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                                                                   EXHIBIT 10.67


                         SIMPLICITY CAPITAL CORPORATION
                            SIMPLICITY HOLDINGS, INC.
                           SIMPLICITY PATTERN CO. INC.

                           EXECUTIVE SEVERANCE POLICY
                          EFFECTIVE DATE: JULY 24, 1997


I.       ELIGIBLE EXECUTIVES:

         A.       GROUP A EXECUTIVES

                  Senior Vice President - Chief Financial Officer (Frank Rizzo)
                  Senior Vice President - Sales and Marketing (Louis Oltman)
                  Senior Vice President - Fashion Product (Judy Raymond)

         B.       GROUP B EXECUTIVES

                  Vice President - International (Gordon Robinson)
                  Vice President - Crafts and Home Decorating (Abbie Small)
                  Plant Director (Eric Booker)

II.      SPECIAL VOLUNTARY TERMINATION:

         A.       QUALIFICATION

                  Upon the occurrence of a recapitalization, sale, merger or
                  other transaction that results in a change of control the
                  executives listed above may voluntarily terminate their
                  employment within the first year following the change of
                  control transaction if any of the following events occur:

                  -        Material diminution of job title
                  -        Material diminution of job responsibilities
                  -        Material diminution of base salary
                  -        Material diminution of retirement benefits (other
                           than as required by a change in law)
                  -        Requirement imposed by the Company to relocate more
                           than 50 miles from the executive's previous base of
                           employment

         B.       SEVERANCE BENEFITS

                  -        Base salary of 12 months for Group A Executives and 9
                           months for Group B Executives with mitigation for any
                           base salary received from another employer during the
                           12 or 9 months after voluntary termination.

                  -        Pro-rata share, based upon the number of days
                           employed, of bonus for the fiscal year during which
                           voluntary termination occurred.

                  -        Pro-rata share, based upon the number of days
                           employed, of retirement benefits for the fiscal year
                           during which voluntary termination occurred.

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                  -        Continuation of medical benefits for 12 months for
                           Group A Executives and 9 months for Group B
                           Executives after voluntary termination occurs, unless
                           commencement of other employment occurs sooner and
                           medical coverage is available from the new employer.

III.     TERMINATION WITHOUT CAUSE:

         A.       DURING THE FIRST YEAR

                  If termination without cause occurs during the first year
                  following a change of control transaction, the executive will
                  be entitled to the same severance benefits as described above
                  in (II B.) for voluntary termination.

         B.       DURING THE SECOND YEAR

                  If termination without cause occurs during the second year
                  following a change of control transaction, the executive will
                  be entitled to the following severance benefits:

                  -        Base salary of 12 months for Group A Executives and 9
                           months for Group B Executives with mitigation for any
                           base salary received from another employer during the
                           12 or 9 months after termination without cause
                           occurred.

                  -        Pro-rata share, based upon the number of days
                           employed, of bonus for the fiscal year during which
                           termination without cause occurred.

                  -        Continuation of medical benefits for 12 months for
                           Group A Executives and 9 months for Group B
                           Executives after termination without cause occurs,
                           unless commencement of other employment occurs sooner
                           and medical coverage is available from the new
                           employer.

         C.       BEYOND THE SECOND YEAR

                  If termination without cause occurs anytime beyond the second
                  year following a change of control transaction, the executive
                  will be entitled to the following severance benefits:

                  -        Base salary and benefits based upon the policy in
                           effect at that time

                  -        Pro-rata share, based upon the number of days
                           employed, of bonus for the fiscal year during which
                           termination without cause occurred


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