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HAGGAR CORP.
6113 LEMMON AVENUE
DALLAS, TEXAS 75209
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD FEBRUARY 9, 2000
------------------------
To Our Stockholders:
NOTICE IS HEREBY GIVEN that the 2000 Annual Meeting of Stockholders of
Haggar Corp. (the "Company") will be held in Suite 1700 of the Park City Club,
5956 Sherry Lane, Dallas, Texas, on the 9th day of February, 2000, at 2:00 p.m.
(local time) for the following purposes:
1. To elect two Class I directors to serve until the expiration of their
terms and until their successors are duly elected and qualified;
2. To ratify the appointment by the Board of Directors of Arthur Andersen
LLP as independent certified public accountants of the Company for the
fiscal year ending September 30, 2000; and
3. To transact such other business as may properly come before the meeting
or any adjournments thereof.
Stockholders of record at the close of business on December 30, 1999, are
entitled to notice of and to vote at the Annual Meeting and any adjournments
thereof.
You are cordially invited to attend the Annual Meeting.
By Order of the Board of Directors
/s/ J. M. Haggar, III
J. M. Haggar, III
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
Dated: January 11, 2000
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE MARK, SIGN, DATE,
AND RETURN THE ENCLOSED PROXY PROMPTLY IN THE ENCLOSED POSTAGE PAID ENVELOPE. IF
YOU ATTEND THE MEETING, YOU MAY REVOKE YOUR PROXY AND VOTE IN PERSON.
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HAGGAR CORP.
6113 LEMMON AVENUE
DALLAS, TEXAS 75209
------------------------
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD FEBRUARY 9, 2000
---------------------
SOLICITATION AND REVOCABILITY OF PROXIES
The accompanying proxy is solicited by the Board of Directors of Haggar
Corp., a Nevada corporation ("Haggar" or the "Company"), to be voted at the 2000
Annual Meeting of Stockholders (the "Annual Meeting") to be held on Wednesday,
February 9, 2000, at the time and place and for the purposes set forth in the
accompanying Notice of Annual Meeting of Stockholders (the "Notice") and at any
adjournment(s) thereof. When proxies in the accompanying form are properly
executed and received, the shares represented thereby will be voted at the
Annual Meeting in accordance with the directions noted thereon. If no direction
is indicated on the proxy, the shares represented thereby will be voted for the
election of directors and in favor of the other proposals set forth in the
Notice.
The enclosed proxy, even though executed and returned, may be revoked at any
time prior to the voting of the proxy by giving written notice of revocation to
the Secretary of the Company or by executing and delivering to the Secretary of
the Company a proxy bearing a later date. However, no such revocation shall be
effective until notice thereof has been received by the Company at or before the
Annual Meeting. Mere attendance at the Annual Meeting will not of itself revoke
the proxy.
In addition to the solicitation of proxies by mail, the directors, officers
and regular employees of the Company may solicit the return of proxies either by
mail, telephone, telegraph, or through personal contact. Such officers and
employees will not be additionally compensated but will be reimbursed for out-
of-pocket expenses. The cost of preparing, printing, assembling, and mailing the
Annual Report, the Notice, this Proxy Statement, and the enclosed proxy will be
borne by Haggar.
The principal executive offices of Haggar are located at 6113 Lemmon Avenue,
Dallas, Texas 75209. Haggar's mailing address is the same as that of its
principal executive offices.
This Proxy Statement and accompanying proxy are first being mailed on or
about January 11, 2000. Haggar's Annual Report covering the Company's fiscal
year ended September 30, 1999, is enclosed herewith, but does not form any part
of the materials for solicitation of proxies.
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PURPOSES OF THE MEETING
At the Annual Meeting, the stockholders of Haggar will consider and vote on
the following matters:
1. The election of two Class I directors to hold office until the
expiration of their terms and until their successors are duly elected
and qualified;
2. The ratification of the appointment by the Board of Directors of
Arthur Andersen LLP as independent certified public accountants of
the Company for the fiscal year ending September 30, 2000; and
3. The transaction of such other business that may properly come before
the Annual Meeting or any adjournments thereof.
QUORUM AND VOTING
The record date for the determination of stockholders entitled to notice of
and to vote at the Annual Meeting was the close of business on December 30, 1999
(the "Record Date"). On the Record Date, there were 6,891,393 shares of Common
Stock of the Company, par value $0.10 per share, issued and outstanding, each of
which is entitled to one vote on all matters to be acted upon at the Annual
Meeting. There are no cumulative voting rights. The presence, in person or by
proxy, of holders of a majority of the outstanding shares of Common Stock
entitled to vote at the meeting is necessary to constitute a quorum to transact
business. Assuming the presence of a quorum, directors will be elected by a
plurality of the votes cast. The affirmative vote of the holders of a majority
of the shares of Common Stock represented at the Annual Meeting will be required
to approve all other matters to be presented at the Annual Meeting.
Abstentions and broker non-votes will be counted toward determining whether
a quorum is present at the Annual Meeting. Abstentions and broker non-votes will
have no effect on the election of directors or the approval of any other
matters.
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PRINCIPAL STOCKHOLDERS AND STOCK OWNERSHIP OF MANAGEMENT
The following table and the notes thereto set forth certain information
regarding the beneficial ownership of the Company's Common Stock as of the
Record Date by (i) each current director and nominee for director of the
Company; (ii) the executive officers of the Company; (iii) all executive
officers and current directors of the Company as a group; and (iv) each other
person known to the Company to own beneficially more than five percent of the
presently outstanding Common Stock.
<TABLE>
<CAPTION>
COMMON PERCENT OF
STOCK OWNED CLASS OWNED
BENEFICIALLY(1) BENEFICIALLY(1)
--------------- ---------------
<S> <C> <C>
J. M. Haggar, III (2)...................................... 716,324 10.1
Frank D. Bracken (3)....................................... 217,072 3.1
David M. Tehle (4)......................................... 12,368 *
Richard W. Heath (5)....................................... 18,400 *
Norman E. Brinker (6)...................................... 14,000 *
Rae F. Evans (7)........................................... 12,600 *
John C. Tolleson (8)....................................... 68,000 *
All Executive Officers and Directors (7 persons) (9)....... 1,058,764 14.4
Franklin Resources, Inc. (10).............................. 827,000 12.0
Kahn Brothers, Inc. (11)................................... 766,472 11.1
Barrow Hanley Mewhinney & Strauss, Inc. (12)............... 664,800 9.6
Brinson Partners, Inc. (13)................................ 427,300 6.2
Dimensional Fund Advisors, Inc. (14)....................... 421,525 6.1
</TABLE>
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* Less than 1%.
(1) Except as otherwise indicated, the persons named in the table have sole
voting and dispositive power with respect to the shares of Common Stock
shown as beneficially owned by them.
(2) Includes 2,299 shares over which J. M. Haggar, III shares voting and
dispositive power with his wife, 37,113 shares over which he otherwise
shares voting and dispositive power as a trustee of various trusts,
50,143 shares over which he shares voting and dispositive power as a
director of a private charitable foundation and 205,459 shares which
may be acquired pursuant to stock options that are exercisable
currently or within 60 days of the Record Date.
(3) Includes 10,000 shares over which Mr. Bracken shares voting and
dispositive power with his wife and 197,278 shares which may be
acquired pursuant to stock options that are exercisable currently.
(4) Includes 11,668 shares which may be acquired upon exercise of stock option
that are currently exercisable.
(5) Includes 5,000 shares over which Mr. Heath shares voting and dispositive
power with his wife and 13,400 shares which may be acquired pursuant to
stock options exercisable currently or within 60 days of the Record Date.
(6) Includes 13,000 shares which may be acquired pursuant to stock options
exercisable currently or within 60 days of the Record Date.
(7) Represents shares which may be acquired pursuant to stock options
exercisable currently or within 60 days of the Record Date.
(8) Includes 3,000 shares which may be acquired upon exercise of stock options
that are exercisable currently or within 60 days of the Record Date.
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(9) Includes 104,555 shares over which voting and dispositive power is shared
and 456,405 shares which may be acquired pursuant to stock options which
are exercisable currently or within 60 days of the Record Date.
(10) Based on information provided by the Company's transfer agent as of
September 30, 1999 for Franklin Resources, Inc. ("FRI"), its two principal
shareholders Charles B. Johnson and Rupert H. Johnson, Jr. (the
"Principals") and its wholly-owned subsidiary Franklin Advisory
Services, Inc. ("FAS"). The address of FRI and the Principals is 777
Mariners Island Boulevard, San Mateo, California 94404, and the address of
FAS is One Parker Plaza, Sixteenth Floor, Ft. Lee, New Jersey 07024.
(11) Based on information provided by the Company's transfer agent as of
September 30, 1999 for Kahn Brothers, Inc., whose address is 55 Broadway,
9th floor, New York, New York 10006.
(12) Based on information provided by the Company's transfer agent as of
September 30, 1999 for Barrow Hanley Mewhinney & Strauss, Inc. whose
address is 3232 McKinney Ave., 15th Floor, Dallas, Texas 75204.
(13) Based on information provided by the Company's transfer agent as of
September 30, 1999 for Brinson Partners, Inc. ("BPI") and its three
principal shareholders, Brinson Holdings, Inc. ("BHI"), SBC Holding
(USA), Inc. ("SBCUSA"), and Swiss Bank Corporation ("SBC"). The address of
BPI and BHI is 209 South LaSalle, Chicago, Illinois 60604, the address of
SBCUSA is 222 Broadway, New York, New York 10038, and the address of SBC
is Aeschenplatz 6 CH-4002, Basel, Switzerland.
(14) Based on information provided by the Company's transfer agent as of
September 30, 1999 for Dimensional Fund Advisors, Inc., whose address is
1299 Ocean Avenue, 11th floor, Santa Monica, California 90401.
ELECTION OF DIRECTORS
(ITEM 1)
The Board of Directors of the Company is divided into three classes
presently consisting of two Class I directors, two Class II directors and two
Class III directors. The term of office of the Class I directors expires at the
2000 Annual Meeting. The Board of Directors has proposed Frank D. Bracken and
Rae F. Evans as nominees for election as the two Class I directors to serve for
three-year terms and until their successors are elected and qualified.
A plurality of the votes cast at the meeting is required to elect each
nominee. Shares represented by proxies will be voted for the election of the
nominees named below unless authority to do so is withheld. Management has no
reason to believe that any nominee will be unable to serve if elected. If any
nominee should be unable to serve, the shares represented by a proxy may be
voted for a substitute nominee to be designated by the Board of Directors.
The Board of Directors recommends a vote FOR each nominee for Class I
director.
<TABLE>
<CAPTION>
NAME AGE POSITIONS WITH COMPANY
- ---- -------- ----------------------
<S> <C> <C>
Frank D. Bracken......... 59 President, Chief Operating Officer and
Director
Rae F. Evans............. 51 Director
</TABLE>
FRANK D. BRACKEN has served as a director of the Company since 1991. He
was elected President and Chief Operating Officer of the Company in 1994. Mr.
Bracken previously served as Executive Vice President of Marketing of the
Company from 1991 to 1994. He joined the Company as a management trainee in
1963 and has served as a Regional Sales Manager, Western Sales Manager,
National Sales Manager, Senior Vice President of Sales and Merchandising and
Senior Vice President of Marketing.
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RAE F. EVANS has served as a director of the Company since 1994. She is
President of Rae Evans & Associates, Inc., a firm specializing in Washington
corporate strategies. Prior to founding Rae Evans & Associates, Inc. in 1995,
Mrs. Evans had served as Vice President, National Affairs of Hallmark
Cards, Inc. for 13 years.
EXECUTIVE OFFICERS AND DIRECTORS CONTINUING IN OFFICE
Set forth below is information concerning the executive officers of the
Company and the other directors of the Company whose terms will continue after
the Annual Meeting:
<TABLE>
<CAPTION>
NAME AGE POSITIONS WITH COMPANY
- ---- -------- ----------------------
<S> <C> <C>
J. M. Haggar, III........ 48 Chairman of the Board, Chief Executive
Officer and Director
David M. Tehle........... 43 Senior Vice President and Chief Financial
Officer
Norman E. Brinker........ 68 Director
John C. Tolleson......... 51 Director
Richard W. Heath......... 57 Director
</TABLE>
J. M. HAGGAR, III has served as Chairman of the Board of the Company since
1994 and Chief Executive Officer since 1990. He has been a director of the
Company since 1983. He also served as President of the Company from 1990 to
1994. Mr. Haggar joined the Company on a part-time basis in 1969 and on a full-
time basis in 1973. Over the course of his career with the Company, Mr. Haggar
has participated in virtually every aspect of the business, including three
years in the Manufacturing Division, two years as the Dallas Service Center
Manager, one year in the Sales Division, six years in the Marketing and
Merchandising Division, and in 1985 was named President of the Menswear
Division. Mr. Haggar also serves on the Boards of Directors of Chase Bank of
Texas and BeautiControl Cosmetics, Inc.
DAVID M. TEHLE joined the Company as Senior Vice President and Chief
Financial Officer in 1997. Prior to joining Haggar, Mr. Tehle served as Vice
President of Finance for a division of The Stanley Works from 1996 to 1997,
where he was responsible for worldwide finance, strategic planning, accounting,
credit and tax functions. From 1993 to 1996, he served as Vice President of
Finance and Chief Financial Officer of Hat Brands, Inc., the world's largest
independent hat manufacturer. Before his tenure at Hat Brands, Mr. Tehle served
as Vice President of Finance for Ryder Aviall, an aviation supply company and
previously held various financial positions with Texas Instruments.
NORMAN E. BRINKER has served as a director of the Company since 1990. He is
the Chairman of the Board of Brinker International, Inc., a company that owns
casual-style restaurants, including Chili's Grill & Bar, Romano's Macaroni
Grill, On The Border, Cozymel's, Maggiano's Little Italy and The Corner Bakery.
Mr. Brinker also served as Chief Executive Officer of Brinker
International, Inc. from 1983 until 1995. He was the founder of Steak & Ale
Restaurants and is a former Chairman of Burger King Corporation and a former
President of The Pillsbury Restaurant Group.
JOHN C. TOLLESON has served as a director of the Company since 1998.
Since 1997, he has been the Chief Executive Officer of The Tolleson Group, a
private investment firm and Managing Director of Arena Capital Partners, a
private equity fund. Mr. Tolleson founded First USA, Inc. in 1985 and served
as Chairman and Chief Executive Officer until its merger with Banc One
Corporation in 1997. He has served as a director of Banc One Corporation
since 1997. Mr. Tolleson is also a director of Capstead Mortgage Corporation
and Viad Corporation.
RICHARD W. HEATH has served as a director of the Company since 1991. He has
been President, Chief Executive Officer and a director of BeautiControl
Cosmetics, Inc., a direct seller of cosmetic and skin care products, since its
inception in 1981. He has over 29 years of experience in the direct sales
industry.
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BOARD COMMITTEES AND MEETINGS
Standing committees of the Board of Directors of the Company include the
Executive Committee, Audit Committee, Compensation Committee and Nominating
Committee.
The Executive Committee is presently composed of J. M. Haggar, III
(chairman) and Frank D. Bracken. Pursuant to the Bylaws of the Company, between
meetings of the Board of Directors the Executive Committee has the full power
and authority of the Board in the management of the business and affairs of the
Corporation, except to the extent limited by statute. The Executive Committee
meets periodically between meetings of the Board of Directors and held nine such
meetings during fiscal 1999.
The Audit Committee is presently composed of Norman E. Brinker (chairman),
John C. Tolleson and Rae F. Evans. The Audit Committee provides the opportunity
for direct communication between the independent certified public accountants,
the internal accounting staff and the Board of Directors. The Audit Committee
met twice during fiscal 1999 to review the scope and results of the fiscal 1999
audit, to review various matters with respect to internal financial controls and
procedures, to consider the engagement of the Company's auditors for fiscal 2000
and to review the timing and planning of the 2000 audit.
The Compensation Committee is presently composed of Richard W. Heath
(chairman) and Rae F. Evans. The Compensation Committee provides recommendations
to the Board of Directors regarding compensation for executive officers and
senior management of the Company. The Compensation Committee also administers
the Company's 1992 Long Term Incentive Plan, including the grant of stock
options thereunder. The Compensation Committee held three meetings during fiscal
1999.
The Nominating Committee is presently composed of J. M. Haggar, III
(chairman), Norman E. Brinker and Richard W. Heath. The Nominating Committee
investigates and recommends to the Board of Directors qualified nominees for
election to the Board. The Nominating Committee will consider a nominee for
director recommended by a stockholder of the Company if a written request naming
the person to be placed in nomination, accompanied by a brief biographical
description of the proposed nominee and his or her written consent to serve as a
director if elected, is submitted and received by the Secretary of the
Corporation not later than (i) 60 days following the end of the Corporation's
fiscal year immediately preceding the annual meeting of the stockholders, or
(ii) if a vacancy is to be filled at a special meeting of stockholders, five
business days following the earlier of the public disclosure of such special
meeting or the date notices thereof were mailed. The Nominating Committee did
not meet during fiscal 1999.
The Board of Directors held seven meetings during the fiscal year ended
September 30, 1999. Various matters were also approved during the last fiscal
year by unanimous written consent of the Board of Directors. Each director
attended at least 75% of the aggregate of (i) the total number of meetings of
the Board of Directors and (ii) the total number of meetings held by all
committees of the Board on which such director served.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Richard W. Heath and Rae F. Evans comprised the Compensation Committee of
the Company during fiscal 1999. Neither Mr. Heath nor Mrs. Evans has ever been
an officer or employee of the Company. During fiscal 1999, J. M. Haggar, III
served as a director of BeautiControl Cosmetics, Inc., for whom Mr. Heath serves
as President and Chief Executive Officer.
DIRECTOR COMPENSATION
Non-employee members of the Board of Directors receive $15,000 annually plus
$1,000 for each Board meeting or committee meeting attended. Non-employee
directors also receive a grant of stock options covering 9,000 shares of Common
Stock on their initial election to the Board and an additional grant of stock
options covering 6,000 shares of Common Stock upon each re-election to the
Board. Directors who are also employees of the Company receive no additional
compensation for their service on the Board and its committees.
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COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
The Company's executive officers, directors and beneficial owners of more
than 10% of the Company's Common Stock are required to file reports of ownership
and changes of ownership of the Common Stock with the Securities and Exchange
Commission. Based solely upon information provided to the Company by individual
directors, executive officers and beneficial owners, the Company believes that
during the fiscal year ended September 30, 1999, all such reports were timely
filed, except that Form 5's reporting the grant of options to Norman E. Brinker
and John C. Tolleson were filed late.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth certain information concerning compensation
of the Chief Executive Officer and the only two other executive officers of the
Company for the fiscal years ended September 30, 1999, 1998 and 1997.
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
ANNUAL COMPENSATION ------------
--------------------------------------------- SECURITIES
OTHER ANNUAL UNDERLYING ALL OTHER
NAME AND FISCAL SALARY BONUS COMPENSATION OPTIONS COMPENSATION
PRINCIPAL POSITION YEAR ($) ($)(1) ($)(2) (#)(3) ($)(4)
- ------------------ -------- -------- -------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
J. M. Haggar, III............. 1999 575,000 723,450 63,812 -- 19,308
Chairman and Chief 1998 525,000 565,000 58,638 255,458 19,667
Executive Officer 1997 475,000 129,250 55,244 -- 8,106
Frank D. Bracken.............. 1999 500,000 643,450 54,656 -- 19,308
President and Chief 1998 460,000 477,000 49,818 100,000 19,667
Operating Officer 1997 420,000 105,750 47,222 147,277 8,106
David M. Tehle (5)............ 1999 220,000 261,150 20,552 -- 15,708
Senior Vice President 1998 200,000 195,000 12,180 15,000 15,767
and Chief Financial Officer 1997 47,561 11,750 -- 10,000 2,700
</TABLE>
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(1) Reflects bonus earned during the fiscal year pursuant to the Company's
Management Incentive Bonus Plan described in the Compensation Committee
Report contained herein. In each case, the bonus was approved and paid
during the following fiscal year.
(2) Represents tax reimbursements for the fiscal year pursuant to the Company's
Deferred Annuity Plan described in the Compensation Committee Report
contained herein.
(3) All awards were for the purchase of Common Stock of the Company pursuant to
the 1992 Long Term Incentive Plan described in the Compensation Committee
Report contained herein. The amount shown for Mr. Haggar in fiscal 1998 and
Mr. Bracken in fiscal 1997 reflects the effect of the repricing of a portion
of their previously granted stock options and the cancellation of the
remainder.
(4) Represents car allowances and the Company's contributions to its defined
contribution profit sharing plan and Section 401(k) retirement plan for the
account of the executive officer.
(5) Mr. Tehle joined the Company in July 1997.
7
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OPTION GRANTS IN LAST FISCAL YEAR
There were no individual grants of stock options to the three executive
officers of the Company during the fiscal year ended September 30, 1999.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
Shown below is information with respect to the three executive officers of
the Company regarding option exercises during the fiscal year ended
September 30, 1999, and the number and value of unexercised options held as of
September 30, 1999.
<TABLE>
<CAPTION>
SECURITIES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS AT
SHARES FISCAL YEAR END (#) FISCAL YEAR END ($)(1)
ACQUIRED ON VALUE --------------------------- ---------------------------
EXERCISE (#) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
------------ ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
J. M. Haggar, III.......... 0 0 205,459 49,999 27,084 54,168
Frank D. Bracken........... 0 0 197,278 49,999 27,084 54,168
David M. Tehle............. 0 0 11,668 13,332 8,125 16,250
</TABLE>
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(1) Values stated are pre-tax and are based upon the closing price of $12.625
per share of the Company's Common Stock on Nasdaq National Market System on
September 30, 1999.
8
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PERFORMANCE GRAPH
The line graph below compares the cumulative total stockholder return on the
Company's Common Stock from September 30, 1994, through September 30, 1999, with
the return on the Standard & Poor's 500 Stock Index ("S&P 500") and the
Standard & Poor's Textile and Apparel Manufacturers Index ("S&P Apparel") for
the same period. In accordance with the disclosure rules of the Securities and
Exchange Commission, the measurement assumes a $100 initial investment in the
Company's stock with all dividends reinvested, and a $100 initial investment in
the indexes.
[GRAPH]
<TABLE>
<CAPTION>
S&P
Haggar Corp S&P 500 Textiles
<S> <C> <C>
94 - 100 100 100
95 - 68 130 97
96 - 53 156 132
97 - 56 219 143
98 - 42 239 97
99 - 49 306 78
</TABLE>
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COMPENSATION COMMITTEE REPORT
INTRODUCTION
The Compensation Committee, which is comprised of two non-employee directors
of the Company, is responsible for structuring, evaluating and recommending to
the Board of Directors the Company's executive compensation policies and the
annual compensation of the executive officers and other senior management of the
Company thereunder. In connection with such responsibilities, the Compensation
Committee has exclusive authority to administer the Company's 1992 Long Term
Incentive Plan, including the grant of stock options and other awards
thereunder. All other actions of the Compensation Committee are subject to the
approval of the Board of Directors.
EXECUTIVE COMPENSATION OBJECTIVES
The primary objectives of the Compensation Committee are to ensure that the
compensation provided to the Company's executive officers and other senior
management integrates with Haggar's annual and long-term performance objectives,
to reward superior performance, and to assist the Company in attracting,
retaining and motivating executives with exceptional leadership abilities.
Consistent with this philosophy, the Compensation Committee has established a
competitive and appropriate total compensation package for the executive
officers and other senior management of the Company consisting primarily of base
salary, annual bonus pursuant to a Management Incentive Plan, discretionary
payments under a Deferred Annuity Plan and stock options pursuant to the 1992
Long Term Incentive Plan. The Compensation Committee does not presently
anticipate that the compensation of any executive officer will materially exceed
the cap on deductibility imposed by Section 162(m) of the Internal Revenue Code
during fiscal 2000.
ELEMENTS OF EXECUTIVE COMPENSATION
BASE SALARY. The Compensation Committee recommends base salaries each year
at a level intended to be within the competitive market range of comparable
companies. In addition to the competitive market range, many factors are
considered in determining base salaries, including the responsibilities assumed
by the executive, length of service, individual performance and internal equity
considerations. To ensure that the Company maintains its competitive position
and retains the talent necessary to meet the challenges in the apparel industry,
the Compensation Committee will continue to evaluate and analyze Haggar's base
salaries and make appropriate adjustments.
ANNUAL BONUS. The Board of Directors has approved a Management Incentive
Plan pursuant to which certain members of senior management of the Company are
eligible to receive a cash bonus following each fiscal year in which the Company
meets or exceeds an annual net income goal established by the Board of
Directors. The amount of individual bonuses is based on the performance of the
Company, the total amount of funds available for distribution and each
participant's incentive base amount (provided that no participant's bonus may
exceed 200% of his incentive base amount). Eligibility to participate in the
Management Incentive Plan and the amount of the bonus pool are determined by the
Compensation Committee and approved by the Board of Directors.
DISCRETIONARY PAYMENTS. The Company has established a Deferred Annuity Plan
pursuant to which all salaried and sales personnel whose total salary,
commissions and incentive base is $80,000 or more may make voluntary
contributions to deferred annuity investment products on an after-tax basis
through payroll deductions or direct payment. Each year, the Board of Directors
determines whether to pay an additional cash bonus to any of the participants in
the Deferred Annuity Plan for the purpose of compensating for federal income
taxes owed on the annuity plan investment contribution and the bonus. Although
the Compensation Committee does not administer the Deferred Annuity Plan,
bonuses paid to executive officers thereunder are subject to review and approval
by the Compensation Committee in connection with its evaluation of the total
compensation of the Company's executive officers.
STOCK OPTIONS. Stock options are granted by the Compensation Committee
under the Company's 1992 Long Term Incentive Plan. One of the Compensation
Committee's priorities is for the executive officers and senior management of
the Company to be significant stockholders so that their interests are aligned
with the interests of Haggar's other stockholders. The Compensation Committee
believes that this strategy motivates executives to remain focused on the
overall long-term performance of the Company. Under the 1992 Long Term Incentive
Plan, stock options are granted with an option exercise price not less than the
fair market value of the Common Stock on the day of grant. Stock
10
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options are normally granted annually and, in support of the Compensation
Committee's ownership objectives, are intended to be granted to the executive
officers at levels at the high end of the competitive market range of
comparable companies. Stock options were granted after the close of fiscal
1999 which vest ratably over three years and remain exercisable for ten years
from the date of grant, subject to the provisions of the 1992 Long Term
Incentive Plan.
CHIEF EXECUTIVE OFFICER COMPENSATION
The Chief Executive Officer participates in the same executive compensation
program provided to the other executive officers and senior management of the
Company as described above. The Compensation Committee's approach to setting
compensation for the Chief Executive Officer is to be competitive with
comparable companies and to have a major portion of his compensation depend on
the achievement of performance criteria.
The Chief Executive Officer's total cash compensation for fiscal 1999 was
$1,381,570. Approximately 52.4% of this amount was earned under the annual
Management Incentive Program. The Chief Executive Officer's base salary was
increased during fiscal 1999 to $575,000, an approximately 9.5% increase from
his former base salary. In light of the Company's continued promotion of new
products and the leadership required to implement the Company's strategic
objectives, the Compensation Committee believes that the Chief Executive
Officer's total compensation for fiscal 1999 was reasonable and appropriate.
CONCLUSION
The Compensation Committee believes the mix of conservative salaries, cash
incentives for short-term performance and the potential for equity-based rewards
for long-term performance represents an appropriate balance of executive
compensation. This balanced executive compensation program provides a
competitive and motivational compensation package to the executive officer team
necessary to continue to produce the results the Company strives to achieve.
The Compensation Committee:
Richard W. Heath
Rae F. Evans
RATIFICATION OF SELECTION OF AUDITOR
(ITEM 2)
The Board of Directors has selected Arthur Andersen LLP as independent
certified public accountants to audit the consolidated financial statements of
the Company for the fiscal year ending September 30, 2000, and has determined
that it would be desirable to request that the stockholders ratify such
selection. The affirmative vote of a majority of the outstanding shares of
Common Stock present at the Annual Meeting in person or by proxy is necessary
for the ratification of the appointment by the Board of Directors of Arthur
Andersen LLP as independent certified public accountants. Arthur Andersen LLP
served as the Company's independent certified public accountants for the fiscal
year ended September 30, 1999, and has reported on the Company's consolidated
financial statements for such year. Representatives of Arthur Andersen LLP are
expected to be present at the Annual Meeting, will have the opportunity to make
a statement if they desire to do so and will be available to respond to
appropriate questions from stockholders.
The Board of Directors has the responsibility for selecting the Company's
independent certified public accountants and stockholder ratification is not
required. However, the selection is being submitted for ratification at the
Annual Meeting with a view towards soliciting the stockholders' opinions, which
the Board of Directors will take into consideration in future deliberations.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RATIFICATION OF ARTHUR
ANDERSEN LLP AS INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS OF THE COMPANY FOR THE
FISCAL YEAR ENDING SEPTEMBER 30, 2000.
11
<PAGE>
OTHER BUSINESS
(ITEM 3)
The Board of Directors knows of no other business to be brought before the
Annual Meeting. If, however, any other business should properly come before the
Annual Meeting, the persons named in the accompanying proxy will vote the proxy
as in their discretion they may deem appropriate, unless they are directed by
the proxy to do otherwise.
DATE FOR RECEIPT OF PROPOSALS
Any proposal to be presented by a stockholder at the Company's 2001 Annual
Meeting of Stockholders must be presented to the Secretary of the Company not
later than September 13, 2000.
By Order of the Board of Directors
/s/ J. M. Haggar, III
J. M. Haggar, III
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
January 11, 2000
Dallas, Texas
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. WHETHER OR NOT YOU EXPECT
TO ATTEND THE MEETING, PLEASE MARK, SIGN, DATE, AND RETURN THE ENCLOSED PROXY
PROMPTLY IN THE ENCLOSED POSTAGE PAID ENVELOPE. IF YOU ATTEND THE MEETING, YOU
MAY REVOKE YOUR PROXY AND VOTE IN PERSON.
12
<PAGE>
HAGGAR CORP.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
FEBRUARY 9, 2000
THIS PROXY IS SOLICITED ON BEHALF OF HAGGAR CORP.'S BOARD OF DIRECTORS
The undersigned hereby appoints Marc Joseph and David M. Tehle and each of
them, proxies for the undersigned, with full power of substitution, to vote
all shares of Haggar Corp. Common Stock which the undersigned may be entitled
to vote at the Annual Meeting of Stockholders of Haggar Corp. to be held on
Wednesday, February 9, 2000, or at any adjournment thereof, upon the matters
set forth on the reverse side and described in the accompanying Proxy Statement
and upon such other business as may properly come before the meeting or any
adjournment thereof.
This proxy, when properly executed, will be voted in the manner directed.
Please mark this proxy as indicated on the reverse side to vote on any item.
If you wish to vote in accordance with the Board of Directors' recommendations,
no boxes need to be checked. Regardless of how you vote, the proxy must be
signed to be valid. If you attend the meeting, you may revoke your proxy and
vote in person.
- -------------------------------------------------------------------------------
- FOLD AND DETACH HERE -
<PAGE>
Please mark
your votes as
indicated in /X/
this example
THE TWO RESOLUTIONS ON THE BALLOT ARE:
<TABLE>
<S> <C> <C> <C>
1. ELECTION OF DIRECTORS 2. APPROVAL OF ARTHUR
ANDERSEN LLP AS INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
FOR all nominees TO WITHHOLD NOMINEES: Frank D. Bracken, Rae F. Evans
(Except as marked AUTHORITY (INSTRUCTIONS: To withhold authority to
to the contrary) (For all nominees vote for any individual nominee, write
listed) that nominee's name in the space
provided below.) FOR AGAINST ABSTAIN
/ / / / / / / / / /
----------------------------------------
CHANGE
OF / /
__ ADDRESS
|
|
I PLAN TO
ATTEND / /
THE MEETING
Signature(s) Date
------------------------------------------------------------------------------- ----------
NOTE: Please sign as name appears hereon. Joint owners should each sign. When signing as
attorney, executor, administrator, trustee or guardian, please give full title as such.
- ----------------------------------------------------------------------------------------------------------------
- FOLD AND DETACH HERE -
</TABLE>
