EXHIBIT 10.54

                    FORM OF DEFERRED COMPENSATION AGREEMENT


This Deferred Compensation Agreement ("Agreement") is made between  ___________
"Employee") and Farah U.S.A.,  Inc.  ("Employer")  on the  following  terms  and
conditions:

     1.  Beginning  January 1, 1996 and  continuing  through  December 31, 1996,
Employee and Employer agree that  Employee's  monthly salary shall be reduced 5%
(must be 5% or more) each  month  during the  aforementioned  period  ("Deferred
Income") and the monthly  payments of  Employee's  salary shall be  recalculated
accordingly.

     2. The  following  accrual,  crediting  and vesting  rules shall apply with
respect to this Agreement.

     a.  Employer  shall  accrue on  December  31,  1996 an amount  equal to the
Employee's  total  Deferred  Income  during 1996 and shall  credit that sum to a
separate memorandum account on its books ("______________ 1996 Deferral Account"
or "Deferral Account").

     b. In addition,  on December 31, 1996 Employer  shall accrue and credit the
following to the Employee's Deferral Account:  (i) an amount in lieu of interest
equal to the sum of eleven (11) amounts,  each such amount  calculated as of the
last day of each month  during  1996 other than  January 31 by  multiplying  the
Farah  U.S.A.,  Inc.  weighted  average  monthly  interest  rate  on  short-term
borrowing during Farah U.S.A., Inc.'s most recently completed fiscal year (i.e.,
the fiscal year ended October 31, 1996) by the Employee's  Deferred Income as of
the last  day of the  preceding  month  pursuant  to this  Agreement  (with  the
Employee's Deferred Income pursuant to this Agreement with respect to each month
deemed  accrued as of the last day of such month) and (ii) five  percent (5%) of
the  Employee's  total  salary  during the time period  described in paragraph 1
above  ("Matching  Amount").  No amount in lieu of interest  shall be accrued or
credited  to the  Deferral  Account for 1996 on the  amounts  described  in (ii)
above.

     c. After December 31, 1996, until payment of the Employee's vested Deferral
Account balance as provided in paragraph 3 hereof, the Deferral Account shall be
credited  on  December  31 of each  year  with  an  amount  in lieu of  interest
calculated by multiplying  the Employee's  total Deferred  Account balance as of
that December 31 (including his Deferral Income,  Matching Amount and previously
credited sums in lieu of interest) times the Farah U.S.A., Inc. weighted average
annual interest rate on short-term  borrowing  during Farah U.S.A.,  Inc.'s most
recently  completed  fiscal year.  In the event of a partial  calendar year time
period,  the amount in lieu of interest for  post-1996  calendar  years shall be
calculated as previously  described and prorated for the appropriate time period
using the Farah U.S.A., Inc. weighted average annual interest rate on short-term
borrowing  during  Farah U.S.A.  Inc.'s  prior fiscal year,  even if the partial
calendar year time period ends on or after the last day of Farah U.S.A.,  Inc.'s
current fiscal year.

     d.  Notwithstanding  the foregoing to the contrary,  if Employee terminates
his employment with Farah  Incorporated and all of its wholly owned subsidiaries
incorporated in the United States ("Farah Entities" or,  individually,  a "Farah
Entity") during calendar year 1996, the following rules shall apply with respect
to the matching  amount that  Employee  shall (or shall not) be entitled to with
respect to calendar year 1996:

     i) If Employee's  termination  of employment was voluntary and for a reason
other than retirement on or after age 60 or involuntary and for cause,  Employee
shall not be entitled to nor credited  with any matching  amount with respect to
calendar year 1996; and

     ii) If Employee's  termination  of employment  was voluntary and because of
retirement on or after age 60 or involuntary and not for cause  (including,  but
not limited to,  termination  of employment  due to death or permanent and total
disability),  Employee  shall be  entitled  to a prorated  matching  amount with
respect to the calendar year in which his termination of employment occurs equal
to five (5%) of Employee's total salary during the portion of calendar year 1996
with  respect  to  which  he  has  deferred   compensation   pursuant  to  Farah
Incorporated 1993 Unfunded Deferred Compensation Plan ("Plan").

     iii) The Stock Option and Compensation  Committee of the Board of Directors
of Farah Incorporated (or its authorized representative) shall determine, in its
sole discretion,  whether the Employee is entitled to a matching amount pursuant
to the foregoing  paragraphs of this Agreement and the Plan (including,  but not
limited  to,  determining  whether  Employee's  termination  of  employment  was
voluntary or involuntary or for cause or not for cause).

     e. If Employee terminates his employment with all Farah Entities,  Employee
shall  receive  amounts  in lieu of  interest  in the  manner  described  in the
preceding  paragraphs until payment of Employee's entire vested Deferred Account
balance is made. However,  notwithstanding  the foregoing to the contrary,  with
respect  to the  calendar  year in which the last  payment  is made to  Employee
pursuant  to  paragraph 3 (or the only  payment,  if a lump sum payment is to be
made) of this Agreement, no amounts in lieu of interest shall be accrued or paid
later than the date of such last payment and the rules for the  determination of
amounts in lieu of interest  for partial  calendar  year time  periods  shall be
utilized to  determine  the amount in lieu of  interest  which shall be included
with the last payment made to Employee with respect to the Agreement.

     3. The total deferred compensation due to Employee, consisting of the total
amounts  credited to and vested in the  Deferral  Account,  shall be paid to the
Employee  in the form of a lump sum on January 10,  1997.  Should  Employee  die
before  receiving all amounts payable to him pursuant to this Agreement,  and at
such time is an employee of Farah Entity, the remaining amounts shall be paid in
a lump sum (or in a lump  sum to each  beneficiary  if  there  is more  than one
beneficiary,  the sum of which shall not exceed the remaining amounts payable to
Employee)  30  days  after  Employee's  death  to  his  beneficiary(ies)   under
Employee's  primary life insurance plan (per total death benefit  payable due to
Employee's  death)  maintained  by a Farah  Entity with respect to which a Farah
Entity defrays or has defrayed  Employee's cost of coverage.  If Employee is not
employed  by a Farah  Entity at the time of death,  all  unpaid  amounts  in the
Deferral  Account shall be paid in a lump sum 30 days after  Employee's death to
the estate of the Employee.

     4. It is specifically  agreed that the amounts  credited to Employee in the
Deferral  Account  shall  not be held by a Farah  Entity  in a trust,  escrow or
similar arrangement or other fiduciary capacity.  The Deferral Account shall not
be subject in any  manner to  attachment  or other  legal  process  for debts of
Employee or his successors or legal  representatives for any reason; and neither
Employee, nor any legal representative or successor shall have any right against
a Farah Entity with respect to any portion of the Deferral Account,  except as a
general unsecured creditor of a Farah Entity.  Neither Employee,  his successors
or legal  representatives  shall  have any right to  assign,  transfer,  pledge,
hypothecate,   anticipate   or  otherwise   alienate  any  payment  of  deferred
compensation  to become due in the future to such person,  and any attempt to do
so shall be void and will not be recognized by a Farah Entity.

     5. Employee  acknowledges  that he has received a copy of the Plan and that
he understands the terms and conditions of the Plan.

     6.  Employee   agrees  that  by  executing   this   Agreement  he  and  his
beneficiary(ies)  and their  successors or legal  representatives  and any other
person  claiming any amount  pursuant to this  Agreement are bound by all of the
terms of the Plan, pursuant to which this Agreement is executed.

     7. Employee agrees that his election to defer compensation pursuant to this
Agreement is irrevocable and no sale, transfer, alienation,  assignment, pledge,
encumbrance, garnishment,  collateralization,  anticipation or attachment of any
benefits under the Plan shall be valid or recognized.


Executed this 21ST day of December, 1995.



                              EMPLOYER



                               By____________________________________________



                               EMPLOYEE



                               By____________________________________________


<PAGE>


ANNEX TO EXHIBIT 10.54


Below is a list of variables to the Deferred  Compensation  Agreements chosen by
the officers required to file with this Form 10-K.

        Name            Period of Deferral     % Deferred       Payment Date

Richard C. Allender     January 1, 1996 to          5%         January 10, 1997
                        December 31, 1996

Jackie L. Boatman       January 1, 1996 to          5%         January 10, 1997
                        December 31, 1996

Michael R. Mitchell     January 1, 1996 to          7%         January 10, 1997
                        December 31, 1996

James C. Swaim          January 1, 1996 to          5%         January 10, 1997
                        December 31, 1996