LEXINGTON GLOBAL ASSET MANAGERS, INC.
PARK 80 WEST PLAZA TWO
SADDLE BROOK, NEW JERSEY 07663
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
The 1997 Annual Meeting of the stockholders (the "Annual Meeting") of
Lexington Global Asset Managers, Inc. (the "Company") will be held at the
offices of the Company, Park 80 West Plaza Two, Saddle Brook, New Jersey 07663
on Thursday, May 15, 1997 at 9:15 A.M., New York time, for the following
purposes:
1. To elect three Class II Directors to hold office for a term to
expire at the 2000 Annual Meeting of the stockholders;
2. To ratify the appointment of KPMG Peat Marwick LLP as
independent auditors for the current calendar year; and,
3. To transact such other business as may properly come before
the Annual Meeting and any adjournment(s) or postponement(s)
thereof.
The Board of Directors has fixed the close of business on April 3, 1997
as the record date for the determination of the stockholders entitled to notice
of, and to vote at, the Annual Meeting.
Please read carefully the following Proxy Statement, which describes the
matters to be voted upon at the Annual Meeting, and then complete, sign and
return your Proxy as promptly as possible. Should you receive more than one
Proxy because your shares are registered in different names and addresses, each
Proxy should be signed and returned to assure that all your shares will be
voted. If you attend the Annual Meeting and vote by ballot, your Proxy will be
revoked automatically and only your vote at the Annual Meeting will be counted.
By Order of the Board of Directors,
LISA CURCIO
Secretary
Saddle Brook, New Jersey
April 15, 1997
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YOUR VOTE IS IMPORTANT
SO THAT YOUR COMMON STOCK WILL BE REPRESENTED AT THE ANNUAL
MEETING IN THE EVENT YOU ARE NOT PERSONALLY PRESENT, PLEASE
DATE, SIGN AND RETURN PROMPTLY THE ENCLOSED PROXY IN THE
ENVELOPE PROVIDED. EXECUTION OF THE PROXY WILL NOT AFFECT YOUR
RIGHT TO VOTE IN PERSON IF YOU ARE PRESENT AT THE MEETING.
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LEXINGTON GLOBAL ASSET MANAGERS, INC.
Park 80 West Plaza Two
Saddle Brook, New Jersey 07663
PROXY STATEMENT
FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 15, 1997
GENERAL
This Proxy Statement is being furnished in connection with the
solicitation of proxies on behalf of the Board of Directors of Lexington Global
Asset Managers, Inc., a Delaware corporation (the "Company"), for the 1997
Annual Meeting of the stockholders, to be held on Thursday, May 15, 1997 (the
"Annual Meeting"). The Annual Meeting will be held at the offices of the
Company, Park 80 West Plaza Two, Saddle Brook, New Jersey 07663 at 9:15 A.M.,
New York time. The 1997 Annual Meeting will be the second Annual Meeting held
subsequent to the spin-off of the Company on December 13, 1995 (the "Spin-off").
Prior to the Spin-off, the Company was a wholly-owned subsidiary of Piedmont
Management Company Inc. ("Piedmont").
This Proxy Statement and the accompanying form of proxy (the "Proxy") was
first mailed to stockholders on or about April 15, 1997.
SOLICITATION
Solicitation of Proxies for use at the Annual Meeting is being made by
mail on behalf of the Board of Directors by the members of the Nominating and
Proxy Committee consisting of Messrs. Lunsford Richardson, Jr., L. Richardson
Preyer and Stuart Smith Richardson, each a Director of the Company.
The cost of solicitation will be borne by the Company. In addition to the
use of the mails, Proxies may be solicited by persons regularly employed by the
Company by personal interview or telephone and facsimile, with no additional
compensation therefor. Arrangements will also be made with brokerage houses and
other custodians, nominees and fiduciaries for the forwarding of solicitation
material to the beneficial owners of stock held of record by such persons. The
Company may reimburse such persons for their costs in forwarding the
solicitation material to such beneficial owners.
RECORD DATE, VOTING AND STOCK OWNERSHIP
On April 3, 1997, the record date for determination of stockholders
entitled to vote at the Annual Meeting, there were outstanding 5,487,887 shares
of common stock, par value $0.01 per share ("Common Stock") of the Company
entitled to be voted at the Annual Meeting. Each stockholder is entitled to one
vote for each share of Common Stock held by such stockholder. The three
candidates for election as Class II Directors receiving the highest number of
affirmative votes of the shares entitled to vote at the Annual Meeting will be
elected Class II Directors of the Company. The other matters submitted for
stockholder approval at this Annual Meeting will be decided by the affirmative
vote of a majority of the shares present or represented and entitled to vote on
such matter. As to each proposal, abstentions will be included, but broker
non-votes will not be included in the calculation of the number of holders who
are considered present and voting at the meeting.
Based upon their aggregate holdings of Common Stock, members of the
Richardson Family (defined below) have the ability to cast at least a majority
of the votes entitled to notice of and to vote at the meeting. See "Security
Ownership of Certain Beneficial Owners."
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REVOCABILITY OF PROXIES
If you are unable to attend the Annual Meeting, you may vote by Proxy.
The enclosed Proxy is solicited by the Company's Board of Directors and, when
returned properly completed, will be voted as you direct in your Proxy. Unless
otherwise instructed in the Proxy, the proxyholders will vote the Proxies
received by them FOR each of the three proposals described herein.
Any stockholder giving a Proxy has the power to revoke it at any time
before it is exercised. The Proxy may be revoked by filing with Lisa Curcio, the
Secretary of the Company, either a written statement revoking the Proxy or a
subsequent Proxy. You may also revoke your Proxy by attending the Annual Meeting
and voting in person.
DEADLINE FOR RECEIPT OF STOCKHOLDER PROPOSALS
Proposals of stockholders of the Company that are intended to be
presented by such stockholders at the Company's 1998 Annual Meeting must be
received by the Company at its principal executive offices no later than
December 12, 1997 in order that they may be included in the Proxy Statement and
form of Proxy relating to that meeting.
MATTERS TO BE CONSIDERED AT ANNUAL MEETING
PROPOSAL ONE--ELECTION OF DIRECTORS
At the Annual Meeting, three Class II Directors will be elected to hold
office until the 2000 Annual Meeting of stockholders and until their successors
have been elected and qualified. Pursuant to the Bylaws, the Board of Directors
has fixed the number of Directors which shall constitute the Board of Directors
for the ensuing year at ten. The three persons named as nominees in the
following list have been nominated by the Nominating and Proxy Committee to
serve as Class II Directors and to hold office until the 2000 Annual Meeting of
the stockholders and until their successors shall have been elected and shall
qualify. The proxyholders will vote the Proxies received by them FOR the
nominees named below (unless authority is withheld by a stockholder). Each
person nominated for election has agreed to serve if elected. If any nominee is,
in the judgment of the Nominating and Proxy Committee, unable or unavailable to
serve, the Proxies may be voted for the election of another person designated by
said Committee, but it is not presently anticipated that any nominee will be
unable or unavailable to serve. The three candidates receiving the highest
number of the shares entitled to vote at the Annual Meeting will be elected
Class II Directors of the Company. The names, ages, principal occupations and
selected biographical information of the Directors as of March 3, 1997,
including such nominees and the period of previous services as a Director of the
Company, are as follows:
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NOMINEES
Set forth below is information regarding the nominees, including
information furnished by them as to principal occupation, other directorships
held, any arrangements pursuant to which they were selected as nominees and
their ages as of March 3, 1997.
<TABLE>
<CAPTION>
OTHER POSITIONS WITH THE COMPANY AND ITS SUBSIDIARIES; YEAR TERM
PRINCIPAL OCCUPATION FOR THE PAST FIVE YEARS1 AND DIRECTOR OF OFFICE
NAME AGE ALL OTHER DIRECTORSHIPS OF PUBLICLY HELD COMPANIES SINCE TO EXPIRE
- ---------- ------- ----------------------------------------------------------------------------------------
<S> <C> <C> <C>
William R. Miller1 66 Retired; Director of Chartwell Re Corporation 1995 2000
("Chartwell") formerly President and (Class II)
Chief Executive Officer of Winterthur U.S. Holdings.
L. Richardson Preyer1,2 78 Retired; formerly Professor, University of North 1995 2000
Carolina; formerly a Member of the U.S. House of (Class II)
Representatives from the State of North Carolina;
Director of Vanguard Cellular Systems, Inc. ("Vanguard").
Lunsford Richardson, Jr.1,2 73 Director of Chartwell; Chairman of Richardson 1995 2000
Corporation of Greensboro. (Class II)
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1 Each Director was also a director of Piedmont, the former parent of the Company.
2 Messrs. Lunsford Richardson, Jr. and L. Richardson Preyer are first cousins.
</TABLE>
MEMBERS OF THE BOARD OF DIRECTORS CONTINUING IN OFFICE
Set forth below is information regarding the current Directors continuing
in office, including information furnished by them as to principal occupation,
other directorships held, any arrangements pursuant to which they were selected
as Directors and their ages as of March 3, 1997.
<TABLE>
<CAPTION>
OTHER POSITIONS WITH THE COMPANY AND ITS SUBSIDIARIES; YEAR TERM
PRINCIPAL OCCUPATION FOR THE PAST FIVE YEARS1 AND DIRECTOR OF OFFICE
NAME AGE ALL OTHER DIRECTORSHIPS OF PUBLICLY HELD COMPANIES SINCE TO EXPIRE
- ---------- ------- ----------------------------------------------------------------------------------------
<S> <C> <C> <C>
Sion A. Boney, III1,3 41 President Bristol-Myers Products; formerly 1995 1998
Consultant, Marketing Corporation of America. (Class I)
Robert M. DeMichele1 52 President, Chief Executive Officer and Director of the 1995 1998
Company; Chairman and Chief Executive Officer of (Class I)
Lexington Management Corporation (investment
counseling and mutual fund management subsidiary of
the Company); Director of Chartwell; Director of
The Navigators Group, Inc. ("Navigators");
Director of Vanguard.
Haynes G. Griffin1 50 Chairman and Co-Chief Executive Officer of Vanguard; 1995 1998
Director of Geotek Communications Inc. (Class I)
Peter L. Richardson1,2 43 President of Smith Richardson Foundation, Inc.; 1995 1999
Managing Trustee of H. Smith Richardson Family Trust. (Class III)
Stuart Smith Richardson1,2 50 Chairman of the Company; Director of Lexington 1995 1999
Management Corporation; Vice Chairman of Vanguard; (Class III)
Director of Chartwell.
Carl H. Tiedemann1 70 General Partner, Tiedemann Boltres Partners; Director of 1995 1999
Alltel Corporation. (Class III)
Marion A. Woodbury1 74 Retired; Former President of The Reinsurance Corporation 1995 1999
of New York. (Class III)
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1 Each nominee was also a director of Piedmont.
2 Messrs. Stuart Smith Richardson and Peter L. Richardson are brothers.
3 Mr. Sion A. Boney, III is a nephew of Mr. Lunsford Richardson, Jr.
</TABLE>
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BOARD COMMITTEES AND MEETINGS
The Board of Directors has delegated certain of its authority to standing
Audit, Executive Personnel and Nominating and Proxy Committees.
The members of the Audit Committee are nominated annually by the
Nominating and Proxy Committee and appointed by the Board of Directors.
Presently, the members of the Audit Committee are Lunsford Richardson, Jr., L.
Richardson Preyer and Sion A. Boney, III. The Audit Committee is responsible for
appointing and engaging, subject to the approval of stockholders, the
independent auditors for the Company. The Audit Committee is also responsible
for discussing and approving plans for the auditors' annual audit, reviewing
with the independent auditors, and with management, the scope and results of the
auditors' report and monitoring the implementation of suggestions made by the
independent auditors. The Audit Committee met twice during 1996.
The members of the Executive Personnel Committee are designated by the
Board of Directors. The Chairman of the Executive Personnel Committee is
Lunsford Richardson, Jr. and the other members are William R. Miller and Carl H.
Tiedemann. The Executive Personnel Committee is primarily responsible for
reviewing, discussing and approving proposed executive salaries, benefit
changes, promotions, development plans and stock option grants. The Executive
Personnel Committee met once during 1996.
The members of the Nominating and Proxy Committee are L. Richardson
Preyer, Lunsford Richardson, Jr. and Stuart Smith Richardson. The Nominating and
Proxy Committee is primarily responsible for designating nominees for Directors
of the Company, soliciting proxies for the election of Directors and for all
other matters which come before the stockholders. The Nominating and Proxy
Committee is also responsible for the voting of proxies for the election of
Directors and for such other matters as may come before the stockholders. The
Nominating and Proxy Committee met twice during 1996.
During 1996, each Director of the Company attended at least 75% of the
meetings of the Board of Directors and, to the extent such committee met, at
least 75% of the meetings of the committees on which he served. The Board of
Directors held four meetings in 1996.
DIRECTORS COMPENSATION
A Director who is also an employee of the Company or one of its
subsidiaries receives no compensation for service on the Board that is in
addition to that received as an employee. Non-employee Directors who do not
receive a fee for service as a committee member or for consulting and advisory
services provided to the Company are paid an annual Director's fee of $10,000
plus $500 for each Board or committee meeting attended.
EXECUTIVE OFFICERS' COMPENSATION
Set forth below is certain information regarding the compensation of each
of the four most highly compensated executive officers of the Company and its
affiliates (the "Named Executive Officers") for the calendar years ended
December 31, 1996, 1995 and 1994. Prior to the Spin-off, portions of the
following compensation were paid by Piedmont.
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<TABLE>
<CAPTION>
ANNUAL COMPENSATION SECURITIES
---------------------------------------------- UNDERLYING
OTHER STOCK OPTIONS
ANNUAL GRANTED ALL OTHER
NAME/POSITION YEAR SALARY BONUS COMPENSATION (#) (1) COMPENSATION(2)
- ------------------------- -------- ----------- ----------- ----------------- ---------- -------------------
<S> <C> <C> <C> <C> <C> <C>
Stuart S. Richardson 1996 $246,300 $ 30,000 -- -- $7,389
Chairman of the 1995 $237,250 -- -- 30,000 $487,117
Company 1994 $224,275 $ 20,000 -- -- $6,728
Robert M. DeMichele 1996 $492,600 $100,000 -- -- $65,933
President & CEO 1995 $474,500 $ 75,000 -- 58,000 $1,284,294
of the Company 1994 $437,775 $100,000 -- -- $53,152
Richard M. Hisey 1996 $235,125 $130,000 -- -- $7,025
Executive Vice President 1995 $212,500 $ 90,000 -- 25,000 $6,415
& CFO 1994 $167,034 $103,000 -- -- $5,011
Lawrence Kantor 1996 $272,250 $135,000 -- -- $8,139
Executive Vice President
& General 1995 $258,000 $125,000 -- 25,000 $7,920
Manager--Mutual
Funds 1994 $230,535 $153,000 -- -- $6,916
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(1)Represents grants of options under the Company's 1995 Long Term Incentive Plan.
(2)The amounts reported in this column represent, for each of the individuals
named, the employer portion of contributions to the Company's Pay Conversion
Plan, a defined contribution salary deferral plan which qualifies under
Section 401(k) of the Internal Revenue Code. In addition, amounts include
employer contributions to the Company's Executive and Supplemental Benefit
Plans, non-qualified plans replacing the portion of benefits which are in
excess of Internal Revenue Code (the "Code") limits for tax qualified plans.
For each of the last three calendar years, contributions to the Executive
Benefit Plan for Mr. DeMichele were $56,433, $53,948 and $48,652,
respectively; and for each of the last three calendar years contributions to
the Supplemental Benefits Plan were as follows: for Mr. Hisey, $2,525, $1,915
and $511; Mr. Kantor, $3,639, $3,425 and $2,416; and Mr. Richardson, $2,889,
$2,617 and $2,228. There were no contributions to the Supplemental Benefits
Plan prior to 1994. The column also includes for Messrs. Richardson and
DeMichele in 1995, amounts paid for unused vacation and in connection with
stay bonus agreements as a result of the merger of Piedmont with and into
Chartwell on December 13, 1995 and the Spin-off. These amounts were $480,000
and $1,225,846, respectively.
</TABLE>
There were no grants of stock options under the Company's 1995 Long Term
Incentive Plan with respect to the Named Executive Officers during 1996.
AGGREGATED OPTION EXERCISES IN 1996 AND YEAR-END OPTION VALUES
The following table sets forth information with respect to the Named
Executive Officers, concerning unexercised options held as of December 31, 1996.
No options with respect to the Company's Common Stock were exercised in 1996.
<TABLE>
<CAPTION>
NUMBER OF SHARES
UNDERLYING VALUE OF UNEXERCISED
SHARES UNEXERCISED "IN THE MONEY" OPTIONS(1)
ACQUIRED VALUE OPTIONS AT FISCAL YEAR-END (#) AT FISCAL YEAR-END ($)
-----------------------------------------------------------------------------
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
----- ---------- -------- ---------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Stuart S. Richardson ...... -- -- 7,500 22,500 $11,250 $33,750
Robert M. DeMichele ....... -- -- 14,500 43,500 $21,750 $65,250
Richard M. Hisey .......... -- -- 6,250 18,750 $ 9,375 $28,125
Lawrence Kantor ........... -- -- 6,250 18,750 $ 9,375 $28,125
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(1)These values are based upon the December 31, 1996 market price of the Common
Stock which was $6.25 per share.
</TABLE>
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Prior to the Spin-off, the Named Executive Officers held options to
acquire Piedmont common stock. Prior to the Spin-off, such options were canceled
in exchange for Piedmont common stock. At the time of the Spin-off, Messrs.
Richardson, DeMichele, Hisey and Kantor acquired 10,798, 13,526, 4,301 and 5,947
shares, respectively of the Company's Common Stock in respect of the shares of
Piedmont Common Stock acquired upon the cancellation of the options.
RETIREMENT PLAN BENEFITS
The Company and its subsidiaries are the sponsors of a defined benefit
pension plan on behalf of their employees. In addition, the Company and its
subsidiaries are sponsors of an Executive Benefit Plan and a Supplemental
Benefits Plan on behalf of certain of their executives which are non-qualified
plans replacing the portion of benefits which are in excess of Internal Revenue
Code limits for tax qualified plans. Benefit formulas under the plans are
explained below. Benefits vest after five years of service.
An employee becomes a participant in the qualified plan after attaining
age 21 and completing one year of service. The pension benefit is equal to the
sum of past service retirement income plus future service retirement income, and
if eligible, the non-qualified plans distributions. For a participant as of
December 31, 1988, the amount of normal retirement income standing to his credit
as of that date will not be less than 1 1/4% of the first $17,000 of his average
annual earnings for the calendar years 1984 through 1988 inclusive, plus 1 3/4%
of average earnings in excess of $17,000, multiplied by his credited service
through December 31, 1988. All participants' benefits for future service are
arrived at by calculating 1 1/2% of annual salary for each year of service. A
participant is eligible for this normal retirement pension on the first date of
the month coincident with or next following his 65th birthday.
The following table illustrates, as of December 31, l996, for the Named
Executive Officers: (a) years of service credited under the retirement plans;
and, (b) the estimated annual benefits payable under the plans, including Social
Security benefits, assuming the election of a single life annuity upon normal
retirement at the age of 65.
YEARS OF SERVICE AS OF ESTIMATED ANNUAL BENEFIT
NAME OF OFFICER DECEMBER 31, 1996 PAYABLE
- --------------------- ---------------------- ------------------------
Stuart S. Richardson 10 $104,952
Robert M. DeMichele 16 97,452
Richard M. Hisey 10 132,780
Lawrence Kantor 12 113,316
EMPLOYMENT AND CHANGE IN CONTROL ARRANGEMENTS
EMPLOYMENT AGREEMENTS
The Company has entered into three year employment agreements with
Messrs. Richardson, DeMichele, Hisey and Kantor pursuant to which such
executives serve as Chairman, President and Chief Executive Officer, Executive
Vice President and Chief Financial Officer, and Executive Vice President and
General Manager--Mutual Funds, respectively. The agreements became effective on
December 13, 1995. Pursuant to such agreements, the initial base salaries of
Messrs. Richardson, DeMichele, Hisey and Kantor were $240,000, $480,000,
$225,000 and $264,000, respectively. In 1996, Messrs. Richardson, DeMichele,
Hisey and Kantor received salary increases resulting in the following new base
salaries: Mr. Richardson, $248,400; Mr. DeMichele, $496,800; Mr. Hisey,
$238,500; and, Mr. Kantor, $275,000. Following the initial term, the agreements
continue from year to year unless terminated by either party on six months
notice. Each agreement provides for continuation of salary and benefits for the
remaining term of the agreement if employment is terminated by the Company
"other than for cause" (as defined in the agreements). If employment is
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terminated "other than for cause" following a "change in control" (as defined in
the agreements) of the Company or if an executive terminates his employment
following a "change in control" because his authority and/or responsibilities
are substantially reduced or he is required to relocate, he is entitled to
receive a payment equal to his average annual cash compensation for the
immediately preceding five fiscal years multiplied by 2.99. However, if
necessary, such payment will be reduced to an amount that would cause the
payment not to be disqualified from deductibility for Federal income tax
purposes by reason of Section 280G of the Code as an "excess parachute payment."
Each employment agreement also provides that the executive will not solicit
clients or employees of the Company for the term of the agreement and the one
year period following a termination of employment.
SEVERANCE PLAN
On September 14, 1995, the Company adopted the Senior Management
Severance Plan (the "Severance Plan"). The Severance Plan is available to
certain senior management employees designated as participants by the Board of
Directors or the Executive Personnel Committee. The Severance Plan provides that
if the employment of a participant is terminated "other than for cause" (as
defined in the Severance Plan) following a "change in control" of the Company
(as defined in the Severance Plan) or if an executive terminates his employment
following a "change in control" because his authority and/or responsibilities
are substantially reduced or he is required to relocate, he is entitled to
receive a payment equal to his average annual cash compensation for the
immediately preceding five fiscal years multiplied by 2.99. However, if
necessary, such payment will be reduced to an amount that would cause the
payment not to be disqualified from deductibility for Federal income tax
purposes by reason of Section 280G of the Code as an "excess parachute payment."
The Severance Plan requires each participant, as a condition to participation,
to agree not to solicit clients or employees of the Company during such
participant's employment and for the one year period following a termination of
employment. Messrs. DeMichele, Richardson, Hisey and Kantor are designated
participants in the Severance Plan.
The Board of Directors of the Company unanimously approved the Severance
Plan because it believes the continued attention and dedication of the
particular employees to their duties under adverse circumstances is in the best
interests of the Company and its stockholders and ultimately outweighs the
potential cost of the benefit.
DEFERRED COMPENSATION AGREEMENT
Pursuant to the Deferred Compensation Agreement dated as of February 2,
1981 with Mr. DeMichele, the Company will accrue $5,000 a year until Mr.
DeMichele's death or termination of employment and upon such death or
termination of employment (other than for cause), shall pay such accrued amounts
in a lump sum or, at the option of the Company, in five annual installments.
TRANSACTIONS WITH DIRECTORS, OFFICERS OR THEIR ASSOCIATES
Approximately $696 million of invested assets of principal stockholders
of the Company (several of whom are directors) and their related interests are
managed by Lexington Management Corporation, a subsidiary of the Company. See
"Security Ownership of Certain Beneficial Owners." The fees charged by Lexington
Management Corporation for the management of such assets are based upon standard
fee schedules which are competitive with the fees charged on nonrelated
accounts.
Except as stated above, no Director or officer of the Company, nominee
for Director, beneficial owner of more than 5% of any class of stock of the
Company, or any member of the immediate family of any of the foregoing persons
had any material interest in any material transaction of the Company or any of
its subsidiaries or affiliates during the period January 1, 1996 through March
3, 1997 or any such proposed transaction.
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EXECUTIVE PERSONNEL COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Board has established an Executive Personnel Committee comprised of
Lunsford Richardson, Jr., William R. Miller and Carl H. Tiedemann. Mr. Stuart
Smith Richardson and Mr. DeMichele also serve as Directors of Vanguard whose
Chairman, Mr. Haynes G. Griffin, is a member of the Board of Directors of the
Company. Mr. Richardson is Chairman of Vanguard's Executive Committee of which
Mr. DeMichele is a member. Mr. DeMichele also serves on the Compensation
Committee of Vanguard. Mr. Griffin does not serve on any committees of the Board
of Directors of the Company.
REPORT OF THE EXECUTIVE PERSONNEL COMMITTEE
The Executive Personnel Committee of the Board of Directors (the
"Executive Personnel Committee") is responsible for administering the executive
compensation plans and programs of the Company and for making recommendations to
the Board of Directors regarding the compensation of and benefits provided to
the Chief Executive Officer and the other executive officers of the Company and
its subsidiaries. The Board of Directors then reviews such recommendations. All
compensation decisions relating to the Chief Executive Officer must be approved
by the Board of Directors. The Company Executive Personnel Committee was
established on December 13, 1995 the effective date of the Spin-off, and met
once during 1996. Prior to such date, compensation decisions were made by the
Executive Personnel Committee of the Piedmont Board of Directors.
The following is a report submitted by the members of the Executive
Personnel Committee which addresses the Company's compensation policies for 1996
including the determination of bonuses for 1996. The names of the Executive
Personnel Committee members are set forth above.
GENERAL POLICIES REGARDING THE COMPENSATION OF EXECUTIVE OFFICERS.
The Company's executive compensation package consists of base salary,
bonus compensation and grants of stock-based awards under the Company's 1995
Long Term Incentive Plan.
BASE SALARY.
In determining the salaries of the executive officers, the Executive
Personnel Committee reviews industry surveys and other compensation related data
for executives with comparable responsibilities at similarly sized companies in
the investment management industry. In this regard, the Executive Personnel
Committee consulted surveys published on compensation of executives in the
investment management industry. The targets initially established in this manner
were subject to the Executive Personnel Committee's consideration of the
Company's performance and the attainment of specific goals concerning the
individual's performance. In addition, the Executive Personnel Committee
considered the executive's managerial responsibilities, new responsibilities and
performance in special projects.
ANNUAL BONUS.
The bonus pool is directly linked to the operating performance of the
Company. In awarding bonuses, the Executive Personnel Committee focuses on the
pretax income of the Company as a percentage of its total revenue and compares
that percentage against other published industry statistics. In addition, the
Executive Personnel Committee reviews other financial measures such as return on
capital and compensation costs as a percentage of revenue. The Executive
Personnel Committee assigns such relative weight to these criteria as it deems
appropriate under all relevant facts and circumstances. The Executive Personnel
Committee allocates a portion of the total bonus pool to each executive officer
after a subjective and quantitative assessment of the individual's contribution
to the overall performance of the organization, the attainment of specific
performance goals and individual initiatives which contribute to the short and
long term success of the Company.
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LONG TERM INCENTIVE COMPENSATION.
An executive officer's compensation is linked to the long term interests
of the stockholders by making a portion of each executive officer's potential
compensation dependent upon the price of the Company's Common Stock. The
Executive Personnel Committee awards stock options to purchase Common Stock
which have value only to the extent the market price of the underlying Common
Stock increases subsequent to the grant of the option.
LIMITATION ON DEDUCTIBILITY OF EXECUTIVE COMPENSATION.
Section 162(m) of the Internal Revenue Code, enacted as part of the
Revenue Reconciliation Act of 1993, limits the deductibility of compensation
paid to certain executive officers of the Company. To qualify for deductibility
under Section 162(m), compensation in excess of $1,000,000 per year paid to the
Chief Executive Officer and, in the case of the Company, the three other most
highly compensated executive officers at the end of such year generally must be
"performance-based" compensation as determined under Section 162(m). The
Executive Personnel Committee generally intends to comply with the requirements
for full deductibility of compensation under Section 162(m). However, the
Executive Personnel Committee will balance the costs and burdens involved in
such compliance against the value to the Company and its shareholders of the tax
benefits to be obtained by the Company thereby, and may in certain instances pay
compensation that is not fully deductible if in its determination such costs and
burdens outweigh such benefits.
1996 COMPENSATION
The amounts shown as 1996 bonus in the Summary Compensation Table were
paid in March 1997 and directly correlated with the profitability of the
Company. The bonus pools, including a key man supplemental pool, represented
6.6% of revenue while pre-federal taxable income (excluding a one-time gain from
the sale of the West Coast subsidiaries) was 15.0% of revenue in comparison to
10.9% in 1995. In 1996, operating revenue increased by 34.7% reflecting the
absence of 1995's reorganization costs and an overall improvement in the
Company's profitability. In 1996, the Company completed a number of
restructuring projects (including the sale of four of its West Coast
subsidiaries) designed to improve the Company's future profitability. In 1995
and 1994, the bonus pools ranged between 5.5% and 6.4% of revenue, while
operating income as a percentage of revenue ranged between 10.9% and 22.5%.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
The Piedmont Executive Personnel Committee set Mr. DeMichele's salary
level after reviewing industry comparisons for companies in the investment
advisory and mutual fund industry, taking into consideration that the industry
is not homogeneous and that there is a wide range of companies in terms of size,
capability and product offerings. In 1996, Mr. DeMichele's annual base salary
was increased to $496,800, an increase of 3.5% from 1995.
For 1996, the Executive Personnel Committee awarded Mr. DeMichele a bonus
of $100,000. The bonus represented an increase of $25,000 over the $75,000 bonus
awarded in 1995. The Executive Personnel Committee arrived at the amount after
examining operating performance, financial results, investment performance, new
business initiatives, and the accomplishment of key strategic priorities
established in the 1996 business plan. Mr. DeMichele's bonus was granted after
reviewing such data for the Company, its total bonus allocation among all key
executives and determined the amount to be awarded to Mr. DeMichele in 1996,
after assessing the overall contributions of Mr. DeMichele to the organization
in relation to the contributions of all bonus pool participants.
The Executive Personnel Committee had previously granted 58,000 stock
options to Mr. DeMichele in 1995. The Executive Personnel Committee considers
the percentage of total grants of options to other chief executive officers of
public companies in arriving at the level of options to grant Mr. DeMichele as a
9
<PAGE>
percentage of total options granted to all officers participating in the 1995
Long Term Incentive Plan. The Executive Personnel Committee believes that this
grant is a key incentive because it links Mr. DeMichele's long term financial
reward to those of all of the Company's stockholders. There were no new options
granted to Mr. DeMichele in 1996.
Submitted by: Lunsford Richardson, Jr., William R. Miller and Carl. H.
Tiedemann
PERFORMANCE GRAPH
The following line graph compares the percentage change in the cumulative
total stockholder return on the Company's Common Stock with the NASDAQ Stock
Market Index and the NASDAQ Financial Stocks Index during the period from
December 13, 1995 (the date of the Spin-off) through December 31, 1996. It
assumes $100 invested on December 13, 1995 (including dividends reinvested) in
Common Stock of the Company as against each index. There can be no assurance
that the Company's Common Stock performance will continue into the future with
the same or similar trends depicted in the graph.
[The following table represents a graph in the printed piece.]
Lexington Nasdaq Financial Stocks Nasdaq
Global SIC 6000-6799 Stock Market
Asset Managers, Inc. US & Foreign (US Companies)
-------------------- --------------------- --------------
12/13/95 100.00 100.00 100.00
12/29/95 100.66 100.15 99.58
1/30/96 88.16 100.33 100.31
2/28/96 78.95 101.72 104.12
3/29/96 93.42 104.22 104.24
4/30/96 128.95 104.04 112.69
5/29/96 121.05 105.13 117.69
6/30/96 105.26 104.84 112.16
7/31/96 105.26 102.8 102.28
8/30/96 105.26 110.26 108.04
9/30/96 113.16 115.53 116.13
10/31/96 142.11 119.97 115.16
11/27/96 142.11 128.23 122.34
12/31/96 131.58 128.75 122.19
<TABLE>
<CAPTION>
PERIOD ENDING
------------------------------------------------------------------------------------------------------
INDEX 12/13/95 12/31/95 3/31/96 6/30/96 9/30/96 12/31/96
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Lexington Global
Asset Managers 100.00 100.66 93.42 105.26 113.16 131.58
NASDAQ Financial Stocks
SIC 6000-6799
US & Foreign 100.00 100.15 104.22 104.84 115.53 128.75
NASDAQ Stock Market
(US Companies) 100.00 99.58 104.24 112.16 116.13 122.19
</TABLE>
10
<PAGE>
STOCK SECURITY OWNERSHIP OF DIRECTORS AND MANAGEMENT
The following table sets forth certain information as of March 3, 1997
concerning the beneficial ownership of the Company's Common Stock for (i) each
of the Company's Directors and nominees who own Common Stock, (ii) each of the
Named Executive Officers and (iii) all Directors and executive officers of the
Company as a group. For purposes of this Proxy, beneficial ownership of
securities is defined in accordance with the rules of the SEC and means
generally the power to vote or dispose of securities, regardless of any economic
interest therein.
<TABLE>
<CAPTION>
NUMBER OF SHARES OF PERCENT OF
NAME OF BENEFICIAL OWNER COMMON STOCK(1) COMMON STOCK
- ------------------------ ------------------- ------------
<S> <C> <C>
Sion A. Boney, III(2) (3) ............................ 313,308 5.7
Robert M. DeMichele................................... 43,654 *
Haynes G. Griffin(3) ................................. 421,464 7.7
Richard M. Hisey...................................... 4,301 *
Lawrence Kantor....................................... 7,947 *
William R. Miller..................................... 3,000 *
L. Richardson Preyer(2) .............................. 10,050 *
Lunsford Richardson, Jr.(2) .......................... 159,358 2.9
Peter L. Richardson(2) (3) ........................... 533,655 9.7
Stuart Smith Richardson(2) (3) ....................... 1,168,400 21.3
Carl H. Tiedemann..................................... -- --
Marion A. Woodbury.................................... -- --
Directors and Executive Officers as a Group........... 2,665,137 48.6
- --------
* Less than 1%.
(1)The amounts shown include shares which are beneficially owned by more than
one individual since many shares are held in trusts with more than one
trustee.
(2)The individuals named may be deemed to be control persons of the Company
(other than solely by reason of being Directors of the Company) according to
the rules of the SEC.
(3)These individuals share voting and/or investment power with respect to
certain of their share holdings. For a breakdown of the number of shares for
which control is sole or shared, see "Security Ownership of Certain
Beneficial Owners."
</TABLE>
PROPOSAL TWO--RATIFICATION OF INDEPENDENT AUDITORS
The Nominating and Proxy Committee, at the recommendation of the Audit
Committee, has appointed the firm of KPMG Peat Marwick LLP, as independent
auditors for the 1997 calendar year and until their successors are selected. The
services to be performed by KPMG Peat Marwick LLP will primarily include an
audit of the Company's 1997 consolidated financial statements and other services
related to various filings with the SEC.
The Company expects that a representative of KPMG Peat Marwick LLP will
attend the Annual Meeting and will have the opportunity to make a statement if
he or she so desires. In addition, such representative will be available to
respond to appropriate questions from stockholders or their representatives.
11
<PAGE>
The Company terminated its audit relationship with its former principal
accountant, Coopers & Lybrand L.L.P. ("C&L"), on March 6, 1997. On that same
day, KPMG Peat Marwick LLP was engaged as principal accountant for the Company.
C&L's report on the financial statements for the past two years did not contain
an adverse opinion or disclaimer of opinion, and was not qualified or modified
as to uncertainty, audit scope, or accounting principles. The decision to change
principal accountants was recommended by the Audit Committee and approved by the
Board of Directors of the Company. During the Company's two most recent fiscal
years and any subsequent interim period preceding such termination, there were
no disagreements with the former accountant on any matter of accounting
principles or practices, financial statement disclosure, or auditing scope or
procedure, which disagreement(s), if not resolved to the satisfaction of the
former accountant, would have caused it to make reference to the subject matter
of the disagreement(s) in connection with its report. There were no reportable
events of the type described in Item 304(a)(1)(v) (A) through (D) of Regulation
S-K.
THE NOMINATING AND PROXY COMMITTEE AND BOARD OF DIRECTORS CONSIDER KPMG
PEAT MARWICK LLP TO BE WELL QUALIFIED AND RECOMMENDS THAT THE SHAREHOLDERS VOTE
FOR RATIFICATION.
The affirmative vote of the shares representing a majority of the shares
present at the meeting in person or represented by Proxy and entitled to vote,
will be required to approve this item proposed by the Board of Directors.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth information as of March 3, 1997 with
respect to shares of the Common Stock which are held by certain persons and
entities known to the Company to be the beneficial owners of more than 5% of the
Company's outstanding Common Stock.
<TABLE>
<CAPTION>
NAME AND ADDRESS OF NUMBER OF SHARES OF PERCENT OF
BENEFICIAL OWNER COMMON STOCK(1) COMMON STOCK
------------------ ------------------ -------------
<S> <C> <C>
Sion A. Boney, III(2)(3) ..................................................... 313,308 5.7
12 Town Line Road, Bridgewater, CT 06752......................................
Barbara R. Evans(2)(4) ....................................................... 766,230 14.0
5 Fernwood Road, Summit, NJ 07901.............................................
Haynes G. Griffin(2)(5) ...................................................... 421,464 7.7
309 Sunset Drive, Greensboro, NC 27408........................................
Laurinda V. Lowenstein(2)(6) ................................................. 331,300 6.0
Box 371, Seal Harbor, ME 04675................................................
H. Smith Richardson, Jr.(2)(7) ............................................... 433,338 7.9
6246 Head Road, Wilmington, NC 28409..........................................
Peter L. Richardson(2)(8) .................................................... 533,655 9.7
60 Jesup Road, Westport, CT 06880.............................................
Stuart Smith Richardson(2)(9) ................................................ 1,168,400 21.3
Park 80 West Plaza Two, Saddle Brook, NJ 07663................................
Richard G. Smith, III(2)(10) ................................................ 780,907 14.2
1133 Black Gold Place, Gahanna, OH 43230......................................
Center for Creative Leadership(2)(11) ........................................ 421,464 7.7
P.O. Box P-1, Greensboro, NC 27402............................................
Richardson Family(12) ........................................................ 2,763,043 50.4
Gilchrist B. Berg(13) ........................................................ 511,826 9.3
1987 Enterprise Center, Jacksonville, FL 32202................................
Southeastern Asset Management, Inc.(14) ...................................... 280,800 5.1
6075 Poplar Avenue, Memphis, TN 38119.........................................
- ---------
(1) The amounts shown include shares which are beneficially owned by more than
one individual since many shares are held in trusts with more than one
trustee.
</TABLE>
12
<PAGE>
(2) These shares are included in those owned by the "Richardson Family", as
defined below.
(3) These shares include shares of various trusts of which Sion A. Boney, III
is a trustee and exercises shared voting and investment power with respect
to such shares. Sion A. Boney, III exercises sole voting and investment
power with respect to 25,432 shares of Common Stock.
(4) These shares include shares of various trusts of which Barbara R. Evans is
a trustee and exercises shared voting and investment power with respect to
such shares. Barbara R. Evans exercises sole voting and investment power
with respect to 240,792 shares of Common Stock.
(5) These shares include shares of a trust of which Haynes G. Griffin is a
trustee and exercises shared voting and investment power with respect to
such shares.
(6) These shares include shares of various trusts of which Laurinda V.
Lowenstein is a trustee and exercises shared voting and investment power
with respect to such shares. Laurinda V. Lowenstein exercises sole voting
and investment power with respect to 4,580 shares of Common Stock.
(7) These shares include shares of various trusts of which H. Smith Richardson,
Jr. is a trustee and exercises shared voting and investment power with
respect to such shares. H. Smith Richardson, Jr. has sole voting and
investment power with respect to 11,874 shares of Common Stock.
(8) These shares include shares of various trusts of which Peter L. Richardson
is a trustee and exercises shared voting and investment power with respect
to such shares. Peter L. Richardson has sole voting and investment power
with respect to 400 shares of Common Stock.
(9) These shares include shares of various trusts of which Stuart Smith
Richardson is a trustee and exercises shared voting and investment power
with respect to such shares. Stuart Smith Richardson exercises sole voting
and investment power with respect to 456,408 shares of Common Stock.
(10) These shares include shares of various trusts of which Richard G. Smith,
III is a trustee and exercises shared voting and investment power with
respect to such shares. Richard G. Smith, III exercises sole voting and
investment power with respect to 77,732 shares of Common Stock.
(11) The Trustees of the Center for Creative Leadership are: Messrs. Charles
Adams, Larry Coble, Haynes G. Griffin, Thomas K. Hearn, Jr., Ph.D.,
Winburne King, III, Esq., Robert J. Lee, John W. Red, Jr., H. Smith
Richardson, Jr., L. Richardson Preyer, Jr., Peter L. Richardson and Stuart
S. Richarson. These individuals are deemed to be beneficial owners of all
shares held by the Center.
(12) See below for a description of the "Richardson Family."
(13) Mr. Berg's present principal occupation is President of Water Street
Capital, Inc., an investment advisory firm. Mr. Berg, in his capacity with
such firm, exercises sole voting and investment power with respect to such
shares.
(14) Southeastern Asset Management, Inc., an investment advisory firm, exercises
sole voting and investment power with respect to 57,600 shares of Common
Stock.
"Richardson Family," as used herein, means the descendants of Lunsford
Richardson, Sr., their spouses, trusts, a corporation in which they have
interests and charitable organizations established by such descendants. In
addition, several of the descendants of Mr. Richardson or their spouses
currently serve as directors of the Company (Messrs. Sion A. Boney, III; L.
Richardson Preyer; Lunsford Richardson, Jr.; Peter L. Richardson; and Stuart
Smith Richardson). At March 3, 1997, such descendants and spouses (numbering
approximately 190 persons), trusts, a corporation in which they have interests
and charitable organizations established by them owned approximately 2,763,043
shares (50.4%) of Common Stock. Many of these shares may be deemed to be
beneficially owned by more than one person because of multiple fiduciaries, but
such shares have been counted only once for purposes of the foregoing totals.
These individuals and institutions have differing interests and may not
necessarily vote their shares in the same manner. Furthermore, trustees and
directors have fiduciary obligations (either individually or jointly with other
fiduciaries) under which they must act on the basis of fiduciary requirements
which may dictate positions which differ from their personal interests.
13
<PAGE>
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.
Form 3s for Messrs. Boney, DeMichele, Griffin, Hisey, Kantor, Miller,
Preyer, Richardson, Jr., Richardson, Teidemann and Woodbury, which were required
to be filed with the SEC on November 27, 1995 (the effective date of the
Company's Registration Statement on Form 10), were actually filed with the SEC
on December 1, 1995. Such filings were made in advance of December 13, 1995, the
effective date of the distribution of shares of Common Stock to the above-named
individuals, and prior to public trading of the Common Stock.
OTHER BUSINESS
The Board of Directors and Management know of no business other than that
specified in the Notice of Annual Meeting of Stockholders which will be
presented for consideration at the 1997 Annual Meeting; but if other matters are
presented, it is the intention of the proxyholders to vote in accordance with
their best judgment and discretion on such matters.
The consolidated financial statements and other financial information of
the Company and its subsidiaries, as well as notes to the financial statements,
the related report of Coopers, and Management's discussion and analysis of
financial statements are contained in the Company's Annual Report to
Stockholders for 1996, which will accompany this Proxy Statement.
Solicited by the Board of Directors
LISA CURCIO
Secretary
April 15, 1997
14
<PAGE>
6740
/X/ Please mark your
votes as in this
example.
This proxy, when properly executed, will be voted in the manner directed
herein. If no direction is made, this proxy will be voted FOR election of
directors and FOR approval of the appointment of independent auditors.
________________________________________________________________________________
________________________________________________________________________________
FOR WITHHELD
1. Election of Directors.
(See reverse) / / / /
______________________________
For, except vote withheld from the following nominee(s):
2. To approve the appointment of KPMG Peat Marwick L.L.P. as independent
auditors for the current calendar year. / / / /
3.In their discretion, the Proxies are authorized to act upon such other
matters as may properly come before the Annual Meeting or any adjournment(s)
or postponement(s) thereof.
________________________________________________________________________________
Please sign exactly as name appears hereon. Joint owners
should each sign. When signing as attorney, executor, administrator, trustee or
guardian, please give full title as such.
_______________________________
_______________________________
SIGNATURE (S) DATE 1997
P
R
O
X
Y
LEXINGTON GLOBAL ASSET MANAGERS, INC. Proxy Solicited by the Board of
Directors For the 1997 Annual Meeting of Stockholders, May 15, 1997 The
undersigned stockholder(s) of LEXINGTON GLOBAL ASSET MANAGERS, INC., (the
"Company") hereby appoint(s) the members of The Nominating and Proxy Committee,
Stuart Smith Richardson, L. Richardson Preyer and Lunsford Richardson, Jr., and
each or any of them (the "Proxies"), the true and lawful agents and
attorneys-in-fact for the undersigned, with power of substitution, to attend and
to vote the stock owned by or registered in the name of the undersigned, as
instructed below, at the 1997 Annual Meeting of Stockholders (the "Annual
Meeting") to be held at the offices of the Company, Park 80 West, Plaza Two,
Saddle Brook, NJ on May 15, 1997, at 9:15 A.M. local time, and at any
adjournment(s) or postponement(s) thereof, for the transaction of the following
business:
1. To elect three Class II Directors to hold office for a term to expire at
the 2000 Annual Meeting of the Stockholders; Nominees: William R. Miller, L.
Richardson Preyer and Lunsford Richardson, Jr.
2. To ratify the appointment of KPMG Peat Marwick L.L.P. as independent
auditors for the current calendar year; and,
3. To transact such other business as may properly come before the Annual
Meeting and any adjournment(s) or postponement(s) thereof.
You are encouraged to specify your choices by marking the appropriate boxes, SEE
REVERSE SIDE, but you need not mark any boxes if you wish to vote in accordance
with the Board of Directors' recommendations. Please sign and return this card
using the enclosed envelope.
(CONTINUED ON REVERSE SIDE)
SEE REVERSE
SIDE
