EMPLOYMENT AGREEMENT


         EMPLOYMENT  AGREEMENT (this  "Agreement"),  dated as of August 24, 1999
(the "Commencement Date"),  between SALANT CORPORATION,  a Delaware corporation,
(the "Corporation") and Howard Posner (the "Employee").
         WHEREAS,  this  Agreement  will confirm the  understanding  between the
Employee and the  Corporation  concerning  the  Employee's  employment  with the
Corporation.
         NOW THEREFORE,  in  consideration  of the respective  premises,  mutual
covenants  and  agreements  of the parties  hereto,  and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
         Section 1. Nature of  Employees  Services . The  Corporation  agrees to
employ  the  Employee  and the  Employee  agrees  to serve  the  Corporation  as
Executive  Vice  President of Global  Sourcing.  The Employee shall perform such
services and duties as shall be assigned to him or delegated to him from time to
time by Chief Executive  Officer of the Corporation,  or at the direction of the
Chief  Executive  Officer,  in conjunction  with the President,  Chief Operating
Officer or Chief Financial Officer provided,  however, that such duties shall be
consistent  with those  customarily  performed  by a senior  executive  of other
entities doing business in the industries in which the  Corporation is primarily
engaged.

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         The Employee's duties shall include,  without additional  compensation,
the performance of similar services for any subsidiaries of the Corporation. The
Employee  agrees that,  except as  otherwise  provided  herein,  he shall devote
substantially all of his business time,  attention and energy to the business of
the Corporation and its subsidiaries in the advancement of the best interests of
the  Corporation  and its  subsidiaries.  The  Employee  will perform his duties
hereunder principally in the New York metropolitan area.
         It shall not be a violation of this  Agreement  for the Employee to (a)
serve on corporate, civic or charitable boards or committees or otherwise engage
in charitable  activities and community affairs,  (b) deliver lectures,  fulfill
speaking  engagements  or  teach at  educational  institutions,  and (c)  manage
personal  investments,  so long as such  activities do not materially  interfere
with the  performance  of  Employee's  responsibilities  as an  employee  of the
Corporation in accordance with this Agreement.
         Section 2.  Annual  Compensation  . Subject  to the terms  hereof,  the
Corporation  agrees to pay to the Employee,  subject to all applicable  laws and
requirements, including, without limitation, laws with respect to withholding of
federal, state or local taxes, the annual compensation set forth below.
         (a)  Salary.  As annual  salary for the  services to be rendered by the
Employee  the  Corporation  shall pay a salary at the rate of $275,000 per annum
payable in equal bi-weekly  installments,  (the "Salary"),  such Salary shall be
reviewed for increase annually while employed by the Corporation.
         (b)  Incentive  Compensation.  Employee  shall be entitled to receive a
bonus (the "Bonus") in accordance with the schedule  annexed hereto as Exhibit 1
comparing  the  Corporation's  performance  during  each  fiscal year which ends
within a particular  employment year, to operating  targets for each such fiscal
year. The Employee shall not receive a minimum or guaranteed bonus for any year.
Each bonus  shall be paid by the  Corporation  to the  Employee  on or about the
succeeding  March 31  following  the end of the fiscal  year to which such bonus
relates. If the employment of the Employee is terminated on a day other than the
last day of a fiscal year,  the bonus amount payable with respect to such fiscal
year shall be the amount to which the Employee  would have been entitled had his
employment  continued  for all of that fiscal year,  prorated by the  proportion
that the number of days of  employment  completed  by the  Employee  during that
fiscal  year  bears to 360.  Notwithstanding  anything  contained  herein to the
contrary,  no bonus or Minimum Bonus shall be payable to the Employee (i) if the
Employee  is  terminated  pursuant  to  Section  5(c) or  (ii)  if the  Employee
terminates his/her employment other than pursuant to Section 5(e).
         Section 3. Employee Benefit Plans . The Employee, while employed by the
Corporation,  shall be eligible to participate in and receive benefits under and
in accordance  with the  provisions  of any pension plan,  welfare plan or other
similar  plan or policy of the  Corporation  maintained  for the  benefit of the
Corporation's senior level executives or its employees generally (together,  the
"Benefit  Plans").  In the event any new Benefit Plan is established which is in
addition to, and not an alternative to, any existing  Benefit Plan, the Employee
shall  also be  entitled  to  participate  in such  Benefit  Plan to the  extent
permitted by the terms thereof.  The Corporation shall have the right,  however,
to make  changes  in  Benefit  Plans  applicable  to its  senior  executives  or
employees  generally  and the Employee  agrees that such  changes  shall also be
applicable to the Employee.
         Section 4.        Expenses and Other Perquisites.
         (a) Subject to compliance by the Employee with such policies  regarding
expenses  and expense  reimbursement  as may be adopted from time to time by the
Corporation,  the Employee is  authorized  to incur  reasonable  expenses in the
performance  of his duties  hereunder in the  furtherance of the business of the
Corporation  and its  subsidiaries,  and the  Corporation  shall  reimburse  the
Employee for all such reasonable expenses.
         (b) While the Employee is employed by the Corporation,  the Corporation
will provide the Employee with an automobile allowance in the amount of $500 per
month, payable in equal bi-weekly installments.
         Section 5.        Termination.
         (a) Definition of the Termination Date The "Termination  Date" shall be
the date which is earlier of (i) the effective date of termination of employment
as set forth in the notice which Corporation delivers to the Employee indicating
that the Employee's  employment hereunder is terminated,  or (ii) the final date
of employment worked by such employee after he or she delivers written notice to
the Corporation that he or she is terminating his/her employment hereunder.
         (b) Termination Due to Death or Disability. In the event the Employee's
employment is terminated due to his death or Disability(as hereinafter defined),
he, his estate or his beneficiaries, as the case may be shall be entitled to:
                  (i)  Salary through the date of death or disability and any
Bonus for any fiscal year earned but not yet paid;
                  (ii)  pro-rated Bonus through the date of death or Disability,
payable in accordance with Section 2(b);
                  (iii)  in the  case of  death  only,  an  additional  lump sum
payment equal to three months Salary at the annual rate in effect at the date of
death,  paid  promptly  after his death;  (iv) the right to  exercise  all stock
options  granted to Employee at the time of his death or Disability  (whether or
not then  vested)  for a  period  of one year  following  such  event or for the
remainder of the exercise period, if shorter;
                  (vi)  any amounts earned, accrued or owing to the Employee but
not yet paid under Sections 3 or 4;
                  (vii) the right to receive all applicable benefits pursuant to
the Corporation's Employee Long Term Disability Coverage plan (the "Plan") as if
he were fully covered thereunder, provided however, if the Employee is precluded
from receiving such benefits (e.g. due to the fact that he is no longer employed
by the  Corporation),  the Corporation shall pay to Employee cash payments equal
to the amount of benefits he would have received had he continued to be eligible
to participate in the Plan; and
                  (viii)  other or  additional  benefits  then due or  earned in
accordance with applicable plans and programs of the Corporation.
         For purposes of this Agreement, "Disability" shall mean any physical or
mental  illness which as a result  thereof,  the Employee is unable to discharge
his  duties  for a period of three (3)  consecutive  months or for a total of 90
days during any twelve month period.
         (c)  Termination by the Corporation for Cause .
                  (i)  "Cause" shall mean:
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                           (A)  the Employee is convicted of a felony or engages
in conduct which is determined by a court to constitute an act involving moral
turpitude; or
                           (B)  the Employee engages in conduct that constitutes
(i) willful gross misconduct in carrying  out  his  duties  under this Agreement
or (ii) a  violation  of the Company's Code of Conduct, resulting, in each case,
in material  harm to the financial condition or reputation of the Corporation.
                  (iii) In the event the  Corporation  terminates the Employee's
employment for Cause he shall be entitled to:
                           (A)  Salary through the Termination Date;
                           (B)  any amounts earned, accrued or owing to the
Employee but not yet paid under Sections 3 or 4; and
                           (C)  other or additional benefits then due or earned
in accordance with applicable plans or programs of the Corporation.
         (d)  Termination by the Corporation Without Cause .
         In the event the  Employee's  employment  is  terminated  pursuant to a
change in control as herein defined or by the  Corporation  without Cause (which
termination  shall be effective as of the date specified by the Corporation in a
written  notice to the  Employee),  other  than due to death or  Disability  the
Employee shall be entitled to and his sole remedies  under this Agreement  shall
be:
                  (i)  Salary through the Termination Date;
                  (ii)  Salary,   at  the  annualized  rate  in  effect  on  the
Termination  Date for a period  commencing on the Termination  Date and ending 6
months following such  termination;  plus, an amount paid in accordance with the
Corporation's normal severance policy (the "Severance Period");
                  (iii) pro-rated Bonus for the fiscal year in which termination
occurs, payable in accordance with Section 2(b);
                  (iv) the  right  to  exercise  any  stock  option  held by the
Employee at the  Termination  Date (whether or not then vested),  such option to
remain  exercisable  for six (6) months after the  Termination  Date, or for the
remainder of the exercise period, if shorter;
                  (v)  Any amounts earned, accrued, or owing to the Employee but
not yet paid under Sections 3 or 4; and
                   (vi)  other or  additional  benefits  then due or  earned  in
accordance with applicable plans and programs of the Corporation.
                  "Termination   Without   Cause"  shall  mean  the   Employee's
employment  is  terminated  by the  Company  for any reason  other  than  death,
Disability or Cause (as defined in Section 5 (c)).
         (e)  Termination  by Employee for Good Reason . The Employee shall have
the right to terminate  his/her  employment  for "good  reason" (as  hereinafter
defined),  provided that the Employee  shall have given the  Corporation 90 days
prior written  notice of the  Employee's  decision to terminate  his  employment
(specifying  the  alleged  "good  reason" in  reasonable  detail)  and, if it is
possible to cure,  the  Corporation  shall not have cured the same within thirty
(30) days after receipt of such notice, or, if cure cannot be fully accomplished
within thirty (30) days,  the  Corporation  shall not have commenced cure within
thirty  (30) days after  receipt  of such  notice  and cured the  alleged  "good
reason" as soon as possible  thereafter.  For purposes of the  foregoing,  "good
reason"  shall mean (i) the  assignment  to the Employee of duties  inconsistent
with the Employee's  positions,  titles,  offices,  duties,  responsibilities or
status with the  Corporation as an executive,  or a change without good cause in
the Employee's reporting responsibilities,  or any removal of the Employee from,
or any  failure  to elect the  Employee  to any  positions,  titles  or  offices
specified in this  Agreement and held by the  Employee,  (ii) a reduction in the
Employee's  Salary,  (iii) a material  reduction in the  Employee's  benefits or
perquisites  (other than a reduction  pursuant to the second to last sentence of
Section 3  hereof);  or (iv) a  requirement  that  Employee  change his place of
principal employment to a location other than the metropolitan New York area.
         In the event that the  employment  is  terminated  by the  Employee for
"good  reason",  the Employee  shall be entitled to, and his sole remedies shall
be,  the  same  benefits  provided  for  in  Section  5(d)  "Termination  by the
Corporation Without Cause".
          (f) Voluntary Termination. In the event of a termination of employment
by the Employee on his own  initiative,  other than a termination  due to death,
Disability  or Good Reason,  the  Employee  shall have the same  entitlement  as
provided in Section 5 (c) above for a termination for Cause.
         (g)  Condition to Receipt of Severance  Payments.  The Employee  hereby
acknowledges  that the "Severance  Payment" (as hereinafter  defined) is greater
than the amount provided by the  Corporation's  normal  severance  policy and is
being  offered to the  Employee in reliance  upon the  Employee's  agreement  to
release the Corporation  from any liability and to waive any claims the Employee
may have against the  Corporation,  including,  without  limitation,  any claims
relating  to the  Employment  or  separation  from  employment.  Notwithstanding
anything to the contrary  contained herein,  nothing shall impair the Employee's
(i) right to enforce the  obligations  of the  Corporation  as set forth in this
Agreement,  or (ii)  right  to seek  indemnification  or  contribution  from the
Corporation  in the event the Employee is the subject of any  third-party  claim
arising out of or relating  to any act or  omission by the  Employee  during the
course of his employment by the Corporation, to the extent such right would have
otherwise existed. For purposes of this Agreement,  Severance Payment shall mean
any amount paid to the Employee during a Severance Period.
         Section 6. Covenant Not to Compete . The Employee  covenants and agrees
that he will not, at any time during the Restriction  Period (as defined below),
whether  as owner,  principal,  agent,  partner,  director,  officer,  employee,
independent contractor, consultant, shareholder, licensor or otherwise, alone or
in association with any other person,  either directly or indirectly , carry on,
be engaged or take part in, render services to own, or share in the earnings of,
or invest in the stocks,  bonds or other  securities of, or be interested in any
way in any  business  competing  with,  or similar to, the business in which the
Corporation,  or any of  its  subsidiaries  are  primarily  engaged,  including,
without limitation,  any retail customer of the Corporation that accounts for 5%
or more of the Company's net sales on an annualized  basis,  without the written
consent of the Board of Directors, provided that the Employee may hold a passive
investment  in a  business  which is  competitive  with or similar to any of the
businesses of the  Corporation  if the  investment  is in  securities  which are
listed on a national  securities  exchange  and the  investment  in any class of
securities does not exceed 1% of the  outstanding  shares of such class or 1% of
the aggregate outstanding principal amount of such class, as the case may be. In
addition,  for one year after the end of the  Restriction  Period,  the Employee
covenants and agrees that he will not,  directly or indirectly,  hire any person
who is employed by the Corporation on the  Termination  Date whose annual salary
on such date is equal to or greater than $100,000, or solicit, induce, entice or
hire any such person to leave the employment of the Corporation. For purposes of
this Section 6, the "Restriction  Period" shall mean the period beginning on the
Commencement Date and ending on the last day of either (i) the employment of the
Employee by the Corporation (determined without giving effect to any termination
of employment) or (ii) the Severance Period whichever is longer.
         Section 7.  Non-Disclosure  Covenant . The Employee further agrees that
while employed by the  Corporation  and thereafter  without limit,  he will not,
either  directly or indirectly,  communicate  or divulge to any person,  firm or
corporation  other than the  Corporation and its  subsidiaries,  any information
(except that which is generally  known to the public)  relating to the business,
customers and suppliers, or other affairs of the Corporation or its subsidiaries
("Confidential  Information")  except (a) for the purpose  of, or in  connection
with, the  advancement of the business of the  Corporation,  or (b) in the event
that the Employee is required (by verbal  questions,  interrogatories,  requests
for information or documents,  subpoena,  civil investigative  demand or similar
legal  process)  to  disclose  Confidential  Information,  and the  Employee  is
compelled to disclose such Confidential Information at the risk of liability for
contempt or suffer other censure, penalty or violation in a court proceeding. In
the  event  that  the  Employee  is  required  to  disclose  such   Confidential
Information  in the  circumstances  described in clause (b) above,  the Employee
will, to the extent legally permissible either (i) give the Corporation at least
ten days' written notice (or shorter, but prompt, notice to the extent the


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Employee  is  required  to respond to legal  process in fewer than ten days ) so
that the Corporation may seek an appropriate protective order, or (ii) make such
disclosure to a court under seal.
  The provisions of this Section 8, shall not be applicable to information which
                  (i) was at the time of the  disclosure by the  Corporation  to
                  the Employee,  in the public domain;  (ii) has subsequent,  to
                  the disclosure by the  Corporation,  become part of the public
                  domain, through no fault, act or omission of the Employee,
                  directly  or indirectly, in violation of such obligation;
                  (iii) was, at the time of the disclosure by the Corporation to
                  the Employee, in the Employee's possession and was not other-
                  wise, directly or indirectly acquired from the Corporation;
                  (iv)  was  received  by the  Employee  from any  third  party,
provided  that such  information  was not  obtained by said third party from the
Corporation improperly, directly or indirectly, and was not improperly disclosed
by the third party.
         Section 8. Vacations . The Employee shall be entitled to paid vacations
in accordance  with the policies of the Corporation in effect from time to time,
but not less  than  four  weeks in any of the  fiscal  years  during  which  the
Employee is employed.  To the extent the Employee does not use the full vacation
period during a fiscal year the unused  balance shall accrue and be carried over
into subsequent fiscal years; provided,  however, that no more than an aggregate
of two weeks of unused vacation time may be carried forward from one fiscal year
to the next fiscal year.

<PAGE>

         Section 9.  Successors and Assigns . In the event that the  Corporation
shall at any time be merged or consolidated  with any other corporation or shall
sell or  otherwise  transfer  substantially  all of its  assets or  business  to
another corporation or entity, the provisions of this Agreement shall be binding
upon and  inure to the  benefit  of such  corporation  or  entity  surviving  or
resulting from such merger or  consolidation or to which such assets or business
shall be so sold or transferred;  provided,  however,  that nothing contained in
this  Section  11  shall  in any  way  limit,  or be  construed  to  limit,  the
obligations  to the  Employee  under this  Agreement or the  obligations  of the
Corporation or the Corporation's successors or assigns. This Agreement shall not
be assignable by the Employee.
         Section 10. Notice. Any notice or other communication which is required
or permitted by this  Agreement  shall be in writing and shall be deemed to have
been duly given when  delivered in person,  transmitted  by telecopy or five (5)
days after being mailed by registered or certified mail, postage prepaid, return
receipt requested, to such party at the address shown below:

                                   If to the Corporation, care of the following:

                               Salant Corporation
                           1114 Avenue of the Americas
                             New York New York 10036
                        Attention: Senior Vice President
                                Corporate Affairs

                                    If to the Employee, then to the following:

                                  Howard Posner
                                 14 Escher Drive
                           Marlboro, New Jersey 07746

Each party may, by notice or other party, change the above address.

         Section 11. Entire Agreement;  Amendments.  This Agreement embodies the
entire agreement and understanding  between the parties and supersedes all prior
agreements  and  understandings  as to  the  employment  of the  Employee.  This
Agreement may be amended from time to time by action of the Executive  Committee
of the Corporation.  No amendment,  waiver,  modification or discharge of any of
the terms of this  Agreement  shall be valid unless in writing and signed by the
party against which enforcement is sought.
         Section 12.  Waiver. The waiver by either party of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of any
subsequent breach thereof.
         Section 13. Counterparts.  This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original.
         Section 14. Governing Law; Resolution of Disputes. This Agreement shall
be governed by, and construed in accordance  with,  the laws of the State of New
York. The Employee hereby acknowledges that irreparable damage will occur in the
event that  Sections 7 and 8 of this  Agreement  are not performed in accordance
with their  specific  terms or are  otherwise  breached by the  Employee.  It is
accordingly  agreed that the  Corporation  shall be entitled to an injunction or
injunctions  to prevent  breaches or such  provisions in any Court of the United
States or any states  having  jurisdiction,  this being in addition to any other
remedy to which the Corporation  may be entitled to at law or in equity.  Except
in the event the Corporation is attempting to seek injunctive or other equitable
relief for a breach by the Employee of Sections 7 and 8 of this  Agreement,  the
parties  agree that as a condition  precedent  to the filing of any claim as set
forth  below,  the parties and their  attorneys  must attempt to confer at least
twice, in person,  in an effort to resolve any dispute.  Should such efforts not
be successful, such dispute shall be resolved by binding arbitration, to be held
in New York City in  accordance  with the rules and  procedures  of the American
Arbitration  Association.  Judgment upon the award rendered by the arbitrator(s)
may be entered in any court having jurisdiction  thereof.  Each party shall bear
his or its own  costs  of the  arbitration  or  litigation,  including,  without
limitation,  attorneys' fees. Pending the resolution of any arbitration or court
proceeding,  the Corporation  shall continue payment of all amounts and benefits
due the Employee under this Agreement.
         Section 15.       Certain Definitions
         "Affiliate" shall mean any person,  firm,  corporation,  partnership or
other legal entity that, directly or indirectly,  controls,  is controlled by or
is under common control with, the Corporation.
         "Change  of  Control"  shall mean an event or series of events by which
(i) any Person is or becomes the  "beneficial  owner" (as defined in rules 13d-3
and 13d-5 under the Securities and Exchange Act of 1934, as amended, except that
a person shall be deemed to have  "beneficial  ownership" of all shares that any
such  Person  has the  right to  acquire,  whether  such  right  is  exercisable
immediately or after the passage of time), directly or indirectly, of a majority
of  the  aggregate  Voting  Stock  of  the  Corporation;  (ii)  the  Corporation
consolidates with or merges into another Person or any Person  consolidates with
or merges into the  Corporation,  in either event  pursuant to a transaction  in
which  the  outstanding  Voting  Stock of the  Corporation  is  changed  into or
exchanged  for  cash,  securities  or  other  properties,  other  than  any such
transaction where the holders of the Voting Stock of the Corporation immediately
prior to such transaction own,  directly or indirectly,  immediately  after such
transaction  Voting Stock of such  surviving  corporation  entitling them to not
less  than  50% of the  aggregate  voting  power  of all  Voting  Stock  of such
surviving corporation; or (iii) the Corporation conveys, transfers or leases all
or substantially all of its assets to any Person. Notwithstanding the foregoing,
a Change of  Control  shall not be deemed to occur if the  Person  described  in
clause (i), (ii) or (iii) is Magten Asset Management Corp. or is an Affiliate of
Magten Asset Management Corp.
          "Person"  shall mean any  natural  person,  corporation,  partnership,
trust, association, governmental authority or unit, or any other entity, whether
acting in an individual,  fiduciary or other  capacity,  or any group of Persons
acting in concert.
         IN WITNESS WHEREOF,  the parties have executed this Agreement as of the
dates set forth below.

                                  SALANT CORPORATION


                                  By:_____________________________________
                                        Michael J. Setola
                                        Chairman of the Board
                                        and Chief Executive Officer


                                  ________________________________________
                                        Howard Posner




<PAGE>


                                    EXHIBIT 1

                         INCENTIVE COMPENSATION SCHEDULE


         (a)      If the Corporation's "Pre-tax Income", as shown on its audited
                  financial statements for any fiscal year during the Employment
                  Period  ("Actual  Annual  Pre-tax  Income"),  is  equal  to or
                  greater than 100% of the amount of Pre-tax Income provided for
                  in the  annual  business  plan  for the  Corporation  for that
                  fiscal year ("Planned  Annual Pre-tax  Income"),  the Employee
                  shall  receive a cash bonus equal to 35% of his annual  Salary
                  at the end of the applicable fiscal year ("Annual Salary").

          (b)     If Actual Annual Pre-tax  Income is less than 100% of  Planned
                  Annual Pre-tax  Income,  the  Employee's  cash bonus  shall be
                  reduced  by .7% for each full 1% decrease  (after  rounding to
                  the  nearest  1/100th of a percent)  by which  Actual   Annual
                  Pre-tax  Income  is less than 100%  of Planned  Annual Pre-tax
                  Income. For  example, if Actual Annual Pre-tax Income  was 95%
                  of  Planned Annual Pre-tax Income, the Employee  would receive
                  a  cash  bonus  equal  to 31.5% of his  Annual  Salary.  In no
                  event  shall the Employee  receive a cash  bonus if the Actual
                  Annual Pre-tax  Income is less than 90% of  the Planned Annual
                  Pre-tax Income.

         (c)      If Actual Annual Pre-tax Income exceeds 100% of Planned Annual
                  Pre-tax  Income,  then in addition to the bonus  specified  in
                  paragraph (a) above,  the Employee  shall  receive  additional
                  cash bonuses,  each equal to 1% of his Annual Salary, for each
                  full 1% increment  (after rounding to the nearest 1/100th of a
                  percent) by which Actual Annual Pre-tax Income exceeds 100% of
                  Planned Annual Pre-tax Income.

         (d)      The  following  principles  shall  apply  in  calculating  the
                  "Pre-tax Income" which term shall mean the aggregate income of
                  the Corporation  before provisions for all Federal,  State and
                  local income  taxes  thereon.  In  calculating  such  "Pre-tax
                  Income",   all  items  of  income  and  deductions   shall  be
                  determined in accordance  with generally  accepted  accounting
                  principles applied on a consistent basis, subject, however, to
                  the provisions of the following subparagraphs:


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                           (i)  There  shall  be  excluded   from  income:   all
                  extraordinary  items of income such as gains and losses on the
                  sale of fixed  assets  or  intangible  assets;  all  insurance
                  recoveries other than for business interruption; non-recurring
                  gains or losses including, without limitation, gains or losses
                  on the  termination of any employee  benefit plans or gains or
                  losses realized on the sale quota.

                           (ii)   Deductions   from  income  shall  include  all
                  interest expenses, fixed charges and reasonable provisions for
                  depreciation,   amortization   and   obsolescence,   inventory
                  write-offs  and the  salary  and bonus  payable  to all of the
                  employees of the Corporation and the Employee hereunder.

                           (iii) The amount of "Planned  Annual Pre-tax  Income"
                  for each fiscal year shall be determined by the  Corporation's
                  Chief Executive Officer.