SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934 (Amendment No.__)
FILED BY THE REGISTRANT [X]
FILED BY A PARTY OTHER THAN THE REGISTRANT [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
LEXINGTON GLOBAL ASSET MANAGERS, INC.
- -------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- -------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
1) Title of each class of securities to which transaction applies:
_________________________________________________________________________
2) Aggregate number of securities to which transaction applies:
_________________________________________________________________________
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
__________________________________________________________________________
4) Proposed maximum aggregate value of transaction:
__________________________________________________________________________
5) Total fee paid:
__________________________________________________________________________
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
__________________________
2) Form, Schedule or Registration Statement No.:
__________________________
3) Filing Party:
__________________________
4) Date Filed:
__________________________
<PAGE>
LEXINGTON GLOBAL ASSET MANAGERS, INC.
PARK 80 WEST PLAZA TWO
SADDLE BROOK, NEW JERSEY 07663
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
The 1998 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 Wednesday, May 13, 1998 at 9:15 A.M., New York time, for the following
purposes:
1. To elect three Class I Directors to hold office for a term to
expire at the 2001 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 2, 1998 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, 1998
-----------------------------------------------------------
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.
-----------------------------------------------------------
<PAGE>
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 13, 1998
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 1998 Annual
Meeting of the stockholders, to be held on Wednesday, May 13, 1998 (the "Annual
Meeting"). The Annual Meeting will be held at the principal executive offices of
the Company, Park 80 West Plaza Two, Saddle Brook, New Jersey 07663 at 9:15
A.M., New York time. The 1998 Annual Meeting will be the third 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, 1998.
SOLICITATION
Solicitation of Proxies for use at the Annual Meeting is being made by mail
on behalf of the Board of Directors.
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 2, 1998, the record date for determination of stockholders
entitled to vote at the Annual Meeting, there were outstanding 5,407,887 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 I Directors receiving the highest number of
affirmative votes of the shares entitled to vote at the Annual Meeting will be
elected Class I 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 in person or represented by proxy and
entitled to vote on such matter.
The inspectors of election will treat abstentions and broker non-votes
(i.e., shares held by brokers or nominees that the broker or nominee does not
have discretionary power to vote on a particular matter and as to which
instructions have not been received from the beneficial owners or persons
entitled to vote) as shares that are present and entitled to vote for purposes
of determining a quorum. With regard to the election of directors, votes may be
cast in favor of or withheld and directors will be elected by a plurality of the
votes cast by proxy or in person at the Annual Meeting. Accordingly,
1
<PAGE>
votes that are withheld for the election of directors and broker non-votes will
be excluded entirely from the vote and will have no effect on the outcome of the
election except to the extent that the failure to vote for a particular nominee
results in another nominee receiving a larger number of votes. In matters
requiring a majority of the shares present and entitled to vote for approval,
abstentions are considered to be shares present and entitled to vote and
therefore will have the effect of a negative vote on the matter. Broker
non-votes on such matters are not counted as shares eligible to vote and will
have no effect on the outcome of the matter. With respect to the ratification of
the appointment of auditors, therefore, abstentions will be considered a
negative vote and broker non-votes will have no effect.
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."
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 two 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 1999 Annual Meeting must be received by
the Company at its principal executive offices no later than December 11, 1998
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 I Directors will be elected to hold
office until the 2001 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 I Directors and to hold office until the 2001 Annual Meeting of
the stockholders and until their respective 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 I Directors of the Company. The names, ages, principal occupations and
selected biographical information of the Directors as of March 12, 1998,
including such nominees and the period of previous services as a Director of the
Company, are as follows:
2
<PAGE>
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 12, 1998.
<TABLE>
<CAPTION>
OTHER POSITIONS WITH THE COMPANY AND ITS SUBSIDIARIES; YEAR TERM
PRINCIPAL OCCUPATION FOR THE PAST FIVE YEARS 1 AND DIRECTOR OF OFFICE
NAME AGE ALL OTHER DIRECTORSHIPS OF PUBLICLY HELD COMPANIES SINCE TO EXPIRE
- ---- --- ------------------------------------------------------ -------- -----------
<S> <C> <C> <C> <C>
Sion A. Boney, III 1,2 42 President Bristol-Myers Products; formerly 1995 2001
Consultant, Marketing Corporation of America. (Class I)
Robert M. DeMichele 1 53 President, Chief Executive Officer and Director of the 1995 2001
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 Re Corporation
("Chartwell"); Director of The Navigators Group, Inc.
("Navigators"); Director of Vanguard Cellular Systems
Inc. ("Vanguard").
Haynes G. Griffin 1 51 Chairman of Vanguard; Director of Geotek 1995 2001
Communications Inc. (Class I)
</TABLE>
- --------
1 Each Director was also a director of Piedmont, the former parent of the
Company.
2 Mr. Sion A. Boney, III is a nephew of Mr. Lunsford Richardson, Jr.
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 12, 1998.
<TABLE>
<CAPTION>
OTHER POSITIONS WITH THE COMPANY AND ITS SUBSIDIARIES; YEAR TERM
PRINCIPAL OCCUPATION FOR THE PAST FIVE YEARS 1 AND DIRECTOR OF OFFICE
NAME AGE ALL OTHER DIRECTORSHIPS OF PUBLICLY HELD COMPANIES SINCE TO EXPIRE
- ---- --- ------------------------------------------------------ -------- ---------
<S> <C> <C> <C> <C>
William R. Miller 1 67 Retired; Director of Chartwell formerly President and 1995 2000
Chief Executive Officer of Winterthur U.S. Holdings. (Class II)
L. Richardson Preyer 1,2 79 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.
Lunsford Richardson, Jr. 1,2 73 Director of Chartwell; Chairman of Richardson 1995 2000
Corporation of Greensboro. (Class II)
Peter L. Richardson 1, 3 44 President of Smith Richardson Foundation, Inc.; 1995 1999
Managing Trustee of H. Smith Richardson Family Trust. (Class III)
Stuart S. Richardson 1, 3 51 Chairman of the Company; Director of Lexington 1995 1999
Management Corporation; Vice Chairman of Vanguard; (Class III)
Director of Chartwell.
Carl H. Tiedemann 1 71 General Partner, Tiedemann Boltres Partners. 1995 1999
(Class III)
Marion A. Woodbury 1 75 Retired; Former President of The Reinsurance Corporation 1995 1999
of New York. (Class III)
</TABLE>
- --------
1 Each nominee was also a director of Piedmont.
2 Messrs. Lunsford Richardson, Jr. and L. Richardson Preyer are first cousins.
3 Messrs. Stuart S. Richardson and Peter L. Richardson are brothers.
3
<PAGE>
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 1997.
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 twice during 1997.
The members of the Nominating and Proxy Committee are L. Richardson Preyer,
Lunsford Richardson, Jr. and Stuart S. 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 once during 1997.
During 1997, 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 1997.
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 consulting and/or 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.
4
<PAGE>
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, 1997, 1996 and 1995.
Prior to the Spin-off, portions of the following compensation were paid by
Piedmont.
<TABLE>
<CAPTION>
SECURITIES
ANNUAL COMPENSATION UNDERLYING
------------------------------- STOCK
OTHER RESTRICTED OPTIONS
ANNUAL STOCK GRANTED ALL OTHER
NAME/POSITION YEAR SALARY BONUS COMPENSATION AWARDS(1) (#) (2) COMPENSATION(3)
- ------------- ---- ------ ----- ------------ ---------- -------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Stuart S. Richardson 1997 $255,900 $ 25,000 -- $ 37,500 20,000 $7,633
Chairman of the 1996 $246,300 $ 30,000 -- -- -- $7,389
Company 1995 $237,250 -- -- -- 30,000 $487,117
Robert M. DeMichele 1997 $511,950 $75,000 -- $1,268,750 40,000 $68,327
President & CEO 1996 $492,600 $100,000 -- -- -- $65,933
of the Company 1995 $474,500 $ 75,000 -- -- 58,000 $1,284,294
Richard M. Hisey 1997 $254,625 $140,000 -- $ 425,000 18,000 $7,575
Executive Vice President 1996 $235,125 $130,000 -- -- -- $7,025
& CFO 1995 $212,500 $ 90,000 -- -- 25,000 $6,415
Lawrence Kantor 1997 $283,250 $120,000 -- $ 25,000 18,000 $8,433
Executive Vice President
& General 1996 $272,250 $135,000 -- -- -- $8,139
Manager--Mutual
Funds 1995 $258,000 $125,000 -- -- 25,000 $7,920
</TABLE>
- ---------
(1)Represents grants of restricted stock under the Company's 1995 Long Term
Incentive Plan.
(2)Represents grants of options under the Company's 1995 Long Term Incentive
Plan.
(3)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 $58,577, $56,433 and $53,948
respectively; and for each of the last three calendar years contributions to
the Supplemental Benefits Plan were as follows: for Mr. Hisey, $2,825, $2,525
and $1,915; Mr. Kantor, $3,683, $3,639 and $3,425 and Mr. Richardson, 2,883,
$2,889 and $2,617. 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 $1,225,846, respectively.
5
<PAGE>
The following table contains information concerning the grants of stock
options under the Company's 1995 Long Term Incentive Plan with respect to the
Named Executive Officers during 1997.
OPTION GRANTS IN LAST FISCAL YEAR(1)
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE AT
ASSUMED ANNUAL RATES OF
NUMBER OF % OF TOTAL STOCK APPRECIATION FOR
SECURITIES OPTIONS EXERCISE OPTION TERM(2)
UNDERLYING GRANTED TO OR BASE -------------------------------
OPTIONS EMPLOYEES IN PRICE EXPIRATION
NAME GRANTED FISCAL YEAR ($/SHARE) DATE 0%($) 5%($) 10%($)
----- -------- ------------ ------- -------- ------ ------ -------
<S> <C> <C> <C> <C> <C> <C> <C>
Stuart S. Richardson 20,000 15.3 6.25 02/03/07 0 78,600 199,200
Robert M. DeMichele 40,000 30.5 6.25 02/03/07 0 157,200 398,400
Richard M. Hisey 18,000 13.7 6.25 02/03/07 0 70,740 179,280
Lawrence Kantor 18,000 13.7 6.25 02/03/07 0 70,740 179,280
</TABLE>
- --------------
(1)Reflects option grants on February 3, 1997, one fourth of which become
exercisable on each of the first four anniversaries of the date of grant.
Vested options may be exercised at any time prior to the tenth anniversary of
the date of grant, unless the optionee's employment with the Company is
sooner terminated, in which case the optionee shall have a specified period
in which to exercise vested options. All options vest upon a change of
control (as defined in the Plan) of the Company.
(2)As required by the Securities and Exchange Commission (the "SEC"), the
amounts shown assume a 5% and 10% annual rate of appreciation on the price of
the Company's Common Stock throughout a 10 year Option Term. There can be no
assurance that the rate of appreciation assumed for purposes of this table
will be achieved. The actual value of the stock options to the Named
Executive Officers and all optionees as a group will depend on the future
price of the Company's Common Stock. As reflected in the column which assumes
a 0% rate of appreciation, the options will have no value to the Named
Executive Officers if the price of the Company's Common Stock does not
increase above the exercise price of the options. If the price of the
Company's Common Stock increases, all stockholders will benefit
commensurately with the Named Executive Officers. On December 31, 1997, there
were 5,174,887 shares of Common Stock outstanding and the closing price of
the Common Stock was $9.125. Using the same Assumed Annual Rates of Stock
Price Appreciation for the Option Term to arrive at Potential Realizable
Value shown in the table above, the gain to all stockholders as a group at
the 5% and 10% rates would be $20,337,306 and $51,541,875, respectively. The
amount of the gain to all Named Executive Officers as a percent of the gain
to all stockholders under these scenarios would be approximately 1.85%.
AGGREGATED OPTION EXERCISES IN 1997 AND YEAR-END OPTION VALUES
The following table sets forth information with respect to the Named
Executive Officers, concerning unexercised options held as of December 31, 1997.
No options with respect to the Company's Common Stock were exercised in 1997.
NUMBER OF SHARES
<TABLE>
<CAPTION>
UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED "IN THE MONEY" OPTIONS(1)
SHARES OPTIONS AT FISCAL YEAR-END (#) AT FISCAL YEAR-END ($)
ACQUIRED VALUE ----------------------------- --------------------------
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
----- ---------- -------- ---------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Stuart S. Richardson ......... -- -- 15,000 35,000 $ 65,625 $123,125
Robert M. DeMichele .......... -- -- 29,000 69,000 $126,875 $241,875
Richard M. Hisey ............. -- -- 12,500 30,500 $ 54,688 $106,438
Lawrence Kantor .............. -- -- 12,500 30,500 $ 54,688 $106,438
</TABLE>
- ------------
(1)These values are based upon the December 31, 1997 market price of the Common
Stock which was $9.125 per share.
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.
6
<PAGE>
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 11/4% of the first $17,000 of his average
annual earnings for the calendar years 1984 through 1988 inclusive, plus 13/4%
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 11/2% 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, 1997, 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, 1997 PAYABLE
--------------- --------------------- -------------------------
Stuart S. Richardson 11 $114,336
Robert M. DeMichele 17 98,208
Richard M. Hisey 11 144,528
Lawrence Kantor 13 128,016
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. Their salaries are reviewed annually by the Executive
Personnel Committee and ratified by the Board of Directors. In 1997, Messrs.
Richardson, DeMichele, Hisey and Kantor received salary increases resulting in
the following new base salaries: Mr. Richardson, $258,400; Mr. DeMichele,
$517,000; Mr. Hisey, $260,000; and, Mr. Kantor, $286,000. 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 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
7
<PAGE>
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 PROGRAM
The Company implemented a non-qualified deferred compensation program for
highly compensated employees in 1997. The program allows the employees to defer
a portion of their annual compensation.
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 $842 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 from January 1, 1997 through March
12, 1998 or any such proposed transaction.
8
<PAGE>
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 S.
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.
Stuart S. 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
twice during 1997. 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
1997, including the determination of bonuses for 1997. 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.
9
<PAGE>
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. Additionally, the
Executive Personnel Committee awards shares of restricted stock, the value of
which is the market price of the Common Stock. The restricted stock has a three
year vesting provision and is awarded as both an incentive for achieving
specific performance goals and to align key employees' rewards directly with
those of the shareholders.
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.
1997 COMPENSATION
The amounts shown as 1997 bonus in the Summary Compensation Table were paid
in March 1998 and directly correlated with the profitability of the Company. The
bonus pools, including a key man supplemental pool, represented 7.7% of revenue
while pre-federal taxable income was 19.3% of revenue in comparison to 15.0% in
1996 (excluding a one-time gain from the sale of West Coast subsidiaries). In
1997, operating revenue increased by 17.2% reflecting, among other factors, an
improvement in the profitability of the Company's West Coast operations. In
1996, the Company completed the sale of four of its West Coast subsidiaries in
order to improve profitability of these operations. In 1996 and 1995, the bonus
pools ranged between 5.5% and 6.6% of revenue, while operating income as a
percentage of revenue ranged between 10.9% and 15.0%.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
The Company's 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 1997, Mr. DeMichele's annual base salary
was increased to $517,000, an increase of 4.0% from 1996.
For 1997, the Executive Personnel Committee awarded Mr. DeMichele a bonus
of $75,000. The bonus represented a decrease of $25,000 from the $100,000 bonus
awarded in 1996. 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 1997 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 1997,
after assessing the overall
10
<PAGE>
contributions of Mr. DeMichele to the organization in relation to the
contributions of all bonus pool participants.
The Executive Personnel Committee awarded Mr. DeMichele 40,000 stock
options in 1997. In addition, as part of a long term incentive package, Mr.
DeMichele was awarded 161,000 shares of restricted stock. The stock options and
the restricted stock have varying vesting provisions that extend until November,
2001. The restricted stock component of Mr. DeMichele's long term incentive
package has a three year vesting provision of which only 3,667 shares (2.3%)
have vested as of March 12, 1998.
The Executive Personnel Committee implemented the award plan in recognition
of the value of Mr. DeMichele's contributions as Chief Executive Officer,
Chairman of the Company's Investment Strategy Group and as President of the
Lexington family of mutual funds. In establishing these awards the Executive
Personnel Committee considered Mr. DeMichele's impact on the Company as it
relates to investment performance, marketing, product development and his role
in developing a strategic business plan for the Company. These contributions are
examined in view of the responsibilities of other Chief Executive/Chief
Investment Officers in the financial services industry and their respective
incentive packages, recognizing the lack of homogeneity in the industry, as
size, investment product and business strategy vary among companies, making a
precise comparison of title and related responsibilities difficult. The award
was also made and reviewed in relation to the industry and as a percentage of
the total awards granted to all officers participating in the 1995 Long-Term
Incentive Plan.
The Executive Personnel Committee believes that the award package is a
critical incentive to directly link Mr. DeMichele's long-term financial reward
directly to those of all the Company's stockholders.
Submitted by: Lunsford Richardson, Jr., William R. Miller and Carl. H.
Tiedemann
11
<PAGE>
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, 1997. 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 line graph in the printed report.]
Nasdaq Financial
Lexington Global Stocks SIC 6000-6799 Nasdaq Stock Market
Asset Managers, Inc. US & Foreign (US Companies)
------------------- ------------------- --------------------
12/13/95 $100.00 $100.00 $100.00
12/31/95 $100.66 $100.15 $ 99.58
3/31/96 $ 93.42 $104.22 $104.24
6/30/96 $105.26 $104.84 $112.16
9/30/96 $113.16 $115.53 $116.13
12/31/96 $131.58 $128.75 $122.19
3/31/97 $139.47 $134.30 $115.63
6/30/97 $144.74 $154.11 $136.49
9/30/97 $196.05 $180.80 $159.55
12/31/97 $192.10 $202.08 $148.63
<TABLE>
<CAPTION>
PERIOD ENDING
---------------------------------------------------------------------------------
INDEX 12/13/95 12/31/95 12/31/96 3/31/97 6/30/97 9/30/97 12/31/97
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Lexington Global
Asset Managers 100.00 100.66 131.58 139.47 144.74 196.05 192.10
NASDAQ Financial Stocks
SIC 6000-6799
US & Foreign 100.00 100.15 128.75 134.30 154.11 180.80 202.08
NASDAQ Stock Market
(US Companies) 100.00 99.58 122.19 115.63 136.49 159.55 148.63
</TABLE>
12
<PAGE>
STOCK SECURITY OWNERSHIP OF DIRECTORS AND MANAGEMENT
The following table sets forth certain information as of March 12, 1998
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 5.8
Robert M. DeMichele(4) .......................... 204,654 3.8
Haynes G. Griffin(3) ............................ 421,464 7.8
Richard M. Hisey(5) ............................. 58,301 1.1
Lawrence Kantor(6) .............................. 11,947 *
William R. Miller................................ 10,000 *
L. Richardson Preyer(2) ......................... 422,629 7.8
Lunsford Richardson, Jr.(2) ..................... 161,959 3.0
Peter L. Richardson(2) (3) ...................... 541,458 10.0
Stuart S. Richardson(2) (3) (7) ................. 1,182,203 21.9
Carl H. Tiedemann................................ -- --
Marion A. Woodbury............................... -- --
Directors and Executive Officers as a Group...... 3,327,923 61.5
</TABLE>
- --------
* 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."
(4)This amount includes restricted share grants under the Company's 1995 Long
Term Incentive Plan of 11,000 shares on February 3, 1997 and 150,000 shares
on November 7, 1997, of which 3,667 are vested as of March 12, 1998.
(5)This amount includes restricted share grants under the Company's 1995 Long
Term Incentive Plan of 4,000 shares on February 3, 1997 and 50,000 shares on
November 7, 1997, of which 1,334 are vested as of March 12, 1998.
(6)This amount includes a restricted share grant under the Company's 1995 Long
Term Incentive Plan of 4,000 shares on February 3, 1997, of which 1,334 are
vested as of March 12, 1998.
(7)This amount includes a restricted share grant under the Company's 1995 Long
Term Incentive Plan of 6,000 shares on February 3, 1997, of which 2,000 are
vested as of March 12, 1998.
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 1998 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 1998 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.
13
<PAGE>
The Company terminated its audit relationship with its former principal
accountant, Coopers & Lybrand LLP ("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.
THE NOMINATING AND PROXY COMMITTEE AND BOARD OF DIRECTORS CONSIDER KPMG
PEAT MARWICK LLP TO BE WELL QUALIFIED AND RECOMMENDS THAT THE STOCKHOLDERS 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 12, 1998 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 5.8
12 Town Line Road, Bridgewater, CT 06752.........
Barbara R. Evans(2)(4) .......................... 742,854 13.7
5 Fernwood Road, Summit, NJ 07901................
Haynes G. Griffin(5) ............................ 421,464 7.8
309 Sunset Drive, Greensboro, NC 27408...........
Laurinda V. Lowenstein(2)(6) .................... 331,300 6.1
Box 371, Seal Harbor, ME 04675...................
L. Richardson Preyer, Jr.(7) .................... 422,629 7.8
3309 Carriage Trail, Hillsborough, NC 27278......
Peter L. Richardson(8) .......................... 541,458 10.0
60 Jesup Road, Westport, CT 06880................
Stuart S. Richardson(9) ......................... 1,182,203 21.9
Park 80 West Plaza Two, Saddle Brook, NJ 07663...
Richard G. Smith, III(2)(10) ................... 775,411 14.3
2325 Cob Tailway, Blacklick, OH 43004............
Center for Creative Leadership(11) .............. 421,464 7.8
P.O. Box P-1, Greensboro, NC 27402...............
Richardson Family(12) ........................... 2,314,294 42.8
Kennedy Capital Management, Inc.(13) ............ 347,900 6.4
10829 Olive Boulevard, St. Louis, MO 63141.......
</TABLE>
- ------------
(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)These shares are included in those owned by the "Richardson Family", as
defined below.
14
<PAGE>
(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 217,416 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 L. Richardson Preyer,
Jr. is a trustee and exercises shared voting and investment power with
respect to such shares. L. Richardson Preyer, Jr. has sole voting and
investment power with respect to 1,165 shares of Common Stock which shares
are also included in those shares owned by the "Richardson Family," as
defined below.
(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 which shares are also included in
those shares owned by the "Richardson Family," as defined below.
(9) These shares include shares of various trusts of which Stuart S. 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 462,408 shares of Common Stock which shares are also
included in those shares owned by the "Richardson Family," as defined below.
(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 72,236 shares of Common Stock.
(11)The Members of the Center for Creative Leadership are: Messrs. Haynes G.
Griffin, Thomas K. Hearn, Jr., Ph.D., Winburne King, III, Esq., L.
Richardson Preyer, Jr., John W. Red, Jr., Peter L. Richardson and Stuart S.
Richardson. 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)Kennedy Capital Management Inc., an investment advisory firm, exercises
sole voting and investment power with respect to 347,900 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 S.
Richardson). At March 12, 1998, such descendants and spouses (numbering
approximately 190 persons), trusts, a corporation in which they have interests
and charitable organizations established by them owned approximately 2,314,294
shares (42.8%) 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
15
<PAGE>
must act on the basis of fiduciary requirements which may dictate positions
which differ from their personal interests.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's directors and executive officers, and
persons who own more than ten percent (10%) of a registered class of the
Company's equity securities, to file with the Securities and Exchange Commission
(the "Commission") initial reports of ownership and reports of changes in
ownership of Common Stock and other equity securities of the Company. Reporting
persons are required by Commission regulations to furnish the Company with
copies of all Section 16(a) forms they file.
To the Company's knowledge, based solely on review of the copies of such
reports furnished to the Company, the following persons failed to file, on a
timely basis, reports required by Section 16(a) of the Exchange Act, for the
number of transactions indicated:
Mr. Richardson failed to file timely an Annual Statement of Beneficial
Ownership of Securities on Form 5 (a "Form 5") with respect to 30,000 stock
options granted during the year ended December 31, 1995 and a Form 5 with
respect to 20,000 stock options and 6,000 shares of restricted stock granted
during the year ended December 31, 1997. Mr. DeMichele, failed to file timely a
Form 5 with respect to 58,000 stock options granted during the year ended
December 31, 1995 and a Form 5 with respect to 40,000 stock options and 161,000
shares of restricted stock granted during the year ended December 31, 1997. Mr.
Kantor failed to file timely a Form 5 with respect to 25,000 stock options
granted during the year ended December 31, 1995 and a Form 5 with respect to
18,000 stock options and 4,000 shares of restricted stock granted during the
year ended December 31, 1997. Mr. Hisey failed to file timely a Form 5 with
respect to 25,000 stock options granted during the year ended December 31, 1995
and a Form 5 with respect to 18,000 stock options and 54,000 shares of
restricted stock granted during the year ended December 31, 1997. Mr. William R.
Miller failed to file timely a Form 5 with respect to 4,000 shares purchased
during the year ended December 31, 1997.
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 1998 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 KPMG Peat Marwick LLP, and Management's discussion and
analysis of financial statements are contained in the Company's Annual Report to
Stockholders for 1997, which will accompany this Proxy Statement.
Solicited by the Board of Directors
LISA CURCIO
Secretary
April 15, 1998
16
<PAGE>
/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 1998
P
R
O
X
Y
LEXINGTON GLOBAL ASSET MANAGERS, INC. Proxy Solicited by the Board of
Directors For the 1998 Annual Meeting of Stockholders, May 13, 1998 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 1998 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 13, 1998, 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 I Directors to hold office for a term to expire at
the 2001 Annual Meeting of the Stockholders; Nominees: Sion A. Boney, III,
Robert M. DeMichele, Haynes G. Griffin.
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
