Hampshire DEF 14A Definitive proxy

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 

SCHEDULE 14A
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 o

Check the appropriate box:

o Preliminary Proxy Statement

o Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

x Definitive Proxy Statement

o Definitive Additional Materials

o Soliciting Material Under Rule 14a-12

HAMPSHIRE GROUP, LIMITED

(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.

o Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

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o Fee paid previously with preliminary materials.

o Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing:

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2) Form, Schedule or Registration Statement No:

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4) Date Filed:

April 30, 2013

Dear Fellow Stockholder,

You are cordially invited to attend the 2013 Annual Meeting of Stockholders of Hampshire Group, Limited to be held at 9:00 a.m. Eastern Daylight Time on Wednesday, June 12, 2013 at Blank Rome LLP, The Chrysler Building, 405 Lexington Avenue, New York, NY 10174. The attached Notice of Annual Meeting and Proxy Statement describes the business we will conduct at the Annual Meeting and provides information about us that you should consider when you vote your shares. Your Board of Directors and senior management look forward to greeting you at the meeting.

At the Annual Meeting, you will be asked to approve the following proposals:

• To elect six directors, constituting the whole Board of Directors, until the next annual meeting;

• To hold a non-binding advisory vote on the compensation of our named executive officers;

• To hold a non-binding advisory vote to determine the frequency of future advisory votes on the compensation of our named executive officers;

• To ratify the appointment of Elliott Davis, LLC as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2013; and

• To transact such other business as may properly come before the Annual Meeting or any adjournment or postponement thereof.

These proposals are important, and we recommend that you to vote in favor of them.

It is important that your shares are represented and voted at the Annual Meeting. For those of you who are street-name stockholders, you will need to cast your vote and communicate your voting decisions to your broker, bank or other financial institution no later than June 7, 2013.

To ensure that you as a street-name stockholder are able to participate in our upcoming Annual Meeting, please review our proxy materials and follow the instructions for voting your shares on the voting instruction form that you will be receiving from Broadridge Financial Solutions, Inc.

Voting your shares is important, among other things, to ensure that we get the minimum quorum required for the Annual Meeting. Your affirmative participation in the voting process also helps us avoid the need and the added expense of having to contact you to solicit your vote and helps us avoid the need of having to reschedule our Annual Meeting. We hope that you will exercise your legal rights and fully participate as a stockholder in our future.

It is important that as many stockholders as possible be represented at the Annual Meeting, so please review the attached Proxy Statement promptly and vote your shares as soon as possible by following the instructions for voting in the attached Proxy Statement. Also, if you hold shares through a bank, brokerage firm or other nominee, please follow the instructions on the voting instruction forms that they furnish to you, and vote your shares.

If you are a shareholder of record, a valid form of personal photo identification must be presented in order to be admitted to the Annual Meeting. If your shares are held in the name of a broker, bank or other holder of record, you must bring a legal proxy from the broker, a brokerage statement or other proof of ownership with you to the Annual Meeting as well as a valid form of personal photo identification. For further details, please see the response to the question “Do I need a ticket to attend the Annual Meeting?” under “GENERAL INFORMATION ABOUT THE ANNUAL MEETING.”

The close of business on April 23, 2013 is the record date for our Annual Meeting. On or about April 30, 2013, we began mailing Proxy Materials to all of our stockholders of record as of the record date, and we have posted this Proxy Statement and our Annual Report on Form 10-K for the year ended December 31, 2012 on the Internet as described herein.

Sincerely,

Paul M. Buxbaum
President and Chief Executive Officer

April 30, 2013

NOTICE OF 2013 ANNUAL MEETING OF STOCKHOLDERS

TIME:  9:00 a.m. Eastern Daylight Time

DATE:  June 12, 2013

PLACE:  Blank Rome LLP, The Chrysler Building, 405 Lexington Avenue, New York, NY 10174

PURPOSES:

1. To elect six directors, constituting the whole Board of Directors, until the next annual meeting;

2. To hold a non-binding advisory vote on the compensation of our named executive officers;

3. To hold a non-binding advisory vote to determine the frequency of future advisory votes on the compensation of our named executive officers;

4. To ratify the appointment of Elliott Davis, LLC as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2013; and

5. To transact such other business as may properly come before the Annual Meeting or any adjournments or postponement thereof.

These items of business are more fully described in the Proxy Statement accompanying this Notice of Annual Meeting.

The Board of Directors has fixed the close of business on April 23, 2013 as the record date for determining the stockholders entitled to notice of and to vote at the Annual Meeting. We are mailing Proxy Materials commencing on or about April 30, 2013 to all stockholders of record as of the record date for the Annual Meeting.

Regardless of whether you plan to attend the Annual Meeting, we encourage you to vote your shares by proxy card in case your plans change. Please vote today to ensure that your votes are counted.

If you hold our shares in street name, please follow the instructions set forth below in “How Do I Vote?” and vote your shares.

If you are a stockholder of record and attend the Annual Meeting in person, you will be able to vote your shares personally at the meeting if you so desire, even if you previously voted.

BY ORDER OF THE BOARD OF DIRECTORS

Paul M. Buxbaum
President and Chief Executive Officer

TABLE OF CONTENTS

GENERAL INFORMATION ABOUT THE ANNUAL MEETING		1
STOCKHOLDER PROPOSALS AND NOMINATIONS FOR DIRECTORS		6
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT		7
ELECTION OF DIRECTORS		9
CORPORATE GOVERNANCE MATTERS		12
DIRECTOR COMPENSATION		16
MANAGEMENT		17
EXECUTIVE COMPENSATION		18
EQUITY COMPENSATION PLAN INFORMATION		22
NON-BINDING ADVISORY VOTE ON THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS		23
NON-BINDING ADVISORY VOTE ON THE FREQUENCY OF FUTURE ADVISORY VOTES ON THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS		24
REPORT OF AUDIT COMMITTEE		25
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE		28
CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS		29
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM		31
OTHER MATTERS		32

i

HAMPSHIRE GROUP, LIMITED
 
114 W. 41^st Street,
New York, New York 10036
(864) 231-1200

 

PROXY STATEMENT
2013 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 12, 2013

GENERAL INFORMATION ABOUT THE ANNUAL MEETING

Why Did I Receive this Proxy Statement?

You received this proxy statement and the enclosed proxy card because our Board of Directors is soliciting your proxy to vote at the 2013 Annual Meeting of Stockholders and any adjournments of the meeting to be held at 9:00 a.m. Eastern Daylight Time on Wednesday, June 12, 2013 at Blank Rome LLP, The Chrysler Building, 405 Lexington Avenue, New York, NY 10174. This proxy statement along with the accompanying Notice of Annual Meeting of Stockholders summarizes the purposes of the meeting and the information you need to know to vote at the Annual Meeting.

Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting to Be Held on June 12, 2013. The Proxy Statement and our 2012 Annual Report are available atwww.envisionreports.com/HAMP (for registered stockholders) or www.edocumentview.com/HAMP (for beneficial stockholders).

Directions to the Annual Meeting are available at our web site,www.hamp.comby clicking on the “Corporate Governance” tab and then selecting “Directions to the Annual Meeting” from the list of documents on the web page.

On April 30, 2013 we began sending this proxy statement, the attached Notice of Annual Meeting and the enclosed proxy card to all stockholders entitled to vote at the meeting. Although not part of this proxy statement, we are also sending along with this proxy statement our 2012 annual report, which includes our financial statements for the fiscal year ended December 31, 2012.

Do I Need a Ticket to Attend the Annual Meeting?

No, but shareholders must present proof of ownership and also must present a valid form of personal photo identification in order to be admitted to the Annual Meeting. If you are a shareholder of record, your name will be on the date of record (April 23, 2013) list. If your shares are held in the name of a broker, bank or other holder of record and you plan to attend the Annual Meeting, you must present proof of your ownership of Hampshire Group, Limited Common Stock, such as a legal proxy from your broker or a bank or brokerage account statement, to be admitted to the Annual Meeting. Shareholders are also encouraged, but not required, to provide notice of their intent to attend the Annual Meeting in advance via email,investors@hamp.com, or in writing to the Corporate Secretary at our principal office, 114 West 41^st Street, New York, New York 10036.

No cameras, recording equipment, electronic devices, large bags, briefcases or packages will be permitted in the Annual Meeting.

Who Can Vote?

Only stockholders who owned our Common Stock at the close of business on April 23, 2013 are entitled to vote at the Annual Meeting. On this record date, there were 7,472,457 shares of our Common Stock outstanding and entitled to vote. Common Stock is our only class of voting stock.

You do not need to attend the Annual Meeting to vote your shares. Shares represented by valid proxies, received in time for the meeting and not revoked prior to the meeting, will be voted at the meeting. For instructions on how to change or revoke your proxy, see “May I Change or Revoke My Proxy?” below.

How Many Votes Do I Have?

Each share of Hampshire Group, Limited Common Stock that you own entitles you to one vote.

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How Do I Vote?

Whether you plan to attend the Annual Meeting or not, we recommend that you vote by proxy. If you vote by proxy, the individuals named on the proxy card, or your “proxies,” will vote your shares in the manner you indicate. Paul M. Buxbaum, our President and Chief Executive Officer and Maura M. Langley, our Vice President, Chief Financial Officer, Treasurer and Secretary have been designated as proxies for the Annual Meeting. You may specify whether your shares should be voted for all, some or none of the nominees for director or withheld from all or any one of the nominees for director and whether your shares should be voted for, against or abstain with respect to each of the other proposals. Voting by proxy will not affect your right to attend the Annual Meeting. If your shares are registered directly in your name through our stock transfer agent, Computershare, or you have stock certificates registered in your name, you may vote:

• By mail.  Complete and mail the enclosed proxy card in the enclosed postage prepaid envelope. Your proxy will be voted in accordance with your instructions. If you sign the proxy card but do not specify how you want your shares voted, they will be voted as recommended by our Board of Directors.

• By Internet or by telephone.  Follow the instructions on the enclosed proxy card that explains how to vote your shares by Internet or by telephone.

• In person at the meeting.  If you attend the meeting, you may deliver your completed proxy card in person or you may vote by completing a ballot, which will be available at the meeting.

If your shares are held in “street name” (held in the name of a bank, broker or other nominee), you must provide the bank, broker or other holder of record with instructions on how to vote your shares and can do so as follows:

• By mail.  You will receive instructions from your broker or other nominee explaining how to vote your shares.

• By Internet or by telephone.  Follow the instructions from your broker or other nominee explaining how to vote your shares by Internet or by telephone.

• In person at the meeting.  Contact the broker or other nominee who holds your shares to obtain a broker’s proxy card and bring it with you to the Annual Meeting. You will not be able to vote at the Annual Meeting unless you have a proxy card from your broker.

How Does the Board of Directors Recommend That I Vote on the Proposals?

The board of directors recommends that you vote as follows:

• “FOR” the election of the nominees for director;

• “FOR” approving, on an advisory and on a non-binding basis, the compensation of our named executive officers.

• “ONE YEAR” approving, on an advisory and on a non-binding basis, the frequency of future advisory votes on the compensation of our named executive officers.

• “FOR” ratification of the appointment of our independent registered public accounting firm for our fiscal year ending December 31, 2013.

If any other matter is presented at the Annual Meeting, your proxy provides that your shares will be voted by the proxy holder listed on the proxy card in accordance with his or her best judgment. At the time this proxy statement was printed, we knew of no matters that needed to be acted on at the Annual Meeting, other than those described in this proxy statement.

May I Change or Revoke My Proxy?

If you give us your proxy, you may change or revoke it at any time before the meeting. You may change or revoke your proxy in any one of the following ways:

• by signing a new proxy card with a date later than your previously delivered proxy and submitting it as instructed above;

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• by notifying Hampshire Group, Limited’s Secretary in writing before the annual meeting that you have revoked your proxy; or

• by attending the meeting in person and voting in person. Attending the meeting in person will not in and of itself revoke a previously submitted proxy unless you specifically request it.

Your most current proxy card vote is the one that is counted.

What if I Receive More Than One Proxy Card?

You may receive more than one proxy card or voting instruction form if you hold shares of our Common Stock in more than one account, which may be in registered form or held in street name. Please vote in the manner described under “How Do I Vote?” for each account to ensure that all of your shares are voted.

Will My Shares be Voted if I Do Not Vote?

If your shares are registered in your name, they will not be voted if you do not return your proxy card by mail or vote as described above under “How Do I Vote?” If your shares are held in street name and you do not provide voting instructions to the bank, broker or other holder of record that holds your shares as described above under “How Do I Vote?,” the bank, broker or other holder of record has the authority to vote your unvoted shares on Proposal 4 even if it does not receive instructions from you. We encourage you to provide voting instructions. This ensures your shares will be voted at the meeting in the manner you desire. If your broker cannot vote your shares on a particular matter because it has not received instructions from you and does not have discretionary voting authority on that matter or because your broker chooses not to vote on a matter for which it does have discretionary voting authority, this is referred to as a “broker non-vote”.

What Vote is Required to Approve Each Proposal and How are Votes Counted?

Proposal 1: Elect Directors	The nominees for director are elected by a plurality of the votes cast in the election. You may vote either FOR all of the nominees, WITHHOLD your vote for all of the nominees or vote FOR or WITHHOLD your vote for any one or more of the nominees. Under applicable Delaware law, votes that are withheld will not be included in the vote tally for the election of directors. In addition, abstentions will have no effect on the outcome of this vote. Brokerage firms do not have authority to vote customers’ unvoted shares held by the firms in street name for the election of directors. As a result, any shares not voted by a customer will be treated as a broker non-vote. Such broker non-votes will have no effect on the results of this vote. Certain shareholders of the Company, pursuant to a voting agreement, will be obligated to vote in favor of this proposal upon the request of the Company. For more information regarding this arrangement, please see the below section, entitled “CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS —  Amended and Restated Voting Agreement.”
Proposal 2: Non-binding Advisory Vote on the Compensation of our Named Executive Officers	The affirmative vote of a majority of the shares cast affirmatively or negatively for this proposal is required to approve the compensation of our named executive officers. Brokerage firms do not have authority to vote customers’ unvoted shares held by the firms in street name to approve the compensation of our named executive officers. While this vote is required by law, it will not be binding or overrule any decisions by the Board, nor will it create or imply any additional fiduciary duty on the part of the Board. The Compensation Committee will, however, take into account the outcome of the vote when considering future compensation arrangements for our named executive officers.

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Proposal 3: Non-binding Advisory Vote on the Frequency of Future Advisory Votes on the Compensation of our Named Executive Officers	The affirmative vote of a plurality of the shares cast affirmatively or negatively for the proposal is required to approve the frequency of future advisory votes on the compensation of our named executive officers. You may vote to advise the Company to conduct an advisory vote on the compensation of our named executive officers every one, two, or three years or you may abstain from voting. Brokerage firms do not have authority to vote customers’ unvoted shares held by the firms in street name to approve the frequency of future advisory votes on the compensation of our named executive officers. While this vote is required by law, it will not be binding or overrule any decisions by the Board, nor will it create or imply any additional fiduciary duty on the part of the Board. The Compensation Committee will, however, take into account the outcome of the vote when considering the frequency of future advisory votes on executive compensation.
Proposal 4: Ratify Appointment of Our Independent Registered Public Accounting Firm	The affirmative vote of a majority of the shares cast affirmatively or negatively for this proposal is required to ratify the selection of our independent registered public accounting firm. Abstentions will have no effect on the results of this vote. Brokerage firms have authority to vote customers’ unvoted shares held by the firms in street name on this proposal. If a broker does not exercise this authority, such broker non-votes will have no effect on the results of this vote. We are not required to obtain the approval of our stockholders to select our independent registered public accounting firm. However, if our stockholders do not ratify the selection of Elliott Davis, LLC as our independent registered public accounting firm for the fiscal year ending December 31, 2013, the Audit Committee of our Board of Directors may reconsider its selection.

What is the Effect of Not Casting Your Vote?

If you hold your shares in street name it is critical that you cast your vote if you want your vote to be counted for the election of directors in Proposal 1 of this Proxy Statement. In the past, if you held your shares in street name and you did not indicate how you wanted your shares voted in the election of directors, your bank, broker or other holder of record was allowed to vote those shares on your behalf in the election of directors as it felt appropriate.

Recent changes in regulation were made to take away the ability of your bank, broker or other record holder to vote your uninstructed shares in the election of directors on a discretionary basis. Thus, if you hold your shares in street name and you do not instruct your bank, broker or other holder of record how to vote in the election of directors, no votes will be cast on this proposal on your behalf. Your bank, broker or other holder of record will, however, continue to have discretion to vote any uninstructed shares on the ratification of the appointment of the Company’s independent registered public accounting firm. They will not have discretion to vote uninstructed shares with respect to the other proposals specified (Proposals 1, 2 and 3 of this Proxy Statement). If you are a shareholder of record and you do not cast your vote, no votes will be cast on your behalf on any of the items of business at the Annual Meeting.

Is Voting Confidential?

We will keep all the proxies, ballots and voting tabulations private. We only let our Inspectors of Election examine these documents. Management will not know how you voted on a specific proposal unless it is necessary to meet legal requirements. We will, however, forward to management any written comments you make, on the proxy card or elsewhere.

What are the Costs of Soliciting these Proxies?

We will pay all of the costs of soliciting these proxies. Our directors and employees may solicit proxies in person or by telephone, fax or email. We will pay these employees and directors no additional

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compensation for these services. We will ask banks, brokers and other institutions, nominees and fiduciaries to forward these proxy materials to their principals and to obtain authority to execute proxies. We will then reimburse them for their expenses.

What Constitutes a Quorum for the Meeting?

The presence, in person or by proxy, of the holders of a majority of the outstanding shares of our Common Stock is necessary to constitute a quorum at the meeting. Votes of stockholders of record who are present at the meeting in person or by proxy, abstentions and broker non-votes are counted for purposes of determining whether a quorum exists.

Attending the Annual Meeting

The Annual Meeting will be held at 9:00 a.m. Eastern Daylight Time on June 12, 2013 at Blank Rome LLP, The Chrysler Building, 405 Lexington Avenue, New York, NY 10174. Shareholders must present proof of ownership and also must present a valid form of personal photo identification in order to be admitted to the Annual Meeting. If you are a shareholder of record, your name will be on the date of record (April 23, 2013) list. If your shares are held in the name of a broker, bank or other holder of record and you plan to attend the Annual Meeting, you must present proof of your ownership of Hampshire Group, Limited Common Stock, such as a legal proxy from your broker or a bank or brokerage account statement, to be admitted to the Annual Meeting. When you arrive, after being cleared through security, you will be directed to the appropriate meeting room. Shareholders are encouraged, but not required, to provide notice of their intent to attend the Annual Meeting in advance via email,investors@hamp.com, or in writing to the Corporate Secretary at our principal office, 114 West 41^st Street, New York, New York 10036.

Householding of Annual Disclosure Documents

In December 2000, the Securities and Exchange Commission (“SEC”) adopted a rule concerning the delivery of annual disclosure documents. The rule allows us or your broker to send a single set of our annual report and proxy statement to any household at which two or more of our stockholders reside, if we or your broker believe that the stockholders are members of the same family. This practice, referred to as “householding,” benefits both you and us. It reduces the volume of duplicate information received at your household and helps to reduce our expenses. The rule applies to our annual reports, proxy statements and information statements. Once you receive notice from your broker or from us that communications to your address will be “householded,” the practice will continue until you are otherwise notified or until you revoke your consent to the practice. Each stockholder will continue to receive a separate proxy card and/or voting instruction card.

If your household received a single set of disclosure documents this year, but you would prefer to receive your own copy, please contact our transfer agent, Computershare, by calling their toll-free number, 1-877-295-8650.

If you do not wish to participate in “householding” and would like to receive your own set of Hampshire Group, Limited’s annual disclosure documents in future years, follow the instructions described below. Conversely, if you share an address with another Hampshire Group, Limited stockholder and together both of you would like to receive only a single set of our annual disclosure documents, follow these instructions:

• If your Hampshire Group, Limited shares are registered in your own name, please contact our transfer agent, Computershare, and inform them of your request by calling them at 1-877-295-8650 or writing them at Computershare, 480 Washington Boulevard, Jersey City, New Jersey 07310.

• If a broker or other nominee holds your Hampshire Group, Limited shares, please contact the broker or other nominee directly and inform them of your request. Be sure to include your name, the name of your brokerage firm and your account number.

Electronic Delivery of Company Stockholder Communications

Most stockholders can elect to view future proxy statements and annual reports over the Internet instead of receiving paper copies in the mail. You can choose this option and save the Company the cost of producing and mailing these documents by following the instructions provided on your proxy card or voter instruction form.

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STOCKHOLDER PROPOSALS AND NOMINATIONS FOR DIRECTORS

Stockholder Proposals for the 2014 Annual Meeting

Under Rule 14a-8 of the Securities Exchange Act of 1934, as amended, certain stockholder proposals may be eligible for inclusion in our 2014 Proxy Statement and form of proxy. We expect that our 2014 annual meeting will occur on or about June 11, 2014. The date by which we must receive stockholder proposals to be considered for inclusion in the Proxy Statement and form of proxy for the 2014 Annual Meeting of Stockholders is December 31, 2013 or if the date of our 2014 Annual Meeting is changed by more than 30 days from June 11, 2014, a reasonable time before we begin to print and mail the proxy materials for the 2014 Annual Meeting.

Our By-Laws set forth certain procedures that stockholders must follow in order to properly nominate a person for election to the Board of Directors or to present any other business at an annual meeting of stockholders, other than proposals included in our Proxy Statement pursuant to Rule 14a-8. In addition to any other applicable requirements, to properly nominate a person for election to the Board of Directors or for a stockholder to properly bring other business before the 2014 Annual Meeting, a stockholder of record must give timely notice thereof in proper written form to our Corporate Secretary. To be timely, a stockholder’s notice to the Corporate Secretary pursuant to our By-Laws must be received at our principal office no earlier than February 12, 2014 but no later than March 14, 2014;provided that, if the 2014 Annual Meeting is called for a date that is not within 30 days before or after June 11, 2014, then the notice by the stockholder must be so received a reasonable time before we make available our Proxy Statement for the 2014 Annual Meeting. The notice also must contain specific information regarding the nomination or the other business proposed to be brought before the meeting, as set forth in our By-Laws. The By-Law provisions relating to advance notice of business to be transacted at annual meetings are contained in our By-Laws.

Stockholder Nominees to the Board

Apart from any proposals made pursuant to Rule 14a-8 as discussed above, our Nominating Committee will consider director nominees recommended by stockholders in accordance with the Nominating Committee’s Charter. Recommendations should be submitted to our Corporate Secretary in writing at our offices in 114 West 41^st Street, New York, New York 10036, along with additional required information about the nominee and the stockholder making the recommendation.

The Nominating Committee and the Board have also approved qualifications for nomination to the Board. In determining whether to recommend particular individuals to the Board, the Nominating Committee will consider, among other factors, a director’s ethical character and a director’s experience and diversity of background, as well as whether a director is independent under applicable listing standards and financially literate. The process by which the Nominating Committee identifies and evaluates nominees for director is the same regardless of whether the nominee is recommended by a stockholder or the Board.

When the Board or the Nominating Committee has identified the need to add a new Board member with specific qualifications or to fill a vacancy on the Board, the chairman of the Nominating Committee will initiate a search, seeking input from other directors and senior management and hiring a search firm, if necessary. The initial list of candidates that satisfy the specific criteria, if any, and otherwise qualify for membership on the Board will be identified by the Nominating Committee. At least one member of the Nominating Committee (generally the Chairman) and the Chief Executive Officer will interview each qualified candidate. Other directors will also interview the candidate if possible. Based on a satisfactory outcome of those reviews, the Nominating Committee will make its recommendation for approval of the candidate to the Board.

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information concerning

(i) those persons known by our management to own beneficially more than 5% of our outstanding Common Stock,

(ii) our directors,

(iii) our Named Executive Officers and

(iv) all of our current directors and executive officers as a group.

According to rules adopted by the SEC, a person is the “beneficial owner” of securities if he or she has or shares the power to vote them or to direct their investment or has the right to acquire such securities within 60 days through the exercise of an option, warrant or right, the conversion of a security or otherwise. Except as otherwise noted, the indicated owners have sole voting and investment power with respect to shares beneficially owned.

Such information is provided as of April 23, 2013. The percentage of ownership is based on 7,472,457 shares of Common Stock issued and outstanding as of April 23, 2013. Unless otherwise indicated, the address of each beneficial owner is 114 W. 41^st Street, New York, New York 10036.

Stockholder	Shares(1)		Percent
Robert C. Siegel(2)		23,219		*
Maura M. Langley(3)		24,500		*
Robert S. Stec(4)		22,500		*
Peter H. Woodward(5)		177,003		2.4
David L. Gren(6)(9)		1,803,605		24.1
Benjamin C. Yogel(7)(9)		1,893,400		25.3
Paul M. Buxbaum(8)(9)		1,834,480		24.5
Bobby Melnick(10)		777,255		10.4
All directors and current executive officers as a group (8 persons)		2,993,752		40.1
Other Stockholders
BGY II, LLC(9)		1,781,105		23.8
Invesco Investment Funds – 11 Greenway Plaza, Suite 2500, Houston, TX 77046(11)		1,087,224		14.5
Fidelity Low Price Stock Fund – 82 Devonshire Street, Boston, MA 02109(12)		920,000		12.3
Terrier Partners L.P. – 400 E. 89th Street, New York, NY 10128(13)		777,255		10.5
Wynnefield Partners – 450 Seventh Avenue, Suite 509, New York, NY 10123(14)		705,934		9.4

* — Represents beneficial ownership of less than 1% of our outstanding Common Stock.

(1) Attached to each share of Common Stock is a preferred share purchase right to acquire one-thousandth of a share of the Company’s series A Junior Participating Preferred Stock, par value $0.01 per share, which preferred share purchase rights are not presently exercisable. A discussion of the preferred share purchase rights may be found in Note 11 to our consolidated financial statements, included in our Annual Report on Form 10-K for the year ended December 31, 2012.

(2) Includes 2,875 shares of common stock subject to options that are currently exercisable.

(3) Includes 22,500 shares of common stock subject to options that are currently exercisable.

(4) Represents 22,500 shares of common stock subject to options that are currently exercisable.

(5) Includes 2,875 shares of common stock subject to options that are currently exercisable.

(6) Includes 22,500 shares of common stock subject to options that are currently exercisable.

(7) Includes 3,375 shares of common stock subject to options that are currently exercisable.

(8) Includes 3,375 shares of common stock subject to options that are currently exercisable.

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(9) Includes an aggregate total of 1,781,105 shares of Common Stock, held by BGY II, LLC, that have been received in exchange for interest in Rio Garment S. de R.L., under the terms of the Agreement and Plan of Merger, dated as of June 13, 2011. According to a Schedule 13D, filed with the SEC on April 25, 2012 by BGY II, LLC, each of Mr. Buxbaum, Mr. Yogel (through YIH III, an affiliate of Mr. Yogel) and Mr. Gren possessed shared voting power through BGY II, LLC. In addition, pursuant to the merger agreement, an additional 959,429 shares of Common Stock have been held back for issuance relating to potential indemnification claims in accordance with the merger agreement. See “CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS.”

(10) Represents an indirect beneficial interest in 777,255 shares which are directly beneficially owned by Terrier Partners L.P.

(11) Based upon a Schedule 13D filed with the SEC on December 24, 2009 by Invesco Ltd. According to the Schedule 13D, sole voting and dispositive power for the shares belongs to Invesco Trimark Ltd.

(12) Based upon a Form N-CSR filed with the SEC on March 26, 2013, which stated 920,000 shares were held as of January 31, 2013. According to the Schedule 13G/A filed September 10, 2008, Edward C. Johnson III and FMR LLC, through their control of Fidelity Management & Research Company, each have sole power to dispose of the shares owned by FMR LLC Funds, which includes Fidelity Low Price Stock Fund, but do not have or share voting power with respect to the shares, which resides with the Funds’ Board of Trustees.

(13) Based upon a Schedule 13D filed with the SEC on April 24, 2012 by Terrier Partners L.P. According to the Schedule 13D, Terrier Partners L.P. possessed sole voting power with respect to 777,255 shares of Common Stock as of April 20, 2012.

(14) Based upon a Schedule 13D/A filed with the SEC on November 29, 2012 by Wynnefield Partners Small Cap Value, L.P. I. According to the Schedule 13D/A, Wynnefield Partners Small Cap Value, L.P. I, Wynnefield Partners Small Cap Value L.P., Wynnefield Small Cap Value Offshore Fund, Ltd., Wynnefield Capital, Inc. Profit Sharing Plan, Wynnefield Capital Management, LLC, Wynnefield Capital, Inc., Nelson Obus and Joshua Landes in the aggregate possess sole voting power with respect to 705,934 shares of Common Stock as of November 29, 2012.

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ELECTION OF DIRECTORS
  
(Proposal 1)

At the Annual Meeting, the stockholders will elect the whole Board of Directors to serve until the 2014 Annual Meeting and until their successors are elected and qualified.

The Board of Directors, based upon the recommendation of the Nominating Committee, has designated as nominees for election the six persons named below, each of whom currently serve as directors.

In nominating each of those individuals, the Nominating Committee and the Board considered, among other factors, a candidate’s ethical character and a candidate’s experience and diversity of background, as well as whether the candidate is independent and financially literate. In considering the re-nominations, the Nominating Committee and the Board also took into consideration the following additional factors relating to each director:

• Such director’s experience with and contribution to the Board;

• The absence of any material change in such director’s employment or responsibilities with any other organization;

• Such director’s attendance at meetings of the Board and the Board committees on which such director serves and such director’s participation in the activities of the Board and such committees;

• The absence of any relationships with the Company or another organization, or any other circumstances that have arisen, that might make it inappropriate for the director to continue serving on the Board; and

• The director’s age and length of service on the Board. We have not adopted a retirement policy for directors.

The background and experience of each of the nominees for director that the Nominating Committee and the Board considered in evaluating each nominee is set forth opposite their respective names in “Information Concerning Nominees” below. See also “Corporate Governance Matters” below, which discloses additional information about the nominees. The Nominating Committee and the Board considered each nominee’s overall business experience, contributions to Board activities during the preceding year, where appropriate, and independence in their evaluation of each nominee in conjunction with the factors discussed above, but did not otherwise give greater weight to any of the factors cited above compared with any of the others. The Board believes that each of the nominees for director is well qualified to serve, or continue to serve, as appropriate, as a director of the Company.

Shares of Common Stock properly voted at the Annual Meeting by any of the means discussed above will be voted FOR the election of the nominees named below unless you withhold your vote for any or all of the nominees in your voting instructions or your proxy. If any nominee becomes unavailable for any reason or if a vacancy should occur before the election (which events are not anticipated), the holders of such proxies may vote shares represented by a duly executed proxy in favor of such other person as they may determine.

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The Board of Directors unanimously recommends that you vote
FOR
the nominees listed below.

Information Concerning Nominees

Set forth below are the names of the persons nominated as directors, their ages, their offices in the Company, if any, their principal occupations or employment for the past five years, the length of their tenure as directors and the names of other public companies in which such persons hold or have held directorships during the past five years.

Name	Age	Position(s) Held
Paul M. Buxbaum	58	Chief Executive Officer and President; Director
Peter H. Woodward	40	Director and Chairman
Robert C. Siegel	76	Director
Benjamin C. Yogel	35	Director
Bobby Melnick	51	Director
Frank Tworecke	66	Director

PAUL M. BUXBAUM has served as Chief Executive Officer of the Company since January 15, 2013. Mr. Buxbaum has also served as a Director since August 25, 2011. Mr. Buxbaum is the Chairman and CEO of Buxbaum Group and has been a partner in Buxbaum Group and its related and successor companies for over 30 years. Mr. Buxbaum has served on the Board and\or as an officer of various public and private companies covering many facets of the retail industry. Such appointments included CEO of Global Health Sciences, chairman of the board of Ames Department Stores, board member of Herbalife International, Richman-Gordman “Half-Price” Stores, Lamont’s Apparel, and Jay Jacobs. Mr. Buxbaum was the majority equity owner of Rio Garment and served as Chief Executive Officer and a board member of Haggar Clothing Company from March 2009 until April 2012.

We believe Mr. Buxbaum’s qualifications to sit on our Board include his extensive experience in the retail and apparel industry as well as his understanding of our Company’s operations derived from his experience as our President and Chief Executive Officer. Mr. Buxbaum’s knowledge of the industry coupled with the insight into corporate governance gained from many directorships and executive leadership roles will be a valuable resource to the Company and its shareholders.

PETER H. WOODWARD joined the Board on December 2, 2009 and was elected Chairman of the Board in October 2011. Mr. Woodward has served as the General Partner of MHW Capital Management, LLC, an investment firm specializing in equity investments in public companies that are revitalizing their business plans, since he founded it in August 2005. From 1995 to August 2005, he was Managing Director of Regan Fund Management, LLC, an investment firm. Mr. Woodward is currently a director of Fortress International Group and The Management Network Group, and has previously served on the boards of directors of SMF Energy Corp., NewsEdge Corp., Zomax, Inc., and Innodata-Isogen Corp.

We believe Mr. Woodward’s qualifications to sit on our Board include his knowledge of the Company from his prior service as a director and Chairman of the Board of the Company and experience in investing in, monitoring and guiding public and private companies that are revitalizing their business plans. In addition, Mr. Woodward’s governance experience as a director of several public companies provides insight to the Board.

ROBERT C. SIEGEL joined the Board on June 2, 2010. Mr. Siegel retired his position as Chief Executive Officer of Devanlay U.S. Inc., the licensee for Lacoste S.A. branded apparel in the U.S., on December 31, 2009. Mr. Siegel served in this position from 2002 until his retirement in December 2009. Mr. Siegel was Managing Director for Kurt Salmon Associates from January 2000 until he joined Lacoste S.A. From December 1993 to December 1998, Mr. Siegel served as Chairman of the Board, President and Chief Executive Officer of The Stride Rite Corporation. Previously, Mr. Siegel was with Levi Strauss & Co. from 1964 to 1993 and, among other positions, was President of the Dockers and Menswear divisions. Mr. Siegel was a director of The Bon Ton Stores from June 1998 until October 2006 and Skechers U.S.A. Inc., from January 1999 until June 2000. Mr. Siegel was also a director of McNaughton Apparel Group, Inc.

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from March 1999 until September 2003, Oshkosh B’gosh, Inc. from June 1998 until March 2005 and Kellwood Company from February 2007 until May 2008. Mr. Siegel currently serves on the Board of Governors for the College of Charleston School of Business.

We believe Mr. Siegel’s qualifications to sit on our Board include his knowledge of the Company from his prior service as a Director of the Company and experience gained as Chief Executive Officer of Devanlay U.S. Inc. and The Stride Rite Corporation, President of the Dockers and Menswear divisions of Levi Strauss & Co. and as a director of The Bon Ton Stores, Skechers U.S.A. Inc. and McNaughton Apparel Group, Inc. Mr. Siegel’s brings over 40 years of industry experience and an understanding of corporate governance and related topics to the Board.

BENJAMIN C. YOGEL joined the Board on August 25, 2011. Mr. Yogel is a Managing Partner and founder of MRC Capital Group. Prior to that, Mr. Yogel spent three years as an investment professional with Liberty Partners, a middle market buyout group. Mr. Yogel has played an integral role as part of deal teams executing leveraged buyout transactions, portfolio company sales, strategic acquisitions for portfolio companies, leveraged recapitalizations and going-private transactions. Mr. Yogel is currently a director of Buxbaum Jewelry Advisors, LLC and is the Chairman of the Board of Directors of Frontera Investment, Inc. Mr. Yogel graduated from the University of Pennsylvania with a BA in Economics and has an MBA from Columbia Business School.

We believe Mr. Yogel’s qualifications to sit on our Board include his knowledge and experience as an equity investor and managing portfolio companies from a wide array of industries. Mr. Yogel’s perspective in addition to his knowledge of finance and strategic acquisitions will provide insight to the Board for both short and long-term strategic decision making.

BOBBY MELNICK joined the Board on April 19, 2013. Mr. Melnick runs as general partner Terrier Partners LP, an investment partnership he founded in 1999. Terrier invests in micro-cap companies. Prior to starting Terrier, Mr. Melnick was general partner of Wynnefield Capital Inc., from 1996 – 1999, and prior, vice president and equity analyst at Lazard Freres & Co. from 1988 – 1996. From 1999 – 2002, Mr. Melnick sat on the board of Royal Olympic Cruise Lines Inc.

We believe Mr. Melnick’s qualifications to sit on our board include his past experience as an equity investor of various micro-cap companies. His experience in investing in portfolio companies that are similar in size to our own will assist the Board in making strategic decisions for growth.

FRANK TWORECKE joined the Board on April 19, 2013. Mr. Tworecke has served as the Divisional President of the Sportswear Group of Warnaco Group, Inc. since 2004. Prior to that, Mr. Tworecke served at Bon-Ton Stores, a department store operator, from 1999 to 2004. While at Bon-Ton Stores, he served as President and Chief Operating Officer from 2000 to 2004 and as Vice Chairman from 1999 to 2000. Previously, he was President and Chief Operating Officer of menswear retailer Jos. A. Bank. Mr. Tworecke has also held various senior management positions with other specialty and department store retailers including MGR, Inc., Rich’s Lazarus Goldsmith (now known as Macy’s), and John Wanamaker. In addition, Mr. Tworecke is a member of the Board of Advisors of Grafton-Fraser Inc., a private, Toronto-based men’s apparel retailer and a member of the Business Advisory Council of the Department of Applied Economics and Management at Cornell University.

We believe Mr. Tworecke’s qualifications to sit on our Board include the executive experience he has gained through his service as Divisional President of Warnaco Group, Inc. and in his prior roles as President and Chief Operating Officer of both Bon-Ton Stores and Jos. A Bank. Mr. Tworecke is a seasoned executive who brings over 35 years of extensive experience in the retail and apparel markets and his experience will provide valuable insight to the Board.

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CORPORATE GOVERNANCE MATTERS

Responsibility and Oversight

Consistent with Delaware law, our business is managed by our officers under the direction and oversight of the Board of Directors. The Board of Directors is responsible for overseeing the risk management processes of the Company. In exercising its oversight responsibilities, as permitted by law, the Board receives and relies on reports and other information provided by management, reviews and approves matters that it is required or permitted by law or our certificate of incorporation or by-laws, each as amended, to approve and inquires into such other matters as it deems appropriate, including our business plans, prospects and performance, succession planning, risk management and other matters for which it has oversight responsibility.

As discussed below, the Board also maintains several standing committees with oversight responsibility for various Board functions.

Director Independence

Our Board of Directors has reviewed the materiality of any relationship that each of our directors has with Hampshire Group, Limited, either directly or indirectly. Based upon this review, our Board has determined that as of April 23, 2013, the following members of the Board are “independent directors” as defined under NASDAQ listing standards and the rules and regulations of the Securities and Exchange Commission: Mr. Siegel, Mr. Woodward, Mr. Melnick and Mr. Tworecke.

Meeting Attendance

During the fiscal year ended December 31, 2012, the Board of Directors held 8 meetings and acted by written consent 1 time, and the various committees of the Board met a total of 5 times. No director attended fewer than 75% of the total number of meetings of the Board and of committees of the Board on which he or she served during fiscal year 2012.

Policy on Annual Meetings

We encourage, but do not require, all incumbent directors and director nominees to attend each annual meeting of our stockholders.

Board Leadership Structure

Mr. Woodward serves as Chairman of the Board of Directors. As such, the Board has separated the position of Chairman from the position of Chief Executive Officer.

Committees of the Board of Directors

The Board of Directors maintains an Audit Committee, a Compensation Committee and a Nominating Committee. The Board has determined that each of the members of these committees is an independent director with respect to the committees on which they serve. Each of these committees operates under a written charter that has been approved by the Board and is posted on our website, which can be viewed by going towww.hamp.comand clicking on the “Corporate Governance” tab and then selecting the appropriate charter from the list of documents on the web page.

Audit Committee

Our Audit Committee met 5 times during fiscal year 2012. This committee currently has one member in Mr. Woodward, but we expect to add two members at the next meeting of our Board of Directors in May 2013. Our Audit Committee has the authority to retain and terminate the services of our independent registered public accounting firm, review annual financial statements, consider matters relating to accounting policy and internal controls and review the scope of annual audits. The Audit Committee is also responsible for discussing the Corporation’s major financial risk exposures with management and monitoring the steps management has taken to monitor and control such risks, including the Corporation’s risk assessment and risk management policies. All members of the Audit Committee satisfy the current independence standards promulgated by the Securities and Exchange Commission and by The NASDAQ Stock Market LLC, as such standards apply specifically to members of audit committees. The Board has determined that Mr. Woodward is an “audit committee financial expert,” as the Securities and Exchange Commission has defined that term in Item 407 of Regulation S-K. Please also see the report of the Audit Committee set forth elsewhere in this proxy statement.

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A copy of the Audit Committee’s written charter is publicly available on our website atwww.hamp.com.

Compensation Committee

Our Compensation Committee met 1 time during fiscal year 2012 and acted by written consent 3 times. Our Compensation Committee currently has three members: Mr. Woodward, Mr. Yogel and Mr. Siegel. Our Compensation Committee reviews, approves and makes recommendations regarding our compensation policies, practices and procedures to ensure that legal and fiduciary responsibilities of the Board of Directors are carried out and that such policies, practices and procedures contribute to our success. Our Compensation Committee also administers our 2009 Stock Incentive Plan (the “Stock Plan”). The Compensation Committee is responsible for the determination of the compensation of our Chief Executive Officer, and shall conduct its decision making process with respect to that issue without the Chief Executive Officer present. All members of the Compensation Committee qualify as independent under the definition promulgated by The NASDAQ Stock Market LLC.

The Compensation Committee of the Board of Directors oversees our compensation and equity programs generally, and is responsible for all decisions relating to the compensation of all our executive officers, including the named executive officers (“NEOs”) discussed herein.

In developing our compensation programs, and generally in determining the compensation of the NEOs, the Compensation Committee has focused on two core beliefs:

• our success depends in large part on our ability to attract and retain executives with superior talent and the skills necessary to grow our business; and

• executive compensation should be designed to motivate the creation of value and reward executives for such value creation.

To this end, our compensation programs have been designed to compensate NEOs, fairly and competitively, primarily through a mix of: (i) base salary, which is reviewed on an annual basis, except to the extent otherwise provided for in an applicable employment agreement; (ii) annual bonuses, which are based on the achievement of the Company’s performance objectives; and (iii) equity compensation through restricted stock or option grants. In order to maintain flexibility in a changing business environment, in addition to annual bonuses, the Compensation Committee sometimes grants additional cash bonuses that relate to exceptional efforts or accomplishments other than pre-determined Company financial metrics. The NEOs also may participate in our employee benefit plans on the same basis as our other employees.

In determining the levels and mix of compensation, the Compensation Committee does not generally rely on formulaic guidelines but rather maintains a flexible compensation program that allows it to adapt components and levels of compensation to motivate and reward individual executives within the context of our desire to attain certain strategic and financial goals.

The primary objectives of our compensation programs are to:

• attract and retain executives with the skills and attributes that we need to promote the growth and success of our business;

• motivate our executives to achieve our annual and long-term strategic objectives of increasing stockholder value by increasing consolidated operating income and after-tax corporate profits;

• create an identity of interests between our executives and our stockholders by making executive bonuses dependent on the achievement of a pre-determined level of consolidated operating income; and

• encourage our executives to promote and conduct themselves in accordance with our values and Code of Ethics.

This necessarily requires that the Compensation Committee make reasoned subjective determinations about compensation levels. Subjective factors considered in compensation determinations include an executive’s skills and capabilities, contributions as a member of the executive management team, contributions to our overall performance, and whether the total compensation potential and structure is sufficient to ensure

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the retention of an executive when considering the compensation potential that may be available elsewhere. In addition, with respect to the NEOs other than our Chief Executive Officer, the Compensation Committee seeks the input and recommendation of the Chief Executive Officer. The Compensation Committee has engaged a compensation consultant on a limited basis from time to time.

A copy of the Compensation Committee’s written charter is publicly available on our website atwww.hamp.com.

Nominating Committee

During fiscal year 2012, in lieu of Nominating Committee meetings, nominating matters were addressed by the Board of Directors.

Our Nominating Committee currently has two members, Mr. Siegel and Mr. Yogel. We expect to add one additional member to the committee at the next meeting of our Board of Directors in May 2013. This committee’s role is to make recommendations to the full Board as to the size and composition of the Board and its committees, to evaluate and make recommendations as to potential candidates, and to evaluate current Board members’ performance. All members of the Nominating Committee qualify as independent under the definition promulgated by The NASDAQ Stock Market LLC. The Nominating Committee may consider candidates recommended by stockholders as well as from other sources such as other directors or officers, third party search firms or other appropriate sources. For all potential candidates, the Nominating Committee may consider all factors it deems relevant, such as a candidate’s personal integrity and sound judgment, business and professional skills and experience, independence, knowledge of the industry in which we operate, possible conflicts of interest, diversity, the extent to which the candidate would fill a present need on the Board, and concern for the long-term interests of the stockholders. In general, persons recommended by stockholders will be considered on the same basis as candidates from other sources. If a stockholder wishes to nominate a candidate to be considered for election as a director or propose a candidate for consideration as a nominee by the Nominating Committee at the 2014 Annual Meeting of Stockholders using the procedures set forth in the Company’s Bylaws, it must follow the procedures described in “STOCKHOLDER PROPOSALS AND NOMINATIONS FOR DIRECTORS.”

A copy of the Nominating Committee’s written charter is publicly available on the Company’s website atwww.hamp.com.

Code of Conduct and Ethics

We have adopted a code of conduct and ethics that applies to all of our employees, including our Chief Executive Officer, Chief Financial Officer and directors. The text of the code of conduct and ethics is posted on our website atwww.hamp.com and is filed as an exhibit to our Annual Report on Form 10-K, and will be made available to stockholders without charge, upon request in writing to the Corporate Secretary at 114 W. 41^st Street, New York, New York 10036. Disclosure regarding any amendments to, or waivers from, provisions of the code of conduct and ethics that apply to our directors and principal executive and financial officers will be included in a Current Report on Form 8-K within four business days following the date of the amendment or waiver.

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Stockholder Communications to the Board

Generally, stockholders who have questions or concerns should contact our Investor Relations department at (864) 231-1200. However, any stockholder who wishes to address questions regarding our business directly to the Board of Directors, or any individual director, should direct his or her questions in writing to the Chairman of the Board at 114 W. 41^st Street, New York, New York 10036. Communications will be distributed to the Board, or to any individual director or directors as appropriate, depending on the facts and circumstances outlined in the communications. Items that are unrelated to the duties and responsibilities of the Board may be excluded, such as:

• junk mail and mass mailings,

• resumes and other forms of job inquiries,

• surveys, and

• solicitations or advertisements.

In addition, any material that is unduly hostile, threatening or illegal in nature may be excluded, provided that any communication that is filtered out will be made available to any outside non-employee upon request.

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DIRECTOR COMPENSATION

The following table sets forth a summary of our non-employee Directors’ compensation in 2012:

Director Compensation Table

Name	Fees Earned or Paid in Cash ($)
Paul M. Buxbaum		50,000
Richard A. Mandell		50,000
Peter H. Woodward		75,000
Robert C. Siegel		50,000
Benjamin C. Yogel		50,000
Herbert Elish		50,000

NARRATIVE TO DIRECTOR COMPENSATION TABLE

On June 20, 2012, the Board approved a reduction in the annual cash compensation payable to its non-employee directors. Effective July 1, 2012, annualized director fees paid as cash compensation was reduced from $60,000 to $40,000 for non-employee directors. In addition to annualized director fees of $40,000, the Chairman of the Board also receives an additional $20,000 in cash compensation annually and the Chairman of the Audit Committee receives an additional $5,000 in cash compensation annually. Such fees were paid quarterly and were earned pro rata based on the period that the respective positions were held during 2012. No fees were paid to employee directors. During 2012 Mr. Woodward served as both Chairman of the Board and Chairman of the Audit Committee of the Board.

We reimburse our directors for out-of-pocket expenses associated with attendance at the meetings of the Board and its Committees. Non-employee directors do not receive any additional compensation for attending meetings.

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MANAGEMENT

Executive Officers

The following table sets forth certain information regarding all executive officers who are not also directors:

Name	Age	Position(s) Held
Maura M. Langley	41	Vice-President, Chief Financial Officer, Treasurer and Secretary
David L. Gren	43	President and General Manager of Rio Garment S.A., President of Hampshire International LLC
Robert S. Stec	58	President, Hampshire Brands

MAURA M. LANGLEY returned to the Company as Vice President and Chief Financial Officer in August 2011 after leaving to pursue other interests in July 2009. During her time away from the Company, she served as Vice-President, Corporate Controller of Centerplate and then Chief Financial Officer of Spartan Foods of America. During her initial five year tenure at the Company, she served in several roles, most recently, Vice-President of Accounting and Reporting and Chief Accounting Officer. Prior to working at the Company Ms. Langley was an audit manager with Deloitte and Touche. Ms. Langley is a certified public accountant.

DAVID L. GREN joined the Company as President of Hampshire International, LLC (“Hampshire International”) and President and General Manager of Rio Garment S.A., f/k/a Rio Garment S. de R.L. (“Rio Garment”) the manufacturing operation of Hampshire Group, Limited upon the acquisition of the entity on August 25, 2011. Mr. Gren brings 20 plus years of experience in textile and apparel development, design, sourcing, manufacturing and sales. Prior to Hampshire, in 2001, Mr. Gren founded and was President of Indosheen, Inc. a textile and garment production company based in Los Angeles, CA. In 2005, Mr. Gren transitioned the growing Indosheen business and co-founded Maya Apparel Group, Inc. with Paul Buxbaum. Mr. Gren remained President of the corporation. In 2006 Mr. Gren co-founded Rio Garment with Paul Buxbaum and they transitioned their order base and clients into this new wholly owned manufacturing facility based in San Pedro Sula, Honduras. Mr. Gren at that time began to serve as General Manager of Rio Garment. Mr. Gren was responsible for the overall operations and performance of the corporation including new sales and the maintaining and growth of the current relationships.

ROBERT S. STEC joined the Company as President of the Hampshire Brands division in August 2012 with approximately 30 years of retail expertise which includes nearly a decade at VF Corporation where his portfolio of brands included Wrangler®, Jansport®, and Marithe + Francois Girbaud® brand and he assisted in launching additional niche brands. Prior to that, Mr. Stec was Chief Executive Officer of Lexington Home Brands, Inc. where he spearheaded the Company’s transformation from manufacturing to a consumer marketing-oriented company, shifting company product lines from unbranded to branded while securing licenses for top consumer brands.

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EXECUTIVE COMPENSATION

The following Summary Compensation Table sets forth information regarding compensation of our principal executive officers and our other named executive officers during 2012 and 2011.

Summary Compensation Table

Name and Principal Position	Year		Salary ($)		Bonus ($)		Stock Awards ($)(1)		Option Awards ($)(1)		All Other Compensation ($)		Total ($)
Heath L. Golden(2)(3) Former President and Chief Executive Officer		2012		450,000		235,000		—		111,800		5,270		802,070
		2011		450,000		100,000		718,000		192,000		270		1,462,270
David L. Gren(4) President and General Manager of Rio Garment and President of Hampshire International		2012		428,029		54,000		—		125,775		8,257		616,061
		2011		140,577		—		—		—		29,835		170,412
Robert S. Stec(5) President, Hampshire Brands		2012		127,885		—		—		217,800		6,139		351,824
		2011		—		—		—		—		—		—
Eric G. Prengel(6) President, Men’s Division		2012		190,385		5,000		—		111,800		113,450		420,635
		2011		300,000		—		—		—		300		300,300

(1) These amounts represent the grant date fair value of stock and option awards granted to each named executive officer in the year ended December 31, 2012 or 2011 computed in accordance with Financial Accounting Standards Board Accounting Standard Codification® Topic 718. A discussion of the assumptions used in determining grant date fair value may be found in Note 1 and Note 15 to our consolidated financial statements, included in our Annual Report on Form 10-K for the year ended December 31, 2012.

(2) Mr. Golden’s all other compensation consists primarily of employer matching contributions to the 401(k) plan.

(3) Mr. Golden received a one-time bonus with respect to restricted stock granted to him in 2011.

(4) Mr. Gren was named President and General Manager of Rio Garment and President of Hampshire International on August 25, 2011, the date Rio Garment was acquired and he became an employee of the Company. All other compensation consists of perquisites and employer matching contributions to the 401(k) plan.

(5) Mr. Stec was named President of Hampshire Brands on August 13, 2012, the date he became an employee of the Company. All other compensation consists primarily of moving expenses.

(6) On August 10, 2012, Mr. Prengel resigned from the position of President of the Company’s Men’s Division. $103,846 of all other compensation relates to severance paid in 2012.

NARRATIVE DISCLOSURE RELATING TO SUMMARY COMPENSATION TABLE

Golden Employment Agreement

Mr. Golden’s employment with us during 2012 was governed by the terms of an amended and restated employment agreement dated May 2, 2011, pursuant to which he served as our President and Chief Executive Officer and received a base salary of $450,000 per year. Mr. Golden was also eligible to receive an annual bonus based on a bonus program established from time to time by our Compensation Committee. The amended and restated employment agreement provides, subject to his execution of a release of claims, for the following severance benefits upon a termination of employment by the Company (other than for cause or due to Mr. Golden’s disability) or by Mr. Golden for good reason: (i) an amount equal to 18 months of his then current base salary (or, in the event such termination occurs on or following a change in control, 24 months of his then current base salary plus the annual bonus paid or payable with respect to the year immediately prior to such termination), generally paid in six (6) equal monthly installments following such termination, and (ii) a pro-rata annual bonus in respect of the year of termination (payable in the year immediately following such termination in accordance with normal payroll practices), calculated by multiplying any annual bonus Mr. Golden would otherwise have been entitled to receive in respect of the year of his termination by a

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fraction, the numerator of which would be the number of full completed months in the fiscal year of termination elapsed through the date of termination, and the denominator of which would be 12. Mr. Golden agreed not to solicit any of our customers or personnel during his employment and for one year following any termination of his employment. In addition, Mr. Golden also agreed to customary confidentiality restrictions for an indefinite period following any termination of his employment.

On January 15, 2013, Mr. Golden resigned as Chief Executive Officer of the Company. On January 18, 2013, the Company entered into a Separation, Consulting and Release Agreement with Heath L. Golden (the “Separation Agreement”). In exchange for Mr. Golden agreeing to a general release of claims in favor of the Company and customary indefinite mutual non-disparagement restrictions, the Separation Agreement provides that Mr. Golden is entitled to the following severance payments and benefits: (i) an amount equal to 18 months’ of his base salary, payable as (x) four months’ base salary on or about each of January 18, 2013, February 15, 2013, March 15, 2013, and April 15, 2013, and (y) two months’ base salary on or about the earlier of May 15, 2013 and the resolution of certain on-going litigation regarding the Company’s lease of its headquarters in New York, New York, (ii) reimbursement for his COBRA premiums for a period of up to six months, and (iii) the right to “net exercise” his vested stock options.

Buxbaum Group Consulting Agreement

On January 28, 2013, the Company entered into a letter agreement (the “Agreement”) with Buxbaum Holdings, Inc., d/b/a Buxbaum Group (“Buxbaum Group”). Pursuant to the Agreement, Buxbaum Group will provide certain restructuring and advisory consulting services, including providing the services of Paul Buxbaum to serve as the Company’s Chief Executive Officer, in exchange for a fee of $75,000 per month during the period commencing on January 16, 2013 and ending (unless extended by mutual agreement) on May 16, 2013 (the “Term”). Mr. Buxbaum will not be entitled to any direct compensation from the Company in respect of his service as its Chief Executive Officer.

During the Term, Buxbaum Group will be tasked with providing specific recommendations to the Company’s Board of Directors (the “Board”) in order to restructure the organization, operations and expenses to better support the Company’s business model and sales levels. Additionally, Buxbaum Group will be responsible for the implementation of such recommendations to the extent adopted by the Board.

Additionally, director fees are not paid to employee directors, and therefore Mr. Buxbaum did not receive any director fees subsequent to the first quarter of 2013.

Gren Employment Agreement

Mr. Gren’s employment with us during 2012 was governed by the terms of an employment agreement dated June 13, 2011, pursuant to which Mr. Gren served as President and General Manager of Rio Garment and President of Hampshire International beginning as of the closing date of the acquisition of Rio Garment, August 25, 2011. Under the agreement, Mr. Gren is entitled to an annual base salary of $425,000 and is eligible for an annual incentive bonus award determined by our Compensation Committee in respect of each fiscal year (with a target bonus of 50% of his base salary and a maximum bonus of 150% of his base salary). The annual incentive bonus shall be subject to Mr. Gren’s continuous employment through the payment date. The employment agreement provides, subject to execution of a release of claims, for the following severance benefits upon a termination of employment by the Company (other than for cause or due to Mr. Gren’s disability) or by Mr. Gren for good reason: (i) continuation of his then base salary for a period of 18 months, payable pursuant to our customary payroll practices, (ii) any earned but unpaid annual incentive bonus award for the year prior to the year of termination (payable in the year immediately following such termination in accordance with normal payroll practices), and (iii) a pro rata portion of any annual incentive bonus award in respect of the year of termination, calculated by multiplying any annual incentive bonus award Mr. Gren would otherwise have been entitled to receive in respect of the year of his termination by a fraction, the numerator of which will be the number of full completed months in the fiscal year of termination elapsed through the date of termination, and the denominator of which will be 12. Mr. Gren has agreed not to compete or solicit any of our customers or personnel during his employment and for a period of 18 months following any termination of his employment. In addition, Mr. Gren has also agreed to customary confidentiality restrictions for an indefinite period following any termination of his employment.

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Stec Employment Agreement

Mr. Stec’s employment with us during 2012 was governed by the terms of an employment agreement dated August 13, 2012, pursuant to which Mr. Stec serves as President of Hampshire Brands. Under the agreement, Mr. Stec is entitled to an annual base salary of $350,000 and is eligible for an annual incentive bonus award determined by our Compensation Committee in respect of each fiscal year. The annual incentive bonus shall be subject to Mr. Stec’s continuous employment through the payment date. The employment agreement provides subject to execution of a release of claims, for continuation of his then base salary for a period of 6 months, payable pursuant to our customary payroll practices, upon termination of employment by the Company (other than for cause or due to Mr. Stec’s death or disability). Mr. Stec has agreed to a non-competition covenant during his employment and for a period of 12 months following any termination of his employment. Mr. Stec has also agreed not to solicit any of our customers or personnel during his employment and for a period of 24 months following any termination of his employment. In addition, Mr. Stec has also agreed to customary confidentiality restrictions for an indefinite period following any termination of his employment.

Prengel Employment Agreement

Mr. Prengel’s employment with us during 2012 was governed by the terms of an employment agreement dated October 12, 2010, the date he joined the Company, pursuant to which Mr. Prengel served as President of our Men’s division. Under the agreement, Mr. Prengel is entitled to an annual base salary of $300,000. Upon a termination of employment by the Company other than for cause, Mr. Prengel was entitled, subject to his execution of a release of claims, to severance equal to half of his annual base salary (payable in accordance with the Company’s normal payroll practices) and a pro rata bonus for the year of termination. Mr. Prengel agreed not to solicit any of our customers or personnel during his employment and for one year following the termination of his employment. In addition, Mr. Prengel has also agreed to customary confidentiality restrictions for an indefinite period following any termination of his employment. On August 10, 2012, Mr. Prengel resigned from the position of President of the Company’s Men’s Division.

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Outstanding Equity Awards at Fiscal Year-End

The following table provides information concerning equity awards that were outstanding as of December 31, 2012 for each of our named executive officers.

Outstanding Equity Awards at Fiscal Year-End Table

	Option Awards										Stock Awards
Name	Number of Securities Underlying Unexercised Options (#) Exercisable		Number of Securities Underlying Unexercised Options (#) Unexercisable		Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#)		Option Exercise Price ($)		Option Expiration Date		Number of Shares or Units of Stock That Have Not Vested (#)		Market Value of Shares or Units of Stock That Have Not Vested ($)(1)		Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)		Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)
Heath L. Golden(2)		66,666		33,334		—	$	3.09		May 2, 2021		33,333		100,666		—		—
		20,000		60,000		—	$	2.05		March 30, 2022		50,000		151,000		—		—
David L. Gren(3)		22,500		67,500		—	$	2.05		March 30, 2022		—		—		—		—
Robert S. Stec(4)		22,500		67,500		—	$	3.48		March 30, 2022		—		—		—		—

(1) The market value of the stock award is determined by multiplying the number of shares times $3.02, the closing price of our Common Stock on the OTC Markets (formerly known as “Pink Sheets”) under the symbol “HAMP” on December 31, 2012, the last day of our fiscal year.

(2) Mr. Golden was granted 100,000 stock options on May 2, 2011, of which 33,334 remained unvested at December 31, 2012. Mr. Golden was also granted 80,000 stock options on March 30, 2012 of which 60,000 remained unvested at December 31, 2012. On May 2, 2011 Mr. Golden was granted 100,000 restricted stock units, of which 33,333 remained unvested at December 31, 2012. Also, on August 25, 2011 Mr. Golden was granted 150,000 shares of restricted stock of which 50,000 remained unvested at December 31, 2012. On January 15, 2013, Mr. Golden resigned from the Company and forfeited the remaining unvested stock options, restricted stock units and restricted stock.

(3) Mr. Gren was granted 90,000 stock options on March 30, 2012. Twenty-five percent (25%) of such options vested and became exercisable on December 31, 2012 and another twenty-five percent (25%) will vest and become exercisable on December 31^st of each of 2013, 2014 and 2015.

(4) Mr. Stec was granted 90,000 stock options on August 13, 2012. Twenty-five percent (25%) of such options vested and became exercisable on December 31, 2012 and another twenty-five percent (25%) will vest and become exercisable on December 31^st of each of 2013, 2014 and 2015.

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EQUITY COMPENSATION PLAN INFORMATION

The following table provides information as of December 31, 2012 with respect to shares of the Company’s Common Stock that may be issued under equity compensation plans:

Equity Compensation Plan Information Table

Plan Category	(a) Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants, and Rights		(b) Weighted Average Exercise Price of Outstanding Options, Warrants, and Rights		(c) Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a))
Equity Compensation Plans Approved by Stockholders		None		N/A		None
Equity Compensation Plans Not Approved by Stockholders		688,583	$	2.45		324,750
Total		688,583	$	2.45		324,750

The Hampshire Group, Limited 2009 Stock Incentive Plan (the “Stock Plan”) is designed to assist us in attracting, retaining, motivating and rewarding key employees, officers, directors and consultants, and promoting the creation of long term value for stockholders of the Company by closely aligning the interests of these individuals with those of our stockholders. The Stock Plan permits us to award eligible persons nonqualified stock options, restricted stock and other stock-based awards. In connection with the adoption of the Stock Plan, the Board authorized 880,000 shares of common stock under the Stock Plan and initially approved grants totaling 862,500 shares, which consisted of grants to certain employees, managers, named executive officers and directors. Ten percent of each award of restricted stock is subject to time-based vesting with the remaining 90% of each award subject to performance-based vesting. During 2012, 459,000 shares of non-vested restricted stock previously granted to certain employees who were participants in the Stock Plan were surrendered for cancellation by such employees pursuant to transactions that, with respect to each such employee, provided that such employee would be granted options to purchase Hampshire Common Stock in consideration for the cancellation of such shares of restricted stock held by it. In connection with such transactions, a total of 331,250 options were granted. In addition, during 2012, certain other employees who were participants in the Stock Plan were granted, in the aggregate, 375,750 options to purchase Hampshire Common Stock. Twenty-five percent (25%) of such options vested and became exercisable on December 31, 2012 and another twenty-five percent (25%) will vest and become exercisable on December 31^st of each of 2013, 2014 and 2015, and the options will expire on March 30, 2022. 416,438 options remained unvested at December 31, 2012.

Separate from the Stock Plan, we granted to our previous chief executive officer, Heath Golden, 100,000 stock options (the “Options”) and 100,000 restricted stock units (“RSUs”), each on May 2, 2011, and 150,000 restricted shares of Hampshire Common Stock (the “Restricted Stock”) on August 25, 2011. The Options expire ten years from the grant date and vest ratably over two years following the grant date. One-third of the Options were unvested as of December 31, 2012. Each RSU represents the right to receive one share of the Company’s common stock upon settlement. The RSUs vest and settle ratably over two years following the grant date. One-third of the RSUs were unvested as of December 31, 2012. The shares of Restricted Stock vest ratably over two years following the grant date. As of December 31, 2012, 50,000 shares of Restricted Stock were unvested. Each of these stock awards were subject to Mr. Golden’s continued service through the applicable vesting dates. As a result of the resignation of Mr. Golden on January 15, 2013, all of the remaining unvested Options, RSUs and Restricted Stock were forfeited at that time.

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NON-BINDING ADVISORY VOTE ON THE COMPENSATION OF OUR NAMED
EXECUTIVE OFFICERS
  
(Proposal 2)

In accordance with Section 14A of the Exchange Act, we ask our stockholders to vote to approve, on an advisory and on a non-binding basis, the compensation of our Named Executive Officers as disclosed in this Proxy Statement. Because your vote is advisory, it will not be binding on our Board, our Compensation Committee, or the Company, and we will not be required to take any action as a result of the outcome of the vote on this proposal. However, the Compensation Committee will carefully consider the voting results and take them into consideration when making future decisions regarding executive compensation arrangements.

Our Compensation Committee believes that the success of our Company depends on attracting and retaining executives with superior talent and the skills necessary to grow our business. The Compensation Committee also believes that executive compensation should be designed to motivate the creation of value and reward executives for such value creation. Our compensation programs have been designed to compensate NEOs, fairly and competitively, primarily through a mix of: (i) base salary, which is reviewed on an annual basis, except to the extent otherwise provided for in an applicable employment agreement; (ii) annual bonuses, which are based on the achievement of the Company’s performance objectives; and (iii) equity compensation through restricted stock or option grants. In determining the levels and mix of compensation, the Compensation Committee does not generally rely on formulaic guidelines but rather maintains a flexible compensation program that allows it to adapt components and levels of compensation to motivate and reward individual executives within the context of our desire to attain certain strategic and financial goals.

For these reasons, the Board of Directors requests that you approve the Company's executive compensation policies and practices for our named executive officers as described in this Proxy Statement pursuant to the SEC disclosure rules, the executive compensation tables and narrative discussions.

Shareholders are being asked to approve the following advisory resolution:

RESOLVED, that the compensation paid to the Company’s named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, including the compensation tables and narrative discussion is hereby APPROVED.

The Board of Directors Recommends A Vote Approving, On A Non-Binding And On An Advisory Basis, The Compensation Of Our Named Executive Officers As Described In This Proxy Statement.

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NON-BINDING ADVISORY VOTE ON THE FREQUENCY OF FUTURE ADVISORY VOTES ON THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS
  
(Proposal 3)

In accordance with Section 14A of the Exchange Act, we ask our stockholders to vote to approve, on an advisory and on a non-binding basis, on whether future advisory votes on the executive compensation of our named executive officers should occur every year, every two years, or every three years.

The Board believes that advisory votes on the compensation of our named executive officers should occur every year so that our stockholders will have an opportunity to express their views on our compensation practices. The affirmative vote of a plurality of the shares cast affirmatively or negatively for the proposal is required to approve the frequency of future advisory votes on the compensation of our named executive officers. You may vote to advise the Company to conduct an advisory vote on the compensation of our named executive officers every one, two, or three years or you may abstain from voting. While this vote is required by law, it will not be binding or overrule any decisions by the Board, nor will it create or imply any additional fiduciary duty on the part of the Board. The Compensation Committee will, however, take into account the outcome of the vote when considering the frequency of future advisory votes on executive compensation.

The Board of Directors Recommends A Vote Approving, On A Non-Binding And On An Advisory Basis, Future Advisory Votes On The Compensation Of Our Named Executive Officers Every Year.

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REPORT OF AUDIT COMMITTEE

The Audit Committee of the Board of Directors, which consists entirely of directors who meet the independence and experience requirements of the Securities and Exchange Commission for service on an audit committee, has furnished the following report:

The Audit Committee assists the Board in overseeing and monitoring the integrity of our financial reporting process, compliance with legal and regulatory requirements and the quality of internal and external audit processes. This committee’s role and responsibilities are set forth in our charter adopted by the Board, which is available on our website atwww.hamp.com. This committee reviews and reassesses our charter annually and recommends any changes to the Board for approval. The Audit Committee is responsible for overseeing our overall financial reporting process, and for the appointment, compensation, retention and oversight of the work of Elliott Davis, LLC. In fulfilling its responsibilities for the financial statements for fiscal year December 31, 2012, the Audit Committee took the following actions:

• Reviewed and discussed the audited financial statements for the fiscal year ended December 31, 2012 with management and Elliott Davis, LLC, our independent registered public accounting firm;

• Discussed with Elliott Davis, LLC the matters required to be discussed by Statement on Auditing Standards No. 61, as amended, as adopted by the Public Company Accounting Oversight Board in Rule 3200T, relating to the conduct of the audit; and

• Received written disclosures and the letter from Elliott Davis, LLC regarding its independence as required by applicable requirements of the Public Company Accounting Oversight Board regarding communications with the Audit Committee, and the Audit Committee further discussed Elliott Davis, LLC’s independence. The Audit Committee also considered the status of pending litigation, taxation matters and other areas of oversight relating to the financial reporting and audit process that the committee determined appropriate.

Based on the Audit Committee’s review of the audited financial statements and discussions with management, the Audit Committee recommended to the Board that the audited financial statements be included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2012 for filing with the Securities and Exchange Commission.

Members of the Audit Committee
 
Peter H. Woodward, Chairman

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AUDIT FEES

The Audit Committee has appointed Elliott Davis, LLC (“Elliott Davis”), as our independent registered public accounting firm, to audit our financial statements for the fiscal year ending December 31, 2013. Elliott Davis was engaged as the Company’s independent registered public accounting firm for the fiscal year ended December 31, 2012, and to perform procedures related to the financial statements included in the Company’s quarterly report on Form 10-Q for the third quarter of 2012. Representatives of Elliott Davis will be present at the meeting, will be able to make a statement if they so desire, and will be available to respond to appropriate questions.

During the fiscal year ended December 31, 2011 and through September 18, 2012, the date of the appointment of Elliott Davis, the Company did not consult Elliott Davis with respect to the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on the Company’s consolidated financial statements, or any other matters or reportable events as defined in Item 304(a)(2)(i) and (ii) of the Securities and Exchange Commission’s Regulation S-K.

On September 18, 2012, the Company dismissed BDO USA, LLP (“BDO”) as the Company’s independent registered public accounting firm. The decision to dismiss BDO was recommended and approved by the Audit Committee of the Board of Directors as part of the Company’s continuing effort to reduce costs and expenses while maintaining an equivalent level of audit quality and services.

The audit reports of BDO in respect of the Company’s consolidated financial statements for the fiscal years ended December 31, 2011 and 2010 did not contain an adverse opinion or a disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principles. During the fiscal years ended December 31, 2011 and December 31, 2010, and during the period from the end of the most recently completed fiscal year through September 18, 2012, the date of the dismissal of BDO, there were no disagreements with BDO regarding any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedures, which disagreements, if not resolved to the satisfaction of BDO would have caused it to make reference to such disagreements in its reports. During the years ended December 31, 2011 and 2010, and through September 18, 2012, there were no reportable events as defined in Item 304(a)(1)(v) of Regulation S-K.

The Company has provided BDO with a copy of the disclosure contained in this Current Report on Form 8-K and has requested that BDO furnish the Company with a letter addressed to the Securities and Exchange Commission stating whether BDO agrees with the above statements. A copy of that letter, dated September 18, 2012, is filed with the Company’s Current Report on Form 8-K dated September 21, 2012.

The aggregate fees for professional services rendered for the Company by the Company’s independent registered public accountants for the years ended December 31, 2012 (Elliott Davis) and 2011 (BDO) were:

	2012		2011
Audit fees	$	136,465	$	360,777
Audit related fees		—		—
Tax fees		1,500		—
All other fees		—		—
Total	$	137,965	$	360,777

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Audit Fees

The aggregate fees of Elliott Davis for professional services for the audit of our annual consolidated financial statements as of and for the year ended December 31, 2012 and for the review of our unaudited consolidated financial statements for the third quarter of 2012 was $127,500 and expenses related thereto were $8,965.

Audit Related Fees

There were no audit related services for 2012 and 2011.

Tax Fees

Tax related services rendered by Elliott Davis was $1,500 for 2012. There were no tax related services for 2011.

All Other Fees

There were no other fees billed for 2012 and 2011.

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AUDIT COMMITTEE’S PRE-APPROVAL POLICIES AND PROCEDURES

Consistent with SEC policies regarding auditor independence, the Audit Committee has responsibility for appointing, setting compensation and overseeing the work of the independent registered public accounting firm. In recognition of this responsibility, the Audit Committee has established a policy to pre-approve all audit and permissible non-audit services provided by the independent auditor. Prior to engagement of the independent registered accounting firm for the next year’s audit, management will submit a listing of services expected to be rendered during that year for each of our categories of services to the Audit Committee for approval.

1.  AUDIT SERVICES include audit work performed in the preparation of financial statements, as well as work that generally only the independent auditor can reasonably be expected to provide, including comfort letters, statutory audits and attest services and consultation regarding financial accounting and/or reporting standards.

2.  AUDIT-RELATED SERVICES are for assurance and related services that are traditionally performed by the independent auditor, including due diligence related to mergers and acquisitions, sales and disposals, employee benefit plan audits and special procedures required to meet certain regulatory requirements.

3.  TAX RELATED SERVICES include all services performed by the independent auditor’s tax personnel except those services specifically related to the audit of the financial statements, and include fees in the areas of tax compliance, tax planning and tax advice.

4.  OTHER FEES are those associated with services not captured in the above categories. The Company generally does not request such services from the independent registered accounting firm.

Prior to engagement, the Audit Committee obtains detailed information as to the particular services to be provided, and then completes its pre-approval process. The fees are budgeted and the Audit Committee requires the independent registered accounting firm and management to report actual fees versus the budget periodically throughout the year by category of service. During the year, circumstances may arise when it may become necessary to engage the independent registered public accounting firm for additional services not contemplated in the original pre-approval. In those instances, the Audit Committee requires specific pre-approval before engaging the independent registered accounting firm. The Audit Committee may delegate pre-approval authority to one or more of its members. The members to whom such authority is delegated must report any pre-approval decisions to the Audit Committee at its next scheduled meeting.

All work performed by Elliott Davis, LLC and BDO USA, LLP as described in the “Audit Fees” section under the captions Audit Fees, Audit-Related Fees, Tax Fees and All Other Fees was approved or pre-approved by the Audit Committee in accordance with the policies and procedures set forth above.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

To our knowledge, all reports which were required to be filed by our directors, executive officers and ten percent stockholders pursuant to Section 16(a) of the Securities Exchange Act of 1934, as amended, were filed on a timely basis, except for one transaction relating to a director and reporting person, Mr. Buxbaum, one transaction relating to a director and reporting person, Mr. Yogel, one transaction relating to an officer and reporting person, Mr. Gren, one transaction relating to a ten percent stockholder, BGY II, LLC and one event and one transaction relating to an officer and reporting person, Mr. Stec, that were disclosed in five Forms 4 — Statement of Changes in Beneficial Ownership and one Form 3 — Initial Statement of Changes in Beneficial Ownership of Securities filings during the fiscal year 2012.

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CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS

The Board of Directors is committed to upholding the highest legal and ethical conduct in fulfilling its responsibilities and recognizes that related party transactions can present a heightened risk of potential or actual conflicts of interest. Current rules define a related party transaction to include any transaction, arrangement or relationship in which the company is a participant and in which any of the following persons has or will have a direct or indirect interest:

(a) An executive officer, director or director nominee of the company;

(b) Any person who is known to be the beneficial owner of more than 5% of the company’s Common Stock;

(c) Any person who is an immediate family member (as defined under Item 404 of Regulation S-K) of an executive officer, director or director nominee or beneficial owner of more than 5% of the company’s Common Stock; or

(d) Any firm, corporation or other entity in which any of the foregoing persons is employed or is a partner or principal or in a similar position or in which such person, together with any other of the foregoing persons, has a 5% or greater beneficial ownership interest.

The Audit Committee Charter provides that the Audit Committee must approve all related party transactions entered into by the Company with any of our directors or executive officers.

Acquisition of Rio Garment

On August 25, 2011, pursuant to the terms of the Agreement and Plan of Merger, dated as of June 13, 2011, the Company paid to a representative of the equity holders of Rio, which include a current director and Chief Executive Officer, Mr. Buxbaum, a current director, Mr. Yogel (through YIH III, an affiliate of Mr. Yogel), and the current president of Rio Garment, Mr. Gren, on their behalf, a total of $7.0 million in cash, $3.5 million of which was deposited into an escrow account pending certain post-closing purchase price adjustments. Additionally, at closing, the Company issued to the equity holders’ representative an aggregate of $2.6 million of Hampshire Common Stock and held back an additional $6.5 million of Hampshire Common Stock for potential post-closing purchase price adjustments and indemnification claims.

During 2012, in respect of a net working capital purchase price adjustment, approximately $1.4 million of the escrowed amount was paid to the equity holders’ representative and approximately $0.3 million was released to the Company pursuant to the terms of the merger agreement. An additional $1.8 million of the escrowed amount was paid to the equity holders relating to Rio’s 2011 “Adjusted EBITDA,” as determined in accordance with the merger agreement.

Also, an additional installment of purchase price which included contingent consideration in the amount of approximately $6.5 million was to be paid to the sellers based on post-closing purchase price adjustments in accordance with the Merger Agreement. As a result of Rio’s 2011 Adjusted EBITDA multiplied by three equaling or exceeding $23.0 million and the release of certain shares previously being held back in connection with potential tax indemnification claims, during 2012, the Company issued to a representative of the Equityholders a total of $3.0 million of Hampshire Common Stock pursuant to the terms of the merger agreement. The remaining recorded value of the contingent consideration of $3.5 million approximated fair value at December 31, 2012.

On April 5, 2013, the Company and the former Rio equity holders entered into an Amendment to the Agreement and Plan of Merger, originally dated as of June 13, 2011, as amended on August 15, 2011, August 25, 2011, March 7, 2013 and April 1, 2013. The Amendment to the Agreement and Plan of Merger provided that, among other things, the approximately $3.0 million of contingent consideration which was originally due to the former Rio equity holders within 10 days of the 18 month anniversary of the closing date will be paid no later than the earlier of August 26, 2014 or within 5 days of an ownership change as defined by Internal Revenue Code Section 382. The Amendment to the Agreement and Plan of Merger also provides that the release of an additional $0.5 million of consideration, which remains contingent upon the absence of certain tax indemnification claims by the Company, would be made no later than the earlier of (i) August 26, 2014 or (ii) the later of (x) September 4, 2013 or (y) within 5 days of an ownership change as defined by Internal Revenue Code Section 382.

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During 2012, the Company paid approximately $0.2 million for screen printing services to a vendor affiliated with Mr. Gren.

Amended and Restated Voting Agreement

Pursuant to that certain Amended and Restated Voting Agreement, dated as of April 5, 2013, by and among Mr. Buxbaum, Mr. Yogel (through YIH III, an affiliate of Mr. Yogel), Mr. Gren, BGY II, LLC (collectively, the “Rio Stockholders”) and the Company, the Rio Stockholders must, upon the request of the Company, but only with respect to a certain specified percentage of their shares (the “Subject Shares”) (i) appear at the 2013 Annual Meeting of the Company’s Shareholders, or cause such Subject Shares to be counted as present for the purposes of establishing a quorum at such meeting and (ii) vote, or cause to be voted, all of such Subject Shares in favor of each nominee to the Company’s Board that is nominated for election by the Nominating Committee of the Board (or by any successor committee thereto or by the Board), which includes each of the director nominees set forth in Proposal 1 of this Proxy Statement.

The Rio Stockholders have appointed the Company as attorney-in-fact with full power of substitution for and on behalf of each such Rio Stockholder to, with respect to the Subject Shares (i) attend any and all meetings of the stockholders of the Company and to be counted as present thereat, including the 2013 Annual Meeting, (ii) vote, express consent or dissent or otherwise act on and behalf of such Rio Stockholder, and (iii) grant or withhold all written consents at any and all meetings of the Company’s stockholders or in connection with any action sought to be taken by written consent without a meeting, in each case with respect to the matters set forth in the above paragraph.

The above described Amended and Restated Voting Agreement will terminate automatically on August 25, 2015 provided it has not already been terminated prior to such date pursuant to the terms and conditions set forth therein.

Stockholder Rights Agreement

The Company and the Rio Stockholders are also each party to that certain Stockholder Rights Agreement, dated as of August 25, 2011, as amended on April 5, 2013, under which the Board of the Company is currently obligated to take such action as may be necessary to nominate two members of the Board that are designated by certain of the Rio Stockholders. Such nominees, with respect to the election of directors to occur at the 2013 Annual Meeting, are Mr. Buxbaum and Mr. Yogel. The Stockholder Rights Agreement imposes certain limitations on the Rio Stockholders’ ability to purchase or sell Common Stock of the Company. The Rio Stockholders are subject to a standstill until the earlier of January 1, 2014 and the 10^th calendar day prior to the expiration of the notice period specified in the Company’s bylaws (as then in effect) to deliver notice of shareholder nominations for the election of directors at the Company’s 2014 annual meeting of stockholders, however, the Rio Stockholders are not prohibited from acquiring Common Stock of the Company if the Rio Stockholders would not, as a result of such acquisitions, beneficially own more than 34.9% of the total outstanding Common Stock of the Company.

Buxbaum Group Consulting Agreement

On January 28, 2013, the Company entered into a letter agreement (the “Agreement”) with Buxbaum Holdings, Inc., d/b/a Buxbaum Group (“Buxbaum Group”). Pursuant to the Agreement, Buxbaum Group will provide certain restructuring and advisory consulting services, including providing the services of Paul Buxbaum to serve as the Company’s Chief Executive Officer, in exchange for a fee of $75,000 per month during the period commencing on January 16, 2013 and ending (unless extended by mutual agreement) on May 16, 2013 (the “Term”). Mr. Buxbaum will not be entitled to any direct compensation from the Company in respect of his service as its Chief Executive Officer.

During the Term, Buxbaum Group will be tasked with providing specific recommendations to the Company’s Board of Directors (the “Board”) in order to restructure the organization, operations and expenses to better support the Company’s business model and sales levels. Additionally, Buxbaum Group will be responsible for the implementation of such recommendations to the extent adopted by the Board.

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INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
  
(Proposal 4)

The Audit Committee has appointed Elliott Davis, LLC, as our independent registered public accounting firm, to audit our financial statements for the fiscal year ending December 31, 2013. The Board proposes that the stockholders ratify this appointment. Elliott Davis, LLC was engaged as the Company’s independent registered public accounting firm for the fiscal year ended December 31, 2012, and to perform procedures related to the financial statements included in the Company’s quarterly report on Form 10-Q for the third quarter of 2012. Representatives of Elliott Davis, LLC will be present at the meeting, will be able to make a statement if they so desire, and will be available to respond to appropriate questions.

During the fiscal year ended December 31, 2011 and through September 18, 2012, the date of the appointment of Elliott Davis, LLC, the Company did not consult Elliott Davis, LLC with respect to the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on the Company’s consolidated financial statements, or any other matters or reportable events as defined in Item 304(a)(2)(i) and (ii) of the Securities and Exchange Commission’s Regulation S-K.

The following table presents fees for professional audit services rendered by Elliott Davis, LLC for the audit of the Company’s annual financial statements for the year ended December 31, 2012 and fees billed for other services rendered by Elliott Davis, LLC during this period.

AUDIT FEES

The Audit Committee appointed Elliott Davis, LLC as the Company’s independent registered public accounting firm for the year ended December 31, 2012.

	2012
Audit fees	$	136,465
Audit related fees		—
Tax fees		1,500
All other fees		—
Total	$	137,965

Audit Fees

The aggregate fees of Elliott Davis, LLC for professional services for the audit of our annual consolidated financial statements as of and for the year ended December 31, 2012 and for the review of our unaudited consolidated financial statements for the third quarter of 2012 was $127,500 and expenses related thereto were $8,965.

Audit Related Fees

There were no audit related services for 2012 and 2011.

Tax Fees

Tax related services rendered by Elliott Davis, LLC was $1,500 for 2012. There were no tax related services for 2011.

All Other Fees

There were no other fees billed for 2012 and 2011.

In the event the stockholders do not ratify the appointment of Elliott Davis, LLC as our independent registered public accounting firm, the Audit Committee may reconsider its appointment. The affirmative vote of a majority of the shares cast affirmatively or negatively at the annual meeting is required to ratify the appointment of the independent registered public accounting firm.

The Board Of Directors Recommends A Vote To Ratify The Appointment OfElliott Davis, LLC As Our Independent Registered Public Accounting Firm, And Proxies Solicited By The Board Will Be Voted In Favor Of Such Ratification Unless A Stockholder Indicates Otherwise On The Proxy.

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OTHER MATTERS

The Board of Directors knows of no other business which will be presented at the Annual Meeting. If any other business is properly brought before the Annual Meeting, proxies will be voted in accordance with the judgment of the persons named therein.

New York, New York
April 30, 2013

Our Annual Report on Form 10-K, which includes our financial statements for the fiscal year ended December 31, 2012, and which provides additional information about us, can be found on the website of the Securities and Exchange Commission atwww.sec.gov.It is also available on our website at www.hamp.com.You may obtain from us a printed copy of our Annual Report on Form 10-K, including our financial statements, free of charge, by sending a written request to: Chief Financial Officer, Hampshire Group, Limited, 1924 Pearman Dairy Road, Anderson, South Carolina, 29625. Exhibits will be provided upon written request and payment of an appropriate processing fee.

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