<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
HARTMARX CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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[HARTMARX LOGO]
----------------
NOTICE
OF
ANNUAL MEETING OF STOCKHOLDERS OF HARTMARX CORPORATION
TO BE HELD APRIL 17, 1996
To the Stockholders of HARTMARX CORPORATION:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of HARTMARX
CORPORATION (the "Corporation") will be held at The Executive Plaza Hotel, 71
East Wacker Drive, Chicago, Illinois, on Wednesday, April 17, 1996, at 11:00
A. M. for the following purposes:
(1) To elect Directors of the Corporation.
(2) To consider ratifying the appointment of independent auditors.
(3) To transact such other business as may properly come before the
meeting.
In addition to the foregoing, stockholders are hereby notified that the
Board of Directors has adopted certain amendments to the By-Laws of the
Corporation. The time period during which the Annual Meeting may be scheduled
by the Board has been enlarged by five days to any day between April 1 and
April 20, inclusive. Certain other amendments are discussed more fully in the
section entitled "Proposals by Security Holders" on page 16 of the Proxy
Statement. These By-Law amendments by the Board do not require any action by
the stockholders nor is any such action proposed to be taken at the meeting.
The Board of Directors has fixed February 20, 1996, as the record date for
determination of stockholders entitled to notice of, and to vote at, the
Annual Meeting.
In order that the shares of the Corporation may be represented as fully as
possible at the Annual Meeting, every stockholder is requested to vote, date,
sign and mail the enclosed Proxy, as early as practicable, in the accompanying
postage-paid envelope addressed to HARTMARX CORPORATION, c/o First Chicago
Trust Company, P.O. Box 8914, Edison, New Jersey 08818-9258. If you also
attend the Annual Meeting, you will have the opportunity to vote your shares
in person instead of having the Proxy counted.
A complete list of the stockholders entitled to vote at the Annual Meeting,
showing the address and number of shares registered in the name of each
stockholder, may be examined by any stockholder, for any purpose germane to
the meeting, during regular business hours between April 1, 1996 and April 17,
1996, at the office of Mrs. Kay C. Nalbach, Assistant Secretary of the
Corporation, 101 North Wacker Drive, Chicago, Illinois.
A Proxy Statement with respect to the Annual Meeting is attached hereto. The
Annual Report to Stockholders and the Annual Report on Form 10-K for the
fiscal year ended November 30, 1995, is enclosed herewith.
By Order of the Board of Directors
SIGNATURE OF MARY D. ALLEN
MARY D. ALLEN, Secretary
Chicago, Illinois
February 28, 1996
<PAGE>
[HARTMARX LOGO]
----------------
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS OF HARTMARX CORPORATION
TO BE HELD APRIL 17, 1996
The common stock, par value $2.50 ("Common Stock"), of HARTMARX CORPORATION
(the "Corporation") is the only security entitled to vote at the meeting. On
February 20, 1996, the record date for determining the stockholders entitled
to vote at the meeting, the Corporation had 32,908,101 shares of outstanding
Common Stock, each share entitled to one vote, held by approximately 6,400
stockholders (estimated by adding the number of registered holders furnished
by the Corporation's registrar and the number of participants in the Hartmarx
Employee Stock Ownership Plan). All shares represented by valid Proxies
received pursuant to this solicitation will be voted, if the Proxies are not
revoked prior thereto. Any stockholder may revoke a Proxy at any time prior to
the voting by delivering to the Corporation's Secretary a signed notice
specifying the number of shares and clearly identifying the Proxy to be
revoked or by attending the Annual Meeting and voting in person by written
ballot. The Corporation's principal executive offices are located at 101 North
Wacker Drive, Chicago, Illinois 60606, telephone 312/372-6300.
The enclosed Proxy is solicited by the Corporation's Board of Directors (the
"Board"). The cost of preparing and mailing the proxy material will be paid by
the Corporation. The approximate mailing date for this material is February
28, 1996. The Corporation will, upon request, reimburse brokers, banks and
trust companies for the costs incurred in mailing the proxy material to their
customers who are beneficial owners of Common Stock of the Corporation
registered in the names of such brokers, banks and trust companies or their
nominees. In addition to solicitation by mail, officers and regular employees
of the Corporation may solicit Proxies by telephone or telegram or in person,
but will receive no additional compensation for such activities.
Votes cast by proxy or in person at the meeting will be tabulated by the
inspectors of election appointed by the Board for the meeting. The affirmative
vote of a plurality of the shares represented at the meeting is required to
elect directors, and the affirmative vote of a majority of such shares is
required to ratify the appointment of auditors. Abstentions and broker non-
votes are each included in the determination of shares present and voting for
purposes of determining whether a quorum is present. On other matters,
abstentions are counted as votes cast, while broker non-votes are not counted
in determining whether a proposal has been approved.
ITEM (1)--ELECTION OF DIRECTORS
Votes will be cast pursuant to authority granted by the enclosed Proxy for
the election of the ten nominees named below as directors of the Corporation.
Each elected director's term of office will be for one year or until a
successor is duly elected and qualified. In the event any of these nominees
becomes unavailable for election for any reason, votes will be cast pursuant
to authority granted by the enclosed Proxy for such persons as may be
designated by the Board. Ms. Letitia Baldrige, Mr. Miles L. Marsh, Mr. Talat
M. Othman and Mr. Sam Segnar have chosen not to stand for reelection this
year. Accordingly, the Hartmarx Board has determined to reduce the size of the
Board from fourteen to ten members in correspondence with overall downsizing
of the company.
1
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INFORMATION ABOUT NOMINEES FOR DIRECTORS
The information shown below includes the principal business affiliations of
each nominee since 1991.
Shares
Held(1)
A. ROBERT ABBOUD, 66--Director since 1974 40,616
(20,616)
Mr. Abboud is president of A. Robert Abboud and
Company, a private investment company. From April,
1988 to March, 1991, he was chairman and chief
executive officer of First City Bancorporation of
Texas, Inc. and its subsidiary, First City National
Bank of Houston. He is also a director of AAR
Corporation, Inland Steel Company and Alberto-Culver
Company. (2)
[PHOTO OF
A. ROBERT
ABBOUD] 0
SAMAWAL A. BAKHSH, 27--Director since 1995
Mr. Bakhsh is a director of Traco Group of Companies,
a privately held investment company. He also serves
as a director of several other privately held
corporations. (3)
[PHOTO OF
SAMAWAL A.
BAKHSH]
JEFFREY A. COLE, 54--Director since 1990 29,376
(26,876)
Mr. Cole is chairman, chief executive officer and a
director of Cole National Corporation, a specialty
retailer, having served as president, chief executive
officer and director prior to 1991.
[PHOTO OF
JEFFREY A.
COLE]
RAYMOND F. FARLEY, 71--Director since 1981 55,880
(29,380)
Mr. Farley is retired as president and chief
executive officer of S. C. Johnson & Son, Inc. (SC
Johnson Wax). He is also a director of Johnson
Worldwide Associates, Inc. and Snap-On Incorporated.
[PHOTO OF
RAYMOND F.
FARLEY]
2
<PAGE>
Shares
Held(1)
ELBERT O. HAND, 56--Director since 1984 295,594
(237,759)
Mr. Hand is chairman and chief executive officer of
HARTMARX CORPORATION. He was president and chief
operating officer from 1987 to 1992. He is also a
director of Austin Reed PLC, London, England.
[PHOTO OF
ELBERT O.
HAND] DONALD P. JACOBS, 68--Director since 1980 42,173
(34,778)
Mr. Jacobs is Dean of the J. L. Kellogg Graduate
School of Management and Gaylord Freeman
Distinguished Professor of Finance at Northwestern
University. He is also a director of Unicom
Corporation and its subsidiary, Commonwealth Edison
Company, The First National Bank of Chicago, a
subsidiary of First Chicago NBD Corporation, Security
Capital Industrial Trust, Unocal Corporation and
Whitman Corporation.
[PHOTO OF
DONALD P.
JACOBS] CHARLES MARSHALL, 66--Director since 1980 40,461
(16,109)
Mr. Marshall is retired as vice chairman of the board
and a director of American Telephone and Telegraph
Company, a communications company. He is also a
director of Ceridian Corporation, GATX Corporation,
Sonat, Inc. and Sunstrand Corp.
[PHOTO OF
CHARLES
MARSHALL] HOMI B. PATEL, 46--Director since 1994 213,074
(142,909)
Mr. Patel is President and Chief Operating Officer of
HARTMARX CORPORATION. He was president of the Men's
Apparel Group in 1990 and chairman and chief
executive officer in 1991. He is also a director of
the Amalgamated Life Insurance Co.
[PHOTO OF
HOMI B.
PATEL] MICHAEL B. ROHLFS, 44--Director since 1995 0
Mr. Rohlfs is President and Chief Executive Officer
of Dearborn Financial, Inc., an investment advisory
company. From 1991 to September, 1995, he served as
Executive Vice President and Managing Director of
Dearborn. He is also a director of In-Flight Phone
Corporation. (3)(4)
[PHOTO OF
MICHAEL B.
ROHLFS]
3
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STUART L. SCOTT, 57--Director since 1993 33,534
(18,534)
Mr. Scott is chairman and chief executive officer of
LaSalle Partners Limited, an international real
estate services firm. He was co-chairman from 1990 to
1992, and previously served in various executive
positions with LaSalle Partners. (5)
[PHOTO OF
STUART L.
SCOTT]
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(1) Shares listed include shares of Common Stock beneficially owned, directly
or indirectly, as of February 20, 1996 and shares which may be acquired
within 60 days through exercise of stock options (shown in parentheses
under "Shares Held"). Shares beneficially owned, directly or indirectly,
and shares which may be acquired within 60 days through the exercise of
stock options (shown in parentheses) by the Named Executive Officers
included in the Summary Compensation Table (other than Messrs. Hand and
Patel) and those directors not standing for reelection are as follows: Ms.
Allen, 5,069 (5,000); Mr. Morgan, 45,491 (31,374); Mr. Brenner, 22,801
(14,218); Mr. Rueckel, 70,294 (70,000); Ms. Baldrige, 23,363 (22,863); Mr.
Marsh, 30,935 (29,435); Mr. Othman 18,534 (18,534) and Mr. Segnar 34,550
(32,713). Each person has sole voting and dispositive power with respect
to the Shares held, except as follows: Mr. Hand's total includes 200
shares held as custodian for the benefit of his child and 100 shares held
by his wife; and Mr. Jacobs' total includes 3,000 shares held by his wife.
No director or nominee beneficially owns as much as 1% of the
Corporation's Common Stock. All directors and executive officers of the
Corporation as a group (a total of 21 persons) beneficially own 1,053,942
shares of Common Stock (3.1% of all outstanding shares), including 777,088
shares (2.3%) that they have rights to acquire within 60 days through the
exercise of stock options.
(2) On November 23, 1992, First City Bancorporation of Texas, Inc. ("First
City"), consented to an involuntary bankruptcy petition filed against it
following federal regulatory actions closing, and appointing the FDIC as
receiver of, First City's subsidiary banks. The Bankruptcy Court entered
an order permitting First City to operate as a debtor-in-possession under
Chapter 11 of the Bankruptcy Code. A plan of reorganization was confirmed
by the Bankruptcy Court in May, 1995 and completed the following July.
Under the plan, First City merged with J-Hawk Corporation to form First
City Financial Corporation, a company engaged in the acquisition,
management and disposition of distressed asset portfolios. Stockholders of
First City received beneficial interests in a liquidating trust, stock,
warrants or senior subordinated notes, or a combination thereof; creditors
were paid in full, including post-petition interest.
(3) Messrs. Bakhsh and Rohlfs were elected in December, 1995, and are being
nominated for election, as directors pursuant to the provisions of a
Stockholder's Agreement entered into by the Corporation and Traco
International, N.V. ("Traco"), in conjunction with Traco's December 31,
1992 acquisition of 5,714,286 shares of the Corporation's Common Stock at
$5.25 per share. In October and December, 1993, Traco transferred
5,523,810 shares to Emerson Investment, Ltd. ("Emerson"), and Emerson
consented to be bound by the terms of the Stockholder's Agreement.
Dearborn Financial, Inc. is an affiliate of Traco and Emerson.
(4) From 1990 through 1994, Mr. Rohlfs served as Chief Executive Officer of
three Louisiana corporations which were the general partners (including
the managing general partner) of Canal Place Limited Partnership ("Canal
Place"). During 1990, Canal Place voluntarily filed for reorganization
under Chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for
the Eastern District of Louisiana. In November, 1994, the Court entered an
order confirming Canal Place's plan of reorganization; such plan was
consummated at that time by Canal Place, resulting in the payment of all
allowed claims. The case has been fully administered and closed.
4
<PAGE>
(5) Affiliates of LaSalle Partners Limited manage certain commercial real
estate in which subsidiaries of the Corporation lease offices and
showrooms, including the Corporation's principal executive offices. Mr.
Scott does not have a direct or indirect material interest in these
transactions.
Directors, officers and holders of more than 10% of the Corporation's Common
Stock are required to file reports of their transactions in the Corporation's
Common Stock with the Securities and Exchange Commission and the New York
Stock Exchange and to furnish copies of these reports to the Corporation.
These reports are to be filed within specified times after each reportable
transaction. Based solely on its review of the furnished copies of these
reports, the Corporation believes that all filing requirements were complied
with in fiscal 1995.
The Board held seven meetings, one of which was the annual meeting, in
fiscal 1995. Mr. Marsh was unable to attend two Board meetings and three
committee meetings and Mr. Othman was unable to attend three Board meetings;
all other directors attended at least 75% of the meetings of the Board and
committees on which he or she served. Board committees are reconstituted
annually at the Annual Meeting of the Board immediately following the Annual
Meeting of Stockholders.
The Audit and Finance Committee now consists of Mr. Scott, chairman, Ms.
Baldrige, Mr. Cole, Mr. Jacobs and Mr. Marshall. The Committee was formed in
December, 1995 when two previously separate committees, the Audit Committee
and Finance Committee, were combined. Prior to their combination, the Audit
Committee met two times and the Finance Committee met three times in fiscal
1995. The Committee maintains communications between the directors and
independent auditors and assists the Board with its responsibilities relating
to corporate accounting, integrity of financial controls and reporting
practices. It reports to the entire Board periodically on such matters as the
Committee or the Board may specify, approves all non-audit work which the
independent auditors perform for the Corporation and approves their fees. It
also oversees the Corporation's investment policies, methods of financing
corporate operations and employee benefit plans.
The Compensation and Stock Option Committee is currently composed of Mr.
Farley, chairman, Mr. Abboud, Mr. Jacobs, Mr. Marsh and Mr.Othman. It met four
times in fiscal 1995. It exercises the full powers of the Board with respect
to compensation paid to executives of the Corporation and its subsidiaries. It
also grants employee stock options and makes other determinations regarding
the administration of employee stock option plans. It approves management
incentive (bonus) plans and determines from time to time the standards of
performance for bonus payments.
The Nominating and Governance Committee now consists of Ms. Baldrige and Mr.
Marshall, co-chairpersons, Mr. Marsh, Mr. Scott and Mr. Segnar. It met once in
fiscal 1995. Its function is to propose to the entire Board qualified nominees
for election to fill vacancies on the Board and, pursuant to an expansion of
its responsibilities in April, 1995, to make recommendations on directorship
and corporate governance practices. Stockholders wishing to suggest qualified
candidates for this Committee's consideration should forward their suggestions
to the Nominating and Governance Committee, in care of Mrs. Kay C. Nalbach,
Assistant Secretary, HARTMARX CORPORATION, 101 North Wacker Drive, Chicago,
Illinois 60606.
For fiscal 1995, each of the directors not employed by the Corporation was
entitled to receive a $17,500 annual retainer plus $750 for each Board meeting
attended and $600 for each committee meeting attended. Each committee chairman
was entitled to receive $2,500 annually in addition. Some of the directors had
the opportunity to defer payment of all or a portion of annual fees otherwise
payable from January 1, 1986 through 1989. Deferred fees earn interest from
the date of deferral at 110% of the seasoned Moody's Corporate Bond Index
rate. Upon termination of their service as a director, the Corporation agrees
to pay such deferred fees and interest ("Deferral Account"), either in a lump
sum or in installments. The deferral arrangements also provide for the
Corporation's payment of specified death benefits under certain circumstances.
Each director who has deferred fees is an
5
<PAGE>
unsecured general creditor of the Corporation with respect to such Deferral
Account. Some directors have withdrawn or converted their Deferral Account
into Director Stock Options exercisable for $1.00. Non-employee directors are
also provided a clothing allowance and, while on Hartmarx business, travel
accident insurance. The cost of such benefits was approximately $2,700 per
director.
Director Stock Options ("DSOs") and Director Deferred Stock Awards ("DDSAs")
are granted under the 1995 Stock Plan for Non-Employee Directors. Except as
described below, DSOs are generally identical to employee stock options but
are granted only to directors who are not employed by the Corporation or any
of its subsidiaries ("Outside Directors"). The number of shares of Common
Stock covered by DSOs granted to a director in any twelve-month period ending
each March 31 is obtained by dividing the amount of the director's annual
retainer by the fair market value of a share of the Corporation's Common Stock
on the date or dates of grant, but in no event can be less than 1,000 shares.
In addition, each Outside Director may choose to receive, on each date of
election to the Board, a DSO in lieu of all or part of the annual retainer
payable during such director's term of office. The number of shares covered by
such a DSO is obtained by dividing the unpaid retainer amount by the excess of
the fair market value of a share on such date over $1.00; the purchase price
of each covered share is $1.00. For shares covered by these DSOs outstanding
on a Common Stock dividend record date, the director will be paid cash
dividend equivalents based on the cash dividend (or cash value of other
property) that would have been received had such DSO shares been issued and
outstanding on the dividend record date. DDSAs consist of share units credited
to an account for each Outside Director, each unit representing one share of
Common Stock. Since 1988, each Outside Director is also granted 150 units on
each date of election to the Board. DDSAs earn dividend equivalents in the
same manner as DSOs but such dividend equivalents are credited to the
director's account as additional units. Upon the director's death, disability
or termination of Board service, whole units become payable in shares of
Common Stock and any fractional units become payable in cash.
6
<PAGE>
EXECUTIVE OFFICER COMPENSATION
The following table shows the compensation for the past three fiscal years
of the Corporation for each of the Corporation's five most highly compensated
executive officers including the Chief Executive Officer, and one other person
who served as an executive officer during part of fiscal 1995 (the "Named
Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term Compensation
---------------------------------
Annual Compensation Awards Payouts
------------------------------- ----------------------- -------
Name and Restricted Securities Long-Term
Principal Other Annual Stock Underlying Incentive All Other
Position Year Salary(1) Bonus Compensation Awards(2) Options/SARs Payouts Compensation(3)
--------- ---- --------- ----- ------------ ---------- ------------ --------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Elbert O. Hand, 1995 $561,667 -- -- -- 145,000 $ -- $3,686
Chairman and Chief 1994 522,083 $234,891 -- -- 70,000 -- 3,350
Executive Officer 1993 489,167 254,250 -- $264,258 30,000 -- 3,811
Homi B. Patel, 1995 447,500 -- -- -- 135,000 -- 2,898
President and 1994 418,879 138,572 -- -- 60,000 -- 2,758
Chief Operating Officer 1993 388,500 149,992 -- 157,997 25,000 -- 2,817
Mary D. Allen 1995 200,000 -- -- -- 45,000 -- 1,127
Executive Vice 1994(4) 41,668 68,186 -- -- 25,000 -- 200
President, General 1993 -- -- -- -- -- -- --
Counsel and Secretary
Glenn R. Morgan 1995 179,375 -- -- -- 45,000 -- 1,613
Executive Vice 1994 161,807 44,848 -- -- 20,000 -- 1,775
President and Chief 1993 149,713 48,544 -- 27,281 8,000 -- 1,555
Financial Officer
Frank A. Brenner, 1995 160,104 -- -- -- 10,000 -- 1,490
Vice President, 1994 152,229 28,066 -- -- 7,000 -- 1,708
Marketing Services 1993 143,521 30,380 -- 17,946 4,000 -- 1,603
Wallace L. Rueckel, 1995(5) 172,333 -- -- -- 10,000 -- 661,854(6)
Former Executive Vice 1994 218,334 82,515 -- -- 35,000 -- 1,798
President and Chief 1993 150,000 89,316 $92,296(7) 89,320 25,000 -- 720
Financial Officer
</TABLE>
- --------
(1) Includes amounts paid and deferred.
(2) The dollar amount shown equals the number of shares of restricted stock
multiplied by the stock price on the grant date. This valuation does not
take into account the diminution in value attributable to the restrictions
placed on the shares. On January 4, 1993, the following restricted shares
were awarded in lieu of a portion of the executive officer's cash increase
in salary for fiscal 1993 and subject to his continued employment for one
year: Mr. Hand, 1,568; Mr. Patel, 1,254; Mr. Morgan, 471; and Mr. Brenner,
432. On November 30, 1993, the following restricted shares were awarded
and vest in one-third increments over three years, subject to the
executive officer's continued employment (unless otherwise specified in an
employment agreement): Mr. Hand, 36,322; Mr. Patel, 21,428; Mr. Morgan,
3,468; Mr. Brenner, 2,170; and Mr. Rueckel, 12,760. The number and value
of aggregate restricted stock holdings at the end of fiscal year 1995
were: Mr. Hand, 12,107 ($55,208); Mr. Patel, 7,142 ($32,568); Mr. Morgan,
1,156 ($5,271); Mr. Brenner, 723 ($3,297); and Mr. Rueckel, 0. Dividends,
if any, are paid on all shares of restricted stock at the same rate as on
unrestricted shares.
(3) These amounts represent the Corporation's contributions to the Hartmarx
Employee Stock Ownership Plan and premiums paid for term life insurance.
The amounts contributed to the Plan in 1995 were: Mr. Hand, $750; Mr.
Patel, $750; Ms. Allen, $167; Mr. Morgan, $750; Mr. Brenner, $750 and Mr.
Rueckel, $750. The premiums for term life insurance in 1995 were: Mr.
Hand,
7
<PAGE>
$2,936; Mr. Patel, $2,148; Ms. Allen, $960; Mr. Morgan, $863; Mr. Brenner,
$740 and Mr. Rueckel, $1,104.
(4) Ms. Allen's employment with the Corporation commenced on September 12,
1994.
(5) Mr. Rueckel's employment with the Corporation ended on August 31, 1995.
(6) Includes $660,000 which is the amount paid or accrued by the Corporation
in fiscal 1995 for the salary and benefits payable to Mr. Rueckel pursuant
to his employment agreement in connection with the termination of his
employment.
(7) Amount shown for Mr. Rueckel includes relocation expenses totalling
$65,491, the cost of a leased automobile and financial counseling, and
amounts reimbursed for the payment of taxes. On April 28, 1993, the
Corporation loaned Mr. Rueckel $253,000 to assist in the purchase of a new
home, with interest accruing at six percent (6%). Total interest accrued
of $2,704 was forgiven by the Corporation and is included in the
relocation expense figure above. The loan was fully repaid prior to
November 30, 1993.
EMPLOYMENT AGREEMENTS
Messrs. Hand, Patel and Morgan and Ms. Allen each have employment agreements
for a term of not more than two years expiring December 31, 1996, under which
each of them will receive annual salaries at least equal to their respective
annual salaries on the date the agreements were signed (with increases to be
determined by the Compensation Committee), and which provide for participation
in the Management Incentive Plan (MIP), described below, and in any other
fringe benefits, including any long term incentive plan, available to key
executives. In the event that any of these executives is discharged without
cause or resigns with good reason, which includes resignation due to a change
in duties or cancellation of his employment agreement prior to expiration, the
executive will be entitled to continuation of salary and fringe benefits for
24 months (with fringe benefits continuing for 36 months in the event of a
change in control as described below). In addition, all unpaid incentive
compensation under the MIP (including all contingent compensation which would
have been payable for an uncompleted fiscal year; plus 66.67% of the
executive's maximum bonus opportunity under the MIP for such year) and all
unpaid incentive compensation under any long term incentive plan (including
all contingent compensation which would have been payable for uncompleted
performance periods) becomes immediately payable; and all stock options and
restricted stock granted to such executive under the Corporation's stock
option plans become immediately exercisable and fully vested, as the case may
be. The Corporation has also agreed to pay each executive severance benefits
in the event the executive's employment is terminated within 24 months
following a change in control of the Corporation for any reason other than (i)
death, disability or retirement, (ii) for cause, or (iii) resignation without
good reason. The severance payment, payable in lieu of the salary continuation
described above, would equal three times the executive's annual base salary as
of the date the executive's employment is terminated. In addition, all stock
options and restricted stock granted to such executive under the Corporation's
stock option plans would become immediately exercisable and fully vested, as
the case may be, and the executive would also be entitled to receive any
unpaid contingent or other incentive compensation in the same manner as
described above (except that the executive would receive an additional
133.34%, rather than 66.67%, of his maximum bonus opportunity under the MIP
for such year). In the event that total severance benefits to be received by
the executive in connection with a change in control would be subject to any
excise tax imposed under Section 4999 of the Internal Revenue Code, then the
severance payment is subject to possible reduction to an amount necessary so
that no portion would be subject to such excise tax if the total payment with
such a reduction, and net of all taxes, would be greater than the total
payment without reduction, net of all taxes.
Mr. Brenner has agreed to remain in the employ of the Corporation, subject
to the Corporation's agreement to pay him severance benefits if such
employment is terminated within 24 months following an actual change in
control for any reason other than (i) death, disability or retirement, (ii)
8
<PAGE>
for cause, or (iii) resignation without good reason. Generally, the severance
payment, net of additional amounts agreed to be paid by the Corporation, if
necessary, in respect of any excise tax imposed by Section 4999 of the
Internal Revenue Code on such severance benefits (and any federal, state and
local taxes on such additional amounts), would equal up to one and a half
times the executive's average annual compensation for the three calendar years
immediately preceding the year in which the change in control occurs if the
executive is then under age 50, otherwise, up to two times such average annual
compensation; and the executive would also be entitled to receive any
appreciation in the value of Common Stock covered by stock options theretofore
granted to such executive under the Corporation's stock option plans (whether
or not then fully exercisable).
STOCK OPTION PLANS
The Corporation currently has a 1995 Incentive Stock Plan ("1995 Incentive
Plan") and a 1995 Stock Plan for Non-Employee Directors ("1995 Directors
Plan") to encourage directors, officers and other key employees of the
Corporation and its subsidiaries to acquire shares of the Corporation's Common
Stock and thereby develop a stronger incentive to put forth maximum effort for
the success and growth of the Corporation. The 1995 Incentive Plan requires
employee stock option ("ESO") prices to be not less than fair market value at
grant date. Stock appreciation rights, which may be granted in tandem with
ESOs granted under the 1995 Incentive Plan, enable recipients to receive a
combination of shares and a cash payment, which together equal the gain in
market price from the grant date to the exercise date, with the cash payment
limited to one-half of the gain. The 1995 Incentive Plan also authorizes the
grant of Restricted Stock Awards ("RSA") to officers and other key employees.
Full ownership of shares covered by an RSA are subject to the satisfaction of
specified terms and conditions, such as continued employment with the
Corporation or the achievement of specified performance goals. If the terms
and conditions of the RSA are not satisfied, all or a portion of the shares
covered by the RSA will be forfeited. The 1995 Directors Plan requires that
DSO's (described previously) cannot be exercised for six months after the
grant date.
The following tables provide information on the Named Executive Officers'
option grants in fiscal 1995, option exercises in fiscal 1995 and the value of
unexercised options at November 30, 1995.
<TABLE>
<CAPTION>
Potential
Realizable Value
at Assumed Annual
Rates of Stock Price
Appreciation for
Individual Grants Option Term(1)
- ----------------------------------------------------------------------- ---------------------
Percent of
Total
Number of Options
Securities Granted to
Underlying Employees Exercise or
Options in Fiscal Base Price Expiration
Name Granted Year(2) ($/Share)(3) Date 5% ($) 10% ($)
- ---- ---------- ---------- ------------ ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Elbert O. Hand.......... 70,000(4) 7.0 5.25 10/09/2000 101,534 224,362
75,000(5) 7.5 5.25 07/11/2005 239,075 613,919
Homi B. Patel........... 65,000(4) 6.5 5.25 10/09/2000 94,281 208,337
70,000(5) 7.0 5.25 07/11/2005 223,137 572,991
Mary D. Allen........... 20,000(6) 2.0 5.25 10/09/2000 29,010 64,104
25,000(5) 2.5 5.25 07/11/2005 79,692 204,640
Glenn R. Morgan......... 20,000(4) 2.0 5.25 10/09/2000 29,010 64,104
25,000(5) 2.5 5.25 07/11/2005 79,692 204,640
Frank A. Brenner........ 5,000(4) 0.5 5.25 10/09/2000 7,252 16,026
5,000(7) 0.5 5.25 07/11/2005 15,938 40,928
Wallace L. Rueckel...... 10,000(8) 1.0 5.25 07/11/2005 31,877 81,856
</TABLE>
OPTION GRANTS IN THE LAST FISCAL YEAR
- --------
(1) The amounts shown above for each of the Named Executive Officers as
potential realizable values are based on arbitrarily assumed annualized
rates of stock price appreciation of 5% and
9
<PAGE>
10% over the full five or ten year terms of the options, as required by
applicable regulations of the Securities and Exchange Commission. Actual
gains, if any, on stock option exercises and common stock holdings will be
dependent on the future performance of the Corporation and overall stock
market conditions.
(2) The Corporation granted options representing 994,500 shares to employees
in fiscal 1995. No SARs were granted in tandem with these options.
(3) The exercise price may be paid by delivery of already owned shares and the
withholding obligations related to exercise may be paid by offset of the
underlying shares subject to certain conditions. The fair market value on
the date of grant of the shares underlying the July options was $5.18 per
share.
(4) These options were granted on October 10, 1995, and will become fully
exercisable on October 10, 1996, and are subject to termination between 90
days to three years following termination of employment in certain events.
(5) These options were granted on July 12, 1995 and become exercisable in one-
third increments commencing on July 12, 1996 and in cumulative one-third
(33%) installments thereafter, when the stock price exceeds $7.00 for
thirty consecutive days and when the stock price exceeds $10.00 for thirty
consecutive days, with full vesting occurring on July 10, 2005 if not
before, and are subject to termination between 90 days to three years
following termination of employment in certain events.
(6) These options were granted on October 10, 1995 and become exercisable in a
forty percent (40%) installment commencing October 10, 1996 and in
cumulative twenty percent (20%) installments thereafter, with full vesting
occurring on October 10, 1999, and are subject to termination between 90
days to three years following termination of employment in certain events.
(7) These options were granted on July 12, 1995 and will become fully
exercisable on July 12, 1996, and are subject to termination between 90
days to three years following termination of employment in certain events.
(8) These options were granted on July 12, 1995 and became fully exercisable
on August 31, 1995 under the terms of Mr. Rueckel's employment agreement.
AGGREGATED OPTION EXERCISES IN THE LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
Number of
Securities Value ($) of
Underlying Unexercised
Unexercised In-the-Money
Options at Options at
Nov. 30, 1995 Nov. 30, 1995
Shares Acquired Exercisable/ Exercisable/
Name on Exercise Value Realized Unexercisable Unexercisable
- ---- --------------- -------------- --------------- -------------
<S> <C> <C> <C> <C>
Elbert O. Hand.......... 0 0 237,759/145,000 0/0
Homi B. Patel........... 0 0 142,909/135,000 0/0
Mary D. Allen........... 0 0 5,000/ 45,000 0/0
Glenn R. Morgan......... 0 0 31,374/ 45,000 0/0
Frank A. Brenner........ 0 0 14,218/ 10,000 0/0
Wallace L. Rueckel...... 0 0 70,000/ 0 0/0
</TABLE>
PENSION PLAN
The Hartmarx Retirement Income Plan, a trusteed plan, provides for
contributions to be made by the Corporation and designated affiliates on an
actuarial basis, and provides for defined benefits in the event of retirement
after certain age and service requirements have been met. Survivor benefits
are also provided in the event of a participant's death after certain other
age and service requirements are met. Regular eligible employees of the
Corporation or a designated affiliate who
10
<PAGE>
participate in The Hartmarx Savings-Investment Plan, a trusteed defined
contribution plan, automatically participate in this Plan. Normal retirement
age under this Plan is 65 and early retirement at any time after a vested
participant attains age 55 results in actuarially reduced benefits. Maximum
benefits under this Plan are based upon 50% of the highest average annual
earnings (base salary, commissions, bonus and overtime), up to $235,840
(reduced to $150,000 for annual earnings after 1993), paid to an employee for
any five consecutive years included within the final 10 consecutive years of
employment by the Corporation (or subsidiary adopting the Plan), less 50% of
the primary Social Security benefit, for 30 years of service, prorated
downward to one-sixth of such benefits for the minimum of five years normally
required for vested rights.
The following table shows the estimated annual benefits payable upon
retirement at age 65 to participants in this Plan, in specified
classifications as to compensation and years of service. These single-life
benefits are actuarially reduced when the spouse is named as joint annuitant
or if the employee withdraws his or her pre-1984 contributions to the Plan
prior to retirement. In certain instances, benefits are subject to limitations
imposed by the Employee Retirement Income Security Act of 1974, as amended.
The Corporation has authorized additional non-qualified pension payments based
upon the benefits which could have been earned in accordance with the formula
described in the previous paragraph but for the application of such
limitations. Compensation covered by this Plan for the Named Executive
Officers generally corresponds with the earned salary, bonus and cash portion
of any long-term incentive payout shown in the Summary Compensation Table.
Full years of service credited under this Plan as of November 30, 1995, were
26 for Mr. Hand, 15 for Mr. Patel, 0 for Ms. Allen, 14 for Mr. Morgan, 18 for
Mr. Brenner and 2 for Mr. Rueckel.
<TABLE>
<CAPTION>
Average
Annual
Earnings
(Highest 5
Years Years of Credited Service
of Last 10 -------------------------------------------------
years) 5 10 15 20 25 30 or more
---------- ------ ------- ------- ------- ------- ----------
<S> <C> <C> <C> <C> <C> <C>
$200,000.................. 15,419 30,837 46,256 61,675 77,093 92,512
250,000.................. 19,585 39,171 58,756 78,341 97,927 117,512
300,000.................. 23,752 47,504 71,256 95,008 118,760 142,512
350,000.................. 27,919 55,837 83,756 111,675 139,593 167,512
400,000.................. 32,085 64,171 96,256 128,341 160,427 192,512
450,000.................. 36,252 72,504 108,756 145,008 181,260 217,512
500,000.................. 40,419 80,837 121,256 161,675 202,093 242,512
550,000.................. 44,585 89,171 133,756 178,341 222,927 267,512
600,000.................. 48,752 97,504 146,256 195,008 243,760 292,512
650,000.................. 52,919 105,837 158,756 211,675 264,593 317,512
700,000.................. 57,085 114,171 171,256 228,341 285,427 342,512
800,000.................. 65,419 130,837 196,256 261,675 327,093 392,512
900,000.................. 73,752 147,504 221,256 295,008 368,760 442,512
</TABLE>
REPORT OF THE COMPENSATION COMMITTEE
EXECUTIVE COMPENSATION PROGRAM
Compensation Committee Approach
The Compensation and Stock Option Committee (the "Compensation Committee"),
which is composed of five independent directors of the Corporation, sets
executive compensation levels and establishes and administers short-term and
long-term incentive programs based upon a set of guiding principles. These
principles, which are designed to align executive compensation with
management's execution of business strategies and initiatives as well as the
achievement of long-term financial performance and growth in shareholder
values, are as follows:
. Integration of the elements of the compensation package into a reward
program which will attract and retain key executives critical to the long-
term success of the Corporation.
11
<PAGE>
. Awarding of short-term incentives on terms closely tied to operating unit
performance and based upon the achievement of business goals for the
performance period.
. Alignment of executive and shareholder interests through a stock-based long-
term incentive program which will reward executives for enhancement of
shareholder values.
In determining the appropriate levels of executive compensation for fiscal
1995, the Compensation Committee took into account both the Corporation's
financial performance for the year and the executive group's successful
achievement of continued profitability. Future compensation will continue to
be closely tied to performance and its impact on the growth in shareholder
value.
The total compensation program consists of three components:
Base Salary
The base salaries and salary ranges for executives are determined in
relation to competitive market data provided in national executive
compensation surveys and subject to periodic review by independent
compensation consultants. Compensation surveys utilized include the Hay
Executive Compensation Report containing information on nearly 8,000
executives in 630 operating units of 385 industrial organizations (34%
nondurable manufacturing, 30% durable manufacturing, 30% non-manufacturing)
ranging in sales from less than $150 million to over $5 billion and the
American Apparel Manufacturers' Association Management Compensation Study
based upon information from 37 apparel manufacturing companies ranging in
sales from less than $100 million to over $1 billion. Salary ranges are
reviewed on an annual basis and adjusted as warranted to maintain a
competitive position of slightly above the median survey results.
Salaries are reviewed on an annual basis and salary changes are based upon
individual performance and position in salary ranges within the context of an
annual salary budget. The salary budget is determined in relation to
competitive market data provided in national salary planning surveys and the
financial performance of the Corporation and its operating units. Salary
planning surveys utilized include those conducted by the American Compensation
Association, Hewitt Associates, William M. Mercer, Sibson & Company, Towers
Perrin and The Wyatt Company. If the financial performance of the Corporation
results in achieving sales and earnings targeted in the business plan, the
overall salary budget is established at the survey national average and is
allocated to operating units based upon the level of achievement of their
individual business plans.
In fiscal 1994, sales and earnings were achieved in accordance with the
business plan and a competitive overall salary budget of 4.1% was administered
for 1995. Better performing operating units had higher salary budgets while
those with lower performance had less, or in some cases, none. Actual salary
increases averaged 3.8% throughout the Corporation. Above average salary
increases were awarded in January to Mr. Patel, Mr. Rueckel, Mr. Morgan and
Mr. Brenner in recognition of their individual contributions to the continued
profitability of the Corporation. Ms. Allen joined the Corporation in
September of 1994. The employment agreement for Mr. Patel provides for his
annual salary to be at least equal to his 1993 annual salary, for Ms. Allen
equal to her 1994 annual salary and for Mr. Morgan equal to his 1995 annual
salary, with increases to be determined by the Compensation Committee. In
addition, a promotional increase was awarded in September to Mr. Morgan,
elected Executive Vice President and Chief Financial Officer, in recognition
of his increased responsibilities replacing Mr. Rueckel who resigned in August
to pursue other opportunities. The salary of the Chief Executive Officer is
separately discussed below.
Salaries for the Named Executive Officers remain somewhat below average
competitive levels, with the competitiveness of the overall compensation
package significantly dependent upon the reward opportunities created by
achievement of objectives under the Corporation's short-term and long-term
incentive plans.
12
<PAGE>
Short-Term Incentives
Executives are eligible for annual bonuses under the Management Incentive
Plan (MIP). Incentive opportunities are determined in relation to competitive
market data as provided in the aforementioned national executive compensation
surveys and subject to periodic review by independent compensation
consultants. Awards are based upon the achievement of financial goals
established for individual operating units and on a consolidated basis in
accordance with the Corporation's business plan. Individual awards for
corporate executives are based upon the achievement of both consolidated and
operating unit goals weighted according to sales volume. Operating unit
executives are measured on the goals appropriate to the unit within which they
report with unit heads also accountable for consolidated goals. For fiscal
1995, 49 executives participated in the plan. Corporate executives were
measured on consolidated pre-tax income and operating unit sales-weighted pre-
tax income and inventory turnover goals. Operating unit executives were
measured on pre-tax income, sales and inventory turnover goals with unit heads
also measured on consolidated pre-tax income. No bonuses would have been
earned if the Corporation had not achieved positive income results. Bonuses
paid for 1995 averaged 14.7% of eligible salaries and 34.8% of maximum
incentive opportunities. No 1995 bonuses were paid to corporate executives
because fiscal year consolidated pre-tax income results were below the
Corporation's business plan.
Long-Term Incentives
Executives are eligible for awards of stock options and/or restricted stock
under the Corporation's Incentive Stock Plan. Awards are determined in
relation to competitive practice and an individual's position. In July, a new
Long Term Incentive Plan was adopted under which selected senior executives
were given stock option grants utilizing performance based vesting whereby
increments of the award will vest when the stock price exceeds certain levels
for thirty consecutive days. Messrs. Patel and Morgan, and Ms. Allen received
awards from the Long Term Incentive Plan. The amount and terms of the options
already held by the Named Executive Officers were not considered in
determining the size of awards. As reflected in the Table of Option Grants In
The Last Fiscal Year, two stock option grants were awarded to each of the
Named Executive Officers at an exercise price slightly above the fair market
value in the first grant and equal to the fair market value in the second
grant of the Corporation's stock on the dates of the grants.
Chief Executive Officer Compensation
The Compensation Committee increased the salary of the Chief Executive
Officer 7.6% to $565,000 on January 1, 1995. The determination of the Chief
Executive Officer's salary was based upon the salary range for the position,
the salary budget established for 1995 and considering his leadership in
achieving continued improvement in the financial performance of the
Corporation. Mr. Hand's salary remains below average when compared to other
Chief Executive Officers of organizations in the same sales volumes as
reported in the national surveys analyzed. He received no 1995 MIP bonus award
because fiscal year consolidated pre-tax income results were below the
Corporation's business plan. If that goal had been achieved at the threshold
level, his bonus award would have been based upon the achievement of
consolidated pre-tax income and sales-weighted individual operating unit
achievement of pre-tax income and inventory turnover goals. As described
above, the Chief Executive Officer received two stock option grants from the
Corporation's 1995 Incentive Stock Plan. These awards provide an incentive for
future performance and the enhancement of shareholder value.
The Compensation Committee has reviewed the provisions of the Omnibus Budget
Reconciliation Act of 1993 as they relate to limitations on tax deductibility
for certain compensation exceeding $1 million for Named Executive Officers.
Based upon proposed regulations issued by the Internal Revenue Service, the
Committee believes that gains from the exercise of outstanding stock options
13
<PAGE>
or future options will be exempted from this deduction limitation. It is
currently intended that any amendment to the Corporation's Incentive Stock
Plan which may be necessary in the future in order to preserve this exemption
will be prepared and proposed for shareholder approval as and when required.
It is the intention of the Committee, to the extent consistent with sound
compensation policy and incentive program design, that compensation for the
Named Executive Officers be provided in such a way as to remain tax deductible
for the Corporation. It is possible, however, that certain types of
compensation awarded to members of the executive group would not qualify as
wholly deductible under the new tax law if otherwise in excess of the general
deduction limitation. The Committee will continue to review and respond to the
relevant tax law and regulations as appropriate.
COMPENSATION COMMITTEE
Raymond F. Farley, Chairman
A. Robert AbboudMiles L. MarshDonald P. JacobsTalat M. Othman
PERFORMANCE GRAPH
TOTAL CUMULATIVE SHAREHOLDER RETURN FOR FIVE-YEAR PERIOD ENDING NOVEMBER 30,
1995
[GRAPH APPEARS HERE]
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
AMONG HARTMARX CORPORATION, S&P 500 INDEX AND PEER GROUP
<TABLE>
<CAPTION>
Measurement Period HARTMARX S&P
(Fiscal Year Covered) CORPORATION 500 INDEX PEER GROUP
- ------------------- ----------- --------- ----------
<S> <C> <C> <C>
Measurement Pt-
11/30/90 $100.00 $100.00 $100.00
FYE 11/30/91 $112.50 $120.42 $129.81
FYE 11/30/92 $ 87.28 $142.65 $150.76
FYE 11/30/93 $108.62 $157.02 $148.32
FYE 11/30/94 $ 83.40 $158.70 $146.19
FYE 11/30/95 $ 69.83 $217.34 $141.80
</TABLE>
The Peer Group consists of: Crystal Brands, Inc.; Genesco, Inc.; Hartmarx
Corporation; Oxford Industries, Inc.; Russell Corporation; and Spring
Industries. However, due to the suspension of trading on its stock on 9/30/94
following its filing for bankruptcy, Crystal Brands, Inc. has been excluded
from peer group returns for 1994 and 1995.
14
<PAGE>
ITEM (2)--APPOINTMENT OF AUDITORS
Stockholders will be asked to ratify the appointment of Price Waterhouse
LLP, certified public accountants, as independent auditors of the accounts of
the Corporation and its subsidiaries for the 1996 fiscal year. Price
Waterhouse has been regularly engaged in this capacity by the Corporation for
over 80 years. A representative of Price Waterhouse will attend the Annual
Meeting where he will have the opportunity to make a statement if he so
desires and will be available to respond to appropriate questions. Stockholder
ratification is not required; however, the Corporation considers such
ratification to be a desirable practice and if the affirmative vote is less
than a majority of the shares voting on the ratification question, the Board
would reconsider the appointment.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF
RATIFICATION OF THE APPOINTMENT OF THE AUDITORS
OWNERSHIP OF COMMON STOCK
Beneficial owners of more than five percent of the Corporation's Common
Stock, as shown by information received by the Corporation, are listed below:
<TABLE>
<CAPTION>
Amount and Nature of
Beneficial Ownership
------------------------------------------
Name and Address Voting Power Investment Power
of ---------------- ---------------- Percent
Beneficial Owner Sole Shared Sole Shared of Class
---------------- --------- ------ --------- ------ --------
<S> <C> <C> <C> <C> <C>
Abdullah Taha Bakhsh
c/o Traco,
P.O. Box 459,
Jeddah, Saudi Arabia............. 5,523,810 5,523,810 16.8(1)
CTC Illinois Trust Company,
Trustee
of the Corporation's Savings-
Investment Plan and ESOP,
209 W. Jackson Blvd.,
Chicago, Illinois 60606.......... -- -- -- -- -- (2)
Norwest Corporation
Norwest Center,
Sixth and Marquette,
Minneapolis, Minnesota 55479..... 3,161,603 3,785,903 11.6(3)
Sasco Capital, Inc.
10 Sasco Hill Road
Fairfield, Connecticut 06430..... 1,787,700 3,256,000 9.9(4)
</TABLE>
- --------
(1) The shares are held of record by Emerson Investments, Ltd. ("Emerson").
Emerson has represented to the Corporation that it is wholly-owned by Mr.
Bakhsh and that he has sole power to direct the vote and disposition of
Emerson's shares. Emerson has agreed to be bound by the terms of the
Stockholder's Agreement between the Corporation and Traco International
N.V. ("Traco") which, among other things, allows Traco to designate
certain individuals to be nominated for election as directors of the
Corporation. In addition to the shares set forth in the table above,
190,476 shares are held of record by Williamson Investments, Ltd.
("Williamson"). Williamson has also agreed to be bound by the terms of the
Stockholder's Agreement and has represented to the Corporation that it is
wholly owned by Mr. Abdel Mohsen Y Abu Shukhaidem and that Mr. Shukhaidem
has sole power to direct the vote and disposition of Williamson's 190,476
shares.
15
<PAGE>
(2) CTC Illinois Trust Company acts as Trustee of The Hartmarx Savings-
Investment Plan and the Hartmarx Employee Stock Ownership Plan ("ESOP").
At January 2, 1996, the Trustee held 1,492,551 shares (4.6%) for the
Savings-Investment Plan and 697,910 shares (2.1%) for the ESOP. The
Trustee votes all shares held by the respective Plan Trusts proportionally
as directed by participants' instructions, except that shares held in
certain participant sub-accounts in the ESOP are voted only as directed by
participants' instructions.
(3) The aggregate amount beneficially owned at December 31, 1995 was 3,785,903
shares. Norwest Corporation has represented to the Corporation that these
shares are held in a fiduciary or representative capacity, and that for
purposes of the reporting requirements of the Securities Exchange Act of
1934, Norwest and its subsidiaries are deemed to be beneficial owners of
such shares; however, Norwest and its subsidiaries have expressly
disclaimed that they are, in fact, the beneficial owners of such shares.
(4) The aggregate amount beneficially owned at December 31, 1995 was 3,256,000
shares.
PROPOSALS BY SECURITY HOLDERS
NOMINATIONS FOR THE BOARD OF DIRECTORS
The Corporation's By-Laws were recently amended to provide that written
notice of proposed stockholder nominations for the election of directors at an
Annual Meeting must be given to the Secretary of the Corporation no earlier
than December 15 and no later than February 15 immediately preceding the
meeting, and with respect to an election to be held at a special meeting of
stockholders for the election of directors, no later than the close of
business on the fifteenth day following (i) the date on which notice of such
meeting is first given to stockholders or (ii) the date on which public
disclosure of such meeting is first made, whichever is earlier. Notice to the
Corporation from a stockholder who proposes to nominate a person for election
as a director must contain certain information about that person, including
age, business and residence addresses and such other information as would be
required to be included in a proxy statement soliciting proxies to nominate
that person. The notice shall also contain the consent of the nominee to serve
as a director if so elected. If the Chairman of the Annual Meeting determines
that a person was not nominated in accordance with the foregoing procedures,
such person shall not be eligible for election.
OTHER PROPOSALS
Any proposal which a security holder intends to call upon the Corporation to
include in its 1997 Proxy Statement must be received at the principal office
of the Corporation no later than October 31, 1996.
In addition, the Corporation's By-Laws were also recently amended to require
that written notice of proposals to be presented at an Annual Meeting be
delivered to the Secretary of the Corporation at its principal executive
offices no earlier than December 15 and no later than February 15 immediately
preceding the meeting. Such notice to the Corporation must set forth (i) a
brief description of the business desired to be brought before the Annual
Meeting and the reasons for conducting such business at the Annual Meeting,
(ii) the name and record address of the stockholder proposing such business,
(iii) the class and number of shares beneficially owned by the stockholder,
and (iv) any material interest of the stockholder in such business. If the
Chairman of the Annual Meeting determines that business was not properly
brought before the meeting in accordance with the foregoing procedures, such
business shall not be transacted.
16
<PAGE>
[HARTMARX LOGO]
<PAGE>
- --------------------------------------------------------------------------------
PROXY
Solicited By the Board of Directors of
HARTMARX CORPORATION
Elbert O. Hand, Homi B. Patel, Mary D. Allen, and each of them, is hereby
appointed, with full power of substitution, to represent the undersigned at the
Annual Meeting of Stockholders of HARTMARX CORPORATION on April 17, 1996, and at
any adjournment thereof, with the full power to vote all of the shares of stock
which the undersigned is entitled to vote:
THIS PROXY WILL BE VOTED AS SPECIFIED BY THE STOCKHOLDER BUT IF NO CHOICE
IS SPECIFIED IT WILL BE VOTED FOR ELECTION OF THE ABOVE NOMINEES FOR DIRECTORS
AND IN FAVOR OF THE PROPOSAL SET FORTH IN ITEM (2).
Continued, and to be signed, on other side
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
[X] Please mark your votes as in this example. | 4953
(1) Election of Directors
FOR WITHHOLD AUTHORITY
[_] [_]
NOMINEES: A. Robert Abboud Elbert O. Hand Michael B. Rohlfs
Samawal A. Bakhsh Donald P. Jacobs Stuart L. Scott
Jeffrey A. Cole Charles Marshall
Raymond F. Farley Homi B. Patel
For all nominees listed hereon (except as marked to the contrary below):
To withhold authority to vote for any individual nominees, write names
in the space below.
------------------------------------------------------------------------
(2) TO RATIFY the appointment of independent auditors (Item (2) of Notice of
Annual Meeting).
FOR AGAINST ABSTAIN
[_] [_] [_]
(3) TO TRANSACT such other business as may properly come before the meeting.
Dated this ________ day of ____________________________, 1996
-------------------------------------------------------------
(Signature of Stockholder) (Seal)
-------------------------------------------------------------
(Signature of Stockholder) (Seal)
Signature must agree with name as shown above. For shares held in joint
tenancy, each of the joint tenants is requested to sign.
- --------------------------------------------------------------------------------
