<PAGE>
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
- --------------------------------------------------------------------------------
(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:
------------------------------------------------------------------------
(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 (set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(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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<PAGE>
APPAREL AMERICA, INC.
1175 State Street
New Haven, Connecticut 06511
December 16, 1997
Dear Shareholder:
Once again, it is my pleasure to invite you to our annual meeting of
shareholders, which will be held on January 28, 1998, at 10:00 a.m. at the
University Club, 1 West 54th Street, New York, New York 10022.
At the meeting, we will elect five (5) directors for a one year term
expiring in 1999, appoint independent public accountants for the Company and
transact such other business as may come before the meeting.
Your Board of Directors and I look forward to meeting with you and
sincerely hope you will be present at the meeting. Even if you plan to attend
the meeting, please return your signed proxy as soon as possible.
Sincerely,
BURTON I. KOFFMAN
CHAIRMAN OF THE BOARD
<PAGE>
APPAREL AMERICA, INC.
1175 State Street
New Haven, Connecticut 06511
NOTICE OF 1998 ANNUAL MEETING OF SHAREHOLDERS
December 16, 1997
To the Shareholders of
APPAREL AMERICA, INC.:
NOTICE IS HEREBY GIVEN that the annual meeting of shareholders of Apparel
America, Inc. will be held at the University Club, 1 West 54th Street, New
York, New York 10022, on January 28, 1998, at 10:00 a.m., for the following
purposes:
(1) to elect five (5) directors who will constitute the entire Board of
Directors;
(2) to appoint independent public accountants for the Company for fiscal
year 1998, and;
(3) to transact such other business as may come before the meeting or
any adjournment or adjournments thereof.
The Board of Directors has fixed the close of business on December 15,
1997 as the record date for the determination of shareholders who will be
entitled to notice of and to vote at the meeting.
Each shareholder is requested to date, sign and return the accompanying
proxy in the enclosed return envelope, to which no postage need be affixed if
mailed in the United States.
By order of
the Board of Directors,
RICHARD E. KOFFMAN
Secretary
<PAGE>
APPAREL AMERICA, INC.
1175 State Street
New Haven, Connecticut 06511
PROXY STATEMENT
This proxy statement is furnished to the shareholders of Apparel America,
Inc. (the "Company") in connection with the solicitation of proxies to be
used in voting at the Annual Meeting of Shareholders (the "Annual Meeting")
to be held on January 28, 1998 and at any adjournments of such Annual
Meeting. The enclosed proxy is solicited on behalf of the Board of Directors of
the Company. Enclosed with this Proxy Statement is the Company's Annual
Report\on Form 10-K for the year ended July 31, 1997.
Any shareholder giving a proxy may revoke it at any time prior to its use
at the meeting. A proxy may be revoked in writing delivered to the Company,
or by attending the Annual Meeting and voting in person. Submission of a
later dated proxy will revoke any earlier dated proxy. Unless previously
revoked, proxies so delivered will be voted at the meeting. Where a choice or
instruction is specified by the shareholder thereon, the proxy will be voted
in accordance with such specification. Where a choice or instruction is not
specified by such shareholder, the proxy will be voted as recommended by the
directors.
I.ELECTION OF DIRECTORS
To be elected, each director must receive the affirmative vote of the
holders of a plurality of the issued and outstanding shares of Common Stock
represented in person or by proxy at the Annual Meeting.
The Board of Directors recommends that the shareholders elect Burton I.
Koffman, Richard E. Koffman, Jeffrey P. Koffman, Arthur G. Cohen, and Eric T.
Weitz, who have been duly nominated by the Board of Directors, to serve a
term of one year as directors, until the next Annual Meeting of Shareholders
or until his successor is elected and qualified.
It is the intention of the persons named as proxies to vote the proxies,
unless the authority to vote is specifically withheld, to elect as directors
the five (5) nominees set forth below (see "Nominees for Election as
Directors"). In the event any nominee should not continue to be available for
election, such proxies will be voted for the election of such other person as
the Board of Directors may recommend. The Company does not presently
contemplate that any of the nominees will become unavailable for election for
any reason.
1
<PAGE>
The Board of Directors recommends a vote FOR this proposal.
II.NOMINEES FOR ELECTION AS DIRECTORS
The following table sets forth certain information regarding the nominees
for election to the Company's Board of Directors:
NAME AGE CAPACITY
- ---- --- --------
Burton I. Koffman 72 Chairman of the Board
and Chief Executive Officer
of the Company
Richard E. Koffman 65 Vice Chairman of the
Board, Executive Vice
President and Secretary
of the Company
Jeffrey P. Koffman 32 Director and President
of the Company
Arthur G. Cohen 67 Director of the Company
Eric T. Weitz 53 Director and Executive
Vice President of the
Company; President of the
Robby Len Division
- -------------------------------
Burton I. Koffman has served as Chairman of the Board of the Company
since January 1989 and as Chief Executive Officer of the Company since
October 1989. Mr. Koffman served as President of the Company from January
1989 until October 1989 and from June 1995 to February 1996.
Richard E. Koffman has served as Vice Chairman of the Board of the
Company since October 1989 and as a Director, Executive Vice President and
Secretary of the Company since January 1989. Mr. Koffman is also Treasurer,
Vice President, Secretary, and a Director of Empire Industries, Inc. and
Executive Vice President and Secretary of Public Loan Company, Inc.
Jeffrey P. Koffman has served as a Director of the Company since June
1995 and Executive Vice President from June 1994 to February 1996. Mr.
Koffman was appointed President of the Company in February 1996. Mr. Koffman
served as a financial analyst with Security Pacific from 1987 to 1989. In
1989, Mr. Koffman became Vice President of Pilgrim Industries and in 1990, he
became the President of that Company. From 1994 to present, Mr. Koffman has
served in an executive capacity with Tech Aerofoam Products.
2
<PAGE>
Arthur G. Cohen has served as a Director of the Company since July 25,
1989. Mr. Cohen is a self-employed real estate developer and investor. Among
other positions, he serves as Chairman of the Board of The Arlen Corporation.
Eric T. Weitz has served as a Director of the Company since January 1995
and as President of the Robby Len Division since January 1994. Mr. Weitz was
appointed Executive Vice President of the Company in February 1996. Mr. Weitz
served as Vice President--Marketing for Robby Len Fashions from 1983 until it
was acquired by the Company in January 1989 and continued in that capacity
for the Company's Robby Len Division until January 1994. Previously, Mr.
Weitz served in various sales and executive capacities in the apparel
industry.
Messrs. Burton I. Koffman and Richard E. Koffman are brothers and Jeffrey
P. Koffman is the son of Burton I. Koffman.
The Board of Directors held three meetings during the year ended July 31,
1997. All other actions of the Board of Directors during the year ended July
31, 1997 were taken by unanimous written consent. There are two committees of
the Board of Directors, an Audit Committee and an Executive Compensation
Committee. The Company has no standing nominating committee of the Board of
Directors or committee performing a similar function. Officers are elected
by, and serve at the discretion of, the Board of Directors.
3
<PAGE>
III. OWNERSHIP INTEREST OF OFFICERS, DIRECTORS AND
NOMINEES FOR BOARD OF DIRECTORS
The following table sets forth the holdings, as of December 1, 1997, of
the Company's Common Stock by (i) each person who held of record more than 5%
of the Company's Common Stock, (ii) each of the directors of the Company and
(iii) all directors and officers as a group:
<TABLE>
<CAPTION>
SHARES
TITLE OF BENEFICIALLY PERCENT
NAME AND ADDRESS CLASS OWNED OF CLASS
- ---------------- -------- ------------ --------
<S> <C> <C> <C>
PLC, Inc. Common Stock 4,211,400(1) 21.31%
300 Plaza Drive $.05 par value
Vestal, New York
Mayfair Industries, Inc. Common Stock 3,563,640(1) 18.03%
300 Plaza Drive $.05 par value
Vestal, New York
Burton I. Koffman Common Stock 2,124,456(2) 10.75%
300 Plaza Drive $.05 par value
Vestal, New York
REK Corp. Common Stock 1,901,677(1) 9.62%
300 Plaza Drive $.05 par value
Vestal, New York
Richard E. Koffman Common Stock 1,074,037(2) 5.43%
300 Plaza Drive $.05 par value
Vestal, New York
Arthur G. Cohen Common Stock 884,000(3) 4.47%
1501 Broadway $.05 par value
New York, New York
Jeffrey P. Koffman Common Stock 600,000 3.04%
300 Plaza Drive $.05 par value
Vestal, New York
All Directors and Common Stock 5,187,599(4) 26.25%
Officers as a Group $.05 par value
(5 persons)
The Koffman Group Common Stock 15,220,778(5) 77.02%
(13 persons) $.05 par value
300 Plaza Drive
Vestal, New York
</TABLE>
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(1) PLC, Inc., Mayfair Industries, Inc. and REK Corp. are substantially all
owned, directly or indirectly, by members of the Koffman family. See
Footnote (5) below.
4
<PAGE>
(2) The number of shares of Common Stock set forth herein includes 943 shares of
Common Stock jointly held by Messrs. Burton I. Koffman and Richard E.
Koffman, of which each owns an undivided 50% interest, and 645,817 in the
case of Mr. Burton I. Koffman and 601,347 in the case of Richard E. Koffman
of the shares held by Empire Industries, Inc. and Public Loan Company, Inc.,
all of the stock of which is owned directly or indirectly by them and
members of their families.
(3) Mr. Arthur G. Cohen holds the shares of Common Stock set forth herein for
the benefit of Ben Arnold Company, Inc., a corporation owned 50% by members
of Mr. Cohen's immediate family, the beneficial ownership of which Mr. Cohen
disclaims, and 50% by members of Messrs. Burton I. Koffman and Richard E.
Koffman's immediate families, the beneficial ownership of which each
disclaims. Mr. Cohen also disclaims beneficial ownership of 194,720 shares
of Common Stock owned by Karen Cohen, his wife.
(4) The number of shares of Common Stock set forth herein includes the shares of
Common Stock reported above for Messrs. Burton I. Koffman, Richard E.
Koffman, Arthur C. Cohen and Jeffrey P. Koffman. Also included herein are
505,106 shares of Common Stock beneficially owned by Mr. David
L. Koffman, a Vice President and Assistant Secretary of the Company and the
son of Burton I. Koffman and brother of Jeffrey P. Koffman.
(5) The members of this reporting group include Messrs. Burton I. Koffman,
Richard E. Koffman, Jeffrey P. Koffman, David L. Koffman and members of
their immediate families, as well as entities controlled by members of the
Koffman family. The number of shares of Common Stock set forth herein
includes the shares of Common Stock reported above for Messrs. Burton I.
Koffman, Richard E. Koffman, Jeffrey P. Koffman and David L. Koffman.
5
<PAGE>
IV. SALARIES AND COMPENSATION OF OFFICERS, DIRECTORS AND
NOMINEES FOR BOARD OF DIRECTORS
The following table sets forth all compensation paid or accrued by the
Company for the years ended July 31, 1997, July 31, 1996 and July 31, 1995, to
or for the chief executive officer and the remaining four most highly
compensated executive officers and key employees of the Company.
Summary Compensation Table
--------------------------
Name and Annual Compensation All Other
Principal Position Year Salary($) Bonus($) Compensation ($)
- ------------------ ---- --------- -------- ----------------
Burton I. Koffman 1997 -- -- 40,000
Chairman of the Board, 1996 -- -- 40,000
Chief Executive 1995 -- -- 40,000
Officer of the Company
Eric T. Weitz 1997 275,000 -- 4,515
Executive Vice Pres- 1996 240,000 33,240 3,840
ident of the Company, 1995 240,000 144,600 4,800
President of the Robby
Len Division
Mark D. Greenberg 1997 157,500 -- 4,063
V.P. of the Company, 1996 150,000 16,620 3,696
V.P.--Operations 1995 150,000 72,300 3,000
of the Robby
Division Len
Murray Merl 1997 143,000 -- 3,549
V.P. of Manufacturing 1996 136,500 16,620 3,347
of Robby Len Division 1995 130,000 54,225 2,600
Frederick M. D'Amato 1997 125,000 -- 3,399
Vice President - 1996 110,300 16,620 3,770
Finance 1995 105,000 54,225 2,100
Directors who are not officers or employees of the Company receive an
annual fee of $5,000 and $500 per meeting attended for their services as
directors. The Board of Directors held three meetings during the year ended
July 31, 1997.
Mr. Burton I. Koffman and Mr. Richard E. Koffman received an annual
consulting fee of $40,000 (as disclosed above) and $60,000, respectively for
the years ended July 31, 1997, 1996 and 1995. Mr. Jeffrey P. Koffman received
an annual salary of $36,000 for the years ended July 31, 1997 and 1996 and
received an annual salary of $24,000 for the year ended July 31, 1995.
6
<PAGE>
Compensation Committee Report on Executive Compensation
The Report of the Compensation Committee of the Board of Directors shall
not be deemed filed under the Securities Act of 1993 (the "Securities Act")
or under the Securities Exchange Act of 1934 (the "Exchange Act").
General
- -------
The Compensation Committee was established in 1989 when the Company
acquired the existing Robby Len Division and the now discontinued Mayfair
Division. At the time of the 1989 acquisitions, the Company's Compensation
Committee reviewed the compensation level of the executive officers of Robby
Len and Mayfair and adopted their existing compensation plans. The members of
the Compensation Committee for the last fiscal year were Burton I. Koffman,
Jeffrey P. Koffman and Arthur G. Cohen.
Compensation Philosophy
- -----------------------
The Compensation Committee's executive compensation philosophy is to
provide competitive levels of compensation, integrate executive officer's pay
with the achievement of the Company's annual and long-term performance goals,
reward above average corporate performance, recognize individual initiative
and achievement, and assist the Company in attracting and retaining qualified
executive officers. Executive officer compensation is intended to be set at
levels that the Compensation Committee believes are consistent with others in
the Company's industry and gives emphasis to the need for the best creative
talent available in product related positions.
The Compensation Committee plans to further review the Company's existing
executive officer compensation plans in 1998 and intends to modify such plans
as required to fit within the announced philosophy of the Committee.
Base Salaries
- -------------
Base salaries for new executive officers are determined initially by
evaluating the responsibilities of the position held and the experience of
the individual, and by reference to the competitive marketplace for
managerial and creative talent. Annual salary adjustments are determined by
evaluating the competitive marketplace, the performance of the Company, the
performance of the executive and any increased responsibilities assumed by
the executive. Salary adjustments are determined and normally made on an
annual basis.
7
<PAGE>
Salaries for the year ended July 31, 1997 for Messrs. Weitz, Greenberg,
Merl and D'Amato were based on levels established and approved by the
Company's Board of Directors in August 1996. Mr. Burton I. Koffman's
compensation is based on a consulting arrangement.
Annual Bonuses
- --------------
The Company has a bonus incentive program for its executive officers.
The bonuses, if any, awarded are based upon minimum levels of profitability,
as defined. No bonuses were awarded for the year ended July 31, 1997 to
Messrs. Weitz, Greenberg, Merl and D'Amato.
Dated: December 15, 1997 THE COMPENSATION COMMITTEE
Burton I. Koffman
Jeffrey P. Koffman
Arthur G. Cohen
8
<PAGE>
V. VOTING SECURITIES OUTSTANDING
Only holders of record of Common Stock at the close of business on
December 15, 1997 will be entitled to vote at the meeting. On such date,
there were outstanding 19,762,649 shares of Common Stock, each share of which
entitles the holder to one vote.
VI. COMMON STOCK PERFORMANCE
The following graph compares the yearly percentage change in the
Company's cumulative total stockholder return on Common Stock with (i) the
cumulative total return of the NASDAQ market index and (ii) the cumulative
total return of companies with the standard industrial code (SIC) Code 2339
over the period from August 1, 1992 through July 31, 1997. The component
entities of SIC Code 2339 were generated by Media General Financial Service,
Inc. All the entities in SIC Code 2339 were incorporated into the peer group.
COMPARISON OF CUMULATIVE TOTAL RETURN
OF COMPANY, INDUSTRY INDEX AND BROAD MARKET
<TABLE>
<CAPTION>
FISCAL YEAR ENDING
---------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
COMPANY 1992 1993 1994 1995 1996 1997
APPAREL AMERICA, INC. 100 100.00 100.00 200.00 900.00 200.00
INDUSTRY INDEX 100 57.71 60.00 76.88 80.96 26.17
BROAD MARKET - 100 124.21 135.54 166.10 181.07 266.18
</TABLE>
THE INDUSTRY INDEX CHOSEN WAS:
SIC CODE 2339 - WOMEN'S, MISSES', & JUNIORS' OUTERWEAR, N.E.C.
THE BROAD MARKET INDEX CHOSEN WAS:
NASDAQ MARKET INDEX
Assumes $100 invested on August 1, 1992
Assumes dividends reinvested
Fiscal year ended July 31, 1997
9
<PAGE>
VII. SHAREHOLDER PROPOSALS FOR 1999 ANNUAL MEETING
Any shareholder desiring to present a proposal to the shareholders at the
1999 Annual Meeting of Shareholders, currently scheduled for January 28,
1999, must transmit such proposal to the Company so that it is received by
the Company at its principal executive offices on or before October 31, 1998.
All such proposals should be in compliance with applicable Securities and
Exchange Commission regulations.
VIII. ELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
The selection of an independent public accountant is decided by a vote of
the shareholders. The Board of Directors has selected BDO Seidman, LLP which
has acted as auditors of the Company since 1989, to act as auditors for its
current fiscal year. In the event the shareholders do not ratify the
selection by the Board of Directors, the Board of Directors will replace BDO
Seidman, LLP with the shareholders selection.
Unless otherwise specified, shares represented by proxies will be voted
for the appointment of BDO Seidman, LLP as auditors for fiscal year 1998.
Representatives of BDO Seidman, LLP are expected to be present at the Annual
Meeting. Such representatives will have the opportunity to make a statement
if they desire to do so and are expected to be available to respond to
appropriate questions.
IX. METHOD OF SOLICITATION
The solicitation of proxies will be principally by mail, and may be
followed by telephone and personal contacts by officers, directors or regular
employees of the Company. As stated below in Article XI, the cost of
solicitation will be borne by the Company. The costs of proxy solicitation
are not expected to exceed $10,000, unless circumstances require otherwise.
Brokers and others holding shares of Common Stock in their names or in the
names of their nominees will be expected to forward copies of the Company's
proxy soliciting material to beneficial owners of such shares and to seek
authority for execution of proxies and will be reimbursed by the Company for
their reasonable expenses.
X. ANNUAL REPORT
The Company's Annual Report on Form 10-K for the year ended July 31, 1997
including financial statements, is being furnished with this Proxy Statement
to shareholders of record as of December 15, 1997. The Annual Report on Form
10-K does not constitute a part of the proxy solicitation materials although
the financial information and Management Discussion and Analysis contained
therein is incorporated herein by reference.
The Company will bear the cost of the solicitation of proxies including
the charges and expenses of brokerage firms and others for forwarding
solicitation material to beneficial owners of shares of the Common Stock of
the Company.
10
<PAGE>
This proxy, when properly executed will be voted in the manner directed
herein by the undersigned shareholder. If no direction is made, this proxy
will be voted for Proposals 1, 2 and 3.
The undersigned acknowledges receipt of the accompanying Annual Report
and Proxy Statement dated December 16, 1997.
- ----------------------- -----------------------
Account Number Common Shares
1. ELECTION OF BURTON I. KOFFMAN, RICHARD E. KOFFMAN, JEFFREY P. KOFFMAN,
ARTHUR G. COHEN and ERIC T. WEITZ (Strike out name(s) of any nominee(s)
against whom you are voting) as Directors of the Company to serve for one
year until the Company's 1999 Annual Meeting (Mark Only One)
For Against
----- -----
2. RATIFICATION OF THE RE-APPOINTMENT OF BDO SEIDMAN, LLP as independent
accountants of the Company (Mark only one).
For Against Abstain
----- ----- -----
3. In their discretion, upon any other business which may properly come
before the meeting or any adjournment thereof.
(When signing as attorney, trustee, executor, administrator, guardian
corporate officer, etc., please give full title. If more than one trustee,
all should sign. Joint owners must each sign.)
- ------------------------
Date
- ------------------------
Signature
- ------------------------
Signature
11
<PAGE>
PROXY
APPAREL AMERICA, INC.
PROXY SOLICITED ON BEHALF OF THE APPAREL AMERICA, INC. BOARD OF DIRECTORS
The undersigned hereby constitutes and appoints Burton I. Koffman,
Richard E. Koffman and Jeffrey P. Koffman, and each of them, with full power
of substitution, attorneys and proxies to represent and to vote all of the
shares of Common Stock which the undersigned would be entitled to vote, with
all powers the undersigned would possess if personally present, at the Annual
Meeting of Shareholders of Apparel America, Inc. (the "Company"), to be held
at the University Club, 1 West 54th Street, New York, New York 10022, on
January 28, 1998, at 10:00 A.M., local time, and at any adjournment thereof,
on all matters coming before said meeting.
12
