Exhibit 10.1

                              EMPLOYMENT AGREEMENT
                                     between
                      PAXAR CORPORATION and ARTHUR HERSHAFT
                                 October 1, 2004

1. PURPOSE.

Under this Employment  Agreement (the "Agreement"),  dated as of October 1, 2004
(the "Effective  Date"),  Paxar  Corporation  (the "Company")  acknowledges  and
recognizes the value of the services of Arthur Hershaft (the "Executive"), which
services are of special, unique and extraordinary character. The Company desires
to continue to employ  Executive  and retain his abilities and services as Chief
Executive  Officer  and to  continue  to obtain  his advice as  Chairman  of the
Company's  Board of Directors  (the  "Board").  In  recognition  of his long and
faithful service to the Company,  the Company also desires to provide  Executive
and his spouse,  upon his retirement,  with the retirement benefits specified in
this Agreement.

2.       JULY 11, 2001 AGREEMENT SUPERSEDED.

(a)      Executive  and the Company  entered  into an Agreement on July 11, 2001
         (the "2001 Agreement") that superseded Executive's Employment Agreement
         dated as of December  16,  1986,  and amended as of January 1, 1996 (as
         amended, the "1986 Agreement").  The parties have agreed that the terms
         and conditions set forth in this Agreement  shall supersede any and all
         provisions of the 2001 and 1986 Agreements, and any other existing oral
         or  written  agreements,   representations,   or  warranties,   between
         Executive and the Company,  and that such agreements  shall be null and
         void  and  of  no  further  force  and  effect,   except  as  otherwise
         specifically provided in this Agreement.

(b)      Notwithstanding  the  termination  of  the  2001  Agreement  as of  the
         Effective  Date,  the Company  shall be required  to pay  Executive  in
         accordance  with the terms of 2001 Agreement (i) any accrued but unpaid
         base salary under the 2001 Agreement for services  rendered  before the
         Effective Date, (ii) the amount of any compensation earned and deferred
         under the 2001 Agreement by Executive  before the Effective Date, (iii)
         any earned but unpaid  incentive  compensation  for any  calendar  year
         ended before the Effective  Date, and (iv) any expenses  required to be
         reimbursed under the 2001 Agreement that have accrued but are unpaid as
         of the Effective Date.

3.       EMPLOYMENT.

The Company hereby agrees to continue to employ Executive,  and Executive hereby
agrees to continue to be employed by the Company, upon the terms, and subject to
the conditions, set forth in this Agreement.

4.       PERIOD OF EMPLOYMENT; AGREED RETIREMENT DATE.

As  used  in  this  Agreement,  the  phrase,   "Employment  Period,"  refers  to
Executive's  period of  employment  from the Effective  Date until  December 31,
2006,  unless his  employment  is extended to such later date as may be mutually
agreed upon by both parties or terminated earlier in accordance with Section 10,
below. In the event of an extension of the Employment  Period,  all dates herein
shall automatically be extended to coincide with the extended Employment Period.
If said  extension  ends  other than on  December  31 of any year,  payments  to
Executive   for  any   compensation   based  on  full-year   results   shall  be
proportionately adjusted.


5.       POSITIONS, DUTIES AND RESPONSIBILITIES.

(a)      Executive shall continue to serve, at the pleasure of the Board, as the
         Chairman of the Board  until  December  31,  2006.  In his  capacity as
         Chairman,    Executive   shall   have   the   customary    duties   and
         responsibilities of Chairman.


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(b)      Executive shall continue to serve, at the pleasure of the Board, as the
         Company's  Chief  Executive  Officer  until  December 31, 2006. In such
         capacity,  Executive  shall perform the  customary  duties and have the
         customary responsibilities of such position.

(c)      Prior to December 31, 2006,  upon mutual  agreement or upon ninety days
         prior  written  notice  to  Executive,   the  Board  may  transfer  the
         positions, duties and responsibilities of the Chairman and/or the Chief
         Executive  Officer  positions  to one or more  other  employees  of the
         Company.  If both positions are so  transferred,  whether jointly or on
         separate  occasions,  the Board shall establish an Executive  Committee
         consisting of the Executive,  the Lead Director and the Chairpersons of
         each of the three standing committees of the Board. The Executive shall
         be designated  Chairman of the  Executive  Committee,  which  Committee
         shall meet upon the  request of three or more of its  members to review
         matters of urgency  that may occur  between  scheduled  meetings of the
         Board.

(d)      Executive  agrees  to serve the  Company  faithfully,  to  devote  such
         business time, attention and energies as is necessary or appropriate to
         the  performance  of his duties,  and to perform the duties  under this
         Agreement to the best of his abilities.

(e)      Executive  agrees (i) to comply  with all  applicable  laws,  rules and
         regulations,   and  all  requirements  of  all  applicable  regulatory,
         self-regulatory,  and  administrative  bodies;  (ii) to comply with the
         Company's rules, procedures,  policies,  requirements,  and directions;
         and (iii) not to engage in any other business or employment without the
         written  consent  of the  Company,  except  as  otherwise  specifically
         provided herein.

6.       COMPENSATION AND BENEFITS DURING EMPLOYMENT PERIOD.

Executive  shall receive the following  compensation  and benefits,  as approved
annually by the Board of Directors, during the Employment Period.

(a)      Base  Salary.  The  Company  shall pay  Executive  a base salary at the
         annual rate in effect  immediately  prior to the Effective Date of this
         Agreement  ("Base Salary") in accordance with the  compensation  policy
         applicable to the Company's  senior executive  officers.  The Board may
         increase  Executive's  Base Salary from time to time in its discretion.
         The Board also may reduce Executive's Base Salary, provided that it has
         also reduced the base salaries of other senior  executive  officers and
         the reduction of Executive's Base Salary is comparable with that of the
         other  senior  executive  officers.  Such Base Salary  shall be paid in
         accordance  with the  Company's  standard  payroll  practice for senior
         executive officers.

(b)      Annual Incentive  Compensation.  Executive shall be eligible to receive
         annual  incentive  compensation  in the  form of a cash  bonus,  profit
         sharing or otherwise,  as the Board or the  Compensation  Committee may
         grant the Executive  from time to time in  accordance  with targets and
         other criteria  established by the Board or the Compensation  Committee
         for senior executive officers of the Company.  Executive's annual bonus
         award  will be  equal  to 75% of his  Base  Salary  in  effect  for the
         calendar year, if the Company achieves 100% of the plan targets.

(c)      Stock  Options.  Executive  shall  participate  in the Company's  stock
         option  plans and be  eligible  to receive  grants  under such plans in
         accordance  with the Company's  policy  applicable to senior  executive
         officers.

(d)      Benefit  Plans,  Fringe  Benefits  and  Vacations.  Executive  shall be
         eligible to participate in or receive  benefits under any pension plan,
         401(k)  savings  plan,   nonqualified   deferred   compensation   plan,
         supplemental  executive  retirement  plan,  medical and dental benefits
         plan, life insurance plan,  short-term and long-term  disability plans,
         supplemental and/or incentive compensation plans,  perquisite allowance
         or any other employee  benefit or fringe benefit plan that is generally
         made  available  by  the  Company  to  senior  executive   officers  in
         accordance with the eligibility  requirements of such plans and subject
         to the terms and conditions set forth in this Agreement.


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(e)      Company-Provided  Automobile.  The  Company  shall  continue to provide
         Executive  with the  full-time  use of an  automobile  and  payment  of
         related  expenses at the same style and level as provided to  Executive
         immediately prior to the Effective Date of this Agreement.

(f)      Expense  Reimbursement.  The Company shall promptly reimburse Executive
         for the ordinary and necessary  business expenses incurred by Executive
         in the  performance  of his duties under this  Agreement in  accordance
         with the Company's customary  practices  applicable to senior executive
         officers.

(g)      Private Office, Personal Administrative  Assistant,  Other Services and
         Support.  The Company shall continue to furnish Executive with the same
         or comparable (of his choosing)  private office and exclusive  personal
         administrative assistant and such other facilities, services and staff,
         in each case at a level that is consistent  with his  position,  duties
         and responsibilities.

7.       ADVISORY ROLE AFTER EMPLOYMENT PERIOD.

         Effective  January 1, 2007 through  December 31, 2007,  Executive shall
         provide his  services  as an Advisor to the Board and the Company  with
         such duties and responsibilities as are assigned to him by the Board or
         the Company's  then Chief  Executive  Officer.  Executive  agrees to be
         available  for up to 10 days a month,  for an annual  fee of  $300,000,
         which the Company will pay him on a monthly basis,  plus  reimbursement
         for all business and travel  expenses  approved by the Chief  Executive
         Officer and incurred by the  Executive  during this  period.  Executive
         shall be responsible for payment of all federal, state, and local taxes
         applicable to such payments.  The Executive's services as an Advisor to
         the Board and the Company may be extended  after December 31, 2007 upon
         mutual consent of both parties.

8. SUPPLEMENTAL RETIREMENT BENEFIT.

The Company shall pay Executive a supplemental retirement benefit as follows:

(a)      The supplemental  retirement  benefit will be an amount equal to 60% of
         Executive's Final Average Compensation. The following rules shall apply
         for purposes of determining Executive's Final Average Compensation:

         (i)      Executive's Final Average  Compensation  shall be equal to the
                  average of Executive's  Total  Compensation  for the three (3)
                  calendar  years of the last seven (7) full  calendar  years of
                  Executive's  employment  with the Company  preceding such last
                  day of employment in which Executive  earned the highest Total
                  Compensation.

          (ii)    "Total Compensation" means the total Base Salary and incentive
                  compensation   earned  by  Executive  for  a  calendar   year,
                  including compensation earned in one calendar year and paid or
                  payable in a subsequent calendar year.

         It is the  intention  of the  parties  that,  upon  termination  of the
         Employment Period on December 31, 2006, the year 2006 shall be included
         as a full calendar year for purposes of determining  Executive's  Final
         Average Compensation.

(b)      The Company shall pay the supplemental  retirement benefit to Executive
         in equal monthly installments commencing on January 1, 2007.

(c)      In the  event  of  Executive's  death,  the  Company  shall  pay to his
         surviving  spouse until her death or such earlier date as determined in
         accordance  with  Section  24(f)  below an  amount  equal to 50% of the
         supplemental  retirement  benefit  determined  under this  Section 8 in
         equal  monthly  installments.  Such  payments  will commence as soon as
         practicable following Executive's date of death.


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(d)      The  supplemental  retirement  benefit will be payable to Executive and
         his surviving  spouse if  Executive's  employment is terminated  before
         December  31,  2006,  regardless  of  the  reason  for  termination  of
         employment.

9.       COMPENSATION AND BENEFITS FOLLOWING TERMINATION OF EMPLOYMENT.

In addition to the supplemental retirement benefit described in Section 8 above,
the Company will provide Executive and his spouse with the benefits described in
this Section 9 following termination of his employment:

(a)      Health Insurance. The Company shall provide the following health
         insurance benefits to Executive and his spouse:

         (i)      The Company shall pay the full annual premium for any Medicare
                  supplemental  insurance  coverage  selected by Executive until
                  his death.

         (ii)     The Company shall  provide  Executive's  surviving  spouse (as
                  determined in accordance with Section 24(f) below) with health
                  insurance  coverage  (through  the  purchase of  insurance  or
                  otherwise) that is substantially  similar to the coverage that
                  she would have  received if Executive  had continued in active
                  employment  until  she  becomes  eligible  for  Medicare.  The
                  Company shall pay the full cost of such coverage.

         (iii)    The Executive  shall  continue to participate in the Executive
                  Medical  Reimbursement  Plan or any comparable  successor plan
                  that is made available to the Company's most senior  executive
                  officers.

(b)      Stock Options. Upon Executive's last day of employment, all outstanding
         unexercised  stock  options  granted to Executive  under the  Company's
         employee   stock  option  plans  (i)  shall  become  fully  vested  and
         exercisable as of his last day of employment and (ii) shall continue to
         be exercisable  until the option  expiration date  (determined  without
         regard to Executive's employment termination date).

(c)      Post Employment Office and Office Services.  After Executive's last day
         of  employment  and for seven years  thereafter,  if the  Executive  so
         requests,  the  Company  will  provide  office  space  for him on Paxar
         premises or, at the option of the Company, other premises convenient to
         the  Executive's  primary  residence.  Such office  space shall be at a
         level  commensurate  with  Executive's  status as the Company's  former
         Chief Executive Officer and Chairman of the Board. In addition,  during
         this period,  whenever the Executive so requests, the Company will also
         provide the Executive with the services of an administrative  assistant
         who, in the opinion of the Executive,  is capable of providing services
         at a  level  equal  to  the  administrative  services  provided  to the
         Executive during the Employment Period.

(d)      Director's  Fees and  Expenses.  After  completion  of his  services as
         Advisor pursuant to Section 7, above,  during the period that Executive
         continues  to serve  as a  member  of the  Board  of  Directors  of the
         Company,  executive  shall  be paid  the  fees  and be  reimbursed  for
         expenses as are provided to non-employee members of the Board.

10.      TERMINATION OF EMPLOYMENT BEFORE DECEMBER 31, 2006.

Executive's  employment under this Agreement may be terminated prior to December
31, 2006 under any of the circumstances set forth in this Section 10.

(a) Death. Executive's employment shall terminate upon Executive's death.

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(b)      Total Disability. The Company may terminate Executive's employment upon
         his  becoming  "Totally  Disabled."  For  purposes  of this  Agreement,
         Executive  shall be "Totally  Disabled" if Executive is  physically  or
         mentally   incapacitated  so  as  to  render  Executive   incapable  of
         performing his usual and customary duties under this Agreement  without
         reasonable  accommodation.  Executive's  receipt of disability benefits
         under the Company's long-term disability benefits plan (the "LTD Plan")
         or  receipt  of Social  Security  disability  benefits  shall be deemed
         conclusive  evidence of Total Disability for purpose of this Agreement;
         provided,  however,  that in the absence of Executive's receipt of such
         long-term   disability  benefits  or  Social  Security  benefits,   the
         Company's  Board of  Directors  (the  "Board")  may, in its  reasonable
         discretion (but based upon  appropriate  medical  evidence),  determine
         that Executive is Totally Disabled.

(c)      Termination  by the  Company  for  Cause.  The  Company  may  terminate
         Executive's employment for "Cause". Such termination shall be effective
         as of the date specified in the written notice of termination  provided
         to Executive.

         (i)      For purposes of this  Agreement,  the term "Cause"  shall mean
                  any of the following:  (A) conviction (including conviction on
                  a  nolo  contendere   plea)  of  (I)  a  crime  involving  the
                  commission  by  Executive  of a felony or (II) a criminal  act
                  intended to result directly or indirectly in substantial  gain
                  or  personal  enrichment  to  Executive  at the expense of the
                  Company, but excluding any such conviction that results solely
                  from Executive's title or position with the Company and is not
                  based on his personal  conduct;  or (B) willful  misconduct or
                  gross  negligence  in  connection  with  the  business  of the
                  Company or an affiliate  occurring after the Effective Date of
                  this Agreement that results in material  damage to the Company
                  or the affiliate or to their  respective  businesses,  whether
                  monetary or otherwise; or (C) persistent failure to observe or
                  perform  Executive's duties and  responsibilities or to comply
                  with  Company  policies as set forth in Section 5 hereof after
                  written notice thereof by the Company; or (D) breach of any of
                  the covenants set forth in Section 13 or 14 of this Agreement.

         (ii)     Executive's employment shall in no event be considered to have
                  been terminated by the Company for Cause if the act or failure
                  to act  upon  which  such  termination  is  based  was done or
                  omitted to be done as a result of bad  judgment or  negligence
                  on Executive's part.

         (iii)    Any  determination of Cause under this Agreement shall be made
                  by resolution duly adopted by the  affirmative  vote of all of
                  the  non-employee  members  of the Board at a  meeting  of the
                  Board  called and held for that  purpose.  Executive  shall be
                  provided with  reasonable  notice of such meeting and shall be
                  given the opportunity to be heard before such vote is taken by
                  the Board.

(d)      Termination  by Executive for Good Reason.  Executive may terminate his
         employment  under this  Agreement  for "Good  Reason"  after  providing
         thirty  (30)  days'  written  notice  to the  Company.  Termination  of
         employment  by  Executive  for  "Good  Reason"  shall be deemed to have
         occurred,   if  Executive   terminates  his  employment  following  the
         occurrence of any of the following:

         (i)      The  Company's  failure to comply with its  obligations  under
                  this  Agreement  in  any  material  respect  if  such  failure
                  continues  for thirty (30) days after  notice in writing  from
                  Executive specifying such failure.

         (ii)     The  failure  by the  Company to obtain an  assumption  of the
                  obligations of the Company under this Agreement as required by
                  Section 20(a).

(e)      Termination  by  Executive  other than for Good Reason.  Executive  may
         terminate his employment under this Agreement for any reason other than
         "Good Reason"  pursuant to Section 10(d) above after  providing  thirty
         (30) days' prior written notice to the Company.

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(f)      Notice of Termination. Any termination by the Company or by Executive
         under this Agreement shall be communicated by notice of termination to
         the other party hereto. For purposes of this Agreement, a Notice of
         Termination shall mean a notice in writing which shall indicate the
         specific termination provision in this Agreement relied upon to
         terminate Executive's employment and, if applicable, shall set forth in
         reasonable detail the facts and circumstances claimed to provide a
         basis for termination of Executive's employment under the provision so
         indicated.

11.      COMPENSATION AND BENEFITS PAYABLE  FOLLOWING  TERMINATION PRIOR TO
         DECEMBER 31, 2006

In the event that  Executive's  employment is  terminated  prior to December 31,
2006, Executive (or his surviving spouse, beneficiary or estate, as the case may
be) shall receive the following compensation and benefits:

(a)      Death. In the event that Executive's employment is terminated by reason
         of his death:

         (i)      Health  Insurance.   The  Company  shall  provide  Executive's
                  surviving spouse with the health insurance  benefits set forth
                  in Section 9(a)(ii) above.

         (ii)     Stock  Options.  All  outstanding  unexercised  stock  options
                  granted to Executive shall become fully vested and exercisable
                  as of Executive's date of death.

         (iii)    Supplemental  Retirement  Benefit.  The Company  shall provide
                  Executive's surviving spouse with the supplemental  retirement
                  benefit set forth in Section 8(c) above.

(b)      Total  Disability.   In  the  event  that  Executive's   employment  is
         terminated by reason of his Total Disability  pursuant to Section 10(b)
         above:

         (i)      Health Insurance.  The Company shall provide Executive and his
                  spouse with the health insurance benefits set forth in Section
                  9(a) above.

         (ii)     Stock  Options.  All  outstanding  unexercised  stock  options
                  granted to Executive  under the  Company's  stock option plans
                  (A)  shall  become  fully  vested  and  exercisable  as of his
                  employment  termination  date  and (B)  shall  continue  to be
                  exercisable  until  the  option  expiration  date  (determined
                  without regard to Executive's employment termination).

         (iii)    Supplemental  Retirement  Benefit.  The Company  shall provide
                  Executive with the supplemental  retirement  benefit set forth
                  in Section 8.

(c)      Termination  for Cause.  In the event that  Executive's  employment  is
         terminated by the Company for Cause pursuant to Section 10(c) above:

         (i)      The Company  shall  provide  Executive  with the  supplemental
                  retirement benefit set forth in Section 8 above.

         (ii)     If  Executive  notifies the Company in writing that he intends
                  to contest the termination  for Cause,  then the Company shall
                  continue  to  provide  Executive  with  the  compensation  and
                  benefits  that he would have  received if he had  continued in
                  employment  until  the  issuance  of  a  final   determination
                  pursuant to the arbitration  procedure set forth in Section 17
                  below  that his  employment  was  terminated  for Cause or, if
                  earlier,   the  date   Executive   ceases  to   contest   such
                  termination.  If, however, the Company is the prevailing party
                  in  such  arbitration  or  Executive  ceases  to  contest  the
                  termination  after having given the required notice,  then the
                  Company  shall have the right to recover  from  Executive  all
                  compensation  paid to Executive under this clause (ii) and the
                  reasonable  cost of all  benefits  provided  to him under this
                  clause (ii),  in each case in excess of the amounts that would
                  have  otherwise  been  payable or  provided  to him under this
                  Agreement; the Company shall have the further right to set off
                  any such  amounts  payable by  Executive  against  any amounts
                  payable by the Company under this Agreement.


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(d)      Termination  by Executive for Good Reason.  In the event that Executive
         terminates  his  employment  for Good Reason  pursuant to Section 10(d)
         above:

         (i)      Continuation of Compensation  and Benefits.  The Company shall
                  continue to provide  Executive the  compensation  and benefits
                  set forth in Section 6 above  that would have been  payable to
                  him if he had  continued  to  perform  his  normal  duties and
                  responsibilities on a full-time basis until the earlier of (i)
                  December  31,  2006 or (ii) his death,  subject to clause (ii)
                  below   relating   to  the   payment   of   annual   incentive
                  compensation.

         (ii)     Annual Incentive Compensation. The Company shall pay Executive
                  the  amounts  described  in  this  clause  (ii) in lieu of the
                  annual incentive compensation set forth in Section 6(b) above:

                  (A)      For each calendar year commencing  after  Executive's
                           last  day  of  employment,   the  Company  shall  pay
                           Executive   an   amount   equal   to  the   incentive
                           compensation  Executive  would have earned  under the
                           Company's annual incentive compensation plan for such
                           calendar  year had the Company  achieved 100% of such
                           plan's targets for such calendar year.

                  (B)      For the calendar year in which Executive's employment
                           is  terminated,  the Company  shall pay Executive (I)
                           the amount determined under Section 10(f) below, plus
                           (II) an amount equal to a pro rata portion  (based on
                           the number of days  remaining  in the  calendar  year
                           following  Executive's last day of employment) of the
                           incentive  compensation  Executive  would have earned
                           under the Company's  incentive  compensation plan for
                           such calendar  year had the Company  achieved 100% of
                           such plan's targets for such calendar year.

                  (C)      Payments for any calendar year under this clause (ii)
                           shall be made at the same time and in the same manner
                           as incentive compensation is paid to senior executive
                           officers   who  are   participants   in  such  annual
                           incentive compensation plan.

         (iii)    Stock  Options.  All  outstanding  unexercised  stock  options
                  granted to Executive  under the  Company's  stock option plans
                  (A)  shall  become  fully  vested  and  exercisable  as of his
                  employment  termination  date  and (B)  shall  continue  to be
                  exercisable  until  the  option  expiration  date  (determined
                  without regard to Executive's employment termination).

         (iv)     Special  Retirement  Benefits.  Executive  and  his  surviving
                  spouse will receive (A) the  supplemental  retirement  benefit
                  described  in  Section  8 and  (B) the  additional  retirement
                  health  benefits  described in Section 9 above,  commencing on
                  the earlier December 321, 2006 or Executive's death.

(e)      Termination  by  Executive  without  Good  Reason.  In the  event  that
         Executive  terminates  his employment  without Good Reason  pursuant to
         Section 10(f) above,  Executive and his surviving  spouse shall receive
         only (A) the supplemental  retirement  benefits  described in Section 8
         and (B) the additional  retirement health benefits described in Section
         9 above, commencing as of the last day of Executive's employment.

(f)      Annual Incentive Compensation. In the event that Executive's employment
         is terminated  for any reason prior to the last day of a calendar year,
         the Company  shall pay Executive  (or his personal  representative)  an
         amount  equal to the pro rata  portion  (based on the number of days of
         employment  prior  to the  termination  date) of the  annual  incentive
         compensation  that  would  have been  payable  to  Executive  if he had
         continued  in  employment  through the end of the calendar  year.  Such
         amount  will be paid at the same  time and in the  same  manner  as the
         annual  incentive  compensation  for such year is paid to other  senior
         executive officers.

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(g)      Earned  but  Unpaid  Compensation.   Upon  termination  of  Executive's
         employment under Section 10 hereof, the Company shall pay Executive (or
         his  personal  representative)  any  accrued but unpaid Base Salary for
         services  rendered  to the  date  of  termination,  the  amount  of any
         compensation  previously  earned and deferred by Executive,  any earned
         but unpaid incentive  compensation for any calendar year ended prior to
         the year in which his  employment  terminates,  any  accrued but unpaid
         expenses  required  to be  reimbursed  under  this  Agreement,  and any
         vacation accrued to the date of the termination.

         The Company shall pay all of the foregoing  amounts,  except for earned
         but  unpaid  incentive  compensation,  within 30 days after the date of
         termination;  earned but unpaid incentive compensation for any calendar
         year ended prior to the year in which Executive's employment terminates
         shall  be  paid  at  the  same  time  as  the  Company  pays  incentive
         compensation to its other senior executives.

(h)      Other  Compensation  and Benefits.  Except as may otherwise be provided
         under this Agreement,

         (i)      any benefits to which  Executive  may be entitled  pursuant to
                  the plans,  policies and  arrangements  referred to in Section
                  6(d) above shall be determined and paid in accordance with the
                  terms of such plans, policies and arrangements; and

         (ii)     Executive   shall   have  no  right  to   receive   any  other
                  compensation, or to participate in any other plan, arrangement
                  or  benefit,   with  respect  to  future  periods  after  such
                  termination or resignation.

12.      ADDITIONAL COMPENSATION FOLLOWING CHANGE OF CONTROL.

(a)      Applicability.  Executive  shall be  entitled to the  compensation  and
         benefits  described  in this  Section 12 if (i) a Change of Control (as
         hereinafter  defined)  occurs  and (ii)  prior to  December  31,  2006,
         Executive terminates his employment for Good Reason pursuant to Section
         10(d) above.

(b)      Additional  Compensation.  In addition to the compensation and benefits
         set forth in Section  11(d) above,  the Company  shall pay Executive an
         amount equal to the excess (if any) of:

         (i)      the  product  of (A) 2.99  TIMES  (B) the sum of (I) an amount
                  equal to Executive's annual rate of Base Salary at the rate in
                  effect  immediately prior his employment  termination date and
                  (II) the  amount of  annual  incentive  compensation  that the
                  Executive would have received had the Company achieved 100% of
                  the  Company's  incentive  compensation  plan  targets for the
                  calendar year in which his employment termination date occurs;
                  over

         (ii)     the amount payable under Section 11(d) above;

         provided,   however,  that  in  no  event  shall  the  additional  cash
         compensation payable under this Section 12(b) exceed an amount equal to
         one dollar  less than the  amount  that  would  trigger  the excise tax
         payable under Section 4999 of the Internal Revenue Code with respect to
         "excess parachute payments," as defined in Section 280G of the Code, it
         being the  intention  of the  parties  that the  Company  shall have no
         obligation  to make any payment  under this Section  12(b) to Executive
         upon termination of his employment that would result in the requirement
         to pay such excise tax.  Such  additional  cash  compensation  shall be
         payable to Executive in a single lump sum within thirty (30) days after
         his employment termination.

(c)      Subject to the  provisions of Section  12(d),  the amount  described in
         Section  12(b) shall be  initially  determined  by a  certified  public
         accounting  firm  designated  by the Company and agreed to by Executive
         (the  "Accounting  Firm") which  determination  shall provide  detailed
         supporting calculations both to the Company and Executive. All fees and
         expenses  of the  Accounting  Firm shall be borne by the  Company.  The
         determination  of the  Accounting  Firm  of the  amount  payable  under
         Section  12(b) shall be binding on the Company  and  Executive,  and no
         greater  amount  shall  be owed  by the  Company.  Notwithstanding  the
         preceding  sentence,  if any amount is finally  determined  pursuant to
         Section  12(d) to be subject to the  excise  tax  described  in Section
         12(b), the Executive shall repay excess amount to the Company within 90
         days of such final determination.

                                       8

<PAGE>


(d)      Executive  shall  notify  the  Company  in  writing of any claim by the
         Internal Revenue Service that, if successful, would require the payment
         by  Executive  of  the   additional  tax  described  in  Section  12(b)
         (determined   without  regard  to  the  repayment   obligation  of  the
         Executive).  Such  notification  shall be given as soon as practicable,
         but no later than ten (10) business days,  after  Executive is informed
         in writing of such claim and whether  Executive  chooses to defend such
         claim at his own cost and expense or desires the Company to defend such
         claim. If Executive notifies the Company that he desires the Company to
         defend such claim, then the Company shall defend such claim at its cost
         and expense. If Executive elects to have the Company defend such claim,
         Executive shall apprise the Company of the notice of such claim and (i)
         give the Company any  information  reasonably  requested by the Company
         relating  to such  claim,  (ii) take such  action  in  connection  with
         contesting such claim as the Company shall reasonably request from time
         to time; and (iii) cooperate with the Company in good faith in order to
         effectively contest such claim.

(e)      Establishment  of  Trust.  In the event  that  Executive  notifies  the
         Company that this Section 12 is to become effective, the Company shall,
         as soon as possible,  but in no event later than five (5) business days
         after receipt of notice, take the following actions:

         (i)      The  Company  shall  establish  an  irrevocable  trust for the
                  purpose of providing funds for the payment of the supplemental
                  retirement  benefits  payable  pursuant  to  Section 7 of this
                  Agreement.  Such  trust  shall be a grantor  trust  containing
                  provisions  that are the  same  as,  or are  similar  to,  the
                  provisions  contained in the model "rabbi  trust" set forth in
                  IRS Revenue  Procedure  92-64. The Company shall pay all costs
                  relating to the establishment and maintenance of the trust and
                  the investment of funds held in such trust.

         (ii)     The  Company  shall make an  irrevocable  contribution  to the
                  Trust in an amount that is sufficient  to pay  Executive  (and
                  his surviving  spouse) the  supplemental  retirement  benefits
                  pursuant to Section 7 above.

(f)      Definitions. For purposes of this Section 12:

         (i)      "Change  of  Control"  shall  have the  meaning  set  forth in
                  Appendix A attached to this Agreement.

         (ii)     "Change of Control  Effective  Date" means the date on which a
                  Change of  Control  occurs;  provided  that if (A) a Change of
                  Control occurs, (B) Executive's employment with the Company is
                  terminated  prior to the date on which the  Change of  Control
                  occurs,  and (C) such  termination (I) was at the request of a
                  third  party  who has taken  steps  reasonably  calculated  to
                  effect  a  Change  of  Control  or  (II)  otherwise  arose  in
                  connection or in anticipation of a Change of Control, then for
                  all  purposes  under  this  Section  12, the Change of Control
                  Effective  Date shall mean the date  immediately  prior to the
                  date of such termination of employment.

13.      RESTRICTIVE COVENANTS.

(a)      Restrictions.  Executive  covenants that,  except in furtherance of his
         duties  hereunder  and as  approved  by the  Board or  Chief  Executive
         Officer:

(b)      Competitive  Activity.  During the  Restricted  Period (as  hereinafter
         defined),  Executive shall not directly or indirectly, own any interest
         in,  participate or engage in, assist,  render any services  (including
         advisory  services) to, become associated with, work for, serve (in any
         capacity  whatsoever,  including,  without limitation,  as an employee,
         consultant,   advisor,  agent,   independent  contractor,   officer  or
         director) or otherwise  become in any way or manner  connected with the
         ownership,  management,  operation, or control of, any business,  firm,
         corporation,  partnership,  trust or  other  business  or  governmental
         entity  (collectively,  together with any individual,  a "Person") that
         engages  in,  or  assists  others in  engaging  in or  conducting,  any
         business that deals,  directly or  indirectly,  in products or services
         similar to or competitive  with the Company's  product line or services
         anywhere in the world that the Company does business as of  Executive's
         last day of employment;  provided,  however,  that the restrictions set
         forth above shall not be deemed to exclude the Executive from acting as
         director  of a  corporation  for the  benefit of the  Company  with the
         consent of the Board; and provided,  further, that the restrictions set
         forth above shall not be deemed to  prohibit  Executive  from owning or
         acquiring  securities  issued by any corporation  whose  securities are
         listed on a national securities exchange or are quoted on NASDAQ or the
         OTC  Bulletin  Board;  provided  that the  Executive  at no time  owns,
         directly or indirectly,  beneficially or otherwise, one (1%) percent or
         more of any class of any such corporation's outstanding capital stock.


                                       9

<PAGE>



(c)      (i)      Non-solicitation  of Customers.  During the Restricted Period,
                  Executive shall not knowingly provide or solicit to provide to
                  any Person any goods or  services  that are  competitive  with
                  those  provided  by the  Company or that would be  competitive
                  with the goods or  services  that the  Company  has planned to
                  provide. The term "customer" shall mean any Person to whom the
                  Company has provided  goods and services  during the last five
                  (5) years of Executive's employment by the Company.

         (ii)     Non-Solicitation  of Company Personnel.  During the Restricted
                  Period, Executive will not solicit for employment,  or attempt
                  to solicit,  directly or by assisting others,  any employee of
                  Company with whom  Executive  had contact  during  Executive's
                  employment  with  the  Company.   For  the  purposes  of  this
                  paragraph,  "contact" means any interaction whatsoever between
                  Executive and the other employee.

         (iii)    Protected Information.  Executive shall not divulge to others,
                  nor shall he use at any time during the  Restricted  Period or
                  thereafter,  any  confidential  or  trade  secret  information
                  obtained by him during the course of his  employment  with the
                  Company,  including  information relating to sales,  salesmen,
                  sales  volume or  strategy,  customers,  formulas,  processes,
                  methods,   machines,   manufactures,    compositions,   ideas,
                  improvements  or  inventions  belonging  to or relating to the
                  business  of the  Company,  or its  subsidiary  or  affiliated
                  companies.

         (iv)     Non-Disparagement.  Executive covenants and agrees that during
                  the  Restricted  Period or at any time  thereafter,  Executive
                  shall  not,  directly  or  indirectly,  in public or  private,
                  deprecate,  impugn,  disparage, or make any remarks that would
                  tend to or be  construed  to tend to defame the Company or any
                  of its employees, members of its board of directors or agents,
                  nor shall Executive  assist any other person,  firm or company
                  in so doing.

(b)      Definition of "Restricted Period." For purposes of this Agreement,  the
         term  "Restricted  Period"  shall  mean the  Employment  Period and the
         period of five (5) years after the end of the Employment Period.

(c)      Enforcement of Covenants. Executive acknowledges that his breach of any
         of the  restrictive  covenants  contained  in this Section 12 may cause
         irreparable  damage to the Company  for which  remedies at law would be
         inadequate.  Accordingly,  if Executive breaches or threatens to breach
         any of the provisions of this Section 12, the Company shall be entitled
         to  appropriate  injunctive  relief,  including,   without  limitation,
         preliminary  and  permanent  injunctions,  in any  court  of  competent
         jurisdiction,  restraining  Executive from taking any action prohibited
         hereby.  This  remedy  shall  be in  addition  to  all  other  remedies
         available  to the  Company at law or in equity.  If any portion of this
         Section 12 is adjudicated to be invalid or unenforceable,  this Section
         12 shall be  deemed  amended  to  delete  there  from  the  portion  so
         adjudicated,  such deletion to apply only with respect to the operation
         of this Section 12 in the  jurisdiction  in which such  adjudication is
         made.

14.      PROPRIETARY PROPERTY.

(a)      Ownership of Proprietary  Property.  Executive  agrees that any and all
         inventions,  discoveries,  investigations,  know-how, trade secrets and
         developments or improvements in technology (collectively  "Inventions")
         as well as any and all  Proprietary  Information (as defined in Section
         14(b))  created,  developed,  conceived  of or  discovered  during  the
         Employment  Period (i) by  Executive  (solely or jointly  with  others)
         either  (A) in the  course  of his  employment  or  engagement,  on the
         Company's time or with the Company's  materials or  facilities,  or (B)
         relating to any  subject  matter with which his work for the Company is


                                       10

<PAGE>


         or may be  concerned  or to any business in which the Company or any of
         its subsidiaries or affiliated companies is involved, regardless of how
         or when he shall have created, developed, conceived, or discovered such
         Inventions  or  Proprietary  Information  (collectively,   "Proprietary
         Property"),  or (ii) by or for the Company, or (iii) by any independent
         Person and thereafter acquired by the Company, and which are within the
         Executive's  knowledge or  possession  in the case of (i) above or that
         come into the Executive's knowledge or possession during the Restricted
         Period  in the case of (ii) or  (iii)  above,  shall  be,  if  created,
         developed,  conceived  of or  discovered  by  the  Executive,  promptly
         disclosed  to the  Company,  or shall be,  if  otherwise  developed  or
         acquired  by  the  Company,  received  by  Executive  as  an  employee,
         consultant  or  retiree of the  Company  and not in any way for his own
         benefit.  Executive  shall neither have nor obtain any right,  title or
         interest  in or to such  Proprietary  Property  unless  and  until  the
         Company  shall  expressly  and in writing  waive the rights that it has
         therein and thereto under the provisions of this Section.  With respect
         to any and all Proprietary Property that is invented, created, written,
         developed,   furnished  or  produced  by  Executive,  or  suggested  by
         Executive to the Company, during the Employment Period,  Executive does
         hereby agree that all such Proprietary  Property shall be the exclusive
         property of the Company,  and that the Executive shall neither have nor
         retain any right, title or interest, of any kind therein and thereto or
         in and to any results or  proceeds  there  from.  At any time,  whether
         during or after the Employment  Period,  the Executive  will,  upon the
         request  and at the  expense  of the  Company,  (A)  obtain  patents or
         copyrights  on, or (B) permit the Company to patent or  copyright,  any
         such Proprietary Property, whichever (A) or (B) is appropriate,  and/or
         (C)  execute,   acknowledge  and  deliver  any  and  all   assignments,
         instruments  of transfer,  or other  documents,  that the Company deems
         necessary  or  appropriate  to  transfer to and vest in the Company all
         right,  title and interest in and to such  Proprietary  Property and to
         evidence  the  Company's   ownership  of  such  Proprietary   Property,
         including, without limitation, taking all steps necessary to enable the
         Company to publish or protect said  Proprietary  Property by patents or
         otherwise in any and all countries and to render all such assistance as
         the Company may require in any patent  office  proceeding or litigation
         involving  said  Proprietary  Property.  Executive  shall not,  without
         limitation as to time or place, use any Proprietary  Property except on
         Company business,  during or after the Employment  Period, nor disclose
         the same to any other Person or  individual  except for  disclosure  on
         Company business or as may be required by law.

(b)      Definition  of  Proprietary  Information.  As used in this  Agreement,
         "Proprietary  Information"  means any information about the affairs of
         the  Company  or any of its  subsidiaries  or  affiliates,  including,
         without  limitation,  trade  secrets,  trade  "know-how",  inventions,
         customer lists,  client lists,  business plans,  operational  methods,
         pricing policies, marketing plans, sales plans, identity of suppliers,
         trading  positions,  sales,  profits or other  financial  information,
         which is  confidential  to the Company or any of its  subsidiaries  or
         affiliates or is not generally known in the relevant trade, regardless
         of whether Executive developed such information.

(c)      Disclosure of Proprietary  Property.  During the Employment  Period and
         thereafter,  the Executive will not,  directly or  indirectly,  lecture
         upon, publish articles concerning, use, disseminate,  disclose, sell or
         offer for sale any  Proprietary  Property  without the Company's  prior
         written permission.

15.      INDEMNIFICATION.

(a)      The  Company  agrees  that  if the  Executive  is made a  party,  or is
         threatened  to be made a  party,  to any  action,  suit or  proceeding,
         whether   civil,   criminal,   administrative   or   investigative   (a
         "Proceeding"),  by  reason  of the fact  that he is or was a  director,
         officer or  employee of the Company or is or was serving at the request
         of the Company as a  director,  officer,  member,  employee or agent of
         another  corporation,   partnership,  joint  venture,  trust  or  other
         enterprise, including services with respect to employee benefits plans,
         whether or not the basis of such Proceeding is the Executive's  alleged
         action in an official  capacity  while serving as a director,  officer,
         employee or agent, the Executive shall be indemnified and held harmless
         by the Company to the fullest extent legally permitted or authorized by
         the Company's  certificate of incorporation or bylaws or resolutions of
         the  Board  or,  if  greater,  by the  laws of the  Company's  state of
         incorporation against all cost, expense,  liability and loss (including
         without  limitation,  attorneys' fees,  judgments,  fines, ERISA excise
         taxes  or  penalties  and  amounts  paid or to be  paid in  settlement)
         reasonably   incurred  or  suffered  by  the  Executive  in  connection
         therewith,  and such indemnification shall continue as to the Executive
         even if he has ceased to be a  director,  member,  employee or agent of

                                       11


<PAGE>


         the  Company  or other  entity  and shall  inure to the  benefit of the
         Executive's  heirs,  executors  and  administrators.  The Company shall
         advance the Executive all reasonable costs and expenses incurred by him
         in connection  with a Proceeding  within twenty (20) days after receipt
         by the Company of a written  request  for such  advance.  Such  request
         shall  include an  undertaking  by the Executive to repay the amount of
         such  advance  if it  shall  ultimately  be  determined  that he is not
         entitled to be indemnified against such costs and expenses.

(b)      Neither the failure of the Company  (including  its Board,  independent
         legal counsel or  shareholders)  to have made a determination  prior to
         the  commencement  of any  Proceeding  concerning  payment  of  amounts
         claimed by the Executive under paragraph (a) above that indemnification
         of the Executive is proper because he has met the  applicable  standard
         of conduct,  nor a determination  by the Company  (including its Board,
         independent  legal counsel or shareholders)  that the Executive has not
         met such  applicable  standard of conduct,  shall create a  presumption
         that the Executive has not met the applicable standard of conduct.

(c)      The  Company  shall  continue  and  maintain   Directors  and  Officers
         Liability  Insurance  covering the  Executive to the extent the Company
         provides such coverage for its other senior executive officers.

16.      WITHHOLDING OF TAXES.

Except for  Executive's  services to be  provided  under  Section 7, above,  the
Company shall  withhold from any  compensation  and benefits  payable under this
Agreement all applicable federal, state, local, or other taxes.

17. ARBITRATION OF DISPUTES.

Except as  provided  in  Section 13 above,  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 National Rules for the Resolution
of  Employment  Disputes,   existing  at  the  date  thereof,  of  the  American
Arbitration Association. 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 the 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 Section 23 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.


18. PAYMENT OF FEES, EXPENSES AND INTEREST.

If Executive is the prevailing party in any arbitration  conducted under Section
17 hereof,  the Company  shall  promptly  reimburse  Executive  for all fees and
expenses  (including  legal,   consultants'  and  other  professional  fees  and
expenses)  incurred  by  Executive  in  connection  with  such  arbitration.  In
addition,  the Company shall pay Executive interest on any delayed payment under
this  Agreement  at  the  applicable   federal  rate  provided  for  in  Section
7872(f)(2)(A) of the Internal Revenue Code (or any successor to such section).

19. NO CLAIM AGAINST ASSETS.

Nothing in this  Agreement  shall be  construed  as giving  Executive  any claim
against  any  specific  assets  of  the  Company  or  as  imposing  any  trustee
relationship  upon the  Company in respect of  Executive.  Subject to Section 12
above and  Section 20 below,  the Company  shall not be required to  establish a
special or separate  fund or to segregate  any of its assets in order to provide
for the satisfaction of its obligations under this Agreement. Executive's rights
under this Agreement shall be limited to those of an unsecured  general creditor
of the Company and its affiliates.

                                       12
<PAGE>


20. SUCCESSORS AND 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, representatives, successors and assigns.

(a)      Company  Successor.  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.  In the
         event  that the  Company  fails to obtain  such  agreement  prior to or
         concurrently with the effectiveness of any such Change of Control,  the
         Company  shall   establish  an   irrevocable   trust  fund  or  similar
         arrangement  containing  assets  sufficient  to assure  payment  of all
         obligations  under this Agreement  provided that  Executive's  right to
         payment  from such trust fund or  arrangement  shall be no greater than
         the right of an unsecured  creditor of the Company and its  affiliates.
         As used in this  Agreement,  the  "Company"  shall mean the  Company as
         defined  in the first  sentence  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  which  otherwise  becomes  bound  by  all  the  terms  and
         provisions of this Agreement, whether by the terms hereof, by operation
         of law or otherwise.

(b)      Assignment  by  Executive.  The rights and benefits of Executive  under
         this  Agreement  are personal to him and no such right or benefit shall
         be  subject to  voluntary  or  involuntary  alienation,  assignment  or
         transfer;  provided,  however,  that  nothing in this  Section 20 shall
         preclude  Executive from  designating a beneficiary or beneficiaries to
         receive any benefit payable on his death.

21.      ENTIRE AGREEMENT; AMENDMENT.

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  terms  of  Executive's
employment.  It may not be amended except by a written  agreement signed by both
parties.

22. 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.

23.      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 or mailed by registered or certified  mail,  return receipt
requested, or by facsimile or by hand delivery, to those persons listed below at
their  following  respective  addresses  or at such  other  address  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

To Executive:

         Arthur Hershaft
         33 Johnson Place
         Rye, New York 10580

                                       13
<PAGE>



24.      MISCELLANEOUS.

(a)      No Set-Off, etc. Except as otherwise provided in Section 10(c)(ii), the
         Company's  obligation  to  make  the  payments  provided  for  in  this
         Agreement and otherwise  perform its  obligations  under this Agreement
         shall not be affected by any set-off,  counterclaim,  defense, or other
         claim, right, or action that the Company may have against Executive.

(b)      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.

(c)      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.

(d)      Headings. Section headings are used herein for convenience of reference
         only  and  shall  not  affect  the  meaning  of any  provision  of this
         Agreement.

(e)      Rules of Construction. Whenever the context so requires, the use of the
         singular shall be deemed to include the plural and vice versa.

(f)      Term of  Payments  to and  Benefits  for  Surviving  Spouse.  If  Janet
         Hershaft,  Executive's  spouse  on  the  date  of  this  Agreement,  is
         Executive's  surviving spouse at the time of his death,  then she shall
         be entitled to receive the  payments  to and  benefits  provided  for a
         surviving  spouse under  Sections 8, 9 and 11 of this Agreement for the
         periods  specified   therein.   However,   if  Janet  Hershaft  is  not
         Executive's  surviving spouse at the time of his death, for purposes of
         Sections 8, 9 and 11 of this Agreement,  Executive's  surviving spouse,
         if any,  shall be  entitled  to  receive  the  amounts  payable  to and
         benefits provided for a surviving spouse under this Agreement until the
         earlier of (i) the date of such  surviving  spouse's  death or (ii) the
         last date on which Janet  Hershaft  would have been entitled to receive
         such  payment or benefit,  the date of death of such  surviving  spouse
         being  deemed to be the last day of Janet  Hershaft's  life  expectancy
         used by the Company for purposes of preparing the  Company's  financial
         statements to determine the accrual of the Company's expenses resulting
         from such payments and benefits.

(g)      Counterparts.   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.

IN WITNESS  WHEREOF,  the parties hereto have duly executed this Agreement as of
the first day of October, 2004.


 /s/ LeoBenetar                                 /s/ ArthurHershaft
----------------------------------              --------------------------
Leo Benatar                                     Arthur Hershaft
Chairman, Executive Development &
Compensation Committee

                                       14

<PAGE>


                                   APPENDIX A

                         DEFINITION OF CHANGE OF CONTROL

For purposes of Section 11 of this Agreement, "Change of Control" means:

(a)      The acquisition by any individual, entity, or group (within the meaning
         of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,
         as amended (the "Exchange  Act")) of beneficial  ownership  (within the
         meaning of Rule 13d-3  promulgated  under the  Exchange  Act) of 30% or
         more of either (1) the then  outstanding  shares of common stock of the
         Company (the  "Outstanding  Company  Common Stock") or (2) the combined
         voting power of the then outstanding  voting  securities of the Company
         entitled  to  vote   generally  in  the  election  of  directors   (the
         "Outstanding Company Voting Securities");  provided,  however, that for
         purposes of this clause (A), the following  acquisitions of stock shall
         not result in a Change of Control:  (1) any  acquisition  directly from
         the Company, (2) any acquisition by the Company, (3) any acquisition by
         any employee benefit plan (or related trust) sponsored or maintained by
         the Company or any  corporation  controlled by the Company,  or (4) any
         acquisition by any corporation  pursuant to a transaction that complies
         with clauses (1), (2), and (3) of subsection (c) of this definition; or

(b)      Individuals who, as of the date hereof,  constitute the Company's Board
         of Directors (the "Incumbent Board") cease for any reason to constitute
         at least a majority  of the  Company's  Board of  Directors;  provided,
         however, that any individual becoming a director subsequent to the date
         hereof whose  election,  or nomination  for election,  by the Company's
         shareholders  was  approved  by a vote of at  least a  majority  of the
         directors then  comprising  the Incumbent  Board shall be considered as
         though  such  individual  were a member  of the  Incumbent  Board,  but
         excluding,   for  this  purpose,  any  such  individual  whose  initial
         assumption  of office  occurs  as a result  of an actual or  threatened
         election  contest  with respect to the election or removal of directors
         or other actual or threatened solicitation of proxies or consents by or
         on behalf of a Person other than the Company's Board of Directors; or

(c)      Consummation of a  reorganization,  merger, or consolidation or sale or
         other  disposition  of all or  substantially  all of the  assets of the
         Company (a "Business Combination"), in each case, unless following such
         Business  Combination,  (1) all or substantially all of the individuals
         and  entities  who were the  beneficial  owners,  respectively,  of the
         Outstanding   Company  Common  Stock  and  Outstanding  Company  Voting
         Securities immediately prior to such Business Combination  beneficially
         own,  directly  or  indirectly,  more  than 60% of,  respectively,  the
         outstanding shares of common stock and the combined voting power of the
         then outstanding  voting  securities  entitled to vote generally in the
         election of directors, as the case may be, of the corporation resulting
         from  such  Business  Combination,  including,  without  limitation,  a
         corporation  that as a result of such  transaction  owns the Company or
         all or  substantially  all of the Company's  assets either  directly or
         through one or more  subsidiaries  (any such corporation being referred
         to herein as a  "Resulting  Corporation"),  in  substantially  the same
         proportions as their ownership of the Outstanding  Company Common Stock
         and  Outstanding  Company  Voting  Securities,  as  the  case  may  be,
         immediately  prior  to  such  Business   Combination,   (2)  no  Person
         (excluding any employee  benefit plan (or related trust) of the Company
         or a Resulting Corporation)  beneficially owns, directly or indirectly,
         30% or more of, respectively, the outstanding shares of common stock of
         the  Resulting  Corporation  or the  combined  voting power of the then
         outstanding  voting securities of such Resulting  Corporation except to
         the  extent  that  such   ownership   existed  prior  to  the  Business
         Combination, and (3) at least a majority of the members of the board of
         directors of the  Resulting  Corporation  were members of the Incumbent
         Board at the time of the execution of the initial agreement,  or of the
         action of the Board, providing for such Business Combination; or

(d)      Approval by the  shareholders of the Company of a complete  liquidation
         or dissolution of the Company.