Exhibit 10.7


                EMPLOYMENT AGREEMENT FOR ROBERT F. LUEHRS

            EMPLOYMENT AGREEMENT, dated as of March 15, 1996, among
CHIC BY H.I.S, INC., a Delaware corporation ("Holding"), HENRY I. SIEGEL
COMPANY, INC., a Delaware corporation and a wholly owned subsidiary of Holding
(the "Corporation"), and ROBERT F. LUEHRS (the "Executive").
            The Executive has heretofore been employed by the Corporation, and
the Executive and the Corporation desire to continue such employment, upon the
terms and conditions set forth herein.
            Accordingly, the parties agree as follows:
            1.    EMPLOYMENT AND ACCEPTANCE.
            The Corporation hereby employs the Executive and the Executive
hereby accepts employment from the Corporation for the Term (as hereinafter
defined). As of the opening of business on the Effective Date (as defined in Sec
tion 4), this Agreement supersedes all agreements, written or oral, between the
Executive and the Corporation and Holding relating to terms of employment.
            2.    DUTIES.
            During the Term, the Executive shall devote his full time and
energies to the business and affairs of the Corporation. The Executive agrees to
use his best efforts, skill and abilities to promote the Corporation's
interests; to serve as the President of the Corporation and to perform all the
duties necessary or appropriate for the management of the Corporation's business
and also such duties as may be assigned to him by the Chief Executive Officer of
the Corporation (the "Chief Executive Officer") commensurate with the position
of executive.






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            3.    LOCATION.
            The duties to be performed by the Executive hereunder shall be
performed primarily at the principal office of the Corporation, currently
located in the City of New York, subject to reasonable travel requirements on
behalf of the Corporation.
            4.    TERM OF EMPLOYMENT.
            The initial term of the Executive's employment under this Agreement
shall commence on the date hereof (the "Effective Date") and shall end on the
fifth anniversary of the Effective Date, unless sooner terminated pursuant to
Section 6; PROVIDED, HOWEVER, that such initial term shall be extended
automatically for successive one-year periods unless either party gives the
other party at least 90 days' prior written notice of its or his intent not to
allow such extension to become effective (such initial term and automatic
extensions thereof, through the expiration of the last thereof or the date of
any earlier termination thereof pursuant to Section 6, is referred to herein as
the "Term"). As used herein, the term "Scheduled Termination Date" shall refer
to the date the Term would have ended had there been no earlier termination
pursuant to Section 6.
            5.    COMPENSATION, EXPENSES AND BENEFITS.
                  5.1 SALARY. During the Term, the Corporation shall pay the
Executive a salary of $341,250 per year (the "Base Salary"), payable in equal
weekly installments, less such deductions or amounts to be withheld as shall be
required by applicable law and regulations.




 

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                  5.2 INCREASE. The Base Salary may be increased on each
February 1 of the Term, beginning February 1, 1997, at the discretion of the
board of directors of Holding.
                  5.3 AUTOMOBILE AND EXPENSES. The Corporation shall provide the
Executive with an automobile and such other means of transportation as is
reasonable for fulfilling his responsibilities and shall pay or reimburse the
Executive for all transportation, hotel and living expenses incurred by the
Executive on business trips outside the New York City metropolitan area, and for
all other business and entertainment expenses reasonably incurred or paid by him
during the Term in the performance of his services under this Agreement, upon
presentation of expense statements or vouchers or such other supporting
information as the Corporation may require.
                  5.4 VACATION. The Executive shall be entitled to reasonable
annual periods of vacation (not less than an aggregate of four weeks in any
calendar year) with full pay and allowances.
                  5.5 FRINGE BENEFITS. In addition to the compensation and
expenses to be paid under this Section 5, the Executive shall be entitled to all
rights and benefits for which he shall be eligible under any participation or
extra compensation plan, pension, life insurance, health insurance,
hospitalization and other forms of insurance, as well as all other so-called
"fringe" benefits which the Corporation provides for its executives
(collectively, the "Fringe Benefits"). The Corporation agrees that any
significant Fringe Benefits accorded or granted to the




 

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Executive shall not be less than the Fringe Benefits accorded or granted to any
other of the Corporation's employees, other than the Chief Executive Officer.
            6.    TERMINATION.
            The Corporation may terminate the Executive's employment hereunder
(i) for cause (as defined in Section 6.1) or (ii) if the Executive becomes
permanently and seriously disabled, either physically or mentally (pursuant to
Section 6.2).
                  6.1 TERMINATION FOR CAUSE. If the Executive shall be lawfully
discharged for cause during the Term, the Corporation's obligation to pay
compensation or other amounts payable hereunder to or for the benefit of the
Executive shall terminate on the date of such discharge. Such termination may
take place only upon the initiative of the Chief Executive Officer. As used
herein the term "for cause" shall be limited to the Executive's malfeasance and
shall mean the Executive's (i) willful, material and bad faith failure to
perform his duties hereunder after written notice by the Chief Executive Officer
specifying in reasonably detailed terms the alleged failure to follow the Chief
Executive Officer's written, lawful directives and including in said notice the
opinion of the Chief Executive Officer that there has been such failure,
provided that such failure shall continue for at least 30 days following such
notice; (ii) gross and willful misconduct that is materially and demonstrably
injurious to the Corporation or (iii) conviction of a felony after affirmance of
such conviction in any final appeal thereof. The term "for cause" shall not
include a bona fide disagreement over policy matters so long as the Executive
does not willfully and materially violate specific, lawful written directions
from the Chief Executive Officer with respect to policies adopted by the
Executive.




 

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                  6.2 PERMANENT DISABILITY. If during the Term the Executive
shall become permanently and seriously disabled, either physically or mentally,
so that he is absent from his office due to such disability and otherwise unable
substantially to perform his services hereunder for periods aggregating 120
business days during any twelve month period, the Corporation may, upon 30 days'
written notice to the Executive, given after the day on which such periods of
disability shall have equalled such aggregate, terminate the Executive's
employment at the discretion of the Chief Executive Officer. Such termination
shall not take effect if during such 30-day period the Executive has
demonstrated that he has recovered from such permanent and serious disability by
returning to substantial performance of his duties hereunder. Notwithstanding
such termination, (i) the Corporation shall continue to pay the Executive his
full salary up to and including the date of such termination and (ii) thereafter
and until the later of the Scheduled Termination Date or the date that is 36
months after the effective date of the Executive's termination for disability,
but in no event later than the date the Executive has reached age 65 (the
"Disability Pay Termination Date"), the Corporation shall pay the Executive
fifty percent of the Executive's Base Salary as in effect on the date of such
termination, as disability pay, less the sum of (a) any other disability
payments received by the Executive from the Corporation or from insurance
provided by the Corporation and (b) two-thirds of any earned income received by
the Executive from full-time executive employment commencing after the
Executive's recovery from such disability. After the date of the termination of
the Executive's employment under this Section 6.2, the Executive shall




 

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be entitled to continue to receive the Fringe Benefits referred to in Section
5.5 until the Disability Pay Termination Date.
                  6.3 DEATH. In the event of the Executive's death during the
Term, the Executive's employment under this Agreement shall terminate and the
Executive's surviving spouse or, if there is no surviving spouse, the
Executive's estate, shall be entitled to receive the compensation provided for
hereunder to the last day of the sixth full month after which the Executive's
death occurs.
            7.    COVENANT NOT TO COMPETE; CONFIDENTIALITY; REMEDIES.
                  7.1  COVENANT NOT TO COMPETE.  The Executive recognizes that
the services to be performed by the Executive hereunder are special, unique and
extraordinary. Accordingly, for all purposes hereunder or in respect hereof, the
Executive agrees that during the Term, and in the event that the Executive's
employment is terminated for cause pursuant to Section 6.1 or the Executive
resigns prior to the expiration of the Term, then for one year after the
effective date of such termination or resignation, the Executive will not,
directly or indirectly, as an officer, director, stockholder, partner,
associate, employee, consultant, owner, agent, creditor, co-venturer or
otherwise, become or be interested in or be associated with, nor shall he accept
any gratuity from, any other corporation, firm or business engaged, in the
United States, in a business which is materially competitive with any material
business operated by the Corporation on the Effective Date. The Executive's
ownership, directly or indirectly, of not more than three percent of the issued
and outstanding stock (or debt obligations aggregating not more than $250,000)
of any corporation the shares of which are traded on a national securities
exchange or




 

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regularly traded in the over-the-counter market shall not be deemed to be a
violation of the provisions of this Section 7.1. Neither will it constitute a
violation of this Section 7.1 for the Executive to own, directly or indirectly,
securities of any entity not more than fifteen percent of whose revenues are
derived from businesses that compete with businesses of the Corporation.
                  7.2 CONFIDENTIALITY. The Executive shall not divulge to anyone
(other than to directors or employees of the Corporation or its affiliates or in
connection with the proper business and affairs of the Corporation or any of its
affiliates), either during or at any time after the termination of his
employment, any information constituting a trade secret that was acquired by him
during his employment by the Corporation concerning the Corporation's and its
affiliates' customer lists or processes or any other of its trade secrets and
which thereafter does not become publicly known other than by the Executive's
unauthorized disclosure thereof. The Executive acknowledges that any such
information constituting a trade secret is of a confidential and secret
character and of great value to the Corporation and its affiliates.
                  7.3 REMEDIES. The Corporation shall be entitled, in addition
to any other right and remedy it may have at law or at equity, to an injunction
enjoining or restraining the Executive from any material violation or threatened
violation of the covenants contained in Sections 7.1 and 7.2, and the Executive
hereby consents to the issuance of such injunction; PROVIDED, HOWEVER, the
foregoing shall not prevent the Executive from contesting the issuance of any
such injunction on the ground that no violation or threatened violation of
Sections 7.1 and 7.2 has occurred. If any of the




 

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restrictions contained in this Section 7 shall be deemed to be unenforceable by
reason of the extent, duration or geographical scope thereof, or otherwise, then
the court making such determination shall have the right to reduce such extent,
duration, geographical scope, or other provisions hereof, and in its reduced
form this Section 7 shall then be enforceable in the manner contemplated hereby.
The term "affiliate" as used herein shall mean any corporation, partnership, or
other entity or enterprise which, directly or indirectly, controls, is
controlled by, or is under common control with, another entity.
            8.    NOTICES.
            Any notice or other communication required to or which may be given
to any party hereunder shall be in writing and shall be deemed effective if
delivered personally or if mailed by registered or certified mail, postage
prepaid, addressed to such party as follows (the third business day following
the date of mailing of any such notice is deemed the date of delivery thereof):
      To the Executive:

            Robert F. Luehrs
            363 Cognewaugh Road
            Cos Cob, Connecticut  06807

      To the Corporation:

            Henry I. Siegel Company, Inc.
            1372 Broadway
            New York, New York  10018
            Attention:  Chief Executive Officer




 

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      To Holding:
            Chic by H.I.S, Inc.
            1372 Broadway
            New York, New York  10018
            Attention:  Chief Executive Officer
      With copies to:
            Paul, Weiss, Rifkind, Wharton & Garrison
            1285 Avenue of the Americas
            New York, New York  10019-6064
            Attention:  Bruce A. Gutenplan, Esq.

            Any party may change the persons and addresses to which notices or
other communications are to be sent by giving written notice of such change to
the other party in the manner provided herein for giving notice.
            9.    MISCELLANEOUS.
                  9.1 NO ASSIGNMENT. This Agreement is personal in its nature
and none of the parties hereto shall assign or transfer this Agreement or any
rights or obligations hereunder, except that the Corporation may assign this
Agreement and its rights and obligations hereunder in connection with any
transfer, sale or other disposition of all or substantially all of its assets,
in which event this Agreement shall be binding upon and inure to the benefit of
the successor entity of the Corporation and such successor entity shall
discharge and perform all the obligations of the Corporation hereunder.
                  9.2  CHOICE OF LAW.  THIS AGREEMENT SHALL BE
GOVERNED BY AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO
BE PERFORMED ENTIRELY WITHIN SUCH STATE.




 

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                  9.3 NO WAIVER. If any party should waive any breach of any
provision of this Agreement, such party will not thereby be deemed to have
waived any preceding or succeeding breach of the same provision or any breach of
any other provision of this Agreement.
                  9.4 AMENDMENTS. This instrument is the entire agreement of the
parties with respect to the subject matter hereof and may not be amended, supple
mented, canceled or discharged except by a written instrument executed by the
parties hereto. The parties do not intend to confer any benefit hereunder on any
third person, except as otherwise provided in Section 6.3.
                  9.5 HEADINGS. Section headings are inserted herein for
convenience only and do not constitute a part, and shall not affect the meaning
or interpretation, of this Agreement.




 

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                  9.6 COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an original, but all of
which together shall constitute one and the same instrument.
            IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date and year first above written.

                          HENRY I. SIEGEL COMPANY, INC.


                              By:  /s/ Burton M. Rosenberg
                                 -----------------------------------
                                 Burton M. Rosenberg
                                 Chief Executive Officer


                              CHIC BY H.I.S, INC.


                              By:  /s/ Burton M. Rosenberg
                                 -----------------------------------
                                 Burton M. Rosenberg
                                 Chief Executive Officer

                                        /s/ Robert F. Luehrs
                                 -----------------------------------
                                          Robert F. Luehrs