**Exhibit 10.21**

**CHANGE IN CONTROLAGREEMENTFORTHERESA TREAT**

This Agreement is entered into this 24th day of March,2003, by and between Cutter & Buck Inc. (the “Company”) and THERESATREAT (“Executive”). Executive is an at-will employee of the Company. Theparties wish to provide Executive with severance benefits if Executive’semployment is terminated in connection with a change in control of the Company.The Company is willing to provide such benefits if Executive enters into theCompany’s form of Confidentiality and Non-Competition Agreement for executiveofficers.

NOW, THEREFORE, inconsideration of the foregoing recitals and the covenants and conditionscontained herein, the parties hereby agree as follows:

1.                 CHANGEIN CONTROL.

(a)    If, withinthe period commencing 90 days prior to the date of occurrence (the “Event Date”)of a Control Event and ending on the date eighteen (18) months after the EventDate (the “Window”), the Company terminates Executive’s employment (other thanfor Cause) or Executive resigns for Good Reason, the Company shall pay toExecutive the Severance Payment in immediately available funds. If thetermination occurs prior to the Control Event, the Severance Payment is due onthe twentieth business day following the Event Date; if the termination occurson or subsequent to the Event Date, the Severance Payment is due on thetwentieth business day following the date of termination (the “Termination Date”).

(b)    TheSeverance Payment shall be equal to 150% of Executive’s annual base salary asof the Termination Date. If the Termination Date occurs during the Window butprior to the Control Event, the Severance Payment shall be reduced by the sumof any severance payments previously received by Executive from the Company(but not below zero).

(c)    Each ofthe following shall constitute a “Control Event”:

(1)    theacquisition of Common Stock of the Company (the “Common Stock”) by any “Person”(as such term is defined in the Rights Agreement dated as of November 20,1998 between the Company and Mellon Investor Services LLC (the “Rights Plan”),together with all Affiliates and Associates (as such terms are defined in theRights Plan) of such Person, such that such Person becomes, after the date ofthis Agreement, the Beneficial Owner (as defined in the Rights Plan) oftwenty-five percent (25%) or more of the shares of Common Stock thenoutstanding, but shall not include any such acquisition by (i) theCompany, (ii) any subsidiary of the Company, (iii) any employee ordirector of the Company as of the date hereof, or (iv) any employeebenefit plan of the Company or of any subsidiary of the Company or any Personor entity organized, appointed or established by the Company for or pursuant tothe terms of any such employee benefit plan; or

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(2)    the consummationof any merger, consolidation, reorganization or other transaction providing forthe conversion or exchange of twenty-five percent (25%) or more of theoutstanding shares of Common Stock into securities of any Person, or cash, orproperty, or a combination of any of the foregoing; or

(3)    theconsummation of any sale or other disposition of all or substantially all ofthe assets of the Company; or

(4)    individualswho, as of the date hereof, constitute the Company’s Board of Directors (the “IncumbentBoard”) cease for any reason to constitute at least a majority of the Company’sBoard of Directors; provided, however, that any individual becoming a directorsubsequent to the date hereof whose election, or nomination for the election bythe Company’s shareholders, was approved by a vote of at least a majority ofthe directors then comprising the Incumbent Board shall be considered as thoughsuch individual were a member of the Incumbent Board, but excluding, for thispurpose, any such individual whose initial assumption of office occurs as aresult of either an actual or threatened election contest or other actual orthreatened solicitation of proxies or consents by or on behalf of a Personother than the Board of Directors.

(d)    Each ofthe following shall constitute “Good Reason”, provided that it occurs duringthe Window:

(1)    thematerial diminution of Executive’s position, duties, responsibilities or statuswith the Company or its successor, as compared with the position, duties,responsibilities or status of Executive with the Company immediately prior tothe Event Date, except in connection with the termination of Executive forCause;

(2)    theCompany’s assignment of Executive on a substantially full-time basis to work ata location where the distance between the new location and Executive’sprincipal residence is at least 20 miles greater than the distance between theformer location and such residence; provided, however, that this paragraphshall not apply to travel in the furtherance of the Company’s business to anextent substantially consistent with Executive’s business travel obligations asof the date hereof;

(3)    theCompany’s failure to obtain an assumption of the obligations of the Company toperform this Agreement by any successor to the Company;

(4)    anyreduction in Executive’s base salary, or a material reduction in benefitspayable to Executive or failure of the Company to pay Executive any earnedsalary, bonus or benefits except with the prior written consent of Executive;

(5)    theexclusion or limitation of Executive from participating in some form ofvariable compensation plan which provides the Executive the opportunity toachieve a level of total compensation (base salary plus variable compensation)consistent with what the Executive had the opportunity to earn at the EventDate; or

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(6)    any demandby any director or officer of the Company that Executive take any action orrefrain from taking any action where such action or inaction, as the case maybe, would violate any law, rule, regulation or other governmentalpronouncement, court order, decree or judgment, or breach any agreement orfiduciary duty.

(e)    Each ofthe following shall constitute “Cause”:

(1)    anyviolation by Executive of any material obligation under this Agreement or theattached Confidentiality and Non-Disclosure Agreement;

(2)    convictionfor commitment of a felony;

(3)    anyviolation of law which has a material adverse effect on the Company;

(4)    habitualabuse of alcohol or a controlled substance under circumstances that adverselyaffect the Executive’s performance of his or her duties in any way;

(5)    theft orembezzlement from the Company;

(6)    repeatedunexcused absence from work;

(7)    Disabilityof Executive (as defined below); and

(8)    repeatedfailure or refusal by Executive to carry out the reasonable directives, ordersor resolutions of the Company’s Board of Directors or any officer to whom he orshe reports.

(f)     “Disability”shall mean any physical, mental or other health condition which renders theExecutive unable to perform the essential functions of his or her position withor without reasonable accommodation. Any disagreement as to whether Executiveis disabled shall be resolved by a physician selected by the Company after anexamination of Executive. Executive hereby consents to such physicalexamination and to the examination of all medical records of Executivenecessary, in the judgment of the examining physician, to make thedetermination of disability.

(g)    Notwithstandingany other provision of this Agreement to the contrary, in the event that anyseverance or other payment, benefit or right payable or accruing to Executivehereunder or under any of the Company’s benefit plans (the “Benefit Plans”)would constitute a “parachute payment” as defined in Section 280G(b)(2) ofthe Internal Revenue Code of 1986, as amended (the “Code”), then the totalamount of severance and other payments or benefits payable to Executivehereunder and under the Benefit Plans which is deemed to constitute a “parachutepayment” shall not exceed and shall, if necessary, be reduced to an amount (the“Revised Severance Payment”) equal to 2.99 times Executive’s “base amount” asdefined in Code Section 280G(b)(3). In the event of a disagreement betweenthe Company and Executive 

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as to whether the provisions of Code Section 280Gare applicable or the amount of the Revised Severance Payment, suchdetermination shall be made by the Company’s independent public accountants or,if such firm is unable or unwilling to render such a determination, then by alaw firm mutually acceptable to Executive and the Company. All costs relatingto such determination shall be borne by the Company. The Company and theExecutive shall cooperate in good faith to make the determination required bythis Section 1(g) by mutual agreement not later than the laterof:  (i) the fifth day preceding thedate that the Severance Payment is or would be due or (ii) the earlier of (x) thetenth day following the expiration of any period of accelerated vesting ofoptions to purchase the Company’s Common Stock provided by Section 5(n) ofthe Benefit Plan or (y) the tenth day following the date of exercise byExecutive of his or her last remaining option which was exercisable solely dueto the application of Section 5(n) of the Benefit Plan. Pending thefinal calculation of the Severance Payment or Revised Severance Payment, theCompany shall pay the amounts described under subsection (b) above atthe time and in the manner provided herein; provided that, pending suchdetermination, such payments shall be reduced by such amounts as the Companyestimates in good faith to be necessary to satisfy its tax (including excisetax) withholding obligations and effect the reduction in the amount of theSeverance Payment, as contemplated by this subsection 1(g). The aggregateamount of any compensation actually paid or provided to Executive under theterms of this Agreement and in excess of the Revised Severance Payment shall bedeemed, to the extent of such excess, a loan to Executive payable upon demandand bearing interest at the rate of 8% per annum.

2.      CONFIDENTIALLYAND NON-COMPETITION AGREEMENT. In consideration of the obligations undertakenby the Company pursuant to this Agreement, contemporaneously with the executionof this Agreement, Executive and the Company shall enter into the form ofConfidentiality and Non-Competition Agreement attached hereto as EXHIBIT Aand each agreement shall be effective only if both agreements have beenexecuted.

3.      TERM OFAGREEMENT. The Company’s obligations under Section 1 of this Agreementshall expire with respect to Control Events occurring on or after the secondanniversary of the date of this Agreement (“Initial Expiration Date”), providedhowever, that such obligations shall automatically extend for one (1) yearon each anniversary of the Initial Expiration Date unless terminated by theCompany effective as of the last day of the then current one (1) yearextension by written notice to that effect delivered to the Executive not fewerthan ninety (90) days prior to such anniversary of the Expiration Date.

4.      AT WILLEMPLOYMENT. Unless and to the extent otherwise agreed by the Company andExecutive in a separate written employment agreement, Executive’s employmentshall be “at will”, with either party permitted to terminate the employment atany time, with or without cause. No term of any employment agreement betweenthe Company and Executive shall be construed to conflict with, lessen or expandthe obligations of the parties under this Agreement.

5.      NOTICES. Allnotices and other communications called for or required by this Agreement shallbe in writing and shall be addressed to the parties at their respectiveaddresses stated below or to such other address as a party may subsequentlyspecify by written notice and 

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shall be deemed to have been received (i) upondelivery in person, (ii) five days after mailing it by U.S. certified orregistered mail, return receipt requested and postage prepaid, or (iii) twodays after depositing it with a commercial overnight carrier which provideswritten verification of delivery:

| To the Company: |   | 701 N. 34th Street, Suite 400  Seattle, Washington 98103  Attention: Chief Executive Officer |
|-----------------|--------|---------------------------------------------------------------------------------------------------|
|            |   |                                                                                              |
| To Executive:   |   | Theresa Treat  26811 SE Duthie Road  Issaquah, Washington 98029                                   |

 

6.      WITHHOLDING.Except as described in subsection 1(g) of this Agreement, allpayments due to and all benefits to be provided to Executive hereunder shall besubject to reduction for any applicable withholding taxes, including excisetaxes.

7.      ASSIGNMENT.Executive’s rights and duties hereunder are personal to Executive and are notassignable to others, but Executive’s obligations hereunder will bind hisheirs, successors, and assigns. The Company may assign its rights under thisAgreement in connection with any merger or consolidation of the Company or anysale of all or any portion of the Company’s assets (including, withoutlimitation, any division or product line), provided that any such successor orassignee expressly assumes in writing the Company’s obligations hereunder.

8.      NO DUTYTO MITIGATE. Executive shall not be required to mitigate the amount of anypayment made or benefit provided hereunder. The Company may offset any paymentdue hereunder by the amount of damages to the Company resulting from any breachof this Agreement by Executive.

9.      GENERAL. ThisAgreement constitutes the exclusive agreement of the parties with respect tothe subject matter hereof and supersedes all prior agreements or understandingsof the parties. No waiver of or forbearance to enforce any right or provisionhereof shall be binding unless in writing and signed by the party to be bound,and no such waiver or forbearance in any instance shall apply to any otherinstance or to any other right or provision. This Agreement will be governed bythe local laws of the State of Washington without regard to its conflicts oflaws rules to the contrary. The parties hereby consent to the exclusivejurisdiction and venue of the state and federal courts sitting in King County,Washington for all matters and actions arising under this Agreement. Theprevailing party shall be entitled to reasonable attorneys’ fees and costsincurred in connection with such litigation. No term hereof shall be construedto limit or supersede any other right or remedy of the Company under applicablelaw with respect to the protection of trade secrets or otherwise. If anyprovision of this Agreement is held to be invalid or unenforceable to anyextent in any context, it shall nevertheless be enforced to the fullest extentallowed by law in that and other contexts, and the validity and force of theremainder of this Agreement shall not be affected thereby.

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IN WITNESSWHEREOF, the parties have caused this Agreement to be signed as of the datefirst above written.
| CUTTER & BUCK INC. |   | EXECUTIVE:              |   |
|-----------------------------|--------|-------------------------|--------|
|                        |   |                    |   |
|                        |   |                    |   |
| By:                         |   | /s/ FRANCES M. CONLEY   |   |   |   |
|                        |   | Frances M. Conley       |   | Signature | /s/ THERESA S. TREAT |
| Its:                        |   | Chief Executive Officer |   | Printed Name: | Theresa S. Treat |

 

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Exhibit A

**CONFIDENTIALITYAND NON-COMPETITION AGREEMENTFORTHERESA TREAT**

This Agreement is entered into this _____ day ofMarch, 2003, by and between Cutter & Buck Inc. (the “Company”) andTHERESA TREAT (“Executive”). Executive is an at-will employee of theCompany. In consideration of entering into an agreement to provide Executivewith severance benefits if Executive’s employment is terminated in connectionwith a change in control in the Company, Executive promises, on the terms setforth herein, at all times to protect the Company’s proprietary information andto not compete with the Company following termination of Executive’s employmentin connection with a change in control.

NOW, THEREFORE, inconsideration of the foregoing recitals and the covenants and conditionscontained herein, the parties hereby agree as follows:

1.      Non-competitionand Non-solicitation.

(a)    Executiveagrees that during the term of Executive’s employment with the Company and,subject to receipt of the Severance Payment (as defined below) by theExecutive, until eighteen (18) months following the Termination Date (asdefined below), Executive will not in any capacity directly or indirectlyengage in, assist others to engage in or own a material interest in anybusiness or activity that is, or is preparing to be, in competition with theCompany with respect to any product or service sold or service provided by theCompany up to the time of termination of employment in any geographical area inwhich at the time of termination of employment such product or service is soldor is actively engaged in. For the purposes of this Agreement, the terms “SeverancePayment” and “Termination Date” shall have the meanings assigned to them in theChange in Control Agreement (as defined in Section 6 below).

(b)    Executivefurther agrees that during the period stated above, he/she will not directly orindirectly call on, reveal the name of, or otherwise solicit, accept businessfrom or attempt to entice away from the Company any actual or identifiedpotential customer of the Company, nor will he/she assist others in doing so. Executivefurther agrees that he/she will not, during the period stated above, encourageor solicit any other employee or consultant of the Company to leave suchemployment for any reason, nor will he/she assist others to do so.

(c)    Executiveacknowledges that the covenants in this Section 1 are necessary andreasonable to protect the Company in the conduct of its business and thatcompliance with such covenants will not prevent him/her from pursuing his/herlivelihood. However, should any court find that any provision of such covenantsis unreasonable, invalid or unenforceable, whether in period of time,geographical area, or otherwise, then in that event the parties hereby agreethat such covenants shall be interpreted and enforced to the maximum extentwhich the court deems reasonable.

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2.      TradeSecrets and Confidential Information.

(a)    Executiveacknowledges that the Company’s business and future success depend upon thepreservation of the trade secrets and other confidential information of theCompany and its suppliers and customers (the “Secrets”). The Secrets mayinclude, without limitation, existing and to-be-developed oracquired product designs, new product plans or ideas, market surveys, theidentities of past, present or potential customers, business and financialinformation, pricing methods or data, terms of contracts with present or pastcustomers, proposals or bids, marketing plans, personnel information, proceduraland technical manuals and practices, servicing routines, and parts and supplierlists proprietary to the Company or its customers or suppliers, and any othersorts of items or information of the Company or its customers or supplierswhich are not generally known to the public at large. Executive agrees toprotect and to preserve as confidential during and after the term of hisemployment all of the Secrets at any time known to Executive or in his/herpossession or control (whether wholly or partially developed by Executive orprovided to Executive, and whether embodied in a tangible medium or merelyremembered).

(b)    Executiveshall mark all items containing any of the Secrets with prominentconfidentiality notices acceptable to the Company. Executive shall neither usenor allow any other person to use any of the Secrets in any way, except for thebenefit of the Company and as directed by Executive’s supervisor. All materialcontaining or disclosing any portion of the Secrets shall be and remain theproperty of the Company, shall not be removed from the Company’s premiseswithout specific consent from an officer of the Company, and shall be returnedto the Company upon the termination of Executive’s employment or the earlierrequest of Executive’s supervisor. At such time, Executive shall also assembleall materials in his possession or control which contain any of the Secrets,and promptly deliver such items to the Company.

3.      IntellectualProperties.

(a)    Allownership, copyright, patent, trade secrecy and other rights in all works,designs, inventions, ideas, manuals, improvements, discoveries, processes,customer lists or other properties (the “Intellectual Properties”) made orconceived by Executive during the term of his/her employment by the Companyshall be the rights and property solely of the Company, whether developedindependently by Executive or jointly with others, and whether or not developedor conceived during regular working hours or at the Company’s facilities, andwhether or not the Company uses, registers, or markets the same.

(b)    Inaccordance with the Company’s policy and RCW 49.44.140 and RCW 49.44.150, thisAgreement (other than Subsection 3(c)) does not apply to, and Executivehas no obligation to assign to the Company, any invention for which no Companytrade secrets and no equipment, supplies, services, or facilities of theCompany were used and which was developed entirely on Executive’s own time,unless: (i) the invention relates directly to the business of the Company,(ii) the invention relates to actual or demonstrably anticipated researchor 

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development work of the Company, or (iii) theinvention results from any work performed by Executive for the Company.

(c)    If and tothe extent that Executive makes use, in the course of his employment, of anyitems or Intellectual Properties previously developed by Executive or developedby Executive outside of the scope of this Agreement, Executive hereby grantsthe Company a nonexclusive, royalty-free, perpetual, irrevocable,worldwide license (with right to sublicense) to make, use, sell, copy,distribute, modify, and otherwise to practice and exploit any and all suchitems and Intellectual Properties.

(d)    Executivewill assist the Company as reasonably requested during and after the term of hisemployment to further evidence and perfect, and to enforce, the Company’srights in and ownership of the Intellectual Properties covered hereby,including without limitation, the execution of additional instruments ofconveyance and assisting the Company with applications for patents or copyrightor other registrations.

4.      Authorityand Non-Infringement. Executive warrants that any and all items,technology, and Intellectual Properties of any nature developed or provided byExecutive under this Agreement and in any way for or related to the Companywill be original to Executive and will not, as provided to the Company or whenused and exploited by the Company and its contractors and customers and its andtheir successors and assigns, infringe in any respect on the rights or propertyof Executive or any third party. Executive will not, without the prior writtenapproval of the Company, use any equipment, supplies, facilities, orproprietary information of any other party. Executive warrants that Executiveis fully authorized to enter into employment with the Company and to performunder this Agreement, without conflicting with any of Executive’s othercommitments, agreements, understandings or duties, whether to prior employersor otherwise. Executive will indemnify the Company for all losses, claims, andexpenses (including reasonable attorneys’ fees) arising from any breach of byhim/her of this Agreement.

5.      Remedies.The harm to the Company from any breach of Executive’s obligations under thisAgreement may be wholly or partially irreparable, and Executive agrees thatsuch obligations may be enforced by injunctive relief and other appropriateremedies, as well as by damages. If any bond from the Company is required inconnection with such enforcement, the parties agree that a reasonable value ofsuch bond shall be $5,000. Any amounts received by Executive or by any otherthrough Executive in breach of this Agreement shall be held in constructivetrust for the benefit of the Company.

6.      ExecutiveAgreement. In consideration of the obligations undertaken by Executivepursuant to this Agreement, contemporaneously with the execution of thisAgreement, Executive and the Company are entering into a Change in ControlAgreement (the “Change in Control Agreement”), and each agreement shall beeffective only if both agreements have been executed.

7.      AtWill Employment. Unless and to the extent otherwise agreed by the Companyand Executive in a separate written employment agreement, Executive’semployment shall be “at 

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will”, with either party permitted to terminate theemployment at any time, with or without cause. No term of any employmentagreement between the Company and Executive shall be construed to conflict withor lessen Executive’s obligations under this Agreement.

8.      Notices. All notices and other communications called foror required by this Agreement shall be in writing and shall be addressed to theparties at their respective addresses stated below or to such other address asa party may subsequently specify by written notice and shall be deemed to havebeen received (i) upon delivery in person, (ii) five days aftermailing it by U.S. certified or registered mail, return receipt requested andpostage prepaid, or (iii) two days after depositing it with a commercialovernight carrier which provides written verification of delivery:

| To the Company: |   | 701 N. 34th Street, Suite 400  Seattle, Washington 98103  Attention: Chief Executive Officer |   |
|-----------------|--------|---------------------------------------------------------------------------------------------------|--------|
|            |   |                                                                                              |   |
| To Executive:   |   | Theresa Treat                                                                                     |   |
|            |   |                                                                                              |   |
|            |   |                                                                                              |   |

 

9.      Assignment.Executive’s rights and duties hereunder are personal to Executive and are notassignable to others, but Executive’s obligations hereunder will bind his/herheirs, successors, and assigns. The Company may assign its rights under thisAgreement in connection with any merger or consolidation of the Company or anysale of all or any portion of the Company’s assets (including, withoutlimitation, any division or product line), provided that any such successor orassignee expressly assumes in writing the Company’s obligations under theExecutive Agreement.

10.    General.This Agreement constitutes the exclusive agreement of the parties with respectto the subject matter hereof and supersedes all prior agreements or understandingsof the parties. No waiver of or forbearance to enforce any right or provisionhereof shall be binding unless in writing and signed by the party to be bound,and no such waiver or forbearance in any instance shall apply to any otherinstance or to any other right or provision. This Agreement will be governed bythe local laws of the State of Washington without regard to its conflicts oflaws rules to the contrary. The parties hereby consent to the exclusivejurisdiction and venue of the state and federal courts residing in King County,Washington for all matters and actions arising under this Agreement. Theprevailing party shall be entitled to reasonable attorneys’ fees and costsincurred in connection with such litigation. No term hereof shall be construedto limit or supersede any other right or remedy of the Company under applicablelaw with respect to the protection of trade secrets or otherwise. If anyprovision of this Agreement is held to be invalid or unenforceable to anyextent in any context, it shall nevertheless be enforced to the fullest extentallowed by law in that and other contexts, and the validity and force of theremainder of this Agreement shall not be affected thereby.

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**INWITNESS WHEREOF, the parties have caused this Agreement to be signed as of thedate first above written.**
| CUTTER & BUCK INC. |                    | EXECUTIVE: |
|-----------------------------|-------------------------|------------|
|                        |                    |       |
|                        |                    |       |
|                        |                    |       |
| By:                         |                    |       | Signature |   |
|                        | Frances M. Conley       |       | Printed Name: | Theresa S. Treat |
| Its:                        | Chief Executive Officer |       |   |   |

 

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