DONNA KARAN INTERNATIONAL INC
EXHIBIT 10.23
<DOCUMENT>
<TYPE>EX-10.23
<SEQUENCE>3
<FILENAME>a2038805zex-10_23.txt
<DESCRIPTION>EXHIBIT 10.23
<TEXT>

<PAGE>

                                                                  EXHIBIT 10.23


                                  AMENDMENT TO

                              EMPLOYMENT AGREEMENT

      AMENDMENT, effective as of the 30th day of November, 2000, to the
Employment Agreement dated as of July 25, 1997 among Donna Karan International
Inc. (the "Company"), a Delaware corporation, The Donna Karan Company ("DKCo."),
a New York partnership and John D. Idol ("Executive").

                              W I T N E S S E T H:

      WHEREAS, the Company, DKCo. and the Executive have previously entered into
the Employment Agreement;

      WHEREAS, the Company has consulted with and retained a compensation
consultant to review the payments and benefits payable to the Executive under
the Employment Agreement upon the occurrence of a change in control or ownership
of the Company;

      WHEREAS, the compensation consultant concurred with the Company that
certain changes to the Employment Agreement are appropriate and reasonable in
light of competitive compensation practices; and

      WHEREAS, the Company, DKCo. and the Executive desire to amend the
Employment Agreement.

      NOW, THEREFORE, in consideration of the foregoing, the parties hereto
agree as follows:

      1. Section 3(g) of the Employment Agreement is hereby amended, effective
as of April 1, 2000, by adding the following language at the end thereof:

            "Notwithstanding the foregoing, the Company (i) shall be relieved of
            the obligation under subsection (i)(C) to recommend to the Committee
            that the Executive be granted on or about April 1, 2000 and 2001
            Options to purchase 100,000 shares of common stock of the Company
            and (ii) undertakes to recommend to the Committee at the applicable
            time that the Executive be awarded on or about April 1, 2000 and
            April 1, 2001 shares of restricted common stock under the Plan
            intended to have the same economic value on a Black-Scholes basis as
            the Options that would have been granted pursuant to subsection
            (i)(C), as determined by the Committee in its sole discretion, but
            in no event more than 62,000 shares of restricted common stock
            annually. Shares of restricted stock granted pursuant to this
            Section 3(g) shall vest at the end of five


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            (5) years from the date of grant provided the Executive is
            continuously employed by the DK Companies or earlier, in 20%
            increments, if the common stock attains price levels specified by
            the Committee in its sole discretion at the time of the grant. The
            measurement of "attaining" shall be determined on the same basis as
            the restricted stock grants being made on or after April 1, 2000."

      2. A new Section 3(i) is hereby added to the Employment Agreement to read
as follows:


            "(i) TRANSACTION BONUS. The Executive shall be entitled to receive a
            transaction bonus equal to $750,000 at the time specified herein,
            provided that, the Executive shall continue to be employed by the
            Company or any successor (whether direct or indirect, by purchase,
            merger, consolidation or otherwise) to its business and/or assets,
            for a period not to exceed six months following a Change in Control
            (as defined in Section 11(b)). The bonus payable pursuant to this
            Section 3(i) shall be paid in a lump sum in cash within 10 days
            following the earliest of: (i) the expiration of the six month
            period following the Change in Control (as defined in Section
            11(b)), provided that Executive is continuously employed by the
            Company or any successor for such six month period unless the
            Executive dies or incurs a Disability during such six month period;
            (ii) the date Executive's employment with the Company or any
            successor is terminated without Cause on or after the occurrence of
            a Change in Control (as defined in Section 11(b)); or (iii) the date
            Executive's employment with the Company or any successor is
            terminated by the Executive for Good Reason. Only one bonus may be
            paid pursuant to this Section 3(i)."

      3. A new Section 3(j) is hereby added to the Employment Agreement to read
as follows:

            "(j) SPECIAL PERFORMANCE BONUS. Subject to the terms of a written
            agreement of even date mutually agreed to between the Company and
            the Executive, the Executive shall be entitled to receive a special
            performance bonus equal to $1,250,000, provided that he satisfies
            the terms and conditions of such agreement. The bonus payable
            pursuant to this Section 3(j) shall be paid in a lump sum in cash
            within 10 days following the consummation of the transaction
            contemplated under the written agreement referenced herein. Only one
            bonus may be paid pursuant to this Section 3(j)."

      4. Section 6 of the Employment Agreement is hereby amended by deleting
Subsections 6(a) and 6(b) in their entirety and by redesignating Subsections
6(c) and 6(d) as Subsections 6(a) and 6(b), respectively.


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      5. The definition of "Restricted Period," as defined in Section 6(c) of
the Employment Agreement (and which has been redesignated as Section 6(a)) is
hereby amended in its entirety to read as follows:

            ", during the Employment Period and until the first anniversary of
            either the date of the termination of Executive's employment by the
            Company or any other DK Company under this Agreement or the date the
            Executive terminates his employment under this Agreement for Good
            Reason (the "Restricted Period"),"

      6. Section 6(c) of the Employment Agreement (which has been redesignated
as Section 6(a)) is hereby amended by adding the following language at the end
thereof:

            "Notwithstanding the foregoing, in partial consideration for the
            payments and benefits contemplated under Sections 3(i), 3(j) and
            11(b) of this Agreement, as amended, upon the occurrence of a Change
            in Control, the Restricted Period shall be extended until the second
            anniversary of either the date of termination of Executive's
            employment by the Company or any other DK Company under this
            Agreement or the date the Executive terminates his employment under
            this Agreement for Good Reason."

      7. Section 11(b) of the Employment Agreement is hereby amended, effective
December 8, 2000, by substituting "paragraphs (a), (b) or (c) of Exhibit A to
the Company's Executive Severance Plan" for "Section II.E.(a) or II.E.(b) of the
Plan" therein but, solely with respect to Section 11(b)(i) and 11(b)(ii), such
substitution shall be subject to and conditioned upon the confirmation that the
accounting treatment applicable to such amendment to the stock awards described
in Section 11(b)(i) and 11(b)(ii), is consistent with the accounting treatment
for such stock awards prior to such amendment.

      8. Section 11(b) of the Employment Agreement is hereby further amended by
substituting "thirty-six" for "eighteen" in subsection (iii) therein and by
adding the following language at the end thereof:

            "; provided, however, that in the event that the Executive commences
            other full time employment that offers substantially similar or
            improved group health and life insurance and long-term disability
            coverage, such continuation of coverage by the Company shall
            immediately cease. The Company also shall provide outplacement
            services, up to a maximum of $50,000, for the Executive for a period
            of one year commencing on the Executive's date of termination, but
            in no event extending beyond the date on which the Executive
            commences other full time employment."

      9. Section 11(c) of the Employment Agreement is hereby amended in its
entirety to read as follows:

            "(c) (i) In the event any payment that is either received by the
            Executive or paid by the Company on his behalf or any property or


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            any other benefit provided to him under this Agreement or under any
            other plan, arrangement or agreement with the Company or any other
            person whose payments or benefits are treated as contingent on a
            change of ownership or control of the Company (or in the ownership
            of a substantial portion of the assets of the Company) or any person
            affiliated with the Company or such person (but only if such payment
            or other benefit is in connection with the Executive's employment by
            the Company) (collectively the "Company Payments"), will be subject
            to the tax (the "Excise Tax") imposed by Section 4999 of the Code
            (and any similar tax that may hereafter be imposed by any taxing
            authority), the Company shall pay to the Executive an additional
            amount (the "Gross-up Payment") such that the net amount retained by
            the Executive, after deduction of any Excise Tax on the Company
            Payments and any federal, state, and local income or payroll tax
            upon the Gross-up Payment provided for by this subsection (i), but
            before deduction for any federal, state, and local income or payroll
            tax on the Company Payments, shall be equal to the Company Payments.

            (ii) For purposes of determining whether any of the Company Payments
            and Gross-up Payments (collectively the "Total Payments") will be
            subject to the Excise Tax and determining the amount of such Excise
            Tax: (A) the Total Payments shall be treated as "parachute payments"
            within the meaning of Section 280G(b)(2) of the Code, and all
            "parachute payments" in excess of the "base amount" (as defined
            under Code Section 280G(b)(3) of the Code) shall be treated as
            subject to the Excise Tax, unless and except to the extent that, in
            the opinion (based on a substantial authority standard) of the
            Company's independent certified public accountants appointed prior
            to any change in ownership (as defined under Code Section
            280G(b)(2)) or tax counsel selected by such accountants or the
            Company, provided that such counsel advised the Company with regard
            to tax matters prior to any such change in ownership (the
            "Accountants"), such Total Payments (in whole or in part), (1) do
            not constitute "parachute payments," (2) represent reasonable
            compensation for services actually rendered within the meaning of
            Section 280G(b)(4) of the Code or (3) are otherwise not subject to
            the Excise Tax; and (B) the value of any non-cash benefits or any
            deferred payment or benefit shall be determined by the Accountants
            in accordance with the principles of Section 280G of the Code.

            (iii) For purposes of determining the amount of the Gross-up
            Payment, the Executive shall be deemed to pay federal income taxes
            at the highest marginal rate of federal income taxation in the
            calendar year in which the Gross-up Payment is to be made and


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            state and local income taxes at the highest marginal rate of
            taxation in the state and locality of the Executive's residence for
            the calendar year in which the Company Payment is to be made, net of
            the maximum reduction in federal income taxes which could be
            obtained from deduction of such state and local taxes if paid in
            such year. In the event that the Excise Tax is determined by the
            Accountants to be less than the amount taken into account hereunder
            at the time the Gross-up Payment is made, the Executive shall repay
            to the Company, at the time that the amount of such reduction in
            Excise Tax is finally determined, the portion of the prior Gross-up
            Payment attributable to such reduction (plus the portion of the
            Gross-up Payment attributable to the Excise Tax and federal, state
            and local income tax imposed on the portion of the Gross-up Payment
            being repaid by the Executive if such repayment results in a
            reduction in Excise Tax or federal, state and local income tax
            deduction), plus interest on the amount of such repayment at the
            rate provided in Section 1274(b)(2)(B) of the Code. In the event
            that the Excise Tax is later determined by the Accountants or the
            Internal Revenue Service to exceed the amount taken into account
            hereunder at the time the Gross-up Payment is made (including by
            reason of any payment the existence or amount of which cannot be
            determined at the time of the Gross-up Payment), the Company shall
            make an additional Gross-up Payment in respect of such excess (plus
            any interest at the rate provided in Section 1274(b)(2)(B) of the
            Code or penalties payable with respect to such excess) at the time
            that the amount of such excess is finally determined."

      10. LEGAL FEES. The Company shall promptly pay or reimburse the Executive
for his reasonable costs of entering into this Amendment, including
specifically, the fees and expenses of his counsel, up to a maximum of $25,000.

      11. AGREEMENT OTHERWISE UNCHANGED. The Employment Agreement, as so
amended, shall remain in full force and effect.

      12. COUNTERPARTS. This Amendment may be executed in counterparts, each of
which shall be deemed an original, but both of which together shall constitute
the same agreement.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]




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      IN WITNESS WHEREOF, the parties have duly executed this Amendment as of
the date first written above.

                                    DONNA KARAN INTERNATIONAL INC.


                                    By: /s/ William Benedetto
                                       ---------------------------
                                       Name:
                                       Title:

                                    THE DONNA KARAN COMPANY

                                    By: DONNA KARAN INTERNATIONAL INC.,
                                        GENERAL PARTNER


                                    By: /s/ William Benedetto
                                       ---------------------------
                                       Name:
                                       Title:

                                    EXECUTIVE

                                     /s/ John D. Idol
                                    -------------------------------
                                       John D. Idol


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