Unassociated Document


     

    EXHIBIT
      10-G-3

    


    


    November
      26, 2007

    


    


    


    


    Mr.
      Taras R. Proczko

    Hartmarx
      Corporation

    101
      North Wacker Drive

    Chicago,
      Illinois 60606

    


    


    
      	
               

            	
              Re:

            	
              Employment
                Agreement dated as of August 8, 2002 (the "Employment Agreement"),
                and
                Severance Agreement 

              Effective
                as of August 8, 2002 (the "Severance Agreement"), each as amended
                through
                the date hereof

            


    

    


    


    Dear
      Mr. Proczko:

    


    Reference
      is made to the Employment Agreement and the Severance Agreement between you,
      as
      Executive, and Hartmarx Corporation (the "Company").  Hartmarx
      Corporation has been authorized by the Compensation and Stock Option Committee
      of the Board of Directors to amend the Employment Agreement and the Severance
      Agreement in certain respects, effective as of the date hereof, as set forth
      below.

    


    
      	
              A.

            	
              Employment
                Agreement

            


    

    


    1.     Section
      1 of the Employment Agreement is hereby amended by deleting the first clause
      thereof, through the semi-colon ";" in line 4, and inserting the
      following:

    


    "The
      Company hereby employs Executive and Executive hereby agrees to remain in the
      employ of the Company for an employment term ("Agreement Period") beginning
      on
      the date of this Agreement, and continuing in effect through December 31,
      2009;"

    


    2.     Section
      3(a) is amended in its entirety to provide as follows:

    


    "(a)During
      the Agreement Period the Company shall pay Executive an annual base salary
      of
      not less than Executive's base salary in effect as of

    


    


    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    Mr.
      Taras R. Proczko

    Hartmarx
      Corporation

    November
      26, 2007

    Page
      2

    


    


    January
      1, 2007 ("Base Salary").  Base Salary shall be paid in accordance with
      the Company's customary payroll practices.  Base Salary may be
      increased at the discretion of the Compensation and Stock Option Committee
      of
      the Company Board of Directors (the "Committee") and once so increased shall
      not
      thereafter be decreased, except for across-the-board reductions similarly
      affecting all executives of the Company."

    


    3.     Section
      4(c)(iii)(D) is amended by deleting the reference to Section 7 and inserting
      a
      reference to Section 8 in its place.

    


    4.     The
      introductory paragraph of Section 4(d) is amended to read as
      follows:

    


    "(d)Good
      Reason.  The Executive may terminate his employment hereunder for
      Good Reason.  Good Reason shall mean the occurrence (without the
      Executive's written consent) of any one of the following acts by the Company,
      or
      failures by the Company to act, each of which shall be deemed to be a material
      negative change in the terms and conditions of Executive's
      employment:"

    


    5.     Section
      5(a) is amended by deleting the reference to Section 9 and inserting a reference
      to Section 10 in its place.

    


    6.    Section
      6(b)(iii) is amended by deleting the second sentence thereof and inserting
      the
      following in its place:

    


    "Such
      payments will be made within five (5) days of the date on which MIP payments
      are
      made to other MIP participants after the close of each fiscal year, but in
      any
      case not later than March 15 after the close of such fiscal year, and will
      include the cash value, determined without regard to any restrictions on the
      sale thereof, of restricted stock."

    


    7.     Section
      6(b)(v) is amended in its entirety to provide as follows:

    


    "(v)During
      the Severance Period the Company shall arrange to provide the Executive with
      life, disability, accident and health insurance benefits ("Welfare Benefits")
      substantially similar in all material respects to those which the Executive
      is
      receiving immediately prior to the Date of

    


     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      Mr.
        Taras R. Proczko

      Hartmarx
        Corporation

      November
        26, 2007

      Page
        3

      


    

    
 

    Termination
      (without giving effect to any decrease therein which constitutes the basis,
      or
      one of the bases, upon which the Notice of Termination is based), or if such
      benefits are not available or the provision of such benefits would not be
      allowed under the terms of such plans, the Company shall pay Executive the
      after-tax economic equivalent thereof.  If the Executive receives, or
      becomes eligible to receive, Welfare Benefits from another source, then the
      Welfare Benefits otherwise receivable by the Executive pursuant to this Section
      6(b)(v) shall be reduced to the extent of such other Welfare Benefits received
      by, or made available to, the Executive during the Severance Period (and any
      such Welfare Benefits received by or made available to the Executive shall
      be
      reported to the Company by the Executive).  Nothing herein shall be
      deemed to limit Executive's rights, if any, to thereafter participate in any
      retiree medical plan then in effect."

    


    8.    New
      Section 7 is inserted as follows:

    


    "7.   Internal
      Revenue Code Section 409A.

    


    (a)Notwithstanding
      anything to the contrary set forth in Sections 6(b)(i) through (ix) or elsewhere
      in this Agreement, Executive's entitlement to a series of installments payments
      shall be treated and shall be deemed to be an entitlement to a series of
      separate payments within the meaning of Section 409A of the Internal Revenue
      Code of 1986, as amended (the "Code") and the regulations
      thereunder.

    


    (b)Any
      severance benefits paid within the later of (i) 2-1/2 months of the end of
      the
      Company's taxable year containing the Executive's severance from employment,
      or
      (ii) 2-1/2 months of the end of the Executive's taxable year containing the
      severance from employment shall be exempt from Section 409A and shall be paid
      in
      accordance with Section 6(b).  Severance benefits subject to this
      Section 7(b) shall be treated and shall be deemed to be an entitlement to a
      separate payment within the meaning of Section 409A of the Code and the
      regulations thereunder.

    


    (c)To
      the extent severance benefits are not exempt from Section 409A under Section
      7(b) above, any benefits paid in the first 6 months following the Executive's
      severance from employment that are equal to or less than the lesser of the
      amounts described in Treasury Regulation Section

    


    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      Mr.
        Taras R. Proczko

      Hartmarx
        Corporation

      November
        26, 2007

      Page
        4

      


    

     

    
 

    1.409A-1(b)(9)(iii)(A)(1)
      and (2) shall be exempt from Section 409A and shall be paid in accordance with
      Section 6(b).  Severance benefits subject to this Section 7(c) shall
      be treated and shall be deemed to be an entitlement to a separate payment within
      the meaning of Section 409A of the Code and the regulations
      thereunder.

    


    (d)To
      the extent severance benefits are not exempt from Section 409A under Section
      7(b) or 7(c) above, any benefits paid equal to or less than the applicable
      dollar amount under Section 402(g)(1)(B) of the Code for the year of severance
      from employment shall be exempt from Section 409A in accordance with Treasury
      Regulation Section 1.409A-1(b)(9)(v)(D) and shall be paid in accordance with
      Section 6(b).  Severance benefits subject to this Section 7(d) shall
      be treated and shall be deemed to be an entitlement to a separate payment within
      the meaning of Section 409A of the Code and the regulations
      thereunder.

    


    (e)To
      the extent severance benefits are not exempt from Section 409A pursuant to
      Section 7(b), 7(c) or 7(d) above, and to the extent the Executive is a
      "specified employee" (as defined below), payments due to the Executive under
      Section 6 shall begin no sooner than six months after the Executive's severance
      from employment (other than for Death); provided, however, that any payments
      not
      made during the six (6) month period described in this Section 7(e) due to
      the
      6-month delay period required under Treasury Regulation Section 1.409A-3(i)(2)
      shall be made in a single lump sum as soon as administratively practicable
      after
      the expiration of such six (6) month period, with interest thereon computed
      at
      the rate set forth in Section 17 hereof, and the balance of all other payments
      required under this Agreement shall be made as otherwise scheduled in this
      Agreement.

    


    (f)For
      purposes of this Section 7, any reference to severance of employment or
      termination of employment shall mean a "separation from service" as defined
      in
      Treasury Reg. Section 1.409A-1(h).  For purposes of this Agreement,
      the term "specified employee" shall have the meaning set forth in Treasury
      Reg.
      Section 1.409A-1(i).  The determination of whether the Executive is a
      "specified employee" shall be made by the Employer in good faith applying the
      applicable Treasury regulations.

    


    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     

    
      Mr.
        Taras R. Proczko

      Hartmarx
        Corporation

      November
        26, 2007

      Page
        5

      



    

    


    (g)Notwithstanding
      anything to the contrary set forth in this Agreement, and in addition to any
      tax
      gross-up payments to which Executive may be entitled under any other agreement
      between Executive and Company, if any of the amounts payable to Executive
      hereunder are or become subject to excise or other tax liability (including
      interest and penalties) that may be assessed by the IRS pursuant to Section
      409A
      or any other section of the Code and imposed upon Executive, the Company shall
      reimburse and gross-up Executive in an amount sufficient so that such payments
      and benefits received by Executive hereunder will be so received without
      reduction for any such taxes, interest or penalties.  Such gross-up
      payment shall be made promptly after the assessment of such excise or other
      tax
      liability (including interest and penalties); however, in any event, such
      gross-up payment shall be made no later than the end of Executive's taxable
      year
      next following his taxable year in which the related taxes, interest or
      penalties are remitted."

    


    9.     Sections
      7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20 and 21, are hereby
      re-designated as Sections 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20,
      21
      and 22, respectively, and all references thereto shall be references to the
      re-designated Section numbers.

    


    10.     Section
      18 is amended to provide as follows:

    


    "18.Beneficiaries.  If
      Executive should die while any amount is payable to him hereunder, such amount
      shall be paid in a single lump sum to Executive's devisee, legatee or other
      designee or, if there is no such designee, to Executive's estate."

    


    


    
      	
              B.

            	
              Severance
                Agreement

            


    

    


    1.     Section
      2 is amended by deleting the references to Section 7 and Section 12 and
      inserting references to Section 8 and Section 13, respectively.

    


        2.     The
      introductory paragraph of Section 4(d) is amended to read as
      follows:

    


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

    


     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     

    
      Mr.
        Taras R. Proczko

      Hartmarx
        Corporation

      November
        26, 2007

      Page
        6

      


    

     

    
 

    Change
      in Control, (without the Executive's written consent) of any one of the
      following acts by the Company, or failures by the Company to act, each of which
      shall be deemed to be a material negative change in the terms and conditions
      of
      Executive's employment:"

    


    3.    Section
      5(a) is amended by deleting the reference to Section 10 and inserting a
      reference to Section 11 in its place.

    


    4.    Section
      6(b)(iv) is amended in its entirety to provide as follows:

    


    "(iv)During
      a period of thirty-six (36) months (the "Severance Period") the Company shall
      arrange to provide the Executive with life, disability, accident and health
      insurance benefits ("Welfare Benefits") substantially similar in all material
      respects to those which the Executive is receiving immediately prior to the
      Date
      of Termination (without giving effect to any adverse amendment to, or
      elimination of, such benefits made after a Change in Control); provided,
      however, if the termination of Executive's employment after a Change in Control
      and during the Agreement Period by the Company without Cause or by Executive
      for
      Good Reason hereunder occurs after Executive has attained the age of 57 years,
      the Welfare Benefits to be provided by the Company shall continue to be provided
      until such time that Executive becomes Medicare eligible and is covered by
      Medicare.  If any such Welfare Benefits are not available or the
      provision of such benefits would not be allowed under the terms of such plans,
      the Company shall pay Executive the after-tax economic equivalent
      thereof.  If the Executive receives, or becomes eligible to receive,
      Welfare Benefits from another source, then the Welfare Benefits otherwise
      receivable by the Executive pursuant to this Section 6(b)(iv) shall be reduced
      to the extent of such other Welfare Benefits received by, or made available
      to,
      the Executive during the Severance Period (and any such Welfare Benefits
      received by or made available to the Executive shall be reported to the Company
      by the Executive).  Nothing herein shall be deemed to limit
      Executive's rights, if any, to thereafter participate in any retiree medical
      plan then in effect.  Executive covenants and agrees that he shall
      apply for Medicare coverage on his first Medicare eligibility
      date."

     

    
 

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      Mr.
        Taras R. Proczko

      Hartmarx
        Corporation

      November
        26, 2007

      Page
        7

      



    

    


    5.     New
      Section 7 is inserted as follows:

    


    "7.Internal
      Revenue Code Section 409A.

    


    (a)Notwithstanding
      anything to the contrary set forth in Sections 6(b)(i) through (viii) or
      elsewhere in this Agreement, Executive's entitlement to a series of installments
      payments shall be treated and shall be deemed to be an entitlement to a series
      of separate payments within the meaning of Section 409A of the Internal Revenue
      Code of 1986, as amended (the "Code") and the regulations
      thereunder.

     

    (b)Any
      severance benefits paid within the later of (i) 2-1/2 months of the end of
      the
      Company's taxable year containing the Executive's severance from employment,
      or
      (ii) 2-1/2 months of the end of the Executive's taxable year containing the
      severance from employment shall be exempt from Section 409A and shall be paid
      in
      accordance with Section 6(b).  Severance benefits subject to this
      Section 7(b) shall be treated and shall be deemed to be an entitlement to a
      separate payment within the meaning of Section 409A of the Code and the
      regulations thereunder.

    


    (c)To
      the extent severance benefits are not exempt from Section 409A under Section
      7(b) above, any benefits paid in the first 6 months following the Executive's
      severance from employment that are equal to or less than the lesser of the
      amounts described in Treasury Regulation Section 1.409A-1(b)(9)(iii)(A)(1)
      and
      (2) shall be exempt from Section 409A and shall be paid in accordance with
      Section 6(b).  Severance benefits subject to this Section 7(c) shall
      be treated and shall be deemed to be an entitlement to a separate payment within
      the meaning of Section 409A of the Code and the regulations
      thereunder.

    


    (d)To
      the extent severance benefits are not exempt from Section 409A under Section
      7(b) or 7(c) above, any benefits paid equal to or less than the applicable
      dollar amount under Section 402(g)(1)(B) of the Code for the year of severance
      from employment shall be exempt from Section 409A in accordance with Treasury
      Regulation Section 1.409A-1(b)(9)(v)(D) and shall be paid in accordance with
      Section 6(b).  Severance benefits subject to this Section 7(d) shall
      be treated and shall be deemed to be an entitlement to a

    


    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      Mr.
        Taras R. Proczko

      Hartmarx
        Corporation

      November
        26, 2007

      Page
        8

      


    

     

    
 

    separate
      payment within the meaning of Section 409A of the Code and the regulations
      thereunder.

    


    (e)To
      the extent severance benefits are not exempt from Section 409A pursuant to
      Section 7(b), 7(c) or 7(d) above, and to the extent the Executive is a
      "specified employee" (as defined below), payments due to the Executive under
      Section 6 shall begin no sooner than six months after the Executive's severance
      from employment (other than for Death); provided, however, that any payments
      not
      made during the six (6) month period described in this Section 7(e) due to
      the
      6-month delay period required under Treasury Regulation Section 1.409A-3(i)(2)
      shall be made in a single lump sum as soon as administratively practicable
      after
      the expiration of such six (6) month period, with interest thereon computed
      at
      the rate set forth in Section 18 hereof, and the balance of all other payments
      required under this Agreement shall be made as otherwise scheduled in this
      Agreement.

    


    (f)For
      purposes of this Section 7, any reference to severance of employment or
      termination of employment shall mean a "separation from service" as defined
      in
      Treasury Reg. Section 1.409A-1(h).  For purposes of this Agreement,
      the term "specified employee" shall have the meaning set forth in Treasury
      Reg.
      Section 1.409A-1(i).  The determination of whether the Executive is a
      "specified employee" shall be made by the Employer in good faith applying the
      applicable Treasury regulations.

    


    (g)Notwithstanding
      anything to the contrary set forth in this Agreement, and in addition to any
      tax
      gross-up payments to which Executive may be entitled under any other agreement
      between Executive and Company, if any of the amounts payable to Executive
      hereunder are or become subject to excise or other tax liability (including
      interest and penalties) that may be assessed by the IRS pursuant to Section
      409A
      or any other section of the Code and imposed upon Executive, the Company shall
      reimburse and gross-up Executive in an amount sufficient so that such payments
      and benefits received by Executive hereunder will be so received without
      reduction for any such taxes, interest or penalties.  Such gross-up
      payment shall be made promptly after the assessment of such excise or other
      tax
      liability (including interest and penalties); however, in any event, such
      gross-up payment shall be made no later than the end of Executive's taxable
      year
      next following his taxable year in which the related taxes, interest or
      penalties are remitted."

    


     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      Mr.
        Taras R. Proczko

      Hartmarx
        Corporation

      November
        26, 2007

      Page
        9

      



    

    


    6.     Sections
      7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21 and 22 are hereby
      re-designated as Sections 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20,
      21,
      22 and 23, respectively, and all references thereto shall be references to
      the
      re-designated Section numbers.

    


    7.     Section
      19 is amended to provide as follows:

    


    "19.Beneficiaries.  If
      Executive should die while any amount is payable to him hereunder, such amount
      shall be paid in a single lump sum to Executive's devisee, legatee or other
      designee or, if there is no such designee, to Executive's estate."

     

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
 

    
      Mr.
        Taras R. Proczko

      Hartmarx
        Corporation

      November
        26, 2007

      Page
        10

      


    

     

     

     

    Please
      sign both copies of this letter
      where indicated below evidencing your agreement to these amendments to the
      Employment Agreement and Severance Agreement.  When fully executed,
      this letter will serve as an amendment to the Employment Agreement and Severance
      Agreement and, except as expressly amended by this letter, the Employment
      Agreement and Severance Agreement shall each remain in full force and effect
      in
      accordance with their respective terms.

    


    Very
      truly yours,

    


    /s/
      RAYMOND F. FARLEY

    


    Raymond
      F. Farley, Chairman

    Compensation
      and Stock Option

    Committee
      of the Board of Directors

    


    


    


    


    


    


    


    


    


    


    


    Agreed
      and Accepted this

    26th
      day of November, 2007

    


    


    


     /s/
      Taras R. Proczko

    Taras
      R. Proczko