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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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 240.14a-11(c) or 240.14a-12
OAK HILL SPORTSWEAR CORPORATION
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(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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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:
----------------------------------------------------------------------
/ / 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.
1) Amount Previously Paid:
___________________________________________________________________________
2) Form, Schedule or Registration Statement No.:
___________________________________________________________________________
3) Filing Party:
___________________________________________________________________________
4) Date Filed:
___________________________________________________________________________
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OAK HILL SPORTSWEAR CORPORATION
1411 Broadway
New York, New York 10018
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NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
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Dear Shareholder:
A Special Meeting of Shareholders of Oak Hill Sportswear Corporation will
be held at the offices of Joseph Greenberger, Esq., 1370 Avenue of the
Americas, 27th floor, New York, New York 10019 on Tuesday, February 17, 1998,
at 9:00 a.m., to consider proposals to:
(1) change the Company's corporate name to REXX Environmental
Corporation, and
(2) amend the Company's Non-Qualified Stock Option Plan, and to
(3) act upon such other matters as may properly come before the meeting.
The Board of Directors has fixed the close of business on January 6, 1998
as the record date for determining shareholders entitled to notice of and to
vote at the meeting.
Joseph Greenberger
Secretary
January 13, 1998
YOUR VOTE IS IMPORTANT
Whether or not you plan to attend the meeting,
please sign and return the accompanying proxy card.
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OAK HILL SPORTSWEAR CORPORATION
1411 Broadway
New York, New York 10018
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PROXY STATEMENT FOR
SPECIAL MEETING OF SHAREHOLDERS
February 17, 1998
Introduction
Proxies in the form enclosed are solicited by the management of Oak Hill
Sportswear Corporation (the "Company") for use at the Special Meeting of
Shareholders (the "Special Meeting") scheduled to be held on February 17, 1998.
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 change of the Company's
corporate name to REXX Environmental Corporation (see, "Approval of Name
Change," Item 1, below), FOR approval of amendments to the Company's
Non-Qualified Stock Option Plan (see, "Approval of Amendments to the Company's
Non-Qualified Stock Option Plan," Item 2, below) 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 January 6,
1998 (the "Record Date") are entitled to notice of and to vote at the Special
Meeting. On that date, there were 2,467,576 shares of Common Stock, $.02 par
value, outstanding, each entitled to one vote. The Notice of Special Meeting,
this Proxy Statement and the accompanying proxy card are being mailed on or
about January 14, 1998, 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 Special 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 Special Meeting and voting by ballot (which has the
effect of revoking the prior proxy). Attendance at the Special Meeting,
however, will not in and of itself revoke a proxy.
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.
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PRINCIPAL HOLDERS OF COMMON STOCK
The following are believed by the Company to be the beneficial owners of
more than 5% of its outstanding Common Stock, as of December 22, 1997:
Number of Percent of
Name and Address Shares Outstanding
---------------- ------ -----------
Arthur L. Asch ........................ 515,951(1) 20.58%(1)
1411 Broadway
New York, New York 10018
Daren J. Barone ........................ 200,000 8.11%
c/o Watkins Contracting, Inc.
8690 Aero Drive, Suite M327
San Diego, CA 92123
Greg S. Watkins ........................ 200,000 8.11%
c/o Watkins Contracting, Inc.
8690 Aero Drive, Suite M327
San Diego, CA 92123
Directors and executive officers ...... 599,118(1)(2) 23.54%(1)(2)
as a group (5 persons)
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(1) Includes 25,000 shares held by Mr. Asch's wife in which he disclaims
beneficial ownership. Also includes 40,000 shares underlying options which
become exercisable within sixty days, and excludes 30,000 additional
shares underlying options not exercisable within sixty days.
(2) Includes 42,167 shares underlying options which become exercisable within
sixty days held by an executive officer other than Arthur L. Asch.
ITEM 1 -- APPROVAL OF NAME CHANGE
Effective June 30, 1995, the Company sold its Sportswear Division. On
October 21, 1997, it acquired all the outstanding shares of Watkins Contracting
Inc. ("WCI"), an environmental remediation contractor. WCI provides asbestos
abatement, hazardous materials and soil remediation and demolition services,
primarily in California, to commercial and governmental clients. Since the
Company's present corporate name is no longer reflective of its current
business operations, the Board, subject to shareholder approval at the Special
Meeting, decided on December 3, 1997 to amend its certificate of incorporation
to effect a change of its corporate name to REXX Environmental Corporation (the
"Name Change Amendment"). Management anticipates that, if the shareholders
approve the Name Change Amendment, the Company's Nasdaq trading symbol will be
"REXX." The Board recommends that the shareholders vote in favor of the Name
Change Amendment. The affirmative vote of a majority of the outstanding shares
entitled to vote at the Special Meeting is necessary to approve such Amendment.
ITEM 2 -- APPROVAL OF AMENDMENTS TO THE COMPANY'S NON-QUALIFIED STOCK OPTION
PLAN
Proposal to Amend the NQO Plan
The Company has a Non-Qualified Stock Option Plan ("NQO Plan") which
terminates on October 11, 2004. There are no shares presently available for the
grant of options under the NQO Plan. At the Special Meeting, shareholders will
be asked to approve amendments (the "NQO Plan Amendments") to the NQO Plan (1)
reserving from the Company's authorized but unissued shares of Common Stock
250,000 shares for issuance on exercise of options which may be granted under
the Plan, (2) increasing the maximum number of shares for which a person may
receive options under the Plan from 100,000 shares to 150,000 shares, and (3)
adding the incentive to key employees of any business which the Company
acquires or in which it acquires an interest to continue in its employ, by
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the grants of options under the Plan to such employees, as a purpose of the
Plan. The Amendments were approved by the Board of Directors, subject to
shareholder approval, on December 3, 1997. The affirmative vote of a majority
of the shares entitled to vote at the Special Meeting is necessary to approve
the NQO Plan Amendments.
Arthur L. Asch and Michael A. Asch, who are directors and executive
officers of the Company, hold options for 70,000 shares and 84,000 shares,
respectively, and the NQO Plan Amendments, if approved by the shareholders,
will increase the maximum number of additional shares for which they
potentially may be granted options under the Plan from 30,000 shares and 16,000
shares, respectively, to 80,000 shares and 66,000 shares, respectively. See,
"Maximum Option Grants," below. An option for 15,000 shares which was
automatically granted to Brian A. Wasserman when he was elected a director by
the Board on December 3, 1997 is, to the extent of 750 shares, subject to the
shareholders' approval of the NQO Plan Amendments, and an option for 15,000
shares granted to James L. Hochfelder when he was elected a director by the
Board on December 19, 1997 is, to the extent of 5,000 shares, subject to such
approval. See "Certain Automatic Grants," below.
Summary of the NQO Plan
The following summarizes the material features of the NQO Plan.
Purposes. The purpose of the NQO Plan is to provide a continuing,
long-term incentive to officers, directors and selected employees of the
Company and any subsidiary of the Company so that it may be able to continue to
hire and retain qualified personnel. If the NQO Plan Amendments are approved by
the shareholders, the incentive to key employees of any business which the
Company acquires or in which it acquires an interest to continue in its employ,
by the grants of options to such employees under the Plan, will be an
additional purpose of the Plan.
Number of Shares Covered by the NQO Plan. Although 199,250 shares of
Common Stock were made available for issuance on the exercise of options
available for grants under the NQO Plan when the shareholders approved the
Plan, there are presently no shares available for the grant of new options
under the Plan. Giving effect to the proposed NQO Plan Amendments and the
options granted to Mr. Wasserman and Mr. Hochfelder thereunder (see, "Proposal
to Amend the NQO Plan," above), there will be 244,250 shares available for the
issuance of options under the NQO Plan. However, the shares subject to any
outstanding options that terminate without exercise will, in addition, be
available for future grants.
Maximum Option Grants. Without giving effect to the NQO Plan Amendments,
no one person may receive options to purchase in excess of 100,000 shares under
the Plan; giving effect to such Amendments, no person may receive options to
purchase in excess of 150,000 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, and is to consist of not less than the minimum number of persons
from time to time required by Rule 16b-3 promulgated by the Securities and
Exchange Commission under the Securities Exchange Act 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 Internal Revenue Code of 1996, as amended (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. 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, James L. Hochfelder and Brian A. Wasserman.
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).
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Eligibility and Extent of Participation. Options may be granted to
directors and selected key employees of the Company and its subsidiaries. As of
December 22, 1997, approximately 20 individuals were eligible to receive
options, and options were held by eight 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.
Certain Automatic Grants. Under the Company's NQO Plan, a director
receives an automatic grant of an option, on his first election as a director,
to purchase 15,000 shares at a price equal to the market value of the shares at
the date of grant in three cumulative annual installments commencing one year
after the date of grant.
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 paid 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.
Transfer of Options; Early Expiration. 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, or term
as a director of, the Company or its subsidiary terminates, such options expire
ninety days after death or termination because of disability and ten days after
termination for any other cause.
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 option holders, any option theretofore granted under the Plan or
deprive any option holder 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.
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.
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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.
Options Granted and Exercised Under the NQO Plan
No option was granted to or exercised under the NQO Plan by any executive
officer of the Company during its fiscal year ended December 31, 1997. Aaron W.
Weingarten, a director until his resignation on December 3, 1997, exercised an
option for 5,000 shares on December 11, 1997, and the balance of his option for
10,000 shares expired. Kenneth S. Roth, a director until his resignation on
December 19, 1997, exercised an option for 5,000 shares on December 22, 1997,
and the balance of his option for 10,000 shares expired. Two directors elected
in 1997 received automatic option grants on their election. See, "Proposal to
Amend the NQO Plan," above. All current executive officers as a group hold
options for 154,000 shares under the NQO Plan, and all current directors who
are not executive officers hold options for 30,000 shares under the Plan.
Change-in-Control Arrangements
Options granted in 1994 under the NQO Plan to Arthur L. Asch for 40,000
shares and to Michael A. Asch for 34,000 shares provide that if, during the
period of their employment with the Company, there should be a change in
control (as defined in the grant) of the Company, vesting is accelerated and
therefore the full balance of the options (to the extent not previously
exercised) may be exercised by the holder until the earlier to occur of October
11, 1999 and fifteen days following the change of control.
Executive Compensation
The following table summarizes for the Company's fiscal year ended
December 31, 1997 and for the two prior fiscal years, compensation earned by
the Chief Executive Officer and each executive officer of the Company who
served in such capacity in its fiscal year ended December 31, 1997 and whose
total annual compensation exceeded $100,000 in the fiscal year.
Summary Compensation Table
<TABLE>
<CAPTION>
Long Term
Annual Compensation Compensation Awards
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Securities
Other Annual Underlying All Other
Name and Position Year Salary Bonus Compensation (1) Options Compensation(2)
- - ------------------------- ------ ----------------- ---------- ------------------ ------------ ----------------
($) ($) ($) (#)
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<S> <C> <C> <C> <C> <C> <C>
Arthur L. Asch ......... 1997 $ 50,000(3) $120,000 $ -- -- $1,820
(Chief Executive 1996 $ 50,000(3) $ -- $ -- 30,000 $2,400
Officer) 1995 $ 300,404(3) $ -- $ -- -- $8,400
Michael A. Asch ......... 1997 $ 215,000(4) $ -- $ -- -- $8,400
(Chief Operating and 1996 $ 25,000(4) $ -- $ -- 50,000 $ 900
Chief Financial Officer) 1995 $ 129,846(4) $ -- $ -- -- $7,191
</TABLE>
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(1) No executive officer's perquisites equaled or exceeded the lesser of
$50,000 or 10% of his cash compensation.
(2) Represents amounts paid under the Company's defined contribution pension
and profit sharing plans.
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(3) Until July 24, 1995, when the sale of the Company's Sportswear Division was
consummated, Arthur L. Asch was compensated by the Company at the rate of
$500,000 per year, and he was compensated by the new owner of the
Sportswear Division from July 25, 1995 through December 31, 1997 at the
rate of $450,000 per year. As negotiated in connection with the sale of
the Sportswear Division, from July 25, 1995 through December 31, 1997 he
was compensated by the Company at the rate of $50,000 per year.
(4) Until July 24, 1995, the Company compensated Michael A. Asch at the rate of
$215,000 per year, and he was compensated by the new owner of the
Sportswear Division from July 25, 1995 through December 31, 1996 at the
rate of $165,000 per year. As negotiated in connection with the sale of
the Sportswear Division, from July 25, 1995 through December 31, 1996 he
was compensated by the Company at the rate of $25,000 per year.
Deferred Compensation Plans
The Company has non-contributory defined contribution pension and profit
sharing plans covering certain employees (including executive officers) of the
Company, and WCI has a matching contribution 401(k) retirement plan covering
certain employees (including its executive officers) of WCI. Neither the
Company nor WCI has a defined benefit or actuarial plan.
Compensation of Directors
A non-employee director receives an option for 15,000 shares on his first
election as a director. See, "Proposal to Amend the NQO Plan" and "Summary of
the NQO Plan - Certain Automatic Grants," above. In addition, James L.
Hochfelder and Brian A. Wasserman, as non-officer directors, receive a
director's fee of $10,000 a year.
Compensation Interlocks and Insider Participation
Until December 19, 1997, the Board had no separate Compensation Committee,
and the Board performed the function of a Compensation Committee. On December
19, 1997, the Board established a Compensation Committee, and elected Michael
A. Asch, James L. Hochfelder and Brian A. Wasserman as members of the
Committee. Two directors, Arthur L. Asch and Michael A. Asch, are compensated
executive officers and employees of the Company. All directors participated in
the deliberations of the Board with respect to its compensation actions in
1997, except that neither Arthur L. Asch nor Michael A. Asch voted with respect
to the Board's action on his own compensation or bonus. Arthur L. Asch is the
father of Michael A. Asch. Messrs. Asch, as members of the Board's Nominating
Committee, recommend all nominees for election or re-election as directors.
Joseph Greenberger, a director, serves as corporate counsel to the Company, and
for the services of his law firm, Greenberger & Forman, in 1997 it earned
approximately $120,000 for regular legal services to the Company and for legal
services in connection with its acquisition of WCI. The Company expects to
incur fees of $60,000 to Mr. Greenberger for his regular legal services to the
Company during 1998.
SHAREHOLDER PROPOSALS FOR 1998 ANNUAL MEETING
Shareholders may present proposals for inclusion in the Company's Proxy
Statement for its 1998 Annual Meeting of Shareholders provided they are
received by the Company at its principal executive offices no later than
January 19, 1998 and are in compliance with applicable regulations of the
Securities and Exchange Commission.
Dated: January 13, 1998
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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 Michael A. Asch 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
January 6, 1998 at the Special Meeting of Shareholders to be held on February
17, 1998 and any adjournment thereof.
1. Change of corporate name to REXX Environmental Corporation
/ / FOR / / AGAINST / / ABSTAIN
2. Approve amendments 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)
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 proposal to change the Company's corporate name, 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: ------------------------, 1998
PLEASE MARK, SIGN, DATE AND RETURN
THIS PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
