Exhibit 10(b)

 

SECOND AMENDMENT TO THE
PARTICIPATION AGREEMENT UNDER THE
HAGGAR CORP. SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

 

This Second Amendment (“Second Amendment”) to the Participation Agreement under
the Supplemental Executive Retirement Plan by and between Haggar Clothing Co., a
Nevada corporation, and Frank D. Bracken (the “Participant”) dated as of
October 1, 1999 (the “Participation Agreement”) is made and entered into by and
between Haggar Clothing Co. and the Participant effective as of January 1,
2005.  Any capitalized term used herein, and not otherwise defined herein, shall
have the meaning set forth in the Participation Agreement or the Haggar Corp.
Supplemental Executive Retirement Plan (the “Plan”).

 

RECITALS

 

A.                                   Haggar Clothing Co. and the Participant
previously entered into the Participation Agreement;

 

B.                                     Haggar Clothing Co. and the Participant
previously amended the Participation Agreement, effective February 14, 2003 (the
“First Amendment”);

 

C.                                     The portion of the Participant’s benefit
under the Plan vesting on and after January 1, 2005 (the “Unvested Benefit”)
will be subject to section 409A of the Internal Revenue Code of 1986, as amended
(the “Code”), which section imposes additional taxes on the Participant unless
the Participation Agreement is amended to comply with section 409A of the Code;

 

D.                                    The Participant’s Unvested Benefit equals
ten percent (10%) of the Participant’s benefit under the Plan; and

 

E.                                      Haggar Clothing Co. and the Participant
desire to amend the terms of the Participation Agreement to comply with
section 409A of the Code with respect to the Participant’s Unvested Benefit.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the premises and agreements herein contained
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, Haggar Clothing Co. and the Participant hereby agree as
follows:

 

1.                                       Addition of New Section 10.  A new
Section 10 is hereby added, effective January 1, 2005, to the Participation
Agreement to read as follows:

 

10.                                 In order to comply with the provisions of
section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), this
Section 10 will be effective on and after January 1, 2005 with respect to the
10% of the Participant’s benefit under the Plan that was not vested on
January 1, 2005, notwithstanding anything to the contrary in the Plan or this
Agreement.  This Section 10 shall have no effect on the 90% of the Participant’s
benefit vested as of December 31, 2004

 

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and the Plan as in effect on December 31, 2004 shall continue to govern that
portion of the Participant’s benefit.  Moreover, that vested portion of the
Participant’s benefit shall not be considered in calculating the Retirement
Benefit or Pre-Retirement Death Benefit as such terms are used below.

 

(a)                                  Change of Control.  Effective January 1,
2005, the Participant (or the Participant’s surviving spouse) will no longer be
entitled to the lump sum benefit described in Section 4.1(d) of the Plan and
instead upon a Change of Control (as defined below) the Participant (or the
Participant’s surviving spouse) will receive, as soon as administratively
feasible following the Change of Control, a lump sum cash payment with an
actuarial present value of the remaining vested portion of the Retirement
Benefit or Pre-Retirement Death Benefit, as the case may be, reduced by 10%. 
The Corporation’s actuaries shall provide the calculation of such lump sum
amount based on the Actuarial Assumptions (as defined in the Plan).  On and
after January 1, 2005, the Participant (or the Participant’s surviving spouse)
will no longer be entitled to request the acceleration of the Retirement Benefit
or Pre-Retirement Death Benefit into a lump sum payment.

 

Change of Control, with respect to the Participant’s benefit that is unvested as
of January 1, 2005, shall mean (i) a merger or consolidation of the Corporation
or Haggar Clothing Co. with or into another entity, or the exchange of
securities (other than a merger or consolidation) by the holders of the voting
securities of the Corporation or Haggar Clothing Co. and the holders of voting
securities of any other entity, in which the shareholders of the Corporation or
Haggar Clothing Co. immediately before the transaction do not own 50% or more of
the combined voting power of the voting securities of the surviving entity or
its parent immediately after the transaction; (ii) a dissolution of the
Corporation or Haggar Clothing Co.; (iii) a transfer of all or substantially all
of the assets of the Corporation, or Haggar Clothing Co., in one transaction or
a series of transactions occurring within a twelve month period to a “Person” or
“Group” (as defined below); (iv) a transaction or a series of transactions in
which a Person or Group becomes the beneficial owner, directly or indirectly, of
securities of the Corporation, or Haggar Clothing Co., representing more than
50% of the combined voting power of the Corporation’s or Haggar Clothing Co.’s
then outstanding securities; or (v) a majority of the members of the
Corporation’s Board is replaced during any twelve month period by directors
whose appointment or election is not endorsed by a majority of the Corporation’s
Board prior to the date of the appointment or election; provided, however, that
a “Change of Control” shall not be deemed to have occurred if the ownership of
50% or more of the combined voting power of the surviving corporation, asset
transferee, Corporation or Haggar Clothing Co. (as the case may be), after
giving effect to the transaction or series of transactions, is directly or
indirectly held by (A) a trustee or other fiduciary under an employee benefit
plan

 

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maintained by the Corporation, Haggar Clothing Co., or any Subsidiary, (B) one
or more of the “executive officers” of the Corporation that held such positions
prior to the transaction or series of transactions, or any entity, Person or
Group under their control, (C) one or more of the children of J.M. Haggar, Sr.
or their lineal descendants, or any entity, Person or Group under their control,
or (D) one or more members of the “senior management” of the Corporation or
Haggar Clothing Co. as designated by the Chief Executive Officer from time to
time, that held such positions prior to the transaction or series of
transactions, or any entity, Person or Group under their control.  As used
herein, “Person” and “Group” shall have the meanings set forth in Sections
13(d)(3) and/or 14(d)(2) of the Securities Exchange Act of 1934, as amended
(“1934 Act”), and “executive officer” shall have the meaning set forth in
Rule 3b-7 promulgated under the 1934 Act.  “Group” shall further be determined
by the Plan Administrator to constitute “more than one person acting as a group”
for purposes of section 409A of the Code and the guidance promulgated thereunder
(the “Deferred Compensation Rules”).  The definition of Change of Control above
shall be controlling with respect to the portion of  the Participant’s benefit
that is unvested as of January 1, 2005 for all purposes under the Plan and the
Trust under the Haggar Corp. Supplemental Executive Retirement Plan (the
“Trust”).

 

(b)                                 Retirement Benefit.  The Participant’s
vested Retirement Benefit that would otherwise be payable pursuant to
Section 4.1(a) of the Plan shall not commence until the lapse of six months from
the Participant’s termination of employment with Haggar Clothing Co. on which
date the delayed annuity payments will be paid in full and future annuity
payments will be paid in accordance with their schedule.  The Participant will
not be entitled to any additional compensation for the time value of money with
respect to this six month delay.

 

(c)                                  Trust Funding.  Notwithstanding any
provision of the Trust to the contrary (including Section 1(f) of the Trust) the
Corporation shall have no obligation to make any payments to the Trust with
respect to amounts payable pursuant to Section 10(a) above to the Participant
upon a Change of Control as defined above.

 

(d)                                 Section 409A of the Code.  This Section 10
is intended to bring distributions made with respect to the Participant’s
benefit under the Plan that was not vested on January 1, 2005 into compliance
with the Deferred Compensation Rules and the definition of Change of Control
above is intended to constitute “a change in the ownership or effective control
of the corporation, or in the ownership of a substantial portion of the assets
of the corporation” as such terms are used in the Deferred Compensation Rules. 
Accordingly, this Section 10 and the definition of Change of Control herein
shall be interpreted by the Plan Administrator, in its sole discretion exercised
in good faith, in such a manner that

 

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distributions made under the Plan will comply with the requirements of the
Deferred Compensation Rules.

 

2.                                       Effect.  Except as provided by this
Second Amendment and the First Amendment, all of the provisions of the
Participation Agreement are hereby affirmed, ratified and declared to be in full
force and effect.

 

3.                                       Counterparts.  This Second Amendment
may be executed in multiple counterparts, each of which shall be deemed an
original and together shall constitute one and the same Second Amendment.

 

4.                                       Governing Law.  This Second Amendment
shall be governed by and construed in accordance with the laws of the State of
Texas without application of the conflict of laws principles thereof, except to
the extent preempted by federal law, which shall govern to such extent.

 

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Second Amendment as of
March 15, 2005.

 

 

HAGGAR CLOTHING CO., a Nevada
corporation

 

 

 

By:

/s/ John W. Feray

 

 

 

 

Name:

John W. Feray

 

 

 

 

Title:

Chief Accounting Officer

 

 

 

 

 

 

PARTICIPANT

 

 

 

/s/ Frank D. Bracken

 

 

Frank D. Bracken

 

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