Exhibit
      10.13





Planned
      Retirement Agreement





Introduction





This
      Planned Retirement Agreement (this
“Agreement”) is made by and between Richard M. Haddock, an individual (the
      "Employee"), and LaserCard Corporation, a Delaware corporation (the "Company"),
      effective on the date (the “Effective Date”) that this Agreement is signed by
      the Employee as indicated under “Authorized Signatures“
below.





Recital





Employee
      desires to retire no later than March 31, 2008.  Employee has been an
      employee of the Company for more than two decades and the Company desires to
      provide the Employee with a retirement package but is willing to do so only
      if
      the Employee provides the Company with a release so that the Company is assured
      that the retirement package satisfies the Employee's expectations.





Agreement





Based
      upon the information and premises stated in the above Recital and the
      statements, promises and agreements contained below, the parties hereby agree
      as
      follows:





1.           Resignation.  The
      Employee hereby agrees to resign, and does hereby resign, as an employee,
      officer, and member of the board of directors of the Company (the “Board”)
      effective on the first to occur of (a) the Company recruits and hires a
      replacement CEO who determines that s/he has received the full-time transition
      assistance from Employee that s/he desires and (b) March 31, 2008 (the
“Retirement Date”).





2.CEO
      Role.  Employee’s duties as the Company’s CEO shall change
      based upon the expanded role of the Chairman of the Board in the intervening
      time until the Retirement Date.  In these regards, the Employee shall
      have the typical duties of a chief executive officer except that the Employee
      is
      expected to take into account when fulfilling his duties whatever pro-active
      advice and counsel the Chairman of the Board provides and that the Chairman
      of
      the Board, rather than the Employee, would have:




o
            oversight
                and coordination of all US Federal government sales and lobbying
                efforts,o
            oversight
                and execution of the Company’s merger and acquisition
                strategy,o
            oversight
                and execution of the Company's FY2009 business operating plan submission
                to the Board,o
            oversight
                and execution of the Company’s financing activities, including to be the
                principal interface to the banking and investment communities,
                ando
            oversight
                and development of the Company’s strategic
                plan.





In
      addition, Employee would ready the Company for transition to a new CEO and
      once
      the new CEO had been identified, would assist with transition of his
      duties.




1





3.           At
      Will
      Employee.  The service of the Employee as an employee remains
      at will until the Retirement Date, meaning that either the Employee may resign
      or the Company may terminate the employment relationship for any or no
      reason.  The service of the Employee as an officer remains at the
      pleasure of the Board until the Retirement Date.  The service of the
      Employee as a member of the Board remains at the will of the stockholders until
      the Retirement Date.





4.           Subsidiary
      Roles.  Effective on the Retirement Date, or, if earlier, the
      date on which Employee ceases to be an employee of the Company, the Employee
      hereby agrees to resign, and does hereby resign as an employee, officer and
      member of the board of directors of the subsidiaries of the Company, to the
      extent applicable.





5.Salary.  While
      employed through the Retirement Date, or, if earlier, the date on which Employee
      ceases to be an employee of the Company, the
      Employee is to receive base salary at the per annum rate ofthree hundred
      fifty thousand two dollars ($350,002)to be paid to the Employee through the Company’s normal
      payroll.




6.           Separation
      Pay.  Provided
      that Employee has not breached Sections 12, 13, and 15 below, and subject tocompliance
      withSection
      14 below, Employee shall be entitled to receive base salary continuation for
      two
      years from the date of termination of Employee’s employment with the Company
      (the “Severance Period”) if (a) the Employee remains an employee until the
      Retirement Date or (b) Employee’s employment is terminated prior to the
      Retirement Date due to Employee’s resignation for “Good Reason” or the Company’s
      termination other than for “Cause” as defined in Exhibit A.  The
      start of the Severance Period (that is, either the Retirement Date or
      thedate of anyemploymenttermination
      under Section 6(b))is
      referredto as the “Termination Date”.  For each month during the
      Severance Period, the Company shall pay the Employee bi-weekly one-twenty-sixth
      of the Employee’s per annum base salary on the same date payment would be made
      through the Company’s normal payroll; provided, however, that any payment that
      would be made in accordance with the Company’s normal payroll after June 15,
      2008 and before the date which is the six-month anniversary of the Termination
      Date shall
      instead be paid, with interest at the rate offive
      percent (5%)per annum from the datesuch
      payment would have been madein
      accordance with the Company’s normal payroll, on the first business day of the
      seventh month following the Termination Date or, if earlier, the date of
      Employee’s death. Base salary does not include, for example, overtime, bonuses,
      commissions, shift premiums or differentials, compensation associated with
      employee stock options, reimbursements, sales commission awards, employee
      benefits, expense allowances, or any other incidental or additional
      compensation.




7.           Left
      Intentionally Blank.




8.           Tax
      Withholding.  All
      payments of base salary and severancepay under Sections 5 and 6are taxable under the laws of theUnited
      States andCalifornia
      andother payments under this Agreement may be so taxable.  All payments
      under this Agreement shall be made less any and all applicable deductions and
      withholdings required by applicable law andwill be subject to all court
      ordered wage assignments and/or garnishments.





9.Period
      of
      Consultancy.  Provided that Employee has remained an employee
      through the Termination Date, Employee shall be retained as a consultant by
      the
      Company from the Termination Date through December 31, 2008 (the “Period of
      Consultancy”) provided Employee is still entitled to receive separation pay
      under Section 6.  During the Period of Consultancy, Employee’s
      Employee Agreement dated December 28, 1995, a copy of which is attached to
      this
      Agreement as Exhibit C (the “Employee Agreement”) would remain in full force and
      effect with references to “employment” changed to “consultancy” in Sections 1,
      2, and 5 (“term of my employment”), and Section 4 (“in connection with my
      employment”), and Section 7 (“other than employment”) and all references to
“Chief Executive Officer” or “President” shall be replaced
      with  “Chairman of the Board”.  Employee’s primary duties
      would be to assist with transition to the new CEO and to assist with GIG/Prevent
      second source program.  Employee would be available to render two days
      of service per month if and as requested (but may render additional services
      as
      he and the Company desire relative to the establishment of the GIG/Prevent
      second source program).  Employee would receive a retainer of $2,000
      per month, regardless of the amount of services Employee actually renders and
      may receive a bonus under Section 3bii of the Age Discrimination Release
      Agreement which the Company and Employee anticipate entering into (the “Age
      Discrimination Release Agreement”).  Employee would be an independent
      contractor with no authority to bind the Company and all expenses would be
      subject to the prior written approval of the CEO or Chairman or Vice Chairman
      of
      the Board.




2





10.        
      Stock Options and
      Restricted Stock.  Employee’s stock options granted under the
      2004 Equity Incentive Compensation Plan (the “2004 Plan”) and under the prior
      stock option plan shall remain in force and effect according to their terms,
      except that vesting of Employee’s options granted under the 2004 Plan will cease
      on any Termination Date.  This means for example that for Employee’s
      options granted under the 2004  Plan, their vesting would cease when
      Employee ceases to be an employee of the Company but they would remain
      exercisable during any Period of Consultancy and for ninety (90) days thereafter
      whereas Employee’s stock options granted under the prior stock option plan would
      cease vesting when Employee ceases to be an employee of the Company and would
      terminate ninety (90) days thereafter.  Notwithstanding the foregoing,
      the vesting of Employee’s 18,750 options granted on May 24, 2005, under the 2004
      Plan which are scheduled to vest on May 24, 2008, would continue during the
      Period of Consultancy and all of Employee’s options shall cease vesting and
      terminate immediately upon any breach of Section 12, 13, 14, or 15 during the
      Period of Consultancy.  The vesting of Employee’s restricted stock
      grant shall cease upon his employment termination and the unvested shares shall
      be forfeited as provided in the associated Restricted Stock Award Agreement
      except that the vesting of the 3,125 shares under Employee’s restricted stock
      grant that are scheduled to vest on September 21, 2008, shall continue to be
      governed by Employee’s Restricted Stock Award Agreement which means that such
      vesting shall cease upon termination of his Period of Consultancy, or if there
      is no Period of Consultancy, then upon his employment termination, and the
      unvested shares shall be forfeited as provided in the associated Restricted
      Stock Award Agreement.





11.         Left
      Intentionally Blank.





12.         Non-Solicitation
      of Company
      Employees.  The Employee agrees not to directly or indirectly
      solicit or attempt to solicit any employee or full-time independent contractor
      or consultant of the Company to perform services elsewhere during the longer
      of
      (1) the time Employee remains a Company employee and for one year thereafter
      or
      (2) the Severance Period.





13.         Future
      Releases.  Employee agrees to execute the releases attached as
      Exhibit B on March 31, 2008, and January 1, 2009, and not to rescind same during
      the seven-day rescission period.





14.         Other
      Employment.  The Employee’s severance benefits under Section 6
      of this Agreement and Sections 2bii, and 4 of the Age Discrimination Release
      Agreement shall cease and Employee’s options and the vesting of Employee’s
      restricted stock award under Section 10 of this Agreement shall terminate if
      Employee becomes an employee of or otherwise renders services to any business
      and the Employee agrees to promptly notify the Company when the Employee begins
      to so render services.  However, if the Board of Directors of the
      Company determines that the services that Employee is going to perform for
      the
      other business do and will not involve the design, development, or manufacture
      of plastic cards for secure data storage, whether they utilize contact or
      contactless chips, optical or magnetic stripes, holograms, or other means for
      data storage (the “Company’s Business”), then the Company agrees to act
      affirmatively within one (1) week of a written request from Employee for the
      severance benefits under Section 6 of this Agreement and under Sections 2bii,
      and 4 of the Age Discrimination Release Agreement to continue and for the
      options to continue as provided under Section 10.  If a court or
      arbitrator, as the case may be, should for some reason require the Company
      to
      continue Employee’s severance benefits even if the Company’s Board of Directors
      determines that Employee’s services involve the Company’s Business, then such
      benefits shall continue only to the extent a court or arbitrator finds that
      the
      Employee has demonstrated by clear and convincing evidence that Employee’s
      services have not already and would not in the future utilize the Company’s
      confidential information.




3




15.         Not
      Damage the
      Business.  Prior to the Retirement Date and throughout the
      Severance Period, Employee agrees not to act in any manner that might damage
      the
      business of the Company.  Prior to the Retirement Date and throughout
      the Severance Period, and for three (3) years thereafter, Employee agrees not
      to
      counsel or assist any attorneys or their clients in the presentation or
      prosecution of any disputes, differences, grievances, claims, charges, or
      complaints by any third party against the Company and/or any officer, director,
      employee, agent, representative, shareholder or attorney of the Company, unless
      under a subpoena or other court order to do so.  Prior to the
      Retirement Date and throughout the Severance Period, Employee agrees to refrain
      from any disparagement, defamation, libel or slander of the Company or
      Company-affiliates or tortious interference with the contracts and relationships
      of the Company and the Company agrees to instruct its officers and directors
      not
      to defame, libel, or slander the Employee.





16.         Company
      Current in
      Pay.  The Employee acknowledges that the Employee has received
      payment of all wages due through the Effective Date and all equity grants and
      has received reimbursement of all submitted reimbursable business
      expenses.





17.         Current
      Release.




a.            The
      Employee releases and forever discharges the Company and each of its employees,
      officers, directors, shareholders, agents, predecessors and successors in
      interest, parents, subsidiaries, attorneys, and assigns ("Company-Affiliates"),
      from any and all claims, demands, obligations and/or liabilities which arise
      out
      of or relate to any action by the Company or the Company-Affiliates or omission
      to act by the Company or the Company-Affiliates occurring on or before the
      date
      this Agreement is signed by the Employee (the “Release”).





b.           There are certain
      claims which, under state or federal statutes or regulations, may not be
      released or may not be released except with the participation and approval
      of a
      state or federal agency. For example, claims for earned but unpaid wages and
      claims for indemnification under the California Labor Code cannot be waived
      or
      released and claims related to Workers’ Compensation benefits may not be waived
      without the express approval of the agency that oversees administration of
      those
      laws.  The Release is not intended to cover and does not extend to
      these claims or other claims that, by law, cannot be released in an agreement
      between an employer and an employee.





c.            To the
      extent permitted by law, the Release includes, but is not limited to, release
      of
      any and all claims arising out of the Employee's employment with the Company
      and
      the termination of that employment. This includes a release of any rights or
      claims the Employee may have under Title VII of the Civil Rights Act of 1964,
      42
      U.S.C. §§2000, etseq.,
      which prohibits
      discrimination in employment based on race, color, national origin, religion,
      or
      sex, the Equal Pay Act, which prohibits paying men and women unequal pay for
      equal work, the Americans with Disabilities Act (42 U.S.C. §§12101, etseq.),
      which
      prohibits discrimination against the disabled, the Employee Retirement Income
      Security Act ("ERISA"), 29 U.S.C. §§1001, etseq.,
      the California
      Fair Employment and Housing Act ("FEHA"), Government Code §§12940, etseq.,
      , or any other
      federal, state or local laws or regulations relating to terms and conditions
      of
      employment.  However, notwithstanding any provision of this Agreement
      to the contrary, the  Release does NOT include a release of any rights
      or claims the Employee may have under the Age Discrimination in Employment
      in
      Employment Act, 29 U.S.C. §§621, etseq.,
      (as amended by
      the Older Workers' Benefit Protection Act, 29 U.S.C. §626(f)) which prohibits
      age discrimination in employment; such claims and rights are the subject matter
      of the Age Discrimination Release Agreement which the Company and Employee
      are
      concurrently entering into.  The Release also includes any claims for
      wrongful discharge, breach of fiduciary duty, fraud, misrepresentation,
      intentional and negligent infliction of emotional distress, harassment, and
      any
      claims that the Company or any Company-Affiliate has dealt with the Employee
      unfairly or in bad faith.




4





d.           To the maximum
      extent permitted by law, the Release extends to all claims of every nature
      and
      kind whatsoever, whether known or unknown, suspected or unsuspected. The
      Employee expressly waives the provisions of Section 1542 of the Civil Code
      which
      provides:





A
      general
      release does not extend to claims which the creditor does not know or suspect
      to
      exist in his or her favor at the time of executing the release, which if known
      by him or her must have materially affected his or her settlement with the
      debtor.





e.            The Release does
      not waive any rights or claims that the Employee might have arising after the
      date the Employee signs this Agreement nor does the Release waive any rights
      or
      claims that the Employee has under this Agreement or the agreements referenced
      in Section 24 below. In addition, the Release does not extend to any vested
      benefits which would otherwise be available to Employee under any
      Company-sponsored ERISA plan.





f.            The
      Employee promises and states that the Employee has not given or sold any claim
      discussed in this Agreement to anyone and that the Employee has not filed a
      lawsuit, claim, or charge with any court or government agency asserting any
      claims that are released by the Release.





g.           This Agreement
      recognizes the rights and responsibilities of the Equal Employment Opportunity
      Commission (“EEOC”) and the California Department of Fair Employment and Housing
      (“DFEH”) to enforce the statutes which come under their
      jurisdiction.  This Agreement is not intended to prevent Employee from
      initiating or participating in any investigation or proceeding conducted by
      the
      EEOC or the DFEH; provided, however, that nothing in this section limits or
      affects the finality or the scope of the Release.  The Employee has
      waived and released any claim the Employee may have for damages based on any
      alleged discrimination and may not recover damages in any proceeding conducted
      by the EEOC or the DFEH.





18.        
      Internal
      Revenue CodeSection 409A




a.            To the
      fullest extent applicable, amounts and other benefits payable under this
      Agreement are intended to be exempt from the definition of “nonqualified
      deferred compensation” under Section 409A of the Internal Revenue Code of 1986,
      as amended (the “Code”) in accordance with one or more of the exemptions
      available under the final Treasury regulations promulgated under Code Section
      409A.  In this regard, each payment under this Agreement that is made
      in a series of scheduled installments (within the meaning of Treasury Regulation
      Section 1.409A-2(b)(2)(iii)), including without limitation, each salary
      continuation payment under Section 6, shall be deemed a separate payment for
      purposes of Code Section 409A.




5





b.           To the extent
      that any amounts or benefits payable under this Agreement are or become subject
      to Code Section 409A due to a failure to qualify for an exemption from the
      definition of nonqualified deferred compensation in accordance with the final
      Code Section 409A regulations, this Agreement is intended to comply with the
      applicable requirements of Code Section 409A with respect to such amounts or
      benefits. This Agreement shall be interpreted and administered to the extent
      possible in a manner consistent with the foregoing statement of
      intent.





c.            In each
      case where this Agreement provides for the payment of an amount that constitutes
      nonqualified deferred compensation under Code Section 409A to be made to the
      Employee within a designated period and such period begins and ends in different
      calendar years, the exact payment date within such range shall be determined
      by
      the Company, in its sole discretion, and the Employee shall have no right to
      designate the year in which the payment shall be made.





d.           
Notwithstanding anything in this Agreement or elsewhere to the contrary, if
      the
      Company reasonably determines that any amount or other benefit payable under
      this Agreement on account of Employee’s separation from service, within the
      meaning of Code Section 409A, constitutes nonqualified deferred compensation
      that will subject Employee to “additional tax” under Code Section 409A(a)(1)(B)
      (together with any interest or penalties imposed with respect to, or in
      connection with, such tax, a “409A Tax”) with respect to the payment of such
      amount or the provision of such benefit the Company and Employee shall take
      reasonable  actions to avoid the imposition of a 409A Tax at such time
      and in such manner as permitted under Code Section 409A or other applicable
      rules or procedures.  In the event that the Code Section 409A requires
      a delay of any payment other than the delay specified in Section 6, such payment
      shall be accumulated and paid at the earliest time and in such manner that
      comply with Code Section 409A without interest.





e.            For
      purposes of this Section 18, the Employee’s date of termination shall be the
      date on which the Employee has incurred a “separation from service” within the
      meaning of Treasury Regulation Section 1.409A-1(h), or in subsequent IRS
      guidance under Code Section 409A.





19.        
      Employee
      Agreement.  The Employee acknowledges and reaffirms in its
      entirety the Employee Agreement.





20.         Confidentiality.  Except
      to the extent publicly disclosed by the Company, the Employee and the Company
      each promises to hold the provisions of this Agreement in strictest confidence.
      The Employee may disclose this Agreement, in confidence, to his/her immediate
      family, to his/her attorneys, accountants, auditors, tax preparers and financial
      advisors, and as may be necessary to enforce its terms or as otherwise required
      by law. Otherwise, the Employee agrees not to publicize or disclose its terms
      to
      anyone, in any manner. In particular (but without limitation), the Employee
      agrees not to discuss the terms of this Agreement with former or current
      employees, clients, suppliers, subcontractors or other business contacts of
      the
      Company.





21.         Governing
      Law.  This Agreement is to be governed by California
      law.





22.         Severability.  If
      any portion of this Agreement is found to be unenforceable, then both the
      Employee and the Company desire that all other portions that can be separated
      from it or appropriately limited in scope shall remain fully valid and
      enforceable.





23.         Arbitration.  Except
      as prohibited by law, any legal dispute between the Employee the Company (or
      between the Employee and any Company-Affiliates, each of whom is hereby
      designated a third party beneficiary of this agreement regarding arbitration)
      arising out of the Employee’s employment or termination of employment or this
      Agreement (a "Dispute") will be resolved through binding arbitration in San
      Jose, California, under the Arbitration Rules set forth in California Code
      of
      Civil Procedure Section 1280 etseq.,
      and pursuant to
      California law. Nothing in this arbitration provision is intended to limit
      the
      Employee's right to file a charge with or obtain relief from the National Labor
      Relations Board. THE
      PARTIES UNDERSTAND THAT BY AGREEING TO ARBITRATE DISPUTES THEY ARE WAIVING
      ANY
      RIGHT THEY MIGHT OTHERWISE HAVE TO A JURY TRIAL.  This arbitration
      provision is not intended to modify or limit substantive rights or the remedies
      available to the parties, including the right to seek interim relief, such
      as
      injunction or attachment, through judicial process, which shall not be deemed
      a
      waiver of the right to demand and obtain arbitration.




6





24.         Other
      Agreements.  The Employee Agreement, the Employee’s stock
      option agreements and restricted stock award agreement, and the Employee’s
      Indemnification Agreement all remain in full force and effect, subject to the
      modifications provided for in Sections 9 and 10 above.





25.         Entire
      Agreement.  This Agreement, together with the Age
      Discrimination Release Agreement which the Company and Employee anticipate
      entering into, are intended by the parties to be their entire agreement and
      understanding concerning its subject matter and supersede any prior agreements
      and understandings, whether written or oral, concerning its subject
      matter.  The statements, promises and agreements in this Agreement may
      not be contradicted by any prior understandings, agreements, promises or
      statements.  The Employee states and promises that in signing this
      Agreement he/she has not relied on any statements or promises made by the
      Company, other than the promises contained in this Agreement.  Any
      changes to this Agreement must be in writing and signed by both
      parties.





26.         Attorneys
      Fees.  If either party files any arbitration, lawsuit, claim,
      or charge based on, or in any way related to, the Employee’s employment with the
      Company or the cessation of such employment, any claim that the Employee has
      released in the Release or the promises and agreements contained in this
      Agreement, the party that wins the lawsuit or arbitration or prevails on the
      claim or charge will be entitled to recover from the other party all costs
      it
      incurs in connection with the dispute, including reasonable attorneys'
      fees.





[Remainder
      of Page Left Intentionally Blank]




7




27.         Successors
      and
      Assigns.  This Agreement shall be binding upon the Employee’s
      heirs, administrators, executors, personal representatives and assigns and
      upon
      the Company’s successors and assigns.





The
      Employee is advised to consult
      with an attorney before signing this Agreement.





Authorized
      Signatures





In
      order
      to bind the parties to this Planned Retirement Agreement, the parties, or their
      duly authorized representatives have signed their names below on the dates
      indicated.





Company
            
            EmployeeBy
                /s/ Donald
                Mattson
            
            /s/
              Richard M. HaddockRichard
              M. HaddockDonald
                Mattson, Vice ChairmanPrinted
                Name and Title of SignatoryNovember
                28, 2007
            
            November
                28, 2007Date
                Executed on Behalf of Company
            
            Date
                Signed By Employee




8




Exhibit
      A





Definitions





GOOD
      REASON shall mean: (i) a material breach of the Agreement by the Company,
      (ii) a material reduction of the Employee’s base salary, except that neither a
      reduction  proportionate to reductions imposed on all other members of
      the Company’s executive management as part of a cost reduction effort nor a
      reduction of the Employee’s base salary due to a change of duties as a result of
      disability will be a Good Reason for termination, or (iii) the Employee’s duties
      with the Company are materially reduced other than as provided in the
      Agreement.  The Employee shall give notice to the Company that the
      Employee intends to resign for one of the Good Reasons listed above, detailing
      such Good Reason with specificity.  If the Employee gives notice to
      the Company, no later than ninety (90) days after the initial existence of
      one
      or more of the conditions constituting Good Reason listed above arising without
      his consent, that the Employee intends to resign for one of the Good Reasons
      listed above, detailing such Good Reason with specificity, and if the Company
      does not remedy the situation so as to eliminate the Good Reason within two
      (2)
      weeks of receiving such notice, then any resignation by the Employee from the
      Company within the one (1) month period beginning with the delivery of the
      notice shall be deemed a Resignation for Good Reason.





CAUSE
      is defined to mean a good faith determination by the Company that the Employee
      has engaged in any of the following: 1) theft, misappropriation or embezzlement
      of Company property, property of an officer, shareholder, director or employee,
      or property of any customer or supplier of the Company; 2) any conduct which
      constitutes unfair competition with the Company; 3) any breach of a contractual
      or fiduciary duty to the Company or a material breach of a material Company
      policy not cured within five days of the Company giving the Employee notice
      of
      the breach; 4) material dishonesty in the performance of the Employee’s duties
      for the Company or fraud against the  Company; 5) materially exceeding
      the scope of the Employee's authority as delegated or limited from time to
      time
      by the Company; 6) inducement of any customer, consultant, employee or supplier
      of the Company to breach any contract with the Company or cease its business
      relationship with the Company; 7)  refusal to substantially follow the
      lawful instructions of the board of directors; 8) failure to devote full-time
      effort to serving the Company which is not cured within sixty (60) days of
      notice; 9) conviction
      of a crime punishable as a felony;
      or 10) death or disability of the Employee.The
      Company’s
      good faith determination, based on reasonable evaluation that “Cause” exists for
      termination of the employment relationship under this provision shall be
      conclusive for the purposes of this section.  Neither the later
      discovery of additional or different facts tending to negate the Company’s
      determination of “Cause” nor any subsequent finding by any other fact finder
      that the employee did not in fact engage in conduct identified in this
      definition of “Cause” shall alter the finality of the Company’s determination
      for the purposes of this section. The Company’s determination that Cause exists
      shall be made by a committee of the independent members of the Board of
      Directors.




9




Exhibit
      B





Release
      Agreement





Introduction





This
      Release Agreement (this “Agreement”) is made by and between Richard M. Haddock,
      an individual (the "Employee") and LaserCard Corporation, a Delaware corporation
      (the "Company"), effective seven calendar days after the date this Agreement
      is
      signed by the Employee.





Recitals





A.          The
      Employee has entered into the Planned Retirement Agreement (the “Retirement
      Agreement”) to which this Agreement comprises Exhibit B and shortly thereafter
      an Age Discrimination Release Agreement (the “Age Discrimination Release
      Agreement”).





B.          It
      is either on or shortly after March 31, 2008, or otherwise the start of the
      “Severance Period”, as defined in the Retirement Agreement, or else it is on or
      shortly after the end of the “Period of Consultancy” as defined in the
      Retirement Agreement, which is anticipated to be December 31, 2008.





C.          If
      it is on or shortly after March 31, 2008, then Employee’s resignation as an
      employee of the Company has just become effective and Employee’s bonus under
      Section 2a of the Age Discrimination Release Agreement has been
      determined.  If it is otherwise the start of the Severance Period,
      then Employee has either resigned for “Good Reason” or his employment has been
      terminated by the Company other than for “Cause”, as defined in the Retirement
      Agreement.  If it is on or shortly after the end of the Period of
      Consultancy, then Employee’s consulting services to the Company have just ended
      and Employee’s bonus, if any, under Section 2b of the Age Discrimination Release
      Agreement has been determined.





D.          Employee
      desires to receive or to continue to receive the separation pay and other
      benefits provided in the Retirement Agreement and is willing to grant the
      Company a complete release of claims supplemental the complete releases granted
      under the Retirement Agreement and Age Discrimination Release
      Agreement.





Agreement





Based
      upon the information and premises stated in the above Recitals and the
      statements, promises and agreements contained below, the parties hereby agree
      as
      follows:





1.
              The
                  Company promises to continue to provide the benefits under the
                  Retirement
                  Agreement.2.
              The
                  Employee releases and forever discharges the Company and each of
                  its
                  employees, officers, directors, shareholders, agents, predecessors
                  and
                  successors in interest, parents, subsidiaries, attorneys, and assigns
                  ("Company-Affiliates"), from any and all claims, demands, obligations
                  and/or liabilities which arise out of or relate to any action by
                  the
                  Company or the Company-Affiliates or omission to act by the Company
                  or the
                  Company-Affiliates occurring on or before the date this Agreement
                  is
                  signed by the Employee (the “Release”).3.
              There
                  are certain claims which, under state or federal statutes or regulations,
                  may not be released or may not be released except with the participation
                  and approval of a state or federal agency.   For example,
                  claims for earned but unpaid wages and claims for indemnification
                  under
                  the California Labor Code cannot be waived or released and claims
                  related
                  to Workers’ Compensation benefits may not be waived without the express
                  approval of the agency that oversees administration of those
                  laws.  The Release is not intended to cover and does not extend
                  to these claims or other claims that, by law, cannot be released
                  in an
                  agreement between an employer and an
                  employee.
  10
  4.
              To
                  the extent permitted by law, the Release includes, but is not limited
                  to,
                  release of any and all claims arising out of the Employee's employment
                  with the Company and the termination of that employment.  This
                  includes a release of any rights or claims the Employee may have
                  under the
                  Age Discrimination in Employment in Employment Act, 29 U.S.C. §§621, etseq.,
                  (as amended by the Older Workers'
                  Benefit Protection Act, 29 U.S.C. §626(f)) which prohibits age
                  discrimination in employment, Title VII of the Civil Rights Act
                  of 1964,
                  42 U.S.C. §§2000, etseq.,
                  which prohibits discrimination in
                  employment based on race, color, national origin, religion, or
                  sex, the
                  Equal Pay Act, which prohibits paying men and women unequal pay
                  for equal
                  work, the Americans with Disabilities Act (42 U.S.C. §§12101, etseq.),
                  which prohibits discrimination
                  against the disabled, the Employee Retirement Income Security Act
                  ("ERISA"), 29 U.S.C. §§1001, etseq.,
                  the California Fair Employment and
                  Housing Act ("FEHA"), Government Code §§12940, etseq.,
                  , or any other federal, state or
                  local laws or regulations relating to terms and conditions of
                  employment.  The Release also includes any claims for wrongful
                  discharge, breach of fiduciary duty, fraud, misrepresentation,
                  intentional
                  and negligent infliction of emotional distress, harassment, and
                  any claims
                  that the Company or any Company-Affiliate has dealt with the Employee
                  unfairly or in bad faith.5.
              To
                  the maximum extent permitted by law, the Release extends to all
                  claims of
                  every nature and kind whatsoever, whether known or unknown, suspected
                  or
                  unsuspected.  The Employee expressly waives the provisions of
                  Section 1542 of the Civil Code which provides:A
                  general release does not extend to claims which the creditor does
                  not know
                  or suspect to exist in his or her favor at the time of executing
                  the
                  release, which if known by him or her must have materially affected
                  his or
                  her settlement with the debtor.6.
              The
                  Release does not waive any rights or claims that the Employee might
                  have
                  arising after the date the Employee signs this Agreement nor does
                  the
                  Release waive any rights or claims that the Employee has under
                  this
                  Agreement, the Retirement Agreement, or the agreements referenced
                  in
                  Section 24 of the Retirement Agreement.  In addition the Release
                  does not extend to any vested benefits which would otherwise be
                  available
                  to Employee under any Company-sponsored ERISA plan.7.
              The
                  Employee acknowledges that his employment (and if the Effective
                  Date is on
                  or shortly after the end of the Period of Consultany, his consultancy)
                  with the Company ceased on or before the date this Agreement is
                  signed by
                  Employee.8.
              The
                  Employee promises and states that the Employee has not given or
                  sold any
                  claim discussed in this Agreement to anyone and that the Employee
                  has not
                  filed a lawsuit, claim, or charge with any court or government
                  agency
                  asserting any claims that are released by the Release.9.
              The
                  Employee promises and states that he has to his knowledge return
                  to the
                  Company all property belonging to the Company or authored by or
                  concerning
                  Company (other than the Employee’s personal copies of his/her payroll and
                  benefits records), including, but not limited to, keys and passes,
                  credit
                  cards, computer hardware and software, papers, manuals, records,
                  drawings,
                  and documents.  Should the Employee subsequently discover
                  Company property, he will either return it to the Company or if
                  it is
                  immaterial he will destroy it.  Notwithstanding the foregoing,
                  during the Period of Consultancy, the Employee may retain materials
                  related the Prevent agreement and materials provided by the Company
                  to the
                  Employee after the Termination
                  Date.
  11
  10.
              This
                  Agreement recognizes the rights and responsibilities of the Equal
                  Employment Opportunity Commission (“EEOC”) and the California Department
                  of Fair Employment and Housing (“DFEH”) to enforce the statutes which come
                  under their jurisdiction.  This Agreement is not intended to
                  prevent Employee from initiating or participating in any investigation
                  or
                  proceeding conducted by the EEOC or the DFEH; provided, however,
                  that
                  nothing in this section limits or affects the finality or the scope
                  of the
                  Release.  The Employee has waived and released any claim the
                  Employee may have for damages based on any alleged discrimination
                  and may
                  not recover damages in any proceeding conducted by the EEOC or
                  the
                  DFEH.11.
              This
                  Agreement is to be governed by California law.12.
              If
                  any portion of this Agreement is found to be unenforceable, then
                  both the
                  Employee and the Company desire that all other portions that can
                  be
                  separated from it or appropriately limited in scope shall remain
                  fully
                  valid and enforceable.13.
              Except
                  as prohibited by law, any legal dispute between the Employee the
                  Company
                  (or between the Employee and any Company-Affiliates, each of whom
                  is
                  hereby designated a third party beneficiary of this agreement regarding
                  arbitration) arising out of the Employee’s employment or termination of
                  employment or this Agreement (a "Dispute") will be resolved through
                  binding arbitration in San Jose, California, under the Arbitration
                  Rules
                  set forth in California Code of Civil Procedure Section 1280 etseq.,
                  and pursuant to California law.
                  Nothing in this arbitration provision is intended to limit the
                  Employee's
                  right to file a charge with or obtain relief from the National
                  Labor
                  Relations Board. THE PARTIES
                  UNDERSTAND THAT BY AGREEING TO ARBITRATE DISPUTES THEY ARE WAIVING
                  ANY
                  RIGHT THEY MIGHT OTHERWISE HAVE TO A JURY TRIAL.  This
                  arbitration provision is not intended to modify or limit substantive
                  rights or the remedies available to the parties, including the
                  right to
                  seek interim relief, such as injunction or attachment, through
                  judicial
                  process, which shall not be deemed a waiver of the right to demand
                  and
                  obtain arbitration.14.
              This
                  Agreement is intended by the parties to be their entire agreement
                  and
                  understanding concerning its subject matter and supersedes any
                  prior
                  agreements and understandings, whether written or oral, concerning
                  its
                  subject matter.  The statements, promises and agreements in this
                  Agreement may not be contradicted by any prior understandings,
                  agreements,
                  promises or statements.  The Employee states and promises that
                  in signing this Agreement he/she has not relied on any statements
                  or
                  promises made by the Company, other than the promises contained
                  in this
                  Agreement and the Retirement Agreement.  Any changes to this
                  Agreement must be in writing and signed by both
                  parties.15.
              If
                  the Employee breaks any of the promises or agreements made in this
                  Agreement, or if any of the representations or statements made
                  by the
                  Employee in this Agreement are discovered to be untrue, the Company
                  may
                  stop providing the severance benefits described in the Retirement
                  Agreement. All of the other terms of this Agreement will remain
                  in full
                  force and effect.16.
              If
                  either party files any arbitration, lawsuit, claim, or charge based
                  on, or
                  in any way related to, the Employee’s employment with the Company, any
                  claim that the Employee has released in the Release or the promises
                  and
                  agreements contained in this Agreement, the party that wins the
                  lawsuit or
                  arbitration or prevails on the claim or charge will be entitled
                  to recover
                  from the other party all costs it incurs in connection with the
                  dispute,
                  including reasonable attorneys'
                  fees.
  12
  17.
              Paragraph
                  16 shall not apply if the Employee asserts a claim under the Age
                  Discrimination in Employment in Employment Act, 29 U.S.C. §§621, etseq.,
                  (as amended by the Older Workers'
                  Benefit Protection Act, 29 U.S.C. §626(f)), even though such claim is not
                  covered by the Release given by the Employee in this
                  Agreement.  This Paragraph does not limit the completeness or
                  finality of Release. It only limits the Company’s remedies in the event
                  that the Employee asserts certain claims not covered by the
                  Release.18.
              This
                  Agreement shall be binding upon the Employee’s heirs, administrators,
                  executors, personal representatives and assigns and upon the Company’s
                  successors and assigns.





[Remainder
      of Page Left Intentionally Blank]





13





19.
            The
                Employee is advised to consult with an attorney before signing this
                Agreement.  The Employee understands that the choice of
                whether or not to sign this Agreement is the Employee's
                decision.  The Employee acknowledges that the Employee
                has
                been given at least 21 days to consider this Agreement before signing
                it,
                having been provided this Agreement in connection with this
                Agreement.20.
            The
                Employee may revoke this Agreement within seven (7) days of signing
                it.  Revocation can be made by sending a written notice
                of revocation to the Company.  For such revocation to be
                effective, notice must be received no later than 5:00 p.m. on the
                seventh calendar day after the Employee signs this
                Agreement.  If the Employee revokes this Agreement, it shall not
                become effective or enforceable and the Employee will not receive
                the
                severance package described in this
                Agreement.





Authorized
      Signatures





In
      order
      to bind the parties to this Release Agreement, the parties, or their duly
      authorized representatives have signed their names below on the dates
      indicated.





Company
            EmployeeBy___________________________
            __________________________________________________________Printed
                Name and Title of Signatory_______________________________
            _____________________________Date
                Executed on Behalf of Company
            Date
                Signed By Employee





14





Exhibit
        C
 
 Employee
        Agreement
 
  
 
 
 
 DREXLER
        TECHNOLOGY CORPORATION
 
 EMPLOYEE
        AGREEMENT
 
 
 
 
 DREXLER
        TECHNOLOGY CORPORATION is
        dedicated to a policy of exerting a significant influence in its chosen fields
        through technical innovation and creative administration and
        marketing.  The competitive success of this policy depends to a large
        extent on the Company's ability to capitalize on the creative talents of
        its
        employees, and to maintain a free flow of pertinent information among its
        employees.
 For
        this reason, all employees are
        requested to sign the attached AGREEMENT under which:
 1.
              requirements
                  for avoiding conflicting outside activities are specified,
 2.
              the
                  Company is assured of exclusive rights to ideas, works, and inventions
                  which relate to Company business, and
 3.
              the
                  Company is protected against unauthorized disclosure of proprietary
                  information.




15




AGREEMENT
 
 In
        part consideration of my employment
        now being or to be given by DREXLER TECHNOLOGY CORPORATION (hereinafter referred
        to as the "Company"), a corporation of the State of Delaware, or by any
        subsidiary or other affiliate of said Company, and effective as of the date
        that
        said employment first commenced, I agree that:
 1.           
        During the term of my employment, I will not without the prior written consent
        of the Company (a) engage in any other professional employment or consulting,
        or
        (b) directly or indirectly participate in or assist any business which is
        a
        current or potential supplier, customer, or competitor of the Company, except
        that I may invest to an extent not exceeding one percent of the total
        outstanding shares in each of one or more companies whose shares are listed
        on a
        national securities exchange or quoted daily by The Nasdaq Stock
        Market.
 2.           
        I will disclose promptly to the Company any ideas, inventions, works of
        authorship (including but not limited to computer programs, software and
        documentation), improvements or discoveries, patentable or unpatentable,
        copyrightable or uncopyrightable, which during the term of my employment
        I may
        conceive, make, develop or work on, in whole or in part, solely or jointly
        with
        others, whether or not reduced to drawings, written description, documentation,
        models or other tangible form, and which relate either to product, service,
        research or development fields in which the Company or any of its affiliates
        is,
        at the time, actively engaged, or to my employment activities; and all such
        ideas, inventions, works, improvements and discoveries shall forthwith and
        without further consideration become and be the exclusive property of said
        Company, its successors and assigns. The Company hereby notifies you that
        the
        foregoing does not apply to any invention which qualifies fully for exemption
        under Section 2870 of the California Labor Code.
 3.           
        I will assist the Company in every proper way, including the signing of any
        and
        all papers, authorization, applications and assignments, and making and keeping
        of proper records, and the giving of evidence and testimony (all entirely
        at the
        Company's expense), to obtain and to maintain for the use and benefit of
        the
        Company or its nominees patents, copyrights or other protection for any and
        all
        such ideas, inventions, works, improvements and discoveries in all
        countries.
 4.           
        I understand and agree that all data and records coming into my possession
        or
        kept by me in connection with my employment, including notebooks, drawings,
        blueprints, computer programs, software and documentation, bulletins, parts
        lists, reports, customer lists, and production, cost, purchasing, and marketing
        information, and employment data, including policies and salary information,
        are
        the exclusive property of the Company. I agree to return to the Company all
        copies of such data and records upon termination of my employment unless
        specific written consent is obtained from the President of the Company to
        retain
        any such data or records.
  16
  5.           
        I will regard and preserve as confidential and will not divulge to unauthorized
        persons, or use for any unauthorized purposes, either during or after the
        term
        of my employment, any information, matter, or thing of secret, confidential
        or
        private nature, connected with the business of the Company or any of its
        suppliers, customers or affiliates without the written consent of the President
        of the Company until such time as such information otherwise becomes public
        knowledge. Included within the meaning of the foregoing are matters of a
        technical nature, such as know-how, formulae, computer programs, software
        and
        documentation, secret processes or machines, inventions, and research projects,
        and matters of a business nature, such as information about costs, profits,
        markets, sales, lists of customers and business data regarding customers,
        salaries, and other personnel data of the Company's employees, and any other
        information of a similar nature to the extent not available to the public,
        and
        plans for further development.
 6.           
        As a matter of record, the following Schedule A contains a list of all ideas,
        inventions, works, improvements and discoveries, patented and unpatented,
        copyrighted and not copyrighted, and completed prior to my employment, which
        I
        desire to have specifically excluded from the operation of this
        Agreement.
 7.           
        I agree that I will not disclose to the Company or use for the benefit of
        the
        Company any confidential information derived from sources other than employment
        with the Company. I further agree that if I am in doubt as to the confidential
        status of any information, or if any information is alleged to be proprietary,
        I
        will refer to the President of the Company the question of whether such
        information is available for disclosure and use for the benefit of the
        Company.
 8.           
        I understand that employment at the Company is employment at-will. Employment
        at-will may be terminated with or without cause and with or without notice
        at
        any time by the employee or the Company. Nothing in this Agreement or in
        any
        document or statement shall limit the right to terminate employment at-will.
        No
        manager, supervisor or employee of the Company has any authority to enter
        into
        any agreement for employment for any specified period of time or to make
        any
        agreement for employment other than at-will. Only the President of the Company
        has the authority to make any such agreement and then only in
        writing.
 9.           
        This Agreement shall not be terminated or altered by changes in duties,
        compensation or other terms of my employment.
 
 Employee:
 
 /s/  Richard
        M.
        Haddock                                                                
December
        28,
        1995
 (Signature)                                                                                                                                                             
(Date)
   17
 
 SCHEDULE
        A
 
 List
        of
        all ideas, inventions, works, improvements and discoveries, patented and
        unpatented, copyrighted and not copyrighted, and completed, if any, prior
        to my
        employment:
 (Leave
        blank if not applicable)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 /s/  Richard
        M.
        Haddock                                                                
December
        28,
        1995
 (Signature)                                        
                                                                                        
(Date)





18


Age
      Discrimination Release Agreement





Introduction





This
      Age
      Discrimination Release Agreement (this “Agreement”) is made by and between
      Richard M. Haddock, an individual (the "Employee"), and LaserCard Corporation,
      a
      Delaware corporation (the "Company"), effective on the date (the “Effective
      Date”) that this Agreement is signed by the Employee as indicated under “Authorized
      Signatures“ below.





Recital





Employee
      and the Company have recently entered into a Planned Retirement Agreement (the
      “Planned Retirement Agreement”) which does not cover a release of age
      discrimination claims.  The Employee and the Company desire to enter
      into this Agreement to expressly provide for such a release.





Agreement





Based
      upon the information and premises stated in the above Recital and the
      statements, promises and agreements contained below, the parties hereby agree
      as
      follows:





1.           Definitions.  All
      capitalized terms not defined in this Agreement are as defined in the Planned
      Retirement Agreement.





2.        Bonuses.




a. The
      Employee is a
      participant in the Management Bonus Plan.  In lieu of receiving
      bonuses thereunder based on revenue, profit, MBO, and board discretion, Employee
      will instead receive a discretionary bonus of up to $50,000 as determined by
      the
      independent members of the Board based upon the recommendation of the Chairman
      and Vice Chairman of the Board taking into account their evaluation of the
      Employee’s performance between the Effective Date and the Retirement Date, to be
      paid as soon as administratively feasible after the determination to award
      such
      a bonus is made, but in no event later than June 15, 2008.  In these
      regards, upon monthly request by Employee, the Chairman and/or Vice Chairman
      of
      the Board shall provide feedback to Employee on his performance by phone or
      in
      person, as applicable.





b.           
The
      Company plans to
      implement a bonus plan for the GIG/Prevent second source
      program.





i.           
      In
      these regards, in recognition of his role in obtaining the original GIG
      agreements in 2004 and in managing the relationship to date and its transition
      to Prevent, Employee would receive $50,000 payable during January, 2008,
      provided that Employee then remains a Company
      employee.




ii.           
      In
      addition, should the current arrangements be restructured and implemented
      successfully during the period from the Effective Date through the Retirement
      Date and thereafter through Employee’s Period of Consultancy so that by the end
      of the Period of Consultancy the Company has a clear path which the Board
      believes is very likely to lead to the establishment of a second source, then
      Employee will receive a bonus at the discretion of the independent directors
      payable in cash or equity as they determine based upon their evaluation of
      the
      likelihood of successful and timely establishment of a second source and
      Employee’s contribution to such restructuring and implementation to be paid as
      soon as administratively feasible after such determination is made, but in
      no
      event later than two and one-half (2 1⁄2 ) months after such determination is
      made.




19




3.           Tax
      Withholding.  All
      payments of bonus under Section 2 are taxable under the laws of theUnited
      States andCalifornia
      andother payments under this Agreement may be so taxable.  All payments
      under this Agreement shall be made less any and all applicable deductions and
      withholdings required by applicable law andwill be subject to all court
      ordered wage assignments and/or garnishments.





4.           COBRA.  If
      the Employee elects to continue health insurance coverage under COBRA, then
      so
      long as the Employee is receiving severance payments under Section 6 of the
      Planned Retirement Agreement (and therefore subject to compliance with Section
      14 of the Planned Retirement Agreement), and is paying COBRA premiums, the
      Company will pay the Employee a monthly payment equal to the amount that was
      paid by the Company for health insurance coverage prior the termination of
      employment for up to a maximum of 18 months. The Employee will not be reimbursed
      for the portion of the premium which had been paid by the Employee prior to
      the
      termination of employment or for any administrative fees or increases in
      premiums.  The Employee is solely responsible for filing any necessary
      paperwork for COBRA coverage and payment of all premiums. The Company’s duty to
      make these payments will cease if Employee loses eligibility for COBRA
      continuation coverage because Employee becomes eligible for group coverage
      from
      another employer.  The Employee (and/or Employee’s eligible
      dependent(s)), shall have an obligation to inform the Company if the Employee
      or
      such dependants are no longer eligible for COBRA continuation coverage, as
      is
      generally the case when the Employee receives group coverage from another
      employer while receiving COBRA continuation coverage.  The period of
      such Company-reimbursed COBRA continuation coverage shall be considered part
      of
      Employee’s (and Employee’s eligible dependents’) COBRA coverage entitlement
      period.





5.           Age
      Discrimination
      Release.




a.            The
      Employee releases and forever discharges the Company and each of its employees,
      officers, directors, shareholders, agents, predecessors and successors in
      interest, parents, subsidiaries, attorneys, and assigns ("Company-Affiliates"),
      from any and all claims, demands, obligations and/or liabilities which arise
      out
      of or relate to any action by the Company or the Company-Affiliates or omission
      to act by the Company or the Company-Affiliates occurring on or before the
      date
      this Agreement is signed by the Employee (the “Release”) to the extent such
      claims, demands, obligations and/or liabilities arise out of or relate any
      rights or claims the Employee may have under the Age Discrimination in
      Employment in Employment Act, 29 U.S.C. §§621, et seq., (as amended by the Older
      Workers' Benefit Protection Act, 29 U.S.C. §626(f)) which prohibits age
      discrimination in employment.





b.            To the
      maximum extent permitted by law, the Release extends to all claims of every
      nature and kind whatsoever, whether known or unknown, suspected or unsuspected
      involving age discrimination. The Employee expressly waives the provisions
      of
      Section 1542 of the Civil Code which provides:





A
      general
      release does not extend to claims which the creditor does not know or suspect
      to
      exist in his or her favor at the time of executing the release, which if known
      by him or her must have materially affected his or her settlement with the
      debtor.




c.            The Release
      does not waive any rights or claims that the Employee might have arising after
      the date the Employee signs this Agreement.





d.            The
      Employee promises and states that the Employee has not given or sold any claim
      discussed in this Agreement to anyone and that the Employee has not filed a
      lawsuit, claim, or charge with any court or government agency asserting any
      claims that are released by the Release.




20




e.            This
      Agreement recognizes the rights and responsibilities of the Equal Employment
      Opportunity Commission (“EEOC”) and the California Department of Fair Employment
      and Housing (“DFEH”) to enforce the statutes which come under their
      jurisdiction.  This Agreement is not intended to prevent Employee from
      initiating or participating in any investigation or proceeding conducted by
      the
      EEOC or the DFEH; provided, however, that nothing in this section limits or
      affects the finality or scope of the Release.  The Employee has waived
      and released any claim the Employee may have for damages based on any alleged
      age discrimination and may not recover damages in any proceeding conducted
      by
      the EEOC or the DFEH.





6.           Confidentiality.  Except
      to the extent publicly disclosed by the Company, the Employee and the Company
      each promises to hold the provisions of this Agreement in strictest confidence.
      The Employee may disclose this Agreement, in confidence, to his/her immediate
      family, to his/her attorneys, accountants, auditors, tax preparers and financial
      advisors, and as may be necessary to enforce its terms or as otherwise required
      by law. Otherwise, the Employee agrees not to publicize or disclose its terms
      to
      anyone, in any manner. In particular (but without limitation), the Employee
      agrees not to discuss the terms of this Agreement with former or current
      employees, clients, suppliers, subcontractors or other business contacts of
      the
      Company.





7.           Governing
      Law.  This Agreement is to be governed by California
      law.





8.           Severability.  If
      any portion of this Agreement is found to be unenforceable, then both the
      Employee and the Company desire that all other portions that can be separated
      from it or appropriately limited in scope shall remain fully valid and
      enforceable.





9.           Arbitration.  Except
      as prohibited by law, any legal dispute between the Employee the Company (or
      between the Employee and any Company-Affiliates, each of whom is hereby
      designated a third party beneficiary of this agreement regarding arbitration)
      arising out of the Employee’s employment or termination of employment or this
      Agreement (a "Dispute") will be resolved through binding arbitration in San
      Jose, California, under the Arbitration Rules set forth in California Code
      of
      Civil Procedure Section 1280 etseq.,
      and pursuant to
      California law. Nothing in this arbitration provision is intended to limit
      the
      Employee's right to file a charge with or obtain relief from the National Labor
      Relations Board. THE
      PARTIES UNDERSTAND THAT BY AGREEING TO ARBITRATE DISPUTES THEY ARE WAIVING
      ANY
      RIGHT THEY MIGHT OTHERWISE HAVE TO A JURY TRIAL.  This arbitration
      provision is not intended to modify or limit substantive rights or the remedies
      available to the parties, including the right to seek interim relief, such
      as
      injunction or attachment, through judicial process, which shall not be deemed
      a
      waiver of the right to demand and obtain arbitration.





10.         Entire
      Agreement.  This Agreement, together with the Planned
      Retirement  Agreement which the Company and Employee are concurrently
      entering into, are intended by the parties to be their entire agreement and
      understanding concerning its subject matter and supersede any prior agreements
      and understandings, whether written or oral, concerning its subject
      matter.  The statements, promises and agreements in this Agreement may
      not be contradicted by any prior understandings, agreements, promises or
      statements.  The Employee states and promises that in signing this
      Agreement he/she has not relied on any statements or promises made by the
      Company, other than the promises contained in this Agreement.  Any
      changes to this Agreement must be in writing and signed by both
      parties.








[Remainder
      of Page Left Intentionally Blank]




21


12.         Successors
      and
      Assigns.  This Agreement shall be binding upon the Employee’s
      heirs, administrators, executors, personal representatives and assigns and
      upon
      the Company’s successors and assigns.





The
      Employee is advised to consult
      with an attorney before signing this Agreement.  The Employee
      understands that the choice of whether or not to sign this Agreement is the
      Employee's decision.  The Employee acknowledges that the Employee has
      been given at least 21 days, until December 19, 2007, to consider this Agreement
      before signing it.





The
      Employee may revoke this
      Agreement within seven (7) days of signing it.  Revocation can
      be made by sending a written notice of revocation to the Company.  For
      such revocation to be effective, notice must be received no later than
      5:00 p.m. on the seventh calendar day after the Employee signs this
      Agreement.  If the Employee revokes this Agreement, it shall not
      become effective or enforceable and the Employee will not receive the retirement
      package described in this Agreement should Employee’s employment with the
      Company be terminated.





Authorized
      Signatures





In
      order
      to bind the parties to this Age Discrimination Release Agreement, the parties,
      or their duly authorized representatives have signed their names below on the
      dates indicated.




Company
              
              EmployeeBy
                  /s/ Donald
                  Mattson
              
              /s/
                Richard M. HaddockRichard
                M. HaddockDonald
                  Mattson, Vice ChairmanPrinted
                  Name and Title of SignatoryNovember
                  28, 2007
              
              November
                  28, 2007Date
                  Executed on Behalf of Company
              
              Date
                  Signed By Employee


22