<PAGE>

                                                                  EXHIBIT 10-G-1
                                                                  --------------

                    AMENDED AND RESTATED SEVERANCE AGREEMENT
                    ----------------------------------------

       THE SEVERANCE AGREEMENT entered into as of the 1st day of August, 1996,
by and between HARTMARX CORPORATION, a Delaware corporation ("Company"), and
ELBERT O. HAND ("Executive") is herein amended and restated effective as of
November 27, 2000.

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

       WHEREAS, the Company recognized at the time the Severance Agreement was
entered into, and continues to recognize 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 (including
amending the Severance Agreement) 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 Executive agree to enter into this Agreement,
amending, restating and superseding that certain Severance Agreement dated as of
August 1, 1996; and

       WHEREAS, the Company and the Executive intend to enter into an amended
and restated 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
            ----------------
effective date hereof and shall continue in effect through December 31, 2002;
provided, however, that (a) on December 31, 2001 and each anniversary thereof
the Agreement Period shall be automatically extended by one year unless prior to
such date the Company delivers written notice to Executive or Executive delivers
written notice to the Company, in either case to the effect that the Agreement
Period shall not be so extended; (b) 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; and (c) if an Imminent Control Change Date (as
defined below) occurs before the end of the Agreement Period, then the notice
not to extend this Agreement shall be void and of no further effect.
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"Imminent Control Change Date" means any date on which (i) the Board of
 ----------------------------
Directors of the Company adopts a resolution by vote of a majority of Directors
at a meeting at which a quorum is present to the effect that an Imminent Control
Change Date for purposes of this Agreement has occurred; (ii) the Company enters
into an agreement, the consummation of which would result in a Change in Control
of the Company; or (iii) such resolution or agreement remains effective and
unrevoked. In the event that such resolution or agreement is revoked or declared
ineffective, the Imminent Control Change Date shall be deemed to no longer to
exist.

       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 12 hereof, no 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:

          (a) 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 merger or
consolidation which would result in the record holders of 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) in
substantially the same proportions as their ownership immediately prior to such
merger or consolidation 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; provided that this
exclusion shall only apply to the percentage obtained by merger or consolidation
and shall cease to apply in the event additional securities are purchased in
another transaction; or

          (b) during any period of two consecutive years (not including any
period prior to the date of the original Severance 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 66% 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 unless the initial assumption
of office of such subsequently-elected or appointed director was in connection
with (i) an actual or threatened election contest, including a consent
solicitation, relating to the election or removal of one or more

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members of the Board, (ii) a "tender offer" (as such term is used in Section
14(d) of the Securities Exchange Act of 1934), (iii) a proposed merger or
consolidation of the Company, or (iv) a request, nomination or suggestion of any
one or more Beneficial Owner of voting securities of the Company representing
20% or more of the aggregate voting power of the voting securities of the
Company or the surviving corporation, as applicable)) cease for any reason to
constitute 66 2/3% of the Board then in office; or

          (c) 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 merger or consolidation which would result in the record holders of
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) in substantially the same proportions as their ownership
immediately prior to such merger or consolidation 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

          (d) 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 combined voting power of the Company's
outstanding securities 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)

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<PAGE>

the Company or any of its affiliates (as defined in Rule 12b-2 promulgated under
the Exchange Act) prior to the transaction resulting in the Change in Control,
(3) an underwriter temporarily 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".  Disability means a mental or physical condition
which renders Executive unable or incompetent to carry out the material job
responsibilities which such Executive held or the material duties to which
Executive was assigned at the time the disability was incurred, which has
existed for at least six (6) months and which in the certified opinion of a
physician mutually agreed upon by the Company and Executive (which agreement
neither party shall unreasonably withhold) is expected to be permanent or to
last for an indefinite duration or a duration in excess of six (6) months.

          (c) Cause.  The Company may terminate the Executive's employment
              -----
hereunder for Cause (as defined in Section 4(c)(ii)) solely in accordance with
the procedures set forth in Section 4(c)(i).  If the Company fails to comply
with each of the requirements described in Section 4(c)(i), any termination of
employment shall be deemed a termination by the Company without Cause for
purposes of this Agreement.

            (i) The Company may terminate the Executive's employment for Cause
  only upon satisfying each of the following requirements:

            (A) 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;

            (B) A meeting of the Board shall be called for the stated purpose of
                determining whether Executive's acts or omissions constitute
                Cause, whether the Executive failed to correct such conduct and,
                if so, whether to terminate Executive's employment for Cause;

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<PAGE>

            (C) No fewer than forty-five (45) days prior to the date of such
                meeting, the Company provides Executive and each member of the
                Board with written notice (the "Notice of Consideration") of its
                                                -----------------------
                intent to consider termination of Executive's employment for
                Cause, including (1) a detailed description of the specific
                reasons which form the basis for such consideration, (2) the
                date, time and location of such meeting of the Board, and (3)
                Executive's rights under clause (D) below;

            (D) Executive shall have the opportunity, if he so elects, to appear
                before the Board in person and, at Executive's option, with
                legal counsel, and to present to the Board a written response to
                the Notice of Consideration;

            (E) Executive's employment may be terminated for Cause only if (1)
                the Executive failed to correct the conduct constituting Cause
                within thirty (30) days of his receipt of the notice described
                in clause (A) above, (2) the acts or omissions specified in the
                Notice of Consideration did in fact occur and do constitute
                Cause as defined in this Agreement, (3) the Board makes a
                specific determination by an affirmative vote of all of the
                members of the Board (excluding for these purposes Executive) to
                such effect and to the effect that Executive's employment should
                be terminated for Cause and (4) the Company thereafter provides
                Executive with a Notice of Termination which specifies in detail
                the basis of such termination of employment for Cause and which
                notice shall be consistent with the reasons set forth in the
                Notice of Consideration.

           (ii) For purposes of this Agreement, the Company shall have "Cause"
  to terminate the Executive's employment hereunder upon the Executive's:

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

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

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

For purposes of clauses (B) and (C) of Section 4(c)(ii), Cause shall not include
any act or omission that Executive believed in good faith to have been in or not
opposed to the interest of the Company (without intent of Executive to gain
therefrom, directly or

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<PAGE>

indirectly, a profit to which he was not legally entitled), or any act or
omission of which any member of the Board, the Chief Executive Officer or any
other executive officer of the Company who is not a party to such act or
omission has had actual knowledge for at least twelve months.

In the event that the existence of Cause shall become an issue in any action or
proceeding between the parties, the Company shall, notwithstanding the
determination referenced in clause (E) Section 4(c)(i) above, have the burden of
establishing by clear and convincing evidence that the actions or omissions
specified in the Notice of Consideration did in fact occur and do constitute
Cause, that Executive failed to correct such conduct and that the Company has
satisfied the substantive and procedural requirements of Section 4(c). Unless
the Company so establishes, by clear and convincing evidence, any termination of
employment shall be deemed a termination by the Company without Cause for all
purposes of this Agreement.

          (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:

            (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) failure of the Executive to be elected a director of the
      Company; or

            (iii) Any change in (A) the provisions of the Company's
      bylaws describing, or (B) the relative duties and responsibilities of, the
      office of Chairman and Chief Executive Officer or

            (iv) the assignment to Executive of any duties inconsistent with
      Executive's status as Chairman and Chief Executive Officer 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

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<PAGE>

            (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 economic equivalent 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 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 fifty (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; or

            (xi) causing or requiring Executive to report to anyone other than
      the Board; or

            (xii) the Company's material breach of this Agreement.

       Notwithstanding the foregoing, no inadvertent and isolated event shall
constitute "Good Reason" unless the Executive shall have notified the Company in

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<PAGE>

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.  Any determination by
Executive that any of the foregoing events has occurred and constitutes Good
Reason shall be conclusive and binding for all purposes unless the Company
establishes by clear and convincing evidence that Executive did not have any
reasonable basis for such a determination.

       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 10.  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 thirty (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, the Company shall have no further obligations
to provide Executive with the severance benefits described under Sections
6(b)(i) through (viii) of this Agreement but shall continue to provide the other
payments and benefits provided for 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 five (5) days of the Date of Termination, equal to

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<PAGE>

    three times the higher of the Executive's annual base salary as of the Date
    of Termination 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
    ten (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 (or if greater, the year in
    which this Agreement is effective), calculated based on the assumption that
    the Company achieves its "Target" level (as defined in the MIP) for such
    year (annual bonus based on such assumption, "Target 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
    ten (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 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

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<PAGE>

    Change in Control), 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)(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 of
    the term of such options as set forth in the grant document evidencing same,
    as though Executive were to continue as an active employee of the Company
    for such period of exercisability.

            (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.

            (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 Target 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")
    or under any other deferred compensation plan shall be paid to the

                                       10
<PAGE>

    Executive in a lump sum in cash by no later than ten (10) days following the
    Date of Termination. In the event that the supplemental defined benefit plan
    or other deferred compensation plan does not specify the actuarial
    assumptions for determining present value, the present value shall be
    determined using the actuarial assumptions that would be used by the Pension
    Benefit Guaranty corporation for purposes of determining the present value
    of a lump sum distribution on plan 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, the Company shall have no obligations
to provide Executive with the severance benefits described under Sections
6(b)(i) through (viii) of this Agreement but shall continue to provide the other
payments and benefits provided for 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 plan or program of
the Company, including but not limited to the Company's deferred compensation,
benefit or other compensation plans or programs, at the time such payments are
due; (ii) within ten (10) 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 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

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<PAGE>

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 effective marginal rate of federal income taxation
(taking into account the phase out of itemized deductions) 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 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 any interest
received by Executive in connection with the government's refund of such
overpayment. 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.   Change in Control.  Effective as of the date of the Change in
            -----------------
Control, 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 the
Change in Control shall become

                                       12
<PAGE>

immediately exercisable and all restricted stock granted to Executive prior to
the date of the Change in Control shall become fully vested and all restrictions
thereon shall lapse.

       9.   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.

       10.  Any notice required or permitted to be given under this Agreement
shall be sufficient if in writing and, if (i) sent by registered mail or
certified mail, or (ii) personally delivered, or (iii) sent via nationally
recognized courier service, to the Company at its principal executive offices,
to the attention of its Chief Financial Officer, or to Executive at the last
address filed by him in writing with the Committee, as the case may be.

       11.  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.  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.

       13.  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.

       14.  Applicable Law.  The provisions of this Agreement shall be construed
            --------------
in accordance with the internal laws of the State of Illinois without regard to
common law conflicts of laws principles.

                                       13
<PAGE>

       15.  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.

       16.  Attorney's Fees.  The Company also shall pay to the Executive all
            ---------------
legal fees, accounting, expert witness or other fees, costs or expenses incurred
by the Executive (together with an additional amount such that the net amount
retained by Executive, after deduction of any federal, state and local income
and employment taxes on the total payments made pursuant to this paragraph equal
the amount of such fees, costs and expenses incurred by 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.  The amount of taxes for which the
additional amount is paid to Executive shall be determined in the same manner
used for determining the amount of the Gross-Up Payment provided for in Section
7.  Such payments shall be made within five (5) business days after delivery of
the Executive's written requests for payment accompanied with such evidence of
fees and expenses incurred as the Company reasonably may require.

       17.  Interest on Late Payments.  If the Company fails to pay any amount
            -------------------------
provided under this Agreement when due, the Company shall pay interest,
compounded monthly, on such amount at a rate equal to the lesser of (a) (i) the
highest rate of interest charged by the Company's principal lender on its
revolving credit agreements as in effect from time to time during the period of
such nonpayment plus 200 basis points, or (ii) in the absence of such a lender,
300 basis points over the prime commercial lending rate announced by The Wall
Street Journal in effect from time to time during the period of such nonpayment,
or (b) the highest legally-permissible interest rate allowed to be charged under
applicable law.

       18.  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.

       19.  WAIVER OF JURY TRIAL.  THE COMPANY AND EXECUTIVE WAIVE THEIR RIGHTS
            --------------------
TO REQUEST A JURY TRIAL IN ANY LAWSUIT RELATING TO THIS AGREEMENT.

       20.  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.

       21.  Letter of Credit.  The Company shall establish irrevocable standby
            ----------------
letters of credit issued by The Bank of New York or another bank having combined

                                       14
<PAGE>

capital and surplus in excess of $500 million to secure the Company's
obligations to Executive.  Said letters of credit shall be established prior to
an Imminent Control Change Date, and shall be as follows:

          (a) one letter of credit, in substantially the form attached hereto,
to secure the payment of legal fees and related tax gross-up payment as provided
for under Section 16 of this Agreement in the amount of $5 million, which amount
shall be available to the Executive and each other person covered by the letter
of credit; and

          (b) one letter of credit, in substantially the form attached hereto,
to secure the other payments and benefits provided for under this Agreement in
an amount which is not less than the amount of severance and other benefits (the
"Severance Benefits") that would be payable to the Executive pursuant to this
Agreement if the Executive is terminated by the Company without Cause following
a Change in Control, which amount shall be available solely to the Executive.

The amount of the letter of credit described in Section 21(b) above, shall be
increased by the Company from time to time so that such amount is never less
than the amount of the Executive's Severance Benefits.  The letters of credit
described in Sections 21(a) and 21(b) may expire on the date on which the
Imminent Control Change Date ceases to exist. Upon a Change in Control, the
letters of credit shall remain in effect and shall not be subject to termination
prior to their respective Expiry Dates as provided in each such letter of
credit.

       22.  Escrow Account.  The Company shall establish an escrow account for
            --------------
each of the letters of credit described in Section 21 at the time the letters of
credit are established by entering into escrow agreements with LaSalle Bank
National Association, or another bank having combined capital and surplus in
excess of $100 million in substantially the forms attached hereto.


                  [Remainder of page intentionally left blank;
                signatures appear on immediately following page]

                                       15
<PAGE>

       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/ ELBERT O. HAND
                                      ______________________________
                                           Elbert O. Hand

Attest:                               HARTMARX CORPORATION

/s/ TARAS R. PROCZKO                      /s/ GLENN R. MORGAN
____________________________          By: ____________________________
Taras R. Proczko                          Glenn R. Morgan, Executive Vice
Secretary                                 Vice President & CFO

                                       16
<PAGE>

                EXHIBITS HAVE BEEN OMITTED AND WILL BE FURNISHED
                         TO THE COMMISSION UPON REQUEST