EMPLOYMENT AND SEVERANCE AGREEMENT



     THIS AGREEMENT  made and entered into as of the 15th day of November,  1996
by and between  SWISS ARMY BRANDS,  INC., a Delaware  corporation,  (hereinafter
referred to as "SABI" or "the Company"),  and THOMAS D. CUNNINGHAM  (hereinafter
referred to as "Mr. Cunningham").

     WHEREAS,  Mr.  Cunningham  has been  Executive  Vice  President  and  Chief
Financial Officer of SABI since March 1994;

     WHEREAS,  Mr.  Cunningham  has resigned  from the office of Executive  Vice
President  and Chief  Financial  Officer of the Company and as a director of the
Company effective November 13, 1996;

     WHEREAS,  the Company desires to continue Mr. Cunningham's  employment with
the Company for the period and under the terms and  conditions  set forth herein
and to provide Mr. Cunningham with certain severance benefits; and

     WHEREAS, Mr. Cunningham desires to accept such employment and such benefits
under the terms and conditions contained herein.

     NOW,  THEREFORE,  in consideration of the premises and the mutual covenants
and agreements contained herein, the parties hereto agree as follows:

     1. DUTIES AND PERFORMANCE. (a) During the term of his employment hereunder,
Mr.  Cunningham shall be employed by the Company (on a non-exclusive  basis) and
shall be charged with the following duties:

          (i) to work with  management of the Company to identify,  evaluate and
     review  strategic  financial  alternatives  with  respect to the  Company's
     subsidiary,  Cuisine de France Limited ("CDFL") including,  but not limited
     to, a sale of CDFL or the assets of CDFL;

          (ii)  if  requested  by  the  Company,  assist  in  preparation  of  a
     descriptive memorandum concerning CDFL;

          (iii) develop,  update and review with the Company on an ongoing basis
     a list of parties  which might be  interested  in acquiring  part or all of
     CDFL and contact only parties approved by the Company;

          (iv) consult with and advise the Company concerning  alternatives with
     respect to the  disposition  of CDFL and, if so  requested  by the Company,
     participate in negotiations relevant to any disposition of CDFL; and

          (v) if an  agreement  with  respect  to the  disposition  of  CDFL  is
     reached, work with the Company with respect to the consummation of any such
     agreement.

     (b) All of the foregoing is to be done under the direction of the President
of the Company and, upon reasonable request,  Mr. Cunningham shall report on the
steps  he has  taken  and  the  progress  of his  performance  hereunder  to the
President on a regular basis.  Mr.  Cunningham  shall make himself  available to
perform  his duties  hereunder  for such  period of time  during the term of his
employment as such duties reasonably require.  Mr. Cunningham  acknowledges that
he shall not have an office on the premises of the Company and shall perform his
duties  hereunder at other  locations.  During the  Employment  Term (as defined
below), Mr. Cunningham's title shall be Chairman of the Finance Committee.

     2. TERM OF EMPLOYMENT.  The term of Mr. Cunningham's  employment  hereunder
shall  commence  on  November  15,  1996  and  terminate  on May 15,  1997  (the
"Employment  Term")  except  that if the  Company in its sole  discretion  shall
determine that satisfactory  progress has not been made on the tasks referred to
in  Section  1(a) the  Company  may,  upon  written  notice  to Mr.  Cunningham,
terminate  the  Employment  Term at any time after  three  months  from the date
hereof.  The execution by the Company of either (i) a definitive  agreement with
any party or, (ii) a letter of intent with a party or entity not associated with
either Mr. Robert Candler or Mr. Robert Wolff, for the disposition of CDFL shall
be  conclusive  evidence that  "satisfactory  progress" has been made within the
meaning of this Section 2.

     3. SALARY.  During the Employment  Term,  SABI shall pay to Mr.  Cunningham
base salary at the rate of $210,000 per annum,  payable in such  installments as
shall accord with the normal pay practices of the Company.

     4. BONUS. SABI shall pay to Mr. Cunningham a bonus of $20,000 in respect of
his services to the Company performed in 1996.

     5. BENEFITS.  (a) When eligible under non-  discriminatory  standards,  Mr.
Cunningham  shall be entitled  to  participate  during the Term in any  employee
benefit plans  maintained  by the Company  available to employees of the Company
generally.

     (b) SABI shall reimburse Mr.  Cunningham,  in accordance with SABI's policy
then in effect,  for reasonable  travel expenses incurred at the written request
of SABI.

     6.  TERMINATION  OF  EMPLOYMENT.  (a) The  Company  shall  be  entitled  to
terminate Mr. Cunningham's employment in any of the following circumstances:

          (i) For "cause" by reason of the  occurrence of any of the  following:
     (A)  willful  misfeasance  or gross  negligence  by Mr.  Cunningham  in the
     conduct of Mr.  Cunningham's duties including the failure of Mr. Cunningham
     to  follow  lawful  and  reasonable  orders of the  Board of  Directors  or
     President of the Company,  (B) a material breach by Mr.  Cunningham of this
     Agreement,  (C) the commission of acts of dishonesty or moral  turpitude by
     Mr.  Cunningham  that are detrimental to the Company and/or its affiliates,
     or (D) the conviction  of, or nolo  contendere  plea by, Mr.  Cunningham in
     respect of any felony;

          (ii)  Mental or  physical  incapacity  as  determined  in writing by a
     physician selected by the Company,  such determination to indicate that Mr.
     Cunningham's mental or physical condition will render him unable to perform
     his duties  hereunder for a period  exceeding  three  months;  or

          (iii) The death of Mr. Cunningham.

          (b) In the event of termination pursuant to the terms of this section,
     the  obligations  of the Company to provide  benefits  with  respect to Mr.
     Cunningham's  employment  hereunder  other  than those  already  accrued or
     vested as  provided  herein  shall  cease upon such  termination.  Any such
     termination shall have no effect on Mr. Cunningham's rights with respect to
     the severance benefits set forth in Section 7 below.

     7. SEVERANCE  BENEFITS.  The Company agrees to provide Mr.  Cunningham with
the  following  severance  benefits  upon  the  termination  of  his  employment
hereunder for any reason  (including a termination under Sections 2, 6(a)(ii) or
6(a)(iii))  except for termination  pursuant to Section 6(a)(i),  which benefits
Mr. Cunningham  acknowledges are over and above those to which he would normally
be  entitled  and  which  benefits  shall  not be  reduced  by  earnings  by Mr.
Cunningham from other sources:

     (a) Mr. Cunningham shall be paid the sum of $210,000, in a lump sum payment
within seven days of termination or, if the waiting periods set forth in Section
20 hereof have not yet expired, upon such expiration.

     (b) The Company shall pay for  outplacement  services to be provided by Lee
Hecht Harrison (or other services mutually agreed upon) for Mr. Cunningham for a
period of up to one year.

     (c) For a period of twelve  months,  the Company shall pay to the Company's
insurance  carrier,  the amount of the  premium  required to be paid to keep the
medical insurance for the benefit of Mr. Cunningham and his dependents effective
for a period of twelve  months  under  COBRA.  Subsequent  to such twelve  month
period Mr.  Cunningham shall have the option of continuing  coverage under COBRA
at his expense for an additional six month period.

     (d) The Company shall pay the base monthly payments (plus insurance) on the
automobile it previously leased for Mr. Cunningham through October 27, 1997. Mr.
Cunningham  shall be responsible  for and shall pay when due any amounts payable
in  connection  with such  lease  other  than the base  monthly  payments  (plus
insurance)  including,  without  limitation,  any charge  for excess  mileage or
damage  or  excess  wear and tear to the  automobile.  The  Company  shall  make
payments  (and  reimburse  business  call charges) with respect to the car phone
presently in such automobile  throughout Mr. Cunningham's  employment  hereunder
provided and to the extent that the car phone is used  primarily for purposes of
Company  business.  The Company may set off and  withhold  any amount due to the
Company or paid by the Company on Mr.  Cunningham's  behalf in  connection  with
this Section 7(d)  against any amount  payable by the Company to Mr.  Cunningham
pursuant to this Agreement.

     (e) The  Company  shall  reimburse  Mr.  Cunningham  in the amount of up to
$2,500 for the purchase of a computer upon receipt of appropriate documentation.

     (f) Maintain phone and voicemail services at SABI for 12 months.

     (g) Pursuant to Stock Option  Agreements  (the "Option  Agreements")  dated
July 15, 1994 and January 26, 1995 the Company granted to Mr. Cunningham options
to purchase an aggregate of up to 75,000 shares of the  Company's  common stock.
In order  that Mr.  Cunningham  shall  have a period  of eight  months  from the
termination  of his  employment  hereunder  to exercise  such  options that have
vested by the termination of his employment  hereunder,  Section 7(c) of each of
the Option Agreements is hereby amended to read as follows:

          "If the  employment  of the Grantee  shall be  terminated  and Grantee
     shall not have fully  exercised the Option,  the Option may be exercised to
     the extent that the  Grantee's  right to exercise the Option had accrued at
     the time of the  termination of his employment and had not been  previously
     exercised,  at any time  within  eight  months  after  the  termination  of
     Grantee's  employment  but may not be  exercised  in whole or in part after
     such eight month period."

     8. COVENANT NOT TO COMPETE.  (a) Mr.  Cunningham  acknowledges  that in the
course of the Employment Term and his employment by the Company, he has and will
become privy to various  economic  and trade  secrets and  relationships  of the
Company and its affiliates.  Therefore, in consideration of this Agreement,  Mr.
Cunningham  hereby agrees that he will not,  directly or indirectly,  except for
the benefit of the Company or its affiliates:

          (i) during the Employment Term and thereafter, on behalf of himself or
     any other person:

          (A) solicit, entice, persuade or induce any employee of the Company or
     any affiliate, or any other person, who is under contract with or rendering
     services or supplying products to the Company or any affiliate, or any such
     individual  or entity who held any such status  during the two-year  period
     preceding  termination  of  this  Agreement,  (w) to  terminate  his or its
     employment  by,  or  contractual  relationship  with,  the  Company  or any
     affiliate or (x) to refrain  from  extending or renewing the same (upon the
     same or new terms) or (y) to refrain from rendering services to the Company
     or any affiliate, or (z) to become employed by or to enter into contractual
     relations with persons other than the Company; or

          (B) direct,  order or assist in the taking of any such  actions by any
     person other than the Company.

          (ii)(A) during the  Employment  Term and for a period ending two years
     after termination of the Employment Term,  directly or indirectly,  whether
     as  employee,  consultant,   officer,  director,  partner,  shareholder  or
     otherwise  compete with the business of SABI as the same is then  conducted
     nor  engage in the sale of  knives,  cutlery,  timepieces,  pens,  pencils,
     multi-tools  or any other  product  which the  Company is now selling or is
     then selling.

          (B) for  purposes of this  subsection  8 (a)(ii) the term "SABI" shall
     include  SABI  and  all  entities   directly  or   indirectly   controlled,
     controlling or under common control with SABI provided that if SABI becomes
     controlled by another  entity,  the  restrictions of that section shall not
     apply to businesses  of that  controlling  entity and its other  controlled
     affiliates  other than  businesses  in which SABI and its  affiliates  were
     engaged at the time of such  change of control and  logical  extensions  of
     such businesses.

          (b)(i)   Mr.   Cunningham   acknowledges   that  he  has   substantial
     capabilities  and  experience  in fields  other than those  which  would be
     competitive  with the  Company  and that the  restrictions  set forth above
     would not hinder his ability to earn a livelihood.

          (ii) If any of the  restrictions  set forth in this  Section 8 should,
     for any reason  whatsoever,  be  declared  invalid by a court of  competent
     jurisdiction,  the  validity or  enforceability  of the  remainder  of such
     restrictions shall not thereby be adversely affected. Mr. Cunningham agrees
     that the  territorial and time  limitations and other  restrictions in this
     Section 8 are reasonable and properly required for the adequate  protection
     of the business of the Company,  and that if any such  territorial  or time
     limitations  or  other  restrictions  is held  unreasonable  by a court  of
     competent jurisdiction, then he agrees and submits to the reduction of said
     territorial or time limitation or other restrictions to such area or period
     as such court shall find reasonable.

          (c) The provisions of this Section 8 shall survive termination of this
     Agreement.

     9.  CONFIDENTIALITY.  During the Employment Term and thereafter,  except in
the  performance of his duties  hereunder,  Mr.  Cunningham will keep secret and
will not, without the express written consent of the Company:

          (a) knowingly  divulge or communicate to any third person,  or use for
     the benefit of Mr.  Cunningham  or any third  person,  any trade secrets or
     privileged,  proprietary or confidential  information  used or owned by the
     Company or any affiliate or disclosed to or learned by him in the course of
     his employment by the Company including,  without  limitation,  non- public
     information  concerning  products,  profitability,  the  identity  of,  and
     information relating to dealings with customers and suppliers; or

          (b) retain for the benefit of himself or any third person any document
     or paper used or owned by the Company or any  affiliate  or coming into his
     possession in the course of his  employment by the Company or make or cause
     to be made any copy, abstract, or summary thereof.

     10. REMEDIES.  Because the services of Mr. Cunningham  hereunder are unique
and  extraordinary  and the Company  does not have an adequate  remedy at law to
protect  its  business  from Mr.  Cunningham's  competition  or to  protect  its
interest in its trade secrets,  confidential  information and similar commercial
assets,  Mr.  Cunningham  agrees  that any  breach or  threatened  breach of any
provision  of  provisions  of this  Agreement  relating to  non-competition  and
confidentiality  shall  entitle the  Company,  in addition to any other legal or
equitable  remedies  available  to it,  to  apply  to  any  court  of  competent
jurisdiction  to enjoin such breach or threatened  breach without the posting of
any bond or any security.

     11. RELEASE.  Mr.  Cunningham,  for him and for his successors and assigns,
does hereby fully and completely RELEASE, ACQUIT and FOREVER DISCHARGE SABI, and
its  affiliates,   subsidiaries  or  other  related  entities  as  well  as  its
shareholders, officers, directors, employees or agents, from any and all claims,
debts,  demands,  actions,  causes of action,  suits, sums of money,  contracts,
agreements,  judgements and liabilities,  including attorney's fees, whatsoever,
both in law and in equity  ("claims") of any kind and any character that he ever
had, might now or hereafter have, or could have had,  whether in contract,  tort
or otherwise,  including  specifically any claims of discrimination  that he may
claim  in  connection  with  his  employment  or the  termination  thereof,  but
excluding  specifically any claims relating to or arising out of this Agreement.
This includes but is not limited to, claims arising under the federal,  state or
local laws  prohibiting  discrimination  on the basis of one's sex,  race,  age,
disability,  national  origin,  color or religion,  or other reason forbidden by
federal,  state or local laws or claims growing out of any legal restrictions on
SABI's right to terminate its  employees.  This also  specifically  includes the
waiver  of any  rights  or  claims  arising  under  the  Age  Discrimination  in
Employment Act of 1967 (29 U.S.C.  621 et seq.).  It is also understood that the
execution of this Agreement  shall be construed as a release and covenant not to
sue,  that  Mr.  Cunningham  will  not sue  SABI or any  subsidiary,  affiliate,
officer, director, employee or committee thereof, or file any claims of any sort
with any administrative  agency for anything arising out of his employment,  and
the terms of this Agreement  supersede any and all other agreements  relating to
his employment whether written or oral.


     12. CONFIRMATION OF RESIGNATION.  Mr. Cunningham  acknowledges and confirms
that effective November 13, 1996, he resigned from any and all positions held as
an officer and director of SABI and all of SABI's subsidiaries.

     13. SPLIT DOLLAR LIFE INSURANCE.  Mr. Cunningham agrees to execute,  within
thirty days of  submission  to him,  and perform an  Insurance  Agreement  and a
Collateral Assignment Agreement of the split dollar life insurance policies paid
for by SABI for the benefit of Mr.  Cunningham  in the form  determined by SABI,
such  agreements to provide that upon  termination of the  Employment  Term, Mr.
Cunningham  shall have the right to repay SABI within ninety days of the date of
termination  in an amount equal to the cash  surrender  value of such policy and
that if Mr. Cunningham elects not to repay such amount he shall promptly execute
any and all instruments  that may be required to relinquish his interest in such
policies and vest ownership of such policies in SABI.

     14. ADVICE OF COUNSEL.  SABI encourages Mr.  Cunningham to carefully review
the terms of this Agreement  and, if he wishes,  to seek advise and counsel from
an attorney before signing this Agreement.

     15.  DIVISIBILITY  OF AGREEMENT.  In the event that any term,  condition or
provision  of this  Agreement is for any reason  rendered  void,  all  remaining
terms,  conditions  and  provisions  shall  remain  and  continue  as valid  and
enforceable obligations of the parties hereto.

     16. NOTICES. Any notices or other  communications  required or permitted to
be sent  hereunder  shall be in writing  and shall be duly  given if  personally
delivered or sent  postage  pre-paid by certified  or  registered  mail,  return
receipt  requested,  or sent by  electronic  transmission  and confirmed by mail
within two business days of such transmission, as follows:

                                    (a)     If to Mr. Cunningham:
                                            8 Nearwater Road
                                            Rowayton, Connecticut  06853


                                    (b)  If to SABI:
                                            Swiss Army Brands, Inc
                                            One Research Drive
                                            Shelton, Connecticut 06484

     Either  party may change his or its  address  for the  sending of notice to
such party by written  notice to the other  party  sent in  accordance  with the
provisions hereof.

     17.  MERGER.  This  Agreement  merges  and  supersedes  any and  all  other
agreements  between the parties  hereof  related in any way to the employment of
Mr.  Cunningham.  This  Agreement  may not be  altered  or  amended  except by a
writing, duly executed by the party against whom such alteration or amendment is
sought to be enforced.

     18.  GOVERNING  LAW. This  Agreement  shall be governed by and construed in
accordance with the laws of the state of Connecticut  with respect to agreements
made and to be performed wholly therein.

     19.  ASSIGNMENT.  This  Agreement  is personal  and  non-assignable  by Mr.
Cunningham.  It shall  inure to the  benefit  of,  and be the valid and  binding
obligation  of, any  corporation  or other  entity with which the Company  shall
merge  or  consolidate  or to  which  the  Company  shall  lease  or sell all or
substantially  all of its  assets  and may be  assigned  by the  Company  to any
affiliate  of the  Company  or to any  corporation  or entity  with  which  such
affiliate  shall  merge or  consolidate  or which  shall lease or acquire all or
substantially all of the assets of such affiliate.

     20. PERIOD TO REVIEW AND REVOKE. After Mr. Cunningham has had the chance to
review this Agreement and to consult with his attorney,  if he wishes, he should
sign the Agreement and return it to SABI within 22 days.

     After Mr.  Cunningham has executed and delivered this  Agreement,  he shall
have seven (7) days  following  the date of  execution  during which time he may
revoke  this  agreement,  provided,  however,  that,  if he  elects to return an
executed  copy of the document to us before the  expiration  of 22 days from the
date hereof,  he may revoke this Agreement at any time before the later to occur
of seven (7) days  following  the date of  execution  or 22 days  after the date
hereof. If SABI does not receive a written  revocation from Mr.  Cunningham,  or
his attorney,  prior to the expiration of the period in which he may revoke this
Agreement, this Agreement will become effective on the date after the expiration
of the applicable revocation period.

     IN WITNESS WHEREOF,  each of the parties hereto has executed this Agreement
as of the day and year first above written.


                                                      /s/ Thomas D. Cunningham
                                                     Thomas D. Cunningham



                                                     SWISS ARMY BRANDS, INC.



                                                     By: /s/ J. Merrick Taggart
                                                        Title: President


     I  acknowledge  that I have been given the  opportunity  to  consider  this
agreement for at least twenty-one (21) days, that I have been advised to discuss
this  agreement  with an attorney of my choice,  that I have  carefully read and
fully understand and agree to all of the provisions of this agreement and that I
am voluntarily entering into this agreement.

     Finally,  I also  understand  that I have  seven (7) days after I sign this
agreement (or twenty-two days after the date hereof, if later) to change my mind
and that I may revoke this  agreement by providing  written notice of revocation
to you prior to the expiration of the applicable period.



   3/21/97                        /s/ Thomas D. Cunningham
Date of Execution                   Thomas D. Cunningham
<PAGE>