<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-12
Haggar Corp.
--------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
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 offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE>
HAGGAR CORP.
6113 LEMMON AVENUE
DALLAS, TEXAS 75209
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD FEBRUARY 7, 2001
To Our Stockholders:
NOTICE IS HEREBY GIVEN that the 2001 Annual Meeting of Stockholders of Haggar
Corp. (the "Company") will be held in Haggar Corp. Conference Center, 6113
Lemmon Avenue, Dallas, Texas, on the 7th day of February, 2001, at 2:00 p.m.
(local time) for the following purposes:
1. To elect two Class II 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, 2001; 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 29, 2000, 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
J. M. Haggar, III
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
Dated: January 4, 2001
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.
<PAGE>
[THIS PAGE LEFT BLANK INTENTIONALLY]
<PAGE>
HAGGAR CORP.
6113 LEMMON AVENUE
DALLAS, TEXAS 75209
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD FEBRUARY 7, 2001
-----------------------
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 2001 Annual
Meeting of Stockholders (the "Annual Meeting") to be held on Wednesday, February
7, 2001, 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 4, 2001. Haggar's Annual Report covering the Company's fiscal year ended
September 30, 2000, is enclosed herewith, but does not form any part of the
materials for solicitation of proxies.
1
<PAGE>
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 II 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, 2001; 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 29, 2000
(the "Record Date"). On the Record Date, there were 6,495,460 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.
[REMAINDER OF THIS PAGE LEFT BLANK INTENTIONALLY]
2
<PAGE>
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).............................. 761,324 11.3
Frank D. Bracken (3)............................... 260,405 3.9
David M. Tehle (4)................................. 25,700 *
Alan C. Burks (5).................................. 55,272 *
David G. Roy (5)................................... 23,000 *
Richard W. Heath (6)............................... 19,600 *
Norman E. Brinker (7).............................. 16,400 *
Rae F. Evans (5)................................... 15,000 *
John C. Tolleson (8)............................... 71,000 1.1
All Executive Officers and Directors
(9 persons) (9)................................... 1,247,701 17.47
Franklin Resources, Inc. (10)...................... 990,000 9.1
Kahn Brothers & Co., Inc. (11)..................... 631,797 9.7
Barrow Hanley Mewhinney & Strauss, Inc. (12)....... 755,400 11.6
Dimensional Fund Advisors, Inc. (13) .............. 430,725 6.6
Gerald Van Tsai (14)............................... 376,675 5.8
</TABLE>
----------------------
*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 250,459 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 240,611 shares which may be acquired pursuant to
stock options that are exercisable currently.
(4) Includes 25,000 shares which may be acquired upon exercise of stock option
that are currently exercisable.
(5) Represents shares which may be acquired pursuant to stock options
exercisable currently or within 60 days of the Record Date.
(6) Includes 5,000 shares over which Mr. Heath shares voting and dispositive
power with his wife and 14,600 shares which may be acquired pursuant to
stock options exercisable currently or within 60 days of the Record Date.
3
<PAGE>
(7) Includes 15,400 shares which may be acquired pursuant to stock options
exercisable currently or within 60 days of the Record Date.
(8) Includes 6,000 shares which may be acquired upon exercise of stock options
that are exercisable currently or within 60 days of the Record Date.
(9) Includes 104,555 shares over which voting and dispositive power is shared
and 645,342 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 contained in Form 13F-HR filed with the Securities and
Exchange Commission on November 13, 2000, by Franklin Resources, Inc.
("FRI), on behalf of Franklin Advisers, Inc., its two principal
shareholders, Charles B. Johnson and Rupert H. Johnson, Jr., and its
wholly-owned subsidiary, Franklin Advisory Services, Inc., whose address is
777 Mariners Island Boulevard, San Mateo, California 94404.
(11) Based on information contained in Form 13F-HR filed with the Securities and
Exchange Commission on November 2, 2000, by Kahn Brothers & Co., Inc.,
whose address is 55 Broadway, 9th floor, New York, New York 10006.
(12) Based on information contained in Form 13F-HR filed with the Securities and
Exchange Commission on November 13, 2000, by Barrow Hanley Mewhinney &
Strauss, Inc., whose address is 3232 McKinney Ave., 15th Floor, Dallas,
Texas 75204.
(13) Based on information contained in Schedule 13G filed with the Securities
and Exchange Commission on February 3, 2000, by Dimensional Fund Advisors,
Inc., whose address is 1299 Ocean Avenue, 11th floor, Santa Monica,
California 90401.
(14) Based on information contained in a Schedule 13G filed with the Securities
and Exchange Commission on January 20, 2000 by Gerald Van Tsai, whose
address is P.O. Box 900, Hanover, New Hampshire 03755. The amount shown
includes 161,075 shares over which Mr. Van Tsai reports shared voting and
dispositive power.
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 II directors expires at the 2001
Annual Meeting. The Board of Directors has proposed J. M. Haggar, III and
Richard W. Heath as nominees for election as the two Class II 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.
4
<PAGE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH NOMINEE FOR CLASS II
DIRECTOR.
<TABLE>
<CAPTION>
NAME AGE POSITIONS WITH COMPANY
---- --- ----------------------
<S> <C> <C>
Richard W. Heath 58 Director
J.M. Haggar, III 49 Chairman of the Board, Chief
Executive Officer and Director
</TABLE>
RICHARD W. HEATH has served as a director of the Company since 1991. He has
served as President and Chief Executive Officer of BeautiControl Cosmetics,
Inc., a direct seller of cosmetic, nutritional and skin care products, since
its inception in 1981. In October 2000, Mr. Heath was also named Senior Vice
President of Beauty and Nutritional Products for Tupperware Corporation in
connection with Tupperware's acquisition of BeautiControl. He has over 30
years of experience in the direct sales industry.
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
serves on the Board of Directors of Chase Bank of Texas.
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>
Frank D. Bracken 60 President, Chief Operating Officer
and Director
David M. Tehle 44 Executive Vice President and Chief
Financial Officer
Alan C. Burks 46 Executive Vice President and Chief
Marketing Officer
David G. Roy 46 Executive Vice President of Operations
Rae F. Evans 52 Director
John C. Tolleson 52 Director
Norman E. Brinker 69 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
5
<PAGE>
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.
DAVID M. TEHLE has served the Company as Senior Vice President and Chief
Financial Officer since 1997 and was recently promoted to Executive Vice
President and Chief Financial Officer. 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.
ALAN C. BURKS has served the Company as Senior Vice President of Marketing since
1993 and was recently promoted to Executive Vice President and Chief Marketing
Officer. Prior to joining Haggar, Mr. Burks had a distinguished career in the
advertising industry where he worked for agencies such as Ogilvy and DDB
Needham. His account management experience included Frito-Lay, the Ben Hogan
Company, Dial Corp and Haggar.
DAVID G. ROY, has served the Company since 1996 in various positions such as
Vice President of Engineering, Vice President of Technical Services, and
Senior Vice President of Operations. Mr. Roy was recently promoted to
Executive Vice President of Operations for the Company. Prior to joining
Haggar, Mr. Roy spent twenty years at VF Corporation. He held leadership
positions throughout VF's Manufacturing, Distribution and Engineering
Departments for Wrangler, Jantzen and Red Kap, where he served as Vice
President until 1996.
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.
Mr. Tolleson is also a director of Capstead Mortgage Corporation and Viad
Corporation.
RAE F. EVANS has served as a director of the Company since 1994. She is
President of Evans & Black, a firm specializing in Washington corporate
strategies. Prior to founding Evans & Black in 1995, Mrs. Evans had served as
Vice President, National Affairs of Hallmark Cards, Inc. for 13 years.
NORMAN E. BRINKER has served as a director of the Company since 1990. He is
Chairman Emeritus 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 has served as Chairman of Brinker International, Inc.
from 1983 to November 2000, and also served as its Chief Executive Officer
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.
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 2000.
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 2000 to review the scope and results of the fiscal 2000
audit, to review various matters with respect to internal financial controls and
procedures, to consider the engagement of the Company's auditors for fiscal
2001, to review the timing and planning of the 2001 audit and approve the filing
of the Form 10-K consistent with the Audit Committee Charter.
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 four
6
<PAGE>
meetings during fiscal 2000.
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 2000.
The Board of Directors held five meetings during the fiscal year ended
September 30, 2000. 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 2000. Neither Mr. Heath nor Mrs. Evans has ever been an
officer or employee of the Company. During a portion of fiscal 2000, J. M.
Haggar, III served as a director of BeautiControl Cosmetics, Inc., for whom
Mr. Heath serves as President and Chief Executive Officer. During 2000, the
BeautiControl Cosmetics, Inc. Board of Directors was reconstituted as a
result of the purchase of BeautiControl Cosmetics, Inc. by Tupperware, Inc.
DIRECTOR COMPENSATION
Non-employee members of the Board of Directors receive $15,000 annually plus
$1,000 for each Board meeting or committee meeting attended. Non-employee
directors also receive a grant of stock options covering 9,000 shares of Common
Stock on their initial election to the Board and an additional grant of stock
options covering 6,000 shares of Common Stock upon each re-election to the
Board. Directors who are also employees of the Company receive no additional
compensation for their service on the Board and its committees.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
The Company's executive officers, directors and beneficial owners of more than
10% of the Company's Common Stock are required to file reports of ownership and
changes of ownership of the Common Stock with the Securities and Exchange
Commission. Based solely upon information provided to the Company by individual
directors, executive officers and beneficial owners, the Company believes that
during the fiscal year ended September 30, 2000, all such reports were timely
filed.
7
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth certain information concerning compensation of
the Chief Executive Officer and the four other executive officers of the Company
for the fiscal years ended September 30, 2000, 1999 and 1998.
<TABLE>
<CAPTION>
Long Term
Compensation
Annual Compensation -------------
------------------------------------------ Securities
Other Annual Underlying All Other
Name and Fiscal Salary Bonus Compensation Options Compensation
Principal Position Year ($) ($)(1) ($)(2) (#)(3) ($)(4)
------------------ ------ ------ ------ ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
J. M. Haggar, III 2000 575,000 495,000 68,548 35,000 18,664
Chairman and Chief 1999 575,000 723,450 63,812 - 19,308
Executive Officer 1998 525,000 565,000 58,638 255,458 19,667
Frank D. Bracken 2000 500,000 427,000 58,888 30,000 18,664
President and Chief 1999 500,000 643,450 54,656 - 19,308
Operating Officer 1998 460,000 477,000 49,818 100,000 19,667
David M. Tehle 2000 220,000 182,000 22,768 15,000 15,064
Executive Vice 1999 220,000 261,150 20,552 - 15,708
President and 1998 200,000 195,000 12,180 15,000 15,767
Chief Financial
Officer
Alan C. Burks 2000 280,000 182,000 16,800 12,000 15,064
Executive Vice 1999 280,000 251,920 - - 15,780
President and 1998 263,500 195,000 23,358 35,000 11,706
Chief Marketing
Officer
David G. Roy 2000 170,000 108,000 14,788 15,000 10,864
Executive Vice 1999 170,000 155,190 11,463 - 11,580
President of 1998 145,000 91,100 12,366 12,000 7,506
Operations
</TABLE>
---------------------------
(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 reflects the effect of the repricing of a
portion of his 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.
8
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
The following table shows all individual grants of stock options to the five
executive officers of the Company during the fiscal year ended September 30,
2000.
<TABLE>
<CAPTION>
Potential Relizable Value
at Assumed Annual Rates
of Stock Price
% of Total Appreciation for the
Securities Options Granted Term of the Options (3)
Underlying Options to Employees in Exercise Expiration ----------------------------
Granted (1) Fiscal Year Price ($/Sh) Date (2) 5% ($) 10% ($)
------------------ --------------- ------------ ---------- --------- ------------
<S> <C> <C> <C> <C> <C> <C>
J. M. Haggar, III 35,000 8.8% 11.00 11/01/09 242,124 613,591
Frank D. Bracken 30,000 7.5% 11.00 11/01/09 207,535 525,935
David M. Tehle 15,000 3.8% 11.00 11/01/09 103,767 262,968
Alan C. Burks 12,000 3.0% 11.00 11/01/09 83,014 210,374
David G. Roy 15,000 3.8% 11.00 11/01/09 103,767 262,968
</TABLE>
-------------------------------
(1) Options are to purchase shares of the Company's Common Stock. Newly granted
options vest in three equal increments on the first through the third
anniversaries of the grant, subject to acceleration of vesting upon death,
disability or retirement.
(2) All options are subject to earlier termination due to death, disability or
termination of employment.
(3) These calculations and the assumed annual appreciation rates are disclosed
pursuant to rules of the Securities and Exchange Commission and are not
intended to forecast future appreciation of the Common Stock.
9
<PAGE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
Shown below is information with respect to the five executive officers of the
Company regarding option exercises during the fiscal year ended September 30,
2000, and the number and value of unexercised options held as of September 30,
2000.
<TABLE>
<CAPTION>
Securities Value Of
Underlying Unexercised
Unexercised In-The-Money
Options At Options At
Fiscal Year End(#) Fiscal Year End($)(1)
Shares Acquired on --------------------------- ---------------------------
Exercise (#) Value Realized($) Exercisable Unexercisable Exercisable Unexercisable
------------------ ----------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
J. M. Haggar, III 0 0 222,126 68,332 25,000 77,500
Frank D. Bracken 0 0 213,945 63,332 50,000 70,000
David M. Tehle 0 0 20,000 20,000 15,000 30,000
Alan C. Burks 0 0 44,606 23,666 15,000 25,500
David G. Roy 0 0 18,000 19,000 12,000 28,500
--------------------------
</TABLE>
(1) Values stated are pre-tax and are based upon the closing price of $12.50
per share of the Company's Common Stock on Nasdaq National Market System on
September 29, 2000.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
In order to provide supplemental retirement benefits and pre-retirement death
benefits to select executive officers, the Company formed the Haggar Corp.
Supplemental Executive Retirement Plan ("SERP") during the first quarter of
fiscal 2000. At retirement age, as defined in the SERP, each participant will be
entitled to a life annuity benefit (if married, a joint and 50% survivor
annuity) equal to 65% of the participant's average total compensation during the
three prior fiscal years, reduced by any Company-provided benefit under the
existing deferred annuity program. If a participant dies before retirement, the
surviving spouse or other beneficiary will receive a death benefit equal to
$400,000 per year payable annually for 10 years.
The SERP is operating as an unfunded compensation arrangement that is not
subject to the annual reporting and disclosure requirements of the Employee
Retirement Income Security Act of 1974. The Company has established a trust to
which the Company is contributing cash to purchase variable life insurance
policies insuring each participant. During fiscal 2000, the Company contributed
to the trust $584,000 and $1,385,000 for the payment of premiums on variable
life policies insuring J.M. Haggar, III and Frank D. Bracken, respectively.
There are presently no other participants in the SERP.
[REMAINDER OF THIS PAGE LEFT BLANK INTENTIONALLY]
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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, 1995, through September 30, 2000, 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.
[OBJECT OMITTED]
<TABLE>
<CAPTION>
Cumulative Total Return
-------------------------------------------------------
9/95 9/96 9/97 9/98 9/99 9/00
<S> <C> <C> <C> <C> <C> <C>
HAGGAR CORP. 100.00 78.91 82.12 61.62 71.86 72.30
S & P 500 100.00 120.34 169.01 184.30 235.54 266.83
S & P TEXTILES (APPAREL) 100.00 135.78 147.42 100.05 80.63 80.51
</TABLE>
11
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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. Selected executive officers may also participate in
the Supplemental Executive Retirement 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 2001.
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
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with an option exercise price not less than the fair market value of the Common
Stock on the day of grant. Stock 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 during fiscal
2000 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.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN ("SERP"). The SERP established by the
Company is intended to reward executive officers who have exhibited outstanding
performance over an extended tenure with the Company. As such, the SERP provides
an incentive for both consistently high performance and longevity with the
Company. Although the Compensation Committee does not administer the SERP, the
benefits of the SERP are taken into consideration in connection with its
evaluation of the overall package of compensation and benefits provided to
executive officers. Presently, the Chief Executive Officer and the President are
the only participants in the SERP.
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 2000 was
$1,157,212. Approximately 42.8% of this amount was earned under the annual
Management Incentive Program. The Chief Executive Officer's base salary was not
increased during fiscal 2000. 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 2000 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
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AUDIT COMMITTEE REPORT
The Audit Committee of the Board of Directors ( the "Audit Committee" ) is
composed of three independent directors and operates under a written charter
(Exhibit A) adopted by the Board of Directors on July 23, 2000 in accordance
with applicable rules of the Securities and Exchange Commission and Nasdaq. The
members of the Audit Committee are Norman E. Brinker, John C. Tolleson and Rae
F. Evans.
Management is responsible for the Company's internal controls and the
financial reporting process. The independent accountants are responsible for
performing an independent audit of the Company's consolidated financial
statements in accordance with generally accepted auditing standards and to issue
a report thereon. The Audit Committee's responsibility is to monitor and oversee
these processes. The Audit Committee also recommends to the Board of Directors
the selection of the Company's independent accountants.
In this context, the Audit Committee has met and held discussions with
management of the Company, who represented to the Audit Committee that the
Company's consolidated financial statements were prepared in accordance with
generally accepted accounting principles. The Audit Committee has reviewed and
discussed the consolidated financial statements with both management and the
independent accountants. The Audit Committee also discussed with the independent
accountants matters required to be discussed by Statement on Auditing Standards
No. 61 (Communication with Audit Committees). The Company's independent
accountants also provided to the Audit Committee the written disclosures
required by Independence Standards Board Standard No. 1 (Independence
Discussions with Audit Committees), and the Audit Committee discussed with the
independent accountants their independence.
Based upon the Audit Committee's discussion with management and the
independent accountants, and the Committee's review of the representation of
management and the report of the independent accountants to the Audit Committee,
the Audit Committee recommended that the Board of Directors include the audited
consolidated financial statements in the Company's Annual Report on Form 10-K
for the year ended September 30, 2000 filed with the Securities and Exchange
Commission. The Audit Committee also recommended that Arthur Andersen LLP be
retained as the Company's independent accountants for the 2001 fiscal year.
Audit Committee:
Norman E. Brinker
John C. Tolleson
Rae F. Evans
December 21, 2000
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, 2001, 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,
2000, 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.
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<PAGE>
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, 2001.
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 2002 Annual
Meeting of Stockholders must be presented to the Secretary of the Company not
later than September 6, 2001.
By Order of the Board of Directors
J. M. Haggar, III
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
January 4, 2001
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.
15
<PAGE>
EXHIBIT A
HAGGAR CORPORATION
AUDIT COMMITTEE CHARTER
-- PURPOSE
The primary purpose of the Audit Committee (the "Committee") is to assist the
Board of Directors (the "Board") in fulfilling its responsibility to oversee
management's conduct of the Company's financial reporting process by monitoring
(a) the financial reports and other financial information provided by the
Company to any governmental or regulatory body, the public or other users
thereof, (b) the Company's systems of internal accounting and financial
controls, and (c) the annual independent audit of the Company's financial
statements.
In discharging its oversight role, the Committee is empowered to investigate any
matter brought to its attention with full access to all books, records,
facilities and personnel of the Company and the power to retain outside counsel,
auditors or other experts for their purpose.
The Board and the Committee are in place to represent the Company's
shareholders; accordingly, the outside auditor is ultimately accountable to the
Board and the Committee.
The Committee shall review the adequacy of this Charter on an annual basis.
-- MEMBERSHIP
The Committee shall be comprised of not less than three members of the Board,
and the Committee's composition will meet the requirements of the Audit
Committee Policy of the NASD. The board of directors shall appoint Committee
members and each Committee member shall serve for a period of one year or until
such time as his or her successor has been duly named.
Accordingly, all of the members will be directors:
1. Who have no relationship to the Company that may interfere with the
exercise of their independence from management and the Company; and at
least one member of the Committee must have accounting or related financial
management expertise.
2. Who are financially literate or who become financially literate within a
reasonable period of time after appointment to the Committee.
-- KEY RESPONSIBILITIES
The Committee's role is oversight of the financial accounting function rather
than primary responsibility for the preparation or review of financial
statements. The Committee recognizes that the Company's management is primarily
responsible for preparing the Company's financial statements and that the
outside auditors are primarily responsible for auditing those financial
statements. The Committee further recognizes that the Company's management, as
well as the outside auditors, have more time, knowledge and information
concerning the Company than do Committee members. Consequently, in carrying out
its oversight responsibilities, the Committee is not providing any special
assurance as to the Company's financial statements or any professional
certification as to the outside auditor's work.
The following tasks shall be the common recurring activities of the Committee in
carrying out its oversight function. These tasks are set forth as a guide with
the understanding that the Committee may diverge from this guide as appropriate
given the circumstances.
-- The Committee will meet a minimum of two times per year and more times as
deemed necessary by the Committee chair.
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<PAGE>
-- The Committee shall review the audited financial statements to be included
in the Company's Annual Report on Form 10-K (or the Annual Report to
Shareholders if distributed prior to the filing of Form 10-K) and review
and consider with the outside auditors the matters required to be discussed
by Statement of Auditing Standards ("SAS") No. 61 if necessary.
-- As a whole, or through the Committee chair, the Committee shall review any
impact of significant events, transactions, and changes in accounting
estimates to be included in the Company's quarterly reports to be filed
with Securities and Exchange Commission.
-- The Committee must recommend to the board of directors that the audited
financial statements be included in the Company's Annual Report on Form
10-K for the latest fiscal year for filing with the Commission.
-- The Committee shall discuss with management, internal audit, and the
outside auditors the quality and adequacy of the Company's internal
controls.
-- The Committee shall:
-- Request from the outside auditors annually, a formal written statement
delineating all relationships between the auditor and the Company
consistent with Independence Standards Board Standard Number 1;
-- Discuss with the outside auditors any such disclosed relationships and
their impact on the outside auditor's independence; and
-- Recommend that the Board take appropriate action to oversee the
independence of the outside auditor.
-- The Committee, subject to any action that may be taken by the full Board,
shall have the ultimate authority and responsibility to select (or nominate
for shareholder approval), evaluate and, where appropriate, replace the
outside auditor.
-- The Committee shall review the significant findings, if any, of the
Internal Audit department on a quarterly basis. At least once a year,
Internal Audit will review significant findings, if any, with the Audit
Committee.
17
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18
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<CAPTION>
<S> <C>
Please mark
your vote as /X/
indicated in
this example
THE TWO RESOLUTIONS ON THE BALLOT ARE:
1. ELECTION OF DIRECTORS 2. APPROVAL OF ARTHUR ANDERSEN LLP AS INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
FOR all nominees TO WITHHOLD NOMINEES: J.M. Haggar, III, Richard W. Heath
(Except as marked AUTHORITY
to the contrary) (For all nominees (INSTRUCTIONS: To withhold authority to vote for any individual nominee,
listed) write 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.
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FOLD AND DETACH HERE
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