Document:

Exhibit
10.6

 

Gaiam,
Inc.

Executive
Officer Salaries

 

	
  Name

  	
   

  	
  Title

  	
   

  	
  Annual Base Salary

  	
   

  
	
  Jirka Rysavy

  	
   

  	
  Chairman and Chief
  Executive Officer

  	
   

  	
  $

  	
  290,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Lynn Powers

  	
   

  	
  President, Chief Executive Officer of North American Operations,
  Secretary

  	
   

  	
  $

  	
  290,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Janet Mathews

  	
   

  	
  Vice President and Chief Financial Officer

  	
   

  	
  $

  	
  175,000Exhibit
10.7

 

Gaiam,
Inc.

Nonemployee
Director Compensation

 

	
  Event

  	
   

  	
  Compensation

  
	
  Meeting Fee

  	
   

  	
  $3,000 per meeting

  
	
   

  	
   

  	
   

  
	
  Telephonic Meeting Fee

  	
   

  	
  $1,000 per meeting

  
	
   

  	
   

  	
   

  
	
  Committee Meeting Fee

  	
   

  	
  $500 per meeting

  
	
   

  	
   

  	
   

  
	
  Committee Telephonic
  Meeting Fee

  	
   

  	
  $250 per meeting

  
	
   

  	
   

  	
   

  
	
  Standing Committee
  Chairman’s Fee

  	
   

  	
  $1,000 annuallyExhibit 10(a)

 

August
9, 2005

 

Via Telecopy

 

JP Morgan Chase Bank

Loan and Agency Services Group

One Chase Manhattan Plaza, 8th Floor

New York, New York  10081

Attn: Agency Services

Telecopy No. (212) 552-2261

 

Mr. Scott Harvey

JP Morgan Chase Bank

2200 Ross Ave.

Dallas, TX  75201

Telecopy No. (214) 965-3849

 

Re:                     Second Amended and Restated Credit Agreement
dated as of June 13, 2002, as amended (the “Agreement”)

 

Dear Scott:

 

Pursuant to Section 2.4(a) of the Agreement,
Haggar is hereby notifying JP Morgan Chase Bank, as Agent, that we are reducing
the Commitments by $41,000,000 from $111,000,000 to $70,000,000 as of September
6, 2005.

 

Please confirm receipt and acceptance of this
request by signing and returning a copy of this letter to me by telecopy at 214-956-4561.

 

	
   

  	
  Sincerely,

  
	
   

  	
   

  
	
   

  	
  /s/ John W. Feray

  	
   

  
	
   

  	
  John W. Feray

  
	
   

  	
  SVP, Chief Accounting
  Officer

  
	
   

  
	
  Received and Accepted

  JP Morgan Chase Bank

  
	
  By:

  	
    /s/ D. Scott
  Harvey

  	
   

  
	
  Name and Title:

  	
     D. Scott
  Harvey, Vice PresidentExhibit 10(b)

 

THIS AGREEMENT IS SUBJECT TO ARBITRATION

AS PROVIDED IN SECTION  M

 

EXECUTIVE EMPLOYMENT AGREEMENT

 

This
Executive Employment Agreement (“Agreement”), dated as of August 8, 2005,
entered into between John W. Feray, an individual residing in Dallas County,
Texas (“Executive”), and Haggar Clothing Co., a Nevada corporation, having
principal offices at 11511 Luna Road, Dallas, Texas (“Haggar” or the “Company”).

 

Through
this Agreement Haggar employs Executive, and Executive accepts employment by
Haggar, upon the terms and subject to the conditions of this Agreement.

 

Now,
therefore, in consideration of the premises, the agreements and covenants set
forth in this Agreement, and other good and valuable consideration, the receipt
and sufficiency of which are acknowledged, Haggar and Executive agree as
follows:

 

A.                                    Definitions   In this Agreement (including this Section)
the following terms shall have the following meaning:

 

1.                                       “Affiliate”
shall mean, with respect to any Person, any Person which, directly or
indirectly controls or is controlled by that Person, or is, under common
control with that Person.  For purposes
of this definition, “control” (including, with correlative meaning, the terms “controlled
by” and “under common control with”), as used with respect to any Person, shall
mean the possession, directly or indirectly, of power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities or by contract or otherwise.

 

2.                                       The
“Plan” shall mean the Haggar Clothing Co. Corporate Severance Plan for
Associates effective August 29, 1997, and any subsequent modifications or
amendments thereto.

 

3.                                       “Person”
shall mean any individual, corporation, partnership, joint venture, trust, association,
unincorporated organization or other entity.

 

4.                                       “Section”
shall refer to sections of this Agreement.

 

5.                                       “Effective
Date” shall mean the date the Agreement commences as set forth in Section C.

 

 

6.                                       “Subsidiary”
shall mean any corporation in an unbroken chain of corporations beginning with
Haggar Corp., if each such corporation (other than the last corporation in the
unbroken chain) owns stock possessing more than fifty per cent (50%) of the
total combined voting power of all classes of stock in one of the other
corporations in such chain.

 

B.                                    Duties of Executive.   Executive will serve as Senior Vice
President and Chief Accounting Officer, or such other position as may be
assigned by Haggar’s Chief Operating Officer, and shall perform such duties
consistent with such position as are determined and directed by the Chief
Operating Officer.

 

C.                                    Term. 
This Agreement shall be effective commencing on August 8, 2005
(the “Effective Date”), and continue until August 30, 2006 (the “Employment
Period”), subject to earlier termination pursuant to the provisions of Section J.

 

D.                                    Time Required to Devote to Duties and Place of
Employment.  Executive
shall devote his full working time, attention and ability to the business of
Haggar, including, if applicable, its Subsidiaries and/or Affiliates to which
Executive may have been assigned responsibilities under Section B.  Executive shall well and faithfully serve
Haggar, including such applicable Subsidiaries and/or Affiliates, during the
continuance of his employment under this Agreement and use his best efforts to
promote the interests and welfare of Haggar, its Subsidiaries and
Affiliates.  Notwithstanding the
foregoing, Executive shall be entitled to participate in community affairs and
passive investment  activities not
involving any measurable portion of Executive’s business time, so long as such
activities do not interfere with the due performance of his duties under this
Agreement.  Executive’s place of
employment shall be the Dallas/Fort Worth, Texas, area or such other area in
which the Board of Directors of Haggar, with the concurrence of the chief
executive officer of Haggar, shall determine to locate the principal executive
offices of Haggar.

 

E.                                      Compensation.   During the term defined above, Haggar shall
pay the Executive the following compensation:

 

1.                                       Basic  Salary. Basic
salary at an annual rate of $200,000.00 (the “Basic Salary”), payable on Haggar’s
regular payroll dates.  Haggar may, in
its sole discretion, increase Executive’s Basic Salary in light of his
performance, inflation and cost of living, and other factors deemed relevant by
Haggar; provided, however, that Executive’s Basic Salary may not be decreased
below the initial Basic Salary during the term of this Agreement.

 

2.                                       Bonus.   A bonus calculated in accordance with Haggar’s
Executive Bonus Plan in effect from time to time.

 

3.                                       Expenses
and Reimbursements. Executive will be entitled to reimbursement for
reasonable out-of-pocket expenses incurred by Executive that are directly
attributable to the performance of Executive’s duties under this
Agreement.  Executive will adhere to
Haggar’s customary practices and procedures with respect to incurring
out-of-pocket

 

2

 

expenses and will present
such expense statements, receipts, and vouchers, or other evidence supporting
expenses incurred by Executive as Haggar may from time to time request.

 

4.                                       Benefits.

 

(a)                                  Executive
shall be entitled to participate in all hospital, medical, dental, group life, short
and long-term disability, other health and welfare benefits, and such employee
pension benefit plans as are made available generally to other executives of
Haggar.

 

(b)                                 Executive
shall be entitled to vacation and floating holidays in accordance with Haggar’s
policies currently in effect and from time to time modified for its executive
employees.

 

(c)                                  An
annual car allowance in the amount of $10,800.00, to be paid monthly.

 

(d)                                 If
Executive becomes disabled during the term of this Agreement (or any extension
or renewal) Haggar shall continue to pay Executive his full Basic Salary for up
to one year, or if earlier, until the earliest to occur of (i) the
cessation of such disability;  or (ii) the
Executive’s death;  provided, however,
that if the Executive should die within one (1) year after the date of
disability (or most recent disability), the payment of disability benefits
shall continue for such one-year period. 
The amount payable to the Executive shall be offset on a prospective
basis by (i) the amount of any proceeds received by Executive from any
disability income program (whether or not insured) maintained by Haggar or any
Affiliate;  (ii) the amount of any
disability payment under the U.S. Social Security Disability Insurance
Program;  and (iii) any amount of
compensation received by Executive from gainful employment, other than
employment approved by Executive’s physician for therapy or
rehabilitation.  For purposes of this
paragraph, Executive shall be deemed disabled if he suffers a physical, mental
or emotional injury, illness or disorder that renders him unable to capably
perform in Haggar’s opinion substantially all of his usual and customary duties
for Haggar with the degree of decorum and dignity normally associated with
employment in a similar capacity.  If
there is a disagreement between Haggar and Executive concerning the existence
of a disability, such disagreement shall be resolved by the opinion of a
physician selected by Haggar.  Haggar
shall pay the cost of the assessment and determination of such physician.  Subject to the above limitations, Executive’s
Basic Salary shall be continued until such time as a determination is made on
the issue of disability.

 

F.                                      Confidential
Information.   Executive
acknowledges that, in the course of performing and fulfilling his duties under
this Agreement, he may have access to and may be entrusted with confidential
information concerning the present and contemplated activities of and the
techniques and modes of business operations evolved and used or to be evolved
and used by Haggar, its Subsidiaries and Affiliates and their respective
customers and clients, which information is not generally known in the industry
in which Haggar does business, the disclosure of any of which confidential
information to competitors of Haggar, its Subsidiaries or Affiliates or to
other persons would be highly detrimental to the interests of Haggar, its
Subsidiaries and

 

3

 

Affiliates (the “Confidential
Information”).  Executive further
acknowledges and agrees that the right to maintain confidential such
information constitutes a proprietary right that Haggar, its Subsidiaries or
Affiliates are entitled to protect. 
Accordingly, Executive covenants and agrees with Haggar and with each
Subsidiary and Affiliate of Haggar that (i) he will not, during the
continuance of his employment under this Agreement, directly or indirectly
disclose any of such Confidential Information to any Person, nor shall he use
the same, except as required in the normal course of his employment;  and (ii) after the termination or
expiration of his employment under this Agreement, he will not directly or
indirectly disclose or make any use of the Confidential Information without the
written consent of Haggar for himself or any third parties;  and (iii) after the termination or
expiration of his employment under this Agreement, he will return the originals
and all copies of any documents or other media containing Confidential
Information in his possession or under his control to Haggar;  provided, however, that Haggar acknowledges
and agrees that Executive shall not be prohibited by this Section from
using the personal skills and know-how developed by Executive prior to the
execution of this Agreement and during the term of this Agreement, and subject
to the provisions of Section H, Executive shall be allowed to pursue a
career and earn his livelihood through the use of such general skills and know-how he has obtained (but not any
Confidential Information, systems or techniques of Haggar) before and during
his employment under this Agreement after the termination or expiration of this
Agreement without the express consent of, or any liability to, Haggar.  Executive acknowledges and agrees that in the
event of any actual or threatened violation of the provisions of this Section F
or of Sections G or H, Haggar and/or any Subsidiary or Affiliate may commence
proceedings in any court of competent jurisdiction for, and shall be entitled
to obtain, preliminary and permanent injunctive relief or other appropriate
equitable remedies (without any bond or other security being required) and an
accounting of all profits and benefits arising out of such violation, which
rights and remedies shall be in addition to any other rights or remedies to
which Haggar may be entitled at law.

 

G.                                    Non-Solicitation.   During the time of Executive’s
employment and for a period of two (2) years after the termination of
Executive’s employment for any reason whatsoever, Executive shall not, without
the prior written consent of Haggar, engage in any of the conduct described in
subsections (1) and (2) below, either directly or indirectly or in
any capacity for any other Person:

 

1.                                       Directly
or indirectly hire, attempt to hire, or assist any other person or entity in
hiring or attempting to hire any person who was a Haggar employee, consultant
or agent within the 12-month period prior to the termination of Executive’s
employment;  or

 

2.                                       directly
or indirectly solicit, divert or take away, in competition with Haggar, the
business or patronage of any Person who was a customer, supplier, distributor,
licensor or licensee of Haggar within the 12-month period prior to the
termination of Executive’s employment.

 

H.                                    Covenant
Not to Compete.   As an ancillary
covenant to the terms and conditions set forth elsewhere in this Agreement, and
in particular the covenants set forth in Sections F and G above, and in
consideration of the mutual promises set forth in this Agreement and other good

 

4

 

and valuable
consideration received and to be received, including without limitation, access
to Confidential Information as described above, Executive covenants and agrees
with Haggar that he will not (without the prior written consent of Haggar) at
any time during the term of this Agreement and during the Applicable Period,
either individually or in partnership or in conjunction with any Person or
Persons, as principal, agent, shareholder, guarantor, creditor, employee, consultant
or in any other manner whatsoever, carry on any business of, or be engaged in,
consult or advise, lend money to, guarantee the debts or obligations of, or
permit his name or any part thereof to be used by, any Person engaged in or
concerned with or interested in any business carried on, within the United
States or the provinces of Canada in which
Haggar carries on business, which competes with the products manufactured and
sold or services provided by Haggar (the “Business”).  For purposes of this Section H, the “Applicable
Period” shall mean a period commencing upon termination of employment and
continuing:

 

(i)                                     if
termination of employment by Haggar is for other than Cause, until the
expiration of the term contemplated by Section C; or

 

(ii)                                  if
a Change of Control Termination occurs or employment is terminated for any
other reason, for one (1) year.

 

I.                                         Reasonableness
of Restrictions.   The Executive
acknowledges that, while performing his duties under this Agreement, he will
have access to and come into contact with trade secrets and Confidential
Information belonging to Haggar and will obtain personal knowledge of and
influence over its world-wide operations, customers and/or employees. The
Executive agrees that the restrictions contained in Sections F, G, and H are
reasonable, supported by valid consideration, and necessary to protect the
legitimate business interests of Haggar both during and after the termination
of this Agreement.

 

J.                                      Rights
and Remedies of Haggar.   This
Agreement is terminable prior to the expiration of the term by Haggar for “Cause”,
as determined in good faith by the Board of Directors of Haggar Corp.  As used in this Agreement, “Cause” shall be
limited to the following:

 

1.                                       Executive’s
repeated unavailability or refusal to devote the time required for the
performance of his duties as described in Section B;

 

2.                                       Executive’s
intentional and repeated refusal to follow instructions of the Chief Operating
Officer of Haggar (provided such instructions are made in good faith, are not
arbitrary or capricious and do not require Executive to subject himself to
criminal liability or material civil liability against which he is not
indemnified by Haggar)  (Haggar
acknowledges that “intentional and repeated” connotes reasonable notice to Executive
after one or more instances of refusal and prior to any further instances
which, together with earlier ones, are relied on by Haggar for termination
under this paragraph);

 

3.                                           Intentional
misrepresentation or unlawful conduct by Executive in the discharge of his
responsibilities;

 

5

 

4.                                           Executive’s
intentional disclosure to third parties of any
Confidential Information (as described in Section F) outside the normal
course of his employment and without Haggar’s consent;  or

 

5.                                               Theft
of or fraud by Executive involving property of Haggar or its customers, or
conviction of Executive of a felony criminal offense; or any other action by
Executive involving moral turpitude and reflecting unfavorably upon the public
image of Haggar.

 

Haggar
recognizes that one of the principal benefits to it of the employment of
Executive under this Agreement will be the benefit of Executive’s best
independent judgment in connection with his area of responsibility.  Accordingly, notwithstanding anything to the
contrary in this Agreement, Cause shall not include Executive’s exercising his
right to articulate to Haggar’s Board of Directors, Chairman of the Board,
Chief Executive Officer or Chief Operating Officer his views as to Haggar’s
plans or policies, so long as he carries out the instructions of the Chief
Operating Officer (provided such instructions are made in good faith, are not
arbitrary or capricious and do not require Executive to subject himself to
criminal liability or material civil liability against which he is not
indemnified by Haggar).

 

Prior
to terminating Executive’s employment, Haggar will advise Executive in writing
of the grounds for such termination and Executive shall have a period of 30
days after such notice is given within which to cure or contest such claimed
grounds, and Haggar may not terminate his employment for cause unless such
nonperformance is not cured during that period, or, if contested by Executive,
shall have been given a reasonable opportunity to appear before the Board, with
or without legal representation, to present arguments and evidence on his
behalf.

 

Upon
termination for Cause, Haggar shall pay Executive any accrued and unpaid Basic
Salary through the date of termination.

 

K.                                    Rights
and Remedies of Executive.

 

If
termination of Executive’s employment by Haggar is not for Cause, Executive
shall be entitled to receive, as the exclusive remedy for such termination,
violation or failure, payment of the then Basic Salary (payable when and as
such payments would have become due) for a period beginning on the date of
termination and ending on the date on which the term of this Agreement would
have expired in accordance with Section C, reduced by any payments made to
Executive pursuant to the Plan or from any other Person as compensation for
services rendered.  It is understood,
however, that Executive shall have no obligation to seek other employment
during such period.  In the event of any
violation of Sections F, G or H, Executive shall cease to be entitled to any
payments pursuant to this Section K or the Plan (no limitation on any
other remedies available to Haggar being intended).

 

6

 

L.                                     Representations, Warranties and Covenants of the
Employee.

 

1.                                       The
Executive represents and warrants to Haggar that:

 

(a)                                  There
are no restrictions, agreements or understandings whatsoever to which the
Executive is a party that would prevent or make unlawful the Executive’s
execution of this Agreement or the Executive’s employment under this Agreement,
or which is or would be inconsistent, or in conflict with this Agreement or the
Executive’s employment under this Agreement, or would prevent, limit or impair
in any way the performance by the Executive of the obligations under this
Agreement; and

 

(b)                                 The
Executive has disclosed to Haggar all restraints, confidentiality commitments
or other employment restrictions that Executive has with any other employer,
person or entity.

 

2.                                       Upon
and after the Executive’s termination or
cessation of employment with Haggar and until such time as no obligations of
the Executive to Haggar hereunder exist, the Executive:  (i) shall provide a complete copy of
this Agreement to any prospective employer or other person, entity or association
in the Business, with whom or which the Executive proposes to be employed,
affiliated, engaged, associated or to establish any business or remunerative
relationship prior to the commencement; 
and (ii) shall notify  Haggar
of the name and address of any such Person, entity or association prior to the
Executive’s employment, affiliation, engagement, association or the
establishment of any business or remunerative relationship.

 

M.                                Arbitration.   Except as contemplated by the last
sentence of Section F, any dispute between the parties to this Agreement,
whether arising during the period of this Agreement or at any time thereafter
which relates to the validity, construction, meaning, performance or effect of
this Agreement or the rights and obligations of the parties shall be determined
pursuant to the arbitration rules for employment disputes of the American
Arbitration Association in Dallas, Texas. 
The decision of the arbitrators pursuant to such procedures shall be
final and binding upon the parties and shall not be subject to appeal and may
be enforceable in my court of competent jurisdiction located in Dallas County,
Texas.

 

N.                                    Assignment.   Neither this Agreement nor the parties’
obligations under this Agreement are assignable;  provided, however, if all or substantially
all of the assets and liabilities of Haggar are transferred to another Person
at any time during the term of this Agreement, this Agreement shall be assigned
to such Person, and Executive shall continue to be bound by the provisions of
this Agreement provided that such assignee shall assume and agree to perform
all obligations of Haggar expressed in this Agreement.  No such assignment shall release Haggar from
its obligations to Executive under this Agreement, and Haggar shall remain liable
hereunder notwithstanding such assignment.

 

7

 

O.                                   Severance
Payment After Change of Control.

 

1.                                       This
Section O sets forth an agreement regarding Executive’s rights and
obligations upon a Change of Control (as defined below).  These provisions are intended to assure and
encourage in advance Executive’s continued attention and dedication to his
assigned duties and his objectivity during the pendency and after the
occurrence of a Change of Control.  These
provisions apply in lieu of, and expressly supersede, the provisions of Section K
regarding payments following termination of employment, if (i) termination
of employment is initiated by the Executive for Good Reason (as defined below)
within twenty-four (24) months after the Change of Control; or (ii) termination
of employment by Haggar occurs within twenty-four (24) months after the Change
of Control other than for Cause (a “Change of Control Termination”).  These provisions shall terminate and be of no
further force or effect following twenty-four (24) months after the Change of
Control.

 

2.                                       Upon
a Change of Control Termination, in addition to any benefit to which the
Executive is entitled under the Plan, Haggar shall pay Executive any accrued
and unpaid Basic Salary through the date of termination, and a lump sum
severance payment equal to 2.99 times the Executive’s “Base amount,” as defined
in Section 28OG of the Internal
Revenue Code of 1986, as amended (the “Code”). 
In addition, if it is determined that any benefits or payment by Haggar
to or for the benefit of Executive (a “Payment”) would be subject to the excise
tax imposed by Section 4999 of the Code, or any interest or penalties are
incurred by Executive with respect to such excise tax (collectively the “Excise
Tax”), then Executive shall be entitled to receive an additional payment (a “Gross-up
Payment”) in an amount such that, after payment by Executive of all taxes,
interest and penalties, including, without limitation, any income taxes and Excise
Tax imposed upon the Gross-up Payment, Executive retains an amount of the
Gross-up Payment equal to the Excise Tax imposed upon the Payments. All
determinations required to be made under this Section O. shall be made by
an independent national accounting firm selected by Haggar (the “Accounting
Firm”) which shall provide detailed supporting calculations to Haggar and the
Executive.  Any determination by the
Accounting Firm shall be conclusive and binding upon Haggar and the Executive.  Any Gross-up Payment determined shall be paid
by Haggar to the Executive within five (5) days of the receipt of the
determination.

 

(a)                                  As
a result of the uncertainty in the application of Section 4999 of the Code
at the time of the initial determination by the Accounting Firm hereunder, it
is possible that Gross-Up Payments which will not have been made by Haggar
should have been made (“Underpayment”), consistent with the calculations
required to be made hereunder.  In the
event that Haggar exhausts its remedies pursuant to subparagraph (b) and
the Executive thereafter is required to make a payment of any Excise Tax, the
Accounting Firm shall determine the amount of the Underpayment that has
occurred and any such Underpayment shall be promptly paid by Haggar to or for
the benefit of the Executive.

 

(b)                                 The
Executive shall notify Haggar in writing of any claim by the Internal Revenue
Service that, if successful, would require the payment by Haggar of the
Gross-Up Payment.  Such notification
shall be given as soon as practicable but no later than ten (10)

 

8

 

business days after the
Executive is informed in writing of such claim and shall apprise Haggar of the
nature of such claim and the date on which such claim is requested to be
paid.  The Executive shall not pay such
claim prior to the expiration of the 30-day period following the date on which
it gives such notice to Haggar (or such shorter period ending on the date that
any payment of taxes with respect to such claim is due).  If Haggar notifies the Executive in writing
prior to the expiration of such period that it desires to contest such claim,
the Executive shall:

 

(i)                                     give
Haggar any information reasonably requested by it relating to such claim;

 

(ii)                                  take
such action in connection with contesting such claim as Haggar shall reasonably
request in writing from time to time, including, without limitation, accepting
legal representation with respect to such claim by an attorney reasonably
selected by Haggar;

 

(iii)                               cooperate with Haggar in
good faith in order effectively to contest such claim;  and

 

(iv)                              permit
Haggar to participate in any proceedings relating to such claim;

 

provided, however, that
Haggar shall bear and pay directly all costs and expenses (including additional
interest and penalties) incurred in connection with such contest and shall
indemnify and hold the Executive harmless, on an after-tax basis, for any
Excise Tax or income tax (including interest and penalties with respect
thereto) imposed as a result of such representation and payment of costs and
expenses.  Without limitation of the
foregoing provisions of this subparagraph (b), Haggar shall control all
proceedings taken in connection with such contest and, at its sole option, may
pursue or forego any and all administrative appeals, proceedings, hearings and
conferences with the taxing authority in respect of such claim and may, at its
sole option, either direct the Executive to pay the tax claimed and sue for a
refund or contest the claim in any permissible manner, and the Executive agrees
to prosecute such contest to a determination before any administrative
tribunal, in a court of initial jurisdiction and in one or more appellate
courts, as Haggar shall determine;  provided,
however that if Haggar directs the Executive to pay such claim and sue for a
refund, Haggar shall advance the amount of such payment to the Executive, on an
interest-free basis and shall indemnify and hold the Executive harmless on an
after-tax basis, from any Excise Tax or income tax (including interest or
penalties with respect thereto) imposed with respect to such advance or with
respect to any imputed income with respect to such advance;  and further provided that any extension of
the statute of limitations relating to payment of taxes for the taxable year of
the Executive with respect to which such contested amount is claimed to be due
is limited solely to such contested amount. 
Furthermore, Haggar’s control of the contest shall be limited to issues
with respect to which a Gross-Up Payment would be payable hereunder and the
Executive shall be entitled to settle or contest, as the case may be, any other
issue raised by the Internal Revenue Service or any other taxing authority.

 

9

 

(c)                                  If,
after the receipt by the Executive of an amount advanced by Haggar pursuant to
subparagraph (b), the Executive becomes entitled to receive any refund with
respect to such claim, the Executive shall (subject to Haggar’s complying with
the requirements of subparagraph (b)), promptly pay to Haggar the amount of
such refund (together with any interest paid or credited thereon after taxes
applicable thereto).  If, after the
receipt by the Executive of an amount advanced by Haggar pursuant to
subparagraph (b), a determination is made that the Executive shall not be
entitled to any refund with respect to such claim and  Haggar does not notify the Executive in
writing of its intent to contest such denial of refund prior to the expiration
of 30 days after such determination, then such advance shall be forgiven and
shall not be required to be repaid and the amount of such advance shall offset,
to the extent thereof, the amount of Gross-Up Payment required to be paid.

 

3.                                       Upon
a Change of Control, Executive’s outstanding stock options, restricted stock
grants, Profit Sharing Program awards, and other benefits or incentive awards
subject to vesting schedules shall become 100% vested and exercisable .

 

4.                                       Upon
a Change of Control Termination, and for a period of one (1) year after
such termination, Executive shall be entitled to continued benefits for himself
and/or his family at Haggar’s expense at least equal to those which would have
been provided to them under the health and welfare benefit plans provided by
Haggar prior to the Change of Control.

 

5.                                       Unless
otherwise provided in this Agreement, any severance or other payment payable to
Executive under this Section shall be paid within ten (10) days after
the date of termination.  Severance or
other payments shall not be discounted by reason of the fact that the time of
payment is accelerated in advance of the ordinary course of payments under this
Agreement.

 

6.                                       This provision shall not affect Executive’s
participation in, or determination of, distributions and vested rights under
any pension, profit-sharing, insurance, performance unit plan or other employee
benefit plan of Haggar to which Executive is entitled pursuant to the terms of
such plans, except for the acceleration of vested rights pursuant to this
Section.

 

7.                                 For the purposes of this Agreement, a “Change
of Control” shall be deemed to have taken place if one or more of the following
occurs: (i) a merger or consolidation of Haggar Corp. or the Company with
or into another entity, or the exchange of securities (other than a merger or
consolidation) by the holders of the voting securities of Haggar Corp. or the
Company and the holders of voting securities of any other entity, in which the
shareholders of Haggar Corp. or the Company 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 Haggar Corp. or the Company, (iii) a transfer of all or
substantially all of the assets of Haggar Corp. or the Company in one
transaction or a series of related transactions to one or more other persons or
entities, (iv) a transaction or series of transactions that results in any
entity, “Person” or “Group” (as defined below), becoming the beneficial owner,
directly or indirectly, of securities of Haggar Corp. or the Company
representing

 

10

 

more than 50% of
the combined voting power of Haggar Corp.’s or the Company’s then outstanding securities,
or (v) during any period commencing on or after the date of the Executive
Employment Agreement, individuals who at the beginning of the period
constituted Haggar Corp.’s Board of Directors cease for any reason to
constitute at least a majority, unless the election of each director who was
not a director at the beginning of the period has been approved in advance by
directors representing at least two-thirds (2/3) of the directors then in
office who were directors at the beginning of the period; 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 or Haggar Corp. or Company (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 Haggar Corp., the Company, or any Subsidiary, (B) one
or more of the “executive officers” of Haggar Corp. 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, Jr.
or their lineal descendants, or any entity, Person or Group under their
control, or (D) one or more members of the “senior management” of Haggar
Corp. or the Company (as defined by the Chief Executive Officer of the Company)
that held such positions prior to the transaction or series of transactions, or
any entity, Person or Group under their control (collectively, the “Excluded
Persons”).  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.

 

8.                                       For
purposes of this Agreement, “Good Reason” means

 

(i)                                     the assignment of the Executive of any
responsibilities or duties inconsistent in any respect with the Executive’s
position (including status, offices, titles and reporting requirements), or any
other action by the Company which results in a diminution in such position,
authority, duties or responsibilities, excluding for this purpose an isolated,
insubstantial or inadvertent action not taken in bad faith and which is
remedied by the Company within 30 days after receipt of written notice thereof
given by the Executive;

 

(ii)                                  any failure by the Company to comply with
any material provision of this Agreement, including the requirement to pay any
compensation or provide any benefits to which the Executive is entitled
pursuant to this Agreement, other than an isolated, insubstantial or
inadvertent failure not occurring in bad faith and which is remedied by the Company
within 30 days after receipt of written notice thereof given by the Executive;

 

(iii)                                the Company requiring
Executive to be based at any office or location other than the location where
the Executive is employed as of the date of this Agreement or any office or
location more than 20 miles from such location; or

 

11

 

(iv)                               any
purported termination by the Company of the Executive’s employment other than
for Cause.

 

P.                                      Notices.   All notices that may, or are required to, be
given pursuant to this Agreement shall be in writing and shall be served
properly if personally delivered or mailed by registered or certified mail,
postage pre-paid, addressed as follows:

 

	
  HAGGAR:

  	
   

  	
  President and
  Chief Operating Officer

  
	
   

  	
   

  	
  Haggar Clothing
  Co.

  
	
   

  	
   

  	
  11511 Luna Road

  
	
   

  	
   

  	
  Dallas, Texas
  75234

  
	
   

  	
   

  	
   

  
	
  Copy to:

  	
   

  	
  General Counsel

  
	
   

  	
   

  	
  Haggar Clothing
  Co.

  
	
   

  	
   

  	
  11511 Luna Road

  
	
   

  	
   

  	
  Dallas, Texas
  75234

  
	
   

  	
   

  	
   

  
	
  EXECUTIVE:

  	
   

  	
  John W. Feray

  
	
   

  	
   

  	
  706 East
  Peninsula

  
	
   

  	
   

  	
  Coppell, Texas
  75019

  

 

or such other address or
addresses as any such party may from time to time designate by notice in
writing to the others.  Notice and
communications shall be effective when actually received by the addressee.

 

Q.                                   Entire
Agreement;  Amendments.   This Agreement (together with all
benefit or plan documents referred to in this Agreement) constitutes the entire
understanding between the parties with respect to the subject matter hereof,
superseding all negotiations, prior discussions and agreements, written or
oral.  This Agreement may not be amended
except in writing executed by both parties.  
In the event of an inconsistency between the provisions of this
Agreement and any benefit or plan document referred to in this Agreement, the
provision conferring the greater benefit upon Executive shall control.

 

R.                               Further
Assurance.   Each of the parties
hereto shall do or cause to be made, done and executed, all such further and
other things, acts, deeds, documents, conveyances and assurances as may be
necessary or reasonably required to carry out the intended purpose of this
Agreement fully and effectually.

 

S.                                Construction.   Where the singular or masculine are used
in this Agreement, the same shall, be construed as the plural or feminine or
neuter and vice versa, where the context so requires or permits.

 

12

 

T.                                Headings.   The headings of the Sections of this
Agreement are inserted for purposes of convenience of reference only and. shall
not affect the construction or meaning of any provision of this Agreement.

 

U.                                Severability.   If any covenant or provision of this
Agreement is determined to be void or unenforceable, in whole or in part, it
shall not be deemed to affect or impair the validity of any other covenant or
provision of the remaining part or parts thereof.

 

V.                                    Survival.   The provisions of this Agreement set
forth in Sections F, G, H, I, J, K, M and O hereof shall survive the
termination of the Executive’s employment under this Agreement.

 

W.                                Good
Faith.   The parties agree to
conduct themselves in good faith and deal fairly with each other in the employment relationship created by this Agreement and to
refrain from action which injures either party’s right to receive the benefits
hereof.

 

X.                               Governing
Law.   This Agreement shall be
governed, construed and enforced in accordance with the laws of the State of
Texas, without giving effect to its rules governing choice of law.

 

Y.                                Professional Fees and Expenses.   Other than with respect to claims brought by
the Executive against, or defenses by the Executive of any claim of, the
Company with respect to this Agreement that were determined to have been made
or asserted by the Executive in bad faith or frivolously, the Company agrees to
pay all reasonable legal and professional fees and expenses that the Executive
may reasonably incur as a result of any contest by the Executive, by the
Company or others of the validity or enforceability of, or liability under, any
provision of this Agreement (including as a result of any contest by the
Executive about the amount of any payment under this Agreement).

 

Z.                                     Employee Acknowledgment.   THE EMPLOYEE REPRESENTS THAT HE HAS HAD
AMPLE OPPORTUNITY TO REVIEW THIS AGREEMENT, AND THE EMPLOYEE ACKNOWLEDGES THAT
HE UNDERSTANDS THAT THIS AGREEMENT CONTAINS IMPORTANT CONDITIONS OF HIS
EMPLOYMENT AND THAT IT EXPLAINS POSSIBLE CONSEQUENCES, BOTH FINANCIAL AND
LEGAL, IF THE EMPLOYEE BREACHES THE AGREEMENT.

 

[THE REMAINDER OF THIS PAGE IS

INTENTIONALLY LEFT BLANK.]

 

13

 

AS
WITNESS the hands of a duly authorized officer of Haggar and
of the Executive the day and year first before written, which is the Effective
Date.

 

	
   

  	
  EXECUTIVE

  
	
   

  	
   

  
	
   

  	
  /s/ John W.
  Feray

  	
   

  
	
   

  	
  Name:  John W. Feray

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HAGGAR
  CLOTHING CO.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Frank D. Bracken

  	
   

  
	
   

  	
  Name: Frank D.
  Bracken

  
	
   

  	
  Title:  President and Chief Operating Officer

  
				

 

14

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