<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
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
[X] Definitive Proxy Statement Commission Only as permitted by
[ ] Definitive Additional Materials Rule 14a-6(e)(2))
[ ] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
HARTMARX CORPORATION
(Name of Registrant as Specified In Its Charter)
.........................................................................
(Name of Persons(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(l) and 0-11.
1) Title of each class of securities to which transaction applies: ......
2) Aggregate number of securities to which transaction applies: ..........
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):
.......................................................................
4) Proposed maximum aggregate value of transaction: ......................
5) Total fee paid: .......................................................
[ ] 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 offering 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:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
HARTMARX CONSUMER APPAREL PRODUCTS LOGO
----------------
NOTICE
OF
ANNUAL MEETING OF STOCKHOLDERS OF HARTMARX CORPORATION
TO BE HELD APRIL 18, 1997
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 410 Club & Conference
Center, 410 North Michigan Avenue, Chicago, Illinois, on Friday, April 18,
1997, 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.
The Board of Directors has fixed February 20, 1997, 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 Mary D. Allen, Secretary, HARTMARX
CORPORATION, 101 North Wacker Drive, Chicago, Illinois 60606. 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 7, 1997 and April 18,
1997, 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, 1996, are enclosed herewith.
By Order of the Board of Directors
/s/ Mary D. Allen
MARY D. ALLEN, Secretary
Chicago, Illinois
February 28, 1997
<PAGE>
HARTMARX CONSUMER APPAREL PRODUCTS LOGO
----------------
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS OF HARTMARX CORPORATION
TO BE HELD APRIL 18, 1997
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, 1997, the record date for determining the stockholders entitled
to vote at the meeting, the Corporation had 33,280,563 shares of outstanding
Common Stock, each share entitled to one vote, held by approximately 6,200
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, 1997. 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, telecopier 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.
1
<PAGE>
INFORMATION ABOUT NOMINEES FOR DIRECTORS
The information shown below includes the principal business affiliations of
each nominee since 1992.
A. ROBERT ABBOUD, 67--Director since 1974
Mr. Abboud is president of A. Robert Abboud and Company, a
private investment company. He is also a director of AAR
Corporation, Inland Steel Company and Alberto-Culver Company.
(1)
A. ROBERT ABBOUD
PHOTO
SAMAWAL A. BAKHSH, 28--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. (2)
SAMAWAL A. BAKHSH
PHOTO
JEFFREY A. COLE, 55--Director since 1990
Mr. Cole is chairman, chief executive officer and a director
of Cole National Corporation, a specialty retailer.
JEFFREY A. COLE
PHOTO
RAYMOND F. FARLEY, 72--Director since 1981
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 International, Inc., Johnson Worldwide
Associates, Inc. and Snap-On Incorporated.
RAYMOND F. FARLEY
PHOTO
2
<PAGE>
ELBERT O. HAND, 57--Director since 1984
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, Lon-
don, England.
ELBERT O. HAND
PHOTO
DONALD P. JACOBS, 69--Director since 1980
Mr. Jacobs is Dean of the J. L. Kellogg Graduate School of
Management and Gaylord Freeman Distinguished Professor of Fi-
nance 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.
DONALD P. JACOBS
PHOTO
CHARLES MARSHALL, 67--Director since 1980
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.
CHARLES MARSHALL
PHOTO
HOMI B. PATEL, 47--Director since 1994
Mr. Patel is president and chief operating officer of HARTMARX
CORPORATION. He was chairman and chief executive officer of
the Men's Apparel Group from 1991 to 1992, and was named pres-
ident and chief operating officer in 1992. He is also a direc-
tor of the Amalgamated Life Insurance Co.
HOMI B. PATEL
PHOTO
MICHAEL B. ROHLFS, 45--Director since 1995
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. (2)
MICHAEL B. ROHLFS
PHOTO
3
<PAGE>
STUART L. SCOTT, 58--Director since 1993
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. (3)
STUART L. SCOTT
PHOTO
- --------
(1) From April, 1988 to March, 1991, Mr. Abboud was chairman and chief
executive officer of First City Bancorporation of Texas, Inc. and its
subsidiary, First City National Bank of Houston. 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.
(2) 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.
(3) 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.
The Board held seven meetings, one of which was the annual meeting, in
fiscal 1996. All directors attended at least 75% of the meetings of the Board
and committees on which he served, except for Mr. Bakhsh who was unable to
attend five Board meetings. 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, Mr.
Jacobs, Mr. Marshall and Mr. Rohlfs. It met two times in fiscal 1996. 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 significant 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. Cole and Mr. Jacobs. It met four times in
fiscal 1996. 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 and long-term) plans and determines the standards of
performance for incentive payments.
4
<PAGE>
The Nominating and Governance Committee now consists of Mr. Marshall,
chairman, Mr. Jacobs, Mr. Rohlfs and Mr. Scott. It met once in fiscal 1996.
Its function is to propose to the entire Board qualified nominees for election
to fill vacancies on the Board and 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 1996, each of the directors not employed by the Corporation or
any of its subsidiaries ("Outside Directors") 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 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.
Outside 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 Incentive Stock Plan for Non-Employee Directors
("1995 Directors Plan"). Except as described below, DSOs are generally
identical to employee stock options but are granted only to Outside Directors.
The number of shares of Common Stock covered by DSOs granted to an Outside
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 is entitled to be paid cash dividend equivalents
based on any 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. The 1995 Directors Plan provides that DSOs cannot be exercised
for six months after the grant date. DDSAs consist of share units credited to
an account for each Outside Director, each unit representing one share of
Common Stock. Each Outside Director is also granted 150 DDSA units on each
date of election to the Board. DDSAs earn dividend equivalents in the same
manner as DSOs but any 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.
5
<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 (the "Named
Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term Compensation
-----------------------
Annual Compensation Awards
-------------------------- -----------------------
Name and Restricted Securities
Principal Stock Underlying All Other
Position Year Salary(1) Bonus Awards(3) Options/SARs Compensation(4)
--------- ---- --------- -------- ---------- ------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
Elbert O.
Hand, 1996 $565,000 $364,280(2) $206,822 25,000 $3,702
Chairman
and Chief 1995 561,667 0 -- 145,000 3,686
Executive
Officer 1994 522,083 234,891 -- 70,000 3,350
Homi B.
Patel, 1996 450,000 285,807(2) 157,993 23,000 2,821
President
and 1995 447,500 0 -- 135,000 2,898
Chief Op-
erating
Officer 1994 418,879 138,572 -- 60,000 2,758
Mary D. Al-
len 1996 200,000 138,215(2) 59,950 10,000 1,647
Executive
Vice 1995 200,000 0 -- 45,000 1,127
President,
General
Counsel
and Secre-
tary 1994(5) 41,668 68,186 -- 25,000 200
Glenn R.
Morgan 1996 200,000 138,215(2) 59,950 10,000 1,695
Executive
Vice 1995 179,375 0 -- 45,000 1,613
President
and Chief
Financial
Officer 1994 161,807 44,848 -- 20,000 1,775
Frank A.
Brenner, 1996 160,750 34,394 6,732 5,000 1,530
Vice Pres-
ident, 1995 160,104 0 -- 10,000 1,490
Marketing
Services 1994 152,229 28,066 -- 7,000 1,708
</TABLE>
- --------
(1) Includes amounts paid and deferred.
(2) These amounts represent the total of bonuses earned under the Management
Incentive Plan and discretionary bonuses awarded in connection with the
Corporation's acquisition of the assets of Plaid Clothing Group, Inc. The
amounts earned under the Management Incentive Plan for fiscal 1996 were:
Mr. Hand, $239,280; Mr. Patel, $160,807; Ms. Allen, $63,215; and Mr.
Morgan, $63,215; and discretionary bonuses awarded were: Mr. Hand,
$125,000; Mr. Patel, $125,000; Ms. Allen, $75,000; and Mr. Morgan,
$75,000.
(3) 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 July 9, 1996, the following restricted shares
were awarded to the Named Executive Officers and vest on the first to
occur of (i) July 9, 2006; (ii) the closing stock price on the New York
Stock Exchange exceeds $9 for 30 consecutive days; (iii) retirement at age
65; or (iv) with the consent of the Compensation Committee: Mr. Hand,
25,000; Mr. Patel, 20,000; Ms. Allen, 7,500; and Mr. Morgan, 7,500. On
December 1, 1996, the following restricted stock awards were granted in
lieu of cash payments under the Management incentive Plan and vest on
December 1, 1997: Mr. Hand, 10,604; Mr. Patel, 7,126; Ms. Allen, 2,800;
Mr. Morgan, 2,800; and Mr. Brenner, 1,224. The number and value of
aggregate restricted stock holdings at the end of fiscal year 1996 were:
Mr. Hand, 25,000 ($137,500); Mr. Patel, 20,000 ($110,000); Ms. Allen,
7,500 ($41,250); Mr. Morgan, 7,500 ($41,250); and Mr. Brenner, 0.
(4) 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 1996 were: Mr. Hand, $750; Mr.
Patel, $661; Ms. Allen, $687; Mr. Morgan, $735; and Mr. Brenner, $786. The
premiums for term life insurance in 1996 were: Mr. Hand, $2,952; Mr.
Patel, $2,160; Ms. Allen, $960; Mr. Morgan, $960; and Mr. Brenner, $744.
(5) Ms. Allen's employment with the Corporation commenced on September 12,
1994.
6
<PAGE>
EMPLOYMENT AND SEVERANCE AGREEMENTS
Effective August 1, 1996, the Corporation entered into separate employment
and severance agreements with each of Messrs. Hand, Patel and Morgan and Ms.
Allen, replacing existing agreements with each of them. The employment
agreements are for an initial term expiring December 31, 1998, and
automatically renew for an additional two year period unless cancelled in
accordance with their terms. They provide that Messrs. Hand, Patel and Morgan
and Ms. Allen 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 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 December 31,
2000, the executive will be entitled to continuation of salary and fringe
benefits for 24 months. In addition, all unpaid incentive compensation under
the MIP (including all contingent compensation which would have been payable
for the full fiscal year in which such executive's employment is terminated
and for the following fiscal year) is to be paid as and when MIP payments are
made to other MIP participants for such periods. 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 severance agreements are for an initial period ending December 31, 1997,
and, commencing January 1, 1998, renew for successive periods of one year
unless notice of non-renewal is given by the Corporation or executive not
later than the immediately preceding July 15. Pursuant to the severance
agreements, the Corporation has 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) cause, or (iii) resignation
without good reason. The severance payment, payable as a lump sum in lieu of
the salary continuation, bonus and long-term incentive compensation payments
described above, would equal three times the higher of executive's annual base
salary as of the date the executive's employment is terminated and executive's
annual base salary in effect immediately prior to the change in control plus
three times two-thirds of the executive's maximum bonus opportunity under the
MIP for such year. 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. All such amounts
would be due and payable within ten days of the date of termination. Fringe
benefits would continue to be provided for a period of 36 months. 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 Corporation shall pay to
executive an additional amount such that after deduction of any excise tax on
such severance benefits and any federal, state and local income and employment
taxes and excise tax on such additional amount, the net amount retained by
executive shall be equal to the severance benefits to be paid to such
executive.
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)
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 two times his average
annual compensation for
7
<PAGE>
the three calendar years immediately preceding the year in which the change in
control occurs; and he would also be entitled to receive any appreciation in
the value of Common Stock covered by stock options theretofore granted to him
under the Corporation's stock option plans (whether or not then fully
exercisable).
STOCK OPTION GRANTS
The following tables provide information on the Named Executive Officers'
option grants in fiscal 1996, option exercises in fiscal 1996 and the value of
unexercised options at November 30, 1996.
OPTION GRANTS IN THE LAST FISCAL YEAR
<TABLE>
<CAPTION>
Potential
Realizable
Value at
Assumed Annual
Rates of Stock
Price
Appreciation
for Option
Individual Grants Term(1)
- ---------------------------------------------------------------------- --------------
Percent
of Total
Options
Number of Granted
Securities 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.......... 25,000(4) 10.0 5.94 07/08/2006 93,391 236,671
Homi B. Patel........... 23,000(4) 9.2 5.94 07/08/2006 85,920 217,737
Mary D. Allen........... 10,000(5) 4.0 5.94 07/08/2006 37,356 94,668
Glenn R. Morgan......... 10,000(4) 4.0 5.94 07/08/2006 37,356 94,668
Frank A. Brenner........ 5,000(4) 2.0 5.94 07/08/2006 18,678 47,334
</TABLE>
- --------
(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 10% over the full ten year
term 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 249,000 shares to employees
in fiscal 1996. No stock appreciation rights 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 $5.94 per
share.
(4) These options were granted on July 9, 1996 and become fully exercisable on
July 9, 1997, and are subject to termination between 90 days to three
years following termination of employment in certain events.
(5) These options were granted on July 9, 1996 and become exercisable in a
sixty-seven percent (67%) installment on July 9, 1997, with full vesting
occurring on July 9, 1998, and are subject to termination between 90 days
to three years following termination of employment in certain events.
8
<PAGE>
AGGREGATED OPTION EXERCISES IN THE LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
<TABLE>
<CAPTION>
Shares Number of Securities Value ($) of Unexercised
Acquired Underlying Unexercised In-the-Money Options at
on Value Options at Nov. 30, 1996 Nov. 30, 1996
Name Exercise Realized Exercisable/Unexercisable Exercisable/Unexercisable
---- -------- -------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
Elbert O. Hand.......... 0 0 332,759/75,000 0/0
Homi B. Patel........... 0 0 231,242/69,667 0/0
Mary D. Allen........... 0 0 26,333/53,667 0/0
Glenn R. Morgan......... 0 0 59,707/26,667 0/0
Frank A. Brenner........ 0 0 24,218/ 5,000 0/0
</TABLE>
PENSION PLAN
The Hartmarx Retirement Income Plan (the "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 participate in The Hartmarx Savings-
Investment Plan, a trusteed defined contribution plan, automatically
participate in the Plan. Normal retirement age under the Plan is 65 and early
retirement at any time after a vested participant attains age 55 results in
actuarially reduced benefits. Maximum benefits under the 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 the 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 the 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 the Plan as of November 30, 1996, were 27 for Mr.
Hand, 16 for Mr. Patel, 1 for Ms. Allen, 15 for Mr. Morgan and 19 for Mr.
Brenner.
<TABLE>
<CAPTION>
Average Annual Earnings Years of Credited Service
(Highest 5 Years of Last 10 -------------------------------------------------
years) 5 10 15 20 25 30 or more
---------------------------- ------ ------- ------- ------- ------- ----------
<S> <C> <C> <C> <C> <C> <C>
$200,000.................... 15,341 30,681 46,022 61,363 76,703 92,044
250,000.................... 19,507 39,015 58,522 78,029 97,537 117,044
300,000.................... 23,674 47,348 71,022 94,696 118,370 142,044
350,000.................... 27,841 55,681 83,522 111,363 139,203 167,044
400,000.................... 32,007 64,015 96,022 128,029 160,037 192,044
450,000.................... 36,174 72,348 108,522 144,696 180,870 217,044
500,000.................... 40,341 80,681 121,022 161,363 201,703 242,044
550,000.................... 44,507 89,015 133,522 178,029 222,537 267,044
600,000.................... 48,674 97,348 146,022 194,696 243,370 292,044
650,000.................... 52,841 105,681 158,522 211,363 264,203 317,044
700,000.................... 57,007 114,015 171,022 228,029 285,037 342,044
800,000.................... 65,341 130,681 196,022 261,363 326,703 392,044
900,000.................... 73,674 147,348 221,022 294,696 368,370 442,044
</TABLE>
9
<PAGE>
REPORT OF THE COMPENSATION COMMITTEE
EXECUTIVE COMPENSATION PROGRAM
Compensation Committee Approach
The Compensation and Stock Option Committee (the "Compensation Committee"),
which is composed of four 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.
. 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
1996, the Compensation Committee took into account both the Corporation's
financial performance for the year and the executive group's 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 1995, sales and earnings were not achieved in accordance with the
business plan and a salary freeze was instituted during 1996 for all employees
throughout the Corporation, including the Named Executive Officers.
The employment agreements for Messrs. Hand, Patel and Morgan and Ms. Allen
provide for their respective annual salaries to be at least equal to their
annual salaries for 1996. Salaries for the Named Executive Officers continue
below average competitive levels, with the competitiveness of the overall
compensation package significantly dependent upon the reward opportunities
created by
10
<PAGE>
achievement of objectives under the Corporation's short-term and long-term
incentive plans. The salary of the Chief Executive Officer is separately
discussed below.
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 1996, 43 executives participated
in the plan. Corporate executives were measured on consolidated pre-tax income
and operating unit sales-weighted pre-tax income and adjusted net asset goals.
Operating unit executives were measured on pre-tax income, sales and adjusted
net asset 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 1996 averaged 30% of eligible salaries and
69.3% of maximum incentive opportunities. Bonus payments were apportioned
between cash payments and restricted stock awards in accordance with a formula
limiting cash payment to a percentage of consolidated pre-tax earnings adopted
by the Compensation Committee for fiscal 1996. The restricted stock awards vest
one year from the date of grant.
Long-Term Incentives
Executives are eligible for awards of stock options and/or restricted stock
under the Corporation's 1995 Incentive Stock Plan. Awards are determined in
relation to competitive practice and an individual's position. In July, under
the Long Term Incentive Plan, selected senior executives received a combination
of stock option grants utilizing length of service vesting and restricted stock
awards 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 was taken into consideration in determining the size of the
awards. As reflected in the Table of Option Grants In The Last Fiscal Year, one
stock option grant was awarded to each of the Named Executive Officers at an
exercise price equal to the fair market value of the Corporation's stock on the
date of the grant.
Chief Executive Officer Compensation
The Compensation Committee did not increase the salary of the Chief Executive
Officer for fiscal 1996. 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. His fiscal 1996 MIP bonus award was
based upon the achievement of consolidated pre-tax income and sales-weighted
individual operating unit achievement of pre-tax income and adjusted net asset
goals. The Chief Executive Officer received a stock option grant and a
restricted stock award from the Corporation's 1995 Incentive Stock Plan,
described above. 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 regulations issued by the Internal Revenue Service, the Committee
believes that gains from the exercise of outstanding stock options or future
options will be exempted from this deduction limitation. It is currently
intended that any amendment to the Corporation's 1995 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.
11
<PAGE>
It is the intention of the Compensation 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 applicable 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 Abboud Jeffrey A. ColeDonald P. Jacobs
PERFORMANCE GRAPH
TOTAL CUMULATIVE SHAREHOLDER RETURN FOR FIVE-YEAR PERIOD ENDING NOVEMBER 30,
1996
[GRAPH APPEARS HERE]
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
AMONG HARTMARX, S&P 500 INDEX AND PEER GROUP
<TABLE>
<CAPTION>
Measurement Period S&P
(Fiscal Year Covered) HARTMARX 500 INDEX PEER GROUP
- --------------------- -------- --------- ----------
<S> <C> <C> <C>
Measurement Pt-
11/30/91 $100 $100 $100
FYE 11/30/92 $77.59 $118.46 $116.14
FYE 11/30/93 $96.55 $130.39 $114.26
FYE 11/30/94 $74.14 $131.79 $112.62
FYE 11/30/95 $62.07 $180.49 $109.24
FYE 11/30/96 $72.41 $230.80 $127.85
</TABLE>
The Peer Group consists of: Crystal Brands, Inc., Genesco, Inc., Hartmarx
Corporation; Oxford Industries, Inc.; Russell Corporation; and Spring
Industries, Inc. 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, 1995 and 1996.
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 1997 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 represented at the meeting, the Board would
reconsider the appointment.
12
<PAGE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF
RATIFICATION OF THE APPOINTMENT OF THE AUDITORS
SECURITY OWNERSHIP OF DIRECTORS AND OFFICERS
<TABLE>
<CAPTION>
Shares Subject
Beneficial Other to Acquisition Percentage
Name Ownership Ownership Within 60 Days of Class
- ---- ---------- --------- -------------- ----------
<S> <C> <C> <C> <C>
A. Robert Abboud............ 43,727 -- 23,727 *
Samawal A. Bakhsh........... 6,895 -- 6,895 *
Jeffrey A. Cole............. 32,487 -- 29,987 *
Raymond F. Farley........... 61,829 -- 35,329 *
Elbert O. Hand.............. 478,073(1) 300(2) 407,759(1) 1.44%(1)
Donald P. Jacobs............ 49,068 3,000(3) 41,673 *
Charles Marshall............ 47,326 -- 23,004 *
Homi B. Patel............... 395,748(1) -- 297,909(1) 1.19%(1)
Michael B. Rohlfs........... 3,111 -- 3,111 *
Stuart L. Scott............. 40,429 -- 25,429 *
Mary D. Allen............... 50,708(1) -- 43,000(1) *
Glenn R. Morgan............. 104,387(1) -- 83,874(1) *
Frank A. Brenner............ 33,410 -- 24,218 *
All Directors and Executive
Officers as a Group
(16 persons)............... 1,431,740(1) 3,300 1,098,905(1) 4.30%(1)
</TABLE>
- --------
*Less than 1%.
(1) Includes all shares actually or potentially subject to acquisition through
the exercise of stock options within 60 days: either of vested options or
of options which vest when the closing stock price on the New York Stock
Exchange exceeds $7 or $10, respectively, for 30 consecutive days. All
options are granted at the market price on the date of grant and are not
discounted. Also includes shares of restricted stock which vest when the
stock price exceeds $9 for 30 consecutive days. The beneficial ownership
of all directors and executive officers as a group includes 1,098,905
shares (3.30%) which are actually or potentially subject to acquisition
within 60 days through the exercise of stock options or the vesting of
restricted stock awards.
(2) 100 shares held by Mr. Hand's wife; and 200 shares in the name of Mr. Hand
as custodian for his child.
(3) Shares held by Mr. Jacobs' wife.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The Corporation believes that all filing requirements under Section 16(a) of
the Securities Exchange Act of 1934 were complied with in fiscal 1996, except
that Elbert O. Hand, Director, Chairman and Chief Executive Officer of the
Corporation, filed one late Form 4 reporting an open market purchase of 5,000
shares of the Corporation's Common Stock in October, 1996. Through an
inadvertent omission, the Forms 5 filed by the Corporation's Outside Directors
for fiscal years 1991-1995 did not disclose Deferred Director Stock Awards
granted to them under the Corporation's stock option plans. These inadvertent
omissions have been corrected.
13
<PAGE>
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
------------------------------------------------
Voting Power Investment Power
Name and Address 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 16.6(1)
CTC Illinois Trust Company,
Trustee
of the Corporation's
Savings-
Investment Plan and ESOP,
209 W. Jackson Blvd.,
Chicago, Illinois 60606.... -- -- -- -- --(2)
Dimensional Fund Advisors,
Inc.
1299 Ocean Avenue, 11th
Floor
Santa Monica, California
90401...................... 1,276,300 1,878,200 5.7(3)
Norwest Corporation
Norwest Center,
Sixth and Marquette,
Minneapolis, Minnesota
55479...................... 2,154,425 2,442,700 225 7.4(4)
Sasco Capital, Inc.
10 Sasco Hill Road
Fairfield, Connecticut
06430...................... 1,721,400 3,248,300 9.8(5)
</TABLE>
- --------
* On December 31, 1996, the Corporation had outstanding 33,232,817 shares of
common stock.
(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.
(2) CTC Illinois Trust Company acts as Trustee of The Hartmarx Savings-
Investment Plan and the Hartmarx Employee Stock Ownership Plan ("ESOP").
At December 31, 1996, the Trustee held 1,468,372 shares (4.4%) for the
Savings-Investment Plan and 650,831 shares (2.0%) 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) Dimensional Fund Advisors, Inc. ("Dimensional"), a registered investment
advisor, is deemed to be the beneficial owner of 1,878,200 shares as of
December 31, 1996, all of which shares are held in portfolios of DFA
Investment Dimensions Group, Inc. (the "Fund"), a registered open-end
investment company, or in a series of the DFA Investment Trust Company,
Inc. (the "Trust"), a Delaware business trust, or the DFA Group Trust and
DFA Participation Group Trust, investment vehicles for qualified employee
benefit plans. Dimensional serves as investment manager for such entities.
Dimensional has disclaimed beneficial ownership of all such shares.
(4) The aggregate amount beneficially owned at December 31, 1996, was
2,446,025 shares, which includes 2,415,300 shares deemed to be
beneficially owned by Norwest Bank Colorado, a National Association and a
subsidiary of Norwest Corporation. Norwest Corporation has represented to
the Corporation that these shares are held in a fiduciary or
representative
14
<PAGE>
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.
(5) The aggregate amount beneficially owned at December 31, 1996 was 3,248,300
shares.
PROPOSALS BY SECURITY HOLDERS
NOMINATIONS FOR THE BOARD OF DIRECTORS
The Corporation's By-Laws 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 1998 Proxy Statement must be received at the principal office of
the Corporation no later than October 31, 1997.
In addition, the Corporation's By-Laws 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.
OTHER MATTERS
The Board knows of no other business to be presented at the meeting, but if
other matters do properly come before the meeting, it is the intention of the
persons named in the enclosed Proxy to vote the Proxy in accordance with their
best judgment on such matters.
By Order of the Board of Directors
/s/Mary D. Allen
MARY D. ALLEN, Secretary
Chicago, Illinois
February 28, 1997
15
<PAGE>
HARTMARX CONSUMER APPAREL PRODUCTS 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 18, 1997, 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 [ 4953
votes as in this
example.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
WITHHOLD NOMINEES:
FOR AUTHORITY A. Robert Abboud Elbert O. Hand Michael B. Rohlfs
(1) Election of [_] [_] Samawal A. Bakhsh Donald P. Jacobs Stuart L. Scott
Directors Jeffrey A. Cole Charles Marshall
Raymond F. Farley Homi B. Patel
</TABLE>
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.
- -------------------------------------------------------------------
FOR AGAINST ABSTAIN
(2) TO RATIFY the appointment of [_] [_] [_]
independent auditors (Item (2)
of Notice of Annual Meeting).
(3) TO TRANSACT such other
business as may properly
come before the meeting.
Dated this _______ day of ___________________, 1997
- ---------------------------------------------------
(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.
