<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Materials Pursuant to ss. 240.14a-11(c) or ss. 240.14a-12
Oak Hill Sportswear Corporation
- -------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
Registrant
- -------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
-----------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
-----------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:1
-----------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
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1 Set forth the amount on which the filing fee is calculated and state how it
was determined.
[ ] 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:
---------------------------------------------
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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<PAGE>
OAK HILL SPORTSWEAR CORPORATION
1411 Broadway
New York, New York 10018
--------------
NOTICE OF 1996 ANNUAL MEETING OF SHAREHOLDERS
--------------
Dear Shareholder:
The Annual Meeting of Shareholders of Oak Hill Sportswear
Corporation will be held in The Chestnut Room at The Penn Club, 30 West 44th
Street, New York, New York, on Wednesday, June 26, 1996, at 11:15 A.M., to:
(1) elect a Board of five directors;
(2) approve an amendment to the Company's Non-Qualified
Stock Option Plan; and
(3) act upon such other matters as may properly
come before the meeting.
The Board of Directors has fixed the close of business on May
16, 1996 as the record date for determining shareholders entitled to notice of
and to vote at the meeting.
Joseph Greenberger,
Secretary
May 20, 1996
YOUR VOTE IS IMPORTANT
Whether or not you plan to attend the meeting,
please sign and return the accompanying proxy card.
<PAGE>
OAK HILL SPORTSWEAR CORPORATION
1411 Broadway
New York, New York 10018
--------------
PROXY STATEMENT
FOR
1996 ANNUAL MEETING OF SHAREHOLDERS
--------------
Introduction
Proxies in the form enclosed are solicited by the management
of Oak Hill Sportswear Corporation (the "Company") for use at the 1996 Annual
Meeting (the "Meeting") of Shareholders scheduled to be held on Wednesday, June
26, 1996. All properly executed proxies received prior to or at the meeting will
be voted. If a proxy specifies how it is to be voted, it will be so voted. If no
specification is made, it will be voted FOR the election of management's five
nominees as directors (see "Election of Directors"), to approve an amendment to
the Company's Non-Qualified Stock Option Plan (see "Approval of Amendment to the
Company's Non- Qualified Stock Option Plan") and, if other matters properly come
before the meeting, in the discretion of either of the persons named in the
proxy.
Shares Entitled to Vote
Holders of record of Common Stock at the close of business on
May 16, 1996 (the "Record Date") are entitled to notice of and to vote at the
meeting. On that date, there were 2,057,576 shares of Common Stock, $.02 par
value, outstanding, each entitled to one vote. The Notice of Meeting, this Proxy
Statement, the accompanying proxy card and the Annual Report of the Company for
its fiscal year ended December 31, 1995 are being mailed on or about May 20,
1996 to all holders of record of Common Stock on the Record Date.
Proxies and Revocation of Proxies
Execution and delivery of a proxy card will not affect a
shareholder's right to attend the Annual Meeting and vote in person. A
shareholder in whose name shares are registered as of the Record Date and who
has given a proxy may revoke it at any time before it is voted by executing and
delivering a written revocation to the Secretary of the Company, by presentation
of a later dated proxy or by attending the Meeting and voting by ballot (which
has the effect of revoking the prior proxy). Attendance at the Annual Meeting,
however, will not in and of itself revoke a proxy.
<PAGE>
A shareholder who is a beneficial owner, but not a registered
owner, as of the Record Date, cannot vote his or her shares except by the
shareholder's broker, bank or nominee in whose name the shares are registered
executing and delivering a proxy on his or her behalf or the shareholder
attending the Meeting with a proxy or other authorization to vote from the
registered owner and voting.
No compensation will be paid by the Company to any person in
connection with the solicitation of proxies. Brokers, banks, and other nominees
will be reimbursed for out-of-pocket and other reasonable clerical expenses
incurred in obtaining instructions from beneficial owners of the Company's
stock. In addition to the solicitation by mail, solicitation of proxies may, in
certain instances, be made personally or by telephone by directors, officers and
a few regular employees of the Company. It is expected that the expense of such
special solicitation will be nominal. All expenses incurred in connection with
this solicitation will be borne by the Company.
PRINCIPAL HOLDERS OF COMMON STOCK
The following are believed by the Company to be the beneficial
owners of more than 5% of the outstanding Common Stock, as of April 24, 1996:
Number of Percent of
Name and Address Shares Outstanding
---------------- --------- -----------
Arthur L. Asch 425,951(1) 20.6%
1411 Broadway
New York, New York 10018
Alphi Investment Management Company 166,000(2) 8.1%
155 Pfingston Road - Suite 360
Deerfield, IL 60015
(1) Includes 25,000 shares held by his wife. Mr. Asch has disclaimed a
beneficial ownership of these shares. Includes 10,000 shares underlying
options that may be exercisable within sixty days. Excludes 30,000 shares
underlying options not exercisable within sixty days.
(2) As reported in the most recent Schedule 13G received by the Company.
-2-
<PAGE>
ITEM 1 -- ELECTION OF DIRECTORS
Certain Information Regarding
Management's Nominees and Retired Directors
Five directors are to be elected at the 1996 Annual Meeting of
Shareholders to hold office until the next Annual Meeting of Shareholders and
until their successors are elected and qualified. All nominees are presently
directors of the Company. Mr. M. Asch was elected in April 1996 to expand the
Board to five members. Messrs. Roth and Weingarten were elected by the Board in
April 1996 to fill vacancies on the Board. The present directors' term of office
expires at the conclusion of the 1996 Annual Meeting of Shareholders. Management
has no reason to believe that any nominee will be unable to serve. If any should
not be available, either person named in the proxy may vote for a substitute
nominee designated by the Nominating Committee of the Board of Directors.
Nominees receiving a plurality of the votes cast at the Meeting will be elected.
The following table gives certain information as of April 24,
1996 concerning (i) the present directors and nominees for election as directors
and (ii) two former directors (the "Retired Directors") who resigned from the
Board on April 22, 1996, (iii) and the ownership of the Company's common stock
by all executive officers, directors and nominees and the Retired Directors.
<TABLE>
<CAPTION>
Director Number Percent of
Name Age Biographical Information Since of Shares Outstanding
- ---- --- ------------------------ -------- --------- -----------
<S> <C> <C> <C> <C>
Arthur L. Asch 54 Chairman of the Board of Directors 1979 425,951(1) 20.6%
and Chief Executive Officer of the
Company, and member of the
Executive and Nominating
Committees. Chairman of the Oak
Hill Sportswear Division of
Donnkenny Apparel, Inc. since July
1995.
Michael A. Asch 29 Vice President and Chief Financial April 26,500(2) 1.3%
Officer of the Company since March 1996
1994. Vice President - Operations
of the Company's Domestic Division
from January 1993. Member of the
Executive and Nominating
Committees. Since July 1995, Vice
President and Chief Financial
Officer of the Oak Hill Sportswear
Division of Donnkenny Apparel, Inc.
Since February 1992, President and
principal of Anniston Capital, Inc.
(investment banking). From August
1989 to January 1992, Associate -
Investment Banking of Robert
Fleming Inc. Michael A. Asch is
the son of Arthur L. Asch.
Joseph Greenberger 60 Secretary of the Company and member 1979 -- --
of the Executive, Nominating,
Audit, and Stock Option Committees.
Partner of Greenberger & Forman, a
New York law firm.(3)
</TABLE>
-3-
<PAGE>
<TABLE>
<CAPTION>
Director Number Percent of
Name Age Biographical Information Since of Shares Outstanding
- ---- --- ------------------------ -------- --------- -----------
<S> <C> <C> <C> <C>
Kenneth S. Roth 53 President of Rothwood Real Estate April --(4) --
Services, Inc. (commercial real 1996
estate broker) since March, 1992.
From December, 1988 to March, 1992,
President of SZW&E of Long Island,
Inc. (commercial real estate
broker). From June, 1986 to March,
1992, Partner of The Regency Group
(commercial real estate developer).
Member of the Audit and Stock
Option Committees.
Aaron W. Weingarten 62 Chairman of the Board of Yavapai April --(4) --
Hills, Inc. (real estate developer) 1996
since 1980.(5) Member of the Audit
and Stock Option Committees.
Retired
Directors
---------
Steven Kotler 49 President since March 1987, and 1979 25,675(6) 1.2%
Managing Director, since 1986, of
Schroder Wertheim & Co.
Incorporated (investment bankers)
and, prior thereto, general partner
of Wertheim & Co., its predecessor.
Former Chairman of the Company's
Executive Committee and former
member of Audit, Nominating and
Stock Option Committees. Director
of Del Laboratories, Inc.
(cosmetics and drugs); Moore
Medical Corp. (wholesale drugs);
Member of Board of Governors of the
American Stock Exchange.
Wilmer J. Thomas, Jr. 69 Private investor and financial 1979 2,000 *
consultant. Former member of the
Company's Executive, Audit,
Nominating and Stock Option
Committees. Director and Vice
Chairman of International Controls
Corp. since 1989 (automotive parts
and trailers) and its Treasurer
from 1989 to 1994. Director of
Moore Medical Corp.
All directors, 480,126 23.1%
executive officers and
Retiring Directors as
a group (7 persons)
</TABLE>
- -------------------------------
* Less than 1%.
(1) See Note 1 to "Principal Holders of Common Stock."
(2) Includes 8,500 shares underlying stock options exercisable within sixty
days, and excludes 25,500 shares underlying options not exercisable within
sixty days.
(3) Mr. Greenberger's law firm earned approximately $36,000 in fees from the
Company for services rendered in 1995.
(4) Excludes 15,000 shares underlying stock options not exercisable within
sixty days.
(5) Mr. Weingarten was an officer of three corporations which served as the
general partner of three limited partnerships which owned real estate for
which a receiver was appointed during the past two years.
(6) All such shares are held by the Kotler Family Foundation, Inc., of which
Mr. Kotler is Trustee. Mr. Kotler has disclaimed beneficial interest of
these shares.
-4-
<PAGE>
Meetings of Board and Committees
The Board of Directors had eight formal meetings during 1995.
All directors who are nominees and who were directors during 1995 attended at
least 75% of the Board of Directors meetings in 1995. The Board has an Executive
Committee, an Audit Committee, a Nominating Committee and a Stock Option
Committee. The Executive Committee has all the authority which, under the New
York Business Corporation Law, may be delegated to such a Committee; until April
22, 1996 it had been specifically delegated the functions of a compensation
committee. The Executive Committee had two formal and several informal meetings
during 1995. The Audit Committee recommends the firm of independent public
accountants to be engaged as the Company's auditors and participates in such
accounting reviews as it deems appropriate. It had one meeting during 1995. The
Nominating Committee recommends to the Board the slate of management nominees
for election as directors and also recommends officers and other Company
officials; it will consider nominations by shareholders made in writing to the
Chairman of the Board. The Nominating Committee had two meetings during 1995.
The Stock Option Committee is authorized to award options under the Company's
stock option plans. It had no meetings during 1995.
Directors who are not officers were each paid $10,000 in 1995.
Mr. Kotler, as Chairman of the Executive Committee, was paid an additional
$10,000 in 1995 and Mr. Thomas was paid an additional $10,000 in 1995 under a
consulting arrangement with the Company pursuant to which Mr. Thomas consults
with senior officers regarding financial and transaction matters. Current
directors who are not officers each receive $10,000 per year. In addition, upon
joining the Board Messrs. Roth and Weingarten were each granted options to
purchase up to 15,000 shares of the Company's common stock pursuant to the NQO
Plan, as amended. Such grants are subject to the approval by shareholders at the
Meeting. See Item 2 -- "Approval of Amendment to Non-Qualified Stock Option
Plan." The Company maintains directors' and officers' liability insurance. For
1996, the aggregate premiums for such insurance is approximately $74,000.
-5-
<PAGE>
Executive Compensation
The following table summarizes all compensation paid by the
Company during its fiscal year ended December 31, 1995, and for the two prior
fiscal years, to its Chief Executive Officer and each of its most highly
compensated executive officers as of December 31, 1995, whose total compensation
exceeded $100,000 during 1995.
<TABLE>
<CAPTION>
Long Term
Annual Compensation Compensation Awards
------------------------------ ------------------------------
Number
Name and Other Annual of
Principal Salary Compensation Options All Other
Position Year ($) ($)(2) Granted Compensation(3)
- -------- ---- ------- ------------- ------- ---------------
<S> <C> <C> <C> <C> <C>
Arthur L. Asch 1995 $302,404 -- $ 8,400
Chairman of the Board 1994 $500,000 40,000 $ 8,400
(Chief Executive Officer) 1993 $500,000 -- $13,550
Michael A. Asch 1995 $129,846 -- $ 7,191
Vice President 1994 $121,218 34,000 $ 6,673
(Chief Financial
Officer)(1)
</TABLE>
- ------------------------------
(1) Michael A. Asch became Chief Financial Officer in March 1994.
(2) No executive officer's perquisites equaled or exceeded the lesser of
$50,000 or 10% of his cash compensation.
(3) Represents amounts paid under the Company's defined contribution pension
and profit sharing plans.
Employment Agreement
In December 1994, the Company entered into an employment
agreement with Michael A. Asch for a term from January 1, 1995 through December
31, 1996. Pursuant to the agreement, Michael A. Asch was to receive an annual
salary of $215,000 and $230,000 for 1995 and 1996, respectively. Michael A. Asch
agreed to the early termination of such agreement as of July 24, 1995 the date
on which the sale of the Company's Sportswear Division was consummated.
Deferred Compensation Plans
The Company has non-contributory defined contribution pension
and profit sharing plans covering certain employees (including executive
officers) of the Company. The Company has no defined benefit plans.
-6-
<PAGE>
Stock Options
The Company has an Incentive Stock Option Plan ("ISO"), which
terminates on March 21, 1999, and a Non-Qualified Stock Option Plan ("NQO
Plan"), which terminates on October 11, 2004. During 1995, no options were
granted under either Plan, no executive officer of the Company exercised any
options and no options previously granted to any executive officer were
repriced. The Company has no stock appreciation rights ("SAR") plan and has
issued no SARs.
Compensation Committee Interlocks and Insider Participation
The Board has no separate Compensation Committee. The
Executive Committee, which until April 22, 1996, consisted of Steven
Kotler (Chairman), Wilmer J. Thomas, Jr., and Arthur L. Asch (the
Company's Chief Executive Officer), performed the role of a
Compensation Committee. The Board now performs the function of the
Compensation Committee.
Compensation Committee Report
Until July 24, 1995, when the sale of the Company's Sportswear
Division was consummated, Arthur L. Asch was compensated at the rate of $500,000
per year, the annual base salary under his employment agreement which had
expired December 31, 1994. Until July 24, 1995, Michael A. Asch was compensated
at the rate of $215,000 per year, the annual base salary under his employment
agreement with the Company. See "Employment Agreement," above. As negotiated in
connection with the sale of the Sportswear Division, from July 25, 1995 through
December 31, 1995 Arthur L. Asch was compensated by the Company at the rate of
$50,000 per year, and Michael A. Asch was compensated by the Company at the rate
of $25,000 per year.
Steven Kotler, Chairman
Wilmer J. Thomas, Jr.
Arthur L. Asch
-7-
<PAGE>
Performance Graph
The following graph compares the cumulative return on $100
invested at the close of trading on the last trading day of 1990 (assuming the
reinvestment of dividends) of Oak Hill Sportswear Corporation, the S&P 500 Index
and a peer group of companies. The peer group represents the Value Line Apparel
Index, excluding those companies with market capitalizations over $500 million,
as of December 31, 1995, and is comprised of: Farah Inc., Garan Inc., Hartmarx
Corp., Kellwood Co., Oshkosh B'Gosh, Inc. Class A Shares, Oxford Industries,
Inc., Phillips-Van Heusen and Tultex Corp. Those companies excluded as a result
of the market capitalization criteria were Fruit of the Loom, Liz Claiborne,
Russell Corp. and V. F. Corp. The peer group is weighted by market values of the
companies in the group at the beginning of each measurement period.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
Oak Hill Sportswear Corporation, Standard & Poors 500 And Peer Group
(Performance Results Through 12/31/95)
$250.00|------------------------------------------------------------------|
| |
| # & |
$200.00|------------------------------------------------------------------|
| # |
| & |
$150.00|--------------#---------------------&-----------------------------|
| & & @# |
| @ # |
$100.00|---@&#------------------------------@-----------------------------|
| @ |
| @ |
$50.00|------------------------------------------------------------------|
| |
| |
$0.00|----|---------|----------|----------|-----------|------------|----|
1990 1991 1992 1993 1994 1995
@ = Oak Hill Sportswear Corporation
& = Standard & Poors 500 # = Peer Group
<TABLE>
<CAPTION>
1990 1991 1992 1993 1994 1995
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Oak Hill Sportswear Corporation @ $100.00 $115.38 $ 84.62 $109.62 $134.62 $ 61.54
Standard & Poors 500 & $100.00 $130.55 $140.72 $154.91 $157.39 $216.42
Peer Group # $100.00 $150.72 $176.59 $210.63 $133.73 $117.26
</TABLE>
Assumes $100 invested at the close of trading 12/90 in Oak Hill Sportswear
Corporation common stock, Standard & Poors 500, and Industry Peer Group.
* Cumulative total return assumes reinvestment of dividends.
-8-
<PAGE>
ITEM 2 -- APPROVAL OF AN AMENDMENT TO
NON-QUALIFIED STOCK OPTION PLAN
At the Meeting, shareholders will be asked to approve an
amendment (the "Amendment") to the Company's Non-Qualified Stock Option Plan
(the "NQO Plan"). The sole amendment to the NQO Plan is to permit options to be
granted to directors and to provide that each director, who is not an employee
of the Company, shall receive options to purchase 15,000 Shares upon joining the
Board. The Amendment was approved by the Board on April 22, 1996. The
affirmative vote of a majority of the shares present in person or by proxy at
the Meeting is necessary to approve the Amendment.
PLAN BENEFITS
The following table gives information with respect to options
that have been granted under the NQO Plan to each named executive officer, all
executive officers as a group, each nominee for election as a director, all
directors who are not executive officers as a group, and all employees as a
group.
<TABLE>
<CAPTION>
Average Percentage of
Name Shares(1) Expiration Date Exercise Price Options Granted
- ---- --------- --------------- -------------- ---------------
<S> <C> <C> <C> <C>
Arthur L. Asch (Chief 40,000 10/11/99 $4.25 38.5%
Executive Officer)
Michael A. Asch (Chief 34,000 10/11/99 $4.25 32.7%
Financial Officer)
Kenneth S. Roth 15,000(2) 4/22/01 $2.00 14.4%
Aaron W. Weingarten 15,000(2) 4/22/01 $2.00 14.4%
All Executive Officers 74,000 10/11/99 $4.25 71.2%
as a group (2 persons)
All Non-Executive 30,000 4/22/01 $2.00 28.8%
Officer Directors as a
group (2 persons)
All Employees as a 74,000 10/11/99 $4.25 71.2%
group (2 persons)
</TABLE>
- -----------------------
(1) The option grants provide that if, during the period of the holder's
employment by the Company, there should be a change of control (as defined
in the grant) of the Company, the full balance of the option (to the extent
not previously exercised) may be exercised by the holder until the earlier
to occur of the Expiration Date or fifteen days following the change of
control.
(2) The options vest in three equal cumulative annual installments, commencing
April 22, 1997.
-9-
<PAGE>
Summary of the Plan
The following summarizes the material features of the Plan.
Purpose
The primary purpose of the NQO Plan is to provide a
continuing, long-term incentive to officers, directors and selected employees of
the Company so that it may be able to continue to hire and retain qualified
personnel.
Number of Shares Covered by the NQO Plan
Under the NQO Plan, options to purchase up to 199,250 shares
may be granted. Any options that are canceled or terminated without exercise are
available for future grant. No one person may receive options to purchase in
excess of 100,000 shares under the Plan.
Administration
The NQO Plan is administered by the Company's Stock Option
Committee (the "Committee"), which consists of not less than three members of
the Board, each of whom is a "disinterested person" within the meaning of Rule
16b-3 promulgated under the Exchange Act. The interpretations and constructions
by the Committee of any provisions of the Plan and of options granted
thereunder, and such determinations of the Committee as it deems appropriate for
the administration of the Plan and of options granted thereunder, are final and
conclusive on all persons having any interest thereunder. The present members of
the Committee are Joseph Greenberger, Kenneth S. Roth and Aaron W. Weingarten.
The Committee has the authority, in its discretion and subject
to the express provisions of the Plan, to determine the individuals to receive
options, the time when they will receive such options, the purchase price and
the number of shares which will be subject to each option, and the other terms
and provisions of the respective options (which need not be identical).
Eligibility and Extent of Participation
Options may be granted to directors and selected key employees
of the Company. As of April 24, 1996, approximately 40 individuals were eligible
to receive options, and options were held by four individuals. Subject to the
terms of the NQO Plan, the Committee has full and final authority to determine
the persons who are to be granted options under the Plan and the number of
shares subject to each option.
-10-
<PAGE>
Purchase Price, Period and Exercise of Options
The purchase price for each share issuable upon exercise of an
option is to be determined by the Committee, but may not be less than 50% of the
fair market value of such shares on the date the option is granted. The purchase
price for the shares issued upon exercise of options may be in cash, the
Company's common stock or a combination thereof.
An option may be exercisable in such amounts and at such times
as may be determined by the Committee at the time of grant of such option.
Options may be exercisable immediately, but shall not be exercisable more than
five years from the date of grant of such options. To the extent that an option
is not exercised within the period of exercisability fixed by the Committee, it
will expire as to the then unexercised part.
Expiration and Transfer of Options
Options are non-transferable, except by will or by the laws of
descent and distribution. To the extent that options remain exercisable at the
time any Optionee's employment with the Company terminates, such options expire
ten days after a voluntary termination and ninety days after any other
termination.
Adjustment of Shares
If any change is made in the Shares subject to the NQO Plan,
or subject to any option granted under the Plan, through merger, consolidation,
reorganization, recapitalization, stock dividend, stock split, combination of
shares, rights offerings, change in the corporate structure of the Company, or
otherwise, such adjustment shall be made as to the maximum number of shares
subject to the Plan, and the number of shares and prices per share of stock
subject to outstanding options as the Committee may deem appropriate.
Amendments to, and Termination of, the NQO Plan
The Company's Board of Directors may from time to time make
such amendments to the NQO Plan as it may deem proper and in the best interests
of the Company, provided that no amendment shall be made which would impair,
without the consent of the applicable optionholders, any option theretofore
granted under the Plan or deprive any optionholder of any shares which he may
have acquired through or as a result of the Plan or without shareholder approval
to increase the number of shares subject to options under the Plan. The Plan may
be terminated at any time by the Company's Board of Directors except with
respect to options then outstanding under the Plan. Otherwise, it shall
terminate on October 11, 2004, except with respect to options then outstanding.
-11-
<PAGE>
Federal Income Tax Consequences
The following summary of the Federal income tax consequences
of the grant and exercise of options, and the disposition of shares purchased
pursuant to the exercise of options, is intended to reflect the current
provisions of the Code and the regulations thereunder. This summary is not
intended to be a complete statement of applicable law, nor does it deal with
state and local tax considerations.
No tax obligation will arise for the optionee or the Company
upon the granting of options under the NQO Plan. Upon exercise of an option, an
optionee will recognize ordinary income in an amount equal to the excess, if
any, of the fair market value, on the date of exercise, of the stock acquired
over the exercise price of the option. Thereupon, the Company will be entitled
to a tax deduction in an amount equal to the ordinary income recognized by the
optionee (i) provided that applicable federal income tax withholding
requirements are satisfied and (ii) subject to the possible limitations on
deductibility under Section 162(m) of the Internal Revenue Code of 1986, as
amended, of compensation paid to executives designated by that section. The
optionee's tax basis in the underlying shares of Common Stock acquired by
exercise of the option will equal the exercise price plus the amount taxable as
compensation to the optionee. Any additional gain or loss realized by an
optionee on disposition of the shares generally will be capital gain or loss to
the optionee and will not result in any additional tax deduction to the Company.
The payment by an optionee of the exercise price, in full or
in part, with previously acquired shares of common stock will not affect the tax
treatment of the exercise described above. No gain or loss generally will be
recognized by the optionee upon the surrender of the previously acquired shares
of common stock to the Company, and shares received by the optionee, equal in
number to the previously surrendered shares, will have the same tax basis as the
shares surrendered to the Company and will have a holding period that includes
the holding period of the shares surrendered. The value of shares received by
the optionee in excess of the number of shares surrendered to the Company will
be taxable to the optionee. Such additional shares will have a tax basis equal
to the fair market value of such additional shares as of the date ordinary
income is recognized, and will have a holding period that begins on the date
ordinary income is recognized.
-12-
<PAGE>
SHAREHOLDER PROPOSALS FOR 1997 ANNUAL MEETING
Shareholders may present proposals for inclusion in the 1997
Proxy Statement provided they are received by the Company at its principal
executive offices no later than January 21, 1997 and are in compliance with
applicable regulation of the Securities and Exchange Commission.
FILINGS UNDER SECTION 16(a)
Section 16(a) of the Securities Exchange Act of 1934 requires
the Company's officers and directors, and persons who own more than ten percent
of a registered class of the Company's equity securities, to file reports of
ownership of such securities with the Securities and Exchange Commission.
Officers, directors and greater than ten percent beneficial owners are required
by applicable regulations to furnish the Company with copies of all Section
16(a) forms they file. Other than Mr. A. Asch, the Company is not aware of any
beneficial owner of more than ten percent of its Common Stock.
Based on a review of the copies of the Forms furnished to the
Company, the Company believes that all filing requirements applicable to its
officers and directors were complied with in a timely manner during 1995.
THE COMPANY'S INDEPENDENT PUBLIC ACCOUNTANTS
Price Waterhouse LLP has been appointed the Company's
independent public accountants for 1996. A representative of Price Waterhouse
LLP is expected to be present at the 1996 Annual Meeting of Shareholders and
will be available to answer appropriate questions.
A SHAREHOLDER MAY OBTAIN, WITHOUT CHARGE, A COPY OF THE COMPANY'S
ANNUAL REPORT ON FORM 10-K FOR ITS FISCAL YEAR ENDED DECEMBER 31,
1995, BY WRITING TO: OAK HILL SPORTSWEAR CORPORATION, 1411 BROADWAY,
NEW YORK, NY 10018: ATTN: CHIEF FINANCIAL OFFICER.
Dated: May 20, 1996
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OAK HILL SPORTSWEAR CORPORATION
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints Arthur L. Asch and Joseph
Greenberger as proxies, each with the power to appoint his substitute, and
hereby authorizes them to represent and to vote, as designated below, all the
shares of Common Stock of Oak Hill Sportswear Corporation held of record by the
undersigned on May 16, 1996 at the Annual Meeting of Shareholders to be held on
June 26, 1996 and any adjournment thereof.
1. Election of Directors
[_] FOR all nominees listed below [_] WITHHOLD AUTHORITY to
(except as marked to the contrary vote for all nominees
below) listed below
Arthur L. Asch, Michael A. Asch, Joseph Greenberger, Kenneth S.
Roth and Aaron W. Weingarten
(INSTRUCTION: To withhold authority to vote for any individual
nominee, write that nominee's name in the space provided below.)
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2. Approve an amendment to the Company's Non-Qualified Stock Option Plan
[_] FOR [_] AGAINST [_] ABSTAIN
3. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
(Please date and sign on reverse side)
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This proxy when properly executed will be voted in the manner
directed herein by the undersigned stockholder. If no direction is made, the
proxy will be voted FOR the election of management's nominees for directors, and
FOR the proposal to amend the Company's Non-Qualified Stock Option Plan.
When shares are held by joint tenants, both should sign. When
signing as attorney, executor, administrator, trustee or guardian, please give
full title as such. If a corporation, please sign in full corporate name by
President or other authorized officer. If a partnership, please sign in
partnership name by authorized person.
Please sign exactly as name appears herein.
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(Signature)
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(Signature, if held jointly)
Dated:______________________, 1996
PLEASE MARK, SIGN, DATE AND
RETURN THIS PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE
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AMENDED AND RESTATED
OAK HILL SPORTSWEAR CORPORATION
NON-QUALIFIED STOCK OPTION PLAN
1. Purpose. The purpose of this Amended and Restated
Non-Qualified Stock Option Plan (the "Plan") is to provide a continuing
incentive to outside directors and selected key employees of Oak Hill Sportswear
Corporation, a New York corporation (the "Company"), and of any parent or
subsidiary of the Company, by the grant of non-qualified, non-incentive stock
options ("Options") under the Plan. Options granted under the Plan are not
intended to be eligible for the tax consequences provided for in Sections 421
through 424 of the Internal Revenue Code of 1986, as amended (the "Code"). The
Plan is being amended to provide that outside directors, upon joining the Board,
be granted options to purchase 15,000 shares pursuant to Section 5(b) hereof.
2. Shares Covered by Plan. The number of shares which may be
issued pursuant to options granted under the Plan shall not exceed 199,250
shares of the Company's common stock, par value $.02 ("Common Stock"). If any
option granted under the Plan shall terminate, expire or be canceled, for any
reason whatsoever, without having been exercised in full, the shares not
purchased under such option shall be available again for the purposes of the
Plan. The maximum number of shares in respect to which options may be granted
under the Plan to any particular director or employee participating in the Plan
shall be 100,000 per calendar year.
3. Administration. The Plan shall be administered by a
committee of directors of the Company (the "Committee") to be appointed from
time to time by the Company's Board of Directors and to consist of not less than
the minimum number of persons from time to time required by Rule 16b-3
promulgated by the Securities Exchange Commission of 1934, or any successor rule
or regulation thereto as in effect from time to time ("Rule 16b-3") and Section
162(m) of the code, each of whom to the extent necessary to comply with Rule
16b-3 and Section 162(m) of the Code only, is intended to be a "disinterested
person" within the meaning of Rule 16b-3 and an "outside director" within the
meaning of Section 162(m) of the Code; provided that, the mere fact that a
Committee member shall fail to qualify under either of these requirements shall
not invalidate any award made by the Committee which award is otherwise validly
made under this Plan. Any determination in writing signed by all members of the
committee shall be fully as effective as if made by a majority vote at a
meeting. The Committee may hold meetings telephonically. The Committee may
appoint a Secretary, who shall keep minutes of its meetings, and the Committee
may make such rules and regulations for the conduct of its business and for the
carrying out of the Plan as it shall deem appropriate. In addition to the
express powers and authorizations conferred upon the Committee by the Plan, the
Committee shall have the authority to (i) interpret and administer the Plan and
any instrument or agreement relating to, or option made under the Plan and (ii)
correct any defects, supply any omission and reconcile any inconsistency in the
Plan. The interpretations and constructions by the Committee of any provisions
of the Plan or of any option granted hereunder, and such determinations of the
Committee as it shall deem appropriate for the administration of the Plan and of
options granted hereunder, shall be final, binding and conclusive on all persons
having any interest thereunder.
4. Eligibility. Options may be granted under the Plan to
directors and key employees of the Company, and of any parent or subsidiary of
the Company, selected by the Committee.
5. Granting of Options. (a) To Key Employees. The Committee
shall select the key employees eligible to receive options under the Plan, the
number of shares to be included under each option, the date upon which each
option expires, and the other terms and conditions of each option, all subject
to and within the limitations of the Plan. The Committee may grant options which
are exercisable immediately or in installments.
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(b) Automatic Award of Options to Non-Employee Directors. Each
Director who is not an employee of the Company shall receive Options to purchase
15,000 shares upon joining the Board. Such Options shall be awarded at the fair
market value on the date of grant, shall vest in three equal cumulative annual
installments and shall expire five years from the date of grant. This provision
shall not be amended more than once every six months, other than to conform with
changes in the I.R.C., the Employee Retirement Income Security Act of 1974, or
the rules promulgated thereunder.
6. Option Period. The date of grant of an option shall be the
date on which the Committee shall award the option. The Committee may make
options exercisable for up to five years from the date of grant.
7. Option Price. The price to be paid for shares on exercise
of each option shall be fixed by the Committee upon the date of grant. The price
shall not be less than 50% of the fair market value of the common Stock on the
date of the grant.
8. Terms and Conditions of Options.
(a) Each option shall be deemed to include the following
terms and conditions:
(i) The holder of an option may exercise his or her
option by delivering to the Company written notice of the
number of shares with respect to which options rights are
to be exercised together with full payment of the purchase
price of such shares. In addition, the holder of an option
will pay all withholding taxes when due by reason of said
exercise. In both cases (at the election of the holder of
the option) payment may be made either (x) in cash, (y) in
Common Stock, or (z) by a combination of cash and Common
Stock. If payment, in whole or in part, is made in Common
Stock, it shall be valued by the Committee at its fair
market value on the close of business on the date prior to
the date of payment. Common Stock used for payment must
have been held by the optionee for at least six months.
Upon receipt by the Chief Financial Officer or Treasurer of
the Company of payment in full, the option holder shall be
deemed to be the holder of record of the Common Shares
issuable upon such exercise, notwithstanding that
certificates representing such Common Shares shall not then
be actually delivered to the option holder.
(ii) No option and no right under any such option may
be assigned, alienated, pledged, attached, sold or
otherwise transferred or encumbered by the optionee other
than by will or the laws of descent and distribution and
may be exercised during his or her lifetime only by the
optionee.
(iii) If the holder of an option dies during the
period of his or her employment by the Company or during
his or her service as a director, the number of shares for
which the option was exercisable as of the date of death
may be exercised by the option holder's personal
representative, or transferee entitled to acquire the right
to exercise the option by will or pursuant to the laws of
descent and distribution, until the earlier of the date
upon which his or her option expires or ninety days
following the date of death.
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(iv) If the employment of the option holder is
terminated by the option holder by reason of his or her
permanent disability, or terminated by the Company for any
reason (with or without cause), or if an outside director
ceases to serve as a director for any reason, the number of
shares for which the option was exercisable as of the date
of termination may be exercised by the option holder until
the earlier of the date upon which his or her option
expires or ninety days following the date of such
termination.
(v) If the option holder terminates his or her
employment with the Company for any reason other than
permanent disability, the number of shares for which the
option was exercisable as of the date of termination may be
exercised by the option holder until the earlier of the
date upon which his or her option expires or ten days
following the date of such termination.
(vi) No fractional shares shall be issued upon the
exercise of an option. With respect to any fraction of a
share otherwise issuable upon any exercise hereof, the
Company shall pay to the option holder an amount in cash
equal to the fair value of such fraction, in accordance
with Section 509(b) of the New York Business Corporation
Law.
(vii) The option holder shall not, by virtue thereof,
be entitled to any rights of a shareholder in the Company,
either at law or equity, and the rights of the option
holder are limited to those provided by this Plan and (to
the extent consistent therewith) those expressed in the
option. If the shareholders of the Company do not, by April
21, 1997 approve the amendments to this Plan in accordance
with Section 505(d) of the New York Business Corporation
Law, all options granted to outside directors pursuant to
Section 5(b) shall be null and void.
(viii) The Company may require an option holder, and
the option holder's legal representative, heir legatee, or
distributee, as a condition of any exercise of the Option,
to give written assurance satisfactory to the Company that
the shares subject to options are being acquired for
investment only, with no view to the distribution, and that
any subsequent resale thereof will be made pursuant to an
effective and current registration statement under said
Securities Act of 1933, or pursuant to an exemption for
registration under said Act, and all certificates
representing the shares subject to options shall bear the
following legend:
The shares represented by this certificate have
not been registered under the Securities Act of
1933. Said shares have been acquired for
investment, and may not be sold, transferred or
assigned except pursuant to an effective
registration statement for said shares under
said Act or an opinion of the Company's counsel
that such registration is not required under
said Act.
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(b) Each option may be made subject to such other terms and
conditions consistent with the Plan as the Committee may approve and provide for
in the form of option, including, without limitation, those relating to the
immediate exercisability or to the installments in which and/or the conditions
upon which options shall become exercisable.
9. Amendments to and Termination of the Plan. The Board of
Directors of the Company may from time to time make such amendments to the Plan
as it may deem proper and in the best interests of the Company, provided that no
amendment shall be made which would increase the number of shares which may be
made subject to options under the Plan, without shareholders' approval, or
impair, without the consent of the optionee, any option theretofore granted
under the Plan or deprive any optionee of any shares of stock of the Company
which he may have acquired through or as a result of an option under the Plan.
The Plan may be terminated at any time by the Company's Board of Directors,
except with respect to options then outstanding under the Plan.
10. Adjustments. In the event that the Committee determines
that any dividend or other distribution (whether in the form of cash, shares,
other securities, or other property), recapitalization, merger, consolidation,
split-up, spin-off, combination, repurchase, or exchange of shares or other
securities of the Company, issuance of shares or other securities of the
Company, issuance of warrants or other rights to purchase shares or other
similar corporate transaction or event affects the shares such that an
adjustment is determined by the Committee to be appropriate in order to prevent
dilution or enlargement of the benefits or potential benefits intended to be
made available under the Plan, then the Committee shall, in such manner as it
may deem equitable, adjust any or all of (i) the number and type of shares (or
other securities or property) with respect to which options may be granted, (ii)
the number and type of shares (or other securities or property) subject to
outstanding options and (iii) the grant or exercise price with respect to any
option or, if deemed appropriate, make provision for a cash payment to the
holder or an outstanding option in full satisfaction of the Company's
obligations to the holder thereunder.
11. General Provisions.
(a) Options May Be Granted Separately or Together. Options
may, in the discretion of the Committee, be granted either alone or in addition
to, in tandem with, or in substitution for any other option granted under the
Plan or award granted under any other plan of the Company or any affiliate of
the Company.
(b) No Limit on Other Compensation Arrangements. Nothing
contained in the Plan shall prevent the Company or its affiliates from adopting
or continuing in effect other compensation arrangements (subject to shareholder
approval if such approval is required), and such arrangements may be either
generally applicable or applicable only in specific cases.
(c) No Right to Continued Employment. The grant of an option
shall not be construed as giving a participant in the Plan the right to be
retained in the employ of the Company or any of its affiliates. Further, the
Company or its affiliates may at any time dismiss a participant in the Plan from
employment, free from any liability or any claim under the Plan, unless
otherwise expressly provided in the Plan or in any award evidencing an option.
(d) Governing Law. The validity, construction, and effect of
the Plan and any rules and regulations relating to the Plan shall be determined
in accordance with the laws of the State of New York.
(e) No Trust or Fund Created. Neither the Plan nor any option
shall create or be construed to create a trust or separate fund of any kind or a
fiduciary relationship between the Company or any of its affiliates and a
participant in the Plan or any other person. To the extent that any person
acquires a right to receive payments from the Company or any of its affiliates
pursuant to an option, such right shall be no greater than the right of any
unsecured general creditor of the Company or its affiliates.
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12. Effective Date and Term of Plan.
(a) The Plan was adopted and became effective on October 11,
1994, the date on which it was approved by the Board of Directors of the Company
and was approved by shareholders on July 24, 1995. The Amendments thereto become
effective on April 22, 1996, the date on which they were approved by the Board
of Directors; provided that no option granted under section 5(b) hereof shall be
exercisable until and unless the Plan is approved by the Company's shareholders
as contemplated by Section 8(a)(vii).
(b) Unless sooner terminated, this Plan shall terminate on
October 11, 2004 and no options shall thereafter be made under the Plan.
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