November 26, 2007
EXHIBIT
10-G-2
November
26, 2007
Xx.
Xxxxx X. Xxxxxx
Hartmarx
Corporation
000
Xxxxx Xxxxxx Xxxxx
Xxxxxxx,
Xxxxxxxx 00000
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Re:
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Amended
and Restated Employment Agreement Effective as of November 27, 2000
(the
"Employment Agreement") and Amended and Restated Severance Agreement
Effective as of November 27, 2000 (the "Severance Agreement"), each
as
amended through the date hereof
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Dear
Xx. Xxxxxx:
Reference
is made to the Employment Agreement and the Severance Agreement between you,
as
Executive, and Hartmarx Corporation (the "Company"). Hartmarx
Corporation has been authorized by the Compensation and Stock Option Committee
of the Board of Directors to amend the Employment Agreement and the Severance
Agreement in certain respects, effective as of the date hereof, as set forth
below.
1. Section
1 of the Employment Agreement is hereby amended by deleting the first clause
thereof, through the semi-colon ";" in line 4, and inserting the
following:
"The
Company hereby employs Executive and Executive hereby agrees to remain in the
employ of the Company for an employment term ("Agreement Period") beginning
on
the date of this Agreement, and continuing in effect through December 31,
2009;"
2. Section
3(a) is amended in its entirety to provide as follows:
"(a)During
the Agreement Period the Company shall pay Executive an annual base salary
of
not less than Executive's base salary in effect as of
Xx.
Xxxxx X. Xxxxxx
Hartmarx
Corporation
November
26, 2007
Page
2
January
1, 2007 ("Base Salary"). Base Salary shall be paid in accordance with
the Company's customary payroll practices. Base Salary may be
increased at the discretion of the Compensation and Stock Option Committee
of
the Company Board of Directors (the "Committee") and once so increased shall
not
thereafter be decreased, except for across-the-board reductions similarly
affecting all executives of the Company."
3. Section
4(c)(iii)(D) is amended by deleting the reference to Section 7 and inserting
a
reference to Section 8 in its place.
4. The
introductory paragraph of Section 4(d) is amended to read as
follows:
"(d)Good
Reason. The Executive may terminate his employment hereunder for
Good Reason. Good Reason shall mean the occurrence (without the
Executive's written consent) of any one of the following acts by the Company,
or
failures by the Company to act, each of which shall be deemed to be a material
negative change in the terms and conditions of Executive's
employment:"
5. Section
5(a) is amended by deleting the reference to Section 9 and inserting a reference
to Section 10 in its place.
6. Section
6(b)(iii) is amended by deleting the second sentence thereof and inserting
the
following in its place:
"Such
payments will be made within five (5) days of the date on which MIP payments
are
made to other MIP participants after the close of each fiscal year, but in
any
case not later than March 15 after the close of such fiscal year, and will
include the cash value, determined without regard to any restrictions on the
sale thereof, of restricted stock."
7. Section
6(b)(v) is amended in its entirety to provide as follows:
"(v)During
the Severance Period the Company shall arrange to provide the Executive with
life, disability, accident and health insurance benefits ("Welfare Benefits")
substantially similar in all material respects to those which the Executive
is
receiving immediately prior to the Date of
Xx.
Xxxxx X. Xxxxxx
Hartmarx
Corporation
November
26, 2007
Page
3
Termination
(without giving effect to any decrease therein which constitutes the basis,
or
one of the bases, upon which the Notice of Termination is based), or if such
benefits are not available or the provision of such benefits would not be
allowed under the terms of such plans, the Company shall pay Executive the
after-tax economic equivalent thereof. If the Executive receives, or
becomes eligible to receive, Welfare Benefits from another source, then the
Welfare Benefits otherwise receivable by the Executive pursuant to this Section
6(b)(v) shall be reduced to the extent of such other Welfare Benefits received
by, or made available to, the Executive during the Severance Period (and any
such Welfare Benefits received by or made available to the Executive shall
be
reported to the Company by the Executive). Nothing herein shall be
deemed to limit Executive's rights, if any, to thereafter participate in any
retiree medical plan then in effect."
8. New
Section 7 is inserted as follows:
"7. Internal
Revenue Code Section 409A.
(a)Notwithstanding
anything to the contrary set forth in Sections 6(b)(i) through (ix) or elsewhere
in this Agreement, Executive's entitlement to a series of installments payments
shall be treated and shall be deemed to be an entitlement to a series of
separate payments within the meaning of Section 409A of the Internal Revenue
Code of 1986, as amended (the "Code") and the regulations
thereunder.
(b)Any
severance benefits paid within the later of (i) 2-1/2 months of the end of
the
Company's taxable year containing the Executive's severance from employment,
or
(ii) 2-1/2 months of the end of the Executive's taxable year containing the
severance from employment shall be exempt from Section 409A and shall be paid
in
accordance with Section 6(b). Severance benefits subject to this
Section 7(b) shall be treated and shall be deemed to be an entitlement to a
separate payment within the meaning of Section 409A of the Code and the
regulations thereunder.
(c)To
the extent severance benefits are not exempt from Section 409A under Section
7(b) above, any benefits paid in the first 6 months following the Executive's
severance from employment that are equal to or less than the lesser of the
amounts described in Treasury Regulation Section
Xx.
Xxxxx X. Xxxxxx
Hartmarx
Corporation
November
26, 2007
Page
4
1.409A-1(b)(9)(iii)(A)(1)
and (2) shall be exempt from Section 409A and shall be paid in accordance with
Section 6(b). Severance benefits subject to this Section 7(c) shall
be treated and shall be deemed to be an entitlement to a separate payment within
the meaning of Section 409A of the Code and the regulations
thereunder.
(d)To
the extent severance benefits are not exempt from Section 409A under Section
7(b) or 7(c) above, any benefits paid equal to or less than the applicable
dollar amount under Section 402(g)(1)(B) of the Code for the year of severance
from employment shall be exempt from Section 409A in accordance with Treasury
Regulation Section 1.409A-1(b)(9)(v)(D) and shall be paid in accordance with
Section 6(b). Severance benefits subject to this Section 7(d) shall
be treated and shall be deemed to be an entitlement to a separate payment within
the meaning of Section 409A of the Code and the regulations
thereunder.
(e)To
the extent severance benefits are not exempt from Section 409A pursuant to
Section 7(b), 7(c) or 7(d) above, and to the extent the Executive is a
"specified employee" (as defined below), payments due to the Executive under
Section 6 shall begin no sooner than six months after the Executive's severance
from employment (other than for Death); provided, however, that any payments
not
made during the six (6) month period described in this Section 7(e) due to
the
6-month delay period required under Treasury Regulation Section 1.409A-3(i)(2)
shall be made in a single lump sum as soon as administratively practicable
after
the expiration of such six (6) month period, with interest thereon computed
at
the rate set forth in Section 17 hereof, and the balance of all other payments
required under this Agreement shall be made as otherwise scheduled in this
Agreement.
(f)For
purposes of this Section 7, any reference to severance of employment or
termination of employment shall mean a "separation from service" as defined
in
Treasury Reg. Section 1.409A-1(h). For purposes of this Agreement,
the term "specified employee" shall have the meaning set forth in Treasury
Reg.
Section 1.409A-1(i). The determination of whether the Executive is a
"specified employee" shall be made by the Employer in good faith applying the
applicable Treasury regulations.
Xx.
Xxxxx X. Xxxxxx
Hartmarx
Corporation
November
26, 2007
Page
5
(g)Notwithstanding
anything to the contrary set forth in this Agreement, and in addition to any
tax
gross-up payments to which Executive may be entitled under any other agreement
between Executive and Company, if any of the amounts payable to Executive
hereunder are or become subject to excise or other tax liability (including
interest and penalties) that may be assessed by the IRS pursuant to Section
409A
or any other section of the Code and imposed upon Executive, the Company shall
reimburse and gross-up Executive in an amount sufficient so that such payments
and benefits received by Executive hereunder will be so received without
reduction for any such taxes, interest or penalties. Such gross-up
payment shall be made promptly after the assessment of such excise or other
tax
liability (including interest and penalties); however, in any event, such
gross-up payment shall be made no later than the end of Executive's taxable
year
next following his taxable year in which the related taxes, interest or
penalties are remitted."
9. Sections
7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20 and 21, are hereby
re-designated as Sections 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20,
21
and 22, respectively, and all references thereto shall be references to the
re-designated Section numbers.
10. Section
18 is amended to provide as follows:
"18.Beneficiaries. If
Executive should die while any amount is payable to him hereunder, such amount
shall be paid in a single lump sum to Executive's devisee, legatee or other
designee or, if there is no such designee, to Executive's estate."
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X.
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Xxxxxxxxx
Agreement
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1. Section
2 is amended by deleting the references to Section 7 and Section 12 and
inserting references to Section 8 and Section 13, respectively.
2. The
introductory paragraph of Section 4(d) is amended to read as
follows:
"(d)
Good
Reason. The Executive may terminate his employment hereunder for
Good Reason. Good Reason shall mean the occurrence, after
a
Xx.
Xxxxx X. Xxxxxx
Hartmarx
Corporation
November
26, 2007
Page
6
Change
in Control, (without the Executive's written consent) of any one of the
following acts by the Company, or failures by the Company to act, each of which
shall be deemed to be a material negative change in the terms and conditions
of
Executive's employment:"
3. Section
5(a) is amended by deleting the reference to Section 10 and inserting a
reference to Section 11 in its place.
4. Section
6(b)(iv) is amended in its entirety to provide as follows:
"(iv)During
a period of thirty-six (36) months (the "Severance Period") the Company shall
arrange to provide the Executive with life, disability, accident and health
insurance benefits ("Welfare Benefits") substantially similar in all material
respects to those which the Executive is receiving immediately prior to the
Date
of Termination (without giving effect to any adverse amendment to, or
elimination of, such benefits made after a Change in Control); provided,
however, if the termination of Executive's employment after a Change in Control
and during the Agreement Period by the Company without Cause or by Executive
for
Good Reason hereunder occurs after Executive has attained the age of 57 years,
the Welfare Benefits to be provided by the Company shall continue to be provided
until such time that Executive becomes Medicare eligible and is covered by
Medicare. If any such Welfare Benefits are not available or the
provision of such benefits would not be allowed under the terms of such plans,
the Company shall pay Executive the after-tax economic equivalent
thereof. If the Executive receives, or becomes eligible to receive,
Welfare Benefits from another source, then the Welfare Benefits otherwise
receivable by the Executive pursuant to this Section 6(b)(iv) shall be reduced
to the extent of such other Welfare Benefits received by, or made available
to,
the Executive during the Severance Period (and any such Welfare Benefits
received by or made available to the Executive shall be reported to the Company
by the Executive). Nothing herein shall be deemed to limit
Executive's rights, if any, to thereafter participate in any retiree medical
plan then in effect. Executive covenants and agrees that he shall
apply for Medicare coverage on his first Medicare eligibility
date."
Xx.
Xxxxx X. Xxxxxx
Hartmarx
Corporation
November
26, 2007
Page
7
5. New
Section 7 is inserted as follows:
"7.Internal
Revenue Code Section 409A.
(a)Notwithstanding
anything to the contrary set forth in Sections 6(b)(i) through (viii) or
elsewhere in this Agreement, Executive's entitlement to a series of installments
payments shall be treated and shall be deemed to be an entitlement to a series
of separate payments within the meaning of Section 409A of the Internal Revenue
Code of 1986, as amended (the "Code") and the regulations
thereunder.
(b)Any
severance benefits paid within the later of (i) 2-1/2 months of the end of
the
Company's taxable year containing the Executive's severance from employment,
or
(ii) 2-1/2 months of the end of the Executive's taxable year containing the
severance from employment shall be exempt from Section 409A and shall be paid
in
accordance with Section 6(b). Severance benefits subject to this
Section 7(b) shall be treated and shall be deemed to be an entitlement to a
separate payment within the meaning of Section 409A of the Code and the
regulations thereunder.
(c)To
the extent severance benefits are not exempt from Section 409A under Section
7(b) above, any benefits paid in the first 6 months following the Executive's
severance from employment that are equal to or less than the lesser of the
amounts described in Treasury Regulation Section 1.409A-1(b)(9)(iii)(A)(1)
and
(2) shall be exempt from Section 409A and shall be paid in accordance with
Section 6(b). Severance benefits subject to this Section 7(c) shall
be treated and shall be deemed to be an entitlement to a separate payment within
the meaning of Section 409A of the Code and the regulations
thereunder.
(d)To
the extent severance benefits are not exempt from Section 409A under Section
7(b) or 7(c) above, any benefits paid equal to or less than the applicable
dollar amount under Section 402(g)(1)(B) of the Code for the year of severance
from employment shall be exempt from Section 409A in accordance with Treasury
Regulation Section 1.409A-1(b)(9)(v)(D) and shall be paid in accordance with
Section 6(b). Severance benefits subject to this Section 7(d) shall
be treated and shall be deemed to be an entitlement to a
Xx.
Xxxxx X. Xxxxxx
Hartmarx
Corporation
November
26, 2007
Page
8
separate
payment within the meaning of Section 409A of the Code and the regulations
thereunder.
(e)To
the extent severance benefits are not exempt from Section 409A pursuant to
Section 7(b), 7(c) or 7(d) above, and to the extent the Executive is a
"specified employee" (as defined below), payments due to the Executive under
Section 6 shall begin no sooner than six months after the Executive's severance
from employment (other than for Death); provided, however, that any payments
not
made during the six (6) month period described in this Section 7(e) due to
the
6-month delay period required under Treasury Regulation Section 1.409A-3(i)(2)
shall be made in a single lump sum as soon as administratively practicable
after
the expiration of such six (6) month period, with interest thereon computed
at
the rate set forth in Section 18 hereof, and the balance of all other payments
required under this Agreement shall be made as otherwise scheduled in this
Agreement.
(f)For
purposes of this Section 7, any reference to severance of employment or
termination of employment shall mean a "separation from service" as defined
in
Treasury Reg. Section 1.409A-1(h). For purposes of this Agreement,
the term "specified employee" shall have the meaning set forth in Treasury
Reg.
Section 1.409A-1(i). The determination of whether the Executive is a
"specified employee" shall be made by the Employer in good faith applying the
applicable Treasury regulations.
(g)Notwithstanding
anything to the contrary set forth in this Agreement, and in addition to any
tax
gross-up payments to which Executive may be entitled under any other agreement
between Executive and Company, if any of the amounts payable to Executive
hereunder are or become subject to excise or other tax liability (including
interest and penalties) that may be assessed by the IRS pursuant to Section
409A
or any other section of the Code and imposed upon Executive, the Company shall
reimburse and gross-up Executive in an amount sufficient so that such payments
and benefits received by Executive hereunder will be so received without
reduction for any such taxes, interest or penalties. Such gross-up
payment shall be made promptly after the assessment of such excise or other
tax
liability (including interest and penalties); however, in any event, such
gross-up payment shall be made no later than the end of Executive's taxable
year
next following his taxable year in which the related taxes, interest or
penalties are remitted."
Xx.
Xxxxx X. Xxxxxx
Hartmarx
Corporation
November
26, 2007
Page
9
6. Sections
7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21 and 22 are hereby
re-designated as Sections 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20,
21,
22 and 23, respectively, and all references thereto shall be references to
the
re-designated Section numbers.
7. Section
19 is amended to provide as follows:
"19.Beneficiaries. If
Executive should die while any amount is payable to him hereunder, such amount
shall be paid in a single lump sum to Executive's devisee, legatee or other
designee or, if there is no such designee, to Executive's estate."
[Remainder
of page intentionally left blank;
signatures
appear on immediately following page]
Xx.
Xxxxx X. Xxxxxx
Hartmarx
Corporation
November
26, 2007
Page
10
Please
sign both copies of this letter
where indicated below evidencing your agreement to these amendments to the
Employment Agreement and Severance Agreement. When fully executed,
this letter will serve as an amendment to the Employment Agreement and Severance
Agreement and, except as expressly amended by this letter, the Employment
Agreement and Severance Agreement shall each remain in full force and effect
in
accordance with their respective terms.
Very
truly yours,
/s/
XXXXXXX X. XXXXXX
Xxxxxxx
X. Xxxxxx, Chairman
Compensation
and Stock Option
Committee
of the Board of Directors
Agreed
and Accepted this
26th
day of November, 2007
/s/
Xxxxx X. Xxxxxx
Xxxxx
X. Xxxxxx
