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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM S-8
REGISTRATION STATEMENT
Under
The Securities Act of 1933
--------------------------
HARTMARX CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware 36-3217140
(State of incorporation) (I.R.S. Employer Identification No.)
101 North Wacker Drive, Chicago, Illinois 60606
(Address of Principal Executive Offices) (Zip Code)
THE HARTMARX SAVINGS-INVESTMENT PLAN
(Full title of Plan)
MARY D. ALLEN
Executive Vice President,
General Counsel and Secretary
Hartmarx Corporation
101 North Wacker Drive
Chicago, Illinois 60606
312/372-6300
(Name, address and telephone number of agent for service)
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CALCULATION OF REGISTRATION FEE
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Proposed Maximum Amount of
Title of Each Class of Securities Amount to be Offering Price Per Proposed Maximum Registration
Being Registered Registered (1) Share (2) Aggregate Offering Price (2) Fee
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Common Stock, par value $2.50
per share (including Preferred
Stock Purchase Rights) 250,000 $5.44 $1,360,000 $468.97
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(1) The number of shares being registered represents the maximum number of
shares that may be purchased by employees with employee contributions from
time to time under the Plan until a new registration statement becomes
effective. This Registration Statement also covers the stock purchase
rights (the "Rights") of the Registrant which are presently attached to and
trade with the Common Stock of the Registrant. Any value attributable to
the Rights is reflected in the market price of the Common Stock. Such
additional securities are also being registered hereby as may become
issuable under the Plan as a result of applicable anti-dilution provisions.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) under the Securities Act of 1933 on the basis of
the average of the high and low prices of the Common Stock on the New York
Stock Exchange on May 1, 1996.
In addition, pursuant to Rule 416(c) under the Securities Act of 1933, this
Registration Statement also covers an indeterminate amount of interests to be
offered or sold pursuant to the Plan described herein.
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PURSUANT TO RULE 429, THE PROSPECTUS WHICH IS PART OF THIS REGISTRATION
STATEMENT WILL BE ALSO BE USED IN CONNECTION WITH SECURITIES REGISTERED PURSUANT
TO REGISTRATION STATEMENT NOS. 2-32692, 2-44774, 2-53426, 2-64613, 2-83433,
33-6194 and 33-42202.
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<PAGE>
PROSPECTUS
LOGO
----------------
$1,375,000 INTERESTS IN THE PLAN
AND
----------------
HARTMARX CORPORATION
COMMON STOCK
$2.50 PAR VALUE
----------------
As described herein, Hartmarx Corporation ("Hartmarx" or the "Company") is
offering to employees of Hartmarx and participating subsidiary and affiliated
companies (collectively, the "Employers") an opportunity to participate in The
Hartmarx Savings-Investment Plan (the "Plan") through pre-tax and after-tax
contributions from earnings, with the funds so accumulated, together with
certain Employer contributions, to be invested in shares of Hartmarx common
stock, $2.50 par value per share ("Common Stock"), together with the stock
purchase rights (the "Rights") attached thereto (the "Stock Fund"), except to
the extent that employees direct investment of their contributions to the
Hartmarx GIC Fund, Vanguard Money Market Reserves--Prime Portfolio, Vanguard
Fixed Income Securities Fund--GNMA Portfolio, Vanguard STAR Fund, Vanguard
Index Trust--500 Portfolio, Vanguard/PRIMECAP Fund or Vanguard International
Growth Portfolio.
----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE AC-
CURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
----------------
THE DATE OF THIS PROSPECTUS IS MAY 1, 1996.
<PAGE>
HARTMARX CORPORATION
101 NORTH WACKER DRIVE
CHICAGO, ILLINOIS 60606
TELEPHONE: 312 372-6300
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS NOT CONTAINED IN OR INCORPORATED BY REFERENCE IN THIS
PROSPECTUS OR IN THE REGISTRATION STATEMENTS IN CONNECTION WITH THE OFFER MADE
BY THIS PROSPECTUS; AND SUCH INFORMATION OR REPRESENTATIONS NOT CONTAINED OR
INCORPORATED BY REFERENCE HEREIN OR THEREIN MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS IS NOT AN OFFERING OF THE
SECURITIES TO WHICH THIS PROSPECTUS RELATES IN ANY JURISDICTION TO ANY PERSON
TO WHOM IT IS UNLAWFUL TO MAKE ANY SUCH OFFER IN SUCH JURISDICTION. NEITHER
THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
INFORMATION HEREIN SINCE THE DATE HEREOF OR THAT THERE HAS BEEN NO CHANGE IN
THE AFFAIRS OF THE COMPANY SINCE SUCH DATE.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements, and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements, and other information may be inspected and copied at the public
facilities maintained by the Commission at Room 1024, Judiciary Plaza, 450
Fifth Street, N.W., Washington, D.C. 20549; Seven World Trade Center, 13th
Floor, New York, New York 10048; and the Northwestern Atrium Center 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such material
may be obtained at the prescribed rates from the Public Reference Section of
the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549. Such
reports, proxy statements and other information concerning the Company may
also be inspected at the offices of the New York Stock Exchange, Inc., 20
Broad Street, New York, New York 10005, or the Chicago Stock Exchange,
Incorporated, 440 South LaSalle Street, Chicago, Illinois 60605. The common
stock of the Company, par value $2.50 per share, is listed on each such
exchange.
The Company has filed with the Commission a registration statement on Form
S-8 (the "Registration Statement") under the Securities Act of 1933 (the
"Securities Act") with respect to the securities offered hereby. This
Prospectus does not contain all of the information set forth in the
Registration Statement, certain items of which are contained in exhibits to
the Registration Statement as permitted by the rules and regulations of the
Commission. Statements made in this Prospectus as to the contents of any
contract, agreement or other document referred to are not necessarily
complete; with respect to each such contract, agreement or other document
filed as an exhibit to the Registration Statement, reference is made to the
exhibit for a more complete description of the matter involved, and each such
statement shall be deemed qualified in its entirety by such reference. For
further information pertaining to the Company and the securities offered
hereby, reference is made to the Registration Statement and the exhibits
thereto, which may be examined or copied at the locations described above.
Any statement contained in a document incorporated or deemed to be
incorporated herein by reference or contained this Prospectus, shall be deemed
to be modified or superseded for purposes of this Prospectus to the extent
that a statement contained herein or in any subsequently filed document which
also is or is deemed to be incorporated herein by reference modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of
this Prospectus.
THE COMPANY WILL FURNISH WITHOUT CHARGE TO EACH PERSON TO WHOM THIS
PROSPECTUS IS DELIVERED, UPON WRITTEN OR ORAL REQUEST, A COPY OF ANY OR ALL OF
THE DOCUMENTS DESCRIBED UNDER "INFORMATION INCORPORATED BY REFERENCE", OTHER
THAN EXHIBITS TO SUCH DOCUMENTS. REQUESTS SHOULD BE ADDRESSED TO: MRS. KAY C.
NALBACH, ASSISTANT SECRETARY, HARTMARX CORPORATION, 101 NORTH WACKER DRIVE,
CHICAGO, ILLINOIS 60606, TELEPHONE 312 372-6300.
<PAGE>
TABLE OF CONTENTS
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PAGE NO.
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THE PLAN............................................................... 1
Who May Participate.................................................. 2
Employee Contributions............................................... 2
Employer Matching Contributions...................................... 3
Vesting.............................................................. 3
ADMINISTRATION OF THE PLAN............................................. 4
INVESTMENT OF CONTRIBUTIONS............................................ 4
Stock Fund........................................................... 5
GIC Fund............................................................. 6
Vanguard Money Market Fund........................................... 6
Vanguard GNMA Fund................................................... 6
Vanguard STAR Fund................................................... 7
Vanguard 500 Portfolio Fund.......................................... 7
Vanguard PRIMECAP Fund............................................... 7
Vanguard International Growth Fund................................... 7
DISTRIBUTIONS AND WITHDRAWALS.......................................... 7
Retirement........................................................... 7
Death or Disability.................................................. 8
Termination of Employment............................................ 8
Additional Distribution Rules........................................ 8
Withdrawals.......................................................... 8
Loans................................................................ 9
Rollovers to Other Qualified Plans................................... 10
Forfeitures.......................................................... 10
FEDERAL TAX EFFECTS TO PARTICIPATING EMPLOYEES......................... 10
Total Distributions.................................................. 10
Partial In-Service Distributions..................................... 11
In-Kind Distributions................................................ 11
STOCK PURCHASE RIGHTS.................................................. 11
INFORMATION INCORPORATED BY REFERENCE.................................. 12
LEGAL OPINIONS......................................................... 13
EXPERTS................................................................ 13
INDEMNIFICATION OF DIRECTORS AND OFFICERS.............................. 13
</TABLE>
THE PLAN
The Plan was established by Hart Schaffner & Marx ("HSM"), pursuant to the
authorization of its Board of Directors on September 26, 1968, and commenced
operation in 1969. The Plan was adopted by Hartmarx and its name changed to
"The Hartmarx Savings-Investment Plan" after Hartmarx became the parent of HSM
pursuant to an Agreement and Plan of Merger and Reorganization approved by the
shareholders of HSM on April 13, 1983. The purpose of the Plan is to enable
eligible employees of the Employers to provide themselves with retirement
security through a systematic savings program and to provide those employees
with an opportunity to acquire an interest in Hartmarx Common Stock. The Board
of Directors of Hartmarx may alter, amend, modify, revoke or terminate the
Plan at any time. The Plan is a "defined contribution plan" under the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), and is subject
to the principal protective provisions of Title I of ERISA. A "Plan Year"
under the Plan is a calendar year.
The names of the Employers participating in the Plan are listed in the
Appendix to this Prospectus. Hartmarx also maintains a pension plan known as
The Hartmarx Retirement Income Plan (the "Retirement Income Plan").
<PAGE>
Each active employee who participates in this Plan also participates in the
Retirement Income Plan, at no additional cost to the employee.
WHO MAY PARTICIPATE
The Plan is generally open to any active employee of any Employer who has
worked at least 1,000 hours in a specified 12 month period following
commencement of employment, is at least 21 years old, is not a Leased Employee
(as that term is defined in the Plan) and is not a participant in some other
non-governmental retirement plan (other than the Retirement Income Plan or the
Hartmarx Employee Stock Ownership Plan, the "ESOP") the cost of which is borne
in full or in part by the Employers.
EMPLOYEE CONTRIBUTIONS
An employee who is eligible to be a Participant in the Plan may make annual
contributions to the Plan of up to 16 percent, in whole percentages only, of
his annual earnings as an employee of an Employer ("Earnings"), subject to a
$150,000 limitation, effective 1994, as adjusted for cost of living increases.
A Participant's contributions which do not exceed 6 percent of Earnings are
known as "Matched Contributions". Participant contributions in excess of 6
percent of Earnings are referred to as "Voluntary Contributions" and are not
subject to "Employer Matching Contributions", described below. Participant
contributions may be either pre-tax contributions, which reduce Earnings
subject to Federal (and state) income taxes, or after-tax contributions, which
do not so reduce such Earnings; however, the Plan provides that the first 1
percent of Earnings which each Participant contributes will be an after-tax
contribution. A Participant shall designate, in a salary reduction agreement or
form, the percentage he elects to contribute or have his Employer contribute to
the Plan on his behalf and the designation of such percentage as pre-tax or
after-tax. The Internal Revenue Code of 1986, as amended (the "Code"), limits
pre-tax contributions to a maximum amount (effective January 1, 1996, the
maximum amount is $9,500) which is subject to adjustment for cost of living
increases. In certain circumstances, the maximum amount of pre-tax and after-
tax contributions applicable to highly compensated Participants in the Plan may
be less than the maximum permitted for other Participants in order to comply
with certain non-discrimination provisions required under the Code.
Contributions to the Plan are made through regular payroll deductions forwarded
to Vanguard Fiduciary Trust Company (the "Recordkeeper" or "Vanguard"), as
designee of CTC Illinois Trust Company, the Trustee under the Plan (the
"Trustee"), and are generally remitted to Vanguard on a monthly basis.
A Participant may change his contribution percentage, subject to certain
limitations as more fully described under the caption "INVESTMENT OF
CONTRIBUTIONS", with respect to Earnings not yet received. A Participant's
contribution percentage change (or its designation as pre-tax or after-tax)
shall be effective as soon as practicable after the amended salary reduction
agreement or form is received by the Plan Administrator. Under no circumstances
shall a salary reduction agreement or form, or change to a salary reduction
agreement or form (or a change in designation as pre-tax or after-tax) be
adopted retroactively. A Participant may discontinue his contributions at any
time without terminating his interest in the Plan, and such contributions may
be resumed by the Participant as soon as practicable following the Plan
Administrator's receipt of a new salary reduction agreement or form. A
Participant may not continue to contribute to the Plan after his retirement
date or after his employment is terminated for any reason, or during any period
in which he participates in certain non-governmental retirement pension plans
(other than the Retirement Income Plan or the ESOP) paid for in full or in part
by the Employers. Contributions can continue during a temporary absence for as
long as a Participant receives Earnings from one of the Employers, but must
stop when these Earnings cease.
Vanguard is also authorized to receive amounts known as "eligible rollover
distributions" which are payable to Participants in the Plan from another
qualified retirement plan, including a plan which has been terminated or under
which contributions have been completely discontinued. Any of these amounts may
be transferred to the Plan only if permitted by the Plan Administrator and (i)
such amounts may be accepted by Vanguard only on the date designated by the
Plan Administrator for such purpose; (ii) the amounts of such eligible rollover
distributions shall not exceed the portion of such distribution which is
includable in gross
2
<PAGE>
income; and (iii) the transfer must be made within sixty (60) days following
the date the Participant was entitled to receive such eligible rollover
distribution. Eligible rollover distributions are initially invested in the
Stock Fund (described below).
EMPLOYER MATCHING CONTRIBUTIONS
Effective December 31, 1988, upon Hartmarx' adoption of the ESOP, which
contained provisions governing the allocation, distribution and calculation of
the amount of employer contributions that were substantially the same as the
provisions governing the allocation, distribution and calculation of Employer
Matching Contributions under the Plan, all obligations of the Employers to make
any future Employer Matching Contributions to the Plan ceased. All such
contributions are now made pursuant to the terms of the ESOP, which provides
that the Employers contribute, out of current or accumulated earnings, an
amount equal to (i) 25 percent of the first 1 percent of Earnings contributed
by a Participant, and (ii) 5 percent, or such greater percentage as the Company
in its sole discretion shall determine, of a Participant's remaining aggregate
Matched Contributions under this Plan (the "Employer Matching Contributions").
These contributions may be made in cash or in shares of Common Stock (on the
basis of (i) their fair market value at the time such contributions are made or
treated as having been made, or (ii) the Employer's cost of the Common Stock,
whichever is less). Generally, Employer Matching Contributions are paid to
Vanguard on a monthly basis, although Employers have the right under the Plan
to make the Employer Matching Contributions for any year at any time before the
time prescribed by law for filing Hartmarx' Federal income tax return for the
taxable year within which such Plan Year ends, including extensions. If an
Employer's current or accumulated earnings are insufficient to make such
Employer Matching Contributions, then such contributions may be made by any
Employer which has adopted the Plan and shall be deemed to have been made by
the Employer otherwise prevented from making such contribution.
All Employer Matching Contributions are invested in the Stock Fund.
Participants age 55 and older may diversify the Employer Matching Contributions
by directing that all or part of such Participant's ESOP account, invested in
the Stock Fund, be transferred to other investments alternatives available
under the Plan. Employer Matching Contributions will continue to be made
through the ESOP in Common Stock, but Participants age 55 and older may
diversify that investment into other available investments as they deem
appropriate and according to the transfer rules of the Plan. The above
diversification option does not apply to Employer Matching Contributions made
before 1989 that are accumulated in the Plan. The pre-1989 Employer Matching
Contributions remain invested in the Stock Fund and may not be transferred by
Participants.
VESTING
Employer Matching Contributions, and the earnings on the Employer Matching
Contributions held by the ESOP and this Plan, are credited to the accounts of
Participants in the manner set forth under "INVESTMENT OF CONTRIBUTIONS".
Generally, these contributions and the related earnings "vest" (that is, the
Participant has a nonforfeitable right to them) in one of several ways.
Participants are always 100 percent vested in their contributions and the
earnings thereon. A Participant becomes 100 percent vested in Employer Matching
Contributions, and earnings thereon, regardless of the Participant's "Years of
Vesting Service" (defined below) upon (i) attaining age 65, (ii) the date of
his death, (iii) the occurrence of certain specified events deemed to be a
"Change in Control of the Company", (iv) election of early retirement under the
Retirement Income Plan, or (v) termination of the Plan.
Participants also vest based upon the number of the Participant's Years of
Vesting Service in the Plan. A Year of Vesting Service is defined as a Plan
Year during which an employee who is at least 18 years old completes at least
1,000 hours of service and, when eligible to do so, is making contributions to
the Plan. A Participant becomes 33 1/3 percent vested in Employer Matching
Contributions and related earnings after three Completed Years of Vesting
Service, 66 2/3 percent vested after four Completed Years of Vesting Service,
and fully (or 100 percent) vested after five Years of Vesting Service. A
"Completed Year of Vesting Service" is a full 12 consecutive month period
during which a Participant completes at least 1,000 hours of service and is
making contributions to the Plan when eligible to do so.
3
<PAGE>
ADMINISTRATION OF THE PLAN
Effective July 11, 1995, a Plan Administration Committee (the "Plan
Committee") was appointed by the Board of Directors of the Company to be the
Plan Administrator responsible for the general administration of the Plan and
is a "Fiduciary" under the Plan. Prior to this date, Hartmarx was the Plan
Administrator. The Plan Committee may establish rules and regulations for the
administration of the Plan and the transaction of the Plan's business. The Plan
Committee shall cause distributions to be made to Participants and shall cause
to be maintained the records and accounts necessary to show the contributions
made by each Participant, the separate contributions made by Hartmarx and each
other Employer which has adopted the Plan, the credit balance in the accounts
of each Participant, the vested interest of each Participant in Employer
Matching Contributions, and distributions made to each Participant.
No officer or employee of Hartmarx, nor any member of the Plan Committee,
receives any compensation from the assets of the Plan. All costs and expenses
of administration of the Plan, including fees, brokerage, commissions, transfer
taxes and other charges incurred by the Trustee or Vanguard are borne by the
Employers, except to the extent (i) paid out of forfeitures not otherwise
applied to reduce Employer Matching Contributions, or (ii) charged to the Plan.
Fees associated with loans are borne by the Participants obtaining the loans.
The Trustee under the Plan is CTC Illinois Trust Company, 209 West Jackson
Boulevard, Chicago, Illinois 60606.
Vanguard Fiduciary Trust Company (the "Recordkeeper" or "Vanguard"), Vanguard
Financial Center, Valley Forge, Pennsylvania 19482, is the recordkeeper for the
Plan, and pursuant to a Service Agreement among Hartmarx, the Trustee and
Vanguard, Vanguard is also the custodian of all funds in the Plan and provides
all recordkeeping, participant accounting, benefit payment and tax reporting
services.
A copy of the Plan was filed with the Commission on May , 1996, as an
exhibit to the Company's registration statement on Form S-8, and is hereby
incorporated by this reference into this Prospectus. The foregoing description
of the Plan does not purport to be complete and is qualified in its entirety by
reference to the Plan documents. Copies of the Plan documents may be obtained
from the Plan Administrator upon written request to Plan Administration
Committee, Hartmarx Corporation, 101 North Wacker Drive, Chicago, Illinois
60606.
INVESTMENT OF CONTRIBUTIONS
Participant contributions are transmitted to Vanguard and invested in
accordance with a Participant's investment instructions in one or more
investment options made available by the Plan Administrator. As of the date
hereof, the investment options available to Participants are: the Hartmarx
Stock Fund ("Stock Fund"); the Hartmarx GIC Fund ("GIC Fund"); the Vanguard
Money Market Reserves--Prime Portfolio ("Vanguard Money Market Fund"); the
Vanguard Fixed Income Securities Fund--GNMA Portfolio ("Vanguard GNMA Fund");
the Vanguard STAR Fund ("Vanguard STAR Fund"); the Vanguard Index Trust--500
Portfolio ("Vanguard 500 Portfolio Fund"); the Vanguard/PRIMECAP Fund
("Vanguard PRIMECAP Fund"); and the Vanguard International Growth Portfolio
("Vanguard International Growth Fund"). All Employer Matching Contributions are
invested in the Stock Fund and Vanguard may temporarily hold in cash or in
certain bank deposits payable on demand, corporate demand notes or money market
funds, funds needed for pending investments, distributions, loans to
Participants or other disbursements.
A Participant may change his instructions as to the investment of his future
contributions, and may also change the investment of the total amounts already
accumulated in his accounts through contributions he has previously made.
Changes in investment direction may be made once each month, up to 12 times per
year. Transfers from one fund to another may be made as often as once each
month, up to 12 times per year, however, transfers out of the GIC Fund into the
Stock Fund, Vanguard 500 Portfolio Fund, Vanguard STAR Fund,
4
<PAGE>
Vanguard PRIMECAP Fund or the Vanguard International Growth Fund may be made
only once each calendar quarter and must remain invested in such funds for at
least ninety (90) days before any subsequent transfer into the Vanguard GNMA
Fund or the Vanguard Money Market Fund. Up to 25 percent of a Participant's GIC
Fund balance may be transferred directly into the Vanguard GNMA Fund or the
Vanguard Money Market Fund, but only once each year, in January. However, if a
Participant's GIC Fund balance is $500 or less, the entire balance may be
transferred to other investment options, but only in January of any year.
A Participant may determine his investment option allocation by specifying
what percentage of his contributions is to be invested in the various
investment options. A participant's entire contribution is considered as a
whole (100 percent) and the Participant may designate that any percentage of
his contribution (from 1 percent to 100 percent, in whole percentages only) be
invested in any of the available investment options.
In accordance with the directions of the Plan Administrator, the Recordkeeper
maintains the following separate accounts in the name of each Participant:
Employee Pre-Tax Contribution Account, Employee After-Tax Contribution Account
and Employer Matching Contribution Account, which accounts reflect the
contributions made by or on behalf of the Participant and the earnings, losses
and expenses allocated thereto. In addition, the Recordkeeper maintains a
Rollover Contribution Account with respect to each Participant to record any
rollover contributions to the Plan on behalf of the Participant, and the
earnings, losses and expenses related thereto. The Recordkeeper also maintains
subaccounts to distinguish a Participant's Matched Contributions from his
Voluntary Contributions, and the earnings, losses and expenses allocated
thereto.
Participant account valuations are updated on a daily basis by the
Recordkeeper and each Participant is notified of the credit balance in his
accounts as of the close of each quarterly period ending March 31, June 30,
September 30 and December 31, as soon as practicable after the end of such
quarterly period. In addition Participants may obtain fund balance information,
reallocate investments or change investment direction through a toll free
telephone number maintained by Vanguard. Except under certain limited
circumstances permitted by the Plan, these accounts are not subject to
assignment, transfer, encumbrance or alienation, nor are they liable for or
subject to debts or liabilities of the Participant or beneficiaries.
STOCK FUND
Contributions directed to the Stock Fund are invested in an unsegregated fund
comprised of Hartmarx Common Stock. At present such purchases are made by
Vanguard from time to time by direct purchase from Hartmarx. Vanguard may also
accomplish such purchases through matching transactions, on the basis of
prevailing market prices, in connection with any dispositions of shares of
Common Stock held in this Fund which might otherwise be required by reason of
other Participants leaving the Plan or changing their investment directions.
All Employer Matching Contributions are invested in the Stock Fund.
Dividends, if any, and other distributions (other than in shares of Common
Stock) accruing to the Stock Fund are allocated among the accounts by the
Recordkeeper. Such accounts are then charged for shares of Common Stock
purchased by Vanguard (with both Participants' contributions and Employers'
contributions) and credited to such accounts based upon 90 percent (100 percent
in the case of eligible rollover distributions or transfers from other
investment funds available under the Plan) of the average high and low trading
price of the Common Stock on the day such shares are purchased (or treated as
having been purchased) by Vanguard. Stock dividends, if any, or other
distributions of Common Stock are directly credited to Participants' accounts
to the extent that they relate to shares represented by those accounts at that
time, and otherwise go to reduce the average purchase price of Common Stock
purchased during the year.
Participants do not have any rights as to specific shares held in the Stock
Fund nor are they entitled to any of the rights as stockholders, except that
they are able to instruct the Trustee confidentially as to the voting of the
number of shares held in their account at any annual or special meeting of
stockholders of Hartmarx and, subject to applicable laws, as to the tender or
exchange of such shares in response to a tender or exchange offer for the
Common Stock. The Trustee is to vote any shares for which it has not received
voting instructions, or
5
<PAGE>
which have not yet been credited to accounts of Participants, proportionately,
in the same manner as those shares for which it has received instructions. The
Trustee may not tender or exchange shares for which it does not receive
instructions; however, shares which have not yet been credited to accounts of
Participants can be tendered or exchanged, proportionately, in the same manner
as those shares for which the Trustee has received instructions.
The Plan does not provide any restriction on the sale of shares, if any,
acquired pursuant to a distribution from the Plan. Participants who receive
such a distribution who are "affiliates" (as defined by Rule 405 under the
Securities Act) of the Company, their donees, and certain family members,
trusts, estates and other entities, may sell such shares only pursuant to the
registration requirements of the Securities Act or an applicable registration
exemption such as provided by Rule 144 under the Securities Act. It is
advisable for such Participants to consult legal counsel concerning the
securities law implications of the acquisition of shares, or disposition of
shares acquired, from the Plan.
GIC FUND
Contributions to the GIC Fund are invested in investment units in the
Vanguard Investment Contract Trust (the "Vanguard Investment Contract Trust")
and in a group annuity investment contract between the Trustee and an
insurance company (as selected by Hartmarx) arising prior to the transfer of
investments to Vanguard. The Vanguard Investment Contract Trust invests
primarily in investment contracts issued by insurance companies and banks
approved by Vanguard's Investment Committee. For liquidity purposes, the
Vanguard Investment Contract Trust reserves the right to invest up to 15
percent of the Vanguard Investment Contract Trust assets in short-term U.S.
Government obligations (including money market mutual funds investing in such
obligations) or federally insured deposits.
GIC Fund investments produce a "blended" rate of interest by combining the
interest rate of the Vanguard Investment Contract Trust and the interest rate
of the group annuity investment contract. The interest rate adjusts gradually
throughout the year to reflect changes in interest rates and the Fund's
underlying investments. Once the existing group annuity investment contract
matures and is liquidated, the interest rate of the GIC Fund will no longer be
a "blended" rate, but will be the same as the interest rate of the Vanguard
Investment Contract Trust.
VANGUARD MONEY MARKET FUND
Contributions directed to the Vanguard Money Market Fund are invested in
high-quality money market instruments that mature in one year or less. These
money market instruments include negotiable certificates of deposit, bankers'
acceptances, commercial paper, and other short-term corporate obligations. The
Vanguard Money Market Fund seeks maximum current income, preservation of
capital, and liquidity by investing in a portfolio of money market
instruments. The fund is designed to maintain a constant $1.00 share value. It
should be noted that an investment in a money market fund, including this
Vanguard Money Market Fund, is neither insured nor guaranteed by the U.S.
Government, and there can be no assurance that this fund will be able to
maintain a stable net asset value of $1.00 per share.
VANGUARD GNMA FUND
Participant contributions directed to the Vanguard GNMA Fund are invested in
a portfolio of mortgage-backed securities guaranteed by the U.S. Government.
The Vanguard GNMA Fund seeks a high level of current income. Generally, at
least 80 percent of the Vanguard GNMA Fund is invested in Governmental
National Mortgage Association ("GNMA") certificates. These certificates
represent ownership in pools of approved mortgage loans for which the timely
payment of principal and interest is guaranteed by the U.S. Government. The
balance of the Vanguard GNMA Fund is invested in other Government-guaranteed
securities, such as U.S. Treasury bills, notes and bonds. Shares of the
Vanguard GNMA Fund are not backed by the U.S. Government, and the net asset
value or share price of the Vanguard GNMA Fund will fluctuate in response to
general changes in interest rates or other market conditions. GNMA
certificates are subject to prepayment risk; that is, in periods
6
<PAGE>
of lower interest rates, homeowners may "prepay" and refinance the high-coupon
mortgages underlying GNMAs. The proceeds would then be reinvested in new
GNMAs, at generally lower interest rates. As a result, a Participant's yields
may be reduced when interest rates decline.
VANGUARD STAR FUND
Contributions directed to the Vanguard STAR Fund are invested as follows:
approximately 60 percent to 70 percent of Vanguard STAR Fund assets are
invested in seven Vanguard equity funds, including Vanguard/Windsor Fund,
Vanguard/Windsor II, Vanguard 500 Portfolio Fund (described below), Vanguard
International Growth Fund (described below), Vanguard PRIMECAP Fund (described
below), Vanguard/Morgan Growth Fund and Vanguard Explorer Fund. Approximately
30 percent to 40 percent of the assets are invested in three Vanguard fixed
income funds, including Long Term Corporate Portfolio, Vanguard GNMA Fund
(described above) and Vanguard Money Market Fund (described above). The
Vanguard STAR Fund seeks to maximize long-term total return (consisting of
capital appreciation plus income) with a balanced and diversified investment
approach.
VANGUARD 500 PORTFOLIO FUND
Participant contributions which have been directed to the Vanguard 500
Portfolio Fund, an "index fund", are invested in all of the stocks included in
the Standard & Poor's(R) 500 Index (the "S&P Index") in approximately the same
proportions as they are represented in the S&P Index. This investment
alternative attempts to provide investment results that correspond to the
price and yield performance of publicly traded stocks, in the aggregate, as
represented by the S&P Index.
VANGUARD PRIMECAP FUND
Contributions directed to the Vanguard PRIMECAP Fund are invested,
generally, in common stocks. The Vanguard PRIMECAP Fund invests at least 80
percent of its assets in equity securities (stock). Stocks are selected on the
basis of fundamental factors, including above average earnings growth and
current earnings, consistency of earnings growth, and earnings quality. The
Vanguard PRIMECAP Fund seeks long-term growth of capital by investing
principally in a portfolio of common stocks; dividend income is incidental.
VANGUARD INTERNATIONAL GROWTH FUND
Participant contributions which have been directed to the Vanguard
International Growth Fund are invested, primarily, in common stocks of
seasoned foreign companies which are included in this fund based on potential
for capital appreciation. The Vanguard International Growth Fund is intended
primarily for long term-investors willing to accept moderate risks in seeking
capital appreciation. This investment alternative seeks long-term capital
growth by investing in the common stocks of companies based outside of the
United States. Dividend income is incidental.
DISTRIBUTIONS AND WITHDRAWALS
RETIREMENT
A Participant who retires under the retirement provisions of the Retirement
Income Plan is entitled to a distribution from the Plan of the amounts
credited to him under the Plan attributable to his contributions and to vested
Employer Matching Contributions, and the earnings thereon. Ordinarily, he will
be entitled to receive a lump sum distribution of (1) cash equal to such
Participant's fund account balances (if any), excluding, however, his Stock
Fund account balance, (2) shares of Common Stock to the extent of his Stock
Fund account (with cash in lieu of any fractional share) unless he elects to
take the cash equivalent of the fair market value of those shares, and (3)
cash equal to any of his contributions and vested Employer Matching
Contributions which have not yet
7
<PAGE>
been credited to a Fund by Vanguard. Distributions upon retirement are made as
soon as practicable, but no later than 60 days after the end of the Plan Year
in which a Participant attains age 65 or ceases employment, whichever is later.
DEATH OR DISABILITY
If a Participant dies prior to retirement, the Participant's spouse (or, if
there is no spouse or with the spouse's written consent, a designated
beneficiary under the Plan) will be entitled to distribution of the
Participant's fund account balances in the form of a lump sum payment. A
Participant will be given the opportunity to designate a "beneficiary" and may
change this designation from time to time, with his spouse's written consent,
by written notice to his Employer. If a designated beneficiary does not survive
the Participant, these benefits will be paid to the Participant's spouse, and
if neither the beneficiary nor his spouse survives him, benefits will be paid
in the following order of preference: (1) children, (2) parents, (3) brothers
and sisters or (4) executor or administrator.
If a Participant becomes disabled, he is entitled to a lump sum distribution
of all of his employee contributions, all vested Employer Matching
Contributions, and all earnings thereon.
TERMINATION OF EMPLOYMENT
If a Participant ceases to be an employee of the Employers and all affiliated
companies for any reason other than retirement under the retirement provisions
of the Retirement Income Plan or death, he shall be entitled to a distribution
from the Plan of the amount credited to him under the Plan plus the vested
portion, if any, of Employer Matching Contributions and earnings thereon.
ADDITIONAL DISTRIBUTION RULES
Distributions to Participants will commence no later than April 1 of the
calendar year following the calendar year in which the Participant attains age
70 1/2.
If a Participant's account balances are $3,500 or less, distribution will be
made or commenced without the Participant's consent as soon as practicable
after employment is terminated. If a terminated Participant's account balances
are greater than $3,500, then a distribution will not be made without such
Participant's consent before age 65 or death.
WITHDRAWALS
Any Participant may, while he remains employed by an Employer, withdraw the
full amount credited to his account attributable to after-tax contributions and
vested Employer Matching Contributions and the earnings thereon, plus if the
Participant has attained age 59 1/2, the full amount credited to his accounts
attributable to pre-tax contributions and the earnings thereon (less any
amounts previously paid but not charged to the Participant's account). The
withdrawal will be paid as soon as practicable after the Plan Administrator has
received the Participant's signed request for such withdrawal. Distributions
will be made in a lump sum in the manner set forth under "Retirement" above.
Except in the case of an Emergency Withdrawal, a Participant who makes a
withdrawal under the Plan may not participate in the Plan for 12 months
following such withdrawal.
For Participants younger than age 59 1/2, an Emergency Withdrawal is
available only with respect to after-tax contributions, vested Employer
Matching Contributions, and all earnings thereon; a Hardship Withdrawal is
available only with respect to after-tax contributions, vested Employer
Matching Contributions, and all earnings thereon, and pre-tax contributions,
but not earnings on pre-tax contributions. For Participants age 59 1/2 or
older, Emergency or Hardship Withdrawals are available with respect to pre-tax
and after-tax contributions, vested Employer Matching Contributions, and all
earnings thereon.
A withdrawal shall be deemed to constitute an "Emergency Withdrawal" if,
after receiving a Participant's application for such a withdrawal (on a form
provided by the Plan Administrator and completed by the
8
<PAGE>
Participant for that purpose) and according to a uniform nondiscriminatory
policy which involves consideration of a Participant's immediate financial
needs and other pertinent facts and circumstances, the Plan Administrator, in
its sole discretion, shall determine that such withdrawal is precipitated by an
emergency affecting the Participant or a member of his immediate family. The
procedure for obtaining a Hardship Withdrawal is the same as that for an
Emergency Withdrawal, however, a "Hardship Withdrawal" must be precipitated by
a demonstrated financial hardship affecting the Participant which cannot be
alleviated through other resources reasonably available to the Participant.
Also, a Hardship Withdrawal may not exceed the amount required to meet the
immediate financial need created by such hardship.
Participants are not permitted to make more than two Emergency or Hardship
Withdrawals, and no more than one Emergency Withdrawal or Hardship Withdrawal
shall be approved by the Plan Administrator in any five year period with
respect to any Participant.
LOANS
Subject to certain limitations, a Participant may borrow, from the Plan, a
portion of the pre-tax and after-tax contributions (and earnings thereon)
credited to his accounts as of the date on which the loan is made. Generally,
loans may not be in amounts less than $500, and may not exceed the lesser of
(i) 50 percent of the value of a Participant's pre-tax contributions and after-
tax contributions, plus earnings, if any or (ii) $50,000 reduced by the excess
(if any) of the highest outstanding balance of all loans to the Participant
from this Plan and any other qualified plan of the Employers during the one-
year period ending on the last day before the loan was made over the
outstanding balance of all loans to the Participant from such plans on the date
on which the loan was made. Each such loan shall be evidenced by a written note
providing for substantially level amortization over a period of no more than
five years (or 15 years, if the loan is being used to acquire the Participant's
principal residence), for repayment to a separate "Loan Fund Account" by way of
payroll deductions, and for a reasonable rate of interest to be determined by
the Plan Administrator at the time such loan is made.
Generally, a Participant may have only one outstanding loan at a time,
however, Participants may have a second loan outstanding if it is for the
purchase of a primary residence or for a financial emergency. Only one
residential or financial emergency loan may be outstanding at any one time.
All loan payments by the Participant shall be made to his Loan Fund Account
by regular payroll deductions and loan repayments and interest are credited to
a Participant's investment accounts in the same proportion as the Participant's
contributions are credited. If on the date of payment of Plan benefits, any
such loan, or portion thereof, remains unpaid, an amount equal to such loan or
unpaid portion thereof, plus accrued interest thereon, shall be deducted from
the amount otherwise payable to the Participant under the Plan and the amount
of accrued interest on such loan shall be deemed and accounted for as a
distribution to or on behalf of the Participant.
On or before the date of a loan, the Participant's accounts shall be
converted to cash in the following order: after-tax contribution accounts
(first, Voluntary Contribution subaccounts, then Matched Contribution
subaccounts), pre-tax contribution accounts (first, Voluntary Contribution
subaccounts, then Matched Contribution subaccounts), and any Rollover accounts,
with such cash being credited to the Participant's Loan Fund Account, until the
cash balance of the Loan Fund Account is sufficient to fund the loan. Employer
Matching Contributions and earnings thereon, if any, may not be borrowed by the
Participant.
ROLLOVERS TO OTHER QUALIFIED PLANS
With respect to distributions made after January 1, 1993, a participant may
elect to have any portion of an eligible rollover distribution paid directly to
an eligible individual retirement account ("IRA") or other qualified retirement
plan specified by the distributee in a direct rollover, provided that the
amount of a direct rollover cannot be less than the lesser of (i) $500 or (ii)
the eligible rollover; and provided further, that the distributee may not elect
a direct rollover of any portion of eligible rollover distributions received
within one taxable year of the distributee that totals less than $200. A
distributee shall be limited to a single direct rollover for each eligible
rollover distribution.
9
<PAGE>
FORFEITURES
If a Participant leaves the employ of his Employer, for any reason (other
than military leave, approved paid leave of absence, maternity leave,
paternity leave or approved unpaid leave of absence) or completes less than
501 hours of service in a Plan Year, the Participant's unvested Employer
Matching Contributions are credited to a forfeiture account. If a Participant
is not reemployed by Hartmarx (or an affiliate or subsidiary of Hartmarx) or
does not resume completing at least 501 hours of service in a Plan Year before
incurring five consecutive one year breaks in service, such unvested Employer
Matching Contributions are forfeited and applied to pay the Plan's
administrative costs or to pay Employer Matching Contributions for the Plan
Year in which such forfeiture occurs. To the extent that such forfeitures
exceed the administrative costs and Employer Matching Contributions, such
forfeitures are allocated ratably to remaining Participants.
FEDERAL TAX EFFECTS TO PARTICIPATING EMPLOYEES
The Plan is a qualified employee benefit plan under Section 401(a) of the
Code. Accordingly, no tax is payable on any pre-tax contributions, Employer
Matching Contributions and all earnings (including earnings on after-tax
contributions) until a Participant receives benefits under the Plan.
Benefits under the Plan are paid in a lump sum distribution. A distribution
paid to a Participant who has terminated his employment must include his
entire account balance. Federal law requires that the taxable portion of a
distribution (except, in certain cases, the taxable portion of an "In-Kind
Distribution") which is not rolled over directly into an IRA or other
qualified retirement plan is subject to a mandatory 20 percent federal income
tax withholding.
TOTAL DISTRIBUTIONS
If a distribution of a Participant's entire account balance becomes payable
on account of the Participant's death, separation from employment, or on
account of a total in-service withdrawal, the various portions of such
distribution are taxable as follows:
1. The Participant's after-tax contributions are returned tax free, as
taxes have already been paid on such contributions.
2. The Participant's taxable amount (i.e., pre-tax contributions,
Employer Matching Contributions, and all earnings) is taxable as ordinary
income. If the Participant has attained age 59 1/2 by the date of
distribution and has been a Participant in the Plan for five or more
taxable years before the taxable year of the distribution (or in the case
of a distribution to the beneficiary of a deceased Participant who had
attained age 59 1/2 regardless of his years of participation), a special
five year averaging device is available at his election which may reduce
the tax on the ordinary income portion of the distribution. The Participant
(or beneficiary) also has the option of having his entire lump sum
distribution taxed under these special five year averaging rules. A
transitional rule under the Tax Reform Act of 1986 provides that if the
Participant was at least age 50 on January 1, 1986, he may either use five
year averaging (as discussed above) or the ten year averaging (based upon
1986 tax rates) under prior law. The transitional rule also provides that
the taxable portion attributable to pre-1974 participation will be taxed in
accordance with the capital gain provisions effective prior to the
enactment of the Tax Reform Act of 1986.
3. A 10 percent excise tax on the portion of the distribution includible
in taxable income is imposed on the employee for distributions prior to age
59 1/2 except in the case of death, disability, payment of certain medical
expenses, or retirement under the Plan after attaining age 55.
4. The Participant's (or surviving spouse beneficiary's) taxable amount
may be excluded from gross income in the year of receipt if the
distribution is rolled over into an IRA or another qualified retirement
plan within 60 days of such distribution.
5. Any excess of the Participant's after-tax contributions over a lump
sum cash distribution is deductible as a miscellaneous itemized deduction
subject to the 2 percent of adjusted gross income floor for miscellaneous
itemized deductions.
10
<PAGE>
PARTIAL IN-SERVICE DISTRIBUTIONS
If a Participant withdraws part of his account, while continuing as an
employee, such withdrawal, to the extent of pre-1987 after-tax contributions,
is returned tax free and any remaining withdrawal will be taxed as ordinary
income based upon a pro-rata distribution of post-1986 after-tax contributions
and all other amounts in his account available for withdrawal. The
Participant's taxable amount may be excluded from gross income in the year of
receipt if the distribution is rolled over into an IRA or another qualified
retirement plan within 60 days of such distribution. A 10 percent excise tax on
the portion of the distribution includible in taxable income is imposed on the
employee for distributions prior to age 59 1/2 except in the case of death,
disability, payment of certain medical expenses, or retirement under the Plan
after attaining age 55.
IN-KIND DISTRIBUTIONS
A special rule applies if the distribution includes shares of Common Stock of
the Company. If a participant or his beneficiary receives a lump sum
distribution, Federal income taxes with respect to such securities will be
payable in the year of distribution on the amount by which the lesser of the
market price at time of distribution or the cost to the Plan of such securities
exceeds the Participant's after-tax contributions to the Stock Fund. When the
securities are subsequently sold, a short term or long term capital gain or
loss may be realized depending on the sales price of such securities and the
length of time held after distribution. If the Participant receives a lump sum
distribution which includes shares of Common Stock and the value of the
securities has decreased below the amount the Participant contributed for the
purchase of such securities, the Participant does not realize a deductible loss
at the time of distribution; instead, his after-tax contributions become the
basis of the stock for the purpose of determining gain or loss upon a
subsequent sale or exchange. Any such gain or loss will be considered a capital
gain or loss.
The tax provisions are complex and competent tax advice should be obtained so
that the Participant makes those elections best suited to his particular
situation.
STOCK PURCHASE RIGHTS
On December 6, 1995, the Board of Directors of the Company declared a
dividend of one right (a "Right") for each outstanding share of Common Stock of
the Company. The dividend was paid on January 31, 1996 (the "Record Date"), to
stockholders of record at the close of business on the Record Date. The Board
of Directors also authorized the issuance of one Right for each share of Common
Stock issued after the Record Date and prior to the earliest of the
Distribution Date (as defined in the 1995 Rights Agreement), redemption of the
Rights or January 31, 2006 (the "Expiration Date"). Each Right entitles the
registered holder to purchase from the Company one one-thousandth of a share of
Series A Junior Participating Preferred Stock of the Company, at an exercise
price of $25 per Right (the "Purchase Price"). The description and terms of the
Rights are set forth in a Rights Agreement, dated as of December 6, 1995 (the
"1995 Rights Agreement"), between the Company and First Chicago Trust Company
of New York, as Rights Agent.
Separate certificates for Rights will not be distributed nor will the Rights
be exercisable, unless and until, among other things, a Person (as defined in
the 1995 Rights Agreement) or group acquires 15 percent or more, or announces
an offer that could result in acquiring 15 percent or more, of the Company's
Common Stock. Following an acquisition of 15 percent or more of the Company's
Common Stock (a "Stock Acquisition"), each Right holder, except the 15 percent
or more stockholder, has the right to receive, upon exercise, Common Stock
having a market value of twice the then-current Purchase Price (or, under
certain circumstances, cash, property or other Company securities), unless the
15 percent or more stockholder has offered to acquire all of the outstanding
shares of the Company under terms that a majority of the independent directors
of the Company have determined to be fair and in the best interest of the
Company and its stockholders. Similarly, unless certain conditions are met, if
the Company engages in a merger or other business combination following a Stock
Acquisition where it does not survive or survives with a change or exchange of
its Common Stock, or if 50
11
<PAGE>
percent or more of its assets, earning power or cash flow is sold or
transferred, the Rights will become exercisable for shares of the acquiror's
stock having a market value of twice the then-current Purchase Price (or, under
certain circumstances, cash or property). The Rights are not exercisable,
however, until the Company's right of redemption described below has expired.
At any time prior to the earlier of (i) ten days following the Stock
Acquisition Date (as defined in the 1995 Rights Agreement), and (ii) the
Expiration Date, the Company (under certain circumstances, only with the
support of the majority of the directors not affiliated with an Acquiring
Person, as defined in the 1995 Rights Agreement) may redeem the Rights in
whole, but not in part, at a price of $.01 per Right, subject to adjustment.
The Company may, at its option, pay the redemption price in cash, shares of
Common Stock (based on the current market price of the Common Stock at the time
of redemption) or any other form of consideration deemed appropriate by the
Board of Directors of the Company. Immediately upon the action of the Board of
Directors electing to redeem the Rights, the right to exercise the Rights will
terminate and the only right of the holders of the Rights thereafter will be to
receive the applicable redemption price.
Until exercise, a Right holder, as such, has no rights as a stockholder of
the Company, including, without limitation, the right to vote or to receive
dividends or distributions.
A copy of the 1995 Rights Agreement was filed with the Commission on December
29, 1995, as an exhibit to the Company's Current Report on Form 8-K, and is
hereby incorporated by this reference into this Prospectus. The foregoing
summary description of the Rights does not purport to be complete and is
qualified in its entirety by reference to the 1995 Rights Agreement.
INFORMATION INCORPORATED BY REFERENCE
The Company's Form 10-K/A Amendment No. 1 to Annual Report on Form 10-K for
the fiscal year ended November 30, 1994, filed with the Commission on June 27,
1995, Annual Report on Form 10-K for the fiscal year ended November 30, 1995,
Quarterly Report on Form 10-Q for the fiscal quarter ended February 29, 1996,
each as filed with the Commission, and the Company's Current Report on Form 8-
K, as filed with the Commission on December 29, 1995, are incorporated herein
by reference. The Common Stock and Rights are registered under Section 12 of
the Exchange Act, and the descriptions of such securities contained in a Form
8-B Registration Statement, filed with the Commission and effective July 14,
1983, and a Form 8-A Registration Statement, filed with the Commission and
effective January 29, 1996, are also incorporated herein by reference. In
addition, all other documents filed by the Company with the Commission pursuant
to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act after the date
hereof and prior to the termination of the offering of the securities offered
hereby shall be deemed to be incorporated herein by reference.
LEGAL OPINIONS
The validity of the issuance of the shares of Common Stock, and the Rights in
connection therewith, offered hereby will be passed upon for the Company by
Mary D. Allen, Executive Vice President, General Counsel and Secretary of
Hartmarx. As of May , 1996, Mrs. Allen held options to purchase 70,000 shares
of Common Stock.
EXPERTS
The financial statements incorporated in this Prospectus by reference to the
Company's Form 10-K/A Amendment No. 1 to Annual Report on Form 10-K for the
fiscal year ended November 30, 1994, filed June 27, 1995, and the Company's
Annual Report on Form 10-K for the fiscal year ended November 30, 1995, have
been so incorporated in reliance on the report of Price Waterhouse LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
12
<PAGE>
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Title 8, Chapter 1, Subchapter IV, Section 145 of the General Corporation Law
of the State of Delaware (the "GCL") and Article EIGHTH of the Company's
Restated Certificate of Incorporation provide for the indemnification of any
person who was, is or is threatened to be made a party to any action, suit or
proceeding because such person is or was a director, officer, employee or agent
of the Company, or served another enterprise at the request of the Company,
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by such person in connection
with such action, suit or proceeding if such person acted in good faith and in
a manner reasonably believed to be in or not opposed to the best interests of
the Company; and except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable to the Company unless and only to the extent that the Court of Chancery
of Delaware or the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses.
Article Two, Section 10 of the Company's Bylaws, as amended, provides for
indemnification of the Company's directors and officers, and the advancement of
expenses (including attorneys' fees), to the fullest extent permitted by the
GCL. The Company has entered into Indemnification Agreements (ratified by its
stockholders) with each member of its Board of Directors to provide them with
specific contractual assurance of indemnification, rights to advance
reimbursement of related expenses and certain other protections allowed under
Delaware law. Directors' rights under the Indemnification Agreements and
directors' and officers' rights to indemnification and advancement of expenses
(including attorneys' fees) under Article Two, Section 10 of the Company's
Bylaws are not exclusive of other rights such persons may have under statute,
the Company's Restated Certificate of Incorporation, the Company's Bylaws,
agreement, vote of stockholders or disinterested directors or otherwise. The
Bylaws further provide that a person's right to indemnification may not be
retroactively reduced by subsequent amendment to the GCL or Bylaws.
The GCL authorizes the purchase of indemnification insurance by the Company.
The Company currently maintains a policy insuring, subject to certain
exceptions, its directors and officers, and the directors and officers of its
subsidiaries against liabilities which may be incurred by such persons acting
in such capacities, as permitted by Section 145 of the same Delaware statute,
which may cover liabilities under the Securities Act.
Insofar as indemnification for certain liabilities arising under the
Securities Act may be permitted to directors, officers or persons controlling
the Company pursuant to the foregoing provisions, the Company has been informed
that, in the opinion of the Commission, such indemnification is against public
policy as expressed in the Securities Act, and is unenforceable.
13
<PAGE>
THE HARTMARX SAVINGS-INVESTMENT PLAN
APPENDIX DATED MAY 1, 1996
TO
FORM S-8 PROSPECTUS DATED MAY 1, 1996
The following tabulations illustrate the change (consisting of dividends,
interest income and appreciation or depreciation in, and discount from, market
value) for each period and the balance at the end of each period assuming
$100.00 was invested in The Hartmarx Savings-Investment Plan on December 31,
1991, for each of the Hartmarx Stock (at 90 percent of average trading price),
GIC, Vanguard GNMA, Vanguard Money Market, Vanguard 500 Portfolio, Vanguard
STAR, Vanguard PRIMECAP and Vanguard International Growth Funds. The table
includes income from reinvestment of dividends and interest but no other
contributions by the Employer or the Participant.
<TABLE>
<CAPTION>
HARTMARX VANGUARD
STOCK FUND GNMA FUND GIC FUND
------------------ ------------------------- ------------------
ENDING CHANGE FOR ENDING CHANGE FOR ENDING CHANGE FOR
BALANCE PERIOD BALANCE PERIOD BALANCE PERIOD
------- ---------- ------------ ------------ ------- ----------
<S> <C> <C> <C> <C> <C> <C>
1992........... $ 80.11 -19.9% $ 106.85 6.9% $107.50 7.5%
1993........... 87.58 9.3% 113.31 6.0% 113.07 5.2%
1994........... 73.31 -16.3% 112.23 -1.0% 119.20 5.4%
1995........... 54.61 -25.5% 128.10 14.1% 126.45 6.1%
<CAPTION>
VANGUARD MONEY VANGUARD 500 PORTFOLIO VANGUARD
MARKET FUND FUND STAR FUND
------------------ ------------------------- ------------------
ENDING CHANGE FOR ENDING CHANGE FOR ENDING CHANGE FOR
BALANCE PERIOD BALANCE PERIOD BALANCE PERIOD
------- ---------- ------------ ------------ ------- ----------
<S> <C> <C> <C> <C> <C> <C>
1992........... $103.74 3.7% $ 107.42 7.4% $110.51 10.5%
1993........... 106.86 3.0% 118.04 9.9% 122.53 10.9%
1994........... 111.22 4.1% 119.44 1.2% 122.28 -0.2%
1995........... 117.70 5.8% 164.17 37.5% 157.30 28.6%
<CAPTION>
VANGUARD VANGUARD INTERNATIONAL
PRIMECAP FUND GROWTH FUND
------------------ -------------------------
ENDING CHANGE FOR ENDING CHANGE FOR
BALANCE PERIOD BALANCE PERIOD
------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
1992........... $108.99 9.0% $ 94.21 -5.8%
1993........... 128.64 18.0% 136.36 44.7%
1994........... 143.32 11.4% 137.40 0.8%
1995........... 194.17 35.5% 157.85 14.9%
</TABLE>
A-1
<PAGE>
EMPLOYERS WITH EMPLOYEES ENTITLED TO PARTICIPATE IN
THE HARTMARX SAVINGS-INVESTMENT PLAN
NAME OF PARTICIPATING EMPLOYER
HARTMARX CORPORATION
AMERICAN APPAREL BRANDS, INC.
ANNISTON SPORTSWEAR CORPORATION
BILTWELL COMPANY, INC.
DIRECT ROUTE MARKETING CORPORATION
E-TOWN SPORTSWEAR CORPORATION
GLENEAGLES, INC.
HART SCHAFFNER & MARX
HICKEY-FREEMAN CO., INC.
HOOSIER FACTORIES, INCORPORATED
INTERCONTINENTAL APPAREL, INC.
INTERNATIONAL WOMEN'S APPAREL, INC.
JAYMAR-RUBY, INC.
KUPPENHEIMER MEN'S CLOTHIERS DADEVILLE, INC.
MEN'S QUALITY BRANDS, INC.
NATIONAL CLOTHING COMPANY, INC.
NOVAPPAREL, INC.
RECTOR SPORTSWEAR CORPORATION
TAG APPAREL, INC.
TAG LICENSING, INC.
UNIVERSAL DESIGN GROUP, LTD.
M. WILE & COMPANY, INC.
WINCHESTER CLOTHING COMPANY
A-2
<PAGE>
LOGO
<PAGE>
THE HARTMARX SAVINGS-INVESTMENT PLAN
INCORPORATION OF CONTENTS OF PRIOR
REGISTRATION STATEMENTS
The contents of registration statements Nos. 2-32692, 2-44774, 2-53426, 2-64613,
2-83433, 33-6194 and 33-42202 are incorporated herein by reference.
--------------------
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
The following documents filed by the Registrant (Exchange Act File No.
1-8501) with the Securities and Exchange Commission are incorporated herein by
reference and made a part hereof:
(a) Form 10-K/A Amendment No.1 to Annual Report on Form 10-K for the
fiscal year ended November 30, 1994, filed June 27, 1995;
(b) Annual Report on Form 10-K for the fiscal year ended November 30,
1995;
(c) Quarterly Report on Form 10-Q for the fiscal quarter ended
February 29, 1996;
(d) The description of the Registrant's Common Stock contained in the
Registrant's registration statement on Form 8-B dated July 8, 1983; and
(e) The description of the Registrant's rights to purchase preferred
stock contained in the Registrant's registration statement on Form 8-A dated
January 23, 1996.
All documents filed by the Registrant pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), after the date of this Registration Statement and prior to the
termination of the offering of the securities offered hereby shall be deemed to
be incorporated in this Registration Statement by reference and to be a part
hereof from the date of filing of such documents. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this
II-1
<PAGE>
Registration Statement to the extent that a statement contained herein or in any
other subsequently filed document which also is or is deemed to be incorporated
by reference herein modifies or supersedes such statement. Any such statement
so modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Registration Statement.
Item 4. Description of Securities
Not applicable.
Item 5. Interests of Named Experts and Counsel
The validity of the issuance of the shares of Common Stock, and the
Rights in connection therewith, offered hereby will be passed upon for the
Company by Mary D. Allen, Executive Vice President, General Counsel and
Secretary of Hartmarx. As of April 30, 1996, Mrs. Allen held options to
purchase 70,000 shares of Common Stock.
Item 6. Indemnification of Directors and Officers
Title 8, Chapter 1, Subchapter IV, Section 145 of the General
Corporation Law of the State of Delaware (the "GCL") and Article EIGHTH of the
Company's Restated Certificate of Incorporation provide for the indemnification
of any person who was, is or is threatened to be made a party to any action,
suit or proceeding because such person is or was a director, officer, employee
or agent of the Company, or served another enterprise at the request of the
Company, against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by such person in
connection with such action, suit or proceeding if such person acted in good
faith and in a manner reasonably believed to be in or not opposed to the best
interests of the Company; and except that no indemnification shall be made in
respect of any claim, issue or matter as to which such person shall have been
adjudged to be liable to the Company unless and only to the extent that the
Court of Chancery of Delaware or the court in which such action or suit was
brought shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses.
Article Two, Section 10 of the Company's Bylaws, as amended, provides
for indemnification of the Company's directors and officers, and the advancement
of expenses (including attorneys' fees), to the fullest extent permitted by the
GCL. The Company has entered into Indemnification Agreements (ratified by its
stockholders) with each member of its Board of Directors to provide them with
specific contractual assurance of indemnification, rights to advance
reimbursement of related expenses and certain other
II-2
<PAGE>
protections not specifically provided under Delaware law. Directors' rights
under the Indemnification Agreements and directors' and officers' rights to
indemnification and advancement of expenses (including attorneys' fees) under
Article Two, Section 10 of the Company's Bylaws are not exclusive of other
rights such persons may have under statute, the Company's Restated Certificate
of Incorporation, the Company's Bylaws, agreement, vote of stockholders or
disinterested directors or otherwise. The Bylaws further provide that a
person's right to indemnification may not be retroactively reduced by subsequent
amendment to the GCL or Bylaws.
The GCL authorizes the purchase of indemnification insurance by the
Company. The Company currently maintains a policy insuring, subject to certain
exceptions, its directors and officers, and the directors and officers of its
subsidiaries against liabilities which may be incurred by such persons acting in
such capacities, as permitted by Section 145 of the same Delaware statute, which
may cover liabilities under the Securities Act of 1933, as amended (the
"Securities Act").
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers or persons controlling
the Company pursuant to the foregoing provisions, the Company has been informed
that, in the opinion of the Commission, such indemnification is against public
policy as expressed in the Securities Act, and is unenforceable.
Item 7. Exemption from Registration Claimed
Not applicable.
Item 8. Exhibits
3-A-1. Restated Certificate of Incorporation (incorporated by reference to
Exhibit 3-A to Form 10-K for the year ended November 30, 1993) (1).
3-A-2. Certificate of Designation, Preferences and Rights of Series A
Junior Participating Preferred Stock (incorporated by reference to
Exhibit 3-A-3 to Form 10-K for the year ended November 30, 1995)
(1).
3-A-3. Certificate of Amendment for increase in authorized shares of
Common Stock (incorporated by reference to Exhibit 3-A-2 to Form
10-K for the year ended November 30, 1993) (1).
3-A-4. Certificate of Amendment adding Article Fourteenth limiting
director liability as provided under Delaware General Corporation
Law (S)102(b)(7)
II-3
<PAGE>
(incorporated by reference to Exhibit 3-A-3 to Form 10-K for the
year ended November 30, 1993) (1).
3-B. By-Laws of the Registrant as currently in effect (incorporated by
reference to Exhibit 3-B to Form 10-K for the year ended November
30, 1995) (1).
4-A. Rights Agreement dated as of December 6, 1995, between the
Registrant and First Chicago Trust Company of New York
(incorporated by reference to Exhibit 4.1 to Form 8-K filed
December 29, 1995) (1).
4-B-1. The Hartmarx Savings-Investment Plan, as amended and restated
effective as of January 1, 1989.
4-B-2. The Hartmarx Savings-Investment Trust, as amended effective as of
July 1, 1988.
4-B-3. Service Agreement effective the 1st day of November, 1991, by and
between Hartmarx Corporation, Continental Bank and Vanguard
Fiduciary Trust Company.
5. Opinion of Mary D. Allen, Executive Vice President, General Counsel
and Secretary of the Registrant.
23. Consent of Price Waterhouse LLP.
24. Powers of Attorney.
(1) File No. 1-8501
An opinion of counsel concerning compliance with the requirements of
ERISA and an Internal Revenue Service ("IRS") determination letter are not being
filed because (i) the IRS issued its favorable determination letter on April 5,
1996, regarding the qualification under Section 401(a) of the Internal Revenue
Code (the "Code") of the Plan, as amended effective January 1, 1989, and the
Trust, as amended effective as of July 1, 1988, and (ii) the Registrant
undertakes to submit the Plan and any amendment thereto to the IRS in a timely
manner and will make all changes required by the IRS to maintain such
qualification.
Item 9. Undertakings
(a) The undersigned Registrant hereby undertakes:
(i) To file, during any period in which offers or sales are being
made, a post-effective amendment to the Registration Statement
II-4
<PAGE>
to include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement.
(ii) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(iii) To remove from registration by means of post-effective
amendment any of the securities being registered which remain unsold
at the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act, as amended, and each filing of the Plan's annual report pursuant
to Section 15(d) of the Exchange Act that is incorporated by reference in this
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering hereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the provisions described in Item 6 above, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, the Registrant certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing this Registration Statement on Form
S-8 and has duly caused this Registration Statement to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of Chicago, State of
Illinois, on the 2nd day of May, 1996.
HARTMARX CORPORATION
By: /s/ MARY D. ALLEN
---------------------------------
Mary D. Allen,
Executive Vice President, General
Counsel and Secretary
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed below by the following
persons in the capacities and on the date indicated.
Signature Title Date
--------- ----- ----
Director, Chairman of
* the Board and Chief May 2, 1996
________________________ Executive Officer
Elbert O. Hand (Principal Executive Officer)
* Director, President and May 2, 1996
________________________ Chief Operating Officer
Homi B. Patel
* Executive Vice President and
________________________ Chief Financial Officer May 2, 1996
Glenn R. Morgan (Principal Financial Officer)
II-6
<PAGE>
* Controller and Chief
________________________ Accounting Officer May 2, 1996
Andrew A. Zahr (Principal Accounting Officer)
*
________________________ Director May 2, 1996
A. Robert Abboud
*
________________________ Director May 2, 1996
Samawal A. Bakhsh
*
________________________ Director May 2, 1996
Jeffrey A. Cole
*
________________________ Director May 2, 1996
Raymond F. Farley
*
________________________ Director May 2, 1996
Donald P. Jacobs
*
________________________ Director May 2, 1996
Charles Marshall
*
________________________ Director May 2, 1996
Michael B. Rohlfs
*
________________________ Director May 2, 1996
Stuart L. Scott
*By: /S/ MARY D. ALLEN
-----------------------------
Mary D. Allen
Attorney-in-Fact
II-7
<PAGE>
EXHIBIT INDEX
3-A-1. Restated Certificate of Incorporation (incorporated by reference to
Exhibit 3-A to Form 10-K for the year ended November 30, 1993) (1).
3-A-2. Certificate of Designation, Preferences and Rights for Series A Junior
Participating Preferred Stock (incorporated by reference to Exhibit
3-A-3 to Form 10-K for the year ended November 30, 1995) (1).
3-A-3. Certificate of Amendment for increase in authorized shares of Common
Stock (incorporated by reference to Exhibit 3-A-2 to Form 10-K for the
year ended November 30, 1993) (1).
3-A-4. Certificate of Amendment adding Article Fourteenth limiting director
liability as provided under Delaware General Corporation Law
(S)102(b)(7) (incorporated by reference to Exhibit 3-A-3 to Form 10-K
for the year ended November 30, 1993) (1).
3-B. By-laws of the Registrant as currently in effect (incorporated by
reference to Exhibit 3-B to Form 10-K for the year ended November 30,
1995) (1).
4-A. Rights Agreement dated as of December 6, 1995 between the Registrant
and First Chicago Trust Company of New York (incorporated by reference
to Exhibit 4.1 to Form 8-K filed December 29, 1995) (1).
4-B-1. The Hartmarx Savings-Investment Plan, as amended and restated
effective as of January 1, 1989.
4-B-2. The Hartmarx Savings-Investment Trust, as amended effective as of July
1, 1988.
4-B-3. Service Agreement effective the 1st day of November, 1991, by and
between Hartmarx Corporation, Continental Bank and Vanguard Fiduciary
Trust Company.
5. Opinion of Mary D. Allen, Executive Vice President, General Counsel
and Secretary of the Registrant.
23. Consent of Price Waterhouse LLP.
24. Powers of Attorney.
(1) File No. 1-8501
II-8
<PAGE>
HARTMARX SAVINGS-INVESTMENT PLAN
--------------------------------
(As Amended and Restated Effective as of January 1, 1989)
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
PAGE
<S> <C> <C>
SECTION I INTRODUCTION................................ 1
SECTION II DEFINITIONS................................. 1
SECTION III ELIGIBILITY................................. 11
SECTION IV CONTRIBUTIONS............................... 11
SECTION V NONDISCRIMINATION REQUIREMENTS.............. 19
SECTION VI INVESTMENT OF CONTRIBUTIONS................. 31
SECTION VII ALLOCATIONS TO PARTICIPANT ACCOUNTS......... 32
SECTION VIII VESTING OF ACCOUNTS......................... 36
SECTION IX DISTRIBUTIONS AND WITHDRAWAL................ 37
SECTION X ROLLOVERS................................... 46
SECTION XI TRUST AGREEMENT............................. 48
SECTION XII PLEDGE OR ALIENATION OF ACCOUNTS
OR BENEFITS................................. 49
SECTION XIII ADMINISTRATION.............................. 51
SECTION XIV APPROVAL UNDER THE INTERNAL REVENUE CODE.... 55
SECTION XV AMENDMENT AND TERMINATION................... 55
SECTION XVI INCLUSION OF AFFILIATES..................... 56
SECTION XVII TOP-HEAVY PROVISIONS........................ 57
SECTION XVIII MISCELLANEOUS............................... 59
</TABLE>
<PAGE>
SECTION I
INTRODUCTION
Effective January 1, 1989, The Hartmarx Savings-Investment Plan (the
"Savings-Investment Plan" or "prior plan"), which is intended to be a profit
sharing plan, is hereby amended and restated in its entirety. The restated plan
shall be deemed a continuation of the prior plan and not a new plan.
The benefits provided hereunder with respect to any Participant who
retired or whose employment terminated prior to January 1, 1989, will, except as
otherwise specifically provided herein, be governed in all respects by the terms
of the Plan as in effect on the date of the Participant's retirement or other
termination of employment.
The Plan has been established for the purpose of permitting eligible
employees of Hartmarx Corporation and its subsidiaries to supplement their
retirement benefits under The Hartmarx Retirement Income Plan and to provide an
opportunity to acquire an equity interest in the business through contributions
of both pre-tax and after-tax earnings.
SECTION II
DEFINITIONS
2.1 Definitions
The following words and phrases shall have the meaning stated below
unless a different meaning is plainly required by the context.
1. "Account" means the account or accounts to be established for each
Participant, as described in Section VI.
2. "Affiliate" means:
(a) any corporation, partnership, proprietorship or other entity which,
along with an Employer, is a member of a controlled group of corporations, a
group of trades or businesses (whether or not incorporated) under common
control or an affiliated service group, as described in Section 414(b),
414(c) or 414(m), respectively, of the Code or any entity required to be
aggregated with an Employer pursuant to Section 414(o) of the Code; or
<PAGE>
(b) a corporation, on or after the date, if any, designated by the
Company as the date from which Hours of Service with such corporation shall
be recognized.
3. "After-Tax Contributions" means contributions made by a Participant in
a Plan Year which do not reduce his Annual Earnings subject to federal income
taxes for such year.
4. "Annual Earnings" means a Participant's wages, salaries, fees for
professional services and other amounts received (without regard to whether or
not an amount is paid in cash) for personal services actually rendered in the
course of employment with the Employer during a Plan Year to the extent that
such amounts are includible in gross income (including, but not limited to,
commissions paid salesmen, compensation for services on the basis of a
percentage of profits, and bonuses) but excluding:
(a) any amounts contributed by the Employer for the Participant's
benefit under this Plan or any other profit sharing, pension, stock bonus or
other retirement or benefit plan maintained by the Employer; provided, that
any salary reduction amounts elected by the Participant that are not
includible in gross income under Sections 125, 402(e)(3), 402(h) and 403(b)
of the Code shall be included in his earnings;
(b) any distributions from a plan of deferred compensation, regardless
of whether such amounts are includible in gross income when distributed;
(c) any reimbursements or other expense allowances including
reimbursements for travel expenses, relocation allowances, educational
assistance allowances and other special allowances and awards;
(d) any income realized for federal income tax purposes as a result of
(i) group life insurance, (ii) the grant or exercise of an option or options
to acquire shares of stock of any Employer or Affiliate, the receipt of a
cash appreciation payment in lieu of the exercise of such an option or
options, the disposition of shares acquired on exercise of such an option,
or (iii) the transfer of restricted shares of stock, or restricted property
of an Employer or Affiliate or the removal of any such restrictions; and
2
<PAGE>
(e) any fringe benefits (cash and non-cash), moving expenses and welfare
benefits.
It is intended that Annual Earnings as defined above and as used in the
Plan satisfy Section 414(s) of the Code by incorporating the safe harbor
definition provided in Treas. Reg. Section 1.415-2(d)(10) as modified by Treas.
Reg. Sections 1.414(s)-1(c)(3) and (4). In addition to other applicable
limitations set forth in the Plan, and notwithstanding any other provision of
the Plan to the contrary, for Plan Years beginning after 1988, the Annual
Earnings of each Participant taken into account under the Plan shall not exceed
the "annual earnings limit." The annual earnings limit for Plan Years beginning
after 1988 and before 1994 is $200,000, as adjusted as provided under Section
401(a)(17) of the Code. The annual earnings limit for Plan Years beginning
after 1993 is $150,000, as adjusted for increases in the cost-of-living in
accordance with Section 401(a)(17)(B) of the Code.
In determining the Annual Earnings of a Participant for purposes of the
limitation under Section 401(a)(17) of the Code, the family aggregation rules of
Section 414(q)(6) of the Code shall apply, except in applying such rules, the
term "family" shall include only the spouse of the Participant and any lineal
descendants of the Participant who have not attained age 19 before the close of
the Plan Year. If, as a result of the application of such rules the limitation
under Section 401(a)(17) of the Code is exceeded, then the limitation shall be
prorated among the affected individuals in proportion to each such individual's
Annual Earnings as determined under this Paragraph 4 prior to the application of
the limitation.
5. "Beneficiary" means such person or persons as may be entitled (in
accordance with the provisions of Subsection 9.8) to receive any benefits or
payments hereunder upon the death of a Participant.
6. "Board of Directors" means the Board of Directors of the Company.
7. "Calculation Date" means each June 30 and December 31 and, effective
January 1, 1992 and except as otherwise modified below, means the last day of
each month. In addition, the Plan Administrator may adopt more frequent
Calculation Dates for purposes of allocating earnings, losses or expenses under
Sections VII, IX and XII, if the Plan Administrator deems it appropriate in
order to allocate
3
<PAGE>
such earnings, losses or expenses more equitably among Participants. Effective
January 1, 1992, the Plan Administrator has adopted daily Calculation Dates for
purposes of allocating earnings, losses and expenses under Subsections 9.6, 9.7
and 12.2.
8. "Calculation Period" means the period commencing on the date
immediately following a Calculation Date and ending with the next succeeding
Calculation Date.
9. "Change in Control of the Company" means the occurrence of any of
the following events:
(a) any person, as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended, other than a trustee or other
fiduciary holding securities under an employee benefit plan of the Company,
is or becomes the beneficial owner, as defined in Rule 13d-3 under the
Securities Exchange Act of 1934, as amended, directly or indirectly, of
securities of the Company representing 25% or more of the combined voting
power of the Company's then outstanding securities; and
(b) during any period of two consecutive years, individuals who at the
beginning of such period constitute the Board of Directors and any new
director whose election by the Board of Directors or nomination for election
by the Company's stockholders was approved by a vote of at least two-thirds
(2/3) of the directors who were directors at the beginning of the period,
cease for any reason to constitute a majority thereof; or
(c) the business of the Company is disposed of by the Company pursuant
to a partial or complete liquidation of the Company, a sale of assets
(including stock of a subsidiary) of the Company, or otherwise.
10. "Code" means the Internal Revenue Code of 1986, as amended from time
to time.
11. "Company" means Hartmarx Corporation, a Delaware corporation.
12. "Computation Period" means the twelve consecutive month period
beginning on the day an Employee first performs an Hour of Service or on an
anniversary of that date. Upon reemployment after a Computation Period in which
he had less than 501 Hours of Service, an Employee's
4
<PAGE>
Computation Period will be the twelve consecutive month period beginning on the
day he first performs an Hour of Service following reemployment, or any
anniversary of that date.
13. "Eligibility Year" means a Computation Period during which an
Employee completes at least 1,000 Hours of Service.
14. "Employee" means any person who is employed by an Employer or an
Affiliate, including any Leased Employee who is treated as an Employee under
Section 414(n) of the Code.
15. "Employer" means the Company or an Affiliate which has adopted the
Plan.
16. "Employer Matching Contributions" means the contributions made to
the Plan by the Employer in accordance with Subsection 4.4.
17. "ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time.
18. "ESOP" means the Hartmarx Employee Stock Ownership Plan, formerly
known as The Hartmarx Tax Credit Employee Stock Ownership Plan, as the same may,
from time to time, be amended.
19. "415 Compensation" means the total wages within the meaning of
Section 3401(a) of the Code paid to an Employee during the Plan Year for
services rendered to the Employer or an Affiliate as an Employee that is subject
to withholding for federal income tax purposes (before taking into account any
withholding exemptions) but determined without regard to any rules that limit
the remuneration included in wages based on the nature or location of the
employment or services performed. For Plan Years beginning after December 31,
1991, for purposes of applying the limitations of Subsection 4.5, 415
Compensation for a Plan Year is the 415 Compensation actually paid or made
available during such Plan Year.
20. "Highly Compensated Employee" means, for any Plan Year, all highly
compensated active employees and highly compensated former employees.
A highly compensated active employee includes any Employee who performs
an Hour of Service for the Employer or
5
<PAGE>
any Affiliate during the Determination Year and who during the Look-Back year:
(i) was at any time a five percent owner as defined in Section 416(i)(l) of the
Code; (ii) received compensation from the Employer or any Affiliate in excess of
$75,000 (as adjusted pursuant to Section 415(d) of the Code); (iii) received
compensation from the Employer or any Affiliate in excess of $50,000 (as
adjusted pursuant to Section 415(d) of the Code) and was a member of the top-
paid group of Employees within the meaning of Section 414(q)(4) of the Code for
such year; or (iv) was at any time an officer of the Employer or any Affiliate
and received compensation during such year that is greater than 50 percent of
the dollar limitation in effect under Section 415(b)(1)(A) of the Code. The term
Highly Compensated Employee also includes: (i) any Employee who is both
described in the preceding sentence if the term "Determination Year" is
substituted for the term "Look-Back Year" and is one of the 100 Employees who
received the most compensation from the Employer or any Affiliate during the
Determination Year; and (ii) any Employee who is a five percent owner, as
defined in Section 416(i)(l) of the Code, at any time during the Look-Back Year
or Determination Year. If no officer has satisfied the compensation requirement
of (iv) above during either a Determination Year or a Look-Back Year, the
highest paid officer for such year shall be treated as a Highly Compensated
Employee.
In determining Highly Compensated Employees the calendar year calculation
election described in Treas. Reg. Section 1.414(q)-1T Q&A-14(b) shall apply.
Accordingly, for purposes of this Paragraph 20, the Look-Back Year shall be the
calendar year Determination Year and a separate Determination Year calculation
is not required.
A highly compensated former employee includes any Employee who separated
from service (or was deemed to have separated) prior to the Determination Year,
performs no service for the Employer during the Determination Year, and was a
highly compensated active employee for either the separation year or any
Determination Year ending on or after the Employee's 55th birthday.
If an Employee is, during a Determination Year or Look-Back Year, a
family member of either a five percent owner who is an active or former Employee
or a Highly Compensated Employee who is one of the 10 most highly compensated
Employees ranked on the basis of compensation paid by the Employer or any
Affiliate during such year, then the family member and the five percent owner or
top-ten
6
<PAGE>
Highly Compensated Employee shall be treated as a single Employee receiving
compensation and plan contributions or benefits equal to the sum of such
compensation and contributions or benefits of the family member and five percent
owner or top-ten Highly Compensated Employee. For purposes of this Paragraph 20,
family member includes the spouse, lineal ascendants and descendants of the
Employee and the spouses of such lineal ascendants and descendants.
The determination of who is a Highly Compensated Employee, including the
determinations of the number and identity of Employees in the top-paid group,
the top 100 Employees, the number of Employees treated as officers and the
compensation that is taken into account with respect to each Employee shall be
made in accordance with Section 414(q) of the Code and the regulations
thereunder.
For purposes of this Paragraph 20, compensation means 415 Compensation
increased by the amount of any contributions made by the Employer or any
Affiliate under any salary reduction or similar arrangement and which is not
includible in the gross income of the Employee under Sections 125, 402(e)(3),
402(h)(1)(B) or 403(b) of the Code.
21. "Hour of Service" means, subject to the following provisions of this
Paragraph 21, each hour for which an Employee or Participant is either directly
or indirectly paid or entitled to payment by an Employer or by an Affiliate for
the performance of duties or for which back pay, irrespective of mitigation of
damages, has been awarded to the Employee or Participant or agreed to by the
Employer or an Affiliate. Consistent with Section 2530.200b-2(b) and (c) of the
Department of Labor regulations, an Employee or Participant shall be credited
with 8 Hours of Service for each day (but not in excess of 40 hours per week)
for such periods during which,
(a) he performs no duties for the Employer or an Affiliate by reason of
vacation, holiday, illness, incapacity (including disability), layoff, jury
duty, military duty or leave of absence but for which he is directly or
indirectly paid or entitled to payment by the Employer or an Affiliate,
including payments while he is no longer an Employee of the Employer or an
Affiliate and payments unrelated to the length of the period during which no
duties are performed but excluding payments made solely as reimbursement for
medically related expenses or solely for the purpose of complying with
applicable
7
<PAGE>
workmen's compensation, unemployment compensation or disability insurance
laws, or
(b) he is on an approved leave of absence from the Employer or an
Affiliate without compensation, provided that he returns to active employment
with the Employer or an Affiliate immediately following the termination of
such leave (unless he dies or retires during the period of such leave).
No more than 501 Hours of Service shall be credited to an Employee or
Participant under Subparagraphs (a) and (b) next above on account of any single,
continuous period during which he is not engaged in the performance of duties,
whether or not such period falls within more than one Plan Year.
Solely for the purpose of preventing the occurrence of a One Year Break
in Service, and for no other purpose, an Employee or Participant shall also be
credited with 8 Hours of Service for each day (but not in excess of 40 hours per
week) for such periods during which the Employee or Participant is absent from
work by reason of the pregnancy of, or the birth of or adoption of a child by,
such Employee or Participant, or for purposes of caring for such child
immediately following such birth or adoption, provided, however, that no more
than 501 Hours of Service shall be credited to such Employee or Participant on
account of any single, continuous period during which he is absent from work and
provided, further, that such Hours of Service shall be credited only in (a) the
Plan Year or the Computation Period, as applicable, in which the absence from
work begins, or (b) the immediately following Plan Year or the Computation
Period, as applicable, during which such absence continues.
21. "Leased Employee" means any person who is not otherwise a common law
employee of an Employer or an Affiliate and who, pursuant to an agreement
between an Employer or an Affiliate (the "recipient employer") and any other
person (the "leasing organization") has performed services for the recipient
employer (or for the recipient employer and related persons determined in
accordance with Section 414(n)(6) of the Code) on a substantially full-time
basis for a period of at least one year, and such services are of a type
historically performed by employees in the business field of the recipient
employer. A Leased Employee shall not be considered an Employee of the
recipient employer if: (i) such employee is covered by a money
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purchase pension plan which provides for immediate participation, full and
immediate vesting, and a nonintegrated employer contribution rate of at least
10% of such employee's compensation (as defined in Section 414(n) of the Code),
and (ii) leased employees do not constitute more than 20% of the recipient
employer's nonhighly compensated workforce (as defined in Section 414(n) of the
Code).
22. "Matched Contributions" means a Participant's Pre-Tax Contributions
and After-Tax Contributions during a Plan Year which in the aggregate do not
exceed 6% of his Annual Earnings.
23. "Non-Highly Compensated Employee" means, for any Plan Year, an
Employee who is not a Highly Compensated Employee.
24. "One Year Break in Service" means any Plan Year or Computation
Period, as applicable, during which an Employee or a Participant completes less
than 501 Hours of Service.
25. "Participant" means any Employee who has become eligible to
participate hereunder pursuant to Section III and is enrolled as a Participant.
26. "Plan" means the Savings-Investment Plan described in this
instrument and known as the Hartmarx Savings-Investment Plan, as the same may,
from time to time, be amended.
27. "Plan Year" means the calendar year.
28. "Plan Administrator" means the person or persons appointed by the
Company to carry out the administration of the Plan and, in the absence of any
such appointment, means the Company.
29. "Pre-Tax Contributions" means contributions made by the Employer on
behalf of a Participant in a Plan Year which reduce the Annual Earnings of such
Participant subject to federal income taxes for such year.
30. "Recordkeeper" means the individuals or firm selected by the Plan
Administrator to provide record-keeping and participant accounting services for
the Plan, including the maintenance of the separate accounts for Participants in
accordance with the provisions of Section VI.
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31. "Retirement Income Plan" means the Hartmarx Retirement Income Plan,
as the same may, from time to time, be amended.
32. "Trust Agreement" means the written agreement between the Company
and a Trustee which governs the management and administration of the Trust Fund.
33. "Trustee" means the Trustee or Trustees designated pursuant to the
Trust Agreement.
34. "Trust Fund" means all funds received by the Trustee under the Trust
representing contributions by the Employers and Participants to this Plan, and
all income and profits received thereon, and investments and proceeds thereof,
from time to time held by the Trustee under the Trust Agreement.
35. "Voluntary Contributions" means a Participant's Pre-Tax
Contributions and After-Tax Contributions during a Plan Year which are in excess
of his Matched Contributions.
36. "Year of Vesting Service" with respect to an Employee who is at
least age 18 on the last day of the Plan Year shall mean each Plan Year during
which such Employee completes at least 1,000 Hours of Service. For purposes of
determining a Participant's vested interest in his Accounts, all periods of
employment with an Employer or an Affiliate, including periods prior to the
Effective Date shall be recognized, except as provided in Subsection 8.3. A
Participant's Years of Vesting Service shall not include any period:
(a) which would not have been included as part of a Participant's
credited service under the Plan as in effect prior to January 1, 1976;
(b) during which an eligible Employee or a Participant did not make the
required contributions under this Plan as set forth in Subsection 4.1; or
(c) for which this Plan or a predecessor plan (as defined under
regulations prescribed by the Secretary of Labor or his delegate) was not
maintained by the Company or an Affiliate.
37. Use of the masculine pronoun shall be deemed to include the feminine
unless the context clearly indicates the distinction.
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SECTION III
ELIGIBILITY
On or after the Effective Date, an Employee of an Employer who is at
least age 21 and has completed at least one Eligibility Year and who is not a
Leased Employee shall be eligible to participate in this Plan. Leased Employees
shall not be eligible to participate in this Plan. An eligible Employee of an
Employer shall become a Participant in this Plan as of the first day of the
month after the Employer receives the Employee's signed enrollment form.
An Employee who has previously completed an Eligibility Year and whose
employment with the Employer and all Affiliates is terminated at a time when he
is not vested in any portion of the balance of his Employer Matching
Contribution Account shall be required to again complete an Eligibility Year
prior to becoming a Participant in the Plan unless the number of his consecutive
One Year Breaks in Service is five or less.
SECTION IV
CONTRIBUTIONS
4.1 Participant Pre-Tax and After-Tax Contributions
(a) Subject to the conditions and limitations set forth in this Section
IV and in Section V, a Participant may elect to make or have made on his
behalf contributions of up to 16% (in whole percentages only) of his Annual
Earnings after becoming a Participant. A Participant shall designate in a
salary reduction agreement (as described in Paragraph (b) below) the
percentage he elects to have his Employer contribute to the Plan on his
behalf as Pre-Tax Contributions (in whole percentages only) and shall further
designate on forms prescribed by the Plan Administrator the percentage the
Participant will contribute as After-Tax Contributions (in whole percentages
only); provided, however, that the first 1% contributed to the Plan shall
always be designated as an After-Tax Contribution.
(b) The salary reduction agreement referred to in Paragraph (a) above
shall be on a form prescribed by the Plan Administrator whereby the
Participant agrees to reduce his Annual Earnings by a specified percentage
for purposes of having the Employer contribute the reduced
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Annual Earnings amount to the Plan as Pre-Tax Contributions on behalf of the
Participant. Every Employee who is eligible to participate under Section III
shall be afforded a reasonable opportunity by the Plan Administrator to enter
into a salary reduction agreement and to elect to have Pre-Tax Contributions
made to the Plan under this Subsection 4.1. A Participant's salary reduction
agreement shall be effective as soon as practicable following the date the
agreement is received in executed form by the Plan Administrator, provided
such effective date shall be no earlier than the date the Participant would
otherwise commence participation in the Plan under Section III. Under no
circumstances shall a Participant's salary reduction agreement be adopted
retroactively. A Participant's salary reduction agreement shall remain in
effect until amended or terminated by the Participant.
(c) The reduction in a Participant's Annual Earnings which is used for
purposes of funding the Participant's Pre-Tax Contributions under this
Subsection 4.1 shall be done on a monthly, biweekly or other periodic basis
in accordance with the Participant's regular payroll period. The Pre-Tax
Contributions on behalf of a Participant shall be contributed to the Trust
Fund as of the earliest date on which such amounts can reasonably be
segregated from the Employer's general assets, and in no event later than 90
days following the date on which such amounts would otherwise have been
payable to the Participant as Annual Earnings.
(d) After-Tax Contributions made by the Participant shall be made by
regular payroll deductions and shall be done on a monthly, biweekly or other
periodic basis in accordance with the Participant's regular payroll period.
All After-Tax Contributions for a Plan Year shall be made to the Trust Fund
not later than the time required by law.
(e) All contributions to the Trust Fund under this Subsection 4.1 shall
be paid directly to the Trustee. The Plan Administrator shall furnish the
Recordkeeper with allocation instructions with respect to each contribution
which: (i) identify each Participant for whom the contribution is being made
and the amount thereof; (ii) identify whether the amount contributed for or
on behalf of the Participant represents a Pre-Tax Contribution or an After-
Tax Contribution; and (iii) direct the investment of the amount contributed
for or on
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behalf of the Participant in accordance with the provisions of Section VI.
4.2 Maximum Amount of Pre-Tax Contributions
(a) Limitation on Pre-Tax Contributions. No Participant shall be
permitted to have aggregate elective deferrals made to this Plan and any
other qualified plans maintained by the Employer or an Affiliate during any
taxable year in excess of the dollar limitation of Section 402(g) of the Code
in effect at the beginning of such taxable year. For these purposes, a
Participant's "elective deferrals" include: (i) the Participant's Pre-Tax
Contributions to this Plan (excluding any Pre-Tax Contributions returned to
the Participant as excess annual additions under Subsection 4.5); (ii)
Employer contributions made on behalf of the Participant pursuant to an
election to defer under any other plan with a qualified cash or deferred
arrangement under Section 401(k) of the Code, any simplified employee pension
as described in Section 402(h)(1)(B) of the Code, any eligible deferred
compensation plan as described in Section 457 of the Code, or any plan as
described in Section 501(c)(18) of the Code; and (iii) Employer contributions
made on behalf of the Participant pursuant to a salary reduction agreement to
purchase an annuity contract under Section 403(b) of the Code. The term
"Excess Elective Deferral" means the amount of a Participant's elective
deferrals (as defined in the preceding sentence) for a taxable year which are
includible in the Participant's gross income for the taxable year for the
reason that such deferrals exceed the dollar limitation in effect under
Section 402(g) of the Code.
(b) Election of After-Tax Contributions. If the Plan Administrator
reasonably determines that elective deferrals on behalf of a Participant to
this Plan and any other plans maintained by the Employer or an Affiliate for
any Plan Year will exceed the dollar limitation of Section 402(g) of the
Code, such Participant shall be deemed to have changed his election on his
salary reduction agreement such that all Employer contributions which would
otherwise be made to this Plan on his behalf as Pre-Tax Contributions for the
balance of the Plan Year shall instead be treated as having been made by the
Participant as After-Tax Contributions.
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(c) Allocation of Excess Elective Deferrals. If a Participant has made
Excess Elective Deferrals for any taxable year, the Participant may assign to
this Plan any portion of such Excess Elective Deferrals by notifying the Plan
Administrator in writing no later than the March 1st following the close of
the respective taxable year. Such written notification shall certify that the
Participant has made Excess Elective Deferrals to be allocated to this Plan
for the taxable year. A Participant shall be deemed to have notified the Plan
Administrator of the existence of any Excess Elective Deferrals which arise
by taking into account only those elective deferrals on behalf of the
Participant to this Plan and any other plans maintained by the Employer and
an Affiliate and to have assigned those Excess Elective Deferrals to such
plans maintained by the Employer.
(d) Distribution of Excess Elective Deferrals. Notwithstanding any
provision of the Plan to the contrary, if a Participant has assigned Excess
Elective Deferrals to this Plan for a taxable year, the amount of such Excess
Elective Deferrals, plus any income or minus any loss allocable thereto,
shall be distributed to the Participant from the Participant's Account no
later than April 15th following the close of the respective taxable year.
(e) Income or Loss Allocable to Excess Elective Deferrals. The income
or loss allocable to the amount of Excess Elective Deferrals referred to in
Paragraph (d) above shall include all allocable income or loss for the
taxable year of the Excess Elective Deferrals and shall be calculated using
any reasonable method for computing income or loss, provided such method is
used consistently for all Participants and for all corrective distributions
under the Plan for the relevant year, and is used by the Plan for allocating
income or loss to Participants' Accounts.
(f) Alternate Method for Calculating Income or Loss Allocable to Excess
Elective Deferrals. Notwithstanding Paragraph (e) above, the income or loss
allocable to the amount of Excess Elective Deferrals referred to in Paragraph
(d) above may be calculated by multiplying the total investment income or
loss (including dividends, interest, realized gains or losses, and unrealized
appreciation or depreciation) allocated to the Participant's Accounts for the
taxable year of the Excess Elective Deferrals by a fraction, the numerator of
which
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<PAGE>
is the Excess Elective Deferral amount to be distributed to the Participant
by the Plan for the taxable year, and the denominator of which is the total
Account balance attributable to the Participant's Pre-Tax Contributions as of
the end of the taxable year, reduced by the investment gain or increased by
the investment loss allocated to such total amount for the taxable year.
4.3 Changes to Pre-Tax and After-Tax Contributions
A Participant shall be permitted to amend his salary reduction agreement
at any time with respect to Annual Earnings not yet received to designate a new
percentage which will be used to determine Pre-Tax Contributions made to the
Plan on his behalf and shall also be permitted to change the percentage of
After-Tax Contributions previously designated. A Participant's amended salary
reduction agreement or amended form pertaining to After-Tax Contributions shall
be effective as soon as practicable following the date the amended agreement or
form is received by the Plan Administrator. The Plan Administrator may
prescribe uniform and nondiscriminatory rules limiting the number of times a
Participant may make such amendments during a Plan Year, provided that
Participants are afforded a reasonable opportunity to do so at least once each
Plan Year. A Participant may terminate his salary reduction agreement at any
time with respect to Annual Earnings not yet received and may terminate his
After-Tax Contributions by delivering written notice of such termination to the
Plan Administrator.
No contribution may be made by or on behalf of a Participant (i) after
the termination of his employment with an Employer, or (ii) during any period in
which such Participant shall be a participant in some other non-governmental
retirement pension plan (other than the Retirement Income Plan or the ESOP) the
cost of which is borne in full or in part by the Employer.
A Participant who is temporarily absent shall continue to make
contributions only so long as he receives Annual Earnings from the Employer and
only to the extent permitted by applicable law. If the Annual Earnings cease,
the contributions shall concurrently cease and shall be resumed when the Annual
Earnings are resumed.
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4.4 Employer Matching Contributions
Prior to December 31, 1988, in addition to amounts constituting Pre-Tax
Contributions made to the Plan pursuant to Subsection 4.1, each Employer shall
make, out of current or accumulated earnings, a contribution to the Plan for
each Plan Year equal to 25% of the aggregate Matched Contributions made by or on
behalf of the Participants employed by such Employer in such Plan Year (the
"Employer Matching Contributions") less the amount of Forfeitures applied to
reduce such Employer Matching Contributions pursuant to Subsection 9.5. If an
Employer's current or accumulated earnings are insufficient therefor, then so
much of such Employer Matching Contribution as that Employer is unable to make
may be made by any Employer. For all purposes of the Plan, any Employer
Matching Contribution made by any Employer in accordance with this Subsection
4.4 on behalf of an Employer prevented from making all or any part thereof shall
be considered as having been made by the Employer prevented from making such
Employer Matching Contribution.
Employer Matching Contributions under the Plan shall be transferred to
the Trustee in cash or in shares of the Company's common stock (which may be
shares held in the treasury or out of authorized-but-unissued shares), or both.
Shares of the Company's common stock shall be valued at fair market value as of
the date the contribution is made to the Trust Fund. Each Employer may make its
Employer Matching Contribution for any Plan Year at such time or times as it
shall in its sole discretion determine, provided, however, that the Employer
Matching Contribution for any Plan Year shall be made not later than the time
prescribed by law for filing its federal income tax return for the taxable year
within which such Plan Year ends, including any extensions thereof.
4.5 Limitation on Contributions
(a) Notwithstanding anything to the contrary contained in Section IV, the
"annual addition" for any Participant shall not exceed the amount determined
hereunder. Annual addition shall mean the sum of Employer contributions,
Employee contributions and forfeitures allocated on behalf of a Participant
for a Plan Year, which is defined to be the limitation year.
The determination of the annual addition will be made as if the Plan and
all Related Defined Contribution
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Plans were one plan, and any Participant contributions to Related Defined
Benefit Plans will be treated as contributions to Related Defined
Contribution Plans. "Related Defined Contribution Plan" means any other
defined contribution plan maintained by an Employer or an Affiliate. "Related
Defined Benefit Plan" means any defined benefit plan maintained by an
Employer or an Affiliate. Annual additions will be applied to the applicable
Plan Year in accordance with Section 1.415-6(b) of the Treasury Regulations.
Annual addition shall also include amounts allocated to an individual
medical account, as defined in Section 415(l) of the Code which is part of a
Related Defined Benefit Plan and amounts derived from contributions which are
attributable to post-retirement medical benefits allocated to the separate
account of a Key Employee (as defined in Section 416(i)(l) of the Code) under
a welfare benefit plan (as defined in Section 419A(d) of the Code) maintained
by the Employer or an Affiliate.
(b) The annual addition for any Participant shall not exceed the lesser
of (i) or (ii) below:
(i) $30,000, or if greater, one-fourth of the defined benefit
dollar limitation set forth in Section 415(b)(1)(A) of the Code as in
effect for the limitation year. In the event of a short Plan Year, the
maximum dollar limitation shall be divided by 12 and multiplied by the
number of months in the short Plan Year.
(ii) 25% of the Participant's 415 Compensation.
(c) If a Participant also is or has been a participant in one or more
Related Defined Benefit Plans, whether or not terminated, the projected
annual benefit from such Related Defined Benefit Plans shall be reduced so
that a "combined benefit factor" in excess of 1.0 shall not result. The
combined benefit factor is the sum of (i) the defined benefit factor and (ii)
the defined contribution factor where:
(i) the defined benefit factor is a fraction
(A) the numerator of which is the Participant's projected
annual benefit under all Related Defined Benefit Plans at
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the end of the limitation year of the Plan, and
(B) the denominator of which is the lesser of
(1) 1.25 multiplied by the maximum allowable annual benefit
under Sections 415(b)(1)(A) and 415(d) of the Code at the end of
the limitation year of the Plan, or
(2) 1.4 multiplied by the maximum allowable annual benefit
under Section 415(b)(1)(B) of the Code at the end of the limitation
year of the Plan, and
(ii) the defined contribution factor is a fraction
(A) the numerator of which is the sum of the annual additions
for such Participant under the Plan and all Related Defined
Contribution Plans, whether or not terminated, for all such
years during which he was a participant in such plans, and
(B) the denominator of which is the sum of the lesser of the
amounts determined in (1) or (2) for the current year and each
prior year during which the Participant was employed by the
Employer or an Affiliate, regardless of whether or not a plan
was in existence during those years:
(1) 1.25 multiplied by the maximum dollar limitation as
defined in Paragraph (b)(i) above, or
(2) 1.4 multiplied by the compensation limitation as defined
in Paragraph (b)(ii).
(d) If the foregoing limitation should apply to a Participant, his
benefits under any Related Defined Benefit Plan shall be limited before his
benefits under a Related Defined Contribution Plan are limited, and his
benefits under this Plan shall be limited before his benefits under any other
Related Defined Contribution Plan are limited.
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4.6 Employee Stock Ownership Plan
Effective December 31, 1988, upon the Company's adoption of an employee
stock ownership plan of the kind described in Section 4975(e)(7) of the Code
("ESOP") with provisions governing the allocation, distribution and calculation
of the amount of employer contributions which were substantially the same as the
provisions governing the allocation, distribution and calculation of Employer
Matching Contributions under this Plan, all obligations of the Employers to make
any future Employer Matching Contributions to this Plan ceased.
SECTION V
NONDISCRIMINATION REQUIREMENTS
5.1 Definitions
For purposes of this Section V, the following terms shall be defined as
follows:
(a) "Actual Deferral Percentage" means the ratio, expressed as a
percentage calculated to the nearest one-hundredth of one percent, of the
amount of Pre-Tax Contributions on behalf of an Eligible Employee for a Plan
Year to the Employee's Compensation (as hereinafter defined) for the Plan
Year. For these purposes, an Eligible Employee's Pre-Tax Contributions shall
not include any Pre-Tax Contributions on behalf of the Eligible Employee for
the Plan Year which are taken into account in the Average Contribution
Percentage test under Subsection 5.5. A Highly Compensated Employee's Pre-Tax
Contributions shall include any Excess Elective Deferrals on behalf of the
Highly Compensated Employee for the Plan Year. Any Eligible Employee who does
not elect to make Pre-Tax Contributions shall have a zero Actual Deferral
Percentage for the Plan Year. An Eligible Employee's Actual Deferral
Percentage for a Plan Year shall be calculated by disregarding any Pre-Tax
Contributions on behalf of the Eligible Employee for the Plan Year which are
properly returned to the Eligible Employee as an excess annual addition under
Subsection 4.5.
(b) "Average Actual Deferral Percentage" means the average of the Actual
Deferral Percentages of all of the Eligible Employees for the Plan Year.
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(c) "Average Contribution Percentage" means the average of the
Contribution Percentages of the Eligible Employees for the Plan Year.
(d) "Contribution Percentage" means the ratio, expressed as a percentage
calculated to the nearest one-hundredth of one percent, of the sum of
Employer Matching Contributions, After-Tax Contributions, and any Pre-Tax
Contributions taken into account under Subsection 5.7, on behalf of an
Eligible Employee for a Plan Year to the Employee's Compensation for the Plan
Year. For these purposes, an Eligible Employee's Contribution Percentage for
any Plan Year shall be calculated by excluding any Employer Matching
Contributions which are forfeited either to correct Excess Aggregate
Contributions or because the contributions to which they relate are Excess
Elective Deferrals, Excess Contributions, or Excess Aggregate Contributions.
An Eligible Employee's Contribution Percentage for a Plan Year shall be
calculated by disregarding any After-Tax Contributions or Pre-Tax
Contributions on behalf of the Eligible Employee for the Plan Year which are
properly returned to the Eligible Employee as an excess annual addition under
Subsection 4.5.
(e) "Compensation" means the total 415 Compensation received by an
Employee for services rendered to the Employer or an Affiliate while an
Eligible Employee under the Plan during the Plan Year. An Eligible Employee's
Compensation for a Plan Year shall also include all Pre-Tax Contributions
made to the Plan on behalf of the Employee for the Plan Year, and all
elective contributions made by the Employer or an Affiliate for the Plan Year
to any other plan on behalf of the Employee which are not currently
includible in the gross income of the Employee under Sections 125, 402(a)(8),
402(h) or 403(b) of the Code. Not more than $200,000 (or such other amount as
is determined under Section 401(a)(17) of the Code) of Compensation will be
taken into account for any Eligible Employee for any Plan Year beginning
after December 31, 1988 and before January 1, 1994. For Plan Years beginning
on or after January 1, 1994, the Compensation of each Eligible Employee taken
into account for any Plan Year shall not exceed $150,000, as adjusted for
increases in the cost-of-living in accordance with Section 401(a)(17)(B) of
the Code. In determining the Compensation of an Eligible Employee for
purposes of the applicable adjusted annual Compensation limitation, the rules
of Section 414(q)(6) of the Code shall apply,
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except in applying such rules, the term "family" shall include only the
spouse of the Eligible Employee and any lineal descendants of the Eligible
Employee who have not attained age 19 before the close of the Plan Year.
(f) "Eligible Employee" means, with respect to any Plan Year, any
Employee who is eligible to participate under Section III and to have Pre-Tax
Contributions made to the Plan under Subsection 4.1, regardless of whether
any contributions are made to the Plan on behalf of the Employee for such
Plan Year.
(g) "Excess Aggregate Contributions" means, with respect to any Plan
Year, the excess of the aggregate amount of Employer Matching Contributions,
After-Tax Contributions and any Pre-Tax Contributions taken into account
under Subsection 5.7, actually made to the Plan on behalf of Highly
Compensated Employees for the Plan Year over the maximum amount of such
contributions permitted under Subsection 5.5.
(h) "Excess Contributions" means, with respect to any Plan Year, the
excess of the aggregate amount of Pre-Tax Contributions actually made to the
Plan on behalf of Highly Compensated Employees for the Plan Year over the
maximum amount of such contributions permitted under Subsection 5.2.
(i) "Family Member" means, with respect to any Eligible Employee, an
individual described in Section 414(q)(6)(B) of the Code.
5.2 Average Actual Deferral Percentage (ADP) Tests
For each Plan Year, the Plan shall satisfy one of the following Average
Actual Deferral Percentage tests with respect to the Pre-Tax Contributions made
to the Plan for the Plan Year:
(a) the Average Actual Deferral Percentage for the group of Eligible
Employees who are Highly Compensated Employees for the Plan Year shall not
exceed the Average Actual Deferral Percentage for the group of Eligible
Employees who are Non-Highly Compensated Employees for the Plan Year
multiplied by 1.25; or
(b) the Average Actual Deferral Percentage for the group of Eligible
Employees who are Highly Compensated Employees for the Plan Year shall not
exceed the Average
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Actual Deferral Percentage for the group of Eligible Employees who are Non-
Highly Compensated Employees for the Plan Year multiplied by two, provided
that the Average Actual Deferral Percentage for the group of Eligible
Employees who are Highly Compensated Employees for the Plan Year does not
exceed the Average Actual Deferral Percentage for the group of Eligible
Employees who are Non-Highly Compensated Employees by more than two
percentage points.
5.3 Special Rules for ADP Tests
(a) Aggregation of Family Members. For purposes of determining the
Actual Deferral Percentage of any Eligible Employee who is a five-percent
owner or one of the ten most highly-paid Highly Compensated Employees, the
Pre-Tax Contributions and Compensation of such Eligible Employee shall
include the Pre-Tax Contributions and Compensation for the Plan Year of
Family Members. In such a case, the Family Member of the Highly Compensated
Employee shall not be considered a separate Eligible Employee for purposes of
calculating Average Actual Deferral Percentages for the Plan Year.
(b) Multiple Cash or Deferred Arrangements. In the case of any Eligible
Employee who is a Highly Compensated Employee for a Plan Year and who is
eligible to participate in more than one cash or deferred arrangement
described in Section 401(k) of the Code maintained by the Employer or an
Affiliate during the Plan Year, the Actual Deferral Percentage of the
Eligible Employee for the Plan Year shall be calculated by treating all such
cash or deferred arrangements in which the Eligible Employee is eligible to
participate as one arrangement. If the Highly Compensated Employee
participates in two or more such cash or deferred arrangements that have
different plan years, all cash or deferred arrangements ending with or within
the same calendar year shall be treated as a single arrangement.
(c) Aggregation of Plans. In the event that this Plan satisfies the
requirements of Section 401(a), 401(k) or 410(b) of the Code only if
aggregated with one or more other qualified plans, or if one or more other
qualified plans satisfy the requirements of such sections of the Code only if
aggregated with this Plan, then this Section V shall be applied by
determining the Actual Deferral Percentages of Eligible Employees as if all
such qualified plans were a single plan. For plan years
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beginning after December 31, 1989, qualified plans may be aggregated in order
to satisfy Section 401(k) of the Code only if they have the same plan year.
5.4 Correction of Excess Contributions
(a) General Rule. If the Plan fails to satisfy one of the Average Actual
Deferral Percentage tests of Subsection 5.2 as of the end of a Plan Year, the
Excess Contributions for the Plan Year shall be either recharacterized in
accordance with Paragraph (b) below or timely distributed to Highly
Compensated Employees in accordance with Paragraph (c) below, as determined
by the Plan Administration in its sole discretion.
(b) Recharacterization. Highly Compensated Employees' Excess
Contributions may be treated as amounts distributed to the Highly Compensated
Employees and then contributed by such employees to the Plan. Recharacterized
amounts shall remain nonforfeitable and subject to the same distribution
requirements as Pre-Tax Contributions. Recharacterization shall occur no
later than two and one-half months after the last day of the Plan Year in
which such Excess Contributions arose and is deemed to occur no earlier than
the date the last Highly Compensated Employee is informed in writing of the
amount recharacterized and the consequences thereof. Such recharacterized
amounts will be taxable to the Highly Compensated Employees for the tax year
in which such employees would have received them in cash.
(c) Distribution of Excess Contributions. Excess Contributions, plus any
income and minus any loss allocable thereto, which are not recharacterized in
accordance with Paragraph (b) above shall be distributed to Highly
Compensated Employees no later than 12 months following the close of the Plan
Year. Such distributions shall be made to Highly Compensated Employees on the
basis of respective portions of the Excess Contributions attributable to each
such Highly Compensated Employee. For purposes of this Paragraph (c), Excess
Contributions of Highly Compensated Employees who are subject to the family
member aggregation rules of Subsection 5.3 shall be allocated among the
Family Members of the Highly Compensated Employee in proportion to the Pre-
Tax Contributions of each Family Member which are combined to determine the
Highly Compensated Employee's Actual Deferral Percentage.
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(d) Determination and Allocation of Excess Contributions. The Actual
Deferral Percentage for the Highly Compensated Employee with the highest
Actual Deferral Percentage for the Plan Year shall be reduced to the minimum
extent necessary either:
(i) to enable the Plan to satisfy one of the Average Actual Deferral
Percentage tests of Subsection 5.2 for the Plan Year; or
(ii) to cause the Highly Compensated Employee's Actual Deferral
Percentage to equal the next highest Actual Deferral Percentage of any
Highly Compensated Employee for the Plan Year.
This process shall be repeated until the Average Actual Deferral Percentage
for the group of Eligible Employees who are Highly Compensated Employees is
sufficiently reduced to enable the Plan to satisfy one of the Average Actual
Deferral Percentage tests of Subsection 5.2 for the Plan Year. The amount of
Excess Contributions to be allocated to each Highly Compensated Employee for
the Plan Year shall equal the total Pre-Tax Contributions on behalf of the
Highly Compensated Employee for the Plan Year minus the amount determined by
multiplying the Highly Compensated Employee's reduced Actual Deferral
Percentage (as determined above) by the Employee's Compensation for the Plan
Year.
(e) Income or Loss Allocable to Excess Contributions. The income or loss
allocable to the Excess Contributions referred to in Paragraph (d) above
shall be calculated up to the date of distribution using any reasonable
method for computing income or loss, provided such method is used
consistently for all Participants and for all corrective distributions under
the Plan for the Plan Year, and is used by the Plan for allocating income or
loss to Participants' Accounts under the Plan.
(f) Alternate Method for Calculating Income or Loss Allocable to Excess
Contributions. Notwithstanding Paragraph (e) above, the income or loss
allocable to the amount of Excess Contributions may be calculated by (i)
multiplying the total investment income or loss (including dividends,
interest, realized gains or losses, and unrealized appreciation or
depreciation) allocable to the Participant's Pre-Tax Contributions by a
fraction, the numerator of which is the Excess Contributions
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allocated to the Participant for the Plan Year, and the denominator of which
is the total account balance attributable to the Participant's Pre-Tax
Contributions as of the end of the Plan Year, reduced by the investment gain
(or increased by the investment loss) allocated to such total amount for the
Plan Year, and (ii) adding to such sum, ten percent of the amount determined
under (i) above multiplied by the number of whole calendar months between the
end of the Plan Year and the date of distribution counting the month of
distribution if distribution occurs after the 15th of such month.
5.5 Average Contribution Percentage (ACP) Tests
For each Plan Year for which any Employer Matching Contributions are made
to the Plan or any After-Tax Contributions are made to the Plan, the Plan
shall satisfy one of the following Average Contribution Percentage tests for
the Plan Year:
(a) the Average Contribution Percentage for the group of Eligible
Employees who are Highly Compensated Employees for the Plan Year shall not
exceed the Average Contribution Percentage for the group of Eligible
Employees who are Non-Highly Compensated Employees for the Plan Year
multiplied by 1.25; or
(b) the Average Contribution Percentage for the group of Eligible
Employees who are Highly Compensated Employees for the Plan Year shall not
exceed the Average Contribution Percentage for the group of Eligible
Employees who are Non-Highly Compensated Employees for the Plan Year
multiplied by two, provided that the Average Contribution Percentage for the
group of Eligible Employees who are Highly Compensated Employees for the Plan
Year does not exceed the Average Contribution Percentage for the group of
Eligible Employees who are Non-Highly Compensated Employees by more than two
percentage points.
5.6 Special Rules for ACP Tests
(a) Aggregation of Family Members. For purposes of determining the
Contribution Percentage of any Eligible Employee who is a five-percent owner
or one of the ten most highly-paid Highly Compensated Employees, the After-
Tax Contributions and Employer Matching Contributions (and any Pre-Tax
Contributions treated as Employer Matching Contributions under Subsection
5.7) and
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Compensation of such Eligible Employee shall include the After-Tax
Contributions and Employer Matching Contributions (and any Pre-Tax
Contributions treated as Employer Matching Contributions under Subsection
5.7) and Compensation for the Plan Year of Family Members. In such a case,
the Family Member of the Highly Compensated Employee shall not be considered
a separate Eligible Employee for purposes of calculating Average Contribution
Percentages for the Plan Year.
(b) Multiple Plans. In the case of any Eligible Employee who is a
Highly Compensated Employee for a Plan Year and who is eligible to
participate in more than one qualified plan maintained by the Employer or an
Affiliate during the Plan Year, all matching contributions (as defined in
Section 401(m)(4)(A) of the Code) and all employee contributions and any
elective deferrals taken into account under 401(m)(3) of the Code shall be
aggregated for purposes of determining the Eligible Employee's Contribution
Percentage for the Plan Year. If the Highly Compensated Employee participates
in two or more cash or deferred arrangements described in Section 401(k) of
the Code maintained by the Employer that have different plan years, all such
cash or deferred arrangements ending with or within the same calendar year
shall be treated as a single arrangement.
(c) Aggregation of Plans. In the event that this Plan satisfies the
requirements of Section 401(a)(4), 401(m) or 410(b) of the Code only if
aggregated with one or more other qualified plans, or if one or more other
qualified plans satisfy the requirement of such sections of the Code only if
aggregated with this Plan, then this Section V shall be applied by
determining the Contribution Percentages of Eligible Employees as if all such
qualified plans were a single plan. For plan years beginning after December
31, 1989, qualified plans may be aggregated to satisfy Section 401(m) of the
Code only if they have the same plan year.
5.7 Treatment of Employee Pre-Tax Contributions as Employer Matching
Contributions
The Employer may elect, in accordance with the regulations of the
Secretary of Treasury under Section 401(m) of the Code, to treat all or a
portion of the Pre-Tax Contributions as Employer Matching Contributions for
purposes of calculating the Contribution Percentages of Eligible Employees for
the Plan Year. Notwithstanding the
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preceding, the Employer may elect to treat Pre-Tax Contributions as Employer
Matching Contributions for purposes of calculating Contribution Percentages only
if one of the Average Actual Deferral Percentage Tests of Subsection 5.2 is
satisfied before the Pre-Tax Contributions are treated as Employer Matching
Contributions for the Plan Year, and one of the Average Actual Deferral
Percentage Tests of Subsection 5.2 continues to be satisfied excluding the Pre-
Tax Contributions treated as Employer Matching Contributions for the Plan Year.
5.8 Correction of Excess Aggregate Contributions
(a) General Rule. If the Plan does not satisfy one of the Average
Contribution Percentages tests of Subsection 5.5 as of the end of a Plan
Year, the Excess Aggregate Contributions for the Plan Year shall be forfeited
or timely distributed to Highly Compensated Employees in accordance with
Paragraph (c) below.
(b) Allocation of Excess Aggregate Contributions. In the event Excess
Aggregate Contributions are made to the Plan for a Plan Year, the
Contribution Percentage for the Highly Compensated Employee with the highest
Contribution Percentage for the Plan Year shall be reduced to the minimum
extent necessary either:
(i) to enable the Plan to satisfy one of the Average Contribution
Percentage tests of Subsection 5.5 for the Plan Year; or
(ii) to cause the Highly Compensated Employee's Contribution
Percentage to equal the next highest Contribution Percentage of any
Highly Compensated Employee for the Plan Year.
This process shall be repeated until the Average Contribution Percentage for
the group of Eligible Employees who are Highly Compensated Employees for the
Plan Year is sufficiently reduced to enable the Plan to satisfy one of the
Average Contribution Percentage tests of Subsection 5.5 for the Plan Year.
The amount of Excess Aggregate Contributions to be allocated to each Highly
Compensated Employee for the Plan Year shall equal the total After-Tax
Contributions and Employer Matching Contributions, including Pre-Tax
Contributions treated as Employer Matching Contributions under Subsection
5.7, on behalf of the Highly Compensated Employee for the Plan Year minus the
amount determined by multiplying the
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Highly Compensated Employee's reduced Contribution Percentage (as determined
above) by the Employee's Compensation for the Plan Year.
(c) Forfeiture or Distribution of Excess Aggregate Contributions.
Excess Aggregate Contributions allocated to Highly Compensated Employees for
a Plan Year, plus any income or minus any loss allocable thereto, must be
forfeited to the extent attributable under Paragraph (g) below to Employer
Matching Contributions that are not vested under Section VIII, and otherwise
distributed to Highly Compensated Employees no later than 12 months following
the close of the Plan Year. Such distributions shall be made to Highly
Compensated Employees on the basis of the respective portions of the Excess
Aggregate Contributions attributable to each such Highly Compensated
Employee. For purposes of this paragraph (c), Excess Aggregate Contributions
of Highly Compensated Employees who are subject to the family member
aggregation rules of Subsection 5.6 shall be allocated among the Family
Members of the Highly Compensated Employee in proportion to the After-Tax
Contributions and Employer Matching Contributions of each Family Member which
are combined to determine the Highly Compensated Employee's Average
Contribution Percentage.
(d) Income or Loss Allocable to Excess Aggregate Contributions. The
income or loss allocable to the Excess Aggregate Contributions referred to in
Paragraph (c) above shall be calculated up to the date of distribution using
any reasonable method for computing income or loss, provided such method is
used consistently for all Participants and for all corrective distributions
under the Plan for the Plan Year, and is used by the Plan for allocating
income or loss to Participants' Accounts under the Plan.
(e) Alternate Method for Calculating Income or Loss Allocable to Excess
Contributions. Notwithstanding Paragraph (d) above, the income or loss
allocable to the amount of Excess Aggregate Contributions may be calculated
by (i) multiplying the total investment income or loss (including dividends,
interest, realized gains or losses, and unrealized appreciation or
depreciation) allocable to the Participant's After-Tax Contributions,
Employer Matching Contributions and amounts treated as Employer Matching
Contributions under Subsection 5.7 by a fraction, the numerator of which is
the Excess Aggregate Contributions allocated to the Participant for the Plan
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Year, and the denominator of which is the total account balance attributable
to the Participant's After-Tax Contributions, Employer Matching Contributions
and amounts treated as Employer Matching Contributions under Subsection 5.7
as of the end of the Plan Year, reduced by the investment gain (or increased
by the investment loss) allocated to such total amount for the Plan Year, and
(ii) adding to such sum, ten percent of the amount determined under (i) above
multiplied by the number of whole calendar months between the end of the Plan
Year and the date of distribution counting the month of distribution if
distribution occurs after the 15th of such month.
(f) Coordination with Excess Contributions. The determination of the
amount of Excess Aggregate Contributions for a Plan Year shall be made after
the determination of the amount of any Excess Contributions for the Plan
Year.
(g) Accounting for Excess Aggregate Contributions. The amount of Excess
Aggregate Contributions allocated to a Highly Compensated Employee for a Plan
Year shall be attributed first to After-Tax Contributions by the Participant
which are not matched by Employer Matching Contributions under Subsection
4.4. To the extent such Excess Aggregate Contributions exceed the
Participant's After-Tax Contributions which are not matched, such Excess
Aggregate Contributions shall be attributed to After-Tax Contributions which
are matched by Employer Matching Contributions, Employer Matching
Contributions and any amounts treated as Employer Matching Contributions
under Subsection 5.7 in proportion to the amounts of such contributions on
behalf of the Participant for the Plan Year.
5.9 Multiple Use of Alternative Limitation
(a) In General. This Subsection 5.9 shall apply if one or more Highly
Compensated Employees participates in this Plan and the sum of the Average
Actual Deferral Percentage and the Average Contribution Percentage of those
Highly Compensated Employees exceeds the Aggregate Limit, as defined in
Paragraph (b) below. For purposes of this Subsection 5.9, the Average Actual
Deferral Percentage of the Highly Compensated Employees shall be determined
after any corrective measures as described in Subsection 5.4 are undertaken for
the Plan Year. The Average Contribution Percentage of the Highly Compensated
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Employees shall be determined after any corrective measures as described in
Subsections 5.7 and 5.8 are undertaken for the Plan Year. Notwithstanding the
foregoing, this Subsection 5.9 shall not apply if either the Average Actual
Deferral Percentage or the Average Contribution Percentage of the Highly
Compensated Employees does not exceed 1.25 multiplied by the Average Actual
Deferral Percentage and the Average Contribution Percentage of the Non-Highly
Compensated Employees.
(b) Aggregate Limit. The term "Aggregate Limit" shall mean the sum of:
(i) 125 percent of the greater of: (A) the Average Actual Deferral
Percentage for Eligible Employees who are Non-Highly Compensated
Employees for the Plan Year or (B) the Average Contribution Percentage
for Eligible Employees who are Non-Highly Compensated Employees for the
Plan Year; plus
(ii) two plus the lesser of (A) or (B) above, provided that in no
event shall this amount exceed 200 percent of the lesser of (A) or (B) above.
(c) Required Correction. In the event that the Aggregate Limit is
exceeded as of the end of any Plan Year, the Employer shall reduce the
Average Contribution Percentage of the Highly Compensated Employees
(beginning with such Highly Compensated Employees whose Average Contribution
Percentage is the highest) so that the Aggregate Limit is not exceeded. The
amount by which each such Highly Compensated Employee's Average Contribution
Percentage is reduced shall be determined in accordance with the procedures
of Subsection 5.8, by treating the excess amount as Excess Aggregate
Contributions.
5.10 Recordkeeping Requirements
The Plan Administrator shall maintain records sufficient to demonstrate
satisfaction of the Average Actual Deferral Percentage test and the Average
Contribution Percentage test.
5.11 Other Requirements
The determination and treatment of the Average Actual Deferral Percentage
amounts and the Average Contribution Percentage amounts of any Eligible Employee
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shall satisfy such other requirements as may be prescribed by the Secretary of
Treasury.
SECTION VI
INVESTMENT OF CONTRIBUTIONS
6.1 Receipt of Contributions by the Trustee
All contributions to the Plan which are paid to the Trustee under
Subsections 4.1, 4.4 and 10.1 shall be held in trust and managed by the Trustee
in accordance with the terms and conditions of the Trust Agreement.
6.2 Establishment of Separate Accounts by Recordkeeper
(a) In accordance with the directions of the Plan Administrator, the
Recordkeeper shall establish and maintain the following separate accounts in
the name of each Participant:
(i) an "Employee Pre-Tax Contribution Account" to record the
Participant's Pre-Tax Contributions to the Plan under Subsection 4.1, and
the earnings, losses and expenses allocated thereto;
(ii) an "Employee After-Tax Contribution Account" to record the
Participant's After-Tax Contributions to the Plan under Subsection 4.1,
and the earnings, losses and expenses allocated thereto;
(iii) an "Employer Matching Contribution Account" to record any
Employer Matching Contributions to the Plan under Subsection 4.4 on
behalf of the Participant and the earnings, losses and expenses allocated
thereto;
(iv) a "Rollover Contribution Account" to record any rollover
contributions to the Plan on behalf of the Participant under Subsection
10.1 and the earnings, losses and expenses allocated thereto; and
(v) such other accounts as the Plan Administrator shall direct in
accordance with the provisions of the Plan or the requirements of the
Code.
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In addition, the Recordkeeper shall establish subaccounts under the
Accounts in Paragraphs (a)(i) and (ii) above, to distinguish a Participant's
Matched Contributions from his Voluntary Contributions, and the earnings,
losses and expenses allocated thereto.
6.3 Investment of Plan Assets
Subject to Subsection 6.4, all amounts which are allocated to the
separate Accounts of a Participant shall be invested and reinvested in
accordance with the Participant's investment instructions in one or more of the
investment options made available by the Plan Administrator under the Plan and
authorized under the Trust Agreement. The Plan Administrator shall make not less
than 3 investment options available under the Plan. All investment directions by
a Participant shall be made in accordance with rules and procedures prescribed
by the Plan Administrator. A Participant shall be permitted to change investment
directions both as to existing amounts credited to his separate Accounts under
the Plan and future contributions by or on behalf of the Participant under the
Plan. Any such change in investment directions shall be made in accordance with
rules and procedures prescribed by the Plan Administrator. Notwithstanding the
foregoing, the transfer of assets from any investment contract fund shall be
subject to the restrictions set forth in the operative investment contract fund
documents. To the extent such investments are directed by the Participant, the
Trustee and other Plan fiduciaries are relieved of their fiduciary
responsibilities to the extent provided in Section 404 of ERISA.
6.4 Employer Contributions
All Employer Matching Contributions shall be invested, in accordance with
the provisions of the Trust Agreement, only in the "Hartmarx Stock Fund" which
shall be an unsegregated fund invested in the Company's common stock.
SECTION VII
ALLOCATIONS TO PARTICIPANT ACCOUNTS
7.1 Credits to Hartmarx Stock Fund Accounts
The Participant's Account or Accounts which are invested in the Hartmarx
Stock Fund (hereinafter referred to as the "Hartmarx Stock Fund Account" or
"Hartmarx Stock Fund Accounts") shall be credited as of each Calculation Date
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with the dollar amount of the contributions made by or on behalf of the
Participant during the preceding Calculation Period. Such contributions shall be
applied by the Trustee toward the purchase of the Company's common stock. All
amounts transferred to the Trustee under Section X in respect of an eligible
rollover distribution (as defined in said Section X) payable to the Participant
from another retirement plan and permitted by the Company to be so transferred
shall be credited to the Participant's Rollover Contribution Account in the
Hartmarx Stock Fund as of the date of receipt thereof by the Trustee. Any
Hartmarx Stock Fund Account of the Participant which has not been distributed on
account of a termination of employment with the Employer and all Affiliates, or
which has not been withdrawn pursuant to Subsection 9.7, prior to such
Calculation Date shall also be credited (or charged) with dividends, gains or
losses on open market transactions (as measured against the ending valuation for
such Calculation Date), other distributions (other than in Company common stock)
received during the preceding Calculation Period on the Company's common stock
held by the Trustee, and interest earned, if any, on any funds temporarily held
by the Trustee in accordance with the Trust Agreement, in the proportion that
the average of (i) the value of the Participant's Hartmarx Stock Fund Account on
such Calculation Date (without regard to Employer Matching Contributions and
earnings posted thereto on such Calculation Date pursuant to this Subsection
7.1); and (ii) the value (as of such Calculation Date) of the shares in such
Account on the first day of the Calculation Period then ending (computed after
taking into account any distributions pursuant to Section IX), bears to the
average value of the Hartmarx Stock Fund Accounts of all Participants on such
Calculation Date and on the first day of such Calculation Period (similarly
calculated), provided, however, that prior to making such allocation, the net
earnings of the Hartmarx Stock Fund shall first be reduced by the portion
thereof attributable to eligible rollover distribution amounts received by the
Trustee during such Calculation Period. The net earnings determined to be
attributable to such eligible rollover distribution amounts shall then be
allocated to the Hartmarx Stock Fund Accounts of all Participants entitled
thereto in the proportion that the credit balance thereof as of the last day of
the Calculation Period then ending in each such Account of each such Participant
bears to the total credit balances thereof as of the last day of such
Calculation Period in the Hartmarx Stock Fund Accounts of all such Participants.
The Participant's Hartmarx Stock Fund Account shall then be credited as of each
Calculation Date with
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shares of the Company's common stock (calculated to the third decimal place)
valued at the average price per share of the Company's common stock purchased by
the Trustee from the Company (and from the Hartmarx Stock Fund Accounts of
terminated Participants) on account of the contributions made, and income
earned, during such Calculation Period (which shares shall be allocated to such
Accounts in proportion to the dollar balances in such Accounts), and the dollar
amounts in such Account shall be reduced by the aggregate price of the stock so
credited to such Account. In computing said aggregate price, the price per share
of the Company's common stock purchased, or treated as having been purchased, by
the Trustee pursuant to this Subsection 7.1 shall be equal to 90% (100%, with
respect to amounts attributable to rollover contributions under Subsection 10.1)
of the mean of the high and low prices for such share on the New York Stock
Exchange-Composite Transactions, or other principal market quotation, on the day
such share is purchased, or treated as having been purchased. For purposes of
this Subsection 7.1, the aggregate amount of Pre-Tax Contributions and After-Tax
Contributions made to the Hartmarx Stock Fund during each calendar month shall
be applied (or treated as having been applied) by the Trustee to the purchase of
shares of the Company's common stock (which shall be shares held in treasury or
in the accounts of terminated Participants) as of the last day of such month.
The Company may direct the Trustee to exercise rights to purchase stock
of the Company. For purposes of this Subsection 7.1 the price of such stock
shall be increased by the fair market value of such rights on the date of
exercise and such fair market value shall be treated as a dividend.
7.2 Credits to Investment Fund Accounts
The Participant's Account or Accounts which are invested in an investment
fund or funds other than the Hartmarx Stock Fund (hereinafter referred to as the
"Investment Fund" or "Investment Funds") shall be credited as of each
Calculation Date with all contributions made by or on behalf of the Participant
during the preceding Calculation Period which the Participant has directed be
invested in such Investment Fund.
The Trustee shall determine following the close of each Calculation
Period the adjusted net earnings of the Investment Fund for such Calculation
Period, which shall be:
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(a) the interest received on investments of such Fund during such
Calculation Period; gains realized from the sale, collection, exchange or
distribution during such Calculation Period of assets of such Fund; and
appreciation during such Calculation Period in fair market value of assets of
such Fund at the close of such Calculation Period; less
(b) the losses realized from the sale, collection, exchange or
distribution during such Calculation Period of assets of such Fund; and
depreciation during such Calculation Period in fair market value of assets of
such fund owned at the close of such Calculation Period.
The fair market value of any nontransferable securities or obligations of
or guaranteed by the United States of America, having a surrender value, shall
be deemed to be the redemption value or cost during a nonredemption period.
The adjusted net earnings of the Investment Fund shall be posted as of
the last day of each Calculation Date as a credit or charge, as the case may be,
to the Accounts of all Participants in such Investment Fund which have not been
distributed on account of a termination of employment with the Employer and all
Affiliates, or which have not been withdrawn pursuant to Subsection 9.7, prior
to such Calculation Date, in the proportion that the average of (i) the credit
balance in the Participant's Account in such Investment Fund on such Calculation
Date (without regard to earnings posted thereto on such Calculation Date
pursuant to this Subsection 7.2); and (ii) the credit balance in such Account on
the first day of the Calculation Period then ending (computed after taking into
account and distributions pursuant to Section IX), bears to the average of the
total credit balances in the Accounts in such Investment Fund of all
Participants on such Calculation Date and on the first day of such Calculation
Period (similarly calculated).
7.3 Statements to Participants
Each Participant as of the end of each calendar quarter shall be informed
by the Plan Administrator as soon as practicable thereafter, and in such manner
as the Plan Administrator shall determine, as to the credit balance in
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the Participant's Accounts as of such day. Any such information furnished to
any Participant shall in no way control or modify the provisions of this Section
VII.
SECTION VIII
VESTING OF ACCOUNTS
8.1 Participant Contributions
The interest of each Participant in his Accounts attributable to Pre-Tax
Contributions and After-Tax Contributions and the interest of each such
Participant in his Pre-Tax Contributions and After-Tax Contributions, if any,
which are not yet credited to his account(s) shall be fully vested and non-
forfeitable.
8.2 Employer Contributions
The interest of each Participant in his Employer Matching Contribution
Account, whenever and wherever made, and the earnings, if any, thereon shall be
fully vested and non-forfeitable upon the earliest to occur of: (i) his
completion of five Years of Vesting Service; (ii) the date of his death; (iii)
the date on which he attains age 65; (iv) his election of early retirement under
the Retirement Income Plan; and (v) the date on which a Change in Control of the
Company occurs. A Participant who is not 100% vested in the interest in his
Employer Matching Contribution Account in accordance with the preceding sentence
but who has completed at least three "Completed Years of Vesting Service" (as
defined below) will nevertheless have a vested and nonforfeitable interest such
Account in the percentage shown in the following schedule based upon his
Completed Years of Vesting Service:
Completed Years
of Vesting Service Percent Vested
------------------ --------------
At least three but less than four 33-1/3%
Four but less than five 66-2/3%
Five or more 100%
A Participant shall be credited with one Completed Year of Vesting Service for
each full Computation Period of his participation in the Plan during which he
makes the required contributions under the Plan as set forth in Subsection 4.1.
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8.3 Breaks in Service
(a) In the case of a Participant who has incurred five consecutive One
Year Breaks in Service, Years of Vesting Service and Completed Years of
Vesting Service completed by such Participant after such five consecutive One
Year Breaks in Service shall be disregarded for purposes of determining his
vested interest under Subsection 8.2 in the portion of the balance in his
Employer Matching Contribution Account that accrued before such five
consecutive One Year Breaks in Service.
(b) In the case of a Participant who has incurred five consecutive One
Year Breaks in Service and who has no nonforfeitable interest in his Employer
Matching Contribution Account, Years of Vesting Service and Completed Years
of Vesting Service completed by such Participant before such five consecutive
One Year Breaks in Service shall be disregarded for purposes of determining
his vested interest under Subsection 8.2 in the portion of the balance in his
Account that accrues subsequent to such five consecutive One Year Breaks in
Service.
(c) In the case of a Participant who has incurred a One Year Break in
Service but not five consecutive One Year Breaks in Service, Years of Vesting
Service and Completed Years of Vesting Service completed by such Participant
prior to such One Year Break in Service shall be disregarded for purposes of
determining his vested interest under Subsection 8.2 until such Participant
shall have completed a Year of Vesting Service during a Plan Year after the
Plan Year in which such One Year Break in Service was incurred.
SECTION IX
DISTRIBUTIONS AND WITHDRAWAL
9.1 Retirement of Participant
If a Participant retires under the retirement provisions of the
Retirement Income Plan, such Participant shall be entitled to distribution from
the Trust Fund in a lump sum payment of the amount to the credit of the
Participant's Accounts plus cash equal to the amount of any contributions made
by or on behalf of the Participant which have not been credited to the
Participant's Accounts. The
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Participant's Accounts shall be distributed in accordance with the provisions of
Subsection 9.6.
9.2 Death of a Participant
Upon the death of a Participant, the amount to the credit of the
Participant's Accounts plus cash equal to the amount of any contributions made
by or on behalf of the Participant and not previously credited to the
Participant's Accounts will become distributable to or for the benefit of the
Participant's Beneficiary in the form of a lump sum payment.
9.3 Other Termination of Employment: Vested Participant
If a Participant shall cease to be an Employee for any reason (other than
retirement under the retirement provisions of the Retirement Income Plan or
death) after having become vested in any portion of his Employer Matching
Contribution Account, the Participant shall be entitled to distribution from the
Trust Fund, in accordance with the provisions of Subsection 9.6, of the vested
portion of all of the Participant's Accounts, plus cash equal to the sum of any
vested contributions made which have not been credited to the Participant's
Accounts and any rollover contributions.
9.4 Other Termination of Employment: Non-Vested Participant
If a Participant shall cease to be an Employee for any reason (other than
retirement under the retirement provisions of the Retirement Income Plan or
death) before becoming vested in any portion of his Employer Matching
Contribution Account and the earnings, if any, thereon, the Participant shall be
entitled to distribution from the Trust Fund of the amount to the credit of the
Participant's Accounts attributable to his Pre-Tax Contributions and After-Tax
Contributions plus the amount of any of his Pre-Tax Contributions or After-Tax
Contributions which have not been credited to the Participant's accounts and any
rollover contributions, which shall be paid to him in accordance with Subsection
9.6. The amount to the credit of the Employer Matching Contribution Account of
a Participant who is not vested and the earnings, if any, thereon, together with
any such Employer Matching Contributions made on behalf of the Participant and
not credited to the Participant's Accounts shall be distributed in accordance
with Subsection 9.6.
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9.5 Forfeiture Accounts and Forfeitures
The nonvested portion of a Participant's Employer Matching Contribution
Account plus any such Employer Matching Contributions made on his behalf and not
previously credited to his Employer Matching Contribution Account which are not
distributable under the provisions of Subsections 9.3 and 9.4 shall be credited
to a Forfeiture Account established and maintained by the Trustee in the
Participant's name as of the Calculation Date coincident with or next following
his termination date (before adjustments then required under the Plan have been
made). The Forfeiture Account shall be maintained as a Hartmarx Stock Fund
Account and, until distributed as hereinafter provided, shall be subject to the
provisions of Section VII; provided, however, that such Forfeiture Account shall
not be credited (or charged), as set forth in Section VII, with any dividends,
gains, losses or other distributions or any interest earned during the
Calculation Period in which the balance in such Forfeiture Account becomes a
forfeiture as hereinafter set forth. If the Participant does not return to
employment with an Employer or an Affiliate prior to incurring five consecutive
One Year Breaks in Service, the balance in his Forfeiture Account determined as
of the Calculation Date coincident with or next following the date on which he
incurs the fifth consecutive One Year Break in Service will be a Forfeiture. If
the Participant returns to employment with an Employer or an Affiliate prior to
the occurrence of five consecutive One Year Breaks in Service, such Forfeiture
Account shall be maintained on his behalf until he becomes 100% vested. The
amount ("X") attributable to his Forfeiture Account and payable at the time his
participation in the Plan subsequently terminates shall be determined (prior to
100% vesting) in accordance with the following formula: X = P(AB + D) - D, in
which P is the vested percentage (based on all of the Participant's Years of
Vesting Service) at the time of the subsequent termination; AB is the total of
the Participant's Forfeiture Account balance at that time; and D is the amount
previously distributed.
Forfeitures occurring under this Subsection 9.5 shall be applied to pay
administrative costs of the Plan or to reduce Employer Matching Contributions
for the Plan Year in which such Forfeitures occur and, to the extent such
Forfeitures exceed such administrative costs and Employer Matching
Contributions, shall be allocated ratably to the Participants employed by such
Employer during the Plan Year in the proportion that each such Participant's
Annual
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Earnings for the Plan Year bears to the total Annual Earnings for such Plan Year
of all Participants employed by such Employer during such Plan Year. All
increases in benefits provided in this Subsection 9.5 are subject to the
provisions of Subsection 4.5.
9.6 Manner and Form of Distribution
(a) Except as otherwise provided in Subsection 9.5, the vested
amount to the credit of a Participant's Accounts shall be determined as of
the Calculation Date coincident with or next preceding the date of his
retirement, termination or death and after all adjustments required under the
Plan have been made. All benefits shall be paid in a lump sum.
(b) If a Participant's vested Account balances do not exceed $3,500 (or
such higher amount as may be permitted by applicable law or regulation) and
have become distributable pursuant to this Section IX, such vested Account
balances shall be distributed without the Participant's or Beneficiary's
consent as soon as practicable after the date of the Participant's
retirement, termination or death.
(c) If the value of a Participant's vested Account balances exceeds
$3,500 (or such higher amount as may be permitted by applicable law or
regulation) and have become distributable pursuant to this Section IX, then
distribution of such Participant's vested Account balances shall not be made
without his consent before his 65th birthday or death. If the Participant
elects, his vested Account balances that have become distributable in
accordance with this Section IX shall be distributed as soon as practicable
after the date of the Participant's retirement or termination.
(d) Notwithstanding the foregoing, the distribution of benefits under the
Plan shall begin earlier if any of the following provisions applies:
(i) payments to a Participant shall commence no later than April 1
of the calendar year following the calendar year in which such
Participant attains age 70-1/2; provided, however, that in the case of
any Participant who attained age 70-1/2 before January 1, 1988, and who
is not a "five percent owner" (within the meaning of Section 416(i) of
the Code), the payments to the Participant shall
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commence no later than April 1 of the calendar year following the
calendar year in which the later of termination or retirement or
attainment of age 70-1/2 occurs;
(ii) unless the Participant who is entitled to a distribution
pursuant to this Section IX otherwise elects, the payment of benefits
under the Plan will begin not later than the 60th day after the latest of
the close of the Plan Year in which occurs: (A) the date on which the
Participant attains age 65, (B) the 10th anniversary of the year in which
the Participant commenced participation in the Plan, or (C) the date on
which the Participant terminates or retires; and
(iii) if distribution of a Participant's vested Account balances has
not commenced prior to such Participant's death, then the Participant's
vested Account balances shall be distributed within five years of his
date of death to his Beneficiary in a lump sum payment.
(e) Notwithstanding the foregoing, all distributions made pursuant to the
Plan shall be determined and made in accordance with Section 401(a)(9) of the
Code and regulations issued thereunder, including the minimum distribution
incidental benefit requirement of Proposed Treasury Regulations Section
1.401(a)(9)-2 and these provisions shall override any inconsistent
distribution provisions contained in the Plan.
(f) Participants and Beneficiaries are required to maintain a current
post office address on file with the Plan Administrator. If benefits remain
to be paid with respect to a Participant or Beneficiary at a time when the
Plan Administrator is unable to locate the Participant or Beneficiary or
following the death of the Participant or Beneficiary, then the Plan
Administrator shall cause the Participant's or Beneficiary's benefits to be
treated as a forfeiture if at the expiration of five (5) years after they
shall become payable, the benefits shall remain unpaid after the Plan
Administrator has sent a registered letter, return receipt requested, to the
last known address of the Participant or Beneficiary of his entitlement to
benefits and after further diligent effort by the Plan Administrator to
ascertain the whereabouts of such person. In the event
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the Participant or Beneficiary is subsequently located, such benefits shall
be restored.
(g) Distribution of a Participant's Accounts under this Subsection 9.6,
and withdrawals under Subsection 9.7 hereof, shall be made as follows: (i)
the Participant's Accounts other than his Hartmarx Stock Fund Account, if
any, shall be distributed in cash; and (ii) the Participant's Hartmarx Stock
Fund Accounts shall be distributed in full shares of the Company's common
stock (with cash in lieu of a fractional share) plus any cash balance in such
Account unless the Participant elects to have part or all of the distribution
made in cash, in which case cash equivalent to the fair market value of such
shares of the Company's common stock as of the date on which the Participant
terminates his employment with the Employer and all Affiliates, or the date
he elects to withdraw his contributions pursuant to Subsection 9.7, shall be
distributed in lieu of such shares.
There shall also be distributed cash equal to the amount of any vested
contributions made by or on behalf of the Participant which have not been
credited to the Participant's Accounts.
9.7 Withdrawals
A Participant may, while continuing as an Employee of the Employer, elect
to withdraw (in accordance with Subsection 9.6(g)) the following amounts as of
any Calculation Date after all adjustments required under the Plan have been
made:
(a) the entire amount of his After-Tax Contributions and vested Employer
Matching Contributions and the earnings, if any, thereon then credited to the
Participant's Accounts as of the Calculation Date coincident with or next
preceding the withdrawal date (or any lesser amount if such withdrawal
constitutes an Emergency With drawal); plus
(b) cash equal to the amount of the Participant's After-Tax Contributions
and vested Employer Matching Contributions which have not yet been credited
to the Participant's Accounts;
provided, however, that a Participant who has attained age 59-1/2, while
continuing as an Employee of the Employer, must also withdraw (in accordance
with Subsection 9.6(g))
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the entire amount of Pre-Tax Contributions and the earnings, if any, thereon (or
any lesser amount if such withdrawal constitutes an Emergency Withdrawal) then
credited to the Participant's Accounts, plus cash equal to the amount of any
Pre-Tax Contributions made for the Participant which have not been credited to
the Participant's Accounts. The amount so determined shall be reduced by the
amount of payments made to or on behalf of the Participant, if any, and not
previously charged to his Accounts.
Payment of withdrawals shall be made as soon as practicable after the
date the Participant's signed request for such withdrawal is received by the
Plan Administrator.
Except in the case of an Emergency Withdrawal or a Hardship Withdrawal,
if a Participant withdraws any amount from his Accounts under this Subsection
9.7, he may not make contributions to the Plan, or be entitled to Employer
Matching Contributions, during the 12 months next succeeding the month in which
such amount is withdrawn; provided, however, that said 12-month waiting period
will be waived in the case of the first withdrawal in any six-month period of
all or any portion of the Participant's Voluntary Contributions.
A withdrawal under this Subsection 9.7 shall be deemed to constitute an
"Emergency Withdrawal" if, after receiving a Participant's application for such
a withdrawal (on a form provided by the Company and completed by the Participant
for that purpose) and according to uniform nondiscriminatory standards which
involve consideration of a Participant's immediate financial needs and other
pertinent facts and circumstances, the Plan Administrator, in its sole
discretion, shall determine that such withdrawal is precipitated by an emergency
affecting the Participant or a member of his immediate family.
A withdrawal under this Subsection 9.7 shall be deemed to constitute a
"Hardship Withdrawal" if, after receiving a Participant's application for such a
withdrawal (on a form provided by the Plan Administrator and completed by the
Participant for that purpose) and according to uniform nondiscriminatory
standards which involve consideration of a Participant's immediate financial
needs and other pertinent facts and circumstances, the Plan Administrator, in
its sole discretion, shall determine that: (i) the Participant has incurred an
immediate and heavy financial need for funds; and (ii) the amount necessary to
satisfy such financial need is not reasonably available from
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other resources of the Participant. For these purposes, an immediate and heavy
financial need shall mean the following: (i) expenses incurred or necessary for
medical care, described in Section 213(d) of the Code, of the Participant or the
Participant's spouse, children or dependents; (ii) the purchase (excluding
mortgage payments) of the principal residence of the Participant; (iii) payment
of tuition and related educational fees for the next 12 months of post-secondary
education for the Participant or the Participant's spouse, children, or
dependents; and (iv) the need to prevent the eviction of the Participant from,
or foreclosure on the mortgage of, the Participant's principal residence.
No Hardship Withdrawal shall exceed the amount required to meet the
financial need created by such hardship. For purposes of this Subsection 9.7, a
distribution will be considered as necessary to satisfy an immediate and heavy
financial need of the Participant only if:
(a) the Participant has obtained all distributions, other than hardship
distributions, and all nontaxable loans from the Plan and any other plans
maintained by the Employer or an Affiliate;
(b) all plans maintained by the Employer or an Affiliate provide that the
Participant's elective deferrals and employee contributions will be suspended
for twelve months after the receipt of the hardship distribution;
(c) the distribution is not in excess of the amount of an immediate and
heavy financial need (including amounts necessary to pay any federal, state
or local income taxes or penalties reasonably anticipated to result from the
distribution); and
(d) all plans maintained by the Employer or an Affiliate provide that the
Participant may not make elective deferrals for the Participant's taxable
year immediately following the taxable year of the hardship distribution in
excess of the applicable limit under Section 402(g) of the Code for such
taxable year less the amount of such Participant's elective deferrals for the
taxable year of the hardship distribution.
If the withdrawal constitutes a Hardship Withdrawal, a Participant who
has not yet attained age 59-1/2 may elect to withdraw (in accordance with
Subsection 9.6(g)) all or
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any portion of his Pre-Tax Contributions then credited to the Participant's
Accounts as of the Calculation Date coincident with or next preceding the
withdrawal date, including any earnings attributable thereto which were
allocated to the Participant's Accounts as of December 31, 1988 (but not the
earnings allocated thereafter), plus cash equal to the amount of the
Participant's Pre-Tax Contributions which have not yet been credited to his
Accounts.
No Participant shall be permitted more than two (2) Emergency or Hardship
Withdrawals, nor shall an Emergency Withdrawal or a Hardship Withdrawal be
approved by the Plan Administrator more often than once every five years with
respect to any Participant.
9.8 Beneficiary
(a) Upon receipt of notification from the Employer that he has qualified
for participation in the Plan, a Participant shall designate, on forms
provided for that purpose by the Plan Administrator, a Beneficiary who may
become entitled to receive benefits under this Plan provided that in the case
of a Participant who is legally married on the date of his death, the
Participant's Beneficiary shall be his spouse unless such spouse validly
consents in writing to a different Beneficiary designation or the Participant
establishes to the satisfaction of the Plan Administrator that the consent
cannot be obtained because there is no spouse, the spouse cannot be found or
some other reasonable excuse. Such consent shall be valid only if it
acknowledges the effect of such designation and is witnessed by a Plan
representative or a notary public. The designation of a Beneficiary shall not
be effective for any purpose unless and until it has been received by the
Plan Administrator on the prescribed form and entered in the Plan
Administrator's records. Subject to the preceding provisions of this
Subsection 9.8, a Participant may, from time to time, change the Beneficiary
without notice to such Beneficiary under such rules and regulations as the
Plan Administrator may from time to time provide.
(b) If a Participant fails to designate a Beneficiary, or if any such
designation is ineffective under (a) above, or if a Participant's designated
Beneficiary has predeceased the Participant, then the balance in such
Participant's Accounts shall be paid to the first of the following then
surviving in the
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following order and priority: the spouse, children (in equal shares), parents
(in equal shares), brothers and sisters (in equal shares), and the estate of
the Participant.
9.9 Facility of Payment
Whenever, in the Plan Administrator's opinion, a person entitled to
receive any payment is under a legal disability, or is incapacitated in any way
so as to be unable to manage his financial affairs, the Plan Administrator may
direct the Trustee to make the payment to such person, or to his legal
representative, or to a relative or friend of such person for his benefit, or
the Plan Administrator may direct the Trustee to apply the payment for the
benefit of such person in such manner as the Plan Administrator considers
advisable. Any payment made in accordance with the provisions of this
Subsection 9.9 shall be a complete discharge of any liability for the making of
such payment under the provisions of the Plan.
SECTION X
ROLLOVERS
10.1 Receipts from Other Plans
The Trustee is authorized to receive amounts payable to Participants of
this Plan which constitute eligible rollover distributions, as that term is
defined in Subsection 10.2 below.
The Company, in its sole discretion, may permit the transfer, to the
Trustee of this Plan, of any amounts a Participant is entitled to receive as an
eligible rollover distribution from a qualified retirement plan, subject to the
following conditions:
(a) such amounts may be accepted by the Trustee only on the date
designated by the Company for that purpose;
(b) the amount so transferred shall not exceed the portion of such
distribution which is includible in gross income (determined without regard
to Section 402(c)(1) of the Code); and
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(c) the transfer must be made within sixty (60) days following the date
the Participant was entitled to receive such eligible rollover distribution.
Amounts received by the Trustee pursuant to this Section X shall not be
considered to be a contribution of the Participant or of the Employer for any
purpose under this Plan. The Participant will be 100% vested in all amounts
transferred to the Trustee in accordance with this Section X.
10.2 Direct Rollovers to Other Plans
(a) This Subsection 10.2 applies to distributions made on or after
January 1, 1993. Notwithstanding any provision of the Plan to the contrary
which would otherwise limit a distributee's election under this Subsection
10.2, a distributee may elect, at the time and in the manner prescribed by
the Plan Administrator, to have any portion of an eligible rollover
distribution paid directly to an eligible retirement plan specified by the
distributee in a direct rollover; provided the amount of the direct rollover
cannot be less than the lesser of (i) $500 or (ii) the eligible rollover
distribution; and provided further the distributee may not elect a direct
rollover of all or any portion of eligible rollover distributions received
within one taxable year of the distributee that total less than $200. The
distributee shall be limited to a single direct rollover for each eligible
rollover distribution.
(b) For purposes of this Section X, the following definitions shall
apply:
(i) Eligible rollover distribution: An eligible rollover
distribution is any distribution of all or any portion of the balance to
the credit of the distributee, except that an eligible rollover
distribution does not include: any distribution which is one of a series
of substantially equal periodic payments (not less frequently than
annually) made for the life (or life expectancy) of the distributee or
the joint lives (or joint life expectancies) of the distributee and the
distributee's designated Beneficiary, or for a specified period of ten
years or more; any distribution to the extent that such distribution is
required under Section 401(a)(9) of the Code; and the portion of any
distribution which is not
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includible in gross income (determined without regard to the exclusion
for net unrealized appreciation with respect to employer securities).
(ii) Eligible retirement plan: An eligible retirement plan is an
individual retirement account described in Section 408(a) of the Code, an
individual retirement annuity described in Section 408(b) of the Code, an
annuity plan described in Section 403(a) of the Code, or a qualified plan
described in Section 401(a) of the Code which accepts the distributee's
eligible rollover distribution. However, in the case of an eligible
rollover distribution to the surviving spouse, an eligible retirement
plan is an individual retirement account or individual retirement
annuity.
(iii) Distributee: A distributee includes an Employee or former
Employee. In addition, the Employee's or former Employee's surviving
spouse and the Employee's or former Employee's spouse or former spouse
who is the alternate payee under a qualified domestic relations order, as
defined in Section 414(p) of the Code, are distributees with regard to
the interest of the spouse or former spouse.
(iv) Direct rollover: A direct rollover is a payment by the Plan
to the eligible retirement plan specified by the distributee.
SECTION XI
TRUST AGREEMENT
11.1 Trustee
The Company will enter into one or more Trust Agreements with a Trustee
or Trustees selected by the Company to manage and operate the Trust Fund under
this Plan. A Trustee may be removed, the number of Trustees may be changed,
and any successor Trustee may be appointed by Company. All rights which may
accrue to any person under this Plan shall be subject to all the terms and
provisions of the Trust Agreement or Trust Agreements as amended from time to
time.
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11.2 Irrevocability
The Employer shall have no right, title or interest in the Trust Fund or
in any part thereof and no part of the Trust Fund shall revert to the Employer;
provided, however:
(a) in the case of an Employer contribution which is made by virtue of a
mistake of fact, this Subsection 11.2 shall not prohibit the return of such
contribution to the Employer within one year after the mistake is discovered
and made known to the Employer;
(b) if the Plan does not qualify under applicable provisions of the
Code, this Subsection 11.2 shall not prohibit the return of such contribution
to the Employer within one year after the date such non-qualification of the
Plan is made known to the Employer; and
(c) to the extent a deduction for an Employer's contribution to the
Plan is disallowed, this Subsection 11.2 shall not prohibit the return to
such Employer of such contribution (to the extent not deductible), within one
year after such deduction is disallowed.
SECTION XII
PLEDGE OR ALIENATION OF ACCOUNTS OR BENEFITS
12.1 General Rule: Pledge or Alienation Prohibited
Except as provided in this Section XII or as otherwise required by the
tax withholding provisions of the Code or of a state's income tax act, neither a
Participant's Accounts nor any claim payable under this Plan may ever be
assigned, transferred, encumbered, or alienated, or be in any manner liable for
or subject to the debts or liabilities of any Participant, former Participant,
retired Participant, or Beneficiary.
12.2 Exception: Authorized Borrowing from Trust Fund
Subject to the requirements of the Code and the regulations promulgated
thereunder from time to time, a Participant may borrow from the Trust Fund, a
portion of the Pre-Tax Contributions and After-Tax Contributions and the
earnings, if any, thereon then credited to his Accounts, provided, that the
amount of any such loan, when added to the outstanding balance of all other
loans to the Participant from the Plan and any other qualified plans of
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the Employer or an Affiliate, shall not be less than $500 and shall not exceed
the lesser of: (a) 50% of the value of such Pre-Tax Contributions and After-Tax
Contributions and earnings, if any, thereon, under such plans as of the date of
the loan; or (b) $50,000 reduced by the excess (if any) of the highest
outstanding balance of all loans to the Participant from such plans during the
one-year period ending on the day before the loan was made over the outstanding
balance of all loans to the Participant from such plans on the date on which the
loan was made.
A Participant may have only one outstanding loan at a time, except that a
second loan may be granted for the purchase of the Participant's primary
residence or in the case of a financial emergency, as determined by the Plan
Administrator in its sole discretion.
Each such loan shall be evidenced by a written note providing for: (i)
substantially level amortization of principal and interest over a period of five
years or less (or up to 15 years, if the loan is being used to acquire the
Participant's principal residence); (ii) repayment at fixed intervals, not less
frequent than quarterly, to a separate "Loan Fund Account" established for the
Participant; and (iii) a reasonable rate of interest and a loan administration
fee, if any, to be determined by the Plan Administrator at the time such loan is
made. The terms and conditions on which the Plan Administrator shall approve
loans under the Plan shall be applied on a uniform and reasonably equivalent
basis with respect to all Participants and Beneficiaries who are "parties in
interest" as defined in Section 3(14) of ERISA. Loans shall not be made
available to Highly Compensated Employees in percentages greater than the
percentages made available to other employees.
Each loan shall be adequately secured within the meaning of Section
4975(d) of the Code and such security shall include the pledge of all of the
Participant's right, title and interest in the Plan.
On or before the date of the loan, the Participant's Accounts shall be
converted to cash (converting, in the following order and on a pro rata basis,
any After-Tax Contribution Accounts (first, Voluntary Contributions subaccounts,
then Matched Contributions subaccounts), any Pre-Tax Contribution Accounts
(first Voluntary Contributions subaccounts, then Matched Contributions
subaccounts) and any Rollover Contribution Accounts) and such cash credited to
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the Participant's Loan Fund Account, until the cash balance of the Loan Fund
Account is sufficient to fund the loan. Employer Matched Contributions and the
earnings, if any, thereon may not be borrowed by the Participant. All loan
payments by the Participant shall be made to his Loan Fund Account and on each
Calculation Date the cash balance of such Loan Fund Account shall be credited to
the Participant's Accounts in the same proportion as the Participant's current
contributions are credited.
If a Participant shall default on the repayment of any such loan, the
unpaid portion thereof, together with all interest thereon, shall be immediately
due and payable. The Plan Administrator shall take any and all actions necessary
and appropriate to enforce collection of the unpaid loan, although foreclosure
on the Participant's promissory note and attachment of the Plan's security shall
not occur until a distributable event occurs under the Plan. If any loan made to
a Participant remains unpaid on the date payment of Plan benefits are to be made
or commence to or on behalf of such Participant, an amount equal to the unpaid
portion thereof, shall be deducted from the amounts otherwise payable to or on
account of the Participant under the Plan and the amount or accrued interest on
such unpaid loan shall be deemed and accounted for as a distribution to or on
behalf of the Participant.
12.3 Exception: Qualified Domestic Relations Order
All or any portion of a Participant's Accounts which would otherwise be
paid to the Participant pursuant to the terms of the Plan may be paid to an
"alternate payee" (as defined in Section 414(p) of the Code) if the Plan is
required to make such payment pursuant to a "qualified domestic relations order"
(as defined in Section 414(p) of the Code). Upon making any payment to any
alternate payee pursuant to this Subsection 12.3, the Plan shall be released
from all liability to the Participant and any other person or entity claiming
any interest with respect to such payment.
SECTION XIII
ADMINISTRATION
13.1 Plan Administrator's Duties
The Plan shall be administered by the Plan Administrator in its complete
discretion. At any time that
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the Plan Administrator is a committee of one or more persons, a member of the
committee may resign upon 10 days' prior notice to the Board of Directors and a
member of the committee may be removed by the Board of Directors at any time.
13.2 Powers and Duties
The Plan Administrator shall have such discretionary powers as may be
necessary to discharge its duties hereunder, including, but not by way of
limitation, the following powers and duties:
(a) to construe and interpret the Plan, including doubtful or disputed
provisions; to determine all benefits, including factual questions relating
to the payment of benefits and eligibility for benefits; to determine the
amount, manner and time of payment of any benefits hereunder; to determine
other rights of Employees and Participants; and to remedy ambiguities,
inconsistencies or omissions;
(b) to prescribe procedures consistent with the Plan's terms to be
followed by Participants and Beneficiaries in filing applications for
benefits and, as may be necessary, for the efficient administration of the
Plan;
(c) to make a determination as to the right of any person to a benefit
and to administer the claims procedure set forth in Subsection 18.6;
(d) to request and receive from the Employers and from Employees such
information as shall be necessary for the proper administration of the Plan;
(e) to prepare, file and distribute such reports, summaries, descriptions
and other materials as may be required by ERISA or other applicable laws;
(f) to furnish the Employers, upon request, such reports and information
with respect to the administration of the Plan and investments of the Plan as
are reasonable and appropriate;
(g) to appoint or employ any agents it deems advisable, including legal
counsel and to allocate or delegate to them such powers, rights and duties as
the
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Plan Administrator considers necessary or advisable to properly carry out the
administration of the Plan;
(h) to issue directions to the Trustee concerning all benefits which are
to be paid from the Trust Fund pursuant to the Plan;
(i) to receive and review reports of the financial condition and of the
receipts and disbursements of the Trust Fund from the Trustee; and
(j) during any period when a person other than the Company is acting, to
report to the Board of Directors of the Company on such dates as the Board
requests or to such person or persons as the Board designates about any
significant problems which have developed in connection with the
administration of the Plan and any recommendations as to the amendment of the
Plan or the modification of Plan administration.
13.3 Specific Delegation by Plan Administrator
During any period in which the Company is acting as Plan Administrator,
an officer of the Company designated by its Chairman or President shall cause
benefits to be paid to persons entitled thereto, shall establish and maintain
operational rules and procedures that are consistent with the provisions of the
Plan, shall maintain or cause to be maintained all necessary records and
accounts and shall from time to time deliver such reports to participants and
government agencies as shall be required by law or useful in administering the
Plan and providing information to Participants and Beneficiaries. Each of the
Chairman, the President, any Executive Vice President, any Senior Vice
President, any Vice President, the General Counsel, the Secretary, the Treasurer
and the Controller of the Company are authorized to give such necessary and
appropriate directions to the Trustee or Trustees under the Trust Agreement
which implements the Plan as may be required for the proper administration of
the Plan.
13.4 Quorum
At any time that the Plan Administrator is a committee, this Subsection
13.4 shall apply. The action of a majority of the members of the committee at
the time acting hereunder, and any instrument executed by a majority of such
members whether signed as a single document or concurrent documents, shall be
considered the action or
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instrument of the Plan Administrator. Action may be taken by the committee at a
meeting or in writing without a meeting; however, no member of the committee
shall vote or decide upon any matter relating solely to himself or to any of his
rights or benefits under the Plan. If the committee shall be evenly divided on
any question, the decision of the Board of Directors shall control. Except as
required by law, no member of the committee shall be liable or responsible for
an act or omission of other committee members in which the former has not
concurred. The committee may authorize any one or more of its members to execute
any document or documents on behalf of the Plan Administrator, in which event
the Plan Administrator shall notify the Trustee in writing of such action and of
the name or names of its member or members so designated. The Trustee thereafter
may accept and rely upon any document executed by such member or members as
representing action by the Plan Administrator, until the Plan Administrator
shall file with the Trustee a written revocation of such designa tion.
13.5 Procedures
The Plan Administrator shall adopt such rules, regulations, and by-laws
as it deems necessary or desirable. All rules and decisions of the Plan
Administrator shall be uniformly applied to all similarly situated Participants.
When making a determination, the Plan Administrator may rely upon information
furnished by the Employers, by legal counsel for the Employers, or by the
accountant for the Plan. If the Plan Administrator is a committee, the committee
may have one of its members as its chairman and may elect a secretary who may,
but need not, be a member of the committee. The secretary of the committee shall
keep a record of all meetings or actions taken and shall forward all necessary
communications and/or directions to the Trustee.
13.6 Decision of Plan Administrator is Final
Subject to applicable law and the provisions of Subsection 9.9, any
interpretation of the provisions of the Plan and any decision on any matter
within the discretion of the Plan Administrator made by the Plan Administrator
in good faith shall be binding on all persons. A misstatement or other mistake
of fact shall be corrected when it becomes known and the Plan Administrator
shall make such adjustment on account thereof as the Plan Administrator
considers equitable and practicable.
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13.7 Expenses
All costs and expenses of administration of the Plan, including fees,
brokerage commissions and transfer taxes but only to the extent that such
commissions and transfer taxes when added to Employer Matching Contributions
under Section IV do not exceed current or accumulated earnings and profits, and
other charges incurred by the Trustee, shall be borne by the Employers except to
the extent (i) paid out of forfeitures that are not otherwise applied to reduce
Employer Matching Contributions, or (ii) charged to the Trust Fund.
SECTION XIV
APPROVAL UNDER THE INTERNAL REVENUE CODE
This Plan is intended to qualify as a Plan meeting the requirements of
Sections 401(a) and 401(k) of the Code as now in effect or hereafter amended, so
that contributions of the Employer under the Plan may be deductible for federal
income tax purposes under Section 404 of the Code, as now in effect or hereafter
amended. Any modification or amendment of the Plan may be made retroactive, as
necessary or appropriate, to establish and maintain such qualification.
SECTION XV
AMENDMENT AND TERMINATION
The Company reserves the right, by resolution of the Board of Directors
or any subcommittee of the Board of Directors to whom such authority has been
delegated, to alter, amend, modify, revoke or terminate this Plan or any Trust
that may be entered into or established by it to effectuate and implement this
Plan. The Employer reserves the right to discontinue or suspend the payment of
contributions to the Trust Fund held under the Trust. Notwithstanding the
foregoing, no such alteration, amendment, modification, revocation, or
termination of this Plan or any Trust that may be established hereunder shall
operate to enlarge the Employer's rights under Subsection 11.2. Notwithstanding
any other provisions of this Plan, in the event that, as to any Employer, the
Plan is terminated or contributions are permanently discontinued or there is a
partial termination of the Plan by operation of law, the Employer Matching
Contribution Accounts of all affected Participants of such Employer shall
immediately become 100% vested and be non-forfeitable. Distribution of benefits
55
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will be made in a lump-sum payment not later than 60 days following the date on
which the Participant attains age 65 years. All appropriate accounting
provisions of the Plan will continue to apply until the benefits of all affected
persons have been distributed to them.
The Plan shall not merge or consolidate with, or transfer its assets or
liabilities to, any other Plan unless each Participant would (if the Plan then
terminated) be entitled to receive a benefit immediately after the merger,
consolidation, or transfer which is equal to or greater than the benefit he or
she would have been entitled to receive immediately before the merger,
consolidation or transfer (if the Plan had then terminated).
SECTION XVI
INCLUSION OF AFFILIATES
With the consent of the Company and after having adopted the Retirement
Income Plan, any present or future Affiliate may become an Employer under the
Plan by resolution of the board of directors of such Affiliate adopting the
Plan. Upon the adoption of a resolution by the Board of Directors of the Company
approving the action of such Affiliate, such Affiliate shall be an Employer
under this Plan as of the date specified in the resolution of such Affiliate.
Any transfer of employment by an Employee from one Employer to another
Employer shall not constitute termination of service by such Employee for the
purposes of the Plan. Any transfer of employment by an Employee from an Employer
to an Affiliate which is not an Employer shall not constitute termination of
services for purposes of Section VIII, unless such Affiliate shall have adopted
the Savings-Investment Plan and such Employee does not participate therein
although eligible to do so.
Any Affiliate may, by resolution of its board of directors, terminate the
Plan as to such Affiliate, but no Affiliate shall have the power to alter,
amend, modify, or revoke the Plan or to terminate the Plan as a whole.
56
<PAGE>
SECTION XVII
TOP-HEAVY PROVISIONS
17.1 Notwithstanding any other provisions of this Plan to the contrary, this
Section XVII shall apply if the Plan is a Top-Heavy Plan as defined herein. The
Plan shall be a "Top-Heavy Plan" in a Plan Year if, as of the Determination
Date, the value of the Accrued Benefits of Key Employees (as defined in Section
416(i) of the Code and utilizing 415 Compensation in determining Key Employee
status) as of the Valuation Date exceeds 60% of the value of the Accrued
Benefits of all Employees as of the Valuation Date. In determining whether this
Plan is a Top-Heavy Plan (i) the Employer and all Affiliates shall be treated as
a single employer, and (ii) all plans that are part of the Aggregation Group
shall be treated as a single plan. For purposes of this Section XVII:
"Determination Date" and "Valuation Date" mean for the first Plan Year, the last
day of such Plan Year, and for any other Plan Year, the last day of the
preceding Plan Year; "Accrued Benefit" means the account balance of an Employee
or, for an Aggregation Group, the sum of the account balances and the present
value of accrued benefits of an Employee each computed or excluded in accordance
with Section 416(g) of the Code; and "Aggregation Group" means each plan of an
employer in which a Key Employee participates which standing alone or together
with another plan of the employer meets the requirements of Sections 401(a)(4)
or 410 of the Code. In determining whether this Plan is a Top-Heavy Plan, the
following rules shall apply:
(a) Any distribution to a Key Employee, Participant, former Participant,
Beneficiary, participant, former participant or beneficiary from the Plan, a
Related Defined Contribution Plan (as defined in Subsection 4.5) or a Related
Defined Benefit Plan (as defined in Subsection 4.5) made during the five-year
period ending on a Determination Date will be treated as part of that
person's account balance or accrued benefit, as applicable, to the extent the
distribution does not, when made, exceed the account balance or accrued
benefit.
(b) The Beneficiary of any Key Employee or person who is not a Key
Employee will be treated, respectively, as a Key Employee or person who is
not a Key Employee.
(c) If, as of any Determination Date, a person who was a Key Employee for
a prior Plan Year is not a Key Employee for the Plan Year ending on that
Determination
57
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Date, his account balance or accrued benefit will not be taken into account.
(d) No account balance, accrued benefit or distribution attributable to a
person who has performed no services during the five year period ending on
the Determination Date will be included.
17.2 If the Plan is a Top-Heavy Plan in a Plan Year, the nonforfeitable
percentage of the Accrued Benefit for such Plan Year of a Participant who is
credited with an Hour of Service in such Plan Year shall be determined in
accordance with the following schedule based upon Years of Vesting Service:
Years of Vesting Service Percent Vested
------------------------ --------------
Two 20%
Three 40%
Four 66-2/3%
Five 100%
17.3 If the Plan is a Top-Heavy Plan in a Plan Year, unless Subsection 17.4 is
applicable to a Participant, the Employer Matching Contributions and Forfeitures
allocated to a Participant who is not a Key Employee and who is employed on the
last day of the Plan Year shall not be less than the percentage of such
Participant's 415 Compensation (disregarding 415 Compensation in excess of the
applicable adjusted annual compensation limitation described in Section
401(a)(17) of the Code) in the Plan Year which is equal to the percentage at
which Employer Matching Contributions and Forfeitures are made to the Key
Employee for whom such percentage is the highest. The percentage referred to
herein shall be determined by dividing the Employer Matching Contributions and
Forfeitures allocated to the Key Employee by such Key Employee's 415
Compensation (disregarding 415 Compensation in excess of the applicable adjusted
annual compensation limitation described in Section 401(a)(17) of the Code) in
the Plan Year.
17.4 If this Plan is a Top-Heavy Plan in a Plan Year, a Participant who is
not a Key Employee and who also participates in a defined benefit plan which is
a Top-Heavy Plan included in the Aggregation Group shall receive the minimum
benefit provided for in such plan.
17.5 If this Plan is a Top-Heavy Plan in a Plan Year, paragraphs (i) and (ii)
of Subsection 4.5(c) shall be
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amended by substituting "1.0" for the number "1.25" where such number appears
therein.
SECTION XVIII
MISCELLANEOUS
18.1 This Plan shall be governed, construed, administered and regulated in all
respects under the laws of the State of Illinois, except insofar as they shall
have been superseded by the provisions of ERISA.
18.2 In case any provisions of this Plan shall be held illegal or invalid for
any reason, said illegality or invalidity shall not affect the remaining parts
of this Plan, but this Plan shall be construed and enforced as if said illegal
and invalid provisions had never been inserted herein.
18.3 Anything herein to the contrary notwithstanding, neither the
establishment of the Plan, nor any modification hereof, nor the creation of the
Trust Fund or any Account, nor the payment of any benefits shall be construed as
giving any Participant, Beneficiary or any other person, any legal or equitable
right against the Company, an Employer, the Plan Administrator or the Trustee,
unless such right shall be specifically provided for in the Plan; nor shall any
of the foregoing be construed as giving any Participant or any other Employee of
an Employer the right to be retained in the service of an Employer or an
Affiliate, and all Participants and other Employees shall remain subject to
discharge to the same extent as if the Plan had never been adopted.
18.4 Each person entitled to benefits under the Plan must file with the Plan
Administrator, in writing, the person's post office address and each change of
post office address. Any communication, statement, or notice addressed to such a
person at that person's latest post office address as filed with the Plan
Administrator will be binding upon such person for all purposes of the Plan, and
the Plan Administrator shall not be obligated to search for or ascertain the
whereabouts of any such person.
18.5 Participants, former Participants and Beneficiaries must furnish to the
Plan Administrator such documents, evidence or information as the Plan
Administrator considers necessary or desirable for the purpose of administering
the Plan, or to protect the Employer, and it
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shall be a condition of the Plan that each such person must furnish promptly
true and complete data, evidence or information and sign such documents as the
Plan Administrator may require before any benefits become payable under the
Plan.
18.6 Claims Procedure
(a) In order to receive a benefit, a Participant or Beneficiary (the
"Applicant") shall file a written application therefor on forms prescribed by
the Plan Administrator. If a claim for benefits made by the Applicant is
denied, the Plan Administrator shall furnish to the Applicant within 90 days
after its receipt of such claim (or within 180 days after such receipt if
special circumstances require an extension of time) a written notice which:
(i) specifies the reasons for the denial, (ii) refers to the pertinent
provisions of the Plan on which the denial is based, (iii) describes any
additional material or information necessary for the perfection of the claim
and explains why such material or information is necessary, and (iv) explains
the claim review procedures.
(b) Upon the written request of the Applicant submitted within 60 days
after his receipt of such written notice, the Plan Administrator shall afford
the Applicant a full and fair review of the decision denying the claim and,
if so requested: (i) permit the Applicant to review any documents which are
pertinent to the claim and (ii) permit the Applicant to submit to the Plan
Administrator issues and comments in writing.
(c) Within 60 days after its receipt of a request for review (or within
120 days after such receipt if special circumstances, such as the need to
hold a hearing, require an extension of time) the Plan Administrator shall
notify the Applicant in writing of its decision and the reasons for its
decision and shall refer the Applicant to the provisions of the Plan which
form the basis for its decision.
18.7 Litigation
In any action or proceeding regarding any Plan assets, any Plan benefits
or the administration of the Plan, Employees or former Employees of an Employer,
their Beneficiaries and any other persons claiming to have an interest in the
Plan shall not be necessary parties and
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shall not be entitled to any notice of process. Any final judgment which is not
appealed or appealable and which may be entered in any such action or proceeding
shall be binding and conclusive on the parties hereto and on all persons having
or claiming to have any interest in the Plan. To the extent permitted by law, if
a legal action is begun against the Plan Administrator, the Company, an Employer
or any Trustee by or on behalf of any person and such action results adversely
to such person, or if a legal action arises because of conflicting claims to a
Participant's or other person's benefits, the cost of an Employer, the Company,
the Plan Administrator or the Trustee of defending the action will be charged to
the sums, if any, which were involved in the action or were payable to the
Participant or the other person concerned. Acceptance of participation in the
Plan shall constitute a release of all Employers, the Company, the Plan
Administrator, any Trustee and their agents from any and all liability and
obligation not involving willful misconduct or gross neglect to the extent
permitted by applicable law. Notwithstanding any other provisions of the Plan,
if the Plan Administrator is required by a final court order to distribute the
benefits of a Participant other than in a manner required under the Plan, then
the Plan Administrator shall cause the Participant's benefits to be distributed
in a manner consistent with such final court order. The Plan Administrator shall
not be required to comply with the requirements of a final court order in an
action in which the Plan Administrator, the Trustee, the Plan or the Trust was
not a party, except to the extent such a final court order is a qualified
domestic relations order (as defined in section 414(p) of the Code).
18.8 Copies of the Plan and any amendments thereto will be on file at the
principal office of an Employer where they may be examined by any Participant or
any other person entitled to benefits under the Plan.
18.9 Any notice required under the Plan may be waived by the person entitled
to notice.
18.10 Evidence required of anyone under the Plan shall be signed, made or
presented by the proper party or parties and may be by certificate, affidavit,
document or other information which the person acting thereon considers
pertinent and reliable.
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18.11 Fiduciary Responsibilities
It is specifically intended that all provisions of the Plan shall be
applied so that all fiduciaries with respect to the Plan shall be required to
meet the prudence and other requirements and responsibilities of applicable law
to the extent such requirements or responsibilities apply to them. No provisions
of the Plan are intended to relieve a fiduciary from any responsibility,
obligation, duty or liability imposed by applicable law. In general, a fiduciary
shall discharge his duties with respect to the Plan solely in the interests of
Participants and other persons entitled to benefits under the Plan and with the
care, skill, prudence, and diligence under the circumstances then prevailing
that a prudent man acting in a like capacity and familiar with such matters
would use in the conduct of an enterprise of like character and with like aims.
18.12 Indemnification
To the extent permitted by law, no person (including an Employer, the
Company, a Trustee, any present or former Plan Administrator, any present or
former director, officer, shareholder, or Employee of an Employer) shall be
personally liable for any act done or omitted to be done in good faith in the
administration of the Plan or the investment of the Trust Fund. To the extent
permitted by law, each present or former director, officer, shareholder or
Employee of an Employer to whom the Plan Administrator or an Employer has
delegated any portion of its responsibilities under the Plan and each present or
former Plan Administrator shall be indemnified and saved harmless by the
Employers (to the extent not indemnified or saved harmless under any liability
insurance or other indemnification arrangement with respect to the Plan) from
and against any and all claims of liability to which they are subjected by
reason of any act done or omitted to be done in good faith in connection with
the administration of the Plan or the investment of the Trust Fund, including
all expenses reasonably incurred in their defense if the Employers fail to
provide such defense.
18.13 Voting of Company Common Stock
Each Participant (or, in the event of his death, his Beneficiary), as a
named fiduciary, shall have the right to direct the Trustee as to the manner in
which shares of Company common stock credited to his Hartmarx Stock Fund Account
are to be voted on each matter brought before an annual or special stockholders'
meeting of the Company.
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Before each such meeting of stockholders, the Trustee shall cause to be
furnished to each Participant (or beneficiary) a copy of the proxy solicitation
material, together with a form requesting confidential directions on how such
shares shall be voted on each such matter. The Trustee shall on each such matter
vote such shares (including fractional shares) as directed, and the Trustee
shall have no discretion in such matter. The instructions received by the
Trustee from Participants shall be held by the Trustee in confidence and shall
not be divulged or released to any person, including officers or employees of
the Company or any Affiliate. The Trustee shall also vote at any meeting such
shares for which it has not received direction, and shares which have not yet
been credited to the Hartmarx Stock Fund Accounts of Participants, in the same
proportion as directed shares are voted, and the Trustee shall have no
discretion in such matter.
18.14 Tender and Exchange Offers for Company Common Stock
Each Participant (or, in the event of his death, his Beneficiary), as
a named fiduciary, shall have the right, to the extent of the number of shares
of Company common stock credited to his Hartmarx Stock Fund Account, to direct
the Trustee in writing as to the manner in which to respond to a tender or
exchange offer with respect to such shares. The Trustee shall use its best
efforts to timely distribute or cause to be distributed to each Participant (or
Beneficiary) such information as will be distributed to stockholders of the
Company in connection with any such tender or exchange offer. The Trustee shall
respond as instructed with respect to such shares. The instructions received by
the Trustee from Participants shall be held by the Trustee in confidence and
shall not be divulged or released to any person, including officers or employees
of the Company or any Affiliate. If the Trustee shall not receive timely
instruction from a Participant (or Beneficiary) as to the manner in which to
respond to such a tender or exchange offer, the Trustee shall not tender or
exchange any shares with respect to which such Participant has the right of
direction, and the Trustee shall have no discretion in such matter. Shares which
have not yet been credited to the Hartmarx Stock Fund Accounts of Participants
shall be tendered or exchanged by the Trustee in the same proportion as shares
with respect to which Participants (or beneficiaries) have the right of
direction are tendered or exchanged, and the Trustee shall have no discretion in
such matter.
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CERTIFICATE
-----------
I, _____________________________, Secretary of Hartmarx Corporation,
hereby certify that the attached document is a correct copy of the Hartmarx
Savings-Investment Plan, as amended and restated effective as of January 1,
1989.
Dated this ________ day of December, 1994.
By:__________________________________
Its Secretary as Aforesaid
<PAGE>
THE HARTMARX SAVINGS-INVESTMENT TRUST
-------------------------------------
Working Copy
July 1, 1988
<PAGE>
HARTMARX SAVINGS-INVESTMENT TRUST
---------------------------------
THIS AGREEMENT, made and entered into at Chicago, Illinois, as of April
13, 1983, by and between HARTMARX CORPORATION, a Delaware corporation (the
"Company"), HART SCHAFFNER & MARX, a New York corporation ("HSM"), and
CONTINENTAL ILLINOIS NATIONAL BANK AND TRUST COMPANY OF CHICAGO, a national
banking association, as trustee (the "Trustee").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Company has heretofore established a savings-investment
plan, known as the "Savings-Investment Plan for Employees of Hart Schaffner &
Marx, Subsidiary and Affiliated Companies" (the "Plan"); and
WHEREAS, on October 24, 1969, HSM and the Trustee entered into a trust
agreement pursuant to which they have since been implementing and carrying out
the Plan; and
WHEREAS, on April 13, 1983 HSM became a wholly-owned subsidiary of the
Company and the Plan, which is now known as the "Hartmarx Savings-Investment
Plan", was amended to substitute the Company for HSM as the "Company"
thereunder, and
WHEREAS, amendment and restatement of the trust agreement now is
considered desirable so that its provisions will conform to and continue to form
a part of the Plan, as amended;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, IT IS AGREED by and between the parties hereto:
1. That the trust agreement heretofore entered into between HSM and the
Trustee, as amended from time to time, is hereby further amended and restated by
substituting for it this "Trust Agreement"; and
2
<PAGE>
2. That the amended and restated provisions of the Trust, as the Trust is
hereby approved, ratified and adopted by agreement of the Company and the
Trustee, are set forth below:
ARTICLE I
---------
NAME; DEFINITIONS OF WORDS AND PHRASES
--------------------------------------
This Trust Agreement and the Trust hereby evidenced shall be known as the
HARTMARX SAVINGS-INVESTMENT TRUST and for purposes of convenience it shall
sometimes herein be referred to as the "Trust" or "this Agreement". All words
and phrases used in this Agreement which are defined in the Hartmarx Savings-
Investment Plan shall have the same meanings in this Agreement as in the Plan.
ARTICLE II
----------
AFFILIATES
----------
Each Affiliate which is or shall become an Employer under the Retirement
Income Plan has or shall have thereby adopted the Trust and designated the Trust
as constituting a part of a plan intended to qualify under Section 401(a) of the
Internal Revenue Code of 1954, as amended from time to time.
The Company shall deliver to the Trustee a certified list of the
Affiliates which have adopted the Trust and shall give certified notice to the
Trustee of any and all changes in such list.
ARTICLE III
-----------
THE TRUST FUND
--------------
Subject to the provisions of Article X hereof, the Company and Affiliates
will, from time to time, deliver or cause to be delivered to the Trustee such
amounts of cash
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<PAGE>
and of the Company's Common Stock as the Company in its sole discretion deems
necessary to comply with the provisions of the Plan. Unless the context clearly
implies or indicates the contrary, the term "Trust Fund" comprises all property
of every kind held by the Trustee, from time to time, pursuant to this
Agreement.
ARTICLE IV
----------
PAYMENTS FROM THE TRUST FUND
----------------------------
1. Payments shall be made from the Trust Fund by the Trustee to such
persons, in such manner, at such times, and in such amounts as the Plan
Administrator, appointed pursuant to the provisions of the Plan, may from time
to time direct the Trustee, in writing. The Trustee shall have no obligation to
inquire whether a payee is entitled to the payment or as to whether a payment is
proper, and shall have no liability for a payment made in good faith without
actual notice or knowledge of the changed condition or status of the payee.
2. If any payment of a benefit hereunder which has been mailed by regular
United States mail to the last address of the payee furnished to the Trustee by
the Plan Administrator is returned unclaimed, the Trustee shall so notify the
Plan Administrator and shall discontinue further payments to such payee until it
receives the further instruction of the Plan Administrator.
ARTICLE V
---------
INVESTMENT OF THE TRUST FUND
----------------------------
1. The Trustee shall invest and reinvest the Trust Fund and keep the
Trust Fund invested, without distinction between principal and income, in
accordance with the provisions of this Article. Each delivery of cash pursuant
to Article III shall be accompanied by a statement specifying the amount to be
invested in each of the following investment funds established and maintained by
the Trustee:
4
<PAGE>
Government Bond Fund. An unsegregated fund, invested in long-term or
short-term obligation issued or fully guaranteed as to payment of principal
and interest by the United States of America, and in bank deposits bearing a
reasonable rate of interest (including deposits with the banking department
of the Trustee) to the extent they are fully guaranteed by the Federal
Deposit Insurance Corporation.
Hartmarx Stock Fund. An unsegregated fund, invested in the Company's
common stock as expeditiously as possible in accordance with the Plan and
existing laws; provided, however, that the Trustee shall at all times
endeavor to avoid making such large or cumulative open market transactions as
may significantly temporarily affect the market price of the Company's common
stock.
Guaranteed Insurance Contract Fund ("GIC"). An unsegregated fund invested
in one or more insurance contracts between the Trustee and one or more
insurance companies (as selected by the Company) authorized to do business in
the State of Illinois, providing for a guaranteed rate of interest. All
actions of the Trustee pursuant to such contracts shall be as directed by the
Company.
All cash delivered to the Trustee shall be invested in one or the other of such
funds except that the Trustee may (i) temporarily hold in cash or invest in bank
deposits bearing a reasonable rate of interest and which may be liquidated upon
one day notice (including deposits with the banking department of the Trustee)
or in demand notes and interests in demand notes issued by corporations whose
demand notes constitute prudent investments, such amounts as are (a) required to
be held pending execution of orders for the purchase of the Company's stock as
directed above, and (b) reasonably required to provide cash for distribution to
Participants in accordance with Article IV hereof or for other disbursements the
Trustee may be required to make under this Trust Agreement; or (ii) with the
written approval of the Company, fund such loans to Participants as may from
time to time be permitted under Subsection 11.2 of the Plan.
The Trustee shall treat each of the above-described investment funds as a
separate fund and the income of each investment fund shall be invested therein.
All provisions of this Agreement shall apply to each of the funds identified
above as if each such fund were a separate Trust Fund.
2. The Trustee shall establish and maintain for each Participant a
separate account for his interest in the Government Bond Fund (if he
participates in such Fund), the
5
<PAGE>
GIC Fund (if he participates in such Fund) and a separate account for his
interest in the Hartmarx Stock Fund, which shall reflect separately all amounts
contributed by the Participant and by the Employer on his behalf and the
investment thereof. The Trustee shall provide for each Participant a statement
of the credit balances in his accounts as of the close of each calendar year in
accordance with Subsection 7.6 of the Plan.
ARTICLE VI
----------
GENERAL MANAGEMENT POWERS OF THE TRUSTEE
----------------------------------------
With respect to the Trust Fund and subject only to the limitations
expressly provided in this Agreement, the Trustee shall have the following
powers and rights in addition to those vested in it elsewhere in this Agreement
or by law;
1. To sell, purchase, invest and reinvest the assets of the Trust Fund
and the earnings therefrom in accordance with Article V;
2. To borrow, but only with the approval of the Company, any amount or
amounts of money, and for that purpose to mortgage or pledge all or any part of
the Trust Fund;
3. To compromise, contest, arbitrate, settle or abandon claims and
demands, all in its discretion;
4. To have with respect to the Trust Fund the power to give proxies in
accordance with instructions received from Participants, to tender or exchange
Company common stock pursuant to instructions received from Participants, to
exercise or sell stock subscription or conversion rights, and to participate in
reorganizations, recapitalizations or liquidations;
5. To hold any securities in the name of the Trustee or its nominee, or
nominees, or in such other form as it determines best, with or without
disclosing the trust relationship, but the records and books of the Trustee
shall at all times show that such investments are part of the Trust Fund;
6
<PAGE>
6. To perform any and all other acts in its judgment necessary or
appropriate for the proper and advantageous management, investment, and
distribution of the Trust Fund;
7. To retain any funds or property subject to any dispute or to decline
to make payment or delivery thereof until final adjudication is made by a court
of competent jurisdiction.
Subject to the provisions of Article V and XII, the Trustee shall
discharge its duties hereunder solely in the interest of the Plan participants
and their beneficiaries with the care, skill, prudence and diligence under the
circumstances then prevailing that a prudent man acting in a like capacity and
familiar with such matters would use in the conduct of an enterprise of like
character and with like aims.
The Company shall deliver to the Trustee a copy of the Plan and of each
amendment thereto for convenience of reference, but the rights, powers, titles,
duties, discretions, and immunities of the Trustee shall be governed solely by
the Trust without reference to the Plan.
In the investment of the funds and management of the Trust, the Trustee
may assume until advised to the contrary that the Trust herein created qualified
under Section 401, and is entitled to tax exemption under Section 501 of the
Internal Revenue Code, as amended from time to time.
ARTICLE VII
-----------
ADMINISTRATIVE PROVISIONS
-------------------------
1. Records and Accounts
The Trustee shall maintain accurate and detailed records and accounts of
all properties held in the Trust Fund, and of all investments, receipts,
disbursements and other transactions hereunder. The Trustee's books, accounts
and records relating to this Trust Fund shall be open at all reasonable times to
inspection and audit by the Company and by any person or persons designated by
the Company.
7
<PAGE>
2. Accounting
Within ninety (90) days after June 30 and December 31 of each year, or
after the close of each such other accounting period as may be agreed upon by
the Trustee and the Company, the Trustee shall file with the Company a written
account setting forth all investments, receipts, disbursements and other
transactions effected by it during the preceding six (6) months ended on such
June 30 or December 31 or during such other accounting period, as the case may
be, including an exact description of all securities and investments purchased
and sold, the cost and net proceeds of such purchases or sales and showing all
cash, securities and other property held and the fair market value thereof,
reduced by any liabilities other than liabilities to Participants in the Plan
and their beneficiaries, on such June 30, December 31 or at the end of such
other accounting period. Such accounting may be in the form of monthly or
quarterly statements which, taken together, reflect the matters set forth in the
preceding sentence. The Trustee shall furnish to the Company such other
information as the Trustee may possess which the Company requires in order to
comply with Section 103 of The Employee Retirement Security Act of 1974 as
amended and in force from time to time.
3. Approval of Accounts
The Company shall approve or object to each such accounting by written
notice of approval delivered to the Trustee within one hundred eighty (180) days
from the date upon which the accounting was delivered to the Company. Upon
receipt of the Company's written approval of the accounting, the Trustee shall
be forever released and discharged from all its liability and accountability to
the Company for its acts and transactions shown in such accounting. Nothing
herein contained, however, shall be deemed to preclude the Trustee from its
right to have its account judicially settled by a court of competent
jurisdiction.
4. Agents, Attorneys, etc.
The Trustee may employ such agents, attorneys, accountants or other
persons (who also may be employed by or represent the Company) as in its opinion
may be necessary or desirable for the proper administration of the Trust and to
advise the Trustee,
8
<PAGE>
and may pay reasonable compensation to any such persons. The Trustee may act or
refrain from acting on the advice or opinion of the respective agents,
attorneys, actuaries, accountants, or other person selected as above with
reasonable diligence.
5. Taxes
If any benefits payable by the Trustee hereunder shall become liable for
the payment of any estate, inheritance, income or other tax, charge or
assessment, which, in the Trustee's opinion, it shall or may be required to pay,
the Trustee shall have full power and authority to pay such tax, charge or
assessment out of any monies or other property in its hands for the account of
the person whose interest hereunder is liable for such tax, but at least ten
(10) days prior to making any such payment (other than with respect to
withholding taxes) the Trustee shall mail a notice to the Company of its
intention to make such payment. The Trustee, also, prior to making any payment
to any person hereunder, may require such indemnity from such beneficiaries as
the Trustee shall deem necessary for its protection.
ARTICLE VIII
------------
EXPENSES AND COMPENSATION
-------------------------
The Trustee shall be reimbursed for all expenses incurred by it in the
performance of its duties hereunder, including reasonable compensation for
agents and for services of counsel rendered to the Trustee and expenses incident
thereto and all taxes of any and all kinds whatsoever that may be levied or
assessed under existing or future laws of any jurisdiction upon or in respect to
the Trust hereby created or the Trust Fund or any money, property or securities
forming a part thereof. The Trustee shall also be paid such reasonable
compensation as may be agreed upon in writing from time to time between the
Company and the Trustee. To the extent that the Company or its Affiliates who
are included employers hereunder do not pay such expenses and compensation, or
fees as may be agreed upon, they shall be paid by the Trustee from the Trust
Fund.
9
<PAGE>
ARTICLE IX
----------
SUBSTITUTION OF AND SUCCESSORS TO TRUSTEE OR COMPANY
----------------------------------------------------
1. Resignation of Trustee
Any Trustee may resign at any time by giving thirty (30) days' written
notice thereof to the Company.
2. Removal of Trustee
The Company may remove any Trustee by giving thirty (30) days' prior
written notice thereof to the Trustee stating therein the date such removal is
effective.
3. Successor Trustee
In the event of the resignation, removal or inability or refusal to act
of a Trustee, or in the event of the death of an individual Trustee, the Company
shall appoint a successor Trustee who may be either an individual or a
corporation empowered to act as a Trustee hereunder.
4. Duties of Resigning or Removed Trustee and of Successor Trustee
Each successor Trustee shall execute an instrument in duplicate accepting
its trusteeship hereunder and shall file one copy thereof with the Company and
the other copy with the retiring Trustee. The retiring Trustee, after reserving
such reasonable amount or amounts as it may deem necessary to provide for the
payment of any of its expenses then or thereafter due or payable and the amount
of any compensation thereunder due it and any sums then or thereafter chargeable
against the Trust Fund for which it may be liable, shall assign, transfer and
pay over to such successor Trustee the funds and properties then constituting
the Trust Fund, together with any balances of the sum so reserved remaining
after the payment of such expenses, compensation, and charges. Each successor
Trustee shall succeed to the title of the Trust Fund vested in his or its
predecessor and any resigning or removed Trustee shall forthwith execute all
documents and do all acts necessary to vest such title of record in any
successor Trustee. Each successor Trustee shall have and enjoy all of the
rights, powers and authorities, both discretionary and ministerial, herein
conferred upon its predecessor. The retiring Trustee shall, immediately
10
<PAGE>
after the effective date of his or its removal or resignation, file with the
Company a written account of his or its accounts from the date of his or its
last account to the effective date of removal or resignation, which account
shall conform with the requirements of Paragraph 2 of Article VII hereof and
which may be approved or disapproved by the Company as provided in Paragraph 3
of Article VII hereof. No successor Trustee shall be personally liable for any
act or failure to act of any predecessor Trustee, and, with the approval of the
Company, a successor Trustee may accept the account rendered and the property
delivered to it by the predecessor Trustee without incurring any liability or
responsibility for so doing.
5. Successor to Company
In the event of the merger or consolidation of the Company or other
circumstances whereby a successor person, firm or company shall continue to
carry on all or a substantial part of its business and such successor shall
elect to continue the Plan, such successor shall be substituted for the Company
hereunder, upon the filing in writing of its election so to do with the Trustee.
The Trustee may, but need not, rely on the certification of an officer of the
Company and a certified copy of a resolution of the Board of Directors of such
successor reciting the facts and circumstances of such succession and the
election of such successor to continue the Plan as conclusive evidence thereof,
without requiring any additional evidence.
ARTICLE X
---------
AMENDMENT AND TERMINATION
-------------------------
1. Amendment
This Agreement may be amended by the Company from time to time, subject
to the following limitations:
(a) Such amendment shall not permit the return or repayment to the
Company or any of its Affiliates of any part of the Trust Fund, or result in or
permit the distribution of any part of the Trust Fund for the benefit of anyone
other than persons, or
11
<PAGE>
their beneficiaries, employed by the Company or its Affiliates and who are
covered under the Plan.
(b) Such amendment shall not substantially change the duties,
responsibilities or liabilities of the Trustee without its consent and shall not
become effective until a copy thereof certified by the Secretary of the Company
shall have been filed with the Trustee.
2. Affiliates
Once an Affiliate has been certified by the Company to the Trustee as an
included employer participating in the Plan in accordance with its terms, the
Trustee shall receive and hold as part of the Trust Fund, subject to the
provisions of this Agreement, any contributions made under the Plan by said
Affiliate. In the event of withdrawal of any Affiliate from the Plan, the
Trustee shall make such disposition of the assets of the Trust Fund,
attributable to the benefits of employees of such Affiliate, as shall be
determined and directed by the Company, which direction shall be accompanied by
the certification of the Company that such disposition is in accordance with the
terms of the Plan. The Trustee shall have no obligation to account to any
Affiliate or to follow the instruction of, or otherwise to deal with, any
Affiliate. The Trustee shall be protected in its dealings with the Company and
obligated to deal solely with the Company, the Company and the Trustee being the
only parties to this Agreement.
3. Termination
In the event of termination of the Plan as provided therein, the Trustee
shall dispose of the Trust Fund in accordance with the written order of the
Company accompanied by its certification to the Trustee that such disposition is
being made in accordance with the terms of the Plan. At no time shall any part
of the Trust Fund, after deducting any expenses properly chargeable to the Trust
Fund, be used for, or diverted to, purposes other than for the exclusive benefit
of persons covered under the Plan or their beneficiaries.
ARTICLE XI
----------
12
<PAGE>
ALIENATION OF BENEFITS
----------------------
Except as specifically permitted by the Plan, the interest of
Participants and their beneficiaries under this Trust Agreement may not be
voluntarily assigned or alienated.
ARTICLE XII
-----------
NO REVERSION TO COMPANY
-----------------------
No part of the corpus or income of the Trust Fund shall revert to the
Company or be used for, or diverted to, purposes other than for the exclusive
benefit of Participants and their beneficiaries.
ARTICLE XIII
------------
MISCELLANEOUS
-------------
1. Tax Exemption
The Trust hereunder is hereby designated as constituting a part of a plan
intended to qualify under Section 401(a) of the Internal Revenue Code of 1954,
as amended from time to time.
2. Evidence
The Plan will be administered by the Company as described in Section XII
and the Company will be the Plan "Administrator" within the meaning of Section
3(16) (A) of ERISA. Any action required or permitted to be taken by the Company
under this Trust Agreement shall be by resolution of its Board of Directors or
by action, evidenced in writing, of a person or persons authorized by resolution
of the Board of Directors. The Secretary of the Company shall provide the
Trustee with a certified copy of any resolution of the Board of Directors of the
Company designating any person or persons to act with respect to the Plan or to
issue instructions or directions to the Trustee under the Trust
13
<PAGE>
Agreement. The Secretary of the Company shall also provide the Trustee with a
specimen signature of each such person authorized to instruct or direct the
Trustee. The Trustee may rely on the latest certificate without further inquiry
or verification. Evidence required of anyone under this Agreement may be by
certificate, affidavit, document, or other information which the person acting
in reliance thereon may consider pertinent, reliable and genuine, and to have
been signed, made or presented by the proper party or parties. The Trustee shall
be fully protected in acting and relying upon any evidence described above.
3. Third Parties
No person dealing with the Trustee shall be obligated to see to the
application of any money paid or property delivered to the Trustee, or as to
whether or not the Trustee has acted pursuant to any authorization herein
required, or as to the terms of this instrument in general. The certificate of
the Trustee may be accepted by any person dealing with the Trustee as conclusive
evidence of any matter or question relating to this Agreement. In general, each
person dealing with the Trustee may act upon any advice, request or
representation in writing by the Trustee, or the Trustee's duly authorized
agent, and shall not be liable to any person in so doing. In case of doubt as to
whether or not the Trustee has, or has been given, any power hereunder, the
joint certificate of the Trustee and the Company that the exercise of such power
is necessary or desirable for the proper administration of this Trust shall be
conclusive on all persons dealing with the Trustee to the same extent as if such
power had been specifically given to the Trustee.
4. Liabilities Mutually Exclusive
The Company assumes no obligation or responsibility for any act or
failure to act of the Trustee, any employee or any former employee of the
Company or its Affiliates. The Trustee shall have no obligation or
responsibility as respects any action required by this Agreement to be taken by
the Company, any employee or former employee of the Company or its Affiliates or
for the result of the failure of any of the above to act or make any payment or
contribution or otherwise to provide any benefit herein contemplated, nor shall
the Trustee be obliged to collect any contribution required under the Plan, or
to
14
<PAGE>
otherwise see that sufficient funds are deposited to carry out the purposes of
the Plan. Nothing contained in the Plan, either expressly or by implication,
shall be deemed to impose any powers, duties, or responsibilities on the
Trustee, other than those set forth in this Agreement.
5. Law Controls
To the extent not preempted by the Employee Retirement Income Security
Act of 1974, the laws of the State of Illinois shall govern.
In case any provision of this Agreement shall be held illegal or invalid
for any reason, said illegality or invalidity shall not affect the remaining
parts of this Agreement, but this Agreement shall be construed and enforced as
if said illegal and invalid provisions had never been inserted herein, provided
the basic purposes hereof can be effectuated through the remaining valid
provisions.
6. Waiver of Notice
Any notice required hereunder may be waived by the party entitled
thereto.
7. Titles; Gender; Number
Titles of articles and paragraphs are for general information only and
this Agreement is not to be construed by reference thereto; the masculine gender
imports either or both of male and female; the singular number imports either or
both of singular and plural.
8. Whole Agreement
This Trust Agreement shall constitute the whole agreement between the
Company, its Affiliates and the Trustee in connection with the Plan.
9. Counterparts
This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original, and said counterparts shall constitute but
one and the same instrument and may be sufficiently evidenced by any one
counterpart.
15
<PAGE>
Exhibit 4-B-3
VANGUARD FIDUCIARY TRUST COMPANY
SERVICE AGREEMENT
-----------------
THIS AGREEMENT effective the 1st day of November, 1991, by and between
HARTMARX CORPORATION, a Delaware corporation (the "Employer"), CONTINENTAL BANK
(the "Trustee") and VANGUARD FIDUCIARY TRUST COMPANY, a trust company
incorporated under Chapter 10 of the Pennsylvania Banking Code ("Vanguard").
W I T N E S S E T H:
--------------------
WHEREAS, the Employer has adopted and is maintaining the HARTMARX
SAVINGS AND INVESTMENT PLAN and the HARTMARX EMPLOYEE STOCK OWNERSHIP PLAN
(collectively referred to herein as the "Plan") for the exclusive benefit of its
employees;
WHEREAS, the Trustee is serving as trustee for the Plan pursuant to an
agreement of trust entered into with the Employer;
WHEREAS, it is intended that the Plan utilize certain recordkeeping,
participant accounting, benefit payment and tax reporting services provided by
Vanguard in connection with the investment of Plan assets in the regulated
investment companies or collective investment funds offered by Vanguard (the
"Vanguard Funds");
WHEREAS, Vanguard is willing to provide recordkeeping, participant
accounting, benefit payment and tax reporting services to the Plan in accordance
with the terms and conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, the parties hereto, intending to be legally bound, hereby agree and
declare as follows:
<PAGE>
1. Selection of Vanguard Funds. The Employer shall designate the
Vanguard Funds available for investment by participants under the Plan, which
designation shall be made on a separate Employer Selection of Investment Funds
form or similar written document delivered to Vanguard. The Employer shall give
Vanguard 30 days written notice (which notice may, however, be waived by
Vanguard) prior to changing the list of Vanguard Funds that are available
investments under the Plan.
2. Participant Accounting. In accordance with the instructions
furnished by the Employer, Vanguard shall establish and maintain separate
accounts in the name of each participant in the Plan to record the assets of the
Plan allocated to the participant and the earnings, losses and expenses credited
thereto. The maintenance of separate accounts by Vanguard under this Agreement
shall be for accounting purposes only, and the books and records of Vanguard
shall at all times show the legal ownership of Plan assets to be in the name of
the Trustee. The Employer shall furnish Vanguard with participant enrollment
data on magnetic tape identifying the name, address, social security number, and
Vanguard Fund selections of each Plan participant for whom one or more separate
accounts is to be established by Vanguard under this Agreement.
3. Transmittal Of Plan Assets And Participant Information To Vanguard.
With respect to all Plan contributions and other amounts that are transmitted to
Vanguard for investment in the Vanguard Funds, the Employer shall furnish
Vanguard with participant allocation data on magnetic tape identifying each Plan
participant on whose behalf an amount is being transmitted to Vanguard for
investment in the Vanguard Funds and the dollar amount to be allocated to each
of the participant's separate accounts
Pg. 2
<PAGE>
under the Plan. In allocating amounts to participants' separate accounts under
the Plan and investing such amounts in the Vanguard Funds, Vanguard shall be
fully entitled to rely on the participant enrollment and allocation data
furnished to it by the Employer and shall be under no duty to make any inquiry
or investigation with respect thereto. If Vanguard receives any Plan
contribution or other amount that is not preceded or accompanied by instructions
directing its allocation to participants' separate accounts or investment within
the Vanguard Funds, Vanguard shall immediately notify the Employer and the
Trustee of that fact, and Vanguard shall hold or return to the Trustee all or a
portion of the Plan contribution or other amount uninvested without liability
for loss of income or appreciation pending receipt of proper allocation or
investment directions.
4. Investment Exchanges by Participants. Participants in the Plan
shall be permitted to direct Vanguard to make investment exchanges of amounts
allocated to their separate accounts under the Plan from one Vanguard Fund to
any other Vanguard Fund selected by the Employer as an available investment fund
under the Plan in accordance with item 1 of this Agreement. Any such investment
exchange by a participant shall be transmitted directly by the participant to
Vanguard in writing or by telephone in accordance with rules and procedures that
are established and approved by the Employer and communicated to Vanguard. In
making any such investment exchanges, Vanguard shall be fully entitled to rely
on directions furnished to it by participants in accordance with the Employer's
approved rules and procedures, and shall be under no duty to make any inquiry or
investigation with respect thereto.
Pg. 3
<PAGE>
5. Participant Statements. Vanguard shall furnish each participant in
the Plan with quarterly statements reflecting the current fair market value of
the participant's separate accounts under the Plan that are invested in the
Vanguard Funds and all activities occurring within such accounts during the most
recent quarter, including Plan earnings, exchanges, distributions and transfers.
6. Participant Valuation Summaries. On a monthly and quarterly basis,
Vanguard shall furnish the Employer with a Participant Valuation Summary
summarizing all participant transactions in all accounts during the applicable
reporting period.
7. Annual Accounting. Within 120 days after the end of each taxable
year of the Plan, Vanguard shall file with the Employer an annual accounting
summarizing all transactions effected with respect to Plan assets invested in
the Vanguard Funds during the most recent period, including consolidated
financial information necessary for the Employer to complete the Plan's annual
report (Form 5500).
8. Distributions. Any amounts allocated to participants' separate
accounts established under item 2 of this Agreement shall, upon the written
direction of the Employer or its authorized delegate, be paid to the participant
or the participant's designated beneficiary. Vanguard shall be fully entitled to
rely on all payment
Pg. 4
<PAGE>
directions furnished to it by the Employer or its authorized delegate, and shall
be under no duty to ascertain whether the directions are in accordance with the
provisions of the Plan. In making payments to Plan participants and their
beneficiaries, Vanguard shall be responsible for generating all necessary
Internal Revenue Service tax forms.
9. Vanguard Records. Vanguard shall keep full and accurate accounts of
all receipts, investments, disbursements and other transactions occurring with
respect to Plan assets under this Agreement, including such specific records as
may be agreed upon in writing with the Employer or the Trustee. All such
accounts, books and records shall be open to inspection and audit at all
reasonable times by any authorized representative of the Employer or the
Trustee.
10. Limitation Of Obligations And Duties Of Vanguard. The obligations
and duties of Vanguard with respect to the Plan shall be those specifically
listed in this Agreement, and Vanguard shall have no other obligation, duty,
responsibility or liability with respect to any other aspect of the operation or
administration of the Plan. In making any investment or disposition of Plan
assets, Vanguard shall be fully entitled to rely on the instructions furnished
to it by the Employer, Plan participants or the Trustee in accordance with the
terms and conditions of this Agreement,
Pg. 5
<PAGE>
and shall be under no duty to make any inquiry or investigation with respect
thereto.
11. Vanguard Compensation. Vanguard shall be entitled to reasonable
compensation for its recordkeeping, participant accounting, benefit payment and
tax reporting services as set forth in a separate Fee Agreement between Vanguard
and the Employer. If not paid directly by the employer, such compensation shall
be paid to Vanguard from the assets of the Plan.
12. Amendment and Termination of Agreement. The Employer, the Trustee
and Vanguard may agree in writing to amend this Agreement at any time in whole
or in part. Any party hereto may terminate this Agreement upon 120 days written
notice (which notice may, however, be waived by the other parties hereto). In
the event of such termination, all assets of the Plan invested in the Vanguard
Funds as of the date of termination shall be disposed of in accordance with the
written instructions of the Trustee.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective the day and year first above written.
Attest: HARTMARX CORPORATION
/s/ JUNE DRAWYER By: /s/ JAMES E. CONDON
- ------------------------ ------------------------
Title: Vice President &
Treasurer
Pg. 6
<PAGE>
Attest: CONTINENTAL BANK
By: /s/ MARIANNE BUMONTE
------------------------
Title: Trust Officer
Attest: VANGUARD FIDUCIARY
TRUST COMPANY
/s/ MARY J. WITTY By: /s/ R. GREGORY BARTON
- ------------------------ ------------------------
Title: Vice President
Pg. 7
<PAGE>
EXHIBIT 5
LEGAL OPINION AND CONSENT OF MARY D. ALLEN
May 2, 1996
Hartmarx Corporation
101 North Wacker Drive
Chicago, Illinois 60606
Gentlemen:
I am Executive Vice President, General Counsel and Secretary of Hartmarx
Corporation ("Hartmarx"), and acting in such capacity, in connection with the
registration under the Securities Act of 1933, as amended, of 250,000 shares of
its common stock, $2.50 par value (the "Shares"), and the stock purchase rights
(the "Rights") attached to the Shares, for offering pursuant to the Hartmarx
Savings-Investment Plan (the "Plan"), I have examined the Restated Certificate
of Incorporation and Bylaws of Hartmarx, each as amended to date, the Rights
Agreement dated as of December 6, 1995, between Hartmarx and First Chicago Trust
Company of New York, as "Rights Agent", the subject Registration Statement on
Form S-8, and such other original and photostatic copies of documents, records
and instruments, including minutes of meetings of the Board of Directors of
Hartmarx and Stockholders of Hartmarx, respectively, as I have deemed necessary
for the purposes of rendering this opinion. In all of my examinations I have
assumed the genuineness of all signatures on, and the authenticity of, all
documents purporting to be originals and the conformity to originals of all
photostatic copies of documents.
Based upon the foregoing, relying on the statements of facts contained in
the documents referred to, it is my opinion that:
(i) the Shares are duly authorized for issue; and
(ii) the Shares, when issued in accordance with the provisions of the
Plan, and the Rights attached to the Shares, will be legally issued, fully
paid and non-assessable.
<PAGE>
Hartmarx Corporation
May 2, 1996
Page -2-
I hereby consent to the use of my name in the Prospectus and in the
Registration Statement on Form S-8 and to the filing of this opinion with the
Securities and Exchange Commission as an Exhibit to such Registration Statement
on Form S-8.
Very truly yours,
/s/ MARY D. ALLEN
MDA/hcp
<PAGE>
EXHIBIT 23
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of Hartmarx Corporation of our report dated January 9,
1996, which appears on page 14 of Hartmarx Corporation's Annual Report on Form
10-K for the year ended November 30, 1995. We also consent to the incorporation
by reference in this Registration Statement of our report dated June 23, 1995
appearing on page 1 of the Annual Report of the Hartmarx Savings-Investment Plan
for the year ended December 31, 1994 on Form 10-K/A Amendment No. 1 to Annual
Report on Form 10-K for the fiscal year ended November 30, 1994. We also
consent to the reference to us under the heading "Experts" in such Prospectus.
PRICE WATERHOUSE LLP
/S/ PRICE WATERHOUSE LLP
Chicago, Illinois
May 2, 1996
<PAGE>
POWER OF ATTORNEY EXHIBIT 24
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned directors and
officers of HARTMARX CORPORATION, a Delaware corporation, do hereby constitute
and appoint GLENN R. MORGAN and MARY D. ALLEN, or either of them, his true and
lawful attorney-in-fact and agent, with full power and authority of substitution
and resubstitution, to sign in the name and on behalf of the undersigned, as
directors and officers of said corporation, a Registration Statement on FORM S-8
which relates to the registration under the Securities Act of 1933 of shares of
The Hartmarx Savings-Investment Plan, and any and all Amendments of every nature
to said Registration Statement and to the Prospectus constituting a part of such
Registration Statement, and to file the same or cause to be filed the same, with
all exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission.
Each of the undersigned hereby certifies that to the best of the
undersigned's knowledge and belief said corporation meets all of the
requirements for filings on FORM S-8 and hereby grants unto said attorney-in-
fact and agent full power to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as they or either of them might or could do in person,
hereby ratifying and confirming all that said attorney-in- fact and agent, or
his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, the undersigned have executed this Power of Attorney
this 10th day of January, 1996.
/S/ ELBERT O. HAND /S/ HOMI B. PATEL
- ---------------------------------- -----------------------------------
ELBERT O. HAND HOMI B. PATEL
Chairman, Chief Executive President, Chief Operating,
Officer, Director Officer, Director
/S/ A. ROBERT ABBOUD /S/ CHARLES MARSHALL
- -------------------------------------- -----------------------------------
A. ROBERT ABBOUD, Director CHARLES MARSHALL, Director
/S/ SAMAWAL A. BAKHSH /S/ TALAT M. OTHMAN
- -------------------------------------- -----------------------------------
SAMAWAL A. BAKHSH, Director TALAT M. OTHMAN, Director
/S/ LETITIA BALDRIGE /S/ MICHAEL B. ROHLFS
- -------------------------------------- -----------------------------------
LETITIA BALDRIGE, Director MICHAEL B. ROHLFS, Director
/S/ JEFFREY A. COLE /S/ STUART L. SCOTT
- -------------------------------------- -----------------------------------
JEFFREY A. COLE, Director STUART L. SCOTT, Director
/S/ RAYMOND F. FARLEY /S/ SAM F. SEGNAR
- -------------------------------------- -----------------------------------
RAYMOND F. FARLEY, Director SAM F. SEGNAR, Director
/S/ DONALD P. JACOBS /S/ GLENN R. MORGAN
- -------------------------------------- -----------------------------------
DONALD P. JACOBS, Director GLENN R. MORGAN
Executive Vice President
Principal Financial Officer
/S/ MILES L. MARSH /S/ ANDREW A ZAHR
- -------------------------------------- -----------------------------------
MILES L. MARSH, Director ANDREW A. ZAHR
Controller, Principal
Accounting Officer
