SETTLEMENT AGREEMENT

THIS SETTLEMENT AGREEMENT (the Agreement) is made as of February 17, 2003, by and among Thomas G. Kahn (Kahn), Donald Kahn, Irving Kahn, Kahn Brothers & Co., Inc., a New York corporation (Kahn Brothers), and the Kahn Brothers & Co. Profit Sharing Plan & Trust, a trust organized under the laws of New York (the Trust and, collectively with the aforementioned parties, the Investors), and Haggar Corp., a Nevada corporation (the Company).  Certain terms used herein are defined in Section V.7.

RECITALS

WHEREAS, each Investor is the record owner or beneficial owner (as defined in Section V.7) of certain shares of common stock, par value $0.10 per share, of the Company (including any securities convertible into, or exercisable or exchangeable for, such common stock, Common Stock);

WHEREAS, the Trust and its co-trustees have notified the Company that they wish to nominate certain persons for election to the Board of Directors of the Company (the Board) at the Companys Annual Meeting of Stockholders to be held in 2003 (the Annual Meeting);

WHEREAS, Mark E. Schwarz (Schwarz), the Trust, Kahn and Kahn Brothers have filed a preliminary proxy statement with the Securities and Exchange Commission (the SEC) regarding the solicitation of proxies to be used at the Annual Meeting to elect the Trusts nominees as members of the Board;

WHEREAS, the Investors have determined that the best interests of the Company and the Investors would be served by (i) the Investors not engaging in a solicitation of proxies for the Annual Meeting for the election of the nominees of the Trust and its co-trustees in opposition to nominees of the Board (a Proxy Contest), (ii) the appointment of Kahn to the Board as provided herein and (iii) the other arrangements set forth herein; and

WHEREAS, the Company has determined that the best interests of the Company and its stockholders would be served by (i) the Investors not engaging in a Proxy Contest in connection with the Annual Meeting, (ii) the appointment of Kahn to the Board as provided herein and (iii) the other arrangements set forth herein.

NOW, THEREFORE, in consideration of the promises, mutual representations, warranties, covenants and agreements herein contained, and the full, complete and timely performance of each and every one of such covenants and agreements, time being of the essence, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by each of the parties hereto, and intending to be legally bound hereby, each of the parties hereby agrees as follows:

I.

REPRESENTATIONS AND WARRANTIES

1.                                       Representations and Warranties of the Investors.  The Investors, jointly and severally, represent and warrant to the Company as follows:

a.                                       Each Investor who is a natural person is competent and has all requisite power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby.  Each Investor which is not a natural person has been duly organized, and is validly existing and in good standing, under the laws of its jurisdiction of formation, and has all requisite power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby.

b.                                      This Agreement has been duly and validly executed and delivered by each Investor or by the principals of such Investor and, assuming due and valid execution and delivery by the Company, constitutes a legal, valid and binding agreement of such Investor, enforceable against such Investor in accordance with its terms, subject as to enforceability to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws affecting creditors rights and remedies generally and to general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity).  The performance of the terms of this Agreement shall not conflict with, constitute a violation of, or require any notice or consent under, any certificate or articles of incorporation, limited partnership agreement, trust agreement, bylaws or any other agreement or instrument to which such Investor is a party or by which such Investor is bound, and shall not require any consent, approval or notice under any provision of any judgment, order, decree, statute, law, rule or regulation applicable to such Investor or such Investors shares of Common Stock, except as may be required by federal and state securities laws.

c.                                       There are no other persons (as defined in Section V.7) who, by reason of their personal, business, professional or other arrangement, relationship or affiliation with such Investor, whether written or oral and whether existing as of the date hereof or in the future, have agreed, explicitly or implicitly, to take any action on behalf of or in lieu of each Investor that would otherwise be prohibited by this Agreement.

d.                                      As of the date hereof, the Investors and their affiliates and associates (as such terms are defined in Section V.7) beneficially own an aggregate of 837,269 shares of Common Stock (the Investor Shares), free and clear of all liens and encumbrances, and no other person has any beneficial ownership interest in the Investor Shares other than persons who (i) are not affiliates or associates of an Investor and (ii) have a financial or investment advisory agreement with an Investor or any of the Other Kahn Entities (as defined in Section V.7).  Amendment No. 3 to Schedule 13D dated November 27, 2002, filed with the SEC

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