<PAGE>
 
                                                                  EXHIBIT 10-G-3
                              SEVERANCE AGREEMENT
                              -------------------

     This Agreement entered into as of the 1st day of August, 1996, by and
between HARTMARX CORPORATION, a Delaware corporation ("Company"), and MARY D.
ALLEN ("Executive").


                                WITNESSETH THAT:
                                ----------------

     WHEREAS, the Company recognizes that, as is the case with many publicly
held corporations, the possibility of a Change in Control exists and that such
possibility, and the uncertainty and questions which it may raise among
management, may result in the departure or distraction of management personnel
to the detriment of the Company and its stockholders; and

     WHEREAS, the Company has determined that appropriate steps should be taken
to reinforce and encourage the continued attention and dedication of members of
the Company's management, including the Executive, to their assigned duties
without distraction in the face of potentially disturbing circumstances arising
from the possibility of a Change in Control; and

     WHEREAS, the Company and the Executive intend to enter into an Employment
Agreement ("Employment Agreement"), coincident herewith.

     NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth below, it is hereby covenanted and agreed by the parties hereto as
follows:

     1.   Agreement Period.   The Agreement Period shall commence on the date
hereof and shall continue in effect through December 31, 1997; provided,
however, that commencing on January 1, 1998 and each January 1 thereafter, the
Agreement Period shall automatically be extended for one additional year
unless, not later than July 15 of the preceding year, the Company or the
Executive shall have given notice not to extend this Agreement; and further
provided, however, that if a Change in Control shall have occurred during the
Agreement Period, the Agreement Period shall continue in effect for a period of
not less than twenty-four (24) months beyond the month in which such Change in
Control occurred.

     2. Nature of the Agreement. In order to induce the Executive to remain in
the employ of the Company, the Company agrees, under the conditions described
herein, to pay the Executive the severance payments and benefits described
herein. Except as provided in Section 7 hereof and Section 11 hereof, no
<PAGE>
 
amount or benefit shall be payable under this Agreement unless Executive is
employed at the time of the Change in Control and there shall have been a
termination of the Executive's employment with the Company following the Change
in Control and during the Agreement Period.

     3.   Change in Control; Definitions.  A Change in Control shall mean the
occurrence of any of the following:

               (i) any Person is or becomes the Beneficial Owner, directly or
          indirectly, of securities of the Company representing 25% or more of
          the combined voting power of the Company's then outstanding
          securities, excluding any Person who becomes such a Beneficial Owner
          in connection with a transaction described in clause (A) of paragraph
          (iii) below; or

               (ii) during any period of two consecutive years (not including
          any period prior to the date of this Agreement), individuals who at
          the beginning of such period constitute the Board of Directors of the
          Company ("Board") (together with any new directors whose election by
          the Board or whose nomination for election by the shareholders of the
          Company was approved by a vote of at least 662/3% of the directors of
          the Company then still in office who were either directors at the
          beginning of such period or whose election or nomination for election
          was previously so approved) cease for any reason to constitute a
          majority of the Board then in office; or

               (iii) there is consummated a merger or consolidation of the
          Company (or any direct or indirect subsidiary of the Company) with
          any other corporation, other than (A) a merger or consolidation which
          would result in the voting securities of the Company outstanding
          immediately prior to such merger or consolidation continuing to
          represent (either by remaining outstanding or by being converted into
          voting securities of the surviving entity or any parent thereof) at
          least 75% of the combined voting power of the voting securities of the
          Company or such surviving entity or any parent thereof outstanding
          immediately after such merger or consolidation, or (B) a merger or
          consolidation effect-

                                       2
<PAGE>
 
          ed to implement a recapitalization of the Company (or similar
          transaction) in which no Person is or becomes the Beneficial Owner,
          directly or indirectly, of securities of the Company representing 25%
          or more of the combined voting power of the Company's then outstanding
          securities; or

               (iv) the stockholders of the Company approve a plan of complete
          liquidation or dissolution of the Company or there is consummated an
          agreement for the sale or disposition by the Company of all or
          substantially all of the Company's assets, other than a sale or
          disposition by the Company of all or substantially all of the
          Company's assets to an entity at least 75% of the combined voting
          power of the voting securities of which are owned by Persons in
          substantially the same proportions as their ownership of the Company
          immediately prior to such sale.

     Notwithstanding the foregoing, a Change in Control shall not be deemed to
occur in the event of a Management Change in Control.  A Management Change in
Control shall mean a Change in Control pursuant to which Executive (alone or
with others) acquires or retains, directly or indirectly, the power to direct or
cause the direction of the management and policies of the Company (whether
through the ownership of voting securities, by contract, or otherwise) and which
is directly or indirectly attributable to a public announcement by Executive (or
others acting in concert with Executive) of an intention to take actions which,
if consummated, would constitute such Management Change in Control.  In
addition, no "Change in Control" shall be deemed to have occurred if there is
consummated any transaction or series of integrated transactions immediately
following which the record holders of the common stock of the Company
immediately prior to such transaction or series of transactions continue to have
substantially the same proportionate ownership in an entity which owns all or
substantially all of the assets of the Company immediately following such
transaction or series of transactions.

          "Person" shall mean any person (as defined in Section 3(a)(9) of the
Securities Exchange Act (the "Exchange Act"), as such term is modified in
Sections 13(d) and 14(d) of the Exchange Act) other than (1) any employee plan
established by the Company, (2) the Company or any of its affiliates (as defined
in Rule 12b-2 promulgated under the Exchange Act), (3) an underwriter tempo-

                                       3
<PAGE>
 
rarily holding securities pursuant to an offering of such securities, or (4) a
corporation owned, directly or indirectly, by stockholders of the Company in
substantially the same proportions as their ownership of the Company.

          "Beneficial Owner" shall mean beneficial owner as defined in Rule 
13d-3 under the Exchange Act.

     4.   Termination.  The Executive's employment hereunder may be terminated
under the following circumstances:

          (a)  Death. The Executive's employment hereunder shall terminate upon
his death.

          (b)  Disability.  The Company may terminate the Executive's employment
hereunder for "Disability".  Any question as to the existence of the Disability
shall be determined in accordance with the Company's disability plan.

          (c) Cause. The Company may terminate the Executive's employment
hereunder for Cause. For purposes of this Agreement, the Company shall have
"Cause" to terminate the Executive's employment hereunder upon the Executive's:

     (i)       conviction for the commission of a felony; or

     (ii)      willful failure to substantially perform his duties hereunder; or

     (iii)     willful or grossly negligent conduct that is demonstrably and
               materially injurious to the Company or its affiliates.

          Notwithstanding the foregoing, no event shall constitute "Cause"
unless the Company shall have notified Executive in writing of the conduct
allegedly constituting Cause and the Executive shall have failed to correct such
conduct within thirty (30) days of the date of his receipt of such written
notice from the Company.

          (d)  Good Reason.  The Executive may terminate his employment
hereunder for Good Reason.  Good Reason shall mean the occurrence, after a
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:

                                       4
<PAGE>
 
     (i)       failure of the Board of Directors of the Company to elect
               Executive to the office(s) held by the Executive immediately
               prior to the Change in Control; or

     (ii)      [Intentionally omitted]

     (iii)     any change in (i) the provisions of the Company's bylaws
               describing, or (ii) the relative duties and responsibilities of,
               the office of Executive Vice President, General Counsel and
               Secretary; or

     (iv)      the assignment to Executive of any duties inconsistent with
               Executive's status as Executive Vice President, General Counsel
               and Secretary or a substantial adverse alteration in the nature
               or status of Executive's responsibilities; or

     (v)       any reduction by the Company in the Executive's annual base
               salary as in effect immediately prior to the Change in Control or
               as the same may be increased from time to time; or

     (vi)      the failure by the Company to pay to Executive any portion of
               Executive's current compensation, or to pay to Executive any
               portion of an installment of deferred compensation under any
               deferred compensation program of the Company, within seven (7)
               days of the date such compensation is due; or

     (vii)     the failure by the Company to continue in effect any compensation
               plan in which the Executive participates immediately prior to
               the Change in Control which is material to the Executive's total
               compensation, including but not limited to stock option,
               restricted stock, stock appreciation right, incentive
               compensation, bonus and other plans, unless an equitable
               arrangement (embodied in an ongoing substitute or alternative
               plan) has been made with respect to such plan; or the failure by
               the Company to continue the Executive's participation therein (or
               in such substitute or alternative plan) on a basis not materially
               less favorable, both in terms of the amount or timing of payment
               of benefits provided and the level of the Executive's
               participation relative to other

                                       5
<PAGE>
 
               participants, as existed immediately prior to the Change in
               Control; or

     (viii)    the failure by the Company to continue to provide the Executive
               with benefits substantially similar to those enjoyed by the
               Executive under any of the Company's pension, savings, life
               insurance, medical, health and accident, or disability plans in
               which the Executive was participating immediately prior to the
               Change in Control, the taking of any action by the Company which
               would directly or indirectly materially reduce any of such
               benefits or deprive the Executive of any material perquisite or
               fringe benefit enjoyed by the Executive immediately prior to the
               Change in Control, or the failure by the Company to provide the
               Executive with the number of paid vacation days to which the
               Executive is entitled on the basis of years of service with the
               Company in accordance with the Company's normal vacation policy
               in effect immediately prior to the Change in Control; or

     (ix)      the relocation of the Executive's principal place of employment
               to a location more than 50 miles from the Executive's principal
               place of employment as of the date hereof or the Company's
               requiring the Executive to be based anywhere other than such
               principal place of employment (or permitted relocation thereof)
               except for required travel on the Company's business to an extent
               substantially consistent with the Executive's business travel
               obligations immediately prior to the Change in Control; or

     (x)       any purported termination of the Executive's employment by the
               Company other than in accordance with this Agreement; for
               purposes of this Agreement, no such purported termination shall
               be effective.

          Notwithstanding the foregoing, no event shall constitute "Good
Reason" unless the Executive shall have notified the Company in writing of the
conduct allegedly constituting Good Reason and the Company shall have failed to
correct such conduct within thirty (30) days of the date of its receipt of such
written notice from the Executive.

                                       6
<PAGE>
 
     5.   Termination Procedure.
          --------------------- 

          (a)  Notice of Termination.  Any termination of the Executive's
employment by the Company or by the Executive (other than termination pursuant
to Section 4(a) hereof) shall be communicated by written Notice of Termination
to the other party hereto in accordance with Section 9.  For purposes of this
Agreement, a "Notice of Termination" shall mean a notice which shall indicate
the specific provision in this Agreement relied upon and shall identify in
reasonable detail the reason for termination of the Executive's employment under
the provision so indicated.

          (b)  Date of Termination.  "Date of Termination" shall mean (i) if the
Executive's employment is terminated by his death, the date of his death, (ii)
if the Executive's employment is terminated pursuant to Section 4(b) above, the
date thirty (30) days after Notice of Termination (provided that the Executive
shall not have returned to the performance of his duties on a permanent full-
time basis during such thirty (30) day period), (iii) if the Executive's
employment is terminated pursuant to Section 4(c) or 4(d) above, the date thirty
(30) days after Notice of Termination and (iv) if the Executive's employment is
terminated for any other reason, the date specified in the Notice of Termination
which shall be not more than 30 days from the date of such Notice.

      6.  Compensation Upon Termination.
          ----------------------------- 

          (a)   Termination due to Death or Disability.  If the Executive's
employment is terminated after a Change in Control and during the Agreement
Period by his death or Disability, except as provided in Section 6(d) below, the
Company shall have no further obligations to Executive under this Agreement.

          (b)  Termination By Company without Cause or By Executive for Good
Reason.  Upon 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, then, in lieu of any further salary, bonus, or LTI Plan
payments for periods subsequent to the Date of Termination and in lieu of any
severance benefit otherwise payable to the Executive:

               (i) The Company shall pay to the Executive a lump sum cash
          severance payment, within 5 days of the Date of Termination, equal to
          three times the higher of the Executive's annual base salary as of the
          Date of Termi-

                                       7
<PAGE>
 
          nation and the Executive's annual base salary in effect immediately
          prior to the Change in Control.

               (ii) The Company shall pay the Executive a lump sum in cash,
          within 10 days of the Date of Termination, equal to the sum of (A) any
          unpaid incentive compensation (including the cash value, determined
          without regard to any restrictions on the sale thereof, of restricted
          stock) allocated or awarded to Executive under the MIP with respect to
          any fiscal year ending prior to the year in which the Date of
          Termination occurs; plus (B) three times the amount equal to the bonus
          compensation (including the cash value, determined without regard to
          any restrictions on the sale thereof, of restricted stock) which
          would be payable under the MIP with respect to the year in which the
          Date of Termination occurs, calculated based on the assumption that
          the Company achieves its "Step-1" target level (as defined in the
          MIP) for such year (annual bonus based on such assumption, "Step-1
          Bonus"). The amount set forth in item (B) above shall be payable to
          Executive regardless of whether the Company actually achieves the
          performance levels upon which the calculation of such amount is based.

               (iii) The Company shall pay the Executive a lump sum in cash,
          within 10 days of the Date of Termination, equal to the sum of (A) any
          unpaid incentive compensation (including the cash value, determined
          without regard to any restrictions on the sale thereof, of 
          restricted stock) allocated or awarded to Executive under the LTI Plan
          with respect to any performance period ending prior to the Date of
          Termination; plus (B) a pro rata portion of the aggregate value of all
          contingent incentive compensation (including the cash value,
          determined without regard to any restrictions on the sale thereof, of
          restricted stock) awards to Executive with respect to any performance
          periods under the LTI Plan which are not completed as of the Date of
          Termination, calculated based on the assumption that the Company's
          results from the beginning of such performance period(s) to the Date
          of Termination would continue at the same rate until the originally
          intended completion date(s) of such performance period(s). The amount
          set forth in item (B) above shall be payable to Executive regardless
          of whether the Company actually

                                       8

<PAGE>
 
          achieves the performance level upon which the calculation of such
          amount is based.

               (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). 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.

               (v) During the Severance Period, the Company shall arrange to
          provide the Executive with such material perquisites as are provided
          to the Executive immediately prior to the Date of Termination
          (without giving effect to any adverse amendment to, or elimination of,
          such perquisites made after a Change in Control).

               (vi) Effective as of the Date of Termination, all stock options
          (whether or not then fully exercisable) granted to Executive under any
          of the Company's stock option plans prior to the Date of Termination
          shall become immediately exercisable and Executive shall be entitled
          to exercise any or all of such options at any time prior to the
          respective expiration dates of such options as set forth in the grant
          document evidencing same.
 
               (vii) Effective as of the Date of Termination, all restricted
          stock granted to Executive prior to the date Executive's employment
          with the Company is terminated shall become fully vested and all
          restrictions thereon shall lapse.

                                       9
<PAGE>
 
               (viii) The Executive shall receive payment of the incremental
          qualified and supplemental defined benefit pension benefits Executive
          would have earned had Executive's employment continued during the
          Severance Period, had he received credit for service for the Severance
          Period for all purposes under the applicable plans, and had the
          Executive received compensation during the Severance Period of salary,
          at the annual rate equal to the Executive's Base Salary in effect
          immediately prior to the Date of Termination (without giving effect to
          any decrease therein following the Change in Control), and bonus, at
          the annual rate equal to the Step-1 Bonus. Anything in the applicable
          plan to the contrary notwithstanding, the net present value of the
          Executive's benefit (as increased hereunder) under any supplemental
          defined benefit plan maintained by the Company ("SERP Benefit") shall
          be paid to the Executive in a lump sum in cash by no later than 10
          days following the Date of Termination.

          (c)  Termination by the Company for Cause or By Executive Other than
for Good Reason.  If the Executive's employment shall be terminated after a
Change in Control and during the Agreement Period by the Company for Cause or by
the Executive other than for Good Reason, then, subject to Section 6(d) below,
the Company shall have no obligations to Executive under this Agreement.

          (d)  Additional Payments.  Following any termination of Executive's
employment following the Change in Control and during the Agreement Period, (i)
the Company shall pay the Executive all unpaid amounts, if any, to which the
Executive is entitled as of the Date of Termination under any compensation plan
or program of the Company, at the time such payments are due, (ii) within ten
days of the Date of Termination, the Company shall pay the Executive, or his
legal representative or estate, as applicable, the Executive's full salary to
the Executive through the Date of Termination at the rate in effect at the time
the Notice of Termination is given, together with all compensation and benefits
payable to the Executive through the Date of Termination under the terms of the
Company's compensation and benefit plans, programs or arrangements and (iii) the
Company shall pay to the Executive the Executive's normal post-termination
compensation and benefits as such payments become due (such post-termination
compensation and benefits shall be determined under, and paid in

                                       10
<PAGE>
 
accordance with, the Company's retirement, insurance and other compensation or
benefit plans, programs and arrangements).

     7.   Excise Taxes.  If any of the payments or benefits received or to be
received by the Executive in connection with a Change in Control or the
Executive's termination of employment (whether pursuant to the terms of this
Agreement or any other plan, arrangement or agreement with the Company, any
Person whose actions result in a Change in Control or any Person affiliated with
the Company or such Person) (such payments or benefits, being hereinafter
referred to as the "Total Payments") will be subject to any excise tax (the
"Excise Tax") imposed under Section 4999 of the Internal Revenue Code of 1986,
as amended (the "Code"), the Company shall pay to the Executive an additional
amount (the "Gross-Up Payment") such that the net amount retained by the
Executive, after deduction of any Excise Tax on the Total Payments and any
federal, state and local income and employment taxes and Excise Tax upon the
Gross-Up payment, shall be equal to the Total Payments.  For purposes of
determining whether any of the Total Payments will be subject to the Excise Tax
and the amount of such Excise Tax, (i) all of the Total Payments shall be
treated as "parachute payments" (within the meaning of section 280G(b)(2) of the
Code) unless, in the opinion of tax counsel ("Tax Counsel") reasonably
acceptable to the Executive and selected by the accounting firm which was,
immediately prior to the Change in Control, the Company's independent auditor
(the "Auditor"), such payments or benefits (in whole or in part) do not
constitute parachute payments, including by reason of section 280G(b)(4)(A) of
the Code, (ii) all "excess parachute payments" within the meaning of section
280G(b)(l) of the Code shall be treated as subject to the Excise Tax unless, in
the opinion of Tax Counsel, such excess parachute payments (in whole or in part)
represent reasonable compensation for services actually rendered (within the
meaning of section 280G(b)(4)(B) of the Code) in excess of the base amount
allocable to such reasonable compensation, or are otherwise not subject to the
Excise Tax, and (iii) the value of any noncash benefits or any deferred payment
or benefit shall be determined by the Auditor in accordance with the principles
of sections 280G(d)(3) and (4) of the Code.  For purposes of determining the
amount of the Gross-Up Payment, the Executive shall be deemed to pay federal
income tax at the highest marginal rate of federal income taxation in the
calendar year in which the Gross-Up Payment is to be made and state and local
income taxes at the highest marginal rate of taxation in the state and locality
of the Executive's residence on the Date of Termination (or if there is no Date
of Termination, then the date on which the Gross-Up Payment is calculated

                                       11
<PAGE>
 
for purposes of this Section 7), net of the maximum reduction in federal income
taxes which could be obtained from deduction of such state and local taxes. In
the event that the Excise Tax is finally determined to be less than the amount
taken into account hereunder in calculating the Gross-Up Payment, the Executive
shall repay to the Company, at the time that the amount of such reduction in
Excise Tax is finally determined, the portion of the Gross-Up Payment
attributable to such reduction (plus that portion of the Gross-Up Payment
attributable to the Excise Tax and federal, state and local income and
employment taxes imposed on the Gross-Up Payment being repaid by the Executive
to the extent that such repayment results in a reduction in Excise Tax and/or a
federal, state or local income or employment tax deduction) plus interest on
the amount of such repayment at 120% of the rate provided in section
1274(b)(2)(B) of the Code. In the event that the Excise Tax is determined to
exceed the amount taken into account hereunder in calculating the Gross-Up
Payment (including by reason of any payment the existence or amount of which
cannot be determined at the time of the Gross-Up Payment), the Company shall
make an additional Gross-Up Payment in respect of such excess (plus any
interest, penalties or additions payable by the Executive with respect to such
excess) at the time that the amount of such excess is finally determined. The
Executive and the Company shall each reasonably cooperate with the other in
connection with any administrative or judicial proceedings concerning the
existence or amount of liability for Excise Tax with respect to the Total
Payments.

     8.   Amendment.  This Agreement may be amended in writing by mutual
agreement of the parties without the consent of any other person and, during the
life of Executive, no person, other than the parties hereto, shall have any
rights under or interest in this Agreement or the subject matter hereof.

     9.   Notice.  Any notice required or permitted to be given under this
Agreement shall be sufficient if in writing and, if sent by registered mail, to
the Company at its principal executive offices, to the attention of its Chief
Executive Officer, or to Executive at the last address filed by him in writing
with the Committee, as the case may be.

     10.  Nonalienation.  The interests of Executive under this Agreement are
not subject to the claims of his creditors, other than the Company and its
subsidiaries, and may not otherwise be voluntarily or involuntarily assigned,
alienated or encumbered.

                                       12
<PAGE>
 
     11. Successors. In addition to any obligations imposed by law upon any
successor to the Company, the Company will require any successor (whether direct
or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to expressly
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place. Failure of the Company to obtain such assumption and agreement
prior to the effectiveness of any such succession shall be a breach of this
Agreement and shall entitle the Executive to compensation from the Company in
the same amount and on the same terms as the Executive would be entitled to
hereunder if the Executive were to terminate the Executive's employment for Good
Reason after a Change in Control, except that, for purposes of implementing the
foregoing, the date on which any such succession becomes effective shall be
deemed the Date of Termination.
 
     12.  Severability.  If, for any reason, any provision of this Agreement is
held invalid, such invalidity shall not affect any other provision of this
Agreement not held so invalid, and each such other provision shall to the full
extent consistent with law continue in full force and effect.  If any provision
of this Agreement shall be held invalid in part, such invalidity shall in no way
affect the rest of such provision not held so invalid, and the rest of such
provision, together with all other provisions of this Agreement, shall to the
full extent consistent with law continue in full force and effect.

     13.  Applicable Law.  The provisions of this Agreement shall be construed
in accordance with the laws of the State of Illinois.

     14.  Counterpart.  The Agreement may be executed in two or more
counterparts, any one of which shall be deemed the original without reference to
the others.

     15.  Attorney's Fees.  The Company also shall pay to the Executive all
legal fees and expenses incurred by the Executive in disputing in good faith any
issue hereunder relating to the termination of the Executive's employment, in
seeking in good faith to obtain or enforce any benefit or right provided by this
Agreement or in connection with any tax audit or proceeding to the extent
attributable to the application of section 4999 of the Code to any payment or
benefit provided hereunder.  Such payments shall be made within five (5)
business days after delivery of the Executive's written requests for payment
accompanied with such

                                       13
<PAGE>
 
evidence of fees and expenses incurred as the Company reasonably may require.

     16.  Beneficiaries.  If Executive should die while any amount is payable to
him hereunder, such amount shall be paid to Executive's devisee, legatee or
other designee or, if there is no such designee, to Executive's estate.

     17.  Arbitration.  Any dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by arbitration,
conducted before a panel of three arbitrators in Chicago, Illinois in accordance
with the rules of the American Arbitration Association then in effect.  The
Company and the Executive shall each be entitled to select one arbitrator, with
the two selected arbitrators choosing the third arbitrator. Judgment may be
entered on the arbitrators' award in any court having jurisdiction.  The expense
of such arbitration shall be borne by the Company.

     18.  Mitigation.  Executive shall not be required to mitigate damages or
the amount of any payment provided for under this Agreement by seeking (and,
except as provided in Section 6(b)(iv), no payment otherwise required hereunder
shall be reduced on account of) other employment.


     IN WITNESS WHEREOF, Executive has hereunto set his hand, and the Company
has caused these presents to be executed in its name and on its behalf, and its
corporate seal to be hereunto affixed and attested by its Secretary, all as of
the day and year first above written.


                                         /s/ Mary D. Allen
                                         ---------------------------------
                                         MARY D. ALLEN


Attest:                                  HARTMARX CORPORATION


/s/ Glenn R. Morgan                      By: /s/ E. O. Hand      
----------------------                       ------------------------------
Glenn R. Morgan                              E.O. Hand, Chairman and
Assistant Secretary                          Chief Executive Officer
 

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