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                                  EXHIBIT 10.2
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                                                                  EXECUTION COPY


                           STOCK REPURCHASE AGREEMENT


         STOCK REPURCHASE AGREEMENT, dated as of July 11, 2001 (this
"AGREEMENT"), by and between PAXAR CORPORATION, a New York corporation (the
"COMPANY"), and ARTHUR HERSHAFT ("EXECUTIVE").

                                    RECITALS

         Concurrently with the execution and delivery of this Agreement,
Executive and the Company are entering into an Employment Agreement, which
provides for the terms and conditions of Executive's employment and
post-employment relationship with the Company. As of the date of this Agreement,
Executive owns or has the right to acquire by exercise of employee stock options
a total of 3,866,771 shares of the Company's Common Stock, $0.10 par value
("COMMON STOCK"). By entering into this Agreement, the Company desires to
preserve the market price of its Common Stock for the benefit of the Company's
shareholders by limiting Executive's ability to sell large blocks of Common
Stock in public markets. In addition, the Company will have the ability to use
shares of Common Stock purchased from Executive to issue to other employees
covered by the Company's Stock Option Plans, Stock Purchase Plan and other
stock-based plans that the Company may adopt in the future.

         NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein set forth, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:

1.       GENERAL RESTRICTIONS ON TRANSFER.

         1.1 RESTRICTION ON TRANSFER. During the Term of this Agreement (as set
forth in Section 9), Executive shall not sell, assign, transfer, pledge,
hypothecate, give away or in any other manner dispose of or encumber (any such
transaction being hereinafter referred to as a "TRANSFEr") any shares of Common
Stock that he now owns or hereafter acquires, unless:

         (i)      such transfer of Common Stock is permitted by and made in
                  accordance with the requirements of this Agreement; and

         (ii)     if applicable, the proposed recipient of such Common Stock
                  delivers to the Company a written acknowledgment that the
                  Common Stock to be received in such proposed transfer is
                  subject to this Agreement and that the proposed recipient and
                  his, her or its successors in interest are and will be bound
                  hereby.
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         1.2 NON-CONFORMING TRANSFERS VOID. Any purported transfer of Common
Stock other than in accordance with this Agreement shall be null and void and of
no effect, and the Company shall not recognize any such transfer in any respect
and shall not reflect on its stock transfer register any change in record
ownership of Common Stock pursuant to any such purported transfer.

         1.3 STOP TRANSFER ORDER AND RESTRICTIVE LEGEND. In order to effectuate
this Agreement, the Company shall place a stop transfer order on its stock
transfer register against shares of Common Stock owned by Executive, and each
certificate representing Executive's shares of Common Stock hereafter issued to
Executive or any transferee of Executive's Common Stock who becomes bound by
this Agreement (a "PERMITTED TRANSFEREE") shall bear a legend in substantially
the following form upon its face or its back:

                  The shares represented by this certificate are subject to and
                  transferable only in compliance with a Stock Repurchase
                  Agreement, dated as of July __, 2001, between the issuer and
                  the record owner, a copy of which is on file with the
                  Secretary of the issuer.

2.       OPTION.

         2.1 EXECUTIVE'S OPTION TO SELL. Subject to the limitations and
restrictions on transfer elsewhere in this Agreement, Executive shall have the
right and option (the "OPTION") to sell to the Company, and upon Executive's
exercise of the Option as herein provided, the Company shall purchase from
Executive, during any Rolling 12-Month Period (as hereinafter defined) during
the Term of this Agreement a number of shares of Common Stock equal to the sum
of (i) 400,000 shares plus (ii) that number of shares representing the excess of
(x) the total number of shares of Common Stock that Executive had the right to
sell to the Company pursuant to the exercise of his Option prior to the
commencement of the Rolling 12-Month Period applicable to such exercise over (y)
the number of shares of Common Stock Executive actually sold to the Company
pursuant to the Exercise of his Option during such period. For purposes of this
Agreement, a "ROLLING 12-MONTH PERIOD" shall mean (i) each period of twelve (12)
consecutive months during the Term of this Agreement, and (ii) each period
shorter than twelve (12) months commencing on the date hereof and ending on the
Exercise Date referred to in Section 2.5 or on the day before the beginning of
each Rolling 12-Month Period commencing after the first anniversary of this
Agreement. A new Rolling 12-Month Period shall begin on each day of the Term and
end on the day before the corresponding day of the next year.

         2.2 MINIMUM AND MAXIMUM PUT SHARES. Anything in Section 2.1 to the
contrary notwithstanding, the Company shall have no obligation to purchase any
shares of Common Stock from Executive upon his exercise of his Option to the
extent that:

         (i)      the number of shares that Executive desires to sell to the
                  Company upon exercise of his Option plus all other shares of
                  Common Stock that the Company purchased from Executive
                  pursuant to exercises of his Option during the Rolling
                  12-Month Period applicable to such exercise of his


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                  Option exceeds 800,000 shares of Common Stock; or

         (ii)     the number of shares that Executive desires to sell to the
                  Company upon exercise of his Option is less than 200,000
                  shares of Common Stock.

         2.3 ADJUSTMENTS TO SHARES SUBJECT TO THIS AGREEMENT. In case the
Company shall at any time after the date hereof (i) declare a dividend or make a
distribution on the outstanding Common Stock payable in shares of its capital
stock, (ii) subdivide the outstanding Common Stock, (iii) combine the
outstanding Common Stock into a smaller number of shares, or (iv) issue any
shares of its capital stock by reclassification of the Common Stock (other than
a change in par value, or from par value to no par value, or from no par value
to par value, but including any such reclassification in connection with the
consolidation or merger of the Company with or into another corporation (other
than a merger in which the Company is the continuing corporation and which does
not result in any reclassification or change of the then outstanding shares of
Common Stock or other capital stock that the Company is required to purchase
under this Agreement)), then, in each case, the number of shares of Common Stock
that the Company shall be required to purchase upon Executive's exercise of his
Option as well as the number of shares of Common Stock that Executive or his
Permitted Transferees (each, a "HOLDER") are permitted to transfer hereunder, at
the time of the record date for such dividend or at the effective date of such
subdivision, combination or reclassification, shall be proportionately adjusted
so that after such time each Holder shall be entitled to transfer the aggregate
number and kind of shares that, if such transfer had been effected immediately
prior to such time, such Holder would have transferred upon such exercise and
immediately thereafter been entitled to transfer by virtue of such dividend,
subdivision, combination or reclassification. Such adjustment shall be made
successively whenever any event listed above occurs.

         2.4 EFFECT OF REORGANIZATIONS. In case of any consolidation or merger
of the Company with or into another corporation (other than a merger or
consolidation in which the Company is the surviving or continuing corporation
and which does not result in any reclassification of the outstanding shares of
Common Stock or the conversion of such outstanding shares of Common Stock into
shares of other stock or other securities or property), or in case of any sale,
lease or conveyance to another corporation of the property and assets of any
nature of the Company as an entirety or substantially as an entirety (such
actions being hereinafter collectively referred to as "REORGANIZATIONS"), the
successor to the Company shall thereafter be obligated to purchase upon exercise
of Executive's Option and a Holder shall have the right to transfer (in lieu of
the number of shares of Common Stock theretofore required to be purchased or
permitted to be transferred) the kind and amount of shares of stock or other
securities or other property that was deliverable upon such Reorganization to a
holder of the number of shares of Common Stock before Executive's exercise of
his Option or upon a Holder's transfer. In case of any Reorganization,
appropriate adjustment, as determined in good faith by the Board of Directors of
the Company, shall be made in the application of the provisions herein set forth
with respect to the rights and interests of Executive and his Permitted
Transferees so that the provisions set forth herein shall thereafter be
applicable, as nearly as possible, in relation to any shares or other property
thereafter required to be purchased upon Executive's exercise of his Option or
permitted to be transferred by a Holder. Any such adjustment shall be made by
and set forth in a supplemental agreement between the Company, or


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any successor thereto as provided in Section 10.2, and Executive and his
Permitted Transferees, and shall for all purposes hereof conclusively be deemed
to be an appropriate adjustment. The Company shall not effect any such
Reorganization unless upon or prior to the consummation thereof the successor
corporation, or if the Company shall be the surviving corporation in any such
Reorganization and is not the issuer of the shares of stock or other securities
or property to be delivered to holders of shares of the Common Stock outstanding
at the effective time thereof, then such issuer, shall assume by written
instrument the obligation to purchase from Executive or any other person bound
by the terms of this Agreement such shares of stock, securities, or other
property as Executive or such other person shall be entitled to sell in
accordance with the terms of this Agreement. The above provisions of this
Section 2.4 shall similarly apply to successive reclassifications and changes of
shares of Common Stock and to successive consolidations, mergers, sales, leases,
or conveyances.

         2.5 EXERCISE OF OPTION. Executive may exercise his Option by delivering
to the Company at its office at 105 Corporate Park Drive, White Plains, New York
10604, or at such other place as the Company may designate in writing, prior to
5:00 p.m. local time on any day of a Window Period (as hereinafter defined)
occurring during the Term of this Agreement (the "EXERCISE DATE"), a completed
and signed "NOTICE OF EXERCISE" substantially in the form of EXHIBIT A hereto,
together with one or more certificates representing the number of shares of
Common Stock as to which Executive's Option is being exercised (the "PUT
SHARES") and one or more stock powers duly executed in blank with Executive's
signature medallion guaranteed. For purposes of this Agreement, the "WINDOW
PERIOD" shall be the period commencing on the third (3rd) trading day after the
public announcement of the Company's financial results for the preceding fiscal
quarter and ending at the close of business on the twelfth (12th) trading day
after such public announcement or such other period as the Company shall adopt
during which the Company's executive officers may purchase or sell shares of
Common Stock in public markets.

         2.6 PURCHASE PRICE AND EXERCISE PRICE. The aggregate "PURCHASE PRICE"
payable by the Corporation for the Put Shares shall be equal to (x) the number
of Put Shares, multiplied by (y) the Exercise Price. The "EXERCISE PRICE" shall
be equal to the average of the closing sale prices for the Common Stock (or
other security, as applicable) during the period of seven (7) trading days ended
on the trading day immediately preceding the Exercise Date. The closing sale
price for any security as of any date shall be the last closing trade price for
such security on the New York Stock Exchange as reported by Bloomberg, or, if
the New York Stock Exchange is not the principal securities exchange or trading
market for such security, the last closing trade price of such security on the
principal securities exchange or trading market where such security is listed or
traded as reported by Bloomberg, or if the foregoing do not apply, the last
closing trade price of such security in the over-the-counter market on the
electronic bulletin board for such security as reported by Bloomberg, or, if no
last closing trade price is reported for such security by Bloomberg, the last
closing bid price of such security as reported by Bloomberg, or, if no last
closing bid price is reported for such security by Bloomberg, the average of the
bid prices of any market makers for such security as reported in the "pink
sheets" by the National Quotation Bureau, Inc.

         2.7 PAYMENT OF PURCHASE PRICE. The Company shall pay the Purchase Price
to Executive by delivery of a certified or bank check in the amount of the
Purchase Price or by wire


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transfer of immediately available funds in the amount of the Purchase Price to
such account as Executive shall designate in writing, such delivery or wire
transfer to be made not later than the close of business on the third (3rd)
business day after the Exercise Date.

3.       LIMITATIONS ON THE COMPANY'S OBLIGATION TO PURCHASE PUT SHARES.

         3.1 LIMITATIONS ON PURCHASE OBLIGATION. Anything in Section 2 to the
contrary notwithstanding and subject to Sections 3.2 and 7.3 hereof, the Company
shall have no obligation to purchase any Put Shares from Executive under this
Agreement if, after giving effect to the purchase of such Put Shares:

         (i)      the total Purchase Price of such Put Shares, when added to the
                  total Purchase Price of all Put Shares purchased by the
                  Company during the preceding twelve (12) month period, would
                  exceed twenty-five percent (25%) of the Company's Cash Flow
                  (as hereinafter defined) for the four (4) consecutive fiscal
                  quarters of the Company ended immediately before the Exercise
                  Date; or

         (ii)     the purchase of such Put Shares would cause the Company to
                  violate any covenant or agreement to which it may then be
                  subject, including any covenant in any loan agreement; or

         (iii)    the purchase of such Put Shares would result in a violation by
                  the Company of Section 513 of the New York Business
                  Corporation Law (Purchase, Redemption and Certain other
                  Transactions by a Corporation With Respect To Its Own Shares).

For purposes of this Agreement, "CASH FLOW" means the Company's earnings before
interest, taxes, depreciation and amortization (EBITDA) minus the Company's
capital expenditures, in each case determined on a consolidated basis in
accordance with United States generally accepted accounting principles
consistently applied.

         3.2 OBLIGATIONS NOTWITHSTANDING LIMITATIONS. If the Company is not
obligated to purchase Put Shares due to the applicability of Section 3.1, the
Company shall continue to be obligated to purchase all Put Shares that it has
the ability to purchase without exceeding the limitations of Section 3.1,
without regard to the minimum number of shares required to be subject to the
exercise of any Option as provided in clause (ii) of Section 2.2.

4.       RIGHT OF FIRST REFUSAL.

         4.1 NOTICE OF BONA FIDE OFFER. If Executive receives a bona fide offer
to purchase any shares of Common Stock (a "BONA FIDE OFFER") and desires to sell
such shares pursuant to such Bona Fide Offer, Executive shall first deliver to
the Company at its office at 105 Corporate Park Drive, White Plains, New York
10604, or at such other place as the Company may designate in writing, a Notice
of Bona Fide Offer substantially in the form of EXHIBIT B hereto, accompanied by
a duplicate original of a written Bona Fide Offer setting forth the name of the


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proposed transferee and all other terms and conditions of the proposed transfer
and signed by the proposed transferee (who shall not be an affiliate (as defined
in Rule 405 of the Securities Act of 1933) of Executive or a relative of
Executive by blood or marriage). The Notice of Bona Fide Offer shall constitute
an offer to sell the shares of Common Stock subject to such Bona Fide Offer to
the Company on the same terms and conditions set forth in the Bona Fide Offer.
The Company shall have the right to accept Executive's offer to sell his shares
of Common Stock by delivery of a written Notice of Acceptance substantially in
the form of EXHIBIT C hereto to Executive not later than 5:00 p.m. on the third
(3rd) business day following delivery of the Notice of Bona Fide Offer. If the
Company accepts Executive's offer, Executive shall sell his shares to the
Company, and the Company shall purchase such shares from Executive, upon the
terms and conditions and at the price specified in the Bona Fide Offer.

         4.2 RIGHT TO SELL PURSUANT TO BONA FIDE OFFER. If the Company does not
deliver a Notice of Acceptance to Executive in accordance with Section 4.1 above
with respect to all Common Stock offered by Executive, Executive shall have the
right to sell all, but not less than all, of the shares of Common Stock offered
pursuant to the Notice of Bona Fide Offer to the third party designated in and
pursuant to the terms of the Bona Fide Offer for a period of ten (10) business
days after expiration of the Company's option to purchase such shares under
Subsection 4.1 (the "UNRESTRICTED PERIOD"), subject to compliance with all
federal and state securities laws. If Executive does not sell all of such shares
of Common Stock during the Unrestricted Period, then Executive's right to
transfer such Common Stock pursuant to the terms of the Bona Fide Offer shall
expire, and any subsequent proposed transfer of such shares Common Stock shall
again be subject to the obligations of this Agreement.

         4.3 SHARES SOLD NOT PUT SHARES. Shares of Common Stock offered and sold
to the Company or any third party pursuant to this Section 4 shall not be
considered Put Shares for purposes of this Agreement.

5.       SALE OF OPTION SHARES.

         Executive shall have the right to sell any shares of Common Stock that
Executive acquires or has the right to acquire during the Term of this Agreement
pursuant to the exercise of employee stock options granted by the Company to
Executive (such shares being referred to herein as "OPTION SHARES") in any
manner permitted by federal and state securities laws, including sales pursuant
to Rule 144 under the Securities Act of 1933 or pursuant to a resale prospectus
contained in an effective Registration Statement on Form S-8. Executive's right
to sell such Option Shares under this Section 5 shall be in addition to his
right to sell such Option Shares to the Company pursuant to the exercise of his
Option under Section 2. Option Shares that Executive sells in accordance with
this Section 5 shall not be considered Put Shares for purposes of this
Agreement.

6.       PLEDGE OF SHARES.

         6.1 RIGHT TO PLEDGE SHARES. Subject to this Section 6, Executive shall
have the right to pledge, hypothecate, encumber or otherwise grant a security
interest in (a "PLEDGE") up to 800,000 shares of Common Stock as collateral
security for a loan or loans by a financial


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institution (the "PLEDGEE"). Concurrently with any Pledge of Common Stock, the
Pledgee shall agree in writing to be bound by and to sell any shares of Common
Stock pledged to it (such shares being referred to herein as "PLEDGED SHARES")
only in accordance with this Agreement.

         6.2 SALE OF PLEDGED SHARES. The Pledgee shall give written notice to
the Company not later than five (5) business days prior to any sale of Pledged
Shares by the Pledgee or for Executive's account, which notice shall specify the
amount of the loan and any other obligations to be satisfied by a sale of the
Pledged Shares. Such notice shall constitute an offer by the Pledgee to sell all
or any part of such Pledged Shares to the Company for cash at the Exercise Price
on the date of the Pledgee's notice. The Company may accept such offer with
respect to all or any part of the shares so offered by giving the Pledgee a
notice of acceptance specifying the number of shares the Company will purchase
and the total purchase price thereof. Not later than three (3) business days
after receipt of such notice of acceptance, the Pledgee shall deliver one or
more certificates representing the Pledged Shares to be purchased by the Company
together with a stock power medallion guaranteed against delivery of a certified
or bank check in payment of the total purchase price thereof. The Pledgee shall
release such Pledged Shares from all other liens, claims and encumbrances of any
nature whatsoever in favor of the Pledgee and shall otherwise transfer such
Pledged Shares to the Company free of all liens, claims and encumbrances of any
nature whatsoever. If the Company does not purchase all Pledged Shares so
offered, the Pledgee shall have the right to sell any Pledged Shares offered to
the Company but not purchased by it to any person in any legal manner without
any further right or interest of the Company in or to such Pledged Shares.

         6.3 PLEDGED SHARES SOLD DEEMED PUT SHARES. Pledged Shares offered and
sold to the Company or to any other person by the Pledgee shall be deemed to be
Put Shares for purposes of this Agreement.

7.       SALES BY EXECUTIVE'S ESTATE AND ESTATE TRANSFEREES.

         7.1 TRANSFERS BY PERSONAL REPRESENTATIVES AFTER EXECUTIVE'S DEATH.
Except as otherwise provided in this Section 7, if Executive dies during the
Term of this Agreement, transfers of his shares of Common Stock by his personal
representatives and by any person who receives shares of Common Stock from his
estate (each, an "ESTATE TRANSFEREE") shall continue to be subject to the terms
of this Agreement.

         7.2 TRANSFEREES TO BE BOUND. Executive's personal representatives may
transfer shares of Common Stock to the Estate Transferees, provided that such
personal representatives and Estate Transferees of such shares satisfy the
following conditions:

                  (i) before or concurrently with submitting any shares of
         Common Stock to the Company's transfer agent for transfer upon the its
         stock transfer books, the personal representatives shall notify the
         Company of the number of shares to be transferred, the name and address
         of each Estate Transferee to whom such shares are to be transferred,
         the total number of shares that the personal representatives hold or
         have transferred from Executive's estate, and the percentage of all
         shares so held or transferred represented by the shares to be
         transferred to each such Estate Transferee; and


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                  (ii) as a condition to delivery of certificates representing
         the Common Stock to an Estate Transferee, such Estate Transferee shall
         agree in writing to be bound by the terms of this Agreement.


         7.3 MAXIMUM SHARES SUBJECT TO OPTION IN FIRST 12 MONTHS AFTER DEATH.
During the first twelve (12) months after Executive's death, Executive's
personal representatives shall have the right to sell up to a total of 800,000
shares of Common Stock to the Company pursuant to the exercise of the Option
under Section 2 hereof, and the limitation set forth in clause (i) of Section
3.1 shall not be effective to restrict such sales.

         7.4 COMPANY RIGHT OF FIRST OFFER. If Executive's personal
representatives determine in the exercise of their reasonable discretion that in
order to pay estate, inheritance or similar taxes arising as a result of
Executive's death ("ESTATE TAXES"), they need to sell shares of Common Stock in
excess of the shares they are entitled to sell to the Company pursuant to
Section 7.3 above, they shall so inform the Company in writing specifying the
dollar amount required to pay such taxes and the number of shares of Common
Stock they will be required to sell at the Exercise Price on the date of such
notice in order to pay such taxes. Such notice shall constitute an offer by
Executive's personal representatives to sell all or any part of such shares to
the Company for cash at the Exercise Price per share specified therein. The
Company may accept such offer with respect to all or any part of the shares so
offered by giving Executive's personal representatives a notice of acceptance
specifying the number of shares the Company will purchase and the total purchase
price thereof not later than two (2) business days after its receipt of the
personal representatives' notice. Not later than three (3) business days after
receipt of such notice of acceptance, Executive's personal representatives shall
deliver to the Company one or more certificates representing the shares to be
purchased by the Company together with a stock power medallion guaranteed
against delivery of a certified or bank check in payment of the total purchase
price thereof or payment by wire transfer of immediately available funds in the
amount of the total purchase price to such account as executive's personal
representatives shall designate in writing. Executive's personal representatives
shall transfer such shares free of all liens, claims and encumbrances of any
nature whatsoever. If the Company does not purchase all shares so offered,
Executive's personal representatives shall have the right to sell (i) any shares
offered to the Company but not purchased by it and (ii) any additional shares of
Common Stock Executive's personal representatives determine are required to be
sold in order to pay Estate Taxes, to any person in any legal manner without any
further right or interest of the Company in or to such shares.

         7.5 SALES BY ESTATE TRANSFEREES. Subject to this Section 7.5, after the
date on which an Estate Transferee shall have received shares of Common Stock
from Executive's estate (such shares being referred to herein as "TRANSFERRED
SHARES") and shall have agreed to be bound by the terms of this Agreement in
accordance with Section 7.1 (such date being referred to herein as the
"DISTRIBUTION DATE"), an Estate Transferee shall have the right to sell up to
one-third (1/3) of the Transferred Shares in each of the first three (3) years
after the Distribution Date; provided, however, that if the Executive
establishes either an inter vivos trust or a trust under his Will having his
surviving spouse as the sole income beneficiary (such trust being referred to
herein as


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the "MARITAL TRUST"), then the Marital Trust shall have the right to sell up to
one-half (1/2) of the Transferred Shares in each of the first two (2) years
after the Distribution Date. Such right shall be cumulative, such that an Estate
Transferee may sell in subsequent years any Transferred Shares such Estate
Transferee had the right to sell, but did not sell, in prior years. In addition,
if an Estate Transferee is required to sell any Transferred Shares in order to
comply with or satisfy any law, rule, order, judgment or similar legal
obligation, including sales required to comply with provisions of the Internal
Revenue Code and New York State Estates, Powers and Trusts Law applicable to
private foundations, such Estate Transferee may sell additional Transferred
Shares to satisfy such obligation. Any Estate Transferee that desires to sell
Transferred Shares that he, she or it has the right to sell under this Section
7.5 shall give not less than five (5) business days' prior notice of such Estate
Transferee's intention to sell specifying the number of Transferred Shares such
Estate Transferee desires to sell. Such notice shall constitute an offer by such
Estate Transferee to sell all or any part of such Transferred Shares to the
Company for cash at the Exercise Price per share on the date of the notice. The
Company may accept such offer with respect to all or any part of the Transferred
Shares so offered by giving such Estate Transferee a notice of acceptance
specifying the number of Transferred Shares the Company will purchase and the
total purchase price thereof. Not later than three (3) business days after
receipt of such notice of acceptance, such Estate Transferee shall deliver to
the Company one or more certificates representing the Transferred Shares to be
purchased by the Company together with a stock power medallion guaranteed
against delivery of a certified or bank check in payment of the total purchase
price thereof or payment by wire transfer of immediately available funds in the
amount of the total purchase price to such account as such Estate Transferee
shall designate in writing. Such Estate Transferee shall transfer such
Transferred Shares free of all liens, claims and encumbrances of any nature
whatsoever. If the Company does not purchase all Transferred Shares so offered,
such Estate Transferee shall have the right to sell any Transferred Shares
offered to the Company but not purchased by it to any person in any legal manner
without any further right or interest of the Company in or to such Transferred
Shares.

         7.6 TERMINATION OF WINDOW PERIOD RESTRICTIONS. Executive's personal
representatives shall have the right to exercise the Option at any time after
Executive's death without regard to the Window Period set forth in Section 2.5,
provided that the person exercising the Option is not himself or herself an
executive officer of the Company subject to limitations on the sale and purchase
of Common Stock during Window Periods.

         7.7 TERMINATION OF RESTRICTIONS ON ESTATE TRANSFEREES. All restrictions
imposed by this Agreement on the right of Estate Transferees to transfer
Transferred Shares shall end three (3) years after the Distribution Date in the
case of all Estate Transferees other than the Marital Trust and two (2) years
after the Distribution Date in the case of the Marital Trust.

8.       GIFTS.

         8.1 GIFTS TO FAMILY TRUSTS. Anything in this Agreement to the contrary
notwithstanding, Executive may transfer his shares of Common Stock to a trust
exclusively for his benefit and/or the benefit of his spouse and/or children
and/or grandchildren; provided, however, that the trustee of such trust shall
agree in writing to be bound by the terms of this Agreement; and provided,
further, that notwithstanding such transfer, during his lifetime,


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Executive shall be deemed to continue to be the owner of such shares for
purposes of this Agreement. After Executive's death, for purposes of this
Agreement, the trustees and/or beneficiaries of any such trust shall be deemed
to be Estate Transferees, the shares held by such trustees and/or beneficiaries
shall be deemed to be Transferred Shares, the date of Executive's death shall be
deemed to be the Distribution Date with respect to such shares, and such
trustees and/or beneficiaries shall have the right to sell such shares only in
accordance with the terms of Section 7.5 hereof.

         8.2 EXCLUDED GIFTS. Anything in this Agreement to the contrary
notwithstanding, Executive may transfer up to a total of One Hundred Thousand
(100,000) shares of Common Stock during any Rolling 12-Month Period to members
of his immediate family or charitable organizations exempt from taxation under
Section 501 of the Internal Revenue Code of 1986, as amended, or any applicable
successor provision without first complying with the restrictions on transfer
set forth in this Agreement.

9.       TERM.

         9.1 TERM. The Term of this Agreement shall commence as of the date
hereof and shall end on the earlier of (i) July 1, 2013, or (ii) the date on
which all shares of Common Stock owned by Executive shall have been transferred
without any further restriction under this Agreement.

         9.2 TERMINATION AFTER CHANGE OF CONTROL. Anything in Section 8.1 to the
contrary notwithstanding, Executive may terminate this Agreement by giving
written notice of termination at any time within six (6) months after a Change
of Control (as defined in Executive's Employment Agreement) of the Company.

10.      MISCELLANEOUS.

         10.1 ARBITRATION. Any dispute, controversy or claim arising out of or
pursuant to this Agreement or the breach hereof shall be settled by arbitration
in the City of New York, State of New York. Such arbitration shall be effected
by arbitrators selected as hereinafter provided and shall be conducted in
accordance with the rules of the American Arbitration Association then in
effect. The dispute, controversy or claim shall be submitted to three
arbitrators, one arbitrator to be selected by the Company, one arbitrator to be
selected by Executive and the third arbitrator to be selected by the two so
selected by the Company and the Executive, or if they cannot agree on a third,
by the American Arbitration Association. In the event that either the Company or
the Executive within one (1) month after notification of any demand for
arbitration hereunder, shall not have selected its arbitrator and given notice
thereof to the other party in accordance with the terms of this Agreement, the
arbitrator for such party shall be selected by the American Arbitration
Association. Meetings of the arbitrators shall be held in New York, New York, or
at such other place or places as may be agreed upon by the parties and the
arbitrators. The results of final determination of any such arbitration
proceedings shall be binding on the parties hereto and a judgment may be entered
in any court having jurisdiction.


                                       10
<PAGE>   12
         10.2 ASSIGNMENT. Except as otherwise provided in this Agreement, this
Agreement shall inure to the benefit of and be binding upon the parties hereto
and their respective heirs, personal representatives, successors and assigns. In
the event of a Change of Control, the Company shall require any person (or
persons acting as a group) who acquires ownership or effective control of the
Company or ownership of a substantial portion of the business or assets of the
Company (whether direct or indirect, by purchase, merger, consolidation or
otherwise), by agreement in form and substance reasonably satisfactory to
Executive, expressly to assume and agree to perform this Agreement in the same
manner and to the same extent as the Company would be required to perform it if
no such Change of Control had taken place. As used in this Agreement, the
"Company" shall mean the Company as defined in the heading of this Agreement and
any person (or group) that acquires ownership or effective control of the
Company or ownership of a substantial portion of the business or assets of the
Company or that otherwise becomes bound by all the terms and provisions of this
Agreement, whether by the terms hereof, by operation of law or otherwise.

         10.3 INTEGRATED AGREEMENT; AMENDMENTS. This Agreement shall supersede
any and all existing oral or written agreements, representations, or warranties
between Executive and the Company or any of its subsidiaries or affiliated
entities relating to the purchase of Executive's shares of Common Stock. It may
not be amended except by a written agreement signed by both parties.

         10.4 GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York applicable to agreements
made and to be performed in that State, without regard to its conflict of laws
provisions.

         10.5 NOTICES. Any notice, consent, request or other communication made
or given in connection with this Agreement shall be in writing and shall be
deemed to have been duly given when delivered by hand or sent by facsimile and
confirmed by next-day delivery of such notice by Express Mail, Federal Express
or other recognized overnight delivery service, to those persons listed below at
their following respective addresses and fax numbers or at such other address
and fax number as each may specify by notice to the others.

To the Company:

                  Paxar Corporation
                  105 Corporate Park Drive
                  White Plains, New York 10604
                  Attention: General Counsel
                  Fax: 914-967-6860

To Executive:

                  Arthur Hershaft
                  2 Gray Oaks Lane
                  Greenwich, Connecticut 06830
                  Fax:  203-629-0552


                                       11
<PAGE>   13
         As part of his, her or its agreement to be bound by this Agreement,
each Permitted Transferee shall provide the Company in writing with an address
and fax number for notice hereunder.

         10.6 NO WAIVER. The failure of a party to insist upon strict adherence
to any term of this Agreement on any occasion shall not be considered a waiver
thereof or deprive that party of the right thereafter to insist upon strict
adherence to that term or any other term of this Agreement.

         10.7 SEVERABILITY. If any term or provision of this Agreement is
declared illegal or unenforceable by any court of competent jurisdiction and
cannot be modified to be enforceable, such term or provision shall immediately
become null and void, leaving the remainder of this Agreement in full force and
effect.

         10.8 HEADINGS. Section headings are used herein for convenience of
reference only and shall not affect the meaning of any provision of this
Agreement.

         10.9 NUMBER AND GENDER. Whenever the context so requires, the use of
the singular shall be deemed to include the plural and vice versa, and the use
of one gender shall include all other genders, as appropriate.

         10.10 COUNTERPART EXECUTION. This Agreement may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, and such counterparts will together constitute but one Agreement.


                             SIGNATURE PAGE FOLLOWS


                                       12
<PAGE>   14
         IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year set forth above.


PAXAR CORPORATION                              EXECUTIVE

By:    /s/ Leo Benatar                         /s/ Arthur Hershaft
       --------------------------------        --------------------------------
                                               Arthur Hershaft
Name:  Leo Benatar

Title: Chairman, Compensation Committee        Date:   July 11, 2001

Date:  July 11, 2001


                                       13
<PAGE>   15
                                                                       EXHIBIT A



                               NOTICE OF EXERCISE


To: Paxar Corporation

         (1) The undersigned hereby elects to sell ________ shares of Common
Stock OF Paxar Corporation (the "Shares") pursuant to the terms of the Stock
Repurchase Agreement between Paxar and the undersigned, and tenders herewith
certificates representing such shares of Common Stock, together with a Stock
Power duly executed by the undersigned and medallion guaranteed.

         (2) The Exercise Price for the Shares, as determined in accordance with
Section 2.6 of the Stock Repurchase Agreement, is: $_____________.

         (3) The Purchase Price for the Shares, as determined in accordance with
Section 2.6 of the Stock Repurchase Agreement, is: $_____________.

         (4) Please pay the Purchase Price in the manner specified below:

         ___ By check payable to the order of the undersigned.

         ___ By wire transfer in accordance with the following instructions:


Dated:
      ______________________

                                            ____________________________________
                                            Signature


                                       14
<PAGE>   16
                                                                       EXHIBIT B


                            NOTICE OF BONA FIDE OFFER


To: Paxar Corporation

         (1)      The undersigned has received a bona fide offer to purchase
                  _______ shares of Paxar Common Stock in accordance with the
                  signed offer attached hereto.

         (2)      The purchase price per share is $_________ and the total
                  purchase price is $__________.

         (3)      The method of payment is:


Dated:______________________

                                            ____________________________________
                                            Signature


                                       15
<PAGE>   17
                                                                       EXHIBIT C


                              NOTICE OF ACCEPTANCE


To:_______________________


         (1)      Paxar Corporation hereby accepts your offer to sell
                  ___________ shares of Paxar Common Stock pursuant to your
                  Notice of Bona Fide Offer dated ____________.

         (2)      The total purchase price for the shares is:
                  $____________________.

         (3)      Payment will be effected in the manner specified in your
                  Notice of Bona Fide Offer upon Paxar's receipt of the
                  certificates representing your shares and a stock power
                  executed by you and medallion guaranteed.




Dated:_____________________             Paxar Corporation


                                        By:__________________________________


                                           __________________________________
                                           Name

                                           __________________________________
                                           Title


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