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                                                                   Exhibit 10.20

                              EMPLOYMENT AGREEMENT

                  THIS AGREEMENT, effective as of June 1, 2003 (the "Effective
Date"), is made by and between Coach, Inc., a Maryland corporation (the
"Company") and Lew Frankfort (the "Executive").

                                    RECITALS:

                  A.       It is the desire of the Company to assure itself of
the services of the Executive by engaging the Executive as its Chairman and
Chief Executive Officer.

                  B.       The Executive desires to commit himself to serve the
Company on the terms herein provided.

                  NOW, THEREFORE, in consideration of the foregoing and of the
respective covenants and agreements set forth below, the parties hereto agree as
follows:

                  1.       Certain Definitions

                           (a)      "Affiliate" shall mean with respect to any
         Person, any other Person directly or indirectly, through one or more
         intermediaries, controlling, controlled by, or under common control
         with, such Person. For purposes of this Section 1(a), "control" shall
         have the meaning given such term under Rule 405 of the Securities Act
         of 1933, as amended.

                           (b)      "Annual Base Salary" shall have the meaning
         set forth in Section 5(a).

                           (c)      "Board" shall mean the Board of Directors of
         the Company.


                           (d)      "Bonus" shall have the meaning set forth in
         Section 5(b).


                           (e)      The Company shall have "Cause" to terminate
         the Executive's employment upon (i) the Executive's failure to attempt
         in good faith to substantially perform the duties as Chairman and Chief
         Executive Officer (other than any such failure resulting from the
         Executive's physical or mental incapacity) which is not remedied within
         30 days after receipt of written notice from the Company specifying
         such failure; (ii) the Executive's failure to attempt in good faith to
         carry out, or comply with, in any material respect any lawful and
         reasonable directive of the Board, which is not remedied within 30 days
         after receipt of written notice from the Company specifying such
         failure; (iii) the Executive's commission at any time of any act or
         omission that results in, or may reasonably be expected to result in, a
         conviction, plea of no contest, or imposition of unadjudicated
         probation for any felony (or any other crime involving fraud,
         embezzlement, material misconduct or misappropriation having a material
         adverse impact on the Company); (iv) the Executive's unlawful use
         (including being under the influence) or possession of illegal drugs on
         the Company's premises or while performing the Executive's duties and
         responsibilities; or (v) the Executive's willful commission at any time
         of any act of fraud, embezzlement, misappropriation, misconduct, or
         breach of

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         fiduciary duty against the Company (or any predecessor thereto or
         successor thereof) having a material adverse impact on the Company.

                           (f)      "Change in Control" shall occur when:

                                    (i)      A Person (which term, when used in
                  this Section 1(f), shall not include the Company, any
                  underwriter temporarily holding securities pursuant to an
                  offering of such securities, any trustee or other fiduciary
                  holding securities under an employee benefit plan of the
                  Company, or any Company owned, directly or indirectly, by the
                  stockholders of the Company in substantially the same
                  proportions as their ownership of Voting Stock of the Company)
                  is or becomes, without the prior consent of a majority of the
                  Continuing Directors, the beneficial owner (as defined in Rule
                  13d-3 promulgated under the Securities Exchange Act of 1934,
                  as amended), directly or indirectly, of Voting Stock
                  representing, without the prior written consent of a majority
                  of the Continuing Directors twenty percent (20%) (or, even
                  with such prior consent, thirty-five percent (35%)) or more of
                  the combined voting power of the Company's then outstanding
                  securities; or

                                    (ii)     The Company consummates a
                  reorganization, merger or consolidation of the Company (which
                  prior to the date of such consummation has been approved by
                  the Company's stockholders) or the Company sells, or otherwise
                  disposes of, all or substantially all of the Company's
                  property and assets (other than a reorganization, merger,
                  consolidation or sale which would result in all or
                  substantially all of the beneficial owners of the Voting Stock
                  of the Company outstanding immediately prior thereto
                  continuing to beneficially own, directly or indirectly (either
                  by remaining outstanding or by being converted into voting
                  securities of the resulting entity), more than fifty percent
                  (50%) of the combined voting power of the voting securities of
                  the Company or such entity resulting from the transaction
                  (including, without limitation, an entity which as a result of
                  such transaction owns the Company or all or substantially all
                  of the Company's property or assets, directly or indirectly)
                  outstanding immediately after such transaction in
                  substantially the same proportions relative to each other as
                  their ownership immediately prior to such transaction), or the
                  Company's stockholders approve a liquidation or dissolution of
                  the Company; or

                                    (iii)    The individuals who are Continuing
                  Directors of the Company (as defined below) cease for any
                  reason to constitute at least a majority of the Board.

                           (g)      "Code" shall mean the Internal Revenue Code
         of 1986, as amended.

                           (h)      "Committee" shall mean the Human Resources
         and Corporate Governance Committee of the Board.

                           (i)      "Common Stock" shall mean the $.01 par value
         common stock of the Company.


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                           (j)      "Company" shall, except as otherwise
         provided in Section 9, have the meaning set forth in the preamble
         hereto.

                           (k)      "Competitive Business" shall mean any entity
         that, as of the date of the Executive's termination of employment, the
         Committee has designated in its sole discretion as an entity that
         competes with any of the businesses of the Company; provided, that (i)
         not more than 20 entities (which term "entities" shall include any
         subsidiaries, parent entities and other Affiliates thereof) shall be
         designated as Competitive Businesses at one time and (ii) such entities
         are the same 20 entities used for any list of competitive entities for
         any other arrangement with an executive of the Company; and, provided
         further, that the Committee may change its designation of Competitive
         Businesses at any time that is not less than 90 days prior to the
         Executive's termination of employment upon written notice thereof to
         the Executive (and any such change within the 90 day period immediately
         preceding the Executive's termination of employment shall not be
         effective). The list of Competitive Businesses in effect as of the
         Effective Date (which the parties acknowledge and agree may be changed
         by the Committee in accordance with the terms of the immediately
         preceding sentence) shall be communicated by the Company to the
         Executive as soon as reasonably practicable following the Effective
         Date.

                           (l)      "Continuing Director" means (i) any member
         of the Board (other than an employee of the Company) as of the
         Effective Date or (ii) any person who subsequently becomes a member of
         the Board (other than an employee of the Company) whose election or
         nomination for election to the Board is recommended by a majority of
         the Continuing Directors.

                           (m)      "Contract Year" shall mean (i) the period
         beginning on June 1, 2003 and ending on June 30, 2004 and (ii) each
         twelve-month period beginning on July 1, 2004 or any anniversary
         thereof.

                           (n)      "Date of Termination" shall mean (i) if the
         Executive's employment is terminated by his death, the date of his
         death and (ii) if the Executive's employment is terminated pursuant to
         Section 6(a)(ii) - (vi), the date specified in the Notice of
         Termination (or if no such date is specified, the last day of the
         Executive's active employment with the Company).

                           (o)      "Disability" shall mean any mental or
         physical illness, condition, disability or incapacity which:


                                    (i)      Prevents the Executive from
                  discharging substantially all of his essential job
                  responsibilities and employment duties;

                                    (ii)     Shall be attested to in writing by
                  a physician or a group of physicians selected by the Executive
                  and acceptable to the Company; and

                                    (iii)    Has prevented the Executive from so
                  discharging his duties for any 180 days in any 365 day period.

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         A Disability shall be deemed to have occurred on the 180th day in any
         such 365 day period.

                           (p)      "Executive" shall have the meaning set forth
         in the preamble hereto.


                           (q)      "Extension Term" shall have the meaning set
         forth in Section 2.


                           (r)      "Financial Gain" with respect to any
         specified period of time shall mean the sum of all (i) Retention Option
         Gains realized by the Executive during such period and (ii) Retention
         RSU Gains realized by the Executive during such period.

                           (s)      The Executive shall have "Good Reason" to
         resign his employment upon the occurrence of any of the following: (i)
         failure of the Company to continue the Executive in the position of
         Chairman and Chief Executive Officer; (ii) a material diminution in the
         nature or scope of the Executive's responsibilities, duties or
         authority(including, without limitation, the Executive's failure to
         continue to serve as member of the Board); (iii) relocation of the
         Company's executive offices more than 50 miles outside of New York, New
         York or relocation of Executive away from the executive offices; (iv)
         failure of the Company to timely make any material payment or provide
         any material benefit under this Agreement, or the Company's material
         reduction of any compensation, equity or benefits that the Executive is
         eligible to receive under this Agreement; or (v) the Company's material
         breach of this Agreement; provided, however, that notwithstanding the
         foregoing the Executive may not resign his employment for Good Reason
         unless: (x) the Executive provides the Company with at least 30 days
         prior written notice of his intent to resign for Good Reason (which
         notice is provided not later than the 60th day following the occurrence
         of the event constituting Good Reason) and (y) the Company does not
         remedy the alleged violation(s) within such 30-day period; and,
         provided, further, that Executive may resign his employment for Good
         Reason if in connection with any Change in Control the surviving entity
         does not assume this Agreement (or, with the written consent of the
         Executive, substitute a substantially identical agreement) with respect
         to the Executive in writing delivered to the Executive prior to, or as
         soon as reasonably practicable following, the occurrence of such Change
         in Control.

                           (t)      "Initial Term" shall have the meaning set
         forth in Section 2.


                           (u)      "Intellectual Property" shall have the
         meaning set forth in Section 9(f).


                           (v)      "Maximum Bonus" shall have the meaning set
         forth in Section 5(b).


                           (w)      "Notice of Termination" shall have the
         meaning set forth in Section 6(b).

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                           (x)      "Option" shall mean an option to purchase
         Common Stock pursuant to the Stock Incentive Plan (or any other equity
         based compensation plan or agreement that may be adopted or entered
         into by the Company from time to time).

                           (y)      "Person" shall mean an individual,
         partnership, corporation, business trust, limited liability company,
         joint stock company, trust, unincorporated association, joint venture,
         governmental authority or other entity of whatever nature.

                           (z)      "Pro-Rata Bonus" shall have the meaning set
         forth in Section 7(d).


                           (aa)     "Release" shall have the meaning set forth
         in Section 7(b).


                           (bb)     "Retention Option Gain" with respect to any
         specified period of time shall mean the product of (i) the number of
         shares of Common Stock purchased upon the exercise of any Retention
         Options during such period and (ii) the excess of (A) the fair market
         value per share of Common Stock as of the date of such exercise over
         (B) the exercise price per share of Common Stock subject to such
         Retention Options.

                           (cc)     "Retention Options" shall have the meaning
         set forth in Section 5(c).


                           (dd)     "Retention RSU Gain" with respect to any
         specified period of time shall mean the product of (i) the number of
         shares of Common Stock subject to Retention RSUs that first become
         vested during such period and (ii) the fair market value per share of
         Common Stock as of the date such Retention RSUs first become vested.

                           (ee)     "Retention RSUs" shall have the meaning set
         forth in Section 5(d).

                           (ff)     "Stock Incentive Plan" shall mean the
         Company's 2000 Stock Incentive Plan, as amended from time to time.


                           (gg)     "Target Bonus" shall have the meaning set
         forth in Section 5(b).


                           (hh)     "Term" shall have the meaning set forth in
         Section 2.


                           (ii)     "Voting Stock" means all capital stock of
         the Company which by its terms may be voted on all matters submitted to
         stockholders of the Company generally.

                  2.       Employment. The Company shall employ the Executive
and the Executive shall continue in the employ of the Company, for the period
set forth in this Section 2, in the positions set forth in the first sentence of
Section 3 and upon the other terms and conditions herein provided. The initial
term of employment under this Agreement (the "Initial Term") shall be for the
period beginning on the Effective Date and ending on July 1, 2008, unless
earlier terminated as provided in Section 6. The Initial Term shall
automatically be extended for successive one-year periods (each, an "Extension
Term") unless either party hereto gives written notice of non-extension to the
other no later than 180 days prior to the scheduled

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expiration of the Initial Term or the then applicable Extension Term (the
Initial Term and any Extension Term shall be collectively referred to hereunder
as the "Term").

                  3.       Position and Duties. The Executive shall serve as
Chairman and Chief Executive Officer of the Company, reporting to the Board,
with such responsibilities, duties and authority as are customary for such role.
The Executive shall also be nominated for a seat on the Board. The Executive
shall devote all necessary business time and attention, and employ his
reasonable best efforts, toward the fulfillment and execution of all assigned
duties, and the satisfaction of defined annual and/or longer-term performance
criteria. Notwithstanding the foregoing, the Executive may manage his personal
investments, be involved in charitable and professional activities (including
serving on charitable and professional boards), and, with the consent of the
Board, serve on for profit boards of directors and advisory committees so long
as such service does not materially interfere with Executive's obligations
hereunder or violate Section 9 hereof.

                  4.       Place of Performance. In connection with his
employment during the Term, the Executive shall be based at the Company's
offices in New York, New York, except for necessary travel on the Company's
business.

                  5.       Compensation and Related Matters

                           (a)      Annual Base Salary. At the commencement of
         the Term, the Executive shall receive a base salary at a rate of
         $811,000 per annum (the "Annual Base Salary"), paid in accordance with
         the Company's general payroll practices for executives, but no less
         frequently than monthly. No less frequently than annually during the
         Term, the Board and the Committee shall review the rate of Annual Base
         Salary payable to the Executive, and may, in their discretion, increase
         the rate of Annual Base Salary payable hereunder; provided, however,
         that any increased rate shall thereafter be the rate of "Annual Base
         Salary" hereunder.

                           (b)      Bonus. Except as otherwise provided for
         herein, with respect to each Contract Year on which the Executive is
         employed hereunder on the last day, the Executive shall be eligible to
         receive a bonus (the "Bonus"), as determined pursuant to the Coach,
         Inc. Performance-Based Annual Incentive Plan or another "qualified
         performance-based compensation" bonus plan that has been approved by
         the stockholders of the Company in accordance with the provisions for
         such approval under Code Section 162(m) and the regulations promulgated
         thereunder (collectively, the "Bonus Plan"), and on the basis of the
         Executive's or the Company's attainment of objective financial or other
         operating criteria established by the Committee in its sole discretion
         and in accordance with Code Section 162(m) and the regulations
         promulgated thereunder. With respect to each Contract Year (i) the
         Executive shall be eligible to receive a maximum Bonus (the "Maximum
         Bonus") in an amount equal to at least 150% of his Annual Base Salary
         and (ii) the Executive's target-level Bonus (the "Target Bonus") shall
         be equal to 75% of the amount of the Maximum Bonus. In addition, the
         Executive shall be eligible to participate in any other bonus plan or
         program that may be established by the Committee and that covers the
         Executive (even if such plan or program does not provide for qualified
         performance-based bonuses within the meaning of Code Section 162(m)).

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                           (c)      Stock Options

                                    (i)      During the Term, the Executive
                  shall be eligible to be granted Options at such time(s) and in
                  such amount(s) as may be determined by the Committee in its
                  sole discretion; provided, that the Executive shall be granted
                  such Options in accordance with the Company's customary past
                  practice unless the Committee determines in its good faith
                  discretion that the amount or timing of such Option grants
                  shall be revised based upon the Executive's performance.

                                    (ii)     In addition to any Options granted
                  in accordance with subsection (i), as of July 1, 2003 the
                  Executive shall be granted a non-qualified stock option (the
                  "Retention Options") to purchase 222,222 shares of Common
                  Stock, pursuant to the terms and conditions of the Stock
                  Incentive Plan and a written Retention Stock Option Agreement
                  to be entered into by and between the Company and Executive as
                  of the date hereof in substantially the form attached hereto
                  as Exhibit A. The Retention Options shall have an exercise
                  price equal to the fair market value per share of Common Stock
                  as of July 1, 2003 and shall have a term of 10 years. The
                  Retention Options shall become exercisable in two cumulative
                  installments as follows: (A) the first installment shall
                  consist of 30% of the shares of Common Stock covered by the
                  Retention Options and shall become vested and exercisable on
                  July 1, 2007 and (B) the second installment shall consist of
                  70% of the shares of Common Stock covered by the Retention
                  Options and shall become exercisable on July 1, 2008;
                  provided, that, except as otherwise provided in Section 7 or
                  in the Retention Stock Option Agreement, no portion of the
                  Retention Options not then exercisable shall become
                  exercisable following the Executive's termination of
                  employment for any reason. In the event of the Executive's
                  termination of employment for any reason other than for Cause,
                  the Retention Options to the extent then exercisable shall
                  remain exercisable until the earlier of (x) the date provided
                  in the Retention Stock Option Agreement or (y) July 1, 2013.
                  The Company and the Executive acknowledge and agree that the
                  Retention Options shall not provide for the grant of any
                  "Restoration Options" as defined in the Stock Incentive Plan.


                           (d)      Restricted Stock Units

                                    (i)      During the Term, the Executive
                  shall be eligible to be awarded Restricted Stock Units
                  ("RSUs") and other equity compensation awards pursuant to the
                  Stock Incentive Plan (or any other equity based compensation
                  plan that may be adopted by the Company from time to time), at
                  such time(s) and in such amount(s) as may be determined by the
                  Committee in its sole discretion.

                                    (ii)     In addition to any RSUs awarded in
                  accordance with subsection (i), as of July 1, 2003 the
                  Executive shall be awarded that number of RSUs that, as of
                  July 1, 2003, have a projected aggregate value equal to
                  $3,333,333 (assuming the market value per share of Common
                  Stock is exactly $30 greater on July 1, 2008 than on July 1,
                  2003) (the "Retention RSUs"), pursuant to the terms and
                  conditions of the Stock Incentive Plan and a written

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                  Retention RSU Agreement to be entered into by and between the
                  Company and Executive as of the date hereof in substantially
                  the form attached hereto as Exhibit B. The Retention RSUs
                  shall become vested with respect to 30% of the Retention RSUs
                  on July 1, 2007 and with respect to 70% of RSUs on July 1,
                  2008; provided, that, except as otherwise provided in Section
                  7 or in the Retention RSU Agreement, no Retention RSUs not
                  then vested shall become vested following the Executive's
                  termination of employment.

                           (e)      Benefits. The Executive shall be entitled to
         receive such benefits and to participate in such employee group benefit
         plans, including life, health and disability insurance policies, as are
         generally provided by the Company to its senior executives in
         accordance with the plans, practices and programs of the Company.

                           (f)      Expenses. The Company shall reimburse the
         Executive for all reasonable and necessary expenses incurred by the
         Executive in connection with the performance of the Executive's duties
         as an employee of the Company. Such reimbursement is subject to the
         submission to the Company by the Executive of appropriate documentation
         and/or vouchers in accordance with the customary procedures of the
         Company for expense reimbursement, as such procedures may be revised by
         the Company from time to time.

                           (g)      Vacations. The Executive shall be entitled
         to paid vacation in accordance with the Company's vacation policy as in
         effect from time to time. However, in no event shall the Executive be
         entitled to less than four weeks vacation per Contract Year. The
         Executive shall also be entitled to paid holidays and personal days in
         accordance with the Company's practice with respect to same as in
         effect from time to time (but in no event shall the Executive be
         entitled to fewer than two personal days per Contract Year).

                           (h)      Automobile. During the Term, the Company
         shall provide the Executive with a Company-leased automobile in
         accordance with the Company's applicable policies and procedures.

                           (i)      Retirement Eligibility. The Company
         acknowledges and agrees that, as of the Effective Date, the Executive
         shall have attained at least age 55 and been credited with at least 10
         years of service under the applicable retirement plans of the Company
         (and its predecessor) and that the Executive shall be eligible for
         retirement ("Retirement") under such retirement plans upon any
         voluntary departure by the Executive from employment with the Company
         following the Effective Date and shall be treated as retired for
         purposes of all benefit and equity plans and programs (other than for
         purposes of the Retention Options and Retention RSUs (unless otherwise
         provided in the Retention Stock Option Agreement or Retention RSU
         Agreement)). This Agreement shall not impair any rights that the
         Executive may have with respect to the treatment of any Options or RSUs
         upon the Executive's Retirement under any Option or RSU agreement or
         other retirement arrangement entered into prior to the Effective Date.

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                  6.       Termination. The Executive's employment hereunder may
be terminated by the Company, on the one hand, or the Executive, on the other
hand, as applicable, without any breach of this Agreement only under the
following circumstances:

                           (a)      Terminations

                                    (i)      Death. The Executive's employment
                  hereunder shall terminate upon his death.


                                    (ii)     Disability. In the event of the
                  Executive's Disability, the Company may give the Executive
                  written notice of its intention to terminate the Executive's
                  employment. In such event, the Executive's employment with the
                  Company shall terminate effective on the 14th day after
                  delivery of such notice, provided that within the 14 days
                  after such delivery, the Executive shall not have returned to
                  full-time performance of his duties.

                                    (iii)    Cause. The Board may, with the
                  approval of two-thirds of the Continuing Directors after a
                  meeting (of which the Executive is provided with at least 10
                  days prior written notice of the intent of the meeting and the
                  specifics of the grounds for Cause termination being alleged)
                  at which the Executive has been given an opportunity to appear
                  with counsel, terminate the Executive's employment hereunder
                  for Cause; provided, however, that, notwithstanding the
                  foregoing, if (A) the Board terminates the Executive's
                  employment for Cause pursuant to Section 1(e)(iii) and (B) the
                  Executive (i) is not indicted for, or otherwise charged by any
                  court or other governmental or regulatory authority with, any
                  felony or any other crime involving fraud, embezzlement,
                  material misconduct or misappropriation having a material
                  adverse impact on the Company (which felony or other crime was
                  the reason for such termination) within 18 months following
                  the date of his termination of employment, or (ii) is not
                  convicted of, does not plea no contest to, and does not
                  receive unadjudicated probation for, any felony (or any other
                  crime involving fraud, embezzlement, material misconduct or
                  misappropriation having a material adverse impact on the
                  Company) (which felony or other crime was the reason for such
                  termination), then the Executive's termination of employment
                  will be deemed to be without Cause and the Executive shall
                  retroactively be eligible for severance payments to the extent
                  provided by Section 7(b).

                                    (iv)     Good Reason. The Executive may
                  terminate his employment for Good Reason (whether or not due
                  to his Retirement).

                                    (v)      Without Cause. The Company may
                  terminate the Executive's employment hereunder without Cause.
                  A notice by the Company of non-extension of the Term shall be
                  treated as a termination without Cause as of the last day of
                  the Term.

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                                    (vi)     Resignation without Good Reason.
                  The Executive may resign his employment without Good Reason
                  (whether or not due to his Retirement) upon 180 days written
                  notice to the Company.

                           (b)      Notice of Termination. Any termination of
         the Executive's employment by the Company or by the Executive under
         this Section 6 (other than termination pursuant to paragraph (a)(i))
         shall be communicated by a written notice to the other party hereto
         indicating the specific termination provision in this Agreement relied
         upon, setting forth in reasonable detail any facts and circumstances
         claimed to provide a basis for termination of the Executive's
         employment under the provision so indicated, and specifying a Date of
         Termination which, except in the case of termination for Cause or
         Disability, shall be at least thirty days (or such longer period
         provided by Section 6(a)(vi)) following the date of such notice (a
         "Notice of Termination"); provided, the Company may pay out such notice
         period instead of employing the Executive.

                  7.       Severance Payments and Benefits

                           (a)      Termination for any Reason. In the event the
         Executive's employment with the Company is terminated for any reason,
         the Company shall pay the Executive (or his beneficiary in the event of
         his death) any unpaid Annual Base Salary that has accrued as of the
         Date of Termination, any unreimbursed expenses due to the Executive and
         an amount for any accrued but unused vacation days and any earned but
         unpaid bonus for any fiscal year of the Company completed prior to the
         date of such termination. The Executive shall also be entitled to
         accrued, vested benefits under the Company's benefit plans and programs
         as provided therein. The Executive shall be entitled to the cash
         severance payments described below only as set forth herein and the
         provisions of this Section 7 shall supersede in their entirety any
         severance payment provisions in any severance plan, policy, program or
         arrangement maintained by the Company.

                           (b)      Terminations without Cause or for Good
         Reason. Except as otherwise provided by Section 7(c) with respect to
         certain terminations of employment in connection with a Change in
         Control, if the Executive's employment shall terminate without Cause
         (pursuant to Section 6(a)(v)), or for Good Reason (pursuant to Section
         6(a)(iv)), the Company shall (subject to the Executive's entering into
         a Separation and Release Agreement with the Company in substantially
         the form attached hereto as Exhibit C (the "Release")):

                                    (i)      Pay to the Executive an amount
                  equal to the product of (A) the sum of his then current (i)
                  Annual Base Salary and (ii) Target Bonus for the year of
                  termination, and (B) two; payable in equal monthly
                  installments during the period beginning on the Date of
                  Termination and ending on the second anniversary thereof;
                  provided, however, that no amount shall be payable pursuant to
                  this Section 7(b)(i) on or following the date the Executive
                  first (i) violates any of the covenants set forth in Section
                  9(a) or 9(b), or (ii) materially violates any of the covenants
                  set forth in Section 9(c), 9(e) or 9(f);

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                                    (ii)     Continue to provide the Executive
                  with all health and welfare benefits and perquisites which he
                  was participating in or receiving as of the Date of
                  Termination until the earlier of (A) the second anniversary of
                  the Date of Termination or (B) the date the Executive first
                  (i) violates any of the covenants set forth in Section 9(a) or
                  9(b), or (ii) materially violates any of the covenants set
                  forth in Section 9(c), 9(e) or 9(f). If such benefits cannot
                  be provided under the Company's programs, such benefits and
                  perquisites will be provided on an individual basis to the
                  Executive such that his after-tax costs will be no greater
                  than the costs for such benefits and perquisites under the
                  Company's programs;

                                    (iii)    Notwithstanding any provision to
                  the contrary in any Option or RSU agreement, cause all (A)
                  Retention RSUs and Retention Options not vested or exercisable
                  as of the Date of Termination to remain or become vested and
                  remain exercisable in accordance with the terms and conditions
                  of the applicable Retention Option or Retention RSU agreement
                  and (B) except as otherwise provided by Section 7(f) with
                  respect to certain terminations of employment due to the
                  Executive's Retirement, Options and RSUs (other than the
                  Retention Options and the Retention RSUs) then held by the
                  Executive to continue to become vested and exercisable in
                  accordance with their terms as if the Executive had remained
                  employed by the Company until the second anniversary of the
                  Date of Termination (and all Options and RSUs (other than the
                  Retention Options and the Retention RSUs) that do not become
                  vested and exercisable on or prior to the second anniversary
                  of the Date of Termination shall thereupon be forfeited);

                                    (iv)     Pay to the Executive a Pro-Rata
                  Bonus, as defined in Section 7(d), when bonuses are paid for
                  the year of termination based on actual results and the
                  relative portion of the fiscal year during which the Executive
                  was employed.

                           (c)      Certain Terminations in connection with a
         Change in Control. If the Executive's employment shall terminate
         without Cause (pursuant to Section 6(a)(v)) or for Good Reason
         (pursuant to Section 6(a)(iv)) within six months prior to a Change in
         Control or during the 12 month period immediately following such Change
         in Control, the Company shall (subject to the receipt of the Release):

                                    (i)      Pay to the Executive an amount
                  equal to the product of (A) the sum of his then current (i)
                  Annual Base Salary and (ii) Target Bonus for the year of
                  termination, and (B) two; payable in equal monthly
                  installments during the period beginning on the Date of
                  Termination and ending on the second anniversary thereafter;
                  provided, however, that no amount shall be payable pursuant to
                  this Section 7(c)(i) on or following the date the Executive
                  first (i) violates any of the covenants set forth in Section
                  9(a) or 9(b), or (ii) materially violates any of the covenants
                  set forth in Section 9(c), 9(e) or 9(f);

                                    (ii)     Continue to provide the Executive
                  with all health and welfare benefits and perquisites which he
                  was participating in or receiving as of

                                       11

<PAGE>

                  the Date of Termination until the earlier of (A) the second
                  anniversary of the Date of Termination or (B) the date the
                  Executive first (i) violates any of the covenants set forth in
                  Section 9(a) or 9(b), or (ii) materially violates any of the
                  covenants set forth in Section 9(c), 9(e) or 9(f). If such
                  benefits cannot be provided under the Company's programs, such
                  benefits and perquisites will be provided on an individual
                  basis to the Executive such that his after-tax costs will be
                  no greater than the costs for such benefits and perquisites
                  under the Company's programs;

                                    (iii)    Notwithstanding any provision to
                  the contrary in any Option or RSU agreement, cause all Options
                  (including without limitation the Retention Options), RSUs
                  (including without limitation the Retention RSUs) and other
                  equity based compensation awards then held by the Executive to
                  become fully vested and exercisable with respect to all shares
                  subject thereto effective immediately prior to the Date of
                  Termination and all Options shall remain exercisable for the
                  remainder of the 10 year term;

                                    (iv)     Pay Executive a Pro-Rata Bonus, as
                  defined in Section 7(d), within 10 days following the date of
                  such termination.

                           (d)      Termination by Reason of Disability or
         Death. If the Executive's employment shall terminate by reason of his
         Disability (pursuant to Section 6(a)(ii)) or death (pursuant to Section
         6(a)(i)), then (i) the Company shall pay to the Executive (or
         Executive's estate) a pro-rated amount of the Executive's Target Bonus
         for the Contract Year in which the Date of Termination occurs (the
         "Pro-Rata Bonus"); (ii) all Retention Options and Retention RSUs not
         vested or exercisable as of the Date of Termination shall thereupon be
         forfeited; provided, that in the alternative the Committee may, in its
         sole discretion, cause all or any portion of any Retention Options or
         Retention RSUs then held by the Executive to become vested and
         exercisable effective as of the Date of Termination; and (iii) all
         Options and RSUs (other than Retention Options and the Retention RSUs)
         then held by the Executive shall be or become vested and shall remain
         exercisable in accordance with the terms of the applicable Option or
         RSU agreement.

                           (e)      Termination for Cause or without Good
         Reason. If the Executive's employment shall terminate by reason of his
         voluntary resignation without Good Reason (pursuant to Section
         6(a)(vi)) or by the Company for Cause (pursuant to Section 6(a)(iii)),
         then (i) notwithstanding any provision to the contrary in any Option or
         RSU agreement, all Retention RSUs and Retention Options not vested or
         exercisable as of the Date of Termination shall thereupon be forfeited
         and (ii) except as otherwise provided by Section 7(f) with respect to
         certain terminations of employment due to the Executive's Retirement,
         all Options and RSUs (other than the Retention Options and the
         Retention RSUs) or other equity based compensation awards not vested or
         exercisable as of the Date of Termination shall thereupon be forfeited
         and, except as set forth in Section 7(a), the Company shall have no
         further obligations to the Executive.

                           (f)      Retirement. Notwithstanding any provision of
         this Agreement to the contrary, if the Executive's employment shall be
         terminated due to his Retirement (whether such termination is with or
         without Good Reason), then (i) notwithstanding any

                                       12

<PAGE>

         provision to the contrary in any Option or RSU agreement(s), all
         Retention RSUs and Retention Options not vested or exercisable as of
         the Date of Termination shall thereupon be forfeited; (ii) all Options
         (other than the Retention Options) then held by the Executive will vest
         and expire in accordance with the terms set forth in the applicable
         Option agreement; and (iii) all RSUs (other than the Retention RSUs)
         then held by the Executive shall vest (and shares underlying such RSUs
         shall be distributed to the Executive) in accordance with the terms set
         forth in the applicable RSU agreement.

                           (g)      Survival. The expiration or termination of
         the Term shall not impair the rights or obligations of any party hereto
         which shall have accrued hereunder prior to such expiration.

                           (h)      No Mitigation. The Executive shall have no
         obligation to mitigate any payments due hereunder. Any amounts earned
         by the Executive from other employment shall not offset amounts due
         hereunder, except as provided in this Section 7.

                  8.       Parachute Payments.


                           (a)      If it is determined by a nationally
         recognized United States public accounting firm selected by the Company
         and approved in writing by the Executive (which approval shall not be
         unreasonably withheld) (the "Auditors") that any payment or benefit
         made or provided to the Executive in connection with this Agreement or
         otherwise (including without limitation any Option or RSU vesting)
         (collectively, a "Payment"), would be subject to the excise tax imposed
         by Section 4999 of the Code (the "Parachute Tax"), then the Company
         shall pay to the Executive, prior to the time the Parachute Tax is
         payable with respect to such Payment, an additional payment (a
         "Gross-Up Payment") in an amount such that, after payment by the
         Executive of all taxes (including any Parachute Tax) imposed upon the
         Gross-Up Payment, the Executive retains an amount of the Gross-Up
         Payment equal to the Parachute Tax imposed upon the Payment. The amount
         of any Gross-Up Payment shall be determined by the Auditors, subject to
         adjustment, as necessary, as a result of any Internal Revenue Service
         position. For purposes of making the calculations required by this
         Agreement, the Auditors may make reasonable assumptions and
         approximations concerning applicable taxes and may rely on reasonable,
         good faith interpretations concerning the application of Sections 280G
         and 4999 of the Code, provided that the Auditors' determinations must
         be made with substantial authority (within the meaning of Section 6662
         of the Code).

                           (b)      The federal tax returns filed by the
         Executive (and any filing made by a consolidated tax group which
         includes the Company) shall be prepared and filed on a basis consistent
         with the determination of the Auditors with respect to the Parachute
         Tax payable by the Executive. The Executive shall make proper payment
         of the amount of any Parachute Tax, and at the request of the Company,
         provide to the Company true and correct copies (with any amendments) of
         his federal income tax return as filed with the Internal Revenue
         Service, and such other documents reasonably requested by the Company,
         evidencing such payment. If, after the Company's payment to the
         Executive of the Gross-Up Payment, the Auditors determine in good faith
         that the amount of the Gross-Up Payment should be reduced or increased,
         or such determination is made by the

                                       13

<PAGE>

         Internal Revenue Service, then within ten business days of such
         determination, the Executive shall pay to the Company the amount of any
         such reduction, or the Company shall pay to the Executive the amount of
         any such increase; provided, however, that in no event shall the
         Executive have any such refund obligation if it is determined by the
         Company that to do so would be a violation of the Sarbanes-Oxley Act of
         2002, as it may be amended from time to time; and provided, further,
         that if the Executive has prior thereto paid such amounts to the
         Internal Revenue Service, such refund shall be due only to the extent
         that a refund of such amount is received by the Executive; and
         provided, further, that (i) the fees and expenses of the Auditors (and
         any other legal and accounting fees) incurred for services rendered in
         connection with the Auditor's determination of the Parachute Tax or any
         challenge by the Internal Revenue Service or other taxing authority
         relating to such determination shall be paid by the Company and (ii)
         the Company shall indemnify and hold the Executive harmless on an
         after-tax basis for any interest and penalties imposed upon the
         Executive to the extent that such interest and penalties are related to
         the Auditor's determination of the Parachute Tax or the Gross-Up
         Payment. Notwithstanding anything to the contrary herein, the
         Executive's rights under this Section 8 shall survive the termination
         of his employment for any reason and the termination or expiration of
         this Agreement for any reason.

                  9.       Certain Restrictive Covenants

                           (a)      The Executive shall not, at any time during
         the Term or during the 24-month period following the Date of
         Termination (the "Restricted Period") directly or indirectly engage in,
         have any equity interest in, or manage or operate any (i) Competitive
         Business, (ii) new luxury accessories business that competes directly
         with the existing or planned product lines of the Company or (iii)
         business with respect to which Reed Krakoff is a designer or marketer
         (or with respect to which Reed Krakoff otherwise performs similar
         duties to those he performs for the Company); provided, however, that
         the Executive shall be permitted to acquire a passive stock or equity
         interest in such a business provided the stock or other equity interest
         acquired is not more than five percent (5%) of the outstanding interest
         in such business; and, provided, further, that this Section 9(a) shall
         not apply in the event that, prior to July 1, 2007 (A) the Executive's
         employment is terminated by reason of his voluntary resignation without
         Good Reason (pursuant to Section 6(a)(vi)), (B) the Executive's
         employment is terminated by the Company without Cause (pursuant to
         Section 6(a)(v)) or (C) the Executive's employment is terminated by the
         Executive for Good Reason (pursuant to Section 6(a)(iv)) and, in
         connection with such termination, the Executive agrees in writing to
         waive his right to receive all payments and benefits that he would
         otherwise be entitled to receive pursuant to Section 7(b) or 7(c), as
         applicable.

                           (b)      During the Restricted Period, the Executive
         will not, directly or indirectly recruit or otherwise solicit or induce
         any employee, director, consultant, wholesale customer, vendor,
         supplier, lessor or lessee of the Company to terminate its employment
         or arrangement with the Company, otherwise change its relationship with
         the Company, or establish any relationship with the Executive or any of
         his Affiliates for any business purpose.

                                       14

<PAGE>


                           (c)      Except as required in the good faith opinion
         of the Executive in connection with the performance of the Executive's
         duties hereunder or as specifically set forth in this Section 9(c), the
         Executive shall, in perpetuity, maintain in confidence and shall not
         directly, indirectly or otherwise, use, disseminate, disclose or
         publish, or use for his benefit or the benefit of any person, firm,
         corporation or other entity any confidential or proprietary information
         or trade secrets of or relating to the Company, including, without
         limitation, information with respect to the Company's operations,
         processes, products, inventions, business practices, finances,
         principals, vendors, suppliers, customers, potential customers,
         marketing methods, costs, prices, contractual relationships, regulatory
         status, business plans, designs, marketing or other business
         strategies, compensation paid to employees or other terms of
         employment, or deliver to any person, firm, corporation or other entity
         any document, record, notebook, computer program or similar repository
         of or containing any such confidential or proprietary information or
         trade secrets. The parties hereby stipulate and agree that as between
         them the foregoing matters are important, material and confidential
         proprietary information and trade secrets and affect the successful
         conduct of the businesses of the Company (and any successor or assignee
         of the Company). Upon termination of the Executive's employment with
         the Company for any reason, the Executive will promptly deliver to the
         Company all correspondence, drawings, manuals, letters, notes,
         notebooks, reports, programs, plans, proposals, financial documents, or
         any other documents concerning the Company's customers, business plans,
         designs, marketing or other business strategies, products or processes,
         provided that the Executive may retain his rolodex, address book and
         similar information and any non-proprietary documents he received as a
         director.

                           (d)      Notwithstanding Section 9(c), the Executive
         may respond to a lawful and valid subpoena or other legal process or
         other government or regulatory inquiry but shall give the Company
         prompt notice thereof (except to the extent legally prohibited), and
         shall, as much in advance of the return date as is reasonably
         practicable, make available to the Company and its counsel copies of
         any documents sought which are in the Executive's possession or to
         which the Executive otherwise has reasonable access. In addition, the
         Executive shall reasonably cooperate with and assist the Company and
         its counsel at any time and in any manner reasonably requested by the
         Company or its counsel (with due regard for the Executive's other
         commitments if he is not employed by the Company) in connection with
         any litigation or other legal process affecting the Company of which
         the Executive has knowledge as a result of his employment with the
         Company (other than any litigation with respect to this Agreement). In
         the event of such requested cooperation, the Company shall reimburse
         the Executive's reasonable out of pocket expenses.

                           (e)      The Executive shall not disparage the
         Company, any of its products or practices, or any of its directors,
         officers, agents, representatives, or employees, either orally or in
         writing, at any time. The Company (including without limitation its
         directors) shall not disparage the Executive, either orally or in
         writing, at any time. Notwithstanding the foregoing, nothing in this
         Section 9(e) shall limit the ability of the Company or the Executive,
         as applicable, to provide truthful testimony as required by law or any
         judicial or administrative process.

                                       15



<PAGE>

                           (f)      The Executive agrees that all strategies,
         methods, processes, techniques, marketing plans, merchandising schemes,
         themes, layouts, mechanicals, trade secrets, copyrights, trademarks,
         patents, ideas, specifications and other material or work product
         ("Intellectual Property") that the Executive creates, develops or
         assembles in connection with his employment hereunder shall become the
         permanent and exclusive property of the Company to be used in any
         manner it sees fit, in its sole discretion. The Executive shall not
         communicate to the Company any ideas, concepts, or other intellectual
         property of any kind (other than in his capacity as an officer of the
         Company) which (i) were earlier communicated to the Executive in
         confidence by any third party as proprietary information, or (ii) the
         Executive knows or has reason to know is the proprietary information of
         any third party. Further, the Executive shall adhere to and comply with
         the Company's Global Business Integrity Program Guide. All Intellectual
         Property created or assembled in connection with the Executive's
         employment hereunder shall be the permanent and exclusive property of
         the Company. The Company and the Executive mutually agree that all
         Intellectual Property and work product created in connection with this
         agreement, which is subject to copyright, shall be deemed to be "work
         made for hire," and that all rights to copyrights shall be vested in
         the Company. If for any reason the Company cannot be deemed to have
         commissioned "work made for hire," and its rights to copyright are
         thereby in doubt, then the Executive agrees not to claim to be the
         proprietor of the work prepared for the Company, and to irrevocably
         assign to the Company, at the Company's expense, all rights in the
         copyright of the work prepared for the Company.

                           (g)      As used in this Section 9, the term
         "Company" shall include the Company and any of its Affiliates or direct
         or indirect subsidiaries.

                           (h)      The Company and the Executive expressly
         acknowledge and agree that the agreements and covenants contained in
         this Section 9 are reasonable. In the event, however, that any
         agreement or covenant contained in this Section 9 shall be determined
         by any court of competent jurisdiction to be unenforceable by reason of
         its extending for too great a period of time or over too great a
         geographical area or by reason of its being too extensive in any other
         respect, it will be interpreted to extend only over the maximum period
         of time for which it may be enforceable, and/or over the maximum
         geographical area as to which it may be enforceable and/or to the
         maximum extent in all other respects as to which it may be enforceable,
         all as determined by such court in such action.

                  10.      Specific Performance. It is recognized and
acknowledged by the Executive that a breach of the covenants contained in
Section 9 will cause irreparable damage to the Company and its goodwill (or to
the Executive, as the case may be), the exact amount of which will be difficult
or impossible to ascertain, and that the remedies at law for any such breach
will be inadequate. Accordingly, the parties agree that in the event a party
breaches any covenant contained in Section 9, in addition to any other remedy
which may be available at law or in equity (or pursuant to Section 11 of this
Agreement or under any other agreement between the Company and the Executive),
the other party will be entitled to specific performance and injunctive relief.

                                       16

<PAGE>

                  11.      Claw-Backs

                           (a)      In the event that the Executive violates any
         of the covenants set forth in Section 9(a) or 9(b) or materially
         violates any of the covenants set forth in Section 9(c), 9(e) or 9(f),
         the Executive shall, in addition to any other remedy which may be
         available (i) at law or in equity, (ii) pursuant to Section 10 or (iii)
         pursuant to any applicable Option or RSU agreement, be required to pay
         to the Company an amount equal to all Financial Gain that the Executive
         has received during the 24-month period immediately preceding (or at
         any time after) the date that the Executive first breaches such
         covenant. In addition, all Retention Options that have not been
         exercised prior to the date that the Executive violates any of the
         covenants set forth in Section 9(a) or 9(b), or materially violates any
         of the covenants set forth in Section 9(c), 9(e), or 9(f) and all
         Retention RSUs that have not become vested prior to the date of such
         breach shall thereupon be forfeited.

                           (b)      If at any time during the Term the Executive
         willfully commits any act of fraud, embezzlement, misappropriation,
         material misconduct, or breach of fiduciary duty against the Company
         (or any predecessor thereto or successor thereof) having a material
         adverse impact on the Company, then (in addition to any remedy which
         may be available under any applicable Option or RSU agreement) the
         Executive shall be required to pay to the Company an amount equal to
         all Financial Gain that the Executive has received at any time
         following the date of such act. The Executive shall not be required to
         make any payments of Financial Gain pursuant to this Section 11(b) to
         the extent the Executive makes payments of such Financial Gain in
         connection with the same act pursuant to Section 11(a).

                  12.      Purchases and Sales of the Company's Securities. The
Executive agrees to use his reasonable best efforts to comply in all respects
with the Company's applicable written policies regarding the purchase and sale
of the Company's securities by employees, as such written policies may be
amended from time to time and disclosed to the Executive. In particular, and
without limitation, the Executive agrees that he shall not purchase or sell
Company securities (a) at any time that he possesses material non-public
information about the Company or any of its businesses; and (b) while an
employee during any "trading blackout period" as may be determined by the
Company and set forth in the Company's applicable written policies from time to
time.

                  13.      Indemnification. The Executive shall be entitled to
indemnification set forth in the Company's Charter to the maximum extent allowed
under the laws of the State of Maryland, and he shall be entitled to the
protection of any insurance policies the Company may elect to maintain generally
for the benefit of its directors and officers against all costs, charges and
expenses incurred or sustained by him in connection with any action, suit or
proceeding to which he may be made a party by reason of his being or having been
a director, officer or employee of the Company or any of its subsidiaries or his
serving or having served any other enterprise or benefit plan as a director,
officer, employee or fiduciary at the request of the Company (other than any
dispute, claim or controversy arising under or relating to this Agreement).
Notwithstanding anything to the contrary herein, the Executive's rights under
this

                                       17

<PAGE>

Section 13 shall survive the termination of his employment for any reason and
the expiration of this Agreement for any reason.

                  14.      Delegation and Assignment. The Executive shall not
delegate his employment obligations under this Agreement to any other person.
The Company may not assign any of its obligations hereunder other than to any
entity that acquires (by purchase, merger or otherwise) all or substantially all
of the Voting Stock or assets of the Company. In the event of the Executive's
death while he is receiving severance hereunder the remainder shall be paid to
his estate.

                  15.      Notices. Any written notice required by this
Agreement will be deemed provided and delivered to the intended recipient when
(a) delivered in person by hand; or (b) three days after being sent via U.S.
certified mail, return receipt requested; or (c) the day after being sent via by
overnight courier, in each case when such notice is properly addressed to the
following address and with all postage and similar fees having been paid in
advance:

                  If to the Company:       Coach, Inc.
                                           516 West 34th Street
                                           New York, New York 10001
                                           Atn: General Counsel

                  with a copy to:          Latham & Watkins LLP
                                           885 Third Avenue, Suite 1000
                                           New York, NY 10022
                                           Attn: Jed W. Brickner

                  If to the Executive:     to him at the most recent address in
                                           the Company's records.

Either party may change the address to which notices, requests, demands and
other communications to such party shall be delivered personally or mailed by
giving written notice to the other party in the manner described above.

                  16.      Legal Fees. The Company shall pay the Executive's
reasonable attorneys' fees and disbursements incurred by him in connection with
the negotiation of this Agreement.

                  17.      Binding Effect. This Agreement shall be for the
benefit of and binding upon the parties hereto and their respective heirs,
personal representatives, legal representatives, successors and, where
applicable, assigns.

                  18.      Entire Agreement. This Agreement constitutes the
entire agreement between the parties with respect to the subject matter
described in this Agreement and supersedes all prior agreements, understandings
and arrangements, both oral and written, between the parties with respect to
such subject matter; provided, however, that any written agreements between the
Executive and the Company concerning Options, RSUs or any other equity
compensation awards shall remain in full force and effect in accordance with
their terms. This Agreement may not be modified, amended, altered or rescinded
in any manner, except by written instrument signed by both of the parties
hereto; provided, however, that the waiver by either party of a breach or

                                       18

<PAGE>

compliance with any provision of this Agreement shall not operate nor be
construed as a waiver of any subsequent breach or compliance.

                  19.      Severability. In case any one or more of the
provisions of this Agreement shall be held by any court of competent
jurisdiction or any arbitrator selected in accordance with the terms hereof to
be illegal, invalid or unenforceable in any respect, such provision shall have
no force and effect, but such holding shall not affect the legality, validity or
enforceability of any other provision of this Agreement.

                  20.      Dispute Resolution and Arbitration. In the event that
any dispute arises between the Company and the Executive regarding or relating
to this Agreement and/or any aspect of the Executive's employment relationship
with the Company, AND IN LIEU OF LITIGATION AND A TRIAL BY JURY, the parties
consent to resolve such dispute through mandatory arbitration under the
Commercial Rules of the American Arbitration Association ("AAA"), before a
single arbitrator in New York, New York. The parties hereby consent to the entry
of judgment upon award rendered by the arbitrator in any court of competent
jurisdiction. Notwithstanding the foregoing, however, should adequate grounds
exist for seeking immediate injunctive or immediate equitable relief, any party
may seek and obtain such relief. The parties hereby consent to the exclusive
jurisdiction in the state and Federal courts of or in the State of New York for
purposes of seeking such injunctive or equitable relief as set forth above. Any
and all out-of-pocket costs and expenses incurred by the parties in connection
with such arbitration (including attorneys' fees) shall be allocated by the
arbitrator in substantial conformance with his or her decision on the merits of
the arbitration.

                  21.      Choice of Law. The Executive and the Company intend
and hereby acknowledge that jurisdiction over disputes with regard to this
Agreement, and over all aspects of the relationship between the parties hereto,
shall be governed by the laws of the State of New York without giving effect to
its rules governing conflicts of laws.

                  22.      Section Headings. The section headings contained in
this Agreement are for reference purposes only and shall not affect in any
manner the meaning or interpretation of this Agreement.

                  23.      Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original, but all of
which taken together shall constitute one and the same instrument.

                  24.      Force Majeure. Neither Company nor the Executive
shall be liable for any delay or failure in performance of any part of this
Agreement to the extent that such delay or failure is caused by an event beyond
its reasonable control including, but not be limited to, fire, flood, explosion,
war, strike, embargo, government requirement, acts of civil or military
authority, and acts of God not resulting from the negligence of the claiming
party.

                  25.      Right of Offset. The Company may offset any payment
to be made to the Executive pursuant to this Agreement by any amount that the
Executive owes to the Company (including without limitation any amount that the
Executive may be required to pay to the Company pursuant to Section 11) as of
the time such payment would otherwise be made. This

                                       19

<PAGE>

right of offset shall be cumulative (but not duplicative) with any similar
obligation with respect to which the Executive may be subject under any other
agreement with the Company. Notwithstanding the foregoing, no amount of (a)
Annual Base Salary or Bonus deferred by the Executive on or following the
Effective Date pursuant to any deferred compensation plan or arrangement
maintained by the Company, or (b) compensation deferred by the Executive prior
to the Effective Date pursuant to any deferred compensation plan or arrangement
maintained by the Company shall be subject to the Company's right of offset
described in this Section 25.

                  26.      Withholding. The Company shall be entitled to
withhold from any amounts payable under this Agreement any federal, state, local
or foreign withholding or other taxes or charges which the Company is required
to withhold. The Company shall be entitled to rely on an opinion of counsel if
any questions as to the amount or requirement of withholding shall arise.

                            [signature page follows]

                                       20

<PAGE>

                  IN WITNESS WHEREOF, the parties have executed this Agreement
on the date and year first above written.

                           COMPANY

                           By: _________________________________________________

                           Its: ________________________________________________

                           EXECUTIVE

                           _____________________________________________________
                           Lew Frankfort

                                       21