SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
HAGGAR CORP.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(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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(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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/ / Fee paid previously with preliminary materials.
/ / 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.
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[LOGO]
HAGGAR CORP.
6113 LEMMON AVENUE
DALLAS, TEXAS 75209
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD FEBRUARY 11, 1998
To Our Stockholders:
NOTICE IS HEREBY GIVEN that the 1998 Annual Meeting of Stockholders of
Haggar Corp. (the "Company") will be held in the Sam Rayburn Room of the
Adolphus Hotel, 1321 Commerce Street, Dallas, Texas, on the 11th day of
February, 1998, at 2:00 p.m. (local time) for the following purposes:
1. To elect two Class II directors to serve until the expiration of
their terms and until their successors are duly elected and qualified;
2. To ratify the appointment by the Board of Directors of Arthur
Andersen LLP as independent certified public accountants of the Company for
the fiscal year ending September 30, 1998; and
3. To transact such other business as may properly come before the
meeting or any adjournments thereof.
Stockholders of record at the close of business on December 29, 1997, are
entitled to notice of and to vote at the Annual Meeting and any adjournments
thereof.
You are cordially invited to attend the Annual Meeting.
By Order of the Board of Directors
/s/ J. M. Haggar, III
----------------------------------
J. M. Haggar, III
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
Dated: January 16, 1998
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE MARK, SIGN,
DATE, AND RETURN THE ENCLOSED PROXY PROMPTLY IN THE ENCLOSED POSTAGE PAID
ENVELOPE. IF YOU ATTEND THE MEETING, YOU MAY REVOKE YOUR PROXY AND VOTE IN
PERSON.
HAGGAR CORP.
6113 LEMMON AVENUE
DALLAS, TEXAS 75209
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD FEBRUARY 11, 1998
-----------------------
SOLICITATION AND REVOCABILITY OF PROXIES
The accompanying proxy is solicited by the Board of Directors of Haggar
Corp., a Nevada corporation ("Haggar" or the "Company"), to be voted at the
1998 Annual Meeting of Stockholders (the "Annual Meeting") to be held on
Wednesday, February 11, 1998, at the time and place and for the purposes set
forth in the accompanying Notice of Annual Meeting of Stockholders (the
"Notice") and at any adjournment(s) thereof. When proxies in the
accompanying form are properly executed and received, the shares represented
thereby will be voted at the Annual Meeting in accordance with the directions
noted thereon. If no direction is indicated on the proxy, the shares
represented thereby will be voted for the election of directors and in favor
of the other proposals set forth in the Notice.
The enclosed proxy, even though executed and returned, may be revoked at
any time prior to the voting of the proxy by giving written notice of
revocation to the Secretary of the Company or by executing and delivering to
the Secretary of the Company a proxy bearing a later date. However, no such
revocation shall be effective until notice thereof has been received by the
Company at or before the Annual Meeting. Mere attendance at the Annual
Meeting will not of itself revoke the proxy.
In addition to the solicitation of proxies by mail, the directors,
officers and regular employees of the Company may solicit the return of
proxies either by mail, telephone, telegraph, or through personal contact.
Such officers and employees will not be additionally compensated but will be
reimbursed for out-of-pocket expenses. The cost of preparing, printing,
assembling, and mailing the Annual Report, the Notice, this Proxy Statement,
and the enclosed proxy will be borne by Haggar.
The principal executive offices of Haggar are located at 6113 Lemmon
Avenue, Dallas, Texas 75209. Haggar's mailing address is the same as that
of its principal executive offices.
This Proxy Statement and accompanying proxy are first being mailed on or
about January 16, 1998. Haggar's Annual Report covering the Company's fiscal
year ended September 30, 1997, is enclosed herewith, but does not form any
part of the materials for solicitation of proxies.
1
PURPOSES OF THE MEETING
At the Annual Meeting, the stockholders of Haggar will consider and vote
on the following matters:
1. The election of two Class II directors to hold office until the
expiration of their terms and until their successors are duly elected and
qualified;
2. The ratification of the appointment by the Board of Directors of
Arthur Andersen LLP as independent certified public accountants of the
Company for the fiscal year ending September 30, 1998; and
3. The transaction of such other business that may properly come
before the Annual Meeting or any adjournments thereof.
QUORUM AND VOTING
The record date for the determination of stockholders entitled to notice
of and to vote at the Annual Meeting was the close of business on December
29, 1997 (the "Record Date"). On the Record Date, there were 8,551,382
shares of Common Stock of the Company, par value $0.10 per share, issued and
outstanding, each of which is entitled to one vote on all matters to be acted
upon at the Annual Meeting. There are no cumulative voting rights. The
presence, in person or by proxy, of holders of a majority of the outstanding
shares of Common Stock entitled to vote at the meeting is necessary to
constitute a quorum to transact business. Assuming the presence of a quorum,
directors will be elected by a plurality of the votes cast. The affirmative
vote of the holders of a majority of the shares of Common Stock represented
at the Annual Meeting will be required to approve all other matters to be
presented at the Annual Meeting.
Abstentions and broker non-votes will be counted toward determining
whether a quorum is present at the Annual Meeting. Abstentions and broker
non-votes will have no effect on the election of directors or the approval of
any other matters.
PRINCIPAL STOCKHOLDERS AND STOCK OWNERSHIP OF MANAGEMENT
Prior to the completion of the Company's initial public offering of its
Common Stock in December 1992, lineal descendants of J. M. Haggar, Sr. (the
"Haggar family members") and their respective spouses controlled the voting
and disposition of substantially all of the issued and outstanding shares of
the Common Stock. By virtue of their family relationships, each Haggar
family member could be deemed to be the beneficial owner of all shares of the
Common Stock directly or indirectly owned or controlled by all other Haggar
family members. Similarly, each child of J. M. Haggar, Sr. and his or her
respective lineal descendants could be deemed to beneficially own as a group
all of the shares of the Common Stock directly or indirectly owned or
controlled by any of them. However, except as set forth below, each Haggar
family member has disclaimed beneficial ownership of the shares of the Common
Stock directly or indirectly owned or controlled by all other Haggar family
members.
The following table and the notes thereto set forth certain information
regarding the beneficial ownership of the Company's Common Stock as of the
Record Date, by (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 five percent of the
presently outstanding Common Stock.
2
COMMON PERCENT OF
STOCK OWNED CLASS OWNED
BENEFICIALLY (1) BENEFICIALLY (1)
---------------- ----------------
J. M. Haggar, III (2).................... 700,865 8.0
Frank D. Bracken (3)..................... 167,071 1.9
David M. Tehle (4)....................... 0 *
Richard W. Heath (5)..................... 13,600 *
Norman E. Brinker (6).................... 9,600 *
Rae F. Evans (7)......................... 7,600 *
Carlos H. Cantu (8)...................... 5,500 *
All Executive Officers and Directors
(7 persons) (9)......................... 904,236 10.1
Barrow Hanley Mewhinney & Strauss,
Inc. (10)............................... 469,200 5.5
Travelers Group, Inc. (11)............... 545,925 6.4
Franklin Resources, Inc. (12)............ 800,000 9.4
- ----------------------
*Less than 1%.
(1) Except as otherwise indicated, the persons named in the table have sole
voting and dispositive power with respect to the shares of Common Stock
shown as beneficially owned by them. Except as otherwise noted, shared
voting and dispositive power is by virtue of serving as a trustee of
various trusts for Haggar family members and/or as a director of a
charitable foundation established by Haggar family members and, in such
cases, more than one beneficial owner may be listed for the same shares.
(2) Includes 2,299 shares over which J. M. Haggar, III shares voting and
dispositive power with his wife, 87,256 shares over which he otherwise
shares voting and dispositive power and 190,000 shares which may be
acquired pursuant to stock options that are currently exercisable.
(3) Includes 10,000 shares over which Mr. Bracken shares voting and dispositive
power with his wife and 147,277 shares which may be acquired pursuant to
stock options that are exercisable currently or within 60 days of the
Record Date.
(4) Mr. Tehle became the Chief Financial Officer of the Company effective July
7, 1997.
(5) Includes 5,000 shares over which Mr. Heath shares voting and dispositive
power with his wife and 8,600 shares which may be acquired pursuant to
stock options exercisable currently or within 60 days of the Record Date.
(6) Includes 8,600 shares which may be acquired pursuant to stock options
exercisable currently or within 60 days of the Record Date.
(7) Represents shares which may be acquired pursuant to stock options
exercisable currently or within 60 days of the Record Date.
(8) Includes 5,400 shares which may be acquired pursuant to stock options
exercisable currently or within 60 days of the Record Date.
(9) Includes 104,555 shares over which voting and dispositive power is shared
and 367,477 shares which may be acquired pursuant to stock options which
are exercisable currently or within 60 days of the Record Date.
(10) Based on information contained in Schedule 13G filed February 13, 1997, by
Barrow Hanley Mewhinney & Strauss, Inc., whose address is 3232 McKinney
Ave., 15th Floor, Dallas, Texas 75204.
3
(11) Based on information contained in Schedule 13G filed February 11 1997, by
Travelers Group, Inc. ("Travelers") and its wholly-owned subsidiary Smith
Barney Holdings, Inc. ("SB Holdings"), each of whose address is 388
Greenwich Street, New York, New York 10013. Travelers and SB Holdings
report shared voting and dispositive power over such shares.
(12) Based on information contained in Schedule 13G filed February 13 1997, by
Franklin Resources, Inc. ("FRI"), its two principal shareholders Charles B.
Johnson and Rupert H. Johnson, Jr. (the "Principals") and its wholly-owned
subsidiary Franklin Advisory Services, Inc. ("FAS"). The address of FRI
and the Principals is 777 Mariners Island Boulevard, San Mateo, California
94404, and the address of FAS is One Parker Plaza, Sixteenth Floor, Ft.
Lee, New Jersey 07024.
ELECTION OF DIRECTORS
(ITEM 1)
The Board of Directors of the Company is divided into three classes
presently consisting of two Class I directors, two Class II directors and two
Class III directors. The term of office of the Class II directors expires at
the 1998 Annual Meeting. The Board of Directors has proposed J. M. Haggar,
III and Richard W. Heath as nominees for election as the two Class II
directors to serve for three-year terms and until their successors are
elected and qualified.
If elected as a Class II director, Mr. Haggar will vacate his present
position as a Class III director. In such event, the Board of Directors
intends to fill the vacancy in the Class III directors at such time as a
suitable candidate is identified and agrees to serve. The term of any person
elected by the Board of Directors to fill the vacancy in the Class III
directors would expire at the next Annual Meeting of Stockholders unless such
Class III director is elected to a new three-year term by the stockholders.
A plurality of the votes cast at the meeting is required to elect each
nominee. Shares represented by proxies will be voted for the election of the
nominees named below unless authority to do so is withheld. Management has
no reason to believe that any nominee will be unable to serve if elected. If
any nominee should be unable to serve, the shares represented by a proxy may
be voted for a substitute nominee to be designated by the Board of Directors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH NOMINEE FOR CLASS II
DIRECTOR.
NAME AGE POSITIONS WITH COMPANY
---- --- ----------------------
J. M. Haggar, III 46 Chairman of the Board, Chief Executive Officer and
Director
Richard W. Heath 55 Director
J. M. HAGGAR, III has served as Chairman of the Board of the Company
since 1994, and as Chief Executive Officer since 1990. He has been a
director of the Company since 1983. He also served as President of the
Company from 1990 to 1994. Mr. Haggar joined the Company on a part-time
basis in 1969 and on a full-time basis in 1973. Over the course of his
career with the Company, Mr. Haggar has participated in virtually every
aspect of the business, including three years in the Manufacturing Division,
two years as the Dallas Service Center Manager, one year in the Sales
Division, six years in the Marketing and Merchandising Division, and in 1985
was named President of the Menswear Division. Mr. Haggar also serves on the
Boards of Directors of Texas Commerce Bank-Dallas and BeautiControl
Cosmetics, Inc.
RICHARD W. HEATH has served as a director of the Company since 1991.
He has been President, Chief Executive Officer and a director of
BeautiControl Cosmetics, Inc., a direct seller of cosmetic and skin care
products, since its inception in 1981. He has over 28 years of experience in
the direct sales industry. Mr. Heath also serves on the Texas Parks and
Wildlife Commission.
4
EXECUTIVE OFFICERS AND DIRECTORS CONTINUING IN OFFICE
Set forth below is information concerning the executive officers of the
Company and the other directors of the Company whose terms will continue after
the Annual Meeting:
NAME AGE POSITIONS WITH COMPANY
---- --- ----------------------
Frank D. Bracken 57 President, Chief Operating Officer and Director
David M. Tehle 41 Senior Vice President and Chief Financial Officer
Norman E. Brinker 66 Director
Rae F. Evans 49 Director
FRANK D. BRACKEN has served as a director of the Company since 1991. He
was elected President and Chief Operating Officer of the Company in 1994.
Mr. Bracken previously served as Executive Vice President of Marketing of the
Company since 1991. He joined the Company as a management trainee in 1963
and has served as a Regional Sales Manager, Western Sales Manager, National
Sales Manager, Senior Vice President of Sales and Merchandising and Senior
Vice President of Marketing.
DAVID M. TEHLE joined the Company as Senior Vice President and Chief
Financial Officer on July 7, 1997. Prior to joining Haggar, Mr. Tehle served
as Vice President of Finance for a division of The Stanley Works from 1996 to
1997, where he was responsible for worldwide finance, strategic planning,
accounting, credit and tax functions. From 1993 to 1996, he served as Vice
President of Finance and Chief Financial Officer of Hat Brands, Inc., the
world's largest independent hat manufacturer. Before his tenure at Hat
Brands, Mr. Tehle held various financial positions with Texas Instruments and
served as Vice President of Finance for Ryder Aviall, an aviation supply
company.
NORMAN E. BRINKER has served as a director of the Company since 1990.
He is the Chairman of the Board of Brinker International, Inc., a company
that owns casual-style restaurants, including Chili's Grill & Bar, Romano's
Macaroni Grill, On The Border, Cozymel's, Maggiano's Little Italy and The
Corner Bakery. Mr. Brinker also served as Chief Executive Officer of Brinker
International, Inc. from 1983 until 1995. He was the founder of Steak & Ale
Restaurants and is a former Chairman of Burger King Corporation and a former
President of The Pillsbury Restaurant Group.
RAE F. EVANS has served as a director of the Company since 1994. She is
President of Rae Evans & Associates, Inc., a firm specializing in Washington
corporate strategies. Prior to founding Rae Evans & Associates, Inc. in
1995, Mrs. Evans had served as Vice President, National Affairs of Hallmark
Cards, Inc. for 13 years. Mrs. Evans has served on the Board of Directors of
Brinker International, Inc. since 1991. Mrs. Evans serves on the Board of
Trustees of the Meridian International Center and the Women's Museum of
Washington and on the Board of Advisors of Catalyst and the National Women's
Economic Alliance. She is also a member of the Commissioner's Advisory
Council for the Ladies Professional Golf Association.
BOARD COMMITTEES AND MEETINGS
Standing committees of the Board of Directors of the Company include the
Executive Committee, Audit Committee, Compensation Committee and Nominating
Committee.
The Executive Committee is presently composed of J. M. Haggar, III
(chairman) and Frank D. Bracken. Pursuant to the Bylaws of the Company,
between meetings of the Board of Directors the Executive Committee has the
full power and authority of the Board in the management of the business and
affairs of the Corporation, except to the extent limited by statute. The
Executive Committee meets periodically between meetings of the Board of
Directors and held eight such meetings during fiscal 1997.
5
The Audit Committee is presently composed of Norman E. Brinker
(chairman), Rae F. Evans and Carlos H. Cantu. The Audit Committee provides
the opportunity for direct communication between the independent certified
public accountants, the internal accounting staff and the Board of Directors.
The Audit Committee met twice during fiscal 1997 to review the scope and
results of the fiscal 1996 audit, to review various matters with respect to
internal financial controls and procedures, to consider the engagement of the
Company's auditors for fiscal 1997 and to review the timing and planning of
the 1997 audit.
The Compensation Committee is presently composed of Richard W. Heath
(chairman) and Rae F. Evans. The Compensation Committee provides
recommendations to the Board of Directors regarding compensation for
executive officers and senior management of the Company. The Compensation
Committee also administers the Company's 1992 Long Term Incentive Plan,
including the grant of stock options thereunder. The Compensation Committee
met twice during fiscal 1997.
The Nominating Committee is presently composed of J. M. Haggar, III
(chairman), Norman E. Brinker and Richard W. Heath. The Nominating Committee
investigates and recommends to the Board of Directors qualified nominees for
election to the Board. The Nominating Committee will consider a nominee for
director recommended by a stockholder of the Company if a written request
naming the person to be placed in nomination, accompanied by a brief
biographical description of the proposed nominee and his or her written
consent to serve as a director if elected, is submitted and received by the
Secretary of the Corporation not later than (i) 60 days following the end of
the Corporation's fiscal year immediately preceding the annual meeting of the
stockholders, or (ii) if a vacancy is to be filled at a special meeting of
stockholders, five business days following the earlier of the public
disclosure of such special meeting or the date notices thereof were mailed.
The Nominating Committee met once during fiscal 1997.
The Board of Directors held five meetings during the fiscal year ended
September 30, 1997. Various matters were also approved during the last
fiscal year by unanimous written consent of the Board of Directors. Each
director attended at least 75% of the aggregate of (i) the total number of
meetings of the Board of Directors and (ii) the total number of meetings held
by all committees of the Board on which such director served.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Richard W. Heath and Rae F. Evans comprised the Compensation Committee
of the Company during fiscal 1997. Neither Mr. Heath nor Mrs. Evans has ever
been an officer or employee of the Company. During fiscal 1997, J. M.
Haggar, III served as a director of BeautiControl Cosmetics, Inc., for whom
Mr. Heath serves as President and Chief Executive Officer.
DIRECTOR COMPENSATION
Non-employee members of the Board of Directors receive $15,000 annually
plus $1,000 for each Board meeting or committee meeting attended.
Non-employee directors also receive a grant of stock options covering 9,000
shares of Common Stock on their initial election to the Board and an
additional grant of stock options covering 6,000 shares of Common Stock upon
each re-election to the Board. Directors who are also employees of the
Company receive no additional compensation for their service on the Board and
its committees.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
The Company's executive officers, directors and beneficial owners of
more than 10% of the Company's Common Stock are required to file reports of
ownership and changes of ownership of the Common Stock with the Securities
and Exchange Commission. Based solely upon information provided to the
Company by individual directors, executive officers and beneficial owners,
the Company believes that during the fiscal year ended September 30, 1997,
all such reports were timely filed, except that (a) a Form 5 reporting the
repricing of options granted to Frank D. Bracken was filed late and (b) a
Form 5 reporting the automatic grant of additional options to Rae F. Evans
upon her re-election to the Board of Directors was filed late.
6
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth certain information concerning compensation
of the Chief Executive Officer and the only two other executive officers of the
Company for the fiscal years ended September 30, 1997, 1996 and 1995.
LONG TERM
ANNUAL COMPENSATION COMPENSATION
-------------------------- ------------
SECURITIES
UNDER-
OTHER ANNUAL LYING ALL OTHER
NAME AND FISCAL SALARY BONUS COMPENSATION OPTIONS COMPENSATION
PRINCIPAL POSITION YEAR ($) ($)(1) ($)(2) (#)(3) ($)(4)
- ------------------ ---- ------- ------ ------ ------ ------
J. M. Haggar, III 1997 475,000 129,250 55,244 - 8,106
Chairman and Chief 1996 450,000 108,400 54,150 - 7,752
Executive Officer 1995 443,804 175,000 44,806 50,000 8,590
Frank D. Bracken 1997 420,000 105,750 47,222 147,277 8,106
President and Chief 1996 400,000 87,200 45,954 - 7,752
Operating Officer 1995 394,261 140,000 34,306 50,000 8,590
David M. Tehle (5) 1997 47,561 11,750 - 10,000 2,700
Senior Vice President
and Chief Financial
Officer
- ---------------------------
(1) Reflects bonus earned during the fiscal year pursuant to the Company's
Management Incentive Bonus Plan described in the Compensation Committee
Report contained herein. In each case, the bonus was approved and paid
during the following fiscal year.
(2) Represents tax reimbursements for the fiscal year pursuant to the Company's
Deferred Annuity Plan described in the Compensation Committee Report
contained herein.
(3) All awards were for the purchase of Common Stock of the Company pursuant to
the 1992 Long Term Incentive Plan described in the Compensation Committee
Report contained herein. The amount shown for Mr. Bracken in fiscal 1997
represents the net effect of the repricing of a portion of his previously
granted stock options and the cancellation of the remainder.
(4) Represents car allowances and the Company's contributions to its defined
contribution profit sharing plan and Section 401(k) retirement plan for the
account of the executive officer.
(5) Mr. Tehle joined the Company effective July 7, 1997.
OPTION GRANTS IN LAST FISCAL YEAR
The following table shows all individual grants of stock options to the
three executive officers of the Company during the fiscal year ended September
30, 1997.
7
POTENTIAL REALIZABLE
VALUE AT ASSUMED
SECURITIES % OF TOTAL ANNUAL RATES OF STOCK
UNDERLYING OPTIONS PRICE APPRECIATION
OPTIONS GRANTED TO EXERCISE FOR OPTION TERM(3)
GRANTED EMPLOYEES IN PRICE EXPIRATION ---------------------
NAME (#) (1) FISCAL YEAR ($/SH) DATE (2) 5% ($) 10% ($)
- ------------ --------- ------------ -------- --------- -------- -------
J. M. Haggar, III 0 0 - - - -
Frank D. Bracken 57,275 11.1 13.50 11/13/02 213,063 471,946
49,092 9.5 13.50 10/29/03 225,332 511,048
40,910 7.9 13.50 11/14/04 224,596 523,648
David M. Tehle 10,000 1.9 13.50 07/23/07 84,900 215,200
- -----------------
(1) Options are to purchase shares of the Company's Common Stock. Newly
granted options vest in three equal increments on the first through the
third anniversaries of the grant, subject to acceleration of vesting upon
death, disability or retirement. The amounts shown for Mr. Bracken
represents the net effect of the repricing of a portion of his previously
granted stock options and the cancellation of the remainder. Mr. Bracken's
repriced options are fully vested.
(2) All options are subject to earlier termination due to death, disability or
termination of employment.
(3) These calculations and the assumed annual appreciation rates are disclosed
pursuant to rules of the Securities and Exchange Commission and are not
intended to forecast future appreciation of the Common Stock.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
Shown below is information with respect to the three executive officers
of the Company regarding option exercises during the fiscal year ended
September 30, 1997, and the number and value of unexercised options held as
of September 30, 1997.
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
SHARES FISCAL YEAR END (#) FISCAL YEAR END ($) (1)
ACQUIRED ON VALUE --------------------------- ------------------------
NAME EXERCISE (#) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- -------- ------------ ------------ ----------- ------------- ----------- -------------
J. M. Haggar, III 0 0 190,000 0 0 0
Frank D. Bracken 0 0 147,277 0 202,506 0
David M. Tehle 0 0 0 10,000 0 13,750
- ---------------------
(1) Values stated are pre-tax and are based upon the closing price of $14.875
per share of the Company's Common Stock on Nasdaq National Market System on
September 30, 1997, the last trading day of the fiscal year.
8
OPTION REPRICINGS
During fiscal 1997, the Compensation Committee amended the terms of all
stock options granted prior to fiscal 1997 under the Company's 1992 Long Term
Incentive Plan, except for options previously granted to the Chief Executive
Officer. Such amendments reduced the number of shares covered by the
previously granted options and simultaneously reduced the exercise price of
the remaining option shares. The Company has not previously repriced any
outstanding stock options. Shown below is information with respect to the
repricing of stock options previously granted to Frank D. Bracken, the only
executive officer of the Company affected by the amendments.
MARKET LENGTH OF
SECURITIES OPTIONS PRICE ORIGINAL
UNDERLYING EXERCISE REPRICED OF STOCK AT NEW OPTION TERM
DATE OF OPTIONS PRICE AT TIME OF AFTER TIME OF EXERCISE REMAINING AT
REPRICING REPRICED (#) REPRICING ($) CANCELLATION (#) REPRICING ($) PRICE ($) REPRICING DATE
--------- ------------ ------------- ---------------- ------------- --------- --------------
Frank D. Bracken 08/22/97 70,000 16.50 57,275 13.50 13.50 5 years
08/22/97 60,000 18.25 49,092 13.50 13.50 6 years
08/22/97 50,000 21.50 40,910 13.50 13.50 7 years
PERFORMANCE GRAPH
The line graph below compares the cumulative total stockholder return on
the Company's Common Stock with the return on the Standard & Poor's 500 Stock
Index ("S&P 500") and the Standard & Poor's Textile and Apparel Manufacturers
Index ("S&P Apparel"). In accordance with the disclosure rules of the
Securities and Exchange Commission, the measurement assumes a $100 investment
in the Company's stock as of December 11, 1992 (the first day of public
trading after the initial public offering) with all dividends reinvested, and
a $100 investment in the indexes on November 30, 1992 (the end of the month
prior to the Company's initial public offering).
RESEARCH DATA GROUP TOTAL RETURN - DATA SUMMARY
HGGR
CUMULATIVE TOTAL RETURN
--------------------------------------
12/11/92 9/93 9/94 9/95 9/96 9/97
HAGGAR CORP. HGGR 100 98 147 100 79 82
S & P 500 I500 100 109 113 147 176 248
S & P TEXTILES (APPAREL) ITXA 100 69 75 73 100 108
9
COMPENSATION COMMITTEE REPORT
INTRODUCTION
The Compensation Committee, which is comprised of two non-employee
directors of the Company, is responsible for structuring, evaluating and
recommending to the Board of Directors the Company's executive compensation
policies and the annual compensation of the executive officers and other
senior management of the Company thereunder. In connection with such
responsibilities, the Compensation Committee has exclusive authority to
administer the Company's 1992 Long Term Incentive Plan, including the grant
of stock options and other awards thereunder. All other actions of the
Compensation Committee are subject to the approval of the Board of Directors.
EXECUTIVE COMPENSATION OBJECTIVES
The primary objectives of the Compensation Committee are to ensure that
the compensation provided to the Company's executive officers and other
senior management integrates with Haggar's annual and long-term performance
objectives, to reward superior performance, and to assist the Company in
attracting, retaining and motivating executives with exceptional leadership
abilities. Consistent with this philosophy, the Compensation Committee has
established a competitive and appropriate total compensation package for the
executive officers and other senior management of the Company consisting
primarily of base salary, annual bonus pursuant to a Management Incentive
Plan, discretionary payments under a Deferred Annuity Plan and stock options
pursuant to the 1992 Long Term Incentive Plan. The Compensation Committee
does not presently anticipate that the compensation of any executive officer
will materially exceed the cap on deductibility imposed by Section 162(m) of
the Internal Revenue Code during fiscal 1998.
ELEMENTS OF EXECUTIVE COMPENSATION
BASE SALARY. The Compensation Committee recommends base salaries each
year at a level intended to be within the competitive market range of
comparable companies. In addition to the competitive market range, many
factors are considered in determining base salaries, including the
responsibilities assumed by the executive, length of service, individual
performance and internal equity considerations. To ensure that the Company
maintains its competitive position and retains the talent necessary to meet
the challenges in the apparel industry, the Compensation Committee will
continue to evaluate and analyze Haggar's base salaries and make appropriate
adjustments.
ANNUAL BONUS. The Board of Directors has approved a Management
Incentive Plan pursuant to which certain members of senior management of the
Company are eligible to receive a cash bonus following each fiscal year in
which the Company meets or exceeds an annual net income goal established by
the Board of Directors. The amount of individual bonuses is based on the
performance of the Company, the total amount of funds available for
distribution and each participant's incentive base amount (provided that no
participant's bonus may exceed 200% of his incentive base amount).
Eligibility to participate in the Management Incentive Plan and the amount of
the bonus pool are determined by the Compensation Committee and approved by
the Board of Directors.
DISCRETIONARY PAYMENTS. The Company has established a Deferred Annuity
Plan pursuant to which all salaried and sales personnel whose total salary,
commissions and incentive base is $50,000 or more may make voluntary
contributions to deferred annuity investment products on an after-tax basis
through payroll deductions or direct payment. Each year, the Board of
Directors determines whether to pay an additional cash bonus to any of the
participants in the Deferred Annuity Plan for the purpose of compensating for
federal income taxes owed on the annuity plan investment contribution and the
bonus. Although the Compensation Committee does not administer the Deferred
Annuity Plan, bonuses paid to executive officers thereunder are subject to
review and approval by the Compensation Committee in connection with its
evaluation of the total compensation of the Company's executive officers.
STOCK OPTIONS. Stock options are granted by the Compensation Committee
under the Company's 1992 Long Term Incentive Plan. One of the Compensation
Committee's priorities is for the executive officers and senior management of
the Company to be significant stockholders so that their interests are
aligned with the interests of Haggar's other stockholders. The Compensation
Committee believes that this strategy motivates executives to remain focused
on the overall long-term performance of the Company. Under the 1992 Long
Term Incentive Plan, stock
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options are granted with an option exercise price not less than the fair
market value of the Common Stock on the day of grant. Stock options are
normally granted annually and, in support of the Compensation Committee's
ownership objectives, are intended to be granted to the executive officers at
levels at the high end of the competitive market range of comparable
companies. Stock options granted during fiscal 1997 vest ratably over three
years and remain exercisable for ten years from the date of grant, subject to
the provisions of the 1992 Long Term Incentive Plan.
During fiscal 1997, the Compensation Committee reviewed the exercise
prices of all options previously granted to Haggar employees under the 1992
Long Term Incentive Plan and determined that the exercise price of a majority
of such options was too high to provide the desired performance incentive.
Therefore, on August 22, 1997 the Compensation Committee amended all of the
previously issued and unexercised employee stock options (other than options
held by the Chief Executive Officer) to provide an exercise price equal to
the fair market value of the Common Stock on such date. However, as a
condition of repricing these outstanding options, the Compensation Committee
reduced the number of unexercised options held by each employee by
approximately 27% (apportioned ratably between vested and unvested portions
of each prior option grant).
CHIEF EXECUTIVE OFFICER COMPENSATION
The Chief Executive Officer participates in the same executive
compensation program provided to the other executive officers and senior
management of the Company as described above. The Compensation Committee's
approach to setting compensation for the Chief Executive Officer is to be
competitive with comparable companies and to have a major portion of his
compensation depend on the achievement of performance criteria.
The Chief Executive Officer's total cash compensation for fiscal 1997
was $667,600. Approximately 19.4% of this amount was earned under the annual
Management Incentive Program. The Chief Executive Officer's base salary was
increased during fiscal 1997 to $475,000, an approximately 5.5% increase from
his former base salary. In light of the Company's continued promotion of new
products and the leadership required to implement the Company's strategic
objectives, the Compensation Committee believes that the Chief Executive
Officer's total compensation for fiscal 1997 was reasonable and appropriate.
CONCLUSION
The Compensation Committee believes the mix of conservative salaries,
cash incentives for short-term performance and the potential for equity-based
rewards for long-term performance represents an appropriate balance of
executive compensation. This balanced executive compensation program
provides a competitive and motivational compensation package to the executive
officer team necessary to continue to produce the results the Company strives
to achieve.
The Compensation Committee:
Richard W. Heath
Rae F. Evans
RATIFICATION OF SELECTION OF AUDITOR
(ITEM 2)
The Board of Directors has selected Arthur Andersen LLP as independent
certified public accountants to audit the consolidated financial statements
of the Company for the fiscal year ending September 30, 1998, and has
determined that it would be desirable to request that the stockholders ratify
such selection. The affirmative vote of a majority of the outstanding shares
of Common Stock present at the Annual Meeting in person or by proxy is
necessary for the ratification of the appointment by the Board of Directors
of Arthur Andersen LLP as independent certified public accountants. Arthur
Andersen LLP served as the Company's independent certified public accountants
for the fiscal year ended September 30, 1997, and has reported on the
Company's consolidated financial statements for such year. Representatives
of Arthur Andersen LLP are expected to be present at the Annual Meeting, will
have
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the opportunity to make a statement if they desire to do so and will be
available to respond to appropriate questions from stockholders.
The Board of Directors has the responsibility for selecting the
Company's independent certified public accountants and stockholder
ratification is not required. However, the selection is being submitted for
ratification at the Annual Meeting with a view towards soliciting the
stockholders' opinions, which the Board of Directors will take into
consideration in future deliberations.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RATIFICATION OF
ARTHUR ANDERSEN LLP AS INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS OF THE
COMPANY FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 1998.
OTHER BUSINESS
(ITEM 3)
The Board of Directors knows of no other business to be brought before
the Annual Meeting. If, however, any other business should properly come
before the Annual Meeting, the persons named in the accompanying proxy will
vote the proxy as in their discretion they may deem appropriate, unless they
are directed by the proxy to do otherwise.
DATE FOR RECEIPT OF PROPOSALS
Any proposal to be presented by a stockholder at the Company's 1998
Annual Meeting of Stockholders must be presented to the Secretary of the
Company not later than September 18, 1998.
By Order of the Board of Directors
/s/ J. M. Haggar, III
----------------------------------------
J. M. Haggar, III
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
January 16, 1998
Dallas, Texas
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. WHETHER OR NOT YOU
EXPECT TO ATTEND THE MEETING, PLEASE MARK, SIGN, DATE, AND RETURN THE
ENCLOSED PROXY PROMPTLY IN THE ENCLOSED POSTAGE PAID ENVELOPE. IF YOU ATTEND
THE MEETING, YOU MAY REVOKE YOUR PROXY AND VOTE IN PERSON.
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HAGGAR CORP.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
FEBRUARY 11, 1998
THIS PROXY IS SOLICITED ON BEHALF OF HAGGAR CORP.'S BOARD OF DIRECTORS
The undersigned hereby appoints Marc Joseph and David M. Tehle and each of
them, proxies for the undersigned, with full power of substitution, to vote
all shares of Haggar Corp. Common Stock which the undersigned may be entitled
to vote at the Annual Meeting of Stockholders of Haggar Corp. to be held on
Wednesday, February 11, 1998, or at any adjournment thereof, upon the matters
set forth on the reverse side and described in the accompanying Proxy
Statement and upon such other business as may properly come before the
meeting or any adjournment thereof.
This proxy, when properly executed, will be voted in the manner directed.
Please mark this proxy as indicated on the reverse side to vote on any item.
If you wish to vote in accordance with the Board of Directors'
recommendations, no boxes need to be checked. Regardless of how you vote,
the proxy must be signed to be valid. If you attend the meeting, you may
revoke your proxy and vote in person.
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- FOLD AND DETACH HERE -
Please mark
your votes as
indicated in /X/
this example
THE TWO RESOLUTIONS ON THE BALLOT ARE:
1. ELECTION OF DIRECTORS 2. APPROVAL OF ARTHUR
ANDERSEN LLP AS INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
FOR all nominees TO WITHHOLD NOMINEES: Richard W. Heath, J.M. Haggar, III
(Except as marked AUTHORITY (INSTRUCTIONS: To withhold authority to
to the contrary) (For all nominees vote for any individual nominee, write
listed) that nominee's name in the space
provided below.) FOR AGAINST ABSTAIN
/ / / / / / / / / /
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CHANGE
OF / /
__ ADDRESS
|
|
I PLAN TO
ATTEND / /
THE MEETING
Signature(s) Date
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NOTE: Please sign as name appears hereon. Joint owners should each sign. When signing as
attorney, executor, administrator, trustee or guardian, please give full title as such.
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