exhibit10g2.htm


     

     

    EXHIBIT
10-G-2

     

    November
19, 2008

     

    Mr. James
T. Conners

    Vice
President, Controller

    Hartmarx
Corporation

    101 North
Wacker Drive

    Chicago,
Illinois 60606

     

    Dear
Jim:

     

    Hartmarx
Corporation ("Hartmarx")
has been authorized by its Board of Directors to take appropriate steps approved
by the Compensation and Stock Option Committee to induce your continued
attention to your assigned duties as an important Company executive in the event
of a potential Change in Control, although not now contemplated, of
Hartmarx.

     

    Accordingly,
if you agree to remain employed by Hartmarx and/or any subsidiary of Hartmarx
(collectively, the "Company")
until a Change in Control, Hartmarx agrees to pay you the severance benefit
described below ("Severance
Payment") in the event of the termination of your employment at any time
during the twenty-four (24) month period next following a Change in Control for
any reason other than (i) your death, disability or retirement;
(ii) by the Company for Cause (as hereinafter defined); or (iii) by
you for other than Good Reason (as hereinafter defined).

     

    The
initial term of this Agreement continues for one year, and shall be
automatically extended each day by one day to create a new one year term until
the Company delivers written notice to you or you deliver written notice to the
Company, in either case, to the effect that the term of this Agreement shall
expire on a date specified in the notice that is not less than twelve (12)
months after the date the notice is delivered to the Company or you,
respectively, provided, however, that if a Change in Control shall occur during
the initial or extended period, then this Agreement shall continue for a period
of twenty-four (24) months beyond the month in which such a Change in Control
shall be deemed to have occurred, and provided further that if an Imminent
Control Change Date (as defined below) occurs before the end of the term of this
Agreement, then the notice not to extend this Agreement shall be void and of no
further effect.  "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.  A "Change
in Control" shall be deemed to have occurred if:

    
      	 	
               

              (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 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 66b% 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 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 at least 66b% 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 you (alone or with others) acquire or
retain, 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 you (or others acting in
concert with you) 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 (i) any employee plan established by the Company,
(ii) 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, (iii) an underwriter temporarily holding securities pursuant
to an offering of such securities, or (iv) 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.

     

    The
Severance Payment will be equal to (i) 50% of your Annual Compensation plus
one-twelfth (1/12) of your Annual Compensation for each of your full or partial
years of employment by the Company at the time of your termination, up to twelve
years if you are under age 50, otherwise, up to eighteen years; plus
(ii) the excess of the value of all shares of Hartmarx common stock
issuable upon exercise of then outstanding stock options granted to you under
any Hartmarx stock option plan (whether or not then exercised or fully
exercisable), over the aggregate exercise price of such options.  All
such options shall be cancelled upon the making of said payment.  For
purposes of calculating your Severance Payment, the term "Annual
Compensation" means the average annual rate of compensation payable to
you by the Company for the three (3) calendar years immediately preceding the
calendar year in which a Change in Control occurs, including, without
limitation, all compensation income recognized as a result of your exercise of
Hartmarx stock options (or Stock Appreciation Rights) or the sale of the stock
so acquired, or earned by you but not paid for any reason other than your
agreement to postpone and defer such payment.  In the event that you
have not been employed by the Company for at least three (3) calendar years
immediately preceding the calendar year in which a Change in Control occurs,
"Annual Compensation" shall mean the average annual rate of compensation payable
to you by the Company for such period of time as you have been employed by the
Company immediately preceding the calendar year in which a Change in Control
occurs, including, without limitation, all compensation income recognized as a
result of your exercise of Hartmarx stock options (or Stock Appreciation Rights)
or the sale of the stock so acquired, or earned by you but not paid for any
reason other than your agreement to postpone and defer such
payment.

     

    In
addition, and with reference to Internal Revenue Code Section 409A, you and the
Company agree that:

     

    (a)           Notwithstanding
anything to the contrary set forth in clause (i) and clause (ii) in the
immediately preceding paragraph or elsewhere in this Agreement, your entitlement
to a series of installments payments, if any, 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 Payments paid within the later of (i) 2-1/2 months of the end of the
Company's taxable year in which your severance from employment occurred, or (ii)
2-1/2 months of the end of your taxable year in which your severance from
employment occurred shall be exempt from Section 409A and shall be paid in
accordance with this Agreement.  Severance Payments subject to this
paragraph (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 Payments are not exempt from Section 409A under paragraph
(b) above, any benefits paid in the first 6 months following your 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 this
Agreement.  Severance Payments subject to this paragraph (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 Payments are not exempt from Section 409A under paragraphs
(b) or (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
this Agreement.  Severance Payments subject to this paragraph (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 Payments are not exempt from Section 409A pursuant to
paragraphs (b), (c) or (d) above, and to the extent you are a "specified
employee" (as defined below), payments due to you under this Agreement shall be
paid in a lump sum after six months have elapsed


    
      
         


      

      
         


        
          
 

      

      
         


      

    


     

    following
your severance from employment (other than for Death); provided, however, that
any payments not made during the six (6) month period described in this
paragraph (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 the first full paragraph
on page 6 hereof.

     

    (f)           For
purposes of this Agreement, 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 you are 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 you may be entitled under any other agreement between
you and Company, if any of the amounts payable to you 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 you, the Company shall reimburse you and pay you a
gross-up in an amount sufficient so that such payments and benefits received by
you 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 your taxable year next following the taxable year in which the
related taxes, interest or penalties are remitted.

     

    Termination
of your employment for "Cause"
means termination because of (i) your willful and continued failure to
substantially perform your duties with the Company (other than resulting from
your disability or after you have notified the Company that you intend to
terminate your employment for Good Reason) after a written demand for
substantial performance is delivered to you by the Board, which demand
specifically identifies the manner in which the Board believes you have not
substantially performed your duties; or (ii) your willful engaging in wrongful
conduct which is demonstrably and materially injurious to the Company; provided,
however, that no act or failure to act on your part shall be deemed "willful"
unless done, or omitted to be done, in bad faith and without reasonable belief
that your action or omission was in the best interest of the
Company.  In the event that the existence of Cause shall become an
issue in any action or proceeding between the parties, the Company shall have
the burden of establishing by clear and convincing evidence that the actions or
omissions did in fact occur and do constitute Cause and that you failed to
correct such conduct.  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.  Termination of your employment for "Good
Reason" means your termination after the Company has taken any action
without your express written consent, which directly or indirectly reduces or
deprives you of any material benefit enjoyed by you or any of your beneficiaries
immediately prior to a Change in Control, including, without limitation, the
occurrence of any of the following, each of which shall be deemed to be a
material negative change in the terms and conditions of your
employment:

     

    
      	 
      	
              (A)

            	
              the
      assignment to you of any duties inconsistent with your status as Vice
      President, Controller, Hartmarx Corporation, or a substantial adverse
      alteration in the nature or status of your responsibilities from those in
      effect immediately prior to a Change in Control;

            
	 
      	 
      	 
      
	 
      	
              (B)

            	
              a
      reduction in your annual base salary and/or bonus opportunity as in effect
      immediately prior to a Change in Control;

            
	 
      	 
      	 
      
	 
      	
              (C)

            	
              the
      Company's requiring you to be based at a location more than 50 miles
      from your principal place of employment immediately prior to a Change in
      Control;

            
	 
      	 
      	 
      
	 
      	
              (D)

            	
              the
      Company's failure to:  (i) pay you any portion of your
      compensation, including bonus and/or deferred compensation, within seven
      (7) days of its due date; (ii) continue any compensation or benefit
      plan in which you participate, or to continue your
      participation

            
	 
      	 
      	 
      


    

     


    
      
         


      

      
         


        
          
 

      

      
         


      

    


     

    
      	 
      	 
      	
              therein
      on a basis not materially less favorable, both in terms of the amount of
      benefits provided and the level of your participation relative to other
      participants; (iii) continue to provide you with benefits
      substantially similar to those you enjoy at the time of a Change in
      Control; (iv) to provide you with the number of paid vacation days to
      which you may then be entitled on the basis of years of service with the
      Company in accordance with the Company's normal vacation policy in effect
      at the time of a Change in Control; or (v) to obtain a satisfactory
      agreement from any successor to assume and agree to perform this
      Agreement.

            


    

     

    If you
are employed by the Company upon a Change in Control and simultaneously or
thereafter become eligible to receive a Severance Payment, it will be paid to
you, in a lump sum, immediately upon your termination of employment in addition
to all other amounts to which you may be entitled under any employment
agreement(s) and/or compensation plan(s) of the Company.  Hartmarx
will also pay or reimburse you for all legal fees, accounting, expert witness or
other fees, costs and expenses which you incur (together with an additional
amount such that the net amount retained by you, after deduction of any federal,
state and local income tax upon the payment provided by this sentence shall be
equal to the amount you are paid or reimbursed pursuant to this sentence) to
obtain any benefit (including the Severance Payment) to be provided to you
pursuant to this Agreement.  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.  If you should die while any amount
is payable to you hereunder, such amount shall be paid to your devisee, legatee
or other designee or, if there is no such designee, to your estate.

     

    Nothing
in this Agreement is intended to give you the right to be retained in the employ
of Hartmarx or any of its subsidiaries or to interfere with the Company's right
to discharge you at any time for any reason.  Prior to a Change in
Control, you will have no right or interest whatsoever in or to the Severance
Payment or any portion thereof.

     

    The
Company shall establish irrevocable standby letters of credit issued by Wachovia
Bank, National Association, or another bank having combined capital and surplus
in excess of $500 million to secure the Company's obligations to
you.  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 this Agreement in the amount of $5 million, which amount shall
      be available to you 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 you pursuant to this Agreement
      if you were terminated by the Company without Cause following a Change in
      Control, which amount shall be available solely to
  you.

              


      

    

     

     

    The
amount of the letter of credit described in paragraph (B) above, shall be
increased by the Company from time to time so that such amount is never less
than the amount of your Severance Benefits.  The letters of credit
described in paragraphs (A) and (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.  The Company shall establish an escrow account for each of the
letters of credit 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.

     

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    Upon
receiving this letter, please sign both copies where indicated (acknowledging
your agreement to the foregoing) and return one fully executed counterpart as
soon as possible.  Upon your execution and return of this letter, the
terms and conditions of this letter shall control and govern and shall replace
and supersede all prior agreements between you and the Company relating to the
subject matter hereof.

     

    
      	 
      	
              Very
      truly yours,

            
	 
      	 
      
	 
      	
              HARTMARX
      CORPORATION

            
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	
              By:

            	
              /s/
      HOMI B. PATEL

            	 
      
	 
      	 
      	
              Hoi
      B. Patel, Chairman and

            
	
              AGREED
      AND ACCEPTED:

            	 
      	
              Chief
      Executive Officer

            
	 
      	 
      
	 
      	 
      
	 
      	 
      
	
              /s/
      JAMES T. CONNERS

            	 
      	 
      
	
              James
      T. Conners

            	 
      
	
              Vice
      President, Controller

            	 
      
	
              Hartmarx
      Corporation