<PAGE>   1
                                                                   EXHIBIT 10.16


                                                                November 3, 1999
Mr. John R. Agre
36 Highland Street
Weston, MA 02493

Dear John:

      We are pleased that you have accepted employment with Aai.FosterGrant,
Inc. (the "Company"), and want to take this opportunity to set forth our
understanding with respect to your employment and compensation:

1.    Title and Responsibilities:  Executive Director International.  To
report to the office of the CEO.

2.    Compensation:  See Attachment A.

3. Benefits: You shall be entitled to 3 weeks vacation and to participate in the
Company's insurance programs (including life and health insurance) and in any
ERISA benefit plans, all in accordance with Company's employee handbook. You
will be indemnified by the Company as provided in its By Laws, and the Company's
D & O insurance shall be applicable to you in accordance with its terms.

4. Confidentiality and Non-Competition Agreements: As a condition of employment,
you will sign and return to us prior to the first day of employment, the
Proprietary Rights Agreement attached as Attachment B and the Non-Competition
Agreement attached as Attachment C.

5.    Special Provisions:  See Attachment D.

      If these compensation terms and benefits are acceptable, please so signify
by signing below on a copy of this letter and returning it to us. If you have
any questions, please do not hesitate to contact me.

      We look forward to your joining the "AAi Team" and sharing in the future
success of the company. Please contact me to arrange for a mutually acceptable
start date.

                                    Sincerely,

                                    AAi.FosterGrant, Inc.

                                    By /s/ John R. Ranelli
                                       -------------------------------------
                                       Title:  President & COO
Agreed and Accepted:

/s/ John R. Agre
---------------------------------
John R. Agre
<PAGE>   2
                                  ATTACHMENT A

                                  COMPENSATION


1. Base Salary: $200,000/year

2. Bonus: You shall be eligible for and shall receive an annual cash bonus under
the Company's executive incentive compensation plan, subject to the discretion
of the Company's Board of Directors, of up to 30% of your Base Salary.

3. Stock Options: Pursuant to the provisions of the Company's Incentive Common
Stock Option Plan (a copy of which will be provided to you), the Company will
grant to you at the Board of Directors meeting following the commencement of
your employment, but in no event later than six (6) months following the
commencement of your employment, subject to the terms and conditions of the Plan
and the Company's form of Incentive Stock Option Agreement (a copy of which will
be provided to you), the right and option to purchase from the Company all or
any part of an aggregate of 6,000 shares of the common stock ($.01 par value) of
the Company at a purchase price equal to $32.00 per share. The option shall vest
upon an initial public offering of the Company's common stock or the achievement
by Company of $20 million EBIT.

4. Reimbursement: Within ten (10) days of the commencement of your employment
with the Company, you will be paid $30,000 partially on account of relocation
expenses you owe to your former employer (the "AAI Payment"), provided, however,
if your employment is terminated by you within twelve (12) months from the date
hereof, you shall reimburse Company for the AAI Payment as follows:

<TABLE>
<CAPTION>
                      Termination within            Reimburse Company
                      ------------------            -----------------
<S>                                                 <C>
3 months                                                100%
More than 3 months but less than 6 months                80%
More than 6 months but less than 9 months                50%
More than 9 months but less than 12 months               25%
</TABLE>


                                       2
<PAGE>   3
                                  ATTACHMENT B

                          PROPRIETARY RIGHTS 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 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 has expended and continues to expend
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
occupy a position of special value to Company and, in the discharge of duties
customary to that position, have access to Company's vital and unique business
information which allows Company to gain a competitive edge over competitors;
and (3) I have close, regular contact and relationships with Company's other
employees and, because of the personal nature thereof, it is common for such
employees to 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 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 customer personnel and (2)
provides employees, including me, access to information gathered by Company
about 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 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 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, suppliers, 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


                                       3
<PAGE>   4
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 and 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.

      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
in this connection, 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.

     4. 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
<PAGE>   5
     5. 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.

     6. 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.

     7. I shall comply with this Agreement at all times, even after the
termination of my employment for any reason. 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.

     8. 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.
I agree and consent to personal jurisdiction and service and 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. I waive trial by jury in any such action, suit or proceeding.


                                          /s/ John R. Agre
                                          ----------------------------------
                                          John R. Agre


                                       5
<PAGE>   6
                                  ATTACHMENT C

                            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 acknowledge that (1) Company is in the business of providing jewelry,
small leather goods, sunglasses, reading glasses and other accessories sales and
services to numerous customers (the "Business"), and has expended and continues
to expend 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 occupy a position of special value to Company and, in the discharge
of duties customary to that position, have access to Company's vital and unique
business information which allows Company to gain a competitive edge over
competitors; and (3) I have close, regular contact and relationships with
Company's other employees and, because of the personal nature of thereof it is
common for such employees to develop identification with me, rather than Company
itself, creating 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 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 customer personnel and (2)
provides employees, including me, access to information gathered by Company
about 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 customers commonly develop
identification with employees, including me, rather than Company itself. Such
identification could create the potential for my appropriation of the benefits
of relationships developed with customers on Company's behalf and expense.

      In order to clarify our common understanding concerning our mutual
responsibilities in this connection, 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
compensation that I accept in connection with such employment, I agree as
follows:

      1. Were I to leave the Company's employment and utilize my administrative,
technological, marketing and sales skills in competition with Company, the
results could be materially adverse to Company. Accordingly, during such
employment and during (a) the twelve (12) month period following the termination
of such employment by Company for cause pursuant to section 1 of Attachment D,
(b) the twelve (12) month period following the termination of such employment by
me or (c) the period following termination of such employment by Company without
such cause and during which I am receiving severance


                                       6
<PAGE>   7
payments pursuant to section 1 of Attachment D, (collectively, the
"non-competition period"), whether or not such employment is terminated for any
reason, 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, 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.

      2. 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.

      3. 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.

      4. I shall comply with this Agreement during the non-competition period,
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.

      5. 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. I agree and consent to personal jurisdiction and service and 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. I waive trial by jury in any such action, suit or proceeding.


                                    /s/ John R. Agre
                                    ----------------------------------------
                                    John R. Agre


                                       7
<PAGE>   8
                                  ATTACHMENT D

                               SPECIAL PROVISIONS


      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 the agreements attached at Attachments B and C,
Company shall pay to you a severance consisting of payments on the first
business day of each of the twelve (12) 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. 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 reasonable 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 Attachments B and C,
respectively; (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. (For purposes of
clarification, "cause" shall not mean the failure of the international division
to achieve sales/profitability targets, absent the occurrence of any events or
circumstances set forth in items (a) through (f) of this section 1.)

      2. 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. You agree and consent to personal jurisdiction and service and 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. You waive trial by jury in any such action, suit or
proceeding.


                                       8