EMPLOYMENT AGREEMENT


                  THIS AGREEMENT (together with all exhibits hereto, the
"Agreement"), made in New York, New York as of the 2nd day of April, 1999,
between GT INTERACTIVE SOFTWARE CORP., a Delaware corporation having its
executive offices and principal place of business in New York, New York (the
"Company"), and JOHN T. BAKER IV, the undersigned individual ("Executive").


                  IN CONSIDERATION of the mutual covenants and agreements
hereinafter set forth, the Company and Executive agree as follows:


                  1.       Agreement Term.

                           The term of this Agreement shall be the four-year
period commencing on May 3, 1999 (the date on which Executive will commence his
employment, subject to Section 2(d) hereof, at the Company's offices in Los
Angeles, California, referred to as the "Commencement Date") and ending on May
2, 2003 (as extended from time to time pursuant to Section 8(n) hereof, the
"Agreement Term").


                  2.       Employment.

                           (a) Employment by the Company. Executive agrees to be
employed by the Company for the Agreement Term upon the terms and subject to the
conditions set forth in this Agreement. Executive shall serve as the President
and Chief Operating Officer of the Company. Executive shall serve as an
Executive Officer of the Company and shall have such duties as may be reasonably
prescribed by the Chairman of the Board of Directors and Chief Executive Officer
of the Company (the "CEO").

                           (b) Board of Directors. The CEO has agreed to
nominate Executive to the Board of Directors of the Company and to use his best
reasonable efforts to cause Executive's election to fill the current vacancy
thereon.

                           (c) Performance of Duties. Throughout the Agreement
Term, Executive shall faithfully and diligently perform Executive's duties in
conformity with the directions of the Board of Directors of the Company,
commensurate with Executive's titles, and serve the Company to the best of
Executive's ability. Executive shall devote Executive's entire working time,
attention and energies to the business and affairs of the Company, subject to
four weeks' vacation per year, sick leave in accordance with Company policy and
except as otherwise set forth in Section 4(a) hereof. Executive shall have the
titles of President and Chief Operating Officer, and shall report to the CEO.
Subject to the discretion
<PAGE>   2
of the CEO, Executive shall perform the duties and shall have the
responsibilities set forth on Exhibit A hereto.

                           (d) Place of Performance. During the Agreement Term,
Executive shall be based within thirty miles of Los Angeles County, California
and, in this regard, Executive shall maintain Executive's personal residence
within such area or such other location within reasonable access to Executive's
office. Notwithstanding the foregoing, Executive will make such arrangements for
reasonable travel to the Company's offices in New York, New York and elsewhere
as reasonably requested by the CEO, provided that the Company shall bear the
reasonable costs and expenses related to such travel.


                  3.       Compensation and Benefits.

                           (a) Base Salary. The Company agrees to pay to
Executive for employment hereunder a base salary ("Base Salary") at the annual
rate of $350,000 for the first year of the Agreement Term, $375,000 for the
second year of the Agreement Term, $400,000 for the third year of the Agreement
Term and $450,000 for the fourth year of the Agreement Term, payable in
installments consistent with the Company's payroll practices.

                           (b) Benefits and Perquisites.

                                    (i) Benefits Generally. Executive shall be
entitled to participate in, to the extent Executive is otherwise eligible under
the terms thereof, the benefit plans and programs, and receive the benefits and
perquisites, generally provided to senior level executive officers of the
Company. Except as otherwise provided in this Agreement, Executive may receive
bonuses and be entitled to receive stock options at the sole discretion of the
Board of Directors, provided that (A) Executive shall participate in the
Company's senior executive bonus plan with a target bonus of 60% of Base Salary,
and (B) for the Company's fiscal year ending March 31, 2000, Executive shall
receive a minimum guaranteed bonus of no less than $150,000. The company shall
provide, at no cost to Executive, health insurance coverage for Executive and
his wife and children.

                           (c) Travel and Business Expenses. Upon submission of
itemized expense statements in the manner specified by the Company, Executive
shall be entitled to reimbursement for reasonable travel and other reasonable
business expenses duly incurred by Executive in the performance of Executive's
duties under this Agreement in accordance with the policies and procedures
established by the Company from time to time for its senior executives.

                           (d) Options. The Board of Directors or the stock
option subcommittee of the Compensation Committee of the Board of Directors has
approved, and the Company will grant to Executive on the Commencement Date the
stock options at the prices and on the other terms and conditions set forth on
Exhibit B hereto.
<PAGE>   3
                           (e) Commencement Bonus. On or within one day of the
Commencement Date, the Company shall pay to Executive a one-time cash payment of
$200,000.

                           (f) No Other Compensation or Benefits; Payment. The
compensation and benefits specified in Sections 3 and 5 of this Agreement shall
be in lieu of any and all other compensation and benefits. Payment of all
compensation and benefits to Executive hereunder shall be made in accordance
with the relevant Company policies in effect from time to time, including normal
payroll practices, and shall be subject to all applicable employment and
withholding taxes.

                           (g) Cessation of Employment. In the event Executive
shall cease to be employed by the Company for any reason, then Executive's
compensation and benefits shall cease on the date of such event, except as
otherwise provided herein or in any applicable employee benefit plan or program.

                           (h) Company Rules, Regulations and Policies.
Executive agrees to observe all reasonable rules, regulations and policies
adopted by the Company in connection with the operation of its business,
including but not limited to the standards and policies set forth in the
Company's policy manual. In particular, Executive acknowledges and agrees to
abide by the Company's policy that prohibits executive officers who may be
deemed affiliates under SEC policy interpretations, from selling any shares of
the Company's Common Stock at a time when such officer is advised by the Chief
Financial Officer (based upon advice from the Company's independent certified
public accountants) that such sale could adversely affect pooling of interests
accounting treatment of any acquisition or other business combination engaged in
or to be engaged in by the Company. If requested, Executive will execute an
"affiliate" agreement confirming such agreement in connection with any such
acquisition or business combination.


                  4.       Exclusive Employment; Noncompetition.

                           (a) No Conflict; No Other Employment. During the
period of Executive's employment with the Company, Executive shall not: (i)
wilfully engage in any activity which conflicts or interferes with or materially
and unreasonably derogates from the performance of Executive's duties hereunder
nor shall Executive engage in any other business activity, whether or not such
business activity is pursued for gain or profit, except as approved in advance
in writing by the Board of Directors of the Company; provided, that Executive
shall be entitled to manage his personal investments and otherwise attend to
personal affairs, including charitable activities and directorships in
noncompetitive activities, in a manner that does not unreasonably interfere with
his responsibilities hereunder, or (ii) accept any other full-time or
substantially full-time employment, whether as an executive or consultant or in
any other capacity, and whether or not compensated therefor.

                           (b) No Competition. Without limiting the generality
of the provisions of Sections 2(b) or 4(a) hereof, during the Agreement Term,
Executive shall not,
<PAGE>   4
directly or indirectly, own, manage, operate, join, control, participate in,
invest in or otherwise be connected or associated with, in any manner, including
as an officer, director, employee, partner, consultant, advisor, agent,
proprietor, trustee or investor, any Competing Business; provided, however, that
if Executive's employment hereunder is terminated by the Company under Sections
5(c) or 5(d) hereof or Executive voluntarily resigns for Good Reason as provided
in Section 5(d), then the provisions of this Section 4(b) shall terminate at the
time of such event. For purposes of this Section 4(b), the term "Competing
Business" shall mean (A) any business or venture which develops, manufactures,
publishes, licenses, sells, distributes or supplies entertainment, educational
or "edutainment" computer software or video games for commercial use, whether
for retail distribution, by direct marketing, electronically, by license to
others or otherwise; (B) any Internet-related business which is substantially
similar to the whole or any significant part of the business conducted by the
Company's One Zero Media subsidiary; or (C) any other business which is
substantially similar to the whole or any significant part of the business
conducted by the Company (any such activities described in the foregoing clauses
(A), (B) or (C) shall for purposes of this section be hereinafter referred to as
"Prohibited Activities"); provided that ownership of 2% or less of the stock or
other securities of a corporation, the stock of which is listed on a national
securities exchange or is quoted on The NASDAQ Stock Market, shall not
constitute a breach of this Section 4, so long as Executive does not in fact
have the power to control, or direct the management of, or is not otherwise
associated with, such corporation. Notwithstanding anything to the contrary
contained herein, Executive may be employed by a business or venture which
engages in Prohibited Activities only so long as (x) Executive does not engage
directly or indirectly in any Prohibited Activities, (y) such business or
venture derives only immaterial revenues and profits from Prohibited Activities
in relation to its overall business and (z) Executive's ownership of such
business or venture is less than 2% of the stock or other securities thereof and
Executive does not have the power to control or direct the management thereof.

                           (c) No Solicitation of Employment. During the
Agreement Term and for a period of two years thereafter, Executive shall not
solicit or encourage any other employee to leave the Company for any reason.

                           (d) Company Customers. Executive shall not, during
the period which is coincident with the Executive's obligation not to compete
under Section 4(b) hereof, directly or indirectly, contact, solicit or do
business with (i) Wal-mart Corporation, Target Stores, Caldor, Phar-mor, Comp
U.S.A., Best Buy, Office Depot, Kmart or any of their respective affiliated
operations, for the purpose of selling entertainment, educational or
"edutainment" computer software, video games or any other product (which is an
integral product in a material product line of the Company) then sold by the
Company to such customers at the time of termination of Executive's employment
hereunder; (ii) any "customers" (as defined below) of the Company for the
purpose of selling computer software, video games or any other product then sold
by the Company to such customers at the time of termination of Executive's
employment hereunder; or (iii) any supplier, licensor or licensee of the Company
with respect to licensing computer software, video games or other intellectual
property (which is related to computer software, video games or any other
material product line of the Company), from such person.
<PAGE>   5
For the purposes of the provisions of this Section 4(d), "customer" shall
include any entity that purchased computer software, video games or any other
product from the Company within eight months of the termination of Executive's
employment hereunder, without regard to the reason for such termination. The
term "customer" also includes any former customer or potential customer of the
Company which the Company has solicited within eight months of such termination,
for the purpose of selling computer software or any other product then sold by
the Company.


                  5.       Termination of Employment.

                           (a) Termination. The Company may terminate
Executive's employment for Cause (as defined below), in which case the
provisions of Section 5(b) shall apply. The Company may also terminate
Executive's employment in the event of Executive's Disability (as defined
below), in which case the provisions of Section 5(c) shall apply. The Company
may also terminate the Executive's employment for any other reason by written
notice to Executive, in which case the provisions of Section 5(d) shall apply.
If Executive's employment is terminated by reason of Executive's death,
retirement or voluntary resignation, the provisions of Section 5(b) shall apply.

                           (b) Termination for Cause; Termination by Reason of
Death or Retirement or Voluntary Resignation. In the event that Executive's
employment hereunder is terminated during the Agreement Term (x) by the Company
for Cause (as defined below), (y) by reason of Executive's death or retirement
or (z) by reason of Executive's voluntary resignation (other than voluntary
resignation with Good Reason (as hereinafter defined) or following a Change of
Control as permitted by Section 5(d)(iii)), then the Company shall pay to
Executive, within fifteen (15) days of the date of such termination, only the
Base Salary and any bonus previously approved by the Board of Directors and
provide benefits to Executive through such date of termination. For purposes of
this Agreement, "Cause" shall mean (i) conviction of any crime (whether or not
involving the Company) constituting a felony in the jurisdiction involved; (ii)
engaging in any substantiated act involving moral turpitude adversely affecting
the Company's business and not involving a de minimis amount of money; (iii)
willful and continued gross neglect or willful misconduct in the performance of
Executive's material duties hereunder; and (iv) willful and repeated failure or
refusal to perform such duties as may be delegated to Executive by the Chief
Executive Officer commensurate with Executive's position as Chief Operating
Officer of the Company and consistent with the responsibilities of a Chief
Operating Officer; provided, however, that (a) with respect to clauses (iii) and
(iv), Executive shall have received written notice from the Company setting
forth the alleged act or failure to act constituting "Cause" hereunder, and
Executive shall not have cured such act or refusal to act (other than fraud or
embezzlement, which may not be cured) within 15 business days of his actual
receipt of such notice; and (b) for purposes of this Section, no act or failure
to act by Executive shall be considered "willful" unless done, or omitted to be
done, by Executive in bad faith and without a reasonable belief that his actions
or omission were in the best interest of the Company. For purposes hereof, the
term "Good Reason" shall mean (i) the assignment to Executive of a position or
title other than, President and Chief Operating Officer, or (ii) any requirement
<PAGE>   6
that the Executive report to any person other than the CEO, or (iii) any
requirement that Executive perform services in an office of the Company located
more than 30 miles from Los Angeles County, California (except for reasonably
required travel), or (iv) the production or distribution by the Company of any
entertainment software or other product which is pornographic, or (v) the
failure by the Company to pay compensation or provide benefits or perquisites to
Executive as and when required by the terms of this Agreement.

                           (c) Disability. If, as a result of Executive's
incapacity due to physical or mental illness, Executive shall have been absent
from Executive's duties hereunder on a full time basis for either (i) two
hundred ten (210) days within any three hundred sixty-five (365) day period, or
(ii) one hundred eighty (180) consecutive days, and within thirty (30) days
after written notice of termination is given shall not have returned to the
performance of Executive's duties hereunder on a full time basis, the Company
may terminate Executive's employment hereunder for "Disability". In that event,
the Company shall pay to Executive, within fifteen (15) days of the date of such
termination, only the Base Salary and an appropriately pro-rated bonus and
provide benefits to Executive through such date of termination. During any
period that Executive fails to perform Executive's duties hereunder as a result
of incapacity due to physical or mental illness (a "Disability Period"),
Executive shall continue to receive the compensation and benefits provided by
Section 3 hereof until Executive's employment hereunder is terminated; provided,
however, that the amount of compensation and benefits received by Executive
during the Disability Period shall be reduced by the aggregate amounts, if any,
payable to Executive under disability benefit plans and programs of the Company
or under the Social Security disability insurance program covering the same
period of time. Following such termination, for one year the Company shall
provide continued medical coverage and other insurance benefits as previously
provided to Executive, as well as COBRA benefits and other insurance benefits
required by law.

                           (d) Termination By Company For Any Other Reason;
Voluntary Resignation for Good Reason; Change of Control.

                                    (i) In the event that (A) Executive's
employment hereunder is terminated by the Company during the Agreement Term for
any reason other than as provided in Sections 5(b) or 5(c) hereof, or (B) the
Executive voluntarily resigns for Good Reason, as defined in Section 5(b), then
the Company shall pay to Executive, within fifteen (15) days of the date of such
termination, the Base Salary and an appropriately pro-rated bonus and provide
benefits through such date of termination or resignation and, in lieu of any
further compensation, benefits and perquisites for the balance of the Agreement
Term, severance pay of Fifty Thousand Dollars ($50,000) per annum during a
period which shall end on the later to occur of (X) the end of the Agreement
Term or (Y) that date which is two-years from the date of such termination or
resignation (as applicable, the "Severance Period"), commencing with such date
of termination or resignation and payable at the times that Executive's Base
Salary would have been so paid. In addition, under such circumstances, the
Company and Executive will enter into a consulting agreement (as attached hereto
as Exhibit C) for a term equal to the length of the Severance Period.
<PAGE>   7
                                    (ii) Upon the happening of a Change of
Control, as hereinafter defined, then all options previously granted to
Executive pursuant to the Company's 1997 Stock Incentive Plan, 1999 Stock
Incentive Plan, or otherwise shall immediately vest and be exercisable by
Executive in full, and Executive shall thereafter be entitled to exercise such
options for one year from the occurrence of such Change of Control. In addition,
if, following a Change of Control, (1) there occurs Good Reason, as defined in
Section 5(b), or (2) Executive is not the President and Chief Operating Officer
of the Company or its successor and ultimate parent company, if any, or (3)
Executive's employment is terminated by the Company or its successor or parent
company, if any, for any reason other than as provided in Sections 5(b) or (c),
then in any such case, at any time within ninety (90) days of any event
specified in clauses (1) or (2), Executive may voluntarily resign from
employment with the Company or its successor and parent company, and thereupon
(and following the happening of the event specified in clause (3)), the Company
and its successor and parent company shall be obligated to make severance
payments and enter into the consulting agreement as provided in Section 5(d)(i)
hereof with the same effect as if the Company terminated the employment of
Executive as contemplated by the provisions of Section 5(d)(i) or the Executive
voluntarily resigned for Good Reason.

                  For purposes hereof, Change of Control shall mean any of the
following occurrences:

         (1)      any "person" as such term is used in Section 13(d) and 14(d)
                  of the Securities Exchange Act of 1934 ("Exchange Act") or
                  "group" as contemplated by, or required to comply with the
                  provisions of Rule 13d-1(b)(1)(ii)(H) promulgated under the
                  Exchange Act (other than (A) the Company or any trustee or
                  other fiduciary holding securities under an employee benefit
                  plan of the Company, (B) Joseph Cayre, Stanley Cayre, Kenneth
                  Cayre and their respective spouses or children or trusts for
                  such children, (C) General Atlantic Partners or any entity
                  managed or controlled by General Atlantic Partners ((A), (B)
                  and (C) together or individually, a "Current Owner"), or (D)
                  any entity more than 50% of whose voting and equity interests
                  are owned beneficially by a Current Owner), is or becomes the
                  "beneficial owner" (as defined in Rule 13d-3 under the
                  Exchange Act), directly or indirectly, of securities of the
                  Company representing 50% or more of the combined voting power
                  of the Company's then outstanding securities (other than as a
                  result of a merger or consolidation covered by clause (3)(i)
                  below in connection with a merger involving the Company which
                  would result in voting securities of the Company outstanding
                  immediately prior thereto continuing to represent more than
                  50% of the combined voting power of the voting securities of
                  the Company or the surviving entity (or its parent)
                  outstanding immediately after such merger or consolidation);

         (2)      during any period of two consecutive years, individuals who at
                  the beginning of such period constitute the Board of Directors
                  of the Company, and any new director (other than a director
                  designated by a person who has entered into an agreement with
                  the Company to effect a transaction described in clause (1),
                  (3)
<PAGE>   8
                  or (4) of this definition) whose election by the Board or
                  nomination for election by the Company's stockholders was
                  approved by a vote of at least two-thirds (2/3) of the
                  directors then still in office who either were directors at
                  the beginning of the period or whose election or nomination
                  for election was previously so approved, cease for any reason
                  to constitute at least a majority thereof;

         (3)      the stockholders of the Company approve a merger or
                  consolidation of the Company with any other entity, other than
                  (i) a merger or consolidation which would result in the voting
                  securities of the Company outstanding immediately prior
                  thereto continuing to represent (either by remaining
                  outstanding or by being converted into voting securities of
                  the surviving entity) more than 50% of the combined voting
                  power of the voting securities of the Company or such
                  surviving entity (or its parent) outstanding immediately after
                  such merger or consolidation or (ii) a merger or consolidation
                  effected to implement a recapitalization of the Company (or
                  similar transaction) in which no "person" or "group" (as
                  hereinabove defined) acquires more than 50% of the combined
                  voting power of the Company's then outstanding securities; or

         (4)      the stockholders of the Company approve a plan of complete
                  liquidation of the Company or an agreement for the sale or
                  disposition by the Company of all or substantially all of the
                  Company's assets.

                           (e) No Further Liability; Release. Full payment made
and complete performance by the Company in accordance with this Section 5 shall
operate to fully discharge and release the Company and its directors, officers,
employees, subsidiaries, affiliates, stockholders, successors, agents and
representatives from any further obligation or liability with respect to
Executive's employment and termination of employment. Other than paying
Executive's Base Salary through the date of termination of Executive's
employment and making any severance payment and continuing benefits and
perquisites pursuant to and in accordance with this Section 5 (as applicable),
the Company and its directors, officers, employees, subsidiaries, affiliates,
stockholders, successors, agents and representatives shall have no further
obligation or liability to Executive or any other person under this Agreement.
The Company shall have the right to condition the payment of any severance or
other amounts pursuant to Sections 5(c) or 5(d) hereof upon the delivery by
Executive to the Company of a release in form and substance satisfactory to the
Company of any and all claims Executive may have against the Company and its
directors, officers, employees, subsidiaries, affiliates, stockholders,
successors, assigns, agents and representatives arising out of or related to
Executive's employment by the Company and termination of such employment, other
than any failure by the Company to pay amounts otherwise required by this
Agreement.
<PAGE>   9
                  6.       Confidential Information.

                           (a) Existence of Confidential Information. The
Company owns and has developed and compiled, and will develop and compile,
certain proprietary techniques and confidential information which have great
value to its business (referred to in this Agreement, collectively, as
"Confidential Information"). Confidential Information includes not only
information disclosed by the Company to Executive, but also information
developed or learned by Executive during the course of or as a result of
employment with the Company, which information shall be the property of the
Company. Confidential Information includes all information that has or could
have commercial value or other utility in the business in which the Company is
engaged or contemplates engaging, and all information of which the unauthorized
disclosure could be detrimental to the interests of the Company, whether or not
such information is specifically labelled as Confidential Information by the
Company. By way of example and without limitation, Confidential Information
includes any and all information developed, obtained, licensed by or to or owned
by the Company concerning trade secrets, techniques, know-how (including
designs, plans, procedures, merchandising, marketing, distribution and
warehousing know-how, processes, and research records), software, computer
programs, and any other intellectual property created, used or sold (through a
license or otherwise) by the Company, Electronic Data Information know-how and
processes, innovations, discoveries, improvements, research, development, test
results, reports, specifications, data, formats, marketing data and plans,
business plans, strategies, forecasts, unpublished financial information,
orders, agreements and other forms of documents, price and cost information,
merchandising opportunities, expansion plans, store plans, budgets, projections,
customer, supplier, licensee, licensor and subcontractor identities,
characteristics, agreements and operating procedures, and salary, staffing and
employment information.

                           (b) Protection of Confidential Information. Executive
acknowledges and agrees that in the performance of duties hereunder the Company
discloses to and entrusts Executive with Confidential Information which is the
exclusive property of the Company and which Executive may possess or use only in
the performance of duties for the Company. Executive also acknowledges that
Executive is aware that the unauthorized disclosure of Confidential Information,
among other things, may be prejudicial to the Company's interests, an invasion
of privacy and an improper disclosure of trade secrets. Executive shall not,
directly of indirectly, use, make available, sell, disclose or otherwise
communicate to any corporation, partnership, individual or other third party,
other than in the course of Executive's assigned duties and for the benefit of
the Company, any Confidential Information, either during the Agreement Term or
thereafter. Notwithstanding the foregoing, Confidential Information shall not
include that information which (i) is or comes into the public domain, unless
such information comes into the public domain as a result of a breach of this
Agreement or violation of a confidentiality obligation to the Company, or (ii)
is required to be disclosed pursuant to law or under a court order.

                           (c) Delivery of Records, Etc. In the event
Executive's employment with the Company ceases for any reason, Executive will
not remove from the Company's premises without its prior written consent any
records, files, drawings, documents,
<PAGE>   10
equipment, materials and writings received from, created for or belonging to the
Company, including those which relate to or contain Confidential Information, or
any copies thereof, except that Executive shall be permitted to remove his
personal files, records and belongings (including copies of his correspondence,
which may include Confidential Information). Upon request or when employment
with the Company terminates, Executive will immediately deliver the same to the
Company.


                  7.       Assignment and Transfer.

                           (a) Company. Subject to Executive's rights under
Section 5(d)(ii) hereof, this Agreement shall inure to the benefit of and be
enforceable by, and may be assigned by the Company to, any purchaser of all or
substantially all of the Company's business or assets, any successor to the
Company or any assignee thereof (whether direct or indirect, by purchase,
merger, consolidation or otherwise). The Company will require any such
purchaser, successor or assignee to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform it if no such purchase, succession or assignment had taken
place. For purposes of this Agreement, the term Company shall include any
successor to the Company, and any parent company of such successor (or of the
Company), pursuant to or resulting from a merger or consolidation involving the
Company which does not constitute a "Change of Control" pursuant to Section 5(d)
of this Agreement.

                           (b) Executive. Executive's rights and obligations
under this Agreement shall not be transferable by Executive by assignment or
otherwise, and any purported assignment, transfer or delegation thereof shall be
void; provided, however, that if Executive shall die, all amounts then payable
to Executive hereunder shall be paid in accordance with the terms of this
Agreement to Executive's devisee, legatee or other designee or, if there be no
such designee, to Executive's estate.

                  8.       Miscellaneous.

                           (a) Nondisclosure; Other Employers. Executive will
not disclose to the Company, or use, or induce the Company to use, any
proprietary information, trade secrets or confidential business information of
others. Executive represents and warrants that Executive has returned all
property, proprietary information, trade secrets and confidential business
information belonging to all prior employers.

                           (b) Cooperation. Following termination of employment
with the Company, Executive shall cooperate with the Company, as requested by
the Company, to affect a transition of Executive's responsibilities and to
ensure that the Company is aware of all matters being handled by Executive.

                           (c) No Duty to Mitigate. Executive shall be under no
duty to mitigate with respect to any severance or other amounts payable pursuant
to this Agreement
<PAGE>   11
and such payments shall be made without regard to sums earned by Executive from
any other source, except as provided in Section 5(d) hereof.

                           (d) Protection of Reputation. During the Agreement
Term and thereafter, Executive agrees that he will take no action which is
intended, or would reasonably be expected, to harm the Company or its reputation
or which would reasonably be expected to lead to unwanted or unfavorable
publicity to the Company.

                           (e) Governing Law. This Agreement, including the
validity, interpretation, construction and performance of this Agreement, shall
be governed by and construed in accordance with the laws of the State of
California applicable to agreements made and to be performed in such state
without regard to such state's conflicts of law principles. All actions and
proceedings relating directly or indirectly to this Agreement shall be litigated
in any state court or federal court located in Los Angeles, California. The
parties hereto expressly consent to the jurisdiction of any such court and to
venue therein.

                           (f) Entire Agreement. This Agreement contains the
entire agreement and understanding between the parties hereto in respect of the
subject matter hereof and supersedes, cancels and annuls any prior or
contemporaneous written or oral agreements, understandings, commitments and
practices between them respecting the subject matter hereof, including all prior
employment agreements, if any, and any amendments or supplements thereto between
the Company and Executive, which agreement(s) hereby are terminated and shall be
of no further force or effect.

                           (g) Amendment. This Agreement may be amended only by
a writing which makes express reference to this Agreement as the subject of such
amendment and which is signed by Executive and, on behalf of the Company, by its
duly authorized officer.

                           (h) Severability. If any term, provision, covenant or
condition of this Agreement or part thereof, or the application thereof to any
person, place or circumstance, shall be held to be invalid, unenforceable or
void, the remainder of this Agreement and such term, provision, covenant or
condition shall remain in full force and effect, and any such invalid,
unenforceable or void term, provision, covenant or condition shall be deemed,
without further action on the part of the parties hereto, modified, amended and
limited to the extent necessary to render the same and the remainder of this
Agreement valid, enforceable and lawful. In this regard, Executive acknowledges
that the provisions of Sections 4 and 6 are reasonable and necessary for the
protection of the Company.

                           (i) Construction. The headings and captions of this
Agreement are provided for convenience only and are intended to have no effect
in construing or interpreting this Agreement. The language in all parts of this
Agreement shall be in all cases construed according to its fair meaning and not
strictly for or against the Company or Executive. The use herein of the word
"including," when following any general provision, sentence, clause, statement,
term or matter, shall be deemed to mean "including, without limitation". As used
herein, "Company" shall mean the Company and its subsidiaries and any purchaser
of, successor to or assignee (whether direct or indirect, by purchase, merger,
consolidation or
<PAGE>   12
otherwise) of all or substantially all of the Company's business or assets which
is obligated to perform this Agreement by operation of law, agreement pursuant
to Section 7 hereof or otherwise. As used herein, the words "day" or "days"
shall mean a calendar day or days.

                           (j) Nonwaiver. Neither any course of dealing nor any
failure or neglect of either party hereto in any instance to exercise any right,
power or privilege hereunder or under law shall constitute a waiver of any other
right, power or privilege or of the same right, power or privilege in any other
instance. All waivers by either party hereto must be contained in a written
instrument signed by the party to be charged and, in the case of the Company, by
its duly authorized officer.

                           (k) Remedies for Breach. The parties hereto agree
that Executive is obligated under this Agreement to render personal services
during the Agreement Term of a special, unique, unusual, extraordinary and
intellectual character, thereby giving this Agreement peculiar value, and, in
the event of a breach or threatened breach of any covenant of Executive herein,
the injury or imminent injury to the value and the goodwill of the Company's
business could not be reasonably or adequately compensated in damages in an
action at law. Accordingly, Executive expressly acknowledges that the Company
shall be entitled to specific performance, injunctive relief or any other
equitable remedy against Executive, without the posting of a bond, in the event
of any breach or threatened breach of Sections 4 and 6 hereof. Without limiting
the generality of the foregoing, if Executive breaches Sections 4 or 6 hereof,
such breach will entitle the Company to enjoin Executive from disclosing any
Confidential Information to any Competing Business, to enjoin such Competing
Business from receiving from Executive or using any such Confidential
Information and/or to enjoin Executive from rendering personal services to or in
connection with such Competing Business. The rights and remedies of the parties
hereto are cumulative and shall not be exclusive, and each such party shall be
entitled to pursue all legal and equitable rights and remedies and to secure
performance of the obligations and duties of the other under this Agreement, and
the enforcement of one or more of such rights and remedies by a party shall in
no way preclude such party from pursuing, at the same time or subsequently, any
and all other rights and remedies available to it.

                           (l) Notices. Any notice, request, consent or approval
required or permitted to be given under this Agreement or pursuant to law shall
be sufficient if in writing, and if and when sent by certified or registered
mail, return receipt requested, with postage prepaid, or by hand delivery or by
reputable overnight delivery service (such as Federal Express) to Executive's
residence (as reflected in the Company's records or as otherwise designated by
Executive on thirty (30) days' prior written notice to the Company with a copy
to Michael K. Lindsey, Esq., Paul, Hastings, Janofsky & Walker LLP, 555 South
Flower Street, 23rd Floor, Los Angeles, California 90071) or to the Company's
principal executive office, attention: General Counsel (with a copy to David P.
Levin, Esq., Kramer Levin Naftalis & Frankel LLP, 919 Third Avenue, New York,
New York 10022), as the case may be. All such notices, requests, consents and
approvals shall be effective upon receipt. However, the time period in which a
response thereto must be given shall commence to run from the date of receipt on
the return receipt of the notice, request, consent or approval by the addressee
thereof. Rejection or other refusal to accept, or the inability to
<PAGE>   13
deliver because of changed address of which no notice was given as provided
herein, shall be deemed to be receipt of the notice, request, consent or
approval sent.

                           (m) Assistance in Proceedings, Etc. Executive shall,
without additional compensation, during and after expiration of the Agreement
Term, upon reasonable notice, furnish such information and proper assistance to
the Company as may reasonably be required by the Company in connection with any
legal or quasi-legal proceeding, including any external or internal
investigation, involving the Company or any of its affiliates or in which any of
them is, or may become, a party. The Company shall, in connection therewith, pay
Executive's reasonable attorney's fees and expenses incurred in connection with
this Section 8.

                           (n) Automatic Extension of Agreement Term. This
Agreement shall be automatically extended for a period of one year at the end of
the Agreement Term (or any extension thereof) upon economic terms and conditions
to be agreed upon (which shall be no less favorable than those contained herein)
unless, not later than six months prior to the end of the Agreement Term (or
extension thereof) (the "Notice Date"), the Company or the Executive shall have
notified the other in writing of its or his intention not to so renew this
Agreement. Any such extension shall be effective and binding as of the
applicable Notice Date.

                           (o) Survival. This Agreement and the respective
obligations, rights and benefits of the Company and the Executive as set forth
herein shall survive the cessation or termination of Executive's employment with
the Company and the termination of the Agreement Term in accordance with the
terms set forth herein.







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<PAGE>   14
                  IN WITNESS WHEREOF, the Company has caused this Agreement to
be duly executed on its behalf by an officer thereunto duly authorized and
Executive has duly executed this Agreement, all as of the date and year first
written above.


GT Interactive Software Corp.               EXECUTIVE:



By: /s/ THOMAS A. HEYMANN                   /s/ JOHN T. BAKER IV
   -------------------------------          -----------------------------------
   Name: Thomas A. Heymann                  John T. Baker IV
   Title:  Chairman of the Board and
            Chief Executive Officer

Source: OneCLE Business Contracts.