Leave of Absence other than as provided in Section 9.9(c),
        the COMPANY may terminate the TERM by sending a notice in writing to the
        EMPLOYEE. Notwithstanding the foregoing, the Company may at any time
        following an occurrence of a "Change of Control" as defined in the
        Stockholders Agreement of HF Holdings, Inc. dated September 27, 1999
        terminate the TERM by sending notice in writing to EMPLOYEE.

  9.5   The EMPLOYEE may immediately terminate the TERM by sending a notice of
        termination to the Board of Directors with immediate effect following
        any material diminution of the EMPLOYEE's responsibilities or in the
        event that the EMPLOYEE is asked by the Board of Directors to perform
        any act which a reasonable person would consider illegal or unethical
        and the COMPANY has not withdrawn its request to the EMPLOYEE to perform
        such act within five (5) days of receiving a written notice from the
        EMPLOYEE to withdraw such a request.

  9.6   The COMPANY may immediately terminate the TERM, but not the Leave of
        Absence, by sending a notice in writing to the EMPLOYEE with immediate
        effect:

        9.6.1  after a period of six (6) consecutive months (or aggregating six
               (6) months in any twelve (12) month period) of absence by the
               EMPLOYEE from his employment as a result of sickness or
               disability, or

        9.6.2  after sixty (60) days of absence by the EMPLOYEE from his
               employment as a result of sickness or disability and a
               certification by three (3) physicians that the EMPLOYEE is likely
               to be disabled for a period of at least six (6) months from the
               initial date of sickness or disability. One (1) such physician
               shall be chosen by the EMPLOYEE, one (1) shall be chosen by the
               COMPANY and the third shall be chosen by the other two (2)
               selected physicians. The EMPLOYEE agrees that in the event of his
               sickness, he shall submit himself for examination by such
               physicians if reasonably requested to do so by the COMPANY. For
               the purposes of this section, "disabled" or "disability" shall
               mean a temporary or permanent substantial inability because of a
               physical or mental illness to continue to discharge the
               EMPLOYEE's duties hereunder.

        Notwithstanding any other provision hereof, the EMPLOYEE's compensation
        during any period of the EMPLOYEE's disability shall be reduced to the
        extent of any payments to the EMPLOYEE for such period under any
        disability plan or program maintained for the EMPLOYEE by the COMPANY
        for his benefit.

  9.7   In the event of the termination of the TERM by virtue of section 9.6 in
        addition to the payments described therein, the COMPANY shall pay to the
        EMPLOYEE a severance pay equal to one (1) month base salary in effect at
        termination for each calendar year, or part thereof, of the EMPLOYEE's
        employment with the COMPANY, the SUBSIDIARY, IHF Capital, Inc. or IHF
        Holdings, Inc. (or any predecessor companies of the COMPANY, the
        SUBSIDIARY, IHF Capital, Inc., or IHF Holdings, Inc.) after January 1,
        1988.

  9.8   In the event of the termination of the TERM by virtue of Section 9.3,
        9.4 or 9.5, the COMPANY shall pay to the EMPLOYEE a severance payment
        equal to the EMPLOYEE's base salary then in effect and the bonus
        referred to in Section 4 hereof, pro-rated (meaning paid in equal
        monthly installments each year over the period of the payment), for (a)
        twelve (12) months following the termination of the TERM if such
        termination occurs after the date which is three (3) months after the
        Return Date or (b) the number of months remaining in the TERM if such
        Termination occurs prior to the date which is three (3) months after the
        Return Date; provided, however, that (i) if the EMPLOYEE's resignation
        is submitted by EMPLOYEE pursuant to Section 9.3, then the bonus
        referred to in Section 4.1 hereof shall be calculated at the rate of one
        and one-tenth percent (1.10%), (ii) the aggregate severance pay payable
        to the EMPLOYEE pursuant to this Section 9.8 (irrespective and
        independent of any payments pursuant to Section 10.3 hereof) shall not
        exceed (a) 36 months in the event that the EMPLOYEE elects not to return
        to employment with the Company following the Leave of Absence and (b) 48
        months in the event that the EMPLOYEE is terminated by the Company for
        any reason and (iii) for purposes of the preceding clause (ii) in
        calculating the amount of severance pay, payments of base salary and
        bonus during the Leave of Absence shall be deemed to constitute
        severance pay. For the purposes of this Section 9.8, the bonus referred
        to in Section 4.1 hereof shall be determined using EBITDA (as defined in
        Section 4.1 hereof) for the fiscal year immediately preceding
        termination and shall be paid to the EMPLOYEE within ninety (90) days
        from the end of the COMPANY's applicable fiscal year, and the base
        salary shall be paid to the EMPLOYEE on the same payment schedule as was
        applicable to the EMPLOYEE during his employment; provided however if
        termination occurs during the Leave of Absence the bonus referred to in
        Section 4.1 shall be determined using EBITDA as of May 31, 2003.

  9.9       (a) Notwithstanding the foregoing, the COMPANY has agreed to the
            EMPLOYEE taking the Leave of Absence commencing not later than July
            1, 2004 (the "Commencement Date") and ending not later than July 31,
            2007 (the "Return Date"). In no event will the Leave of Absence by
            the EMPLOYEE be deemed a resignation by EMPLOYEE; provided, however,
            that if EMPLOYEE does not return to the COMPANY to resume his duties
            on or prior to the Return Date, the EMPLOYEE will be deemed to have
            terminated the TERM pursuant to Section 9.3 hereof as of the Return
            Date but without being subject to any damages for lack of notice
            provided therein.

        (b) During the Leave of Absence, this Agreement shall remain in full
            force and effect and the COMPANY shall continue to pay EMPLOYEE his
            (i) base salary in effect on the date such Leave of Absence begins,
            payable on the same schedule as was payable to EMPLOYEE prior to the
            Leave of Absence, and (ii) the annual bonus payments referred to in
            Section 4.1 hereof.

        (c) At such time as the EMPLOYEE determines to end the Leave of Absence,
            EMPLOYEE shall provide the COMPANY not less than two (2) months
            prior written notice of his intent to return to the COMPANY to
            resume his full duties as its President and Chief Operating Officer,
            as set forth in this Agreement, and state the Return Date. On the
            Return Date, the EMPLOYEE will be reinstated as the Company's
            President and Chief Operating Officer for the duration of the TERM,
            subject to the provisions of this Agreement, and any bonus payments
            following the Leave of Absence shall be calculated pursuant to
            Section 4.1(b).

            (i) Notwithstanding the foregoing, in the event that during Leave of
                Absence David Watterson shall cease to be Chairman and Chief
                Executive Officer of the COMPANY, the COMPANY will give prompt
                notice thereof to Scott Watterson and to the EMPLOYEE, asking
                Scott Watterson to return to the COMPANY as its Chairman and
                Chief Executive Officer as provided in an Employment Agreement
                of even date with Scott Watterson. In the event Scott Watterson
                does not so return to the COMPANY, the COMPANY shall ask the
                EMPLOYEE to return to the COMPANY as its Chairman and Chief
                Executive Officer. In the event that the EMPLOYEE accepts the
                COMPANY'S request and actually does return to the COMPANY within
                60 days after the COMPANY's request, the EMPLOYEE will thereupon
                become the Chairman and Chief Executive Officer. In the event
                the EMPLOYEE does not so return to the COMPANY, this Agreement
                shall continue in effect, however (x) Section 9.4 shall
                thereupon apply without the words "and except during the Leave
                of Absence", (y) if the COMPANY during the remainder of the
                Leave of Absence terminates the TERM pursuant to Section 9.4 as
                then applicable, EMPLOYEE shall have the right until September
                30, 2007 to reemployment with the COMPANY, but only in an
                executive position, with salary and duties commensurate with
                such position, and for such term, in each case, as the EMPLOYEE
                and the Board of Directors shall then agree (subject to the
                Board of Directors' fiduciary duties), and (z) if in the case of
                clause (y) EMPLOYEE is unable to reach agreement with the Board
                of Directors on the executive position (whether because of the
                Board of Directors' exercise of its fiduciary duties or
                otherwise), then EMPLOYEE shall receive the remaining severance
                payments to which he would then be entitled to in Section 9.8 as
                a result of the prior termination of the TERM by the Company
                pursuant to Section 9.4, which shall be EMPLOYEE's sole remedy
                under law, equity or otherwise.
           (ii) In the event that during the Leave of Absence the COMPANY shall
                have terminated the TERM pursuant the last sentence of Section
                9.4 following the occurrence of a Change of Control, EMPLOYEE
                shall have no obligation to return to the COMPANY as Chief
                Operating Officer or in any other executive position, but
                EMPLOYEE shall have the right until September 30, 2007 to
                reemployment with the COMPANY but only in an executive position,
                with salary and duties commensurate with such position, and for
                such term, in each case, as the EMPLOYEE and the Board of
                Directors shall then agree (subject to the Board of Directors'
                fiduciary duties). If EMPLOYEE is unable to reach agreement with
                the Board of Directors with respect to executive position
                (whether because of the Board of Directors' exercise of its
                fiduciary duties or otherwise), then EMPLOYEE shall receive the
                remaining severance payments to which he would then be entitled
                to in Section 9.8 as a result of the prior termination of the
                TERM by the Company pursuant to Section 9.4, which shall be
                EMPLOYEE's sole remedy under law, equity or otherwise.
        (d) In the event the Agreement is terminated pursuant to Section 9.2 (b)
            during the Leave of Absence, the estate of the Employee shall be
            entitled to all payments that would otherwise have been due to the
            Employee hereunder during the Leave of Absence.

10 RESTRICTIVE COVENANT

  10.1  EMPLOYEE shall not, during the TERM and for a period of one (1) year
        from its termination, either directly or indirectly, individually or in
        partnership, carry on or be engaged in, or concerned with or interested
        in, in any capacity whatsoever (including that of principal, agent,
        shareholder (subject to section 5.6(b)), consultant, employee, lender or
        surety), any person, firm, association, syndicate or company engaged in
        or concerned with or interested in the conception, development,
        fabrication, transformation, marketing, distribution, advertising,
        franchising or sale in Canada, the United States or the European
        Economic Community, or any of them, of any products or services similar
        or identical to any of those manufactured, distributed, or sold by the
        COMPANY or any of its subsidiaries in the course of his employment with
        the COMPANY, its AFFILIATES and subsidiaries.

  10.2      (a) EMPLOYEE shall not, during the TERM hereunder and for a period
            of twelve (12) months from its termination, directly or indirectly,
            hire any Designated Employee.

        (b) EMPLOYEE shall not, during the TERM hereunder and for a period of
            eighteen (18) months from its termination, directly or indirectly,
            solicit, interfere with or endeavor to entice away, any Designated
            Employee.

        (c) For purposes of this Section 10.2, the term "Designated Employee"
            shall mean any person if that person is or was a Senior Employee of
            the COMPANY or any of its AFFILIATES or subsidiaries during the
            period beginning six (6) months prior to the termination of the TERM
            and ending (i) in the case of clause (a), twelve (12) months
            thereafter and (ii) in the case of clause (b), eighteen (18) months
            thereafter, but shall exclude Scott R. Watterson or any RELATIVE.
            For purposes of this Section 10.2 "Senior Employee" shall mean each
            of the two hundred (200) most highly compensated employees of the
            COMPANY or any of its subsidiaries or AFFILIATES.

  10.3  With respect to any termination, such period shall be extended by
        written notice to the EMPLOYEE within thirty (30) days of such
        termination by an additional two (2) years (i.e., for a total of three
        (3) years from the termination of EMPLOYEE's employment) if and to the
        extent that the COMPANY, at its option, pays to the EMPLOYEE additional
        severance pay equal to the EMPLOYEE's base salary then in effect and the
        bonus referred to in Section 4 hereof, pro-rated (meaning paid in equal
        monthly installments each year over the period of the payment) for the
        period of the payment, for an additional two (2) years beyond that
        required to be paid by the COMPANY to the EMPLOYEE under Section 9.8. If
        paid at the COMPANY's option, such bonuses, which shall be determined
        using EBITDA (as defined in Section 4.1 hereof) for the fiscal year
        immediately preceding termination, are to be paid within ninety (90)
        days from the end of the COMPANY's applicable fiscal year, and the base
        salary shall be paid to the EMPLOYEE on the same payment schedule as was
        applicable to the EMPLOYEE during his employment.

11 REASONABLENESS AND REMEDIES

  11.1  The EMPLOYEE agrees that all the conditions and restrictions established
        in this Agreement are reasonable taking into account the circumstances
        surrounding this Agreement.

  11.2  The EMPLOYEE recognizes that in the view of the serious and irreparable
        harm which a violation hereof would have on the COMPANY, and without
        prejudice to the COMPANY's other remedies, injunctive relief would
        constitute an available and appropriate remedy and, to the extent
        permitted by law, the COMPANY shall not be required to furnish any
        security or bond in respect thereof.

12 [INTENTIONALLY OMITTED]

13 GENERAL LIMIT ON EMPLOYEE'S LIABILITY

  13.1  As a general and overall limitation of the EMPLOYEE's liability to the
        COMPANY and AFFILIATES, the COMPANY agrees that the EMPLOYEE shall not
        be liable, for any reason except as set forth below, to the COMPANY or
        any of its AFFILIATES for an amount in excess of the amount provided in
        the next sentence hereof. Accordingly, as and for their sole remedy
        against the EMPLOYEE, the COMPANY agrees that for any claim or cause of
        action that the COMPANY or any of its AFFILIATES may have against the
        EMPLOYEE, whether past or future, their sole remedy shall be the
        forfeiture of the EMPLOYEE's salary, bonus and other compensation (but
        not the equity grant under Section 6.1 hereof, which shall not be
        subject to forfeiture) received by the EMPLOYEE during the COMPANY's
        fiscal year in which the EMPLOYEE's termination occurred plus
        subsequently accruing compensation. In this regard, the COMPANY agrees,
        to the extent permitted by applicable law, to indemnify the EMPLOYEE
        from and against any liability the EMPLOYEE may have in excess of that
        provided in the immediately preceding sentence (i) hereunder or (ii) for
        any other claim the COMPANY or any of its AFFILIATES may have against
        the EMPLOYEE. However, nothing in this Section 13 shall limit the
        EMPLOYEE's liability to the COMPANY or any of its AFFILIATES or provide
        the EMPLOYEE any indemnity (i) for any act by the EMPLOYEE involving
        theft, fraud or embezzlement against the COMPANY or any of its
        AFFILIATES, (ii) in respect of any equitable remedy against the
        EMPLOYEE, (iii) in respect of any agreement listed on Schedule I of the
        Old Employment Agreement (as defined in that separate Termination
        Agreement among IHF Capital, Inc., IHF Holdings, Inc., SUBSIDIARY and
        EMPLOYEE, dated September 27, 1999 (the "Termination Agreement")) or any
        agreement heretofore or hereafter entered into by the EMPLOYEE after the
        date of the Old Employment Agreement, (iv) in respect of any claim or
        cause of action asserted by the COMPANY or any of its AFFILIATES as a
        counterclaim (to the extent of any liability the COMPANY or any of its
        AFFILIATES may have by reason of the EMPLOYEE claim in question) or as a
        set off, or (v) under Section 7, 9.3 or 10 of this Agreement or under
        the Non-Competition Agreement (as defined in the First Amended and
        Restated Master Transaction Agreement dated as of October 12, 1994 among
        ICON Health & Fitness, Inc. and the other parties thereto (the "Master
        Transaction Agreement")); provided, however, that the aggregate of the
        liability of the EMPLOYEE to the COMPANY or any of its AFFILIATES, under
        Section 7, 9.3 or 10 of this Agreement or to the COMPANY, any of its
        AFFILIATES, IHF Capital, Inc. or any of its AFFILIATES (as defined in
        the Old Employment Agreement) under the Non-Competition Agreement and of
        the liability of the EMPLOYEE to IHF Capital, Inc. or any of its
        AFFILIATES (as so defined) in respect of claims subject to the
        $18,000,000 limits set forth in the third to last sentence of Section
        10.3.1.1 of the Master Transaction Agreement, shall not exceed
        $1,240,000.

14 AMENDMENTS

  14.1  This Agreement may be amended only by written instrument duly executed
        by all the parties hereby and approved by the Board of Directors of the
        COMPANY.

15 NO ASSIGNMENT

  15.1  No party hereto shall assign, in whole or in part, this agreement or any
        of its or his respective rights and obligations hereunder without the
        express prior written consent of the other parties hereto; for this
        purpose the merger or reorganization of the COMPANY or the SUBSIDIARY or
        any AFFILIATES shall not be considered an assignment.

16 NO WAIVER

  16.1  No waiver by any party of any breach of the obligations of any other
        party hereunder shall be a waiver of any subsequent breach or of any
        other obligation, nor shall any forbearance to seek a remedy for any
        breach be a waiver of any rights and remedies with respect to any
        subsequent breach.

17 SEVERABILITY

  17.1  The invalidity of one of the provisions of this Agreement shall not
        invalidate or otherwise affect any of the other provisions of this
        Agreement, which shall remain in full force and effect, and each such
        invalid provision shall be construed by limiting it so as to be valid
        for the maximum extent permitted by law.

18 CURRENCY, ETC.

  18.1  All references in this Agreement to dollar or $ mean lawful currency of
        the United States of America.

  18.2  The COMPANY shall have the right to withhold, from or in respect of any
        payment, benefit or other item of compensation due to the EMPLOYEE
        hereunder, any federal, state or local taxes of any kind required by law
        to be withheld with respect thereto. In the event that at the time any
        withholding is required hereunder, the amount of cash payments from
        which the applicable withholding taxes may be deducted is less than the
        withholding taxes due, the EMPLOYEE shall pay to the COMPANY, in
        immediately available funds, an amount equal to such shortfall.

19 GOVERNING LAW; ARBITRATION

  19.1  This Agreement shall be governed by and construed in accordance with the
        domestic substantive laws of the State of Utah, without giving effect to
        any choice or conflict of law provision or rule that would cause the
        application of the domestic substantive laws of any other jurisdiction;
        provided, however, that any dispute relating to the provisions of
        Section 19.2 shall be governed by the United States Arbitration Act as
        then in force.

  19.2  Except solely as set forth in Section 19.4, each dispute, difference,
        controversy or claim arising in connection with or related or incidental
        to, or question occurring under, this Agreement or the subject matter
        hereof shall be finally settled under the Commercial Arbitration Rules
        of the American Arbitration Association (the "AAA") by an arbitral
        tribunal composed of three (3) arbitrators, at least one (1) of whom
        shall be an attorney experienced in corporate transactions, appointed by
        agreement of the parties in accordance with said Rules. In the event the
        parties fail to agree upon a panel of arbitrators from the first list of
        potential arbitrators proposed by the AAA, the AAA will submit a second
        list in accordance with said Rules. In the event the parties shall have
        failed to agree upon a full panel of arbitrators from the second list,
        any remaining arbitrators to be selected shall be appointed by the AAA
        in accordance with said Rules. If, at the time of the arbitration, the
        parties agree in writing to submit the dispute to a single arbitrator,
        said single arbitrator shall be appointed by agreement of the parties in
        accordance with the foregoing procedure, or, failing such agreement, by
        the AAA in accordance with said Rules. The foregoing arbitration
        proceedings may be commenced by any party by notice to all other
        parties.

  19.3  The place of arbitration shall be Salt Lake City, Utah.

  19.4  The parties hereto exclude any right of appeal to any court on the
        merits of the dispute. The provisions of this Section 19 may be enforced
        in any court having jurisdiction over the award of any of the parties or
        any of their respective assets and judgment on the award (including
        without limitation equitable remedies) granted in any arbitration
        hereunder may be entered in any such court. Nothing contained in this
        Section 19 shall prevent any party from seeking interim measures of
        protection in the form of pre-award attachment of assets or preliminary
        or temporary equitable relief.

  19.5  To the extent not prohibited by applicable law which cannot be waived,
        each of the parties hereto hereby waives, and covenants that he or it
        will not assert (whether as plaintiff, defendant, or otherwise), any
        right to trial by jury in any forum in respect of any issue, claim,
        demand, cause of action, action, suit or proceeding arising out of or
        based upon this Agreement or the subject matter hereof, in each case
        whether now existing or hereafter arising and whether in contract or
        tort or otherwise. Any of the parties hereto may file an original
        counterpart or a copy of this Section 19.5 with any court as written
        evidence of the consent of each of the parties hereto to the waiver of
        his or its right to trial by jury.

  19.6  Each of the parties hereto acknowledges that he or it has been informed
        by each other party that the provisions of Section 19 constitute a
        material inducement upon which such party is relying and will rely in
        entering into this Agreement and the transactions contemplated hereby.

20 BINDING ON HEIRS

  20.1  This Agreement binds and inures to the benefit of the parties, their
        heirs, executors, administrators, successors and permitted assigns
        (subject to Section 9.2(b)).

21 ENTIRE AGREEMENT

  21.1  This Agreement embodies the entire Agreement between the parties hereto
        concerning the subject matters mentioned herein and supersedes all
        previous discussions, correspondence, understandings or agreements,
        whether written or oral, with respect to such matters, except as
        provided in the Termination Agreement. This Agreement shall constitute
        an agreement between employer and employee of the type referred to in
        Section 1, Chapter 28, Title 34 of the Utah Code, Annotated.

22 ATTORNEY'S FEES

  22.1  In the event that any party hereto shall be found in default or in
        breach of this Agreement pursuant to arbitral or judicial proceedings,
        such party shall be liable to pay all reasonable attorney's fees, court
        costs and other related collection costs and expenses incurred by the
        non-defaulting or non-breaching party in pursuing its rights hereunder.

23 NOTICES

  23.1  All notices and other communications necessary or contemplated under
        this Agreement shall be in writing and shall be delivered in the manner
        specified herein or, in the absence of such specification, shall be
        deemed to have been duly given three (3) business days after mailing by
        certified mail, when delivered by hand, or when delivered by facsimile
        upon confirmation of receipt, or one (1) day after sending by overnight
        delivery service, to the respective addresses of the parties set forth
        below:

        (a) for notices and communications to the COMPANY or the SUBSIDIARY:

            HF HOLDINGS, INC.
            ICON HEALTH & FITNESS, INC.
            1500 South 1000 East
            Logan, Utah  84321
            Fax:  435-750-5238
            Attn: Board of Directors

        (b) For notices and communications to the EMPLOYEE:

            Gary E. Stevenson
            370 Abbey Lane
            Providence, Utah  84332

        (c) With a copy in each case to:

            Weil, Gotshal & Manges LLP 100 Federal Street 34th Floor Boston, MA
            02110 Fax: 617-772-8333 Attn: Charles W. Robins, Esq.

            and

            Ropes & Gray
            One International Place
            Boston, MA  02110
            Fax:  617-951-7050
            Attn:  R. Newcomb Stillwell, Esq.

24 JOINT AND SEVERAL LIABILITY

  24.1  The COMPANY and the SUBSIDIARY shall be jointly and severally liable in
        respect of all payment obligations of the COMPANY hereunder.

              [Remainder of Page Intentionally Left blank]

[Stevenson Amended and Restated Employment Agreement]



IN WITNESS WHEREOF the parties have hereto signed this Agreement as of the date
first written above.

                                   HF HOLDINGS, INC.


/s/ Debra Stephenson               By: /s/ S. Fred Beck
- --------------------               ---------------------
    Witness                         Name:  S. Fred Beck
                                    Title:  Vice President

                                    ICON HEALTH & FITNESS, INC.


/s/ Debra Stephenson               By: /s/ S. Fred Beck
- --------------------               --------------------
   Witness                          Name:  S. Fred Beck
                                    Title:  Vice President


/s/ F.                             By: /s/ Gary E. Stevenson
- -----------------------            -------------------------
   Witness                           Gary E. Stevenson




                                   SCHEDULE I
                                       To
                              EMPLOYMENT AGREEMENT
                                      Among
                                HF HOLDINGS INC.
                           ICON HEALTH & FITNESS, INC.
                                       And
                                GARY E. STEVENSON

                                ------------

                                   Board Seats

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