<PAGE>   1
                                                                   EXHIBIT 10.20

                                AAI.FOSTER GRANT


May 9, 2001

Brian Lagarto

Dear Brian,

This letter summarizes the changes in your Duties, Salary and Benefits

1.       POSITION:  Chief Financial Officer

2.       REPORTING RELATIONSHIP: John Ranelli CEO

3.       PRIMARY RESPONSIBILITIES: Overall responsibility for the financial
         operations of the company including: Accounting, Cost Accounting,
         Treasury, Accounts Payable, Budget/Analysis and Accounts Receivable.
         In addition you will be responsible for all aspects of the
         relationships with our Financial Institutions.

4.       BASE SALARY: Your base annual salary will be $165,000 commencing
         April 23, 2001

5.       BONUS:  You will participate in the Management Incentive Award
         Program and will be eligible to receive a 30% bonus based set
         objectives to be discussed and agreed upon at a later date

6.       BENEFITS: You will be eligible for all Executive level Benefits that
         the company offers.

7.       PERFORMANCE REVIEW: In accordance with company policy you will be
         given a ninety (90) day non-financial review. As agreed upon you will
         also receive a six(6) month performance and salary review will be
         given on or about six(6) months from April 23, 2001

8.       PROPRIETARY RIGHTS/NON-COMPETITION:  Attachment A shall apply

9.       SPECIAL PROVISION/SEVERANCE: Attachment B shall appy




<PAGE>   2
                                AAI.FOSTER GRANT

Brian Lagarto
May 9, 2001
Page 2


If you are in agreement with the foregoing, please signify by signing below and
Attachment A and B.


Brian, I believe that you have the skills, experience, intellect and energy
level that will make you a successful team member. I am excited about our
opportunity and look forward to your participation in this process as well as
working with you to build our team and achieving common objectives.

Sincerely,                                   Agreed and Accepted

/s/ John Ranelli                             /s/ Brian J. Lagarto
--------------------------------             -----------------------------------
John Ranelli                                 Brian J. Lagarto
Chief Executive Officer
AAi.FosterGrant, Inc.

Date: 5/24/01                                Date: 5/24/01
     ---------------------------                  ------------------------------




<PAGE>   3
                                AAI.FOSTER GRANT


ATTACHMENT A

                  PROPRIETARY RIGHTS/NON-COMPETITION AGREEMENT

         For purposes of this Agreement, the following are collectively
referred to as "Company": AAi.FosterGrant, Inc. and any other corporation,
entity or person, now or hereafter controlled by, controlling or under common
control with Company. "I" shall mean Brian Lagarto

         I acknowledge that (1) Company is in the business of providing jewelry,
small leather goods, reading glasses and sunglasses and other accessories sales
and services to numerous customers, and expends significant resources in
developing, marketing and selling its services and products, and in developing
information which is not generally known to others and which is entitled to
protection from improper disclosure and use; (2) I will occupy a position of
special value to Company and, in the discharge of duties customary to that
position, I will have access to Company's vital and unique business information
which allows Company to gain a competitive edge over competitors; and (3) I will
have close, regular contact and relationships with Company's other employees
and, because of the personal nature thereof, such employees will develop
identification with me, rather than the Company itself, could create the
potential for my appropriation of such relationships developed on Company's
behalf and expense.

         I further acknowledge that an essential element of maintaining
Company's relationships with its customers is the development and maintenance of
personal contacts with vendor and customer personnel who are responsible for
obtaining Company services and products and, towards that end, Company (1)
encourages employees, including me, to become personally acquainted with vendor
and customer personnel and (2) provides employees, including me, access to
information gathered by Company about vendors and customers. This policy
represents a significant, costly investment by Company, to the extent additional
manpower is necessary to develop such contacts and relationships and gather such
information. Because of the personal nature of such contacts and relationships,
Company's vendors and customers commonly develop identification with employees,
including me, rather than Company itself. Such identification creates potential
for my appropriation of the benefits of relationships developed with vendors and
customers on Company's behalf and expense.

        In this Agreement, Company's information, data and knowledge is known as
Proprietary Materials. It includes such information, data and knowledge
developed or obtained by or on behalf of Company relating to, used in connection
with or reasonably likely to be useful to any of Company's businesses, ventures,
research, investigations or activities, including but not limited to all of
Company's products, discoveries, ideas, inventions, methods, improvements,
concepts, developments, methods, designs, drawings, works, processes, know-how,
computer programs, internal policies and procedures, vendors, customers,
contacts, prospects, financial information, business records, marketing
practices and any papers labeled "secret," "confidential," or "proprietary," as
well as any confidential information of any of Company's customers provided to
Company. I understand that each of the foregoing constitutes Proprietary
Materials even if conceived, made, developed, created or first reduced to
practice by me during my term of employment with Company, and whether or not (1)
I did so at the request or suggestion of Company, (2) they resulted from or were
suggested by any work that I have performed or may perform for Company, (3) I
did the work alone or in conjunction with others, (4) I did the work during
regular hours of work or otherwise, or at Company's place of business or
elsewhere, and (5) the Proprietary Materials are patentable or copyrightable by
me or someone else. Notwithstanding the foregoing, Company and I agree that
Proprietary Materials will not include any information, data or knowledge that I
can establish by written evidence as having been conceived, made or reduced to
practice by me which was created or conceived without use of Company resources,
outside of regular Company business hours and that is unrelated to or reasonably
unlikely to be useful to Company.


<PAGE>   4
                                AAI.FOSTER GRANT


         In order to provide greater comfort to Company that it can continue to
share its Proprietary Materials with me without fear of appropriation thereof,
and to clarify our common understanding concerning our mutual responsibilities,
I am entering into this Agreement. I have read it carefully so that I may
understand its importance. As a condition to my employment and continued
employment, and in consideration of the premises and the compensation that I
accept in connection with such employment, I agree as follows:

        1. During my employment and thereafter, I shall not, in any way,
directly or indirectly, disclose or appropriate to my own use, or to the use of
any party other than Company, the Proprietary Materials. I shall use my best
efforts to protect the Proprietary Materials from disclosure or misuse, and
inform an executive officer of Company immediately upon learning of any improper
disclosure or misuse of Proprietary Materials by me or by any other employee or
person. I shall not copy or remove from Company's premises any media, papers,
drawings or models relating to or containing any of the Proprietary Materials,
except to the extent necessary in the course of such employment.

        2. During the term of such employment and upon termination of my
employment, I shall promptly and fully disclose to an executive officer of
Company any Proprietary Materials of which I have knowledge.

        3. The Proprietary Materials shall at all times be the exclusive
property of Company, although I am aware that in the absence of this Agreement I
may have been entitled to rights in some of the Proprietary Materials.
Accordingly, I agree that all Proprietary Materials consisting of writings or
works (including but not limited to computer software program codes) shall be
considered works made for hire under the copyright laws, and therefore owned by
Company. So as to assure Company's exclusive rights in the Proprietary
Materials, I hereby assign, transfer and give to Company my entire right, title
and interest in and to the Proprietary Materials, including but not limited to
all rights throughout the world and any renewals and extensions associated
therewith. At the request of Company, during the term of my employment and
forever thereafter, I shall (a) sign, verify, acknowledge, deliver and file any
documents necessary or advisable for Company to obtain ownership of the
Proprietary Materials, including, at Company's expense, the issuance of patents
or copyrights to Company with respect to the Proprietary Materials, and (b)
otherwise assist Company in every reasonable manner in obtaining any of its
rights in the Proprietary Materials (including but not limited to providing
testimony at legal proceedings). I hereby irrevocably appoint Company as my
attorney-in-fact (which appointment shall be deemed a power coupled with an
interest) with full powers of substitution and delegation, to execute, verify,
acknowledge and deliver any such documents.

         4. Upon the termination of my employment for any reason, or if Company
shall request sooner, I shall promptly deliver to an executive officer of
Company all media, papers, drawings, models and other existing material in my
possession or control relating to or containing any of the Proprietary
Materials.

         5. I shall not disclose to Company any knowledge, data or information
which, to my knowledge, another company may consider to be its confidential
information, trade secrets or proprietary information. I am not subject to any
other agreements, whether in writing or verbally, with anyone else that would
prohibit, restrict or interfere with my employment or fulfilling my obligations
under this Agreement.

         6. Were I to leave the Company's employment and utilize my
administrative, merchandise, financial, technological, marketing and sales
skills in competition with the Company, the results would be materially adverse
to Company. Accordingly, during such employment and during the twelve (12) month
period following the termination of my employment with Company (the
"non-competition period"), I shall not engage in or carry on, in any way,
directly or indirectly, either for myself or as a member of a partnership or as
a stockholder or investor (except for ownership of securities, not exceeding 5%
of any class, of a corporation traded on a national securities exchange) or as
an officer, director, employee, agent,



<PAGE>   5
                                AAI.FOSTER GRANT


representative, advisor or consultant of any entity (other than Company), any
business similar to or competing with any business carried on by Company or its
successors at the time of the termination of my employment, or directly or
indirectly related to the Business and to which I have been exposed at any time
during such employment, in the United States or any other country in which
Company does business or engages in activities at the time of the termination of
such employment. This agreement does not include any retail operation that does
not currently or, in the 5 years prior to execution of this agreement, conduct
business with the Company or one of it's Subsidiaries.

         7. I shall not, during the non-competition period, in any way, directly
or indirectly (except in the course of such employment), call upon, solicit,
advise or otherwise do or attempt to do, business with any clients, customers or
accounts of Company with whom I had any dealings at any time during the course
of such employment, or take away or interfere or attempt to interfere with any
custom, trade, business or patronage of Company, or interfere with or attempt to
interfere with any officers, employees, representatives, advisors, consultants
or agents of Company, or induce or attempt to induce any of them to leave the
service of Company or violate agreements with it. At the termination of my
employment, Company shall supply to me a written listing of clients, customers
or accounts of Company.

         8. The foregoing shall be deemed to be a series of separate covenants,
one for each county of each state or territory of the United States and one for
each and every country in which Company does business or engages in activity. If
a court shall refuse to enforce all of such separate covenants, then such
unenforceable covenants shall be deemed eliminated for the purpose of such
proceedings to the extent necessary to permit the remaining separate covenants
to be enforced. If a court refuses to enforce any one or more of such separate
covenants because the time thereof is deemed to be excessive or unreasonable,
then such covenants, which would otherwise be unenforceable due to such
excessive or unreasonable period of time, shall be enforced for such lesser
period of time as deemed reasonable and not excessive by such court.

          9. I shall comply with this Agreement even after the termination of my
employment for any reason, and I shall perform each and every obligation set
forth in this Agreement without any further payment or compensation to me,
except for any reasonable out-of-pocket expenses incurred at the request of
Company.

             10. It is understood and agreed that any breach of this Agreement
is likely to result in irreparable injury to Company, and that the remedy at law
alone will be an inadequate remedy for such breach, in that in addition to any
other remedy Company may have, Company shall be entitled to enforce my specific
performance of this Agreement, and to seek both temporary and permanent
injunctive relief (to the extent permitted by law) without the necessity of
proving actual damages.


                                                 /s/ Brian J. Lagarto
                                                 -------------------------------
                                                 Brian Lagarto

                                                 5/24/01
                                                 -------------------------------
                                                 Date





<PAGE>   6

                                AAI.FOSTER GRANT


                                  ATTACHMENT B

                          SPECIAL PROVISIONS/SEVERANCE


         1. This letter sets forth the terms of employment, and does not
constitute or promise employment for a specific term. Either you or we can
terminate employment for any reason. Notwithstanding the foregoing, if your
employment is terminated by Company for other than cause, then so long as you
are in compliance with the terms of this letter agreement, including all
attachments. Company shall pay to you a severance consisting of payments on the
first business day of each of the Six (6) months immediately succeeding the date
of termination of your employment equal to 1/12th of your Base Salary in effect
on the date of termination. The severance program will also provide benefit
continuation for the entire severance period. For purposes of the prior
sentence, "cause" shall mean: (a) your permanent disability under Company's
long-term disability insurance coverage; (b) failure to devote full time and
best efforts to the performance of your duties; (c) commission of an act of
gross negligence, dishonesty, fraud, gross insubordination, malfeasance,
disloyalty, bad faith or breach of trust in the performance of your duties; (d)
failure to observe the agreements set forth in the agreements attached as
ATTACHMENT A; (e) commit a felony or act which, in the judgment of the Board of
Directors of Company, subjects you or Company to public disrespect, scandal or
ridicule so as to materially and adversely affect the utility of your services
to Company; or (f) refuse to perform duties assigned to you in good faith or
violate or fail to observe any lawful business instruction or lawful business
policy established by Company with respect to the operation of its business and
affairs or fail to, or refuse to, substantially perform your duties; and with
respect to items (b) and (f), after a written notice is delivered by Company,
which specifically identifies the manner in which you have become subject to
termination for cause, if not cured (if such matter is susceptible of cure)
within twenty (20) days after such written notice.

1.       This Agreement shall be governed by and construed in accordance with
         the laws of the State of Rhode Island, without regard to its Conflict
         of Laws Rules. Employee agrees and consents to personal jurisdiction
         and service in venue in any Federal or State Court within Rhode Island
         having subject matter jurisdiction, for purposes of any action, suit or
         proceeding arising out of or relating to this Agreement. Employee
         waives trial by jury in any such action, suit or proceeding.



     By: /s/ John R. Ranelli                    By: /s/ Brian J. Lagarto
        ------------------------------          --------------------------------
        John R. Ranelli                         Brian J. Lagarto