Document:

EXHIBIT 10.16

QUICKLOGIC CORPORATION

CHANGE OF CONTROL SEVERANCE AGREEMENT

This Change of Control
Severance Agreement (the “Agreement”) is made and entered into effective as of                 ,
2005 (the “Effective Date”), by and between E. Thomas Hart (the “Employee”)
and QuickLogic Corporation, a Delaware corporation (the “Company”). Certain
capitalized terms used in this Agreement are defined in Section 1 below.

R E C
I T A L S

A.    It is
expected that the Company from time to time will consider the possibility of a
Change of Control. The Board of Directors of the Company (the “Board”)
recognizes that such consideration can be a distraction to the Employee and can
cause the Employee to consider alternative employment opportunities.

B.     The Board
believes that it is in the best interests of the Company and its stockholders
to provide the Employee with an incentive to continue his employment and to
maximize the value of the Company upon a Change of Control for the benefit of
its stockholders.

C.     In order to provide the Employee with enhanced financial
security and sufficient encouragement to remain with the Company
notwithstanding the possibility of a Change of Control, the Board believes that
it is imperative to provide the Employee with certain severance benefits upon
the Employee’s termination of employment following a Change of Control.

AGREEMENT

In
consideration of the mutual covenants herein contained and the continued
employment of Employee by the Company, the parties agree as follows:

1.   Definition of
Terms.   The following terms referred to in this Agreement shall
have the following meanings:

(a)   Cause.   “Cause”
shall mean (i) any act of personal dishonesty taken by the Employee in
connection with his responsibilities as an employee which is intended to result
in substantial personal enrichment of the Employee, (ii) Employee’s
conviction of a felony which the Board reasonably believes has had or will have
a material detrimental effect on the Company’s reputation or business, (iii) a
willful act by the Employee which constitutes misconduct and is injurious to
the Company, or (iv) continued willful violations by the Employee of the
Employee’s obligations to the Company after there has been delivered to the
Employee a written demand for performance from the Company which describes the
basis for the Company’s belief that the Employee has not substantially
performed his duties, and a period of thirty (30) days following the date of
delivery of such written demand for the Employee to cure such violations.

(b)   Change of Control.   “Change
of Control” shall mean the occurrence of any of the following events:

(i)    the
approval by stockholders of the Company of a merger or consolidation of the
Company with any other corporation, other than, a merger or consolidation which
would result in the voting securities of the Company outstanding immediately
prior thereto continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity) more than fifty
percent (50%) of the total voting power represented by the voting securities of
the Company or such surviving entity outstanding immediately after such merger
or consolidation;

(ii)   the
approval by the stockholders of the Company of a plan of complete liquidation
of the Company or an agreement for the sale or disposition by the Company of
all or substantially all of the Company’s assets;

(iii)  any “person”
(as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended) becoming the “beneficial owner”
(as defined in Rule 13d-3 under said Act), directly or indirectly,
of securities of the Company representing 50% or more of the total voting power
represented by the Company’s then outstanding voting securities; or

(iv)  a change in the composition of the Board, as a
result of which fewer than a majority of the directors are Incumbent Directors.
“Incumbent Directors” shall mean directors who either (A) are directors of
the Company as of the date hereof, or (B) are elected, or nominated for election,
to the Board with the affirmative votes of at least a majority of those
directors whose election or nomination was not in connection with any
transactions described in subsections (i), (ii), or (iii) or in connection
with an actual or threatened proxy contest relating to the election of
directors of the Company.

(c)   Involuntary
Termination.   “Involuntary Termination” shall mean (i) without
the Employee’s express written consent, a significant reduction of the Employee’s
duties, position or responsibilities relative to the Employee’s duties,
position or responsibilities in effect immediately prior to such reduction, or
the removal of the Employee from such position, duties and responsibilities,
unless the Employee is provided with comparable duties, position and
responsibilities; (ii) without the Employee’s express written consent, a
substantial reduction, without good business reasons, of the facilities and
perquisites (including office space and location) available to the Employee
immediately prior to such reduction; (iii) without the Employee’s express
written consent, a reduction by the Company of the Employee’s base or variable
salary as in effect immediately prior to such reduction; (iv) without the
Employee’s express written consent, a material reduction by the Company in the
kind or level of employee benefits to which the Employee is entitled
immediately prior to such reduction with the result that the Employee’s overall
benefits package is significantly reduced; (v) without the Employee’s
express written consent, the relocation of the Employee to a facility or a
location more than fifty (50) miles from his current location; (vi) any
purported termination of the Employee by the Company which is not effected for
Cause or for which the grounds relied upon are not valid; or (vii) the
failure of the Company to obtain the assumption of this Agreement by any
successors contemplated in Section 6 below.

(d)   Severance
Benefits Period.   “Severance Benefits Period” shall mean a
period of twenty-four (24) months following the Termination Date.

(e)   Termination
Date.   “Termination Date” shall mean the effective date of any
notice of termination delivered by one party to the other hereunder.

2.   Term of
Agreement.   This Agreement shall terminate upon the date that
all obligations of the parties hereto under this Agreement have been satisfied
or, if earlier, on the date, prior to a Change of Control. Employee is no longer
employed by the Company.

3.   At Will
Employment.   The Company and the Employee acknowledge that the
Employee’s employment is and shall continue to be at-will, as defined under
applicable law. If the Employee’s employment terminates for any reason, the
Employee shall not be entitled to any payments, benefits, damages, awards or
compensation other than as provided by this Agreement, or as may otherwise be
established under the Company’s then existing employee benefit plans or
policies at the time of termination.

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4.   Severance
Benefits.

(a)   Termination Following A Change of Control.   If
the Employee’s employment with the Company terminates as a result of an
Involuntary Termination at any time three (3) months prior to, or twelve
(12) months after, a Change of Control, Employee shall be entitled to the
following severance benefits provided that Employee enters into and does not
revoke a general release of claims with the Company in substantially the form
attached hereto as Exhibit A:

(i)    Employee’s
base salary for the Severance Benefits Period as in effect as of the date of
such termination, less applicable withholding, payable in a lump sum within
thirty (30) days of the Involuntary Termination:

(ii)   Employee’s
variable compensation computed at 100% for the Severance Benefits Period as in
effect as of the date of such termination, less applicable withholding, payable
in a lump sum within thirty (30) days of the Involuntary Termination;

(iii)  one
hundred percent (100%) of any bonus declared prior to the date of any such termination
for the Employee but not yet paid, if any, and one hundred percent (100%) of
Employee’s target bonus for the Severance Benefits Period;

(iv)  all stock
options granted by the Company to the Employee prior to the Change of Control
shall become fully vested and exercisable as of the date of the termination and
will remain exercisable for a 90 day period following the Termination Date,
notwithstanding any shorter period stated in the respective stock option
agreements; and

(v)    the same level of health (i.e. medical, vision and dental)
coverage and benefits as in effect for the Employee on the day immediately
preceding the day of the Employee’s termination of employment: provided,
however, that (i) the Employee constitutes a qualified beneficiary, as defined
in Section 4980B(g)(l) of the Internal Revenue Code of 1986, as
amended; and (ii) Employee elects continuation coverage pursuant to the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”),
within the time period prescribed pursuant to COBRA. The Company shall continue
to provide Employee with health coverage until the earlier of (i) the date
Employee is no longer eligible to receive continuation coverage pursuant to
COBRA, or (ii) the end of the Severance Benefits Period as measured from
the termination date.

(b)   Termination
Apart from a Change of Control.   If the Employee’s employment
with the Company terminates other than as a result of an Involuntary
Termination within the twelve (12) months following a Change of Control, then
the Employee shall not be entitled to receive severance or other benefits
hereunder, but may be eligible for those benefits (if any) as may then be
established under the Company’s then existing severance and benefits plans and
policies at the time of such termination.

(c)   Accrued Wages
and Vacation: Expenses.   Without regard to the reason for, or
the timing of, Employee’s termination of employment: (i) the Company shall
pay the Employee any unpaid base salary and variable compensation due for
periods prior to the Termination Date; (ii) the Company shall pay the
Employee all of the Employee’s accrued and unused vacation through the
Termination Date; and (iii) following submission of proper expense reports
by the Employee, the Company shall reimburse the Employee for all expenses
reasonably and necessarily incurred by the Employee in connection with the
business of the Company prior to the Termination Date. These payments shall be
made promptly upon termination and within the period of time mandated by law.

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5.   Limitation on Payments.   In
the event that the severance and other benefits provided for in this Agreement
or otherwise payable to the Employee (i) constitute “parachute payments”
within the meaning of Section 280G of the Code, and (ii) would be
subject to the excise lax imposed by Section 4999 of the Code (the “Excise
Tax”), then Employee’s benefits under this Agreement shall be either delivered
in full, or delivered as to such lesser extent which would result in no portion
of such benefits being subject to the Excise Tax, whichever of the foregoing
amounts, taking into account the applicable federal, state and local income
taxes and the Excise Tax, results in the receipt by Employee on an after-tax
basis, of the greatest amount of benefits, notwithstanding that all or some
portion of such benefits may be taxable under Section 4999 of the Code.

Unless
the Company and the Employee otherwise agree in writing, any determination
required under this Section shall be made in writing by the Company’s
independent public accountants (the “Accountants”), whose determination shall
be conclusive and binding upon the Employee and the Company for all purposes. For
purposes of making the calculations required by this Section, the Accountants
may make reasonable assumptions and approximations concerning applicable taxes
and may-rely on reasonable, good faith interpretations concerning, the
application of Section 280G and 4999 of the Code. The Company and the
Employee shall furnish to the Accountants such information and documents as the
Accountants may reasonably request in order to make a determination under this
Section. The Company shall bear all costs the Accountants may reasonably incur
in connection with any calculations contemplated by this Section.

6.   Successors.

(a)    Company’s Successors. Any successor to the Company (whether
direct or indirect and whether by purchase, lease, merger, consolidation,
liquidation or otherwise) to all or substantially all of the Company’s business
and/or assets shall assume the Company’s obligations under this Agreement and
agree expressly to perform the Company’s obligations under this Agreement in
the same manner and to the same extent as the Company would be required to
perform such obligations in the absence of a succession. For all purposes under
this Agreement, the term “Company” shall include any successor to the Company’s
business and/or assets which executes and delivers the assumption agreement
described in this subsection (a) or which becomes bound by the terms of
this Agreement by operation of law.

(b)   Employee’s
Successors.   Without the written consent of the Company. Employee
shall not assign or transfer this Agreement or any right or obligation under
this Agreement to any other person or entity. Notwithstanding the foregoing,
the terms of this Agreement and all rights of Employee hereunder shall inure to
the benefit of, and be enforceable by, Employee’s personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees.

7.   Notices.

(a)   General.   Notices
and all other communications contemplated by this Agreement shall be in writing
and shall be deemed to have been duly given when personally delivered or when
mailed by U.S. registered or certified mail, return receipt requested and
postage prepaid. In the case of the Employee, mailed notices shall be addressed
to him at the home address which he most recently communicated to the Company
in writing. In the case of the Company, mailed notices shall be addressed to
its corporate headquarters, and all notices shall be directed to the attention
of its Secretary.

(b)   Notice of
Termination.   Any termination or resignation of the Employee
shall be communicated by a notice of termination to the other party hereto
given in accordance with this 

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Section. Such
notice shall indicate the specific termination provision in this Agreement
relied upon, shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination under the provision so indicated,
and shall specify the Termination Date (which shall be not more than 30 days
after the giving of such notice). The failure by the Employee to include in the
notice any fact or circumstance which contributes to a showing of Involuntary
Termination shall not waive any right of the Employee hereunder or preclude the
Employee from asserting such fact or circumstance in enforcing his rights
hereunder.

8.   Arbitration.

(a)    Any dispute or controversy arising out of, relating to, or in
connection with this Agreement, or the interpretation, validity, construction,
performance, breach, or termination thereof, shall be settled by binding
arbitration to be held in Santa Clara County, California, in accordance with
the National Rules for the Resolution of Employment Disputes then in
effect of the American Arbitration Association (the “Rules”). The arbitrator
may grant injunctions or other relief in such dispute or controversy. The
decision of the arbitrator shall be final, conclusive and binding on the
parties to the arbitration. Judgment may be entered on the arbitrator’s
decision in any court having jurisdiction.

(b)   The arbitrator(s) shall apply California law to the merits of
any dispute or claim, without reference to conflicts of law rules. The
arbitration proceedings shall be governed by federal arbitration law and by the
Rules, without reference to state arbitration law. Employee hereby consents to
the personal jurisdiction of the state and federal courts located in California
for any action or proceeding arising from or relating to this Agreement or
relating to any arbitration in which the parties are participants.

(c)    Employee understands that nothing in this Section modifies
Employee’s at-will employment status. Either Employee or the Company can
terminate the employment relationship at any time, with or without Cause.

(d)   EMPLOYEE
HAS READ AND UNDERSTANDS THIS SECTION, WHICH DISCUSSES ARBITRATION. EMPLOYEE
UNDERSTANDS THAT SUBMITTING ANY CLAIMS ARISING OUT OF, RELATING TO, OR IN
CONNECTION WITH THIS AGREEMENT, OR THE INTERPRETATION, VALIDITY, CONSTRUCTION,
PERFORMANCE, BREACH OR TERMINATION THEREOF TO BINDING ARBITRATION, CONSTITUTES
A WAIVER OF EMPLOYEE’S RIGHT TO A JURY TRIAL AND RELATES TO THE RESOLUTION OF
ALL DISPUTES RELATING TO ALL ASPECTS OF THE EMPLOYER/EMPLOYEE RELATIONSHIP,
INCLUDING BUT NOT LIMITED TO THE FOLLOWING CLAIMS:

(i)    ANY AND
ALL CLAIMS FOR WRONGFUL DISCHARGE OF EMPLOYMENT; BREACH OF CONTRACT, BOTH
EXPRESS AND IMPLIED; BREACH OF THE COVENANT OF GOOD FAITH AND FAIR DEALING,
BOTH EXPRESS AND IMPLIED; NEGLIGENT OR INTENTIONAL INFLICTION OF EMOTIONAL
DISTRESS; NEGLIGENT OR INTENTIONAL MISREPRESENTATION; NEGLIGENT OR INTENTIONAL
INTERFERENCE WITH CONTRACT OR PROSPECTIVE ECONOMIC ADVANTAGE: AND DEFAMATION.

(ii)   ANY AND
ALL CLAIMS FOR VIOLATION OF ANY FEDERAL STATE OR MUNICIPAL STATUTE, INCLUDING,
BUT NOT LIMITED TO, TITLE VII OF THE CIVIL RIGHTS ACT OF 1964, THE CIVIL RIGHTS
ACT OF 1991, THE AGE 

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DISCRIMINATION IN
EMPLOYMENT ACT OF 1967, THE AMERICANS WITH DISABILITIES ACT OF 1990, THE FAIR
LABOR STANDARDS ACT, THE CALIFORNIA FAIR EMPLOYMENT AND HOUSING ACT AND LABOR
CODE SECTION 201, et seq;

(iii)  ANY AND ALL CLAIMS ARISING OUT OF ANY OTHER
LAWS ANT) REGULATIONS RELATING TO EMPLOYMENT OR EMPLOYMENT DISCRIMINATION.

9.   Miscellaneous
Provisions.

(a)   No Duty lo
Mitigate.   The Employee shall not be required to mitigate the
amount of any payment contemplated by this Agreement, nor shall any such
payment be reduced by any earnings that the Employee may receive from any other
source.

(b)   Waiver.   No
provision of this Agreement may be modified, waived or discharged unless the
modification, waiver or discharge is agreed to in writing and signed by the
Employee and by an authorized officer of the Company (other than the Employee).
No waiver by either party of any breach of, or of compliance with, any
condition or provision of this Agreement by the other party shall be considered
a waiver of any other condition or provision or of the same condition or
provision at another lime.

(c)   Integration.   This
Agreement and any outstanding stock option agreements referenced herein
represent the entire agreement and understanding between the parties as to the
subject matter herein and supersede all prior or contemporaneous agreements,
whether written or oral, with respect to this Agreement and any stock option
agreement.

(d)   Choice of Law.   The
validity, interpretation, construction and performance of this Agreement shall
be governed by the internal substantive laws, but not the conflicts of law rules,
of the State of California.

(e)   Severability.   The
invalidity or unenforceability of any provision or provisions of this Agreement
shall not affect the validity or enforceability of any other provision hereof,
which shall remain in full force and effect.

(f)   Employment
Taxes.   All payments made pursuant to this Agreement shall be
subject to withholding of applicable income and employment taxes.

(g)   Counterparts.   This
Agreement may be executed in counterparts, each of which shall be deemed an
original, but all of which together will constitute one and the same
instrument.

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IN
WITNESS WHEREOF, each of the parties has executed this Agreement, in the case
of the Company by its duly authorized officer, as of the day and year first
above written.

	
  COMPANY:

  	
  QUICKLOGIC CORPORATION

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
  EMPLOYEE:

  	
   

  
	
   

  	
  E. Thomas Hart

  

 

EXHIBIT
A

SETTLEMENT AGREEMENT AND RELEASE

This Settlement Agreement and Release (‘‘Agreement”)
is made by and between QuickLogic Corporation (the ‘“Company”), and [EMPLOYEE] (“Employee”).

WHEREAS, Employee was employed by the Company:

WHEREAS, the Company and Employee have entered into a
Change of Control Severance Agreement (the “Severance Agreement”);

NOW
THEREFORE, in consideration of the mutual promises made herein, the Company and
Employee (collectively referred to as “the Parties”) hereby agree as follows:

1.   Termination.   Employee’s
employment from the Company terminated on                 .

2.   Consideration.   The
Company agrees to pay Employee the severance benefits set forth in Section 4
of the Severance Agreement under the terms and conditions of the Severance
Agreement.

3.   Confidential
Information.   Employee shall continue to maintain the
confidentiality of all confidential and proprietary information of the Company
and shall continue to comply with the terms and conditions of the
Confidentiality Agreement between Employee and the Company. Employee shall
return all the Company property and confidential and proprietary information in
his possession to the Company on the Effective Date of this Agreement.

4.   Payment of
Salary.   Employee acknowledges and represents that the Company
has paid all salary, wages, bonuses, accrued vacation, commissions and any and
all other benefits due to Employee.

5.   Release of Claims.   Employee
agrees that the foregoing consideration represents settlement in full of all
outstanding obligations owed to Employee by the Company. Employee, on behalf of
himself and his respective heirs, family members, executors and assigns, hereby
fully and forever releases the Company and its past, present and future
officers, agents, directors, employees, investors, shareholders,
administrators, affiliates, divisions, subsidiaries, parents, predecessor and
successor corporations, and assigns, from, and agrees not to sue or otherwise
institute or cause to be instituted any legal or administrative proceedings
concerning any claim, duty, obligation or cause of action relating to any
matters of any kind, whether presently known or unknown, suspected or
unsuspected, that he may possess arising from any omissions, acts or facts that
have occurred up until and including the Effective Date of this Agreement
including, without limitation.

(a)    any and
all claims relating to or arising from Employee’s employment relationship with
the Company and the termination of that relationship;

(b)   any and all
claims relating to, or arising from Employee’s right to purchase, or actual
purchase of shares of stock of the Company, including, without limitation, any
claims for fraud, misrepresentation, breach of fiduciary duty, breach of duty
under applicable state corporate law and securities fraud under any state or
federal law:

(c)    any and
all claims for wrongful discharge of employment; termination in violation of
public policy; discrimination; breach of contract, both express and implied;
breach of a covenant of good faith and fair dealing, both express and implied;
promissory estoppel; negligent or intentional infliction of emotional distress;
negligent or intentional misrepresentation; negligent or intentional
interference with contract or prospective economic advantage; unfair business
practices: defamation; libel; slander; negligence; personal injury; assault;
battery; invasion of privacy; false imprisonment; and conversion;

(d)   any and all
claims for violation of any federal, state or municipal statute, including, but
not limited to, Title VII of the Civil Rights Act of 1964, the Civil Rights Act
of 1991, the Age Discrimination in Employment Act of 1967, the Americans with
Disabilities Act of 1990, the Fair Labor Standards Act, the Employee Retirement
Income Security Act of 1974, The Worker Adjustment and Retraining Notification
Act, the California Fair Employment and Housing Act, and Labor Code section
201, et seq, and section 970, et seq. and all amendments to each such Act as well as the
regulations issued thereunder;

(e)    any and
all claims for violation of the federal, or any state, constitution;

(f)    any and
all claims arising out of any other laws and regulations relating to employment
or employment discrimination; and

(g)    any and all claims for attorney’s fees and costs.

6.     Employee agrees that the release set forth in this section shall
be and remain in effect in all respects as a complete general release as to the
matters released. This release does not extend to any obligations incurred
under this Agreement. Employee acknowledges and agrees that any breach of this
paragraph shall constitute a material breach of the Agreement and in the case
of a breach by Employee, shall entitle the Company immediately to recover the
monetary consideration discussed in paragraph 2 above. Employee shall also be
responsible to the Company for all costs, attorneys’ fees and any and all
damages incurred by the Company (a) enforcing the obligation, including
the bringing of any suit to recover the monetary consideration, and (b) defending
against a claim or suit brought or pursued by Employee in violation of this
provision.

7.   Acknowledgment
of Waiver of Claims under ADEA.   Employee acknowledges that he
is waiving and releasing any rights he may have under the Age Discrimination in
Employment Act of 1967 (“ADEA”) and that this waiver and release is knowing and
voluntary. Employee and the Company agree that this waiver and release does not
apply to any rights or claims that may arise under the ADEA after the Effective
Date of this Agreement. Employee acknowledges that the consideration given for
this waiver and release Agreement is in addition to anything of value to which
Employee was already entitled. Employee further acknowledges that he has been
advised by this writing that (a) he should consult with an attorney prior to executing this Agreement; (b) he has
twenty-one (21) days within which to consider this Agreement: (c) he has
seven (7) days following the execution of this Agreement by the parties to
revoke the Agreement: and (d) this Agreement shall not be effective until
the revocation period has expired. Any revocation should be in writing and
delivered to the Secretary of QuickLogic Corporation at 1277 Orelans Drive,
Sunnyvale, CA 94089 by close of business on the seventh day from the date that
Employee signs this Agreement.

8.   Civil Code Section 1542.   Employee
represents that he is not aware of any claims against the Company other than
the claims that are released by this Agreement. Employee acknowledges that he
has been advised by legal counsel and is familiar with the provisions of
California Civil Code Section 1542, which provides as follows:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF
EXECUTING THE RELEASE, WHICH IE KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS
SETTLEMENT WITH THE DEBTOR.

9.     Employee, being aware of said code
section, agrees to expressly waive any rights he may have thereunder, as well
as under any other statute or common law principles of similar effect.

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10.   No Pending or
Future Lawsuits.   Employee represents that he has no lawsuits,
claims, or actions pending in his name, or on behalf of any other person or
entity, against the Company or any other person or entity referred to herein. Employee
also represents that he does not intend to bring any claims on his own behalf
or on behalf of any other person or entity against the Company or any-other
person or entity referred to herein.

11.   Application for
Employment.   Employee understands and agrees that, as a
condition of this Agreement, he shall not be entitled to any employment with
the Company, its subsidiaries, or any successor, and he hereby waives any
right, or alleged right, of employment or re-employment with the Company.

12.   Confidentiality.   Employee
agrees to use his best efforts to maintain in confidence the existence of this
Agreement, the contents and terms of this Agreement, and the consideration for
this Agreement (hereinafter collectively referred to as “Settlement Information”).
Employee agrees to take every reasonable precaution to prevent disclosure of
any Settlement Information to third parties, and agrees that there will be no
publicity, directly or indirectly, concerning any Settlement Information. Employee
agrees to take every precaution to disclose Settlement Information only to
those attorneys, accountants, governmental entities, and family members who
have a reasonable need to know of such Settlement Information.

13.   No Cooperation.   Employee
agrees he will not act in any manner that might damage the business of the
Company. Employee agrees that he will not 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.

14.   Non-Disparagement.   Employee
agrees to refrain from any defamation, libel or slander of the Company and its
respective officers, directors, employees, investors, shareholders,
administrators, affiliates, divisions, subsidiaries, predecessor and successor
corporations, and assigns or tortious interference with the contracts and
relationships of the Company and its respective officers, directors, employees,
investors, shareholders, administrators, affiliates, divisions, subsidiaries,
predecessor and successor corporations, and assigns.

15.   No Admission of
Liability.   Employee understands and acknowledges that this
Agreement constitutes a compromise and settlement of disputed claims. No action
taken by the Company, either previously or in connection with this Agreement
shall be deemed or construed to be (a) an admission of the truth or
falsity of any claims heretofore made or (b) an acknowledgment or
admission by the Company of any fault or liability whatsoever to the Employee
or to any third party.

16.   Costs.   The
Parties shall each bear their own costs, expert fees, attorneys’ fees and other
fees incurred in connection with this Agreement.

17.   Arbitration.   The
Parties agree that any and all disputes arising out of the terms of this
Agreement, their interpretation, and any of the matters herein released,
including any potential claims of harassment, discrimination or wrongful
termination shall be subject to binding arbitration, to the extent permitted by
law in Santa Clara County, California, before the American Arbitration
Association under its National Rules for the Resolution of Employment
Disputes. Employee agrees and hereby waives his right to
jury trial as to matters arising out of the terms of this Agreement and any
matters herein released to the extent permitted by law. The Parties
agree that the prevailing party in any arbitration shall be entitled to
injunctive relief in any court of competent jurisdiction to enforce the
arbitration award.

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18.   Authority.   Employee
represents and warrants that [he/she] has the
capacity to act on [his/her] own
behalf and on behalf of all who might claim through [him/her]
to bind them to the terms and conditions of this Agreement.

19.   No
Representations.   Employee represents that he has had the
opportunity to consult with an attorney, and has carefully read and understands
the scope and effect of the provisions of this Agreement. Neither party has
relied upon any representations or statements made by the other party hereto
which are not specifically set forth in this Agreement.

20.   Severability.   In
the event that any provision hereof becomes or is declared by a court of
competent jurisdiction to be illegal, unenforceable or void, this Agreement
shall continue in full force and effect without said provision.

21.   Entire
Agreement.   This Agreement and the Confidentiality Agreement
represent the entire agreement and understanding between the Company and
Employee concerning Employee’s separation from the Company, and supersede and
replace any and all prior agreements and understandings concerning Employee’s
relationship with the Company and his compensation by the Company.

22.   No Oral
Modification.   This Agreement may only be amended in writing
signed by Employee and the President of the Company.

23.   Governing Law.   This
Agreement shall be governed by the internal substantive laws, but not the
choice of law rules, of the State of California.

24.   Effective Date.   This
Agreement is effective eight days afters it has been signed by both Parties.

25.   Counterparts.   This
Agreement may be executed in counterparts, and each counterpart shall have the
same force and effect as an original and shall constitute an effective, binding
agreement on the part of each of the undersigned.

26.   Voluntary Execution of Agreement.   This
Agreement is executed voluntarily and without any duress or undue influence on
the part or behalf of the Parties hereto, with the full intent of releasing all
claims. The Parties acknowledge that:

(a)    They have
read this Agreement:

(b)   They have
been represented in the preparation, negotiation, and execution of this
Agreement by legal counsel of their own choice or that they have voluntarily
declined to seek such counsel:

(c)    They
understand the terms and consequences of this Agreement and of the releases it
contains;

(d)   They are
fully aware of the legal and binding effect of this Agreement.

 4

IN
WITNESS WHEREOF, the Parties have executed this Agreement on the respective
dates set forth below.

	
  

  	
  [THE COMPANY]

  
	
  Dated: [DATE]

  	
  By:

  	
   

  
	
   

  	
  [EMPLOYEE NAME],
  an individual

  
	
  Dated: [DATE]Exhibit 10(a)

 

SECOND
AMENDMENT TO THE

PARTICIPATION AGREEMENT UNDER THE

HAGGAR CORP. SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

 

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

 

RECITALS

 

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

 

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

 

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

 

D.                                    The Participant’s
Unvested Benefit equals one hundred percent (100%) of the Participant’s benefit
under the Plan; and

 

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

 

AGREEMENT

 

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

 

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

 

10.                                 In
order to comply with the provisions of section 409A of the Internal
Revenue Code of 1986, as amended (the “Code”), this Section 10 will be
effective on and after January 1, 2005, notwithstanding anything to the
contrary in the Plan or this Agreement.

 

(a)                                  Change of Control.  Effective January 1, 2005, the
Participant (or the Participant’s surviving spouse) will no longer be

 

 

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

 

For all purposes under the Plan, Change of Control shall mean (i) a
merger or consolidation of the Corporation or Haggar Clothing Co. with or into
another entity, or the exchange of securities (other than a merger or
consolidation) by the holders of the voting securities of the Corporation or
Haggar Clothing Co. and the holders of voting securities of any other entity,
in which the shareholders of the Corporation or Haggar Clothing Co. immediately
before the transaction do not own 50% or more of the combined voting power of
the voting securities of the surviving entity or its parent immediately after
the transaction; (ii) a dissolution of the Corporation or Haggar Clothing
Co.; (iii) a transfer of all or substantially all of the assets of the
Corporation, or Haggar Clothing Co., in one transaction or a series of
transactions occurring within a twelve month period to a “Person” or “Group”
(as defined below); (iv) a transaction or a series of transactions in
which a Person or Group becomes the beneficial owner, directly or indirectly,
of securities of the Corporation, or Haggar Clothing Co., representing more
than 50% of the combined voting power of the Corporation’s or Haggar Clothing
Co.’s then outstanding securities; or (v) a majority of the members of the
Corporation’s Board is replaced during any twelve month period by directors
whose appointment or election is not endorsed by a majority of the Corporation’s
Board prior to the date of the appointment or election; provided, however, that
a “Change of Control” shall not be deemed to have occurred if the ownership of
50% or more of the combined voting power of the surviving corporation, asset
transferee, Corporation or Haggar Clothing Co. (as the case may be), after
giving effect to the transaction or series of transactions, is directly or
indirectly held by (A) a trustee or other fiduciary under an employee
benefit plan maintained by the Corporation, Haggar Clothing Co., or any
Subsidiary, (B) one or more of the “executive officers” of the Corporation
that held such positions prior to the transaction or series of transactions, or
any entity, Person or Group under their control, (C) one or more of the
children of J.M. Haggar, Sr. or their lineal descendants, or any entity,
Person or Group under their control, or (D) one or more members of the “senior
management” of the Corporation or Haggar Clothing Co. as designated by the Chief
Executive Officer from time to time, that held

 

2

 

such positions
prior to the transaction or series of transactions, or any entity, Person or
Group under their control.  As used
herein, “Person” and “Group” shall have the meanings set forth in Sections
13(d)(3) and/or 14(d)(2) of the Securities Exchange Act of 1934, as
amended (“1934 Act”), and “executive officer” shall have the meaning set
forth in Rule 3b-7 promulgated under the 1934 Act.  “Group” shall further be determined by the
Plan Administrator to constitute “more than one person acting as a group” for
purposes of section 409A of the Code and the guidance promulgated
thereunder (the “Deferred Compensation Rules”). 
The definition of Change of Control above shall be controlling with
respect to the Participant for all purposes under the Plan and the Trust under
the Haggar Corp. Supplemental Executive Retirement Plan (the “Trust”).

 

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

 

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

 

(d)                                 Section 409A of the Code.  This Section 10 is intended to bring
distributions with respect to the Participant’s benefit under the Plan into
compliance with the Deferred Compensation Rules and the definition of
Change of Control above is intended to constitute “a change in the ownership or
effective control of the corporation, or in the ownership of a substantial
portion of the assets of the corporation” as such terms are used in the
Deferred Compensation Rules. 
Accordingly, this Section 10 and the definition of Change of
Control herein shall be interpreted by the Plan Administrator, in its sole
discretion exercised in good faith, in such a manner that distributions made
under the Plan will comply with the requirements of the Deferred Compensation
Rules.

 

3

 

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

 

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

 

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

 

[Signature Page Follows]

 

4

 

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

 

	
   

  	
  HAGGAR CLOTHING CO.,
  a Nevada

  corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John W. Feray

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
  John W. Feray

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
  Chief Accounting Officer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PARTICIPANT

  
	
   

  	
   

  
	
   

  	
  /s/ J.M. Haggar, III

  	
   

  
	
   

  	
  J.M. Haggar, III

  
						

 

5

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