Document:

Exhibit 10.27

                              EMPLOYMENT AGREEMENT

      This Employment Agreement ("Agreement") is made as of March 31, 2000,
between DESIGNS, INC., a Delaware corporation with an office at 66 B Street,
Needham, Massachusetts, 02494 (the "Company"), and David A. Levin, residing at
150 Monadnock Road, Chestnut Hill, Massachusetts 02467 (the "Executive").

                              W I T N E S S E T H:

      WHEREAS, the Company desires that Executive be employed to serve in a
senior executive capacity with the Company, and Executive desires to be so
employed by the Company, upon the terms and conditions herein set forth.

      NOW, THEREFORE, in consideration of the premises and the mutual promises,
representations and covenants herein contained, the parties hereto agree as
follows:

      1.    EMPLOYMENT

            The Company hereby employs Executive and Executive hereby accepts
such employment, subject to the terms and condition herein set forth. Executive
shall hold the office of President and Chief Executive Officer reporting to the
Board of Directors of the Company (the "Board of Directors").

      2.    TERM

            The initial term of employment under this Agreement shall begin on
April 10, 2000 (the "Employment Date") and shall continue for a period of two
(2) years from that date, subject to prior termination in accordance with the
terms hereof. However, by written notice to Executive on or prior to the first
anniversary of the Employment Date, the Company has the option to extend the
initial term of employment under this Agreement for an additional one year,
until the third anniversary of the Employment Date. Thereafter, this Agreement
shall automatically be renewed for successive one-year terms on each anniversary
of the Employment Date unless either party shall give the other at least ninety
(90) days written notice prior to such anniversary date that it will not renew
this Agreement.

      3.    COMPENSATION

            (a) As compensation for the employment services to be rendered by
Executive hereunder, including all services as an officer and director if
requested, of the Company and any of its subsidiaries and affiliates, the
Company agrees to pay to Executive, and Executive agrees
<PAGE>

to accept, payable in equal installments in accordance with Company practice, an
annual base salary of $375,000.

            (b) In addition to the annual base salary, Executive will be
entitled to receive an annual bonus of up to fifty percent (50%) of his annual
base salary (the "Discretionary Bonus Amount") depending on the performance of
the Company. The Compensation Committee of the Board of Directors shall
determine, in its sole discretion, the amount of the bonus to be paid to
Executive. However, if the Company meets its annual projections for its fiscal
budget plan, as approved by the Board of Directors, the Company shall pay
Executive shall receive a bonus from the Discretionary Bonus amount equal to ten
percent (10%) of his annual base salary.

      4.    OPTIONS

            (a) The Company shall grant to the Executive 75,000 options under
the Company's 1992 Stock Incentive Plan and an additional 225,000 non-qualified
options which are exercisable at a purchase price per share equal to the closing
price of the Common Stock on March 30, 2000. The options will vest pro rata over
a three (3) years period commencing on the Employment Date, with one third of
the total vesting and becoming exercisable on each of the first, second and
third anniversaries of the Employment Date. If on the first anniversary date of
the Employment Date, the Company does not extend the Agreement for an additional
year as discussed in paragraph (2) hereof, the 300,000 options will vest pro
rata over a two (2) year period commencing on the Employment Date, with one half
of the total vesting and becoming exercisable on each of the first and second
anniversaries of the Employment Date. If this Agreement is terminated, then all
options which are not fully vested will be forfeited immediately. The Company
will register at its expense, when any of the 225,000 shares subject to
non-qualified options become vested and exercisable by Executive.

            (b) The Executive's options will vest immediately if there is a
"change in control" as defined in the Company's 1992 Stock Incentive Plan.

      5.    EXPENSES

            The Company shall pay or reimburse Executive, in accordance with the
Company's policies and procedures and upon presentment of suitable vouchers, for
all reasonable business and travel expenses which may be incurred or paid by
Executive in connection with his employment hereunder. Executive shall comply
with such restrictions and shall keep such records as the Company may deem
necessary to meet the requirements of the Internal Revenue Code of 1986, as
amended from time to time, and regulations promulgated thereunder.

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<PAGE>

      6.    OTHER BENEFITS

            (a) Executive shall be entitled to such vacations and to participate
in and receive any other benefits customarily provided by the Company to its
senior management personnel (including any profit sharing, pension, 401(k),
short and long-term disability insurance, hospital, major medical insurance and
group life insurance plans in accordance with the terms of such plans), all as
determined from time to time by the Compensation Committee of the Board of
Directors.

            (b) The Company shall, during the term of Executive's employment
hereunder, provide Executive with an automobile allowance in the amount of
$600.00 per month.

      7.    DUTIES

            (a) Executive shall perform such duties and functions as the Board
of Directors of the Company shall from time to time determine and Executive
shall comply in the performance of his duties with the policies of, and be
subject to the direction of, the Board of Directors. Executive shall serve as an
officer of the Company without further compensation.

            (b) At the request of the Board of Directors, Executive shall serve,
without further compensation, as an executive officer and/or director of any
subsidiary or affiliate of the Company and, in the performance of such duties,
Executive shall comply with the directives and policies of the Board of
Directors of each such subsidiary or affiliate.

            (c) The Company shall use its best efforts to cause Executive to be
appointed to the Board of Directors of the Company and the next Annual Meeting
of Stockholders and Executive shall serve as a Director without further
compensation.

            (d) During the term of this Agreement, Executive shall devote
substantially all of his time and attention, vacation time and absences for
sickness excepted, to the business of the Company, as necessary to fulfill his
duties. Executive shall perform the duties assigned to him with fidelity and to
the best of his ability. Notwithstanding anything herein to the contrary,
subject to the foregoing, Executive may engage in other activities so long as
such activities do not unreasonably interfere with Executive's performance of
his duties hereunder and do not violate Section 10 hereof.

            (e) Nothing in this Section 7 or elsewhere in this Agreement shall
be construed to prevent Executive from investing or trading in nonconflicting
investments as he sees fit for his own account, including real estate, stocks,
bonds, securities, commodities or other forms of investments, provided such
activities do not unreasonably interfere with Executive's performance of his
duties hereunder.

            (f) The principal location at which the Executive shall perform his
duties hereunder shall be at the Company's offices in Needham, Massachusetts or
at such other location as may be designated from time to time by the Board of
Directors of the Company.

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<PAGE>

Notwithstanding the foregoing, Executive shall perform such services at such
other locations as may be required for the proper performance of his duties
hereunder, and Executive recognizes that such duties may involve travel.

      8.    TERMINATION OF EMPLOYMENT; EFFECT OF TERMINATION

            (a) Executive's employment hereunder may be terminated at any time:

                  (i) upon the determination by the Board of Directors that
Executive's performance of his duties has not been fully satisfactory for any
reason which would not constitute justifiable cause (as hereinafter defined)
upon thirty (30) days' prior written notice to Executive; or

                  (ii) upon the determination by the Board of Directors that
there is justifiable cause (as hereinafter defined) for such termination upon
ten (10) days' prior written notice to Executive.

            (b) Executive's employment shall terminate upon:

                  (i) the death of Executive; or

                  (ii) the "disability" of Executive (as hereinafter defined in
subsection (c) herein) pursuant to subsection (g) hereof.

            (c) For the purposes of this Agreement, the term "disability" shall
mean the inability of Executive, due to illness, accident or any other physical
or mental incapacity, substantially to perform his duties for a period of three
(3) consecutive months or for a total of six (6) months (whether or not
consecutive) in any twelve (12) month period during the term of this Agreement,
as reasonably determined by the Board of Directors of the Company after
examination of Executive by an independent physician reasonably acceptable to
Executive.

            (d) For the purposes hereof, the term "justifiable cause" shall mean
and be limited to: any repeated willful failure or refusal to perform any of the
duties pursuant to this Agreement where such conduct shall not have ceased
within 10 days following written warning from the Company; Executive's
conviction (which, through lapse of time or otherwise, is not subject to appeal)
of any crime or offense involving money or other property of the Company or its
subsidiaries or affiliates or which constitutes a felony in the jurisdiction
involved; Executive's performance of any act or his failure to act, as to which
if Executive were prosecuted and convicted, a crime or offense involving money
or property of the Company or its subsidiaries or affiliates, or a crime or
offense constituting a felony in the jurisdiction involved, would have occurred;
any unauthorized disclosure by Executive to any person, firm or corporation
other than the Company, its subsidiaries or affiliates and their respective
directors, officers and employees (or other persons fulfilling similar
functions), of any confidential information or trade secret of the Company or
any of its subsidiaries or affiliates; any attempt by Executive to secure any

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<PAGE>

personal profit in connection with the business of the Company or any of its
subsidiaries and affiliates; or the engaging by Executive in any business other
than the business of the Company and its subsidiaries and affiliates which
unreasonably interferes with the performance of his duties hereunder. Upon
termination of Executive's employment for justifiable cause, this Agreement
shall terminate immediately and Executive shall not be entitled to any amounts
or benefits hereunder other than such portion of Executive's annual salary and
reimbursement of expenses pursuant to Section 5 hereof as has been accrued
through the date of his termination of employment.

            (e) If the Company terminates this Agreement without "justifiable
cause" as provided in paragraph 8 (a) (i) above, the Company shall pay Executive
the lesser of: (i) the base salary for the remaining term of this Agreement or
(ii) an amount equal to one half of the Executive's annual base salary. If the
remaining term of this Agreement on the date of termination is more than the six
(6) month period for which Executive is compensated pursuant to (ii) above, the
Executive must make a good faith effort to find new employment and mitigate his
alleged damages and any costs and expenses to the Company. The Company will pay
any amount due and owing under (i) and (ii) above in accordance with the payment
schedule in 3 (a), until set amount is payable in full.

            (f) If Executive shall die during the term of his employment
hereunder, this Agreement shall terminate immediately. In such event, the estate
of Executive shall thereupon be entitled to receive such portion of Executive's
annual salary and reimbursement of expenses pursuant to Section 5 as has been
accrued through the date of his death.

            (g) Upon Executive's "disability", the Company shall have the right
to terminate Executive's employment. Notwithstanding any inability to perform
his duties, Executive shall be entitled to receive his base salary and
reimbursement of expenses pursuant to Section 5 as provided herein until he
begins to receive long-term disability insurance benefits under the policy
provided by the Company pursuant to Section 6 hereof. Any termination pursuant
to this subsection (g) shall be effective on the later of (i) the date 30 days
after which Executive shall have received written notice of the Company's
election to terminate or (ii) the date he begins to receive long-term disability
insurance benefits under the policy provided by the Company pursuant to Section
6 hereof.

            (h) Upon the resignation of Executive in any capacity, that
resignation will be deemed to be a resignation from all offices and positions
that Executive holds with respect to the Company and any of its subsidiaries and
affiliates.

            (i) In the event Executive is terminated without justifiable cause
(as defined herein) within one (1) year after a Change of Control has occurred,
Executive shall receive in full satisfaction of any obligation relating to
Executive's employment or the termination thereof the greater of: (a) the base
salary for the remaining term of this Agreement, or (b) an amount equal to

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<PAGE>

the current base salary for one (1) year. The Company must make a lump sum
payment of all money due and owing within fifteen (15) days of termination.

            (j) For the purposes of the paragraph 8, "Changes of Control" shall
mean (i) any sale of all or substantially all of the assets of the Company to
any person or group of related persons within the meaning of Section 13 (d) of
the Securities Exchange Act of 1934, as amended ("Group"), (ii) any acquisition
by any person or Group of shares of capital stock of the Company representing
more than 50% of the aggregate voting power of the outstanding capital stock of
the Company entitled under ordinary circumstances to elect the Directors of the
Company ("Voting Stock") or (iii) any replacement of a majority of the Board of
Directors of the Company over the twelve-month period following the acquisition
of shares of the capital stock of the Company representing more than 10% of the
Voting Stock by any person or Group which does not currently own more than 10%
of such Voting Stock (unless such replacement shall have been approved by the
vote of the majority of the Directors then in office who either were members of
the Board of Directors at the beginning of such twelve-month period or whose
elections as Directors was previously so approved).

      9.    REPRESENTATION AND AGREEMENTS OF EXECUTIVE

            (a) Executive represents and warrants that he is free to enter into
this Agreement and to perform the duties required hereunder, and that there are
no employment contracts or understandings, restrictive covenants or other
restrictions, whether written or oral, preventing the performance of his duties
hereunder.

            (b) Executive agrees to submit to a medical examination and to
cooperate and supply such other information and documents as may be required by
any insurance company in connection with the Company's obtaining life insurance
on the life of Executive, and any other type of insurance or fringe benefit as
the Company shall determine from time to time to obtain.

      10.   NON-COMPETITION

            (a) Executive agrees that during his employment by the Company and
during the one year period following the termination of Executive's employment
hereunder (the "Non-Competitive Period"), Executive shall not, directly or
indirectly, as owner, partner, joint venturer, stockholder, employee, broker,
agent, principal, trustee, corporate officer, director, licensor, or in any
capacity whatsoever, engage in, become financially interested in, be employed
by, render any consultation or business advice with respect to, or have any
connection with, any business which is competitive with products or services of
the Company or any of its subsidiaries and affiliates, in any geographic area in
the United States of America where, at the time of the termination of his
employment hereunder, the business of the Company or any of its subsidiaries and
affiliates was being conducted or was proposed to be conducted in any manner
whatsoever; provided, however, that Executive may own any securities of any
corporation which is engaged in such business and is publicly owned and traded
but in an amount not to exceed at any one time one

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<PAGE>

percent (1%) of any class of stock or securities of such corporation. In
addition, Executive shall not, during the Non-Competitive Period, notify
directly or indirectly, request or cause any suppliers or customers with whom
the Company or any of its subsidiaries and affiliates has a business
relationship to cancel or terminate any such business relationship with the
Company or any of its subsidiaries and affiliates or solicit, interfere with or
entice from the Company any employee (or former employee) of the Company.

            (b) If any portion of the restrictions set forth in this Section 10
should, for any reason whatsoever, be declared invalid by a court of competent
jurisdiction, the validity or enforceability of the remainder of such
restrictions shall not thereby be adversely affected.

            (c) Executive acknowledges that the Company conducts business
throughout the Eastern portion of United States (all states east of the
Mississippi River and Missouri) , that its sales and marketing prospects are for
continued expansion throughout the United States and that, therefore, the
territorial and time limitations set forth in this Section 10 are reasonable and
properly required for the adequate protection of the business of the Company and
its subsidiaries and affiliates. In the event any such territorial or time
limitation is deemed to be unreasonable by a court of competent jurisdiction,
Executive agrees to the reduction of the territorial or time limitation to the
area or period which such court shall deem reasonable.

            (d) The existence of any claim or cause of action by Executive
against the Company or any subsidiary or affiliate shall not constitute a
defense to the enforcement by the Company or any subsidiary or affiliate of the
foregoing restrictive covenants, but such claim or cause of action shall be
litigated separately.

      11.   INVENTIONS AND DISCOVERIES

            (a) Upon execution of this Agreement and thereafter Executive shall
promptly and fully disclose to the Company, and with all necessary detail for a
complete understanding of the same, all existing and future developments,
know-how, discoveries, inventions, improvements, concepts, ideas, writings,
formulae, processes and Methods (whether copyrightable, patentable or otherwise)
made, received, conceived, acquired or written during working hours, or
otherwise, by Executive (whether or not at the request or upon the suggestion of
the Company) during the period of his employment with, or rendering of advisory
or consulting services to, the Company or any of its subsidiaries and
affiliates, solely or jointly with others in or relating to any activities of
the Company or its subsidiaries and affiliates known to him as a consequence of
his employment or the rendering of advisory and consulting services hereunder
(collectively the "Subject Matter").

            (b) Executive hereby assigns and transfers, and agrees to assign and
transfer, to the Company, all his rights, title and interest in and to the
Subject Matter, and Executive further agrees to deliver to the Company any and
all drawings, notes, specifications and data relating to the Subject Matter, and
to execute, acknowledge and deliver all such further papers,

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<PAGE>

including applications for copyrights or patents, as may be necessary to obtain
copyrights and patents for any thereof in any and all countries and to vest
title thereto to the Company. Executive shall assist the Company in obtaining
such copyrights or patents during the term of this Agreement, and any time
thereafter on reasonable notice and at mutually convenient times, and Executive
agrees to testify in any prosecution or litigation involving any of the Subject
Matter; provided, however, that Executive shall be compensated in a timely
manner at the rate of $1,000 per day (or portion thereof), plus out-of-pocket
expenses incurred in rendering such assistance or giving or preparing to give
such testimony if it is required after the termination of this Agreement.

      12.   NON-DISCLOSURE OF CONFIDENTIAL INFORMATION

            (a) Executive shall not, during the term of this Agreement, or at
any time following termination of this Agreement, directly or indirectly,
disclose or permit to be known (other than as is required in the regular course
of his duties (including without limitation disclosures to the Company's
advisors and consultants) or as required by law (in which case Executive shall
give the Company prior written notice of such required disclosure) or with the
prior written consent of the Board of Directors of the Company), to any person,
firm or corporation, any confidential information acquired by him during the
course of, or as an incident to, his employment or the rendering of his advisory
or consulting services hereunder, relating to the Company or any of its
subsidiaries and affiliates, the directors of the Company or its subsidiaries
and affiliates, any supplier or customer of the Company or any of their
subsidiaries and affiliates, or any corporation, partnership or other entity
owned or controlled, directly or indirectly, by any of the foregoing, or in
which any of the foregoing has a beneficial interest, including, but not limited
to, the business affairs of each of the foregoing. Such confidential information
shall include, but shall not be limited to, proprietary technology, trade
secrets, patented processes, research and development data, know-how, market
studies and forecasts, financial data, competitive analyses, pricing policies,
employee lists, personnel policies, the substance of agreements with customers,
suppliers and others, marketing or dealership arrangements, servicing and
training programs and arrangements, supplier lists, customer lists and any other
documents embodying such confidential information. This confidentiality
obligation shall not apply to any confidential information which thereafter
becomes publicly available other than pursuant to a breach of this Section 12(a)
by Executive.

            (b) All information and documents relating to the Company and its
affiliates as hereinabove described (or other business affairs) shall be the
exclusive property of the Company, and Executive shall use commercially
reasonable best efforts to prevent any publication or disclosure thereof. Upon
termination of Executive's employment with the Company, all documents, records,
reports, writings and other similar documents containing confidential
information, including copies thereof then in Executive's possession or control
shall be returned and left with the Company.

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<PAGE>

      13.   SPECIFIC PERFORMANCE

            Executive agrees that if he breaches, or threatens to commit a
breach of, any of the provisions of Sections 10, 11 or 12 (the "Restrictive
Covenants"), the Company shall have, in addition to, and not in lieu of, any
other rights and remedies available to the Company under law and in equity, the
right to have the Restrictive Covenants specifically enforced by a court of
competent jurisdiction, it being agreed that any breach or threatened breach of
the Restrictive Covenants would cause irreparable injury to the Company and that
money damages would not provide an adequate remedy to the Company.
Notwithstanding the foregoing, nothing herein shall constitute a waiver by
Executive of his right to contest whether a breach or threatened breach of any
Restrictive Covenant has occurred.

      14.   AMENDMENT OR ALTERATION

            No amendment or alteration of the terms of this Agreement shall be
valid unless made in writing and signed by both of the parties hereto.

      15.   GOVERNING LAW

            This Agreement shall be governed by, and construed and enforced in
accordance with the substantive laws of The Commonwealth of Massachusetts,
without regard to its principles of conflicts of laws.

      16.   SEVERABILITY

            The holding of any provision of this Agreement to be invalid or
unenforceable by a court of competent jurisdiction shall not affect any other
provision of this Agreement, which shall remain in full force and effect.

      17.   NOTICES

            Any notices required or permitted to be given hereunder shall be
sufficient if in writing, and if delivered by hand or courier, or sent by
certified mail, return receipt requested, to the addresses set forth above or
such other address as either party may from time to time designate in writing to
the other, and shall be deemed given as of the date of the delivery or at the
expiration of three days in the event of a mailing.

      18.   WAIVER OR BREACH

            It is agreed that a 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 by that same party.

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<PAGE>

      19.   ENTIRE AGREEMENT AND BINDING EFFECT

            This Agreement contains the entire agreement of the parties with
respect to the subject matter hereof, supersedes all prior agreements, both
written and oral, between the parties with respect to the subject matter hereof,
and shall be binding upon and inure to the benefit of the parties hereto and
their respective legal representatives, heirs, distributors, successors and
assigns.

      20.   SURVIVAL.

            Except as otherwise expressly provided herein, the termination of
Executive's employment hereunder or the expiration of this Agreement shall not
affect the enforceability of Sections 5, 8, 10, 11, 12 and 13 hereof.

      21.   FURTHER ASSURANCES

           The parties agree to execute and deliver all such further documents,
agreements and instruments and take such other and further action as may be
necessary or appropriate to carry out the purposes and intent of this Agreement.

      22.   HEADINGS

            The Section headings appearing in this Agreement are for the
purposes of easy reference and shall not be considered a part of this Agreement
or in any way modify, demand or affect its provisions.

      23.   COUNTERPARTS

            This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original and all of which together shall constitute one
and the same agreement.

      IN WITNESS WHEREOF, the parties hereto have executed this Agreement, under
seal, as of the date and year first above written.

                                       DESIGNS, INC.

                                       By: /s/ JOHN J. SCHULTZ  3/31/2000
                                           -------------------------------

                                       Its: PRESIDENT & CEO
                                            ------------------------------

                                       /s/ DAVID LEVIN
                                       -----------------------------------
                                                David Levin

                                       10Exhibit 10.28

                               SEVERANCE AGREEMENT

      This Severance Agreement is made and entered into as of this 12 day of
January, 2000 by and between Designs, Inc. (the "Company"), a corporation
organized and existing under the laws of Delaware with a principal place of
business at 66 B Street, Needham, Massachusetts 02494, and Joel H. Reichman
("Reichman"), an individual residing at 46 Ralph Road, Marblehead, Massachusetts
01945.

      WHEREAS, the Company and Reichman are parties to an Employment Agreement
dated as of October 16, 1995 (the "Employment Agreement") whereby Reichman was
employed as President and Chief Executive Officer of the Company; and

      WHEREAS, the Company and Reichman wish to resolve Reichman's separation
from employment with the Company and establish the terms of Reichman's severance
arrangement.

      NOW THEREFORE, in consideration of the promises and conditions set forth
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:

      1. Separation Date. The Company and Reichman agree that the effective date
of Reichman's separation from the Company was November 19, 1999 (the "Separation
Date"). From and after the Separation Date, Reichman was no longer an employee
of the Company and had no further duties or responsibilities to act on behalf of
the Company, except as provided herein.

      2. Severance Payments. The Company shall pay Reichman the aggregate sum of
Five Hundred Seventy Three Thousand Five Hundred Fifty Seven Dollars and Fifty
Cents ($573,557.50) (the "Severance Payment"), in accordance with the attached
Payment Schedule. Payments shall be made by direct deposit to Reichman's account
and are deemed paid on the date the deposits are made. Reichman shall be liable
for, and shall pay
<PAGE>

in full when due, any and all local, state and federal income taxes related to
the Severance Payment. Reichman will receive a Form 1099 from the Company at the
end of each calendar year. To the extent Reichman accepts employment after the
Separation Date, the Company agrees that the Severance Payment may not be offset
by any amount he receives from a future employer.

      3. Medical/Dental Insurance. To the extent permitted by the applicable
insurance policies, the Company shall continue to provide Reichman with family
medical and dental insurance coverage during the period from the Separation Date
until May 31, 2000, at Reichman's sole cost and expense. Thereafter, Reichman
shall be entitled to apply for and receive continuation of medical insurance
coverage at his sole cost and expense through COBRA until November 30, 2001. The
current cost for Reichman's family medical and dental insurance coverage for the
period from the Separation Date until May 31, 2000 is set forth on the attached
Payment Schedule and the costs shall be deducted from the Severance Payment due
to Reichman from the Company.

      4. Vehicle. The Company shall transfer all of its rights, title and
interest in the 1997 Range Rover HSE 4.6 vehicle to Reichman in "AS IS"
condition. The Company hereby acknowledges and agrees that Reichman purchased
the vehicle from the Company for $26,442.50 in an arm's length transaction.

      5. Family Discount Card. Reichman shall be permitted to retain his Family
Discount Card ("Card") until the date of the last Severance Payment, at which
time Reichman shall immediately return the Card to the Company. Reichman shall
only be permitted to use the Card to purchase merchandise for his immediate
family.

      6. Legal Fees. In the event either party breaches any of such party's
obligations under this Severance Agreement, the non-breaching party shall be
entitled to recover all reasonable costs incurred by such non-breaching party in
enforcing the terms of the Severance Agreement, including reasonable attorneys'
fees. The prevailing party shall be entitled to recover its reasonable
attorneys' fees and expenses in any litigation that arises out of or relates to
this Severance Agreement.

      7. Options. Reichman hereby acknowledges and agrees that any and all
incentive stock options, non-qualified stock options and/or any other stock
options granted

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<PAGE>

to him during his employment with the Company shall expire and/or terminate as
of the date of this Severance Agreement.

      8. Continued Assistance. Reichman agrees that he will devote whatever time
is necessary after the Separation Date to work with and assist the Company in
any litigation, arbitration or other proceeding that is currently pending or
threatened involving the Company, which shall include, but not be limited to,
testifying at any deposition, hearing, proceeding or trial and meeting with
representatives of the Company to discuss the factual history of such matters.
The Company agrees to compensate Reichman for all reasonable out of pocket
expenses associated with his cooperation pursuant to this paragraph. The Company
agrees further to schedule such assistance/cooperation at such times as to
minimize inconvenience and/or disruption to Reichman's professional and personal
schedule.

      9. References. All responses to any inquiries made to the Company
regarding Reichman's employment references shall be limited to providing dates
of employment, title and salary information. If additional information is
requested, the Company may state that the foregoing information is the only
information that the Company can provide or words to that effect.

      10. Non-disparagement. The Company agrees that its officers and directors
will not make any public or private statement that disparages Reichman unless
required by law and that it will use its best efforts to have its agents,
employees and consultants comply with this provision. Reichman agrees that he
will not make any public or private statement which disparages the Company or
its officers, directors, employees or consultants unless required by law, and
that he will use his best efforts to have his agents and consultants comply with
this provision.

      11. Confidentiality. The parties hereto agree that the terms and
conditions of this Severance Agreement shall be treated as confidential and
shall not be disclosed except as necessary to their respective employees,
officers, directors and financial, investment and legal advisors, as required by
law, or to enforce the terms of this Severance Agreement. Reichman may also
disclose the terms and conditions of the Severance Agreement to his immediate
family. In the event Reichman and/or the Company disclose the terms and
conditions of the Severance Agreement to any of the foregoing persons or
entities, they

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<PAGE>

shall advise such persons and/or entities that the terms and conditions of this
Severance Agreement are confidential and that they shall not disclose the
information to any other person or entity. Notwithstanding the foregoing, the
parties acknowledge and agree (i) that disclosure of this Severance Agreement
and/or the material terms thereof will likely be required by the Company in its
filings with the Securities and Exchange Commission, and (ii) that the Severance
Agreement or the material terms thereof may be disclosed to State Street Bank
and Trust Company.

      12.   Non-Disclosure.

            (a) Reichman agrees that he will not disclose to any person or
      entity, either orally or in written form, except as required by law, any
      confidential information relating to the Company or any of its
      subsidiaries and affiliates, the directors of the Company or its
      subsidiaries and affiliates, any client of the Company or any of its
      subsidiaries and affiliates, or any corporation, partnership or other
      entity owned or controlled, directly or indirectly, by any of the
      foregoing, or in which any of the foregoing has a beneficial interest,
      including, but not limited to, the business affairs of each of the
      foregoing. Such confidential information shall include, but shall not be
      limited to, proprietary technology, trade secrets, patented processes,
      research and development data, know-how, market studies and forecasts,
      competitive analyses, pricing policies, employee lists, personnel
      policies, the substance of agreements with customers, suppliers and
      others, marketing or dealership arrangements, servicing and training
      programs and arrangements, customer lists and any other documents,
      including copies of such information in electronic form, embodying such
      confidential information.

            (b) The non-disclosure obligation set forth above shall not apply to
      any information (i) which was in the public domain at the time of
      disclosure or (ii) which thereafter fell into the public domain without
      any fault of Reichman and which was not disclosed in violation of any
      similar non-disclosure obligation by any other person.

            (c) Reichman hereby represents that he left with the Company all
      documents, computer disks, records, reports, writings and other similar
      documents containing confidential information, including copies thereof
      then in his possession

                                       4
<PAGE>

      or control, except those documents which are his personal copies of
      documents relating to the terms and conditions of his employment with or
      resignation from the Company. Reichman further represents that, except as
      provided herein, he returned to the Company all other assets and/or
      property belonging to the Company.

      13.   Non-Competition and Non-Solicitation.

            (a) Reichman agrees that during the period commencing on the
      Separation Date and ending on November 19, 2001, he shall not work for
      Levi Strauss & Co., and he shall not, directly or indirectly, as owner,
      partner, joint venturer, stockholder, employee, broker, agent, principal,
      trustee, corporate officer, director, licensor, or in any capacity
      whatsoever, engage or assist any person or entity to engage in the Levi's
      or Dockers outlet business in any location in any geographic area in the
      United States or Puerto Rico; provided, however, that Reichman may own any
      securities of any corporation which is engaged in such business and is
      publicly owned and traded but in an amount not to exceed at any one time
      one percent (1%) of any class of stock or securities of such corporation.

            (b) During the period commencing on the Separation Date and ending
      on November 19, 2001, Reichman shall not request any suppliers or
      customers with whom the Company has a business relationship to cancel or
      terminate any such business relationship with the Company or solicit any
      employee of the Company to leave the Company's employ. Notwithstanding the
      foregoing, nothing contained herein shall constitute the Company's
      approval or acquiescence of any actions taken by Reichman after November
      19, 2001 to seek to cause the cancellation or termination of any business
      relationship between the Company and any third party and the Company
      reserves the right to assert any claims it may have against Reichman
      arising out of his conduct.

            (c) Except for the limitations and restrictions contained in this
      Severance Agreement, Reichman and the Company agree that the
      post-employment restrictions contained in the Employment Agreement,
      including without limitation the post employment competition restrictions
      contained in paragraph 9 of the Employment Agreement are hereby waived and
      released and shall have no further force or effect, such that Reichman
      shall be entitled to accept future employment.

                                       5
<PAGE>

      14.   Reichman Release. Reichman hereby voluntarily and irrevocably
releases and forever discharges the Company and its subsidiaries (including
their successors and assigns) and each of their current and former officers,
directors, shareholders, employees, consultants, representatives and agents
(hereinafter the "Company Releasees") from all charges, complaints, claims,
promises, agreements, obligations, causes of action, damages, and debts
(including attorneys' fees and costs actually incurred), known or unknown, which
Reichman has, had, or hereinafter may have, directly or indirectly, relating to
or arising out of any conduct pertaining to the most recent proxy contest and
annual meeting of the Company or relating to or arising out of his employment
with or services performed for the Company, from the beginning of the world to
the day of the date of this Severance Agreement, including, without limitation,
all claims for breach of contract, all claims arising out of or relative to
Reichman's employment with the Company and the termination thereof and any
claims Reichman may have under the Employment Agreement, all claims for breach
of an implied covenant of good faith and fair dealing, intentional or negligent
misrepresentation, any acts or omissions by the Company Releasees, and unlawful
discrimination under the common law or any statute (including, without
limitation, Title VII of the Civil Rights Act of 1964, 42 U.S.C. ss.2000e, et
seq., the Age Discrimination in Employment Act of 1967, 29 U.S.C. ss.621, et
seq., the Employee Retirement Income Security Act, 29 U.S.C. ss.1001, et seq,
and the Americans with Disabilities Act of 1990, 42 U.S.C. ss.12101, et seq.)
Notwithstanding the foregoing, this Release shall not release or limit
Reichman's rights to indemnification under the terms of the By-Laws of the
Company and under the Indemnification Agreement between Reichman and the Company
dated as of December 10, 1998, as in effect on the date hereof, or to enforce
this Severance Agreement or bring claims for breach thereof.

      15.   Company Release. The Company, on behalf of itself and its officers,
directors, agents, representatives, subsidiaries, consultants and shareholders
(hereinafter the "Company Releasors") hereby voluntarily and irrevocably
releases and forever discharges Reichman and his heirs and survivors from any
and all charges, complaints, claims, promises, agreements, obligations, causes
of action, damages and debts, (including attorneys' fees and costs actually
incurred), known or unknown, that the Company Releasors, individually or
jointly, have, had or hereinafter may have, directly or indirectly,

                                       6
<PAGE>

relating to or arising out of any conduct pertaining to the most recent proxy
contest and annual meeting of the Company or relating to or arising out of
Reichman's employment with or services performed for the Company from the
beginning of the world to the day of the date of this Severance Agreement,
including, without limitation, all claims for breach of contract, all claims for
breach of an implied covenant of good faith and fair dealing, intentional or
negligent misrepresentation, mismanagement, nondisclosure, or any acts or
omissions by Reichman during the course of his employment or any claims the
Company may have under the Employment Agreement. Notwithstanding the foregoing,
this release shall not limit the Company's rights to enforce this Severance
Agreement or to bring any claims for breach thereof.

      16.   Arbitration of Disputes. Any controversy or claim arising out of or
relating to this Severance Agreement or the breach thereof shall, to the fullest
extent permitted by law, be settled by arbitration in any forum and form agreed
upon by the parties or, in the absence of such an agreement, under the auspices
of the American Arbitration Association ("AAA") in Boston, Massachusetts, in
accordance with the rules of the AAA, including, but not limited to, the rules
and procedures applicable to the selection of arbitrators. Judgment upon the
award rendered by the arbitrator may be entered in any court having jurisdiction
thereof. This Section 16 shall be specifically enforceable. Notwithstanding the
foregoing, this Section 16 shall not preclude either party from pursuing a court
action for the sole purpose of obtaining a temporary restraining order or a
preliminary injunction in circumstances in which such relief is appropriate;
provided, however, that any other relief shall be pursued through an arbitration
proceeding pursuant to this Section 16.

      17.   Trust Agreement. Reichman hereby relinquishes any and all rights,
title and interest that he had, has or may have in, arising out of or relating
to the Trust Agreement ("Trust Agreement") made as of May 12, 1999 by and
between the Company and State Street Bank and Trust Company ("State Street") or
the assets held thereunder. Reichman agrees and consents to the termination of
the Trust Agreement and the return of all trust assets by State Street to the
Company and shall execute any and all documents necessary to accomplish the
termination and return of trust assets. If Reichman fails to execute the
foregoing documents within forty eight (48) hours after receipt of a written
request from the Company, the Company can suspend the payment of the Severance
Payments until

                                       7
<PAGE>

Reichman executes said documents. Notwithstanding the foregoing, this shall not
release or limit Reichman's rights to indemnification under the terms of the
By-Laws of the Company and under the Indemnification Agreement between Reichman
and the Company dated as of December 10, 1998, as in effect on the date hereof.

      18.   Nature of  Agreement. Reichman and the Company acknowledge and agree
that this Severance Agreement is a severance and settlement agreement and shall
not constitute an admission of liability and wrongdoing on the part of either
party.

      19.   Notices. All notices, requests, demands, and other communications
provided for by this Severance Agreement shall be sufficient if in writing and
delivered in person or sent by registered or certified mail, postage prepaid, to
the other party at the address first above written, or at such other address as
to which the party gives notice, with a copy to:

      For the Company:  Designs, Inc.
                        66 B Street
                        Needham, MA  02494
                        Attn:  Corporate Counsel

                              and

                        Peter Smith, Esq.
                        Kramer Levin Naftalis & Frankel LLP
                        919 Third Avenue
                        New York, NY 10022-39903

      For Reichman:     Karen E. Schneck
                        Hale and Dorr LLP
                        60 State Street
                        Boston, MA  02109

      Copies of all Notices must be delivered or sent in the same manner that
they are sent or delivered to the parties hereto.

      20.   Entire Agreement. This Severance Agreement is the entire agreement
between the parties relating to the subject matter hereof. The Employment
Agreement shall terminate effective upon the signing of this Severance
Agreement, at which time it shall become null and void.

                                       8
<PAGE>

      21.   Voluntary Assent. Reichman and the Company affirm that no other
promises or agreements of any kind have been made to or with them by any person
or entity whatsoever to cause them to sign the Severance Agreement, and that
they fully understand the meaning and intent of this Severance Agreement.
Reichman and the Company state and represent that they have had an opportunity
to fully discuss and review the terms of this Severance Agreement with an
attorney, that they have read this Severance Agreement carefully and understand
the contents hereof, that they freely and voluntarily assent to all of the terms
and conditions hereof and that they sign their name of their own free act.

      22.   Binding Effect. This Severance Agreement shall inure to the benefit
of and be binding upon the Company and Reichman, their respective successors,
executors, administrators, heirs and permitted assigns.

      23.   Amendment. This Severance Agreement may be amended or modified only
by a written instrument signed by Reichman and a duly authorized representative
of the Company.

      24.   Severability. In case any provisions of this Severance Agreement
shall be determined by an arbitrator or court of competent jurisdiction to be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions of this Severance Agreement shall not in any way be
affected or impaired thereby.

      25.   Future Cooperation. At any time after execution and exchange of this
Severance Agreement and from time to time, Reichman and the Company, upon
written request from either party to the other, shall execute and deliver such
further documents or instruments as may be reasonably necessary to more fully
effectuate the intention of the parties hereto but limited to such
amplification, definition or effectuation strictly consistent with the terms and
provisions hereof.

      26.   Applicable Law. This Severance Agreement shall be governed by the
laws of the Commonwealth of Massachusetts.

      27.   Opportunity to Consider; Revoke. Reichman acknowledges that he has
been afforded an opportunity to take at least twenty-one (21) days to consider
this Severance Agreement and has been advised to consult with the attorneys of
his choice prior to executing this Severance Agreement. Reichman acknowledges
that he has had an

                                       9
<PAGE>

adequate opportunity to review this Severance Agreement before its execution.
The parties understand and acknowledge that Reichman will have a period of seven
(7) calendar days following his execution of this Severance Agreement in which
to revoke his consent to this Severance Agreement. Such revocation must be in
writing and shall be transmitted to the Company such that it is actually
received prior to the expiration of the seven-day revocation period.

      28.   Counterparts. This Severance Agreement may be executed in two (2)
signature counterparts, each of which shall constitute an original, but all of
which taken together shall constitute one and the same instrument.

Executed as a sealed instrument this 15 day of January, 2000.

DESIGNS, INC.

By:/s/ John J. Schultz                    /s/ Joel H. Reichman
Its: Chief Executive Officer              Joel H.  Reichman
Hereunto duly authorized

By:Jeffrey M. Unger
Its: Vice President of Corporate Development
Hereunto duly authorized

                                       10
<PAGE>

                    Joel Reichman Severance Payment Schedule
                                            Insurance
                        Payment             Deduction     BI-Weekly Payment

    7-Jan    2000     $11,195.10                  $0.00        $11,195.10
    7-Jan    2000     $25,000.00         $       266.37   $     24,733.63
   21-Jan    2000     $11,195.10         $       266.37   $     10,928.73
    4-Feb    2000     $11,195.05         $       474.79   $     10,720.26
   18-Feb    2000     $11,195.05         $       450.00   $     10,745.05
    3-Mar    2000     $11,195.05         $       474.79   $     10,720.26
   17-Mar    2000     $11,195.05         $       450.00   $     10,745.05
   31-Mar    2000     $11,195.05         $       266.37   $     10,928.68
   14-Apr    2000     $11,195.05         $       474.90   $     10,720.15
   28-Apr    2000     $11,195.05         $       450.00   $     10,745.05
   12-May    2000     $11,195.05         $       474.90   $     10,720.15
   26-May    2000     $11,195.05         $       450.00   $     10,745.05
    9-Jun    2000     $11,195.05         $       266.37   $     10,928.68
   23-Jun    2000     $11,195.05                          $     11,195.05
    7-Jul    2000     $11,195.05                          $     11,195.05
   21-Jul    2000     $11,195.05                          $     11,195.05
    4-Aug    2000     $11,195.05                          $     11,195.05
   18-Aug    2000     $11,195.05                          $     11,195.05
    1-Sep    2000     $11,195.05                          $     11,195.05
   15-Sep    2000     $11,195.05                          $     11,195.05
   29-Sep    2000     $11,195.05                          $     11,195.05
   13-Oct    2000     $11,195.05                          $     11,195.05
   27-Oct    2000     $11,195.05                          $     11,195.05
   10-Nov    2000     $11,195.05                          $     11,195.05
   24-Nov    2000     $11,195.05                          $     11,195.05
    8-Dec    2000     $11,195.05                          $     11,195.05
   22-Dec    2000     $11,195.05                          $     11,195.05
    5-Jan    2001     $11,195.05                          $     11,195.05
   19-Jan    2001     $11,195.05                          $     11,195.05
    2-Feb    2001     $11,195.05                          $     11,195.05
   16-Feb    2001     $11,195.05                          $     11,195.05
    2-Mar    2001     $11,195.05                          $     11,195.05
   16-Mar    2001     $11,195.05                          $     11,195.05
   30-Mar    2001     $11,195.05                          $     11,195.05
   13-Apr    2001     $11,195.05                          $     11,195.05
   27-Apr    2001     $11,195.05                          $     11,195.05
   11-May    2001     $11,195.05                          $     11,195.05
   25-May    2001     $11,195.05                          $     11,195.05
    8-Jun    2001     $11,195.05                          $     11,195.05
   22-Jun    2001     $11,195.05                          $     11,195.05
    6-Jul    2001     $11,195.05                          $     11,195.05
   20-Jul    2001     $11,195.05                          $     11,195.05
    3-Aug    2001     $11,195.05                          $     11,195.05
   17-Aug    2001     $11,195.05                          $     11,195.05
   31-Aug    2001     $11,195.05                          $     11,195.05
   14-Sep    2001     $11,195.05                          $     11,195.05
   28-Sep    2001     $11,195.05                          $     11,195.05
   12-Oct    2001     $11,195.05                          $     11,195.05

                                       11
<PAGE>

   26-Oct    2001     $11,195.05                          $     11,195.05
    9-Nov    2001     $11,195.05                          $     11,195.05
   23-Nov    2001     $11,195.05                          $     11,195.05
Total                $573,557.50        $      4,764.86   $    568,792.64

                                       12

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