SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant / /
Filed by a Party other than the Registrant /X/
Check the appropriate box:
/X/ Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Under Rule 14a-12
HAGGAR CORP.
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(Name of Registrant as Specified in Its Charter)
KAHN BROTHERS & CO., INC.
KAHN BROTHERS & CO. PROFIT SHARING
PLAN & TRUST
THOMAS G. KAHN
MARK E. SCHWARZ
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(Name of Persons(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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/ / Fee paid previously with preliminary materials:
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/ / Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement number,
or the form or schedule and the date of its filing.
(1) Amount previously paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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KAHN BROTHERS & CO., INC.
February , 2003
Dear Fellow Stockholder:
Kahn Brothers & Co., Inc. ("Kahn Brothers") and persons and entities
affiliated with it are the beneficial owners of 837,269 shares of Common Stock
of Haggar Corp. (the "Company"), representing approximately 13.0% of the
outstanding Common Stock of the Company. We do not believe that the current
Board of Directors is acting in your best interests, and we are therefore
seeking your support for the election of our nominees to the Board of Directors
of the Company at the annual meeting of stockholders scheduled to be held in the
Haggar Corp. Conference Center, 6113 Lemmon Avenue, Dallas, Texas 75209 on
________, 2003, at ______ .M. (local time).
We urge you to carefully consider the information contained in the
attached Proxy Statement and then support the efforts of Kahn Brothers to
improve the Company's financial results and corporate governance by signing,
dating and returning the enclosed WHITE proxy today. The attached Proxy
Statement and the enclosed WHITE proxy card are first being furnished to the
stockholders on or about February __, 2003.
If you have already voted for the incumbent management slate you
have every right to change your vote by signing and returning a later dated
proxy.
If you have any questions or require any assistance with your vote,
please contact MacKenzie Partners, Inc., which is assisting us, at their address
and toll-free numbers below.
Thank you for your support,
Thomas G. Kahn
On behalf of Kahn Brothers & Co., Inc.
[MacKenzie Logo]
PRELIMINARY COPY
For the Information of the Securities and Exchange Commission Only
ANNUAL MEETING OF STOCKHOLDERS
OF
HAGGAR CORP.
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PROXY STATEMENT
OF
KAHN BROTHERS & CO., INC.
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PLEASE MAIL THE ENCLOSED WHITE PROXY CARD
Kahn Brothers & Co., Inc. ("Kahn Brothers") and persons and entities
affiliated with it together are one of the largest stockholders of Haggar Corp.,
a Nevada corporation (the "Company"). Kahn Brothers is writing to you in
connection with the election of two directors to the Company's Board of
Directors at the annual meeting of stockholders scheduled to be held in the
Haggar Corp. Conference Center, 6113 Lemmon Avenue, Dallas, Texas 75209 on
_________, 2003, at ______ .M. (local time), including any adjournments or
postponements thereof and any meeting that may be called in lieu thereof (the
"Annual Meeting"). Kahn Brothers has nominated two directors in opposition to
the Company's incumbent director nominees, _________ and __________, whose terms
expire at the Annual Meeting. Kahn Brothers believes that the Board of Directors
of the Company (the "Board of Directors") has not acted in the best interests of
the Company's stockholders. As further described herein, Kahn Brothers believes
that improvement in the Company's financial results and corporate governance
policies will be best achieved through the election of Kahn Brothers nominees.
There can be no assurance that the election of our nominees will improve the
Company's financial results or corporate governance.
This proxy statement (the "Proxy Statement") and the enclosed WHITE
proxy card are being furnished to stockholders of the Company by Kahn Brothers
in connection with the solicitation of proxies from the Company's stockholders
to be used at the Annual Meeting to elect Kahn Brothers' nominees, Thomas G.
Kahn and Mark E. Schwarz (the "Nominees"), to the Board of Directors. As
nominees for director, Messrs. Kahn and Schwarz are deemed to be participants in
this proxy solicitation. As a member of the soliciting group, Kahn Brothers &
Co. Profit Sharing Plan & Trust (the "Kahn Brothers Trust"), an affiliate of
Kahn Brothers, is also deemed to be a participant in this proxy solicitation.
This Proxy Statement and the WHITE proxy card are first being furnished to the
Company's stockholders on or about February __, 2003.
The Company has fixed the record date for determining stockholders
entitled to notice of and to vote at the Annual Meeting as February 7, 2003 (the
"Record Date"). The principal executive offices of the Company are located at
6113 Lemmon Avenue, Dallas, Texas 75209. Stockholders of record at the close of
business on the Record Date will be entitled to vote at the Annual Meeting.
According to the Company, as of the Record Date, there were [6,418,426] shares
of common stock, $.10 par value per share (the "Shares"), outstanding and
entitled to vote at the Annual Meeting. Kahn Brothers, along with all of the
participants in this solicitation, are the beneficial owners of an aggregate of
837,269 Shares, which represents approximately 13.0% of the Shares outstanding
(based on information publicly disclosed by the Company). The participants in
this solicitation intend to vote such Shares for the election of the Nominees.
THIS SOLICITATION IS BEING MADE BY KAHN BROTHERS AND NOT ON BEHALF OF THE BOARD
OF DIRECTORS OR MANAGEMENT OF THE COMPANY. KAHN BROTHERS IS NOT AWARE OF ANY
OTHER MATTERS TO BE BROUGHT BEFORE THE ANNUAL MEETING OTHER THAN THE
RATIFICATION OF THE APPOINTMENT OF THE COMPANY'S AUDITORS. SHOULD OTHER MATTERS,
WHICH KAHN BROTHERS IS NOT AWARE OF A REASONABLE TIME BEFORE THIS SOLICITATION,
BE BROUGHT BEFORE THE ANNUAL MEETING, THE PERSONS NAMED AS PROXIES IN THE
ENCLOSED WHITE PROXY CARD WILL VOTE ON SUCH MATTERS IN THEIR DISCRETION.
WE URGE YOU TO SIGN, DATE AND RETURN THE WHITE PROXY CARD IN FAVOR OF THE
ELECTION OF OUR NOMINEES, WHO ARE DISCUSSED IN THIS PROXY STATEMENT.
IF YOU HAVE ALREADY SENT A PROXY CARD FURNISHED BY THE COMPANY'S MANAGEMENT TO
THE BOARD OF DIRECTORS, YOU MAY REVOKE THAT PROXY AND VOTE AGAINST THE ELECTION
OF THE COMPANY'S NOMINEES BY SIGNING, DATING AND RETURNING THE ENCLOSED WHITE
PROXY CARD. THE LATEST DATED PROXY IS THE ONLY ONE THAT COUNTS. ANY PROXY MAY BE
REVOKED AT ANY TIME PRIOR TO THE ANNUAL MEETING BY DELIVERING A WRITTEN NOTICE
OF REVOCATION OR A LATER DATED PROXY FOR THE ANNUAL MEETING TO KAHN BROTHERS,
C/O MACKENZIE PARTNERS, INC., WHICH IS ASSISTING IN THIS SOLICITATION, OR TO THE
SECRETARY OF THE COMPANY, OR BY VOTING IN PERSON AT THE ANNUAL MEETING.
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IMPORTANT
YOUR VOTE IS IMPORTANT, NO MATTER HOW MANY OR HOW FEW SHARES YOU
OWN. KAHN BROTHERS URGES YOU TO SIGN, DATE, AND RETURN THE ENCLOSED WHITE PROXY
CARD TODAY TO VOTE FOR THE ELECTION OF THE NOMINEES.
The Nominees are committed, subject to their fiduciary duty to the
Company's stockholders, to improving the Company's financial results and
corporate governance. A vote FOR the Nominees will enable you - as the owners of
the Company - to send a message to the Board of Directors that you are committed
to improving financial results and corporate governance.
o If your Shares are registered in your own name, please sign and date
the enclosed WHITE proxy card and return it to Kahn Brothers, c/o
MacKenzie Partners, Inc., in the enclosed envelope today.
o If any of your Shares are held in the name of a brokerage firm,
bank, bank nominee or other institution on the Record Date, only it
can vote such Shares and only upon receipt of your specific
instructions. Accordingly, please contact the person responsible for
your account and instruct that person to execute on your behalf the
WHITE proxy card. Kahn Brothers urges you to confirm your
instructions in writing to the person responsible for your account
and to provide a copy of such instructions to Kahn Brothers, c/o
MacKenzie Partners, Inc., which is assisting in this solicitation,
at the address and telephone numbers set forth below, and on the
back cover of this proxy statement, so that we may be aware of all
instructions and can attempt to ensure that such instructions are
followed.
If you have any questions regarding your proxy,
or need assistance in voting your Shares, please call:
[MacKenzie Logo]
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PROPOSAL 1
ELECTION OF DIRECTORS
REASONS FOR THE SOLICITATION
We are asking you to elect our Nominees in order to:
o remove two incumbent directors up for election;
o elect nominees who support actions that we believe would
improve the financial results and corporate governance of the
Company; and
o elect clearly independent directors.
As further described below, Kahn Brothers believes that the election
of the Nominees represents the best means for the Company's stockholders to
improve the financial results and corporate governance of the Company. Kahn
Brothers and its affiliates, together one of the largest stockholders of the
Company, have a vested interest in the improvement of financial results and
corporate governance. Kahn Brothers believes that the Nominees have extensive
experience in private and public investment, corporate governance and business
management. If elected to the Board of Directors, the Nominees will use their
experience to explore alternatives to improve the financial results and
corporate governance of the Company. There can be no assurance that the election
of our Nominees will in fact improve the operating results and corporate
governance of the Company.
If our investment objectives diverged from those of other investors,
Mr. Kahn could potentially have a conflict of interest between his fiduciary
duties as a director of the Company and his fiduciary duties to his clients.
However, we believe that our investment objectives are generally consistent with
those of other stockholders of the Company. We wish to maximize the value of the
Shares of the Company and to explore alternatives, including strategic
transactions, that may achieve that objective. However, we would not be in favor
of the Company entering into a strategic transaction that valued the Company at
less than its intrinsic value even if the transaction resulted in a short-term
increase in the market price of the Shares of the Company. We also believe that
the Nominees, as members of the Board of Directors, and in cooperation with the
current management, can seek to improve the Company's relationship with the
investor community and seek to identify and pursue strategic alternatives that
would enhance shareholder value.
THE COMPANY'S DISAPPOINTING FINANCIAL RESULTS
The Company's financial results over the past five years have been a
disappointment to Kahn Brothers, and it believes, to many other Company
stockholders.
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SALES:
We believe that the Company has failed to achieve any significant
sales growth in the last five years. According to the Company's Form 10-K for
the fiscal year ended September 30, 1998, its sales were $402.5 million. The
Company's Form 10-K for the fiscal year ended September 30, 2002 indicates that
sales were $481.8 million. Thus, sales over the five-year period increased by
only $79.3 million, a compounded annual rate of 3.7%, including the Company's
1999 acquisition of Jerell Inc. ("Jerell"). Jerell, as stated in the Company's
press release dated December 17, 1998, had annual sales of $66 million for its
fiscal year ended October 31, 1998. Thus, if we subtract the sales of Jerell
from the sales increase of the Company in the past five years and if we account
for the natural inflation in retail selling prices, we believe that the
compounded annual rate of sales growth could be either negative or not
significant.
EARNINGS:
The Company's Forms 10-K for its 1998 through 2002 fiscal years
reflect cumulative net earnings of $10.5 million over the five-year period ended
September 30, 2002. Of such amount, all net earnings were recorded in the three
fiscal years ended September 30, 2000. In the fiscal years ended September 30,
2001 and September 30, 2002, the Company reported net losses of $8.7 million and
$7.5 million, respectively, or total net losses of approximately $16.2 million.
RETURN OF EQUITY:
We believe that the Company's five-year return on stockholders'
equity has also lagged badly. Return on stockholders' equity in a given year is
computed by dividing net income for such year by stockholders' equity as at the
end of the immediately preceding fiscal year. Based upon the Company's net
income (loss) over the five fiscal year period ended September 30, 2002 and its
stockholders' equity as at the end of the five fiscal years ended September 30,
2001, the Company achieved an average annual return on equity over such five
fiscal year period of 1.2%, as shown in the table below:
Fiscal Year Annual Return on Equity
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1998 4.9%
1999 5.7%
2000 5.6%
2001 (5.3%)
2002 (5.0%)
Average 1.2%
By way of comparison, the Lehman Brothers Long Treasury Index (the
"Lehman Index") achieved a compounded annual return over such five fiscal year
period of approximately 10%. The Lehman Index is an unmanaged index that
includes public obligations of the United States Treasury that have remaining
maturities of ten years or more and at least $100 million par amount
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outstanding. We believe that the Lehman Index is an appropriate measure of
comparison because it measures fixed returns from long term government
securities without credit risk but with market risks.
Economic theory dictates that risk and returns are positively
correlated, i.e. if an investor takes more risks, he should get a higher return;
if an investor takes less risks, he should get a lower return. We believe that
the Company competes in an industry which experiences higher risks than holding
United States Treasury securities because of the constantly changing fashion
trends and the low barriers to entry. Therefore, based on established economic
theory mentioned above, we believe that the rate of return on stockholders'
equity for the Company should be higher than that of the Lehman Index.
ACQUISITIONS:
The Company's December 17, 1998 press release, issued in connection
with its acquisition of Jerell, described Jerell as "a leading women's wear
company." The Company stated that the acquisition represented an opportunity for
it to diversify its customer base while providing "an exciting platform from
which to launch a Haggar women's wear brand." The release also described the
acquisition as "the first step in our strategic effort to purchase profitable
growing companies that will be accretive to Haggar shareholders' earnings per
share," and described the "tremendous potential to continue to grow the Jerell
business . . ."
What has actually happened? The Company has made no acquisitions
subsequent to Jerell, which is perhaps fortunate when the results of the Jerell
acquisition are considered. According to the Company's Form 10-K for the fiscal
year ended September 30, 2000 and Form 10-Q for the fiscal quarter ended March
31, 2002, the net acquisition cost of Jerell was $39.3 million, of which $29.0
million represented goodwill. On October 1, 2001, the Company recorded a $15.6
million charge for goodwill impairment related to the acquisition. In just 29
months, 40% of the net acquisition cost had to be written off, a charge to book
value of $2.45 per share, based on shares outstanding as reflected in the
Company's Form 10-Q for the fiscal quarter ended December 31, 2001.
The Company's Form 10-K for the fiscal year ended September 30, 2002
states that the Company "seeks growth through strategic acquisitions of other
apparel businesses." In light of the results of the Jerell acquisition, we are
concerned whether the Board of Directors and Management of the Company possess
the requisite operating and financial acumen to accurately assess the
desirability of other potential acquisitions.
CHARGES TO OPERATIONS:
The Jerell acquisition, in our opinion, should not be the only
source of concern for stockholders of the Company. The Company also recorded a
$20.8 million charge to operations in its Form 10-Q for the fiscal quarter ended
March 31, 2001 (the "March 31, 2001 Form 10-Q"). This included $8.1 million for
employee termination and related costs, $3.1 million for plant and equipment
impairment charges, $8.6 million for legal costs and $1.0 million for other
asset write-downs. This $20.8 million charge, when added to the Jerell-related
$15.6 million charge for goodwill impairment, resulted in the chargeoff of $36.4
million of stockholders' equity in almost a six-month period.
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In addition, as reported in the March 31, 2001 Form 10-Q, the
Company wrote down to no value its $2.1 million investment in its Edinburg,
Texas facility. The Company stated in the March 31, 2001 Form 10-Q that "the net
book value of the Edinburg manufacturing facility and equipment was written off
as the net realizable value of such assets was expected to be insignificant."
The Company's management did not discuss whether they tried to adequately
ascertain the value of the Edinburg facility or what procedures were followed or
whether professional third party experts were engaged before deciding to
write-off the Edinburgh facility. In fact, just a year later, as reported in its
Form 10-Q for the fiscal quarter ended March 31, 2002, the Company completely
reversed the write-off and $2.1 million was recorded under operating income as a
credit to reorganization costs, without, in our opinion, an adequate explanation
by Management as to why there was a change in the net realizable value of the
Edinburg facility.
THE COMPANY NEEDS TO IMPROVE CORPORATE GOVERNANCE
We believe that proper corporate governance procedures and practices
and the level of management accountability that the Board of Directors imposes
are highly relevant to the Company's financial performance. We believe that the
entire Board of Directors should be accountable for its actions each year, by
standing for re-election annually.
The Board of Directors of the Company is classified, with only one
of three classes of directors elected each fiscal year. Thus, it would require
successful proxy contests in two succeeding years to replace a majority of the
present six-member Board of Directors. Furthermore, in October 2002, the Board
of Directors adopted a new Stockholder Rights Plan, or "poison pill," to replace
a then-expiring rights plan. The Stockholder Rights Plan makes it harder to
effect a change of control in the Company and thus provides more job security to
the present Board of Directors and Management of the Company.
We believe that stockholders of the Company deserve a higher level
of accountability, given the Company's recent financial performance. We are
therefore committed to seeking corporate governance reforms. However, even if
the Nominees are elected to the Board of Directors, they will comprise only two
of six directors, and accordingly there can be no assurance that the corporate
governance initiatives the Nominees recommend will be implemented.
ANNUAL ELECTION OF DIRECTORS:
If the Nominees are elected, they will use their best efforts to
cause the Board of Directors to propose to the stockholders of the Company that
the Articles of Incorporation of the Company be amended to declassify the Board
of Directors and to provide for the annual election of all the directors of the
Company. Under Nevada law, any such proposal must be adopted by resolution and
declared advisable by the Board of Directors, either by calling a special
meeting of stockholders entitled to vote on the proposal or directing that the
proposal be considered at the next annual meeting of the stockholders entitled
to vote on the proposal. At the meeting, such proposal must be approved by
holders of a majority of the then outstanding shares entitled to vote.
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We and the Nominees view a classified board of directors as having
the effect of insulating directors from accountability to a corporation's
stockholders. So long as the board of directors is classified into three
classes, a minimum of three annual meetings of stockholders would generally be
required to replace the entire board of directors, absent intervening vacancies.
Consequently, we believe that a classified board of directors makes it difficult
for stockholders to replace incumbent directors and management, even if the
reason for the desired change is inadequate performance. We also believe that
the annual election of directors is the primary means for stockholders to
influence corporate governance policies and to hold directors accountable for
the implementation of these policies.
We further believe that the entire board of directors should be
elected annually so that it best reflects the stockholders' current views and
the direction their company should take. With a classified board, it is more
probable to have directors that don't represent the views of current
stockholders.
REDEMPTION OF POISON PILL:
If the Nominees are elected, they also will use their best efforts
to cause the Board of Directors to terminate the Company's poison pill by
redeeming all of the outstanding rights under the Company's poison pill and
filing evidence of such redemption with the rights agent. Historically,
proponents of poison pills have asserted that they enable a board of directors
to respond in an orderly fashion to unsolicited takeover bids by providing
sufficient time to carefully evaluate the fairness of such a bid. We oppose the
Company's poison pill because we believe that it places such an obstacle to a
takeover bid that it serves to entrench the Board of Directors and Management.
We believe that the Company's poison pill would force a would-be acquirer to
negotiate the possible takeover of the Company with management, instead of
making its offer directly to the stockholders of the Company. In our opinion,
this consequential lack of management accountability to stockholders adversely
affects stockholder value and could deter a takeover bid that, while in the
stockholders' best interest, does not leave management in control. We further
believe that the effect of a poison pill is to insulate management from a change
of control by providing its Board of Directors, which is advised by and includes
representatives of management, with a veto over takeover bids, even when
stockholders might favorably view such bids.
INDEPENDENCE OF DIRECTORS:
We believe that a majority of the Board of Directors should comprise
truly independent directors. At present, the Chief Executive and Chief Operating
Officers occupy two Board seats. A third is held by the partner of the law firm
that serves as the Company's outside counsel. That firm was paid $606,000 in
legal fees for services during the 2002 fiscal year, according to the Company's
Form 10-K for the fiscal year ended September 30, 2002. Accordingly, three of
the current six members of the Board of Directors are, in our opinion, not
independent.
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In contrast, we believe that the Nominees would be truly independent
directors and are committed to representing the interests of all the
stockholders of the Company. The Nominees and their affiliates have not entered
into any agreement to provide professional or other services with the Company
and have no interest in the Company except for their interests that arise from
being stockholders of the Company. We believe that the Nominees not only
represent the views of Kahn Brothers, which we believe is one of the largest
institutional investors of the Company, but also their views as minority
stockholders, Mr. Schwarz being the holders of less than one percent of the
outstanding shares of Common Stock.
We believe that in order to enable independent directors to serve as
an effective check on Management, independent directors should meet at regularly
scheduled executive sessions, without the presence of Management. This would
permit open discussion among independent directors. Regular scheduling of such
meetings would not only promote more effective communication among independent
directors, but would avoid any negative inference that might be drawn from the
sessions themselves. Finally, we believe that the Company should make prominent
disclosure in its public filings of a means by which interested parties could
communicate with independent directors.
THE NOMINEES
The following information sets forth the names, business addresses,
present principal occupations, and employment and material occupations,
positions, offices, or employments for the past five years of the Nominees. This
information has been furnished to Kahn Brothers by the Nominees. Where no date
is given for the commencement of the indicated office or position, such office
or position was assumed prior to January 1, 1998. The Nominees are citizens of
the United States of America.
Thomas G. Kahn. Mr. Kahn is 60 years old and is a Chartered
Financial Analyst. Since 1995, Mr. Kahn has served as President of
Kahn Brothers, a New York Stock Exchange Member Firm. Founded in
1978 to continue a business begun in 1929, Kahn Brothers conducts a
registered brokerage business and registered investment advisory
business with assets under management of approximately $575 million.
The principal business address of Kahn Brothers, and Mr. Kahn's
business address, is 555 Madison Avenue, New York, New York
10022-3301. In addition, Mr. Kahn currently serves as a member of
the board of directors of Warwick Community Bancorp., a bank holding
company with a class of securities registered pursuant to Section 12
of the Securities Exchange Act of 1934, as amended (the "Exchange
Act") or subject to the requirements of Section 15(d) of the
Exchange Act.
By virtue of his involvement with Kahn Brothers and other related
entities, Mr. Kahn is, as of the date hereof, a beneficial owner of 837,269
Shares. As of the date hereof, Mr. Kahn is the record owner of 500 Shares, and
is not the record holder of any Shares that he does not beneficially own. Mr.
Kahn has no substantial interest in matters to be acted upon at the Annual
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Meeting, except for his interest arising from his beneficial stock ownership,
his interest in being nominated and elected as a director, and his interest in
the nomination and election of Mark E. Schwarz as a director. None of the Shares
held by Mr. Kahn was purchased with borrowed funds.
Mark E. Schwarz. Mr. Schwarz is 42 years old. Since 1993, Mr.
Schwarz has served as the general partner, directly or through
entities he controls, of Newcastle Partners, L.P. ("Newcastle"), a
private investment firm. The principal business address of
Newcastle, and Mr. Schwarz's business address, is 300 Crescent
Court, Suite 1110, Dallas, Texas 75201. As of December 2001, Mr.
Schwarz is the managing member of Newcastle Capital Group, L.L.C.,
the general partner of Newcastle Capital Management, L.P., which is
the general partner of Newcastle. Mr. Schwarz was also the Vice
President of Sandera Capital Management, L.L.C., a private
investment firm associated with the Lamar Hunt ("Hunt") family from
1995 until September 1999 and a securities analyst and portfolio
manager for SCM Advisors, L.L.C., a Hunt-affiliated registered
investment advisory firm from May 1993 to 1996. Mr. Schwarz
currently serves as Chairman of the Board and Chief Executive
Officer of Hallmark Financial Services, Inc., a property and
casualty insurance holding company that has a class of securities
registered pursuant to Section 12 of the Exchange Act or subject to
the requirements of Section 15(d) of the Exchange Act. Mr. Schwarz
is also a member of the boards of directors of the following
additional companies that have a class of securities registered
pursuant to Section 12 of the Exchange Act or subject to the
requirements of Section 15(d) of the Exchange Act: SL Industries,
Inc., a power supply and power motion products manufacturer; Nashua
Corporation, a specialty paper, label, and printing supplies
manufacturer; Bell Industries, Inc., a company that provides
computer systems integration services, distributes after-market
parts to the recreational vehicle market, and manufactures passive
electronic components; Tandycrafts, Inc., a company that
manufactures frames and framed art; WebFinancial Corporation, a
banking and specialty finance company; and Pizza Inn, Inc., a
franchisor and food and supply distributor to a system of
restaurants. Mr. Schwarz was previously a member of the board of
directors of Aydin Corporation, a defense electronics manufacturer
until its sale in 1999 to L-3 Communications.
Mr. Schwarz is a beneficial owner of 4,200 Shares, and is not the
record holder of any Shares he does not beneficially own. Mr. Schwarz has no
substantial interest in matters to be acted upon at the Annual Meeting, except
for his interest arising from his beneficial stock ownership, his interest in
being nominated and elected as a director, and his interest in the nomination
and election of Thomas G. Kahn as a director. None of the Shares held by Mr.
Schwarz was purchased with borrowed funds.
The Nominees will not receive any compensation from Kahn Brothers
for their services as directors of the Company. Mr. Kahn and Mr. Schwarz are
each a party to separate indemnification letters with Kahn Brothers, effective
as of November 27, 2002. Additionally, Mr. Kahn, Mr. Schwarz, Kahn Brothers, and
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the Kahn Brothers & Co. Profit Sharing Plan & Trust and the co-trustees
thereof (collectively, the "Kahn Brothers Trust") have entered into a Joint
Filing and Reimbursement Agreement, effective as of the same date. Neither Mr.
Kahn nor Mr. Schwarz, nor any of their respective associates, has any
understandings, arrangements, or agreements with the Company or with any other
person with respect to any future transactions or employment with the Company or
any of its affiliates.
In the past 10 years, neither Mr. Kahn nor Mr. Schwarz has been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors).
Other than as described below, the Nominees are not parties adverse
to the Company or any of its subsidiaries nor have a material interest adverse
to the Company or any of its subsidiaries in any material pending legal
proceedings.
Kahn Brothers does not expect that the Nominees will be unable to
stand for election, but, in the event that the Nominees are unable to serve or
for good cause will not serve, the Shares represented by the enclosed WHITE
proxy card will be voted for substitute nominees. In addition, Kahn Brothers
reserves the right to nominate a substitute person if the Company makes or
announces any changes to its Bylaws or takes or announces any other action that
has, or if consummated would have, the effect of disqualifying the Nominees. In
any such case, Shares represented by the enclosed WHITE proxy card will be voted
for such substitute nominee. Kahn Brothers has no reason to believe that the
Nominees will be disqualified or unable or unwilling to serve if elected.
Notwithstanding the ability of Kahn Brothers to vote proxies for substitute
nominees, the enclosed WHITE proxy card can only be voted for up to two
directors being elected at the Annual Meeting.
The Board of Directors is divided into three classes serving
staggered three-year terms. Two directors are to be elected at the Annual
Meeting to hold office until 2006 and until their successors are duly elected
and qualify.
CERTAIN LEGAL PROCEEDINGS
On November 22, 2002, the Company filed a complaint for declaratory
relief (the "Complaint") in District Court, Clark County, Nevada (the "Court"),
against Thomas G. Kahn, individually as a trustee or co-trustee of the Kahn
Brothers Trust, with respect to a demand made by Mr. Kahn on November 14, 2002
for access to the stockholder ledger of the Company. The Complaint alleged
certain irregularities with regard to the demand, including those related to Mr.
Kahn's authority and capacity to make the demand and the authority conferred
upon the attorney-in-fact who assisted with the demand. The Complaint asked the
Court for its declaration with regard to four questions posed by the Company and
for any other relief the Court deemed just and proper.
On December 10, 2002, Mr. Kahn and Irving Kahn and Donald W. Kahn,
as co-trustees of the Kahn Brothers Trust, made an amended demand on the
Company. On December 16, 2002, the Company filed a First Amended Complaint for
Declaratory Relief in the Court, which named each of the Messrs. Kahn as
defendant individually and in their capacities as co-trustees of the Kahn
Brothers Trust. The First Amended Complaint seeks to have declared invalid the
November 14, 2002 demand. It further seeks a declaration of the Company's rights
concerning the December 10, 2002 demand, including a declaration as to:
-11-
(a) What obligation does the Company have to generate or furnish a
stop list or lists as referenced in the demand?
(b) What obligation does the Company have to prepare "what is known
as an updated NOBO sheet"?
(c) What obligation does the Company have to supply the co-trustees
with a list of stockholders who are participants in any of its employee stock
ownership, stock purchase, stock option, retirement, restricted stock,
incentive, profit sharing, dividend reinvestment or other similar plans.
(d) What obligation does the Company have to provide a daily update
of its corporate records or materials, which the First Amended Complaint alleges
"that the Company otherwise would not have to the Kahns."
The First Amended Complaint seeks a declaration of rights as set
forth therein and any other relief that the Court deems just and proper.
On December 19, 2002, the co-trustees of Kahn Brothers Trust filed a
Notice of Removal in the United States District Court for the District of Nevada
to have the foregoing action removed to such court.
On December 31, 2002, the Company filed a Motion for Remand and Cost
and Fees in the United States District Court for the District of Nevada to have
the foregoing action remanded back to the Eighth Judicial District Court, Clark
County, Nevada.
YOU ARE URGED TO VOTE FOR THE ELECTION OF
THE NOMINEES ON THE ENCLOSED WHITE PROXY CARD.
-12-
PROPOSAL 2
APPOINTMENT OF INDEPENDENT AUDITORS
Kahn Brothers has no objection to the ratification of the
appointment of PricewaterhouseCoopers LLP as independent accountants for the
Company for the fiscal year ending September 30, 2003. Please see the Management
Proxy Statement for a description of this proposal.
VOTING AND PROXY PROCEDURES
Only stockholders of record on the Record Date will be entitled to
notice of and to vote at the Annual Meeting. Each Share is entitled to one vote.
Stockholders who sell Shares before the Record Date (or acquire them without
voting rights after the Record Date) may not vote such Shares. Stockholders of
record on the Record Date will retain their voting rights in connection with the
Annual Meeting even if they sell such Shares after the Record Date. Based on
publicly available information, Kahn Brothers believes that the only outstanding
class of securities of the Company entitled to vote at the Annual Meeting is the
Shares.
Shares represented by properly executed WHITE proxy cards will be
voted at the Annual Meeting as marked and, in the absence of specific
instructions, will be voted FOR the election of the Nominees to the Board of
Directors, FOR the proposal to ratify the appointment of PricewaterhouseCoopers
LLP as independent accountants of the Company for the fiscal year ending
September 30, 2003, and in the discretion of the persons named as proxies on all
other matters as may properly come before the Annual Meeting.
We are asking you to elect our Nominees in opposition to two
incumbent nominees whose terms expire at the Annual Meeting. The enclosed WHITE
proxy card may only be voted for our Nominees. It will not enable you to vote
for either of the Company's nominees. You can only vote for one or both of the
Company's nominees by signing and returning a proxy card provided by the
Company. Stockholders should refer to the Management Proxy Statement for the
names, background, qualifications and other information concerning the Company's
nominees.
-13-
QUORUM AND ABSTENTIONS
In order to conduct any business at the Annual Meeting, a quorum
must be present in person or represented by valid proxies. A quorum consists of
a majority of the Shares issued and outstanding on the Record Date. Since the
Company's articles of incorporation and bylaws do not address how abstentions
should be treated in voting on any matter presented to the stockholders and
while there is no definitive statutory or case law authority in the State of
Nevada, the Company's state of incorporation, as to the proper treatment of
abstentions, Kahn Brothers believes that abstentions should be treated as Shares
entitled to vote at the Annual Meeting and count for purposes of determining the
following: (i) the total number of votes cast on any matter (the "Votes
Present") for the purpose of determining whether a quorum is present; and (ii)
the total number of Votes Present that are cast ("Votes Cast") with respect to a
matter (other than in the election of the Board of Directors) and will have the
same effect as a vote against a matter (other than in the election for the Board
of Directors).
BROKER NON-VOTES
Shares held in street name that are present by proxy will be
considered as Votes Present for purposes of determining whether a quorum is
present. With regard to certain proposals, the holder of record of Shares held
in street name is permitted to vote as it determines, in its discretion, in the
absence of direction from the beneficial holder of the Shares.
The term "broker non-vote" refers to shares held in street name that
are not voted with respect to a particular matter, generally because the
beneficial owner did not give any instructions to the broker as to how to vote
such shares and the broker is not permitted under applicable rules to vote such
shares in its discretion because of the subject matter of the proposal, but
which shares are present on at least one matter. Such shares shall be counted as
Votes Present for the purpose of determining whether a quorum is present. Broker
non-votes will not be counted as Votes Cast with respect to matters as to which
the record holder has expressly not voted. Accordingly, Kahn Brothers believes
that broker non-votes will have no effect upon the outcome of voting on any of
the business matters set forth in this Proxy Statement.
VOTES REQUIRED FOR APPROVAL
Election of Directors. A plurality of the total Votes Cast by
holders of the Shares is required for the election of directors and the nominees
who receive the most votes will be elected (assuming a quorum is present). A
vote to "WITHHOLD" for any nominee for director will be counted for purposes of
determining the Votes Present, but will have no other effect on the outcome of
the vote on the election of directors. Stockholders do not have cumulative
voting rights with respect to the election of directors.
-14-
Other Proposals. Other than the election of directors, the vote
required for all other business matters set forth in this Proxy Statement is the
affirmative vote of a majority of the Votes Cast. At the time of this proxy
solicitation, we are not aware of any additional matter which may be presented
at the Annual Meeting. However, with respect to any such additional matters as
may properly come before the Annual Meeting, Messrs. Kahn and Schwarz will vote
your Shares in their discretion.
REVOCATION OF PROXIES
Stockholders of the Company may revoke their proxies at any time
prior to exercise by attending the Annual Meeting and voting in person (although
attendance at the Annual Meeting will not in and of itself constitute revocation
of a proxy) or by delivering a written notice of revocation. The delivery of a
subsequently dated proxy that is properly completed will constitute a revocation
of any earlier proxy. The revocation may be delivered either to Kahn Brothers in
care of MacKenzie Partners, Inc. at the address set forth on the back cover of
this Proxy Statement or to the Company at 6113 Lemmon Avenue, Dallas, Texas
75209 or any other address provided by the Company. Although a revocation is
effective if delivered to the Company, Kahn Brothers requests that either the
original or photostatic copies of all revocations be mailed to Kahn Brothers in
care of MacKenzie Partners, Inc. at the address set forth on the back cover of
this Proxy Statement, so that Kahn Brothers will be aware of all revocations and
can more accurately determine if and when proxies have been received from the
holders of record on the Record Date of a majority of the outstanding Shares.
Additionally, MacKenzie Partners, Inc. may use this information to contact
stockholders who have revoked their proxies in order to solicit later dated
proxies for the election of the Nominees.
IF YOU WISH TO VOTE FOR THE ELECTION OF THE NOMINEES TO THE BOARD OF DIRECTORS,
PLEASE SIGN, DATE AND RETURN PROMPTLY THE ENCLOSED WHITE PROXY CARD IN THE
POSTAGE-PAID ENVELOPE PROVIDED.
SOLICITATION OF PROXIES
The solicitation of proxies pursuant to this Proxy Statement is
being made by Kahn Brothers. Proxies may be solicited by mail, facsimile,
telephone, telegraph, in person and by advertisements. Kahn Brothers will not
solicit proxies via the Internet.
Kahn Brothers has entered into an agreement with MacKenzie Partners,
Inc. for solicitation and advisory services in connection with this
solicitation, for which MacKenzie Partners, Inc. will receive a fee not to
exceed $________, together with reimbursement for its reasonable out-of-pocket
expenses, and will be indemnified against certain liabilities and expenses,
including certain liabilities under the federal securities laws. MacKenzie
Partners, Inc. will solicit proxies from individuals, brokers, banks, bank
nominees and other institutional holders. Kahn Brothers has requested banks,
brokerage houses and other custodians, nominees and fiduciaries to forward all
solicitation materials to the beneficial owners of the Shares they hold of
record. Kahn Brothers will reimburse these record holders for their reasonable
-15-
out-of-pocket expenses in so doing. It is anticipated that MacKenzie Partners,
Inc. will employ approximately __ persons to solicit the Company's stockholders
for the Annual Meeting.
The entire expense of soliciting proxies is being borne by Kahn
Brothers. If the Nominees are elected to the Board of Directors, Kahn Brothers
intends to seek reimbursement of the costs of this solicitation from the
Company. Unless otherwise required by law, Kahn Brothers does not currently
intend to submit the question of reimbursement of the costs of this solicitation
to a stockholder vote. Costs of this solicitation of proxies are currently
estimated to be approximately $______. Kahn Brothers estimates that through the
date hereof, its expenses in connection with this solicitation are approximately
______.
PARTICIPANT INFORMATION
Along with the Nominees, Kahn Brothers and the Kahn Brothers Trust
are participants in the solicitation.
Kahn Brothers is a New York Stock Exchange Member Firm founded in
1978 to continue a business begun in 1929. It operates a brokerage business
registered under the Exchange Act and an investment advisory business registered
under the Investment Advisors Act of 1940. The members of the board of directors
of Kahn Brothers are Irving Kahn, Chairman, Thomas G. Kahn, Donald W. Kahn,
Paula Meo Cutrone and Kenneth Rodwogin. The executive officers of Kahn Brothers
are Thomas G. Kahn, President, and William DeLuca, Vice President. The Kahn
Brothers Trust was created under agreement dated June 25, 1979 under the laws of
the State of New York. Its three co-trustees are Thomas G. Kahn, Donald W. Kahn
and Irving Kahn. The principal business address of each of Kahn Brothers and the
Kahn Brothers Trust is 555 Madison Avenue, New York, New York 10022.
As of the date of this proxy solicitation, Kahn Brothers and Kahn
Brothers Trust beneficially own 784,669 and 29,600 shares of Common Stock,
respectively. By virtue of being co-trustees, each of Messrs Irving, Donald and
Thomas Kahn may be deemed to be the beneficial owner of the Shares held by Kahn
Brothers Trust. By virtue of his involvement with Kahn Brothers and other
related entities, Thomas G. Kahn is, as of the date of this proxy solicitation,
a beneficial owner of 837,269 Shares. As of the date hereof, Thomas G. Kahn is
the record owner of 500 Shares.
As of the filing date of this proxy solicitation, Mark E. Schwarz,
as the managing member of Newcastle Capital Group, LLC, the general partner of
Newcastle Capital Management, L.P., which is the general partner of Newcastle,
may be deemed to beneficially own 4,200 shares of Common Stock beneficially
owned by Newcastle, representing less than one percent of the issued and
outstanding Shares.
As of the date of this proxy solicitation, none of the participants
owns any Shares of record but not beneficially. Aside from the beneficial
ownership disclosed in this proxy solicitation, none of the affiliates of the
participants to this proxy solicitation own Shares. For information regarding
purchases and sales of Shares during the past two years by participants in this
proxy solicitation, see Schedule I.
-16-
On November 27, 2002, Kahn Brothers, the Kahn Brothers Trust and the
Nominees entered into a Joint Filing and Reimbursement Agreement, in which,
among other things, (i) they agreed to the joint filing on behalf of each of
them of statements on Schedule 13D with respect to the Shares; (ii) they agreed
to solicit proxies or written consents for the election of the Nominees or any
other persons nominated by the Trust to the Board of Directors of the Company at
the next annual meeting of stockholders; and (iii) Kahn Brothers agreed to bear
all expenses incurred in connection with the participants' activities, including
approved expenses incurred by any of the participants in connection with the
solicitation of proxies or written consents by Kahn Brothers. The Joint Filing
and Reimbursement Agreement was filed as an exhibit to Amendment No. 3 to
Schedule 13D filed by the participants in respect of the Shares and is
incorporated herein by reference.
On November 27, 2002, each of the Nominees and the Kahn Brothers
Trust entered into a separate Indemnification Agreement with Kahn Brothers, in
which Kahn Brothers agreed to indemnify and hold harmless each from and against
any and all claims of any nature, whenever brought, arising from the proxy
solicitation. Each of the Indemnification Agreements was filed as an exhibit to
Amendment No. 3 to Schedule 13D filed by the participants in respect of the
Shares and is incorporated herein by reference.
TRANSACTIONS BETWEEN KAHN BROTHERS AND THE COMPANY
Except as set forth in this Proxy Statement (including the Schedules
hereto), neither Kahn Brothers nor any of the other participants in this
solicitation, or any of their respective associates: (i) directly or indirectly
beneficially owns any Shares or any securities of the Company; (ii) has had any
relationship with the Company in any capacity other than as a stockholder, or is
or has been a party to any transactions, or series of similar transactions, or
was indebted to the Company during the past year with respect to any Shares of
the Company; or (iii) knows of any transactions during the past year, currently
proposed transactions, or series of similar transactions, to which the Company
or any of its subsidiaries was or is to be a party, in which the amount involved
exceeds $60,000 and in which any of them or their respective affiliates had, or
will have, a direct or indirect material interest. In addition, other than as
set forth herein, there are no contracts, arrangements or understandings entered
into by Kahn Brothers or any other participant in this solicitation or any of
their respective associates within the past year with any person with respect to
any of the Company's securities, including, but not limited to, joint ventures,
loan or option arrangements, puts or calls, guarantees against loss or
guarantees of profit, division of losses or profits, or the giving or
withholding of proxies.
Except as set forth in this Proxy Statement (including the Schedules
hereto), neither Kahn Brothers nor any of the other participants in this
solicitation, or any of their respective associates, has entered into any
agreement or understanding with any person with respect to (i) any future
employment by the Company or its affiliates or (ii) any future transactions to
which the Company or any of its affiliates will or may be a party. However, Kahn
Brothers has reviewed, and will continue to review, on the basis of publicly
available information, various possible business strategies that it might
consider in the event that the Nominees are elected to the Board of Directors.
-17-
OTHER MATTERS AND ADDITIONAL INFORMATION
Kahn Brothers is unaware of any other matters to be considered at
the Annual Meeting other than the ratification of the appointment of the
Company's auditors. However, should other matters, which Kahn Brothers is not
aware of a reasonable time before this solicitation, be brought before the
Annual Meeting, the persons named as proxies on the enclosed WHITE proxy card
will vote on such matters in their discretion.
Kahn Brothers has omitted from this Proxy Statement certain
disclosure required by applicable law that is already included in the Management
Proxy Statement. This disclosure includes, among other things, biographical
information on the Company's directors and executive officers, information
concerning executive compensation, an analysis of cumulative total returns on an
investment in the Shares during the past five years, information on audit
services and fees of PricewaterhouseCoopers LLP and Arthur Andersen LLP and
procedures for nominating directors for election to the Board of Directors and
submitting proposals for inclusion in the Company's proxy statement at the next
annual meeting. Stockholders should refer to the Management Proxy Statement in
order to review this disclosure.
See Schedule II for information regarding persons who beneficially
own more than 5% of the Shares and the ownership of the Shares by the management
of the Company.
The information concerning the Company contained in this Proxy
Statement and the Schedules attached hereto has been taken from, or is based
upon, publicly available information.
KAHN BROTHERS & CO., INC.
February __, 2003
-18-
SCHEDULE I
TRANSACTIONS DURING THE LAST TWO YEARS IN SHARES OF
HAGGAR CORP. BENEFICIALLY OWNED BY THOMAS G. KAHN
- --------------------------------------------------------------------------------
Shares: Transaction*: Date:
10,000 BOT 7/25/2001
11,600 BOT 1/4/2002
3,400 BOT 1/8/2002
700 BOT 8/2/2001
700 BOT 8/2/2001
5,000 BOT 7/27/2001
300 BOT 5/25/2001
1,000 BOT 11/14/2002
10,000 BOT 11/5/2002
5,000 BOT 11/13/2002
5,000 BOT 11/14/2002
300 BOT 8/14/2001
200 BOT 8/6/2001
1,000 BOT 8/6/2001
1,000 BOT 4/18/2001
500 BOT 9/21/2001
3,000 BOT 10/31/2001
900 BOT 11/2/2001
100 BOT 11/6/2001
14,000 BOT 11/7/2001
2,000 BOT 11/8/2001
20,000 SOLD 12/18/2001
1,000 BOT 8/14/2001
1,000 BOT 11/8/2001
1,000 SOLD 12/18/2001
500 BOT 11/8/2001
500 SOLD 12/18/2001
8,000 BOT 11/15/2001
5,500 SOLD 12/27/2001
2,500 SOLD 12/28/2001
3,000 BOT 11/18/2002
500 BOT 8/14/2001
500 BOT 8/14/2001
700 SOLD 12/31/2000
850 BOT 12/31/2001
1,000 BOT 11/16/2001
* BOT represents Bought
-19-
SCHEDULE I
TRANSACTIONS DURING THE LAST TWO YEARS IN SHARES OF
HAGGAR CORP. BENEFICIALLY OWNED BY THOMAS G. KAHN (Continued)
- --------------------------------------------------------------------------------
Shares: Transaction*: Date:
1,000 SOLD 12/28/2001
1,000 BOT 3/23/2001
1,000 BOT 3/28/2001
1,000 BOT 11/23/2001
1,200 BOT 9/21/2001
2,000 BOT 9/21/2001
300 BOT 9/21/2001
5,000 BOT 11/18/2002
1,500 BOT 11/21/2001
2,000 BOT 8/2/2001
2,000 BOT 10/30/2001
300 BOT 8/14/2001
450 BOT 9/19/2001
1,050 BOT 9/20/2001
200 BOT 8/1/2001
400 BOT 12/12/2000
500 BOT 7/31/2001
700 BOT 12/5/2001
3,500 SOLD 9/21/2001
1,000 BOT 1/22/2002
500 BOT 1/22/2002
300 BOT 9/21/2001
2,000 BOT 3/28/2001
300 SOLD 7/9/2002
* BOT represents Bought
-20-
SCHEDULE I (continued)
TRANSACTIONS DURING THE LAST TWO YEARS IN SHARES OF
HAGGAR CORP. BENEFICIALLY OWNED BY MARK E. SCHWARZ
- --------------------------------------------------------------------------------
Shares: Transaction: Date:
2,000 Bought 11/20/02
2,000 Bought 11/21/02
200 Bought 11/25/02
-21-
SCHEDULE II
SECURITY OWNERSHIP OF PRINCIPAL STOCKHOLDERS AND MANAGEMENT
-----------------------------------------------------------
THE FOLLOWING IS BASED SOLELY ON INFORMATION PROVIDED IN THE
MANAGEMENT PROXY STATEMENT:
PRINCIPAL STOCKHOLDERS AND STOCK OWNERSHIP OF MANAGEMENT
The following table and the notes thereto set forth certain
information regarding the beneficial ownership of the Shares as of the Record
Date of (i) each current director and nominee for director of the Company; (ii)
the executive officers of the Company; (iii) all executive officers and current
directors of the Company as a group; and (iv) each other person known to the
Company to own beneficially more than 5% of the presently outstanding Shares.
Shares Owned Percent of Class
Beneficially (1) Owned Beneficially (1)
---------------- ----------------------
J.M. Haggar, III 770,025(2) 11.9
Frank D. Bracken 297,071(3) 4.3
David M. Tehle 40,700(4) *
Alan C. Burks 68,368(5) *
David G. Roy 37,100(6) *
Richard W. Heath 24,400(7) *
Rae F. Evans 15,873(5) *
John C. Tollenson 78,200(9) 1.2
Donald E. Godwin -- --
All Executive Officers and
Directors (9 persons) 1,331,737(10) 18.9
Franklin Resources, Inc. (11) 572,900 9.3
Thomas G. Kahn(12) 837,269 ____
Kahn Brothers & Co., Inc. (12) 784,669 13.0
Barrow Hanley Mewhinney &
Strauss, Inc. (13) 605,700 10.1
Dimensional Fund Advisors, Inc. (14) 452,325 7.4
Gerald Van Tsai (15) 472,349 12.7
* Less than 1%
(1) Except as otherwise indicated, the persons name in the table have
sole voting and dispositive power with respect to the Shares shown
as beneficially owned by them.
-22-
(2) Includes 2,299 Shares over which J. M. Haggar, III shares voting and
dispositive power with his wife, 37,113 Shares over which he
otherwise shares voting and dispositive power as a trustee of
various trusts, 50,143 Shares over which he shares voting and
dispositive power as a director of a private charitable foundation
and 278,791 Shares which may be acquired pursuant to stock options
that are exercisable currently or with 60 days after the Record
Date.
(3) Includes 10,000 Shares over which Mr. Bracken shares voting and
dispositve power with his wife and 267,277 Shares which may be
acquired pursuant to stock options that are exercisable currently.
(4) Includes 35,000 Shares which may be acquired upon exercise of stock
options that are currently exercisable.
(5) Represents Shares which may be acquired pursuant to stock options
exercisable currently or within 60 days after the Record Date.
(6) Includes 32,000 Shares which may be acquired upon exercise of stock
options that are currently exercisable.
(7) Includes 5,000 Shares over which Mr. Heath shares voting and
dispositive power with his wife and 17,000 Shares which may be
acquired pursuant to stock options exercisable currently or within
60 days after the Record Date.
(8) Reserved.
(9) Includes 9,000 Shares which may be acquired upon exercise of stock
options that are exercisable currently or within 60 days after the
Record Date.
(10) Includes 104,555 Shares over which voting and dispositive power is
shared and 737,340 Shares which may be acquired pursuant to stock
options which are exercisable currently or within 60 days after the
Record Date.
(11) Based on information contained in Form 13F filed with the Securities
and Exchange Commission on November 13, 2002 by Franklin Resources,
Inc., whose address is One Frankline Parkway, San Mateo, California
94403.
(12) Based on information contained in Schedule 13D, as amended, filed
with the Securities and Exchange Commission on December 4, 2002, by
Kahn Brothers & Co. Inc., Kahn Brothers & Co. Profit Sharing Plan
and Trust and Thomas G. Kahn, the address of each of which or whom
is 555 Madison Avenue, 22nd Floor, New York, New York 10022, and by
Mark E. Schwarz ,whose address is c/o Newcastle Capital Management,
L.P., 300 Crescent Court, Suite 1110, Dallas, Texas 75201.
(13) Based on information contained in Form 13F filed with the Securities
and Exchange Commission on November 8, 2002, by Barrow Hanley
Mewhinney & Strauss, Inc., whose address is One McKinney Plaza, 3232
McKinney Ave., 15th Floor, Dallas, Texas 75204.
-23-
(14) Based on information contained in Form 13F filed with the Securities
and Exchange Commission on October 28, 2002, by Dimensional Fund
Advisors, Inc. whose address is 1299 Ocean Avenue, 11th floor, Santa
Monica, California 90401.
(15) Based on information contained in a Form 4 filed with the Securities
and Exchange Commission on December 31, 2002 by Gerald Van Tsai,
whose address is P.O. Box 900, Hanover, New Hampshire 03755.
-24-
IMPORTANT
Tell your Board of Directors what you think! Your vote is important.
No matter how many Shares you own, please give Kahn Brothers your proxy FOR the
election of the Nominees by taking three steps:
o SIGNING the enclosed WHITE proxy card,
o DATING the enclosed WHITE proxy card, and
o MAILING the enclosed WHITE proxy card TODAY in the envelope
provided (no postage is required if mailed in the United
States).
If any of your Shares are held in the name of a brokerage firm,
bank, bank nominee or other institution, only it can vote such Shares and only
upon receipt of your specific instructions. Accordingly, please contact the
person responsible for your account and instruct that person to execute the
WHTIE proxy card representing your Shares. Kahn Brothers urges you to confirm in
writing your instructions to Kahn Brothers in care of MacKenzie Partners, Inc.
at the address provided below so that Kahn Brothers will be aware of all
instructions given and can attempt to ensure that such instructions are
followed.
If you have any questions or require any additional information
concerning this Proxy Statement, please contact MacKenzie Partners, Inc. at the
address set forth below.
[MacKenzie Logo]
-25-
PRELIMINARY COPY
For the Information of the Securities and Exchange Commission Only
HAGGAR CORP. ANNUAL MEETING OF STOCKHOLDERS
-------------------------------------------
THIS PROXY IS SOLICITED ON BEHALF OF KAHN BROTHERS, INC.
THE BOARD OF DIRECTORS OF HAGGAR CORP. IS NOT SOLICITING THIS PROXY
The undersigned appoints Thomas G. Kahn and Mark E. Schwarz, and each of them,
attorneys and agents with full power of substitution to vote all shares of
common stock of Haggar Corp. (the "Company") which the undersigned would be
entitled to vote if personally present at the Annual Meeting of Stockholders of
the Company, and including at any adjournments or postponements thereof and at
any meeting called in lieu thereof, as follows:
1. ELECTION OF DIRECTORS:
The election of Thomas G. Kahn and Mark E.
Schwarz to Class I of the Board of Directors for
a term of three years.
Withhold Authority
For All To Vote For All
Nominees [ ] Nominees [ ]
---------------------------------------------------
To withhold authority to vote for any
individual nominee(s), print names above.
2. RATIFICATION OF APPOINTMENT FOR AGAINST ABSTAIN
OF INDEPENDENT AUDITORS: [ ] [ ] [ ]
3. In their discretion with respect to any other matters as may
properly come before the Annual Meeting.
-26-
The undersigned hereby revokes any other proxy or proxies
heretofore given to vote or act with respect to the shares of common
stock of the Company held by the undersigned, and hereby ratifies and
confirms all action the herein named attorneys and proxies, their
substitutes, or any of them may lawfully take by virtue hereof. If
properly executed, this Proxy will be voted as directed above. If no
direction is indicated with respect to the above proposals, this Proxy
will be voted FOR the election of the Nominees, or any substitutions
thereto, and FOR the ratification of the appointment of independent
auditors.
This proxy will be valid until the sooner of one year from
the date indicated below and the completion of the Annual Meeting.
DATED: ____________________________
PLEASE SIGN EXACTLY AS NAME APPEARS ON THIS PROXY.
- ------------------------------------
(Signature)
- ------------------------------------
(Signature, if held jointly)
- ------------------------------------
(Title)
WHEN SHARES ARE HELD JOINTLY, JOINT OWNERS SHOULD EACH SIGN. EXECUTORS,
ADMINISTRATORS, TRUSTEES, ETC., SHOULD INDICATE THE CAPACITY IN WHICH SIGNING.
IMPORTANT: PLEASE SIGN, DATE AND MAIL THIS PROXY CARD PROMPTLY!
-27-
