<PAGE> 1
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant /X/
Filed by a party other than the Registrant / /
Check the appropriate box:
<TABLE>
<S> <C>
/ / 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 Rule 14a-11(c) or Rule 14a-12
</TABLE>
LEXINGTON PRECISION CORPORATION
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction
applies: N/A
(2) Aggregate number of securities to which transaction applies: N/A
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:1 N/A
(4) Proposed maximum aggregate value of transaction: N/A
(5) Total fee paid: N/A
1 Set forth the amount on which the filing fee is calculated and
state how it was determined.
/ / 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> 2
LEXINGTON PRECISION CORPORATION
767 THIRD AVENUE
NEW YORK, NEW YORK 10017
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 16, 1995
The Annual Meeting of Stockholders of LEXINGTON PRECISION CORPORATION
(the "Company") will be held at the offices of Nixon, Hargrave, Devans & Doyle,
437 Madison Avenue, 24th Floor, New York, New York, on Tuesday, May 16, 1995, at
10:30 A.M. for the purpose of considering and acting upon the following matters.
(1) The election of two directors as set forth in the accompanying Proxy
Statement.
(2) The ratification or disapproval of Ernst & Young LLP as independent
auditors of the Company for the year ending December 31, 1995.
(3) The transaction of such other business as may properly come before
the meeting and any adjournments thereof.
Pursuant to the provisions of the By-Laws, the Board of Directors has
fixed the close of business on April 3, 1995 as the record date for determining
the stockholders of the Company entitled to notice of and to vote at the meeting
and any adjournments thereof.
ALL STOCKHOLDERS ARE URGED TO DATE, SIGN AND PROMPTLY MAIL THE
ENCLOSED PROXY TO THE COMPANY IN THE ACCOMPANYING POSTAGE PAID ENVELOPE.
By Order of the Board of Directors,
Kenneth I. Greenstein
Secretary
April 20, 1995
New York, New York
<PAGE> 3
LEXINGTON PRECISION CORPORATION
767 THIRD AVENUE
NEW YORK, NEW YORK 10017
------------------------
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 16, 1995
SOLICITATION
This Proxy Statement is being mailed to stockholders on or about April
24, 1995, in connection with the solicitation of proxies by the Board of
Directors of LEXINGTON PRECISION CORPORATION, a Delaware corporation (the
"Company"), to be used at the Annual Meeting of Stockholders of the Company (the
"Annual Meeting"), to be held on May 16, 1995. Accompanying this Proxy Statement
is a Notice of Annual Meeting of Stockholders and a form of proxy for such
meeting. A copy of the Company's Annual Report for the year ended December 31,
1994, which contains financial statements and related data, also accompanies
this Proxy Statement.
All proxies which are properly completed, signed and returned to the
Company in time will be voted in accordance with the instructions thereon.
Proxies may be revoked by any stockholder upon written notice to the Secretary
of the Company prior to the exercise thereof and stockholders who are present at
the Annual Meeting may withdraw their proxies and vote in person if they so
desire.
The expense of preparing, assembling, printing and mailing the form of
proxy and the material used in the solicitation of proxies will be borne by the
Company. In addition to the solicitation of proxies by use of the mails, the
Company may utilize the services of some of its officers and regular employees
(who will receive no additional compensation therefor) to solicit proxies
personally and by telephone. The Company has requested banks, brokers and other
custodians, nominees and fiduciaries to forward copies of the proxy materials to
their principals and to request authority for the execution of proxies and will
reimburse such persons for their services in doing so. The cost of additional
solicitation incurred otherwise than by use of the mails is estimated not to
exceed $3,000. In addition, the Company may employ a proxy solicitation
organization at a cost not to exceed $15,000.
The Board of Directors has fixed the close of business on April 3, 1995,
as the record date for the determination of stockholders who are entitled to
notice of, and to vote at, the Annual Meeting and any adjournments thereof. As
of the record date, the Company had outstanding 4,203,036 shares of its common
stock, $.25 par value (the "Common Stock"), and 5,550 shares of its $8
Cumulative Convertible Preferred Stock, Series B, $100 par value (the "Series B
Preferred Stock"), the holders of each of which are entitled to one vote per
share. A plurality of the votes of the shares of the Company's Common Stock and
Series B Preferred Stock present in person or represented by proxy and entitled
to vote at the Annual Meeting is required for the election of directors. The
affirmative vote of a majority of shares of the Company's Common Stock and
Series B Preferred Stock present in person or represented by proxy and entitled
to vote at the Annual Meeting is required for the ratification of the selection
of auditors.
With regard to the election of directors, votes may be cast in favor or
withheld. Votes withheld from any director will be counted for purposes of
determining the presence or absence of a quorum for the transaction of business
at the Annual Meeting, but have no legal effect under Delaware law and,
consequently, will not affect the outcome of the voting on such proposal. With
regard to other proposals, abstentions may be specified. While there is no
definitive statutory or case law authority in Delaware as to the proper
treatment of abstentions with respect to proposals such as those to be
considered at the Annual Meeting, the Company believes that abstentions are
shares present and entitled to vote on the subject matter and, therefore,
intends to count abstentions in respect of a particular proposal for purposes of
determining both the presence or absence of a quorum for the transaction of
business at the Annual Meeting and the total number of shares present and
entitled to vote with respect to such proposal. Accordingly, an abstention will
have the same effect as a vote against the subject proposal at the Annual
Meeting. Under Delaware law, broker non-votes (that is, proxies from brokers or
<PAGE> 4
nominees indicating that such persons have not received instructions from the
beneficial owners or other persons entitled to vote shares on a particular
matter as to which the brokers or nominees do not have discretionary power) may
be counted as present or represented for purposes of determining the presence or
absence of a quorum for the transaction of business but not for purposes of
determining the voting power present with respect to non-discretionary
proposals. Although the Company believes that the proposals to be considered at
the Annual Meeting are proposals in respect of which brokers and other nominees
typically have discretion, the Company believes that, due to the timing of the
mailing of this Proxy Statement and related materials, such proposals may be
treated as non-discretionary proposals. If there are any broker non-votes in
respect of these proposals, the Company intends to treat such broker non-votes
as stated above.
PRINCIPAL STOCKHOLDERS
COMMON STOCK
The following table sets forth the beneficial ownership of the Company's
Common Stock, as of April 3, 1995, by each person known to or believed by the
Company to own beneficially more than 5% of its outstanding Common Stock.
<TABLE>
<CAPTION>
AMOUNT
NAME AND ADDRESS OF BENEFICIALLY PERCENT
BENEFICIAL OWNER OWNED(1) OF CLASS
- --------------------------------------------- ------------- ------------
<S> <C> <C>
Michael A. Lubin............................. 1,299,694(2) 29.4%
Lubin, Delano & Company
767 Third Avenue
New York, New York 10017
Warren Delano................................ 1,169,307(3) 26.4
Lubin, Delano & Company
767 Third Avenue
New York, New York 10017
Foreman Associates, a California
Limited Partnership........................ 215,672(4) 5.1
844 Moraga Drive
Los Angeles, California 90049
William B. Conner............................ 219,906(5) 5.2
Conner Holding Company
1030 State Street
Erie, Pennsylvania 16501
- ---------------------------------------
<FN>
(1) The persons named in the table have sole voting and dispositive power with
respect to all shares of the Company's Common Stock shown as beneficially
owned by them, except as set forth in the notes to the table.
(2) Includes (i) 35,000 shares owned by each of Mr. Lubin's two minor sons with
respect to which Mr. Lubin acts as custodian under the New York Uniform
Gifts to Minors Act, and (ii) 222,200 shares which Mr. Lubin has the right
to acquire upon the conversion of $505,000 principal amount of the Company's
Junior Subordinated Convertible Increasing Rate Notes, due May 1, 2000 (the
"14% Convertible Notes"), owned by Mr. Lubin at an initial conversion price
(subject to adjustment) of $2.27273 per share of Common Stock and (iii)
50,000 shares owned by an Individual Retirement Account of Mr. Lubin.
(3) Includes (i) 217,800 shares which Mr. Delano has the right to acquire upon
the conversion of $495,000 principal amount of the Company's 14% Convertible
Notes owned by Mr. Delano at an initial conversion price (subject to
adjustment) of $2.27273 per share of Common Stock, and (ii) 110,750 shares
owned by Individual Retirement Accounts of Mr. Delano.
(footnotes continued on next page)
- 2 -
<PAGE> 5
(footnotes continued from prior page)
(4) Based on information set forth in a Schedule 13D, as amended, filed with the
Securities and Exchange Commission ("SEC") by Foreman Associates, a
California Limited Partnership ("Foreman"), and conversations with
representatives of Foreman.
(5) Includes 158,594 shares owned by Conner Holding Company, a Nevada
corporation, of which Mr. Conner is President, a director and majority
stockholder.
</TABLE>
SERIES B PREFERRED STOCK
The following table sets forth the beneficial ownership of the Company's
Series B Preferred Stock, as of April 3, 1995, by each person known to or
believed by the Company to own beneficially more than 5% of its outstanding
Series B Preferred Stock.
<TABLE>
<CAPTION>
AMOUNT
NAME AND ADDRESS OF BENEFICIALLY PERCENT
BENEFICIAL OWNER OWNED(1) OF CLASS
- --------------------------------------------- ------------ ------------
<S> <C> <C>
Ellen Byers.................................. 1,100(2) 19.8%
741 Taft Avenue
Bedford, Ohio 44146
National City Bank........................... 832(2) 15.0
P.O. Box 5756
Cleveland, Ohio 44101
Elizabeth MacAlonan.......................... 758(2)(3) 13.7
902 Brandon Circle
Aurora, Ohio 44202
Arnold W. MacAlonan.......................... 734(4) 13.2
902 Brandon Circle
Aurora, Ohio 44202
Edwin Osborn................................. 490(2) 8.8
801 W. Limberlost Street
Tucson, Arizona 85705
Craig Lindauer............................... 409 7.4
9540 Crackle Road
Aurora, Ohio 44202
Dale W. Lindauer............................. 409 7.4
19405 Libby Road
Maple Heights, Ohio 44137
Dennis Lindauer.............................. 409 7.4
1750 Hicks Pike
Walton, Kentucky 41094
Keith A. Lindauer............................ 409 7.4
P.O. Box 42
Rico, Colorado 81332
- ---------------------------------------
<FN>
(1) The persons named in the table have sole voting and dispositive power with
respect to all shares of the Company's Series B Preferred Stock shown as
beneficially owned by them, except as set forth in the notes to the table.
(footnotes continued on next page)
- 3 -
<PAGE> 6
(footnotes continued from prior page)
(2) Ellen Byers, Elizabeth MacAlonan and Edwin Osborn are contingent
beneficiaries under a trust which owns 832 shares of Series B Preferred
Stock held by National City Bank as nominee. Such shares are reflected in
the above table under the name of National City Bank only.
(3) Does not include 734 shares of Series B Preferred Stock owned by Arnold W.
MacAlonan, Mrs. MacAlonan's husband.
(4) Does not include the following shares of Series B Preferred Stock in which
Mr. MacAlonan disclaims any beneficial interest: (i) 758 shares of Series B
Preferred Stock owned by Elizabeth MacAlonan, Mr. MacAlonan's wife; and (ii)
832 shares of Series B Preferred Stock owned by a trust of which Mrs.
MacAlonan is one of three contingent beneficiaries.
</TABLE>
PROPOSAL 1 - ELECTION OF DIRECTORS
The By-Laws of the Company provide that the Board of Directors shall be
divided into three classes, as nearly equal in number as possible, and that
directors shall be elected for terms of three years on a staggered basis. There
are presently six directors, two whose terms expire in 1995, two whose terms
expire in 1996 and two whose terms expire in 1997. Unless authority to vote for
the election of a director is specifically withheld by appropriate designation
on the face of the proxy, it is the intention of persons named in the
accompanying form of proxy to vote such proxy for the election at the Annual
Meeting of Warren Delano and Kenneth I. Greenstein as directors, to serve until
the 1998 Annual Meeting of Stockholders and until their respective successors
shall have been elected and qualified. Messrs. Delano and Greenstein are
presently members of the Company's Board of Directors. The proxies cannot be
voted for a greater number of persons than two. Management has no reason to
believe that the named nominees will be unable or unwilling to serve if elected.
However, in such case, it is intended that the individuals named in the enclosed
proxy will vote for the election of such substituted nominees as the Company's
Board of Directors may recommend.
The Company's Restated Certificate of Incorporation provides that the
holders of the Series B Preferred Stock will be entitled, in the event that
there exist arrearages in respect of at least six dividend payments on the
Series B Preferred Stock, to elect two directors to serve on the Company's Board
of Directors until the annual meeting following the date on which all such
arrearages have been paid in full. As of April 3, 1995, there were no arrearages
in dividend payments in respect of the Series B Preferred Stock.
Certain information concerning the nominees and directors continuing in
office is set forth in the following table.
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION, BUSINESS
NAME AGE EXPERIENCE AND DIRECTORSHIPS
- --------------------------------- --------- ---------------------------------------------------
<S> <C> <C>
NOMINEES FOR TERMS EXPIRING IN 1998
Warren Delano 44 President of the Company since January 1988 and
Chief Operating Officer of the Company from January
1988 through May 1991. Partner of Lubin, Delano &
Company, an investment banking and consulting firm,
for more than five years. Director of the Company
since 1985.
Kenneth I. Greenstein 65 Secretary of the Company since September 1979.
Stockholder of a professional corporation which is
a partner in Nixon, Hargrave, Devans & Doyle, a law
firm, for more than five years. Director of the
Company since 1978.
</TABLE>
(table continued on next page)
- 4 -
<PAGE> 7
(table continued from prior page)
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION, BUSINESS
NAME AGE EXPERIENCE AND DIRECTORSHIPS
- --------------------------------- --------- ---------------------------------------------------
<S> <C> <C>
DIRECTORS WHOSE TERMS EXPIRE IN 1997
Michael A. Lubin 45 Chairman of the Board of the Company since May 1991
and Chief Executive Officer of the Company from
January 1988 through May 1991. Partner of Lubin,
Delano & Company, an investment banking and
consulting firm, for more than five years. Director
of the Company since 1985.
Arnold W. MacAlonan 76 Vice Chairman of the Board and Senior Vice
President of the Company from 1981 until retirement
in February 1986. Director of the Company since
1969.
DIRECTORS WHOSE TERMS EXPIRE IN 1996
William B. Conner 62 Private Investor. President and director of Conner
Holding Company, a holding company for aviation
companies, and Chairman of the Board of the
subsidiaries thereof for more than five years.
Director of Acordia, Inc., a holding company for
insurance brokerage, claims administration and
employee benefits consulting companies, since April
1991. President of Robinson-Conner, Inc., an
insurance brokerage firm which became a subsidiary
of Acordia, Inc. in April 1991, from 1967 until
June 1993. Executive Vice President of Acordia,
Inc. from April 1991 until March 1993. Director of
the Company since 1981.
Phillips E. Patton 57 Private Investor. Chairman of the Board and
President of Specialty Packaging Products Inc., a
manufacturer of metal and plastic packaging
components, from February 1984 until November 1992.
Director of Regency Bank since 1987. Director of
the Company since 1993.
</TABLE>
BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD
The Board of Directors met six times during the year ended December 31,
1994. During the last fiscal year, each of the directors attended 75% or more of
the meetings held by the Board of Directors and 75% or more of the meetings held
by the Committees of the Board of Directors on which such person served.
As of December 31, 1994, the Board of Directors had standing Audit and
Compensation Committees. The members of those Committees were as follows:
<TABLE>
<CAPTION>
NAME OF COMMITTEE CHAIRMAN OTHER MEMBERS
- ---------------------------- ------------------------- -------------------------
<S> <C> <C>
Audit Committee Arnold W. MacAlonan Kenneth I. Greenstein
Compensation Committee William B. Conner Phillips E. Patton
</TABLE>
The Audit Committee, which is composed of two non-management members of
the Board of Directors, met two times during the year ended December 31, 1994.
Its functions included consulting periodically with the Company's independent
auditors as to the nature, scope and results of their audit of the accounts of
the Company, reviewing the Company's internal accounting controls and procedures
and such other related matters as the Audit Committee deemed advisable.
The Compensation Committee, which is composed of two members of the
Board of Directors (none of whom is an employee of the Company or eligible to
receive restricted stock awards pursuant to the Company's 1986 Restricted Stock
Award Plan), met two times during the year ended December 31, 1994. Its
functions included reviewing salaries, cash bonus awards and existing or
potential compensation plans for the Company's
- 5 -
<PAGE> 8
executive officers and other key employees and making recommendations to the
Board of Directors regarding such salaries, cash bonus awards and incentive
compensation plans. Additionally, this Committee administers the 1983 Incentive
Stock Option Plan and the 1986 Restricted Stock Award Plan. The Committee is
responsible for, among other matters, determining the employees of the Company
to whom, and the time or times at which, options or awards shall be granted as
well as the number of shares issuable upon exercise of each option to be
awarded.
Each member of the Board of Directors receives an annual fee of $8,000.
Each member of the Company's Audit Committee receives an additional annual fee
of $4,000. Directors receive $1,000 for each Board or Committee meeting attended
in person as well as reasonable out-of-pocket expenses incurred in connection
with attending such meetings. Directors receive $250 for each Board meeting and
each Audit Committee meeting attended by telephone. There are no other fees paid
to directors for services rendered as members of the Board of Directors or
Committees of the Board of Directors.
EXECUTIVE OFFICERS AND OTHER KEY EMPLOYEES
The following table sets forth certain information concerning the
executive officers and other key employees of the Company.
<TABLE>
<CAPTION>
NAME POSITION AND OFFICES AGE
- ----------------------- ----------------------------------------- -------------
<S> <C> <C>
Michael A. Lubin Chairman of the Board 45
Warren Delano President 44
Dennis J. Welhouse Senior Vice President, Chief Financial 46
Officer, Treasurer and Assistant
Secretary
James B. Bergman President of Lexington Components, Inc., 50
a subsidiary of the Company
Robert A. Dewey President of Ness Precision Products, a 40
division of the Company
Arthur K. Martin President of Falconer Die Casting 66
Company, a division of the Company
</TABLE>
Mr. Lubin has been Chairman of the Board of the Company since May 1991.
Mr. Lubin was Chief Executive Officer of the Company from January 1988 through
May 1991. For more than five years, Mr. Lubin has been a partner of Lubin,
Delano & Company, an investment banking and consulting firm which has been
retained by the Company.
Mr. Delano has been President of the Company since January 1988. Mr.
Delano was Chief Operating Officer of the Company from January 1988 through May
1991. For more than five years, Mr. Delano has been a partner of Lubin, Delano &
Company, an investment banking and consulting firm which has been retained by
the Company.
Dennis J. Welhouse has been Senior Vice President of the Company since
March 1992 and Chief Financial Officer, Treasurer and Assistant Secretary of the
Company since November 1988. Mr. Welhouse was Vice President-Finance of the
Company from November 1988 through March 1992 and Vice President-Controller of
the Company from January 1988 through November 1988.
James B. Bergman has been President of Lexington Components, Inc., a
wholly-owned subsidiary of the Company, since July 1989. Mr. Bergman was
President of Elastomeric Products, Inc., a former subsidiary of the Company
which was merged into Lexington Components, Inc. in April 1991, from July 1989
through April 1991.
Robert A. Dewey has been President of Ness Precision Products, a
division of the Company ("Ness"), since May 1991. Mr. Dewey was Vice
President-General Manager of the Casa Grande, Arizona facility of Ness from
March 1989 through May 1991.
Arthur K. Martin has been President of Falconer Die Casting Company, a
division of the Company, for more than five years.
- 6 -
<PAGE> 9
Each of the Company's executive officers and other key employees serves
at the pleasure of the Board of Directors.
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth the beneficial ownership of the Company's
equity securities, as of April 3, 1995, by each director and director nominee,
by each of the named executive officers and by all directors and executive
officers as a group.
<TABLE>
<CAPTION>
PERCENT OF
NAME AMOUNT BENEFICIALLY OWNED(1) CLASS OWNED
- ------------------------------ ----------------------------------------- ------------
<S> <C> <C> <C>
Michael A. Lubin 1,299,694 Shs. Com. Stk. (2) 29.4%
Warren Delano 1,169,307 Shs. Com. Stk. (3) 26.4
William B. Conner 219,906 Shs. Com. Stk. (4) 5.2
Phillips E. Patton 92,000 Shs. Com. Stk. 2.2
Dennis J. Welhouse 65,842 Shs. Com. Stk. (5) 1.6
Kenneth I. Greenstein 35,636 Shs. Com. Stk. (6) *
Arnold W. MacAlonan 10,874 Shs. Com. Stk. (7) *
734 Shs. Series B Pfd. Stk. (8) 13.2
Directors and executive
officers as a group (7
persons) 2,893,259 Shs. Com. Stk. (9) 62.1
734 Shs. Series B Pfd. Stk. (8) 13.2
- ---------------------------------------
<FN>
* Less than one percent.
(1) The persons named in the table have sole voting and dispositive power with
respect to all shares of the Company's Common Stock and Series B Preferred
Stock shown as beneficially owned by them, except as set forth in the notes
to the table.
(2) Includes (i) 35,000 shares owned by each of Mr. Lubin's two minor sons with
respect to which Mr. Lubin acts as custodian under the New York Uniform
Gifts to Minors Act, (ii) 222,200 shares which Mr. Lubin has the right to
acquire upon the conversion of $505,000 principal amount of the Company's
14% Convertible Notes owned by Mr. Lubin at an initial conversion price
(subject to adjustment) of $2.27273 per share of Common Stock and (iii)
50,000 shares owned by an Individual Retirement Account of Mr. Lubin.
(3) Includes (i) 217,800 shares which Mr. Delano has the right to acquire upon
the conversion of $495,000 principal amount of the Company's 14% Convertible
Notes owned by Mr. Delano at an initial conversion price (subject to
adjustment) of $2.27273 per share of Common Stock and (ii) 110,750 shares
owned by Individual Retirement Accounts of Mr. Delano.
(4) Includes 158,594 shares owned by Conner Holding Company, a Nevada
corporation, of which Mr. Conner is President, a director and majority
stockholder.
(5) Includes 5,000 shares which Mr. Welhouse has the right to acquire upon the
exercise of options granted to him pursuant to the Company's 1983 Incentive
Stock Option Plan.
(6) Includes 8,170 shares owned by a pension plan of which Mr. Greenstein is
sole beneficiary.
(7) Represents, with respect to Common Stock, shares of Common Stock which Mr.
MacAlonan has the right to acquire through the conversion of 734 shares of
the Company's Series B Preferred Stock. Does not include the following
equity securities in which Mr. MacAlonan disclaims any beneficial interest:
(i) 11,268 shares of Common Stock owned by Mr. MacAlonan's wife; (ii) 11,230
shares of Common Stock which Mr. MacAlonan's wife has the right to acquire
through the conversion of 758 shares of Series B Preferred Stock; or (iii)
12,326 shares of Common Stock which a trust of which Mr. MacAlonan's wife is
one of three contingent beneficiaries has the right to acquire through the
conversion of 832 shares of Series B Preferred Stock.
(footnotes continued on next page)
- 7 -
<PAGE> 10
(footnotes continued from prior page)
(8) Does not include the following shares of Series B Preferred Stock in which
Mr. MacAlonan disclaims any beneficial interest: (i) 758 shares of Series B
Preferred Stock owned by Mr. MacAlonan's wife; and (ii) 832 shares of Series
B Preferred Stock owned by a trust of which his wife is one of three
contingent beneficiaries.
(9) See footnotes 1 through 7, above.
</TABLE>
Section 16(a) of the Securities Exchange Act of 1934, as amended
("Section 16(a)"), and the rules promulgated thereunder require the Company's
officers and directors and persons who own more than ten percent of a registered
class of the Company's equity securities to file reports of ownership and
changes in ownership with the Securities and Exchange Commission ("SEC") and to
furnish to the Company copies of all such filings. The Company has determined,
based solely upon a review of (i) those reports and amendments thereto furnished
to the Company during and with respect to the year ended December 31, 1994, and
(ii) written representations from certain reporting persons, that each of Mr.
Lubin and Mr. Delano was inadvertently late in filing a Form 4 reporting the
purchase of 2,500 shares of the Company's common stock.
EXECUTIVE COMPENSATION
The following table summarizes compensation, for the Company's past
three fiscal years, paid to the Company's chief executive officer and other most
highly compensated executive officers whose total annual salary and bonus
exceeded $100,000.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
NAME AND FISCAL ----------------------------- ALL OTHER
PRINCIPAL POSITION YEAR SALARY($) BONUS($)(1) COMPENSATION($)
- ---------------------------- ----------- ------------ ------------ -----------------
<S> <C> <C> <C> <C>
Michael A. Lubin, 1994 188,667(2) -0-(3) -0-
Chairman of the 1993 158,250(4) 164,205(5) -0-
Board and director 1992 158,250(4) -0- -0-
Warren Delano, 1994 188,417(6) -0-(3) -0-
President and director 1993 158,250(7) 164,205(5) -0-
1992 158,250(7) -0- -0-
Dennis J. Welhouse, 1994 121,680 -0- 7,525(8)
Senior Vice President, 1993 117,000 35,100 5,702(8)
Chief Financial 1992 114,861 -0- 4,157(8)
Officer, Treasurer
and Assistant Secretary
- ---------------------------------------
<FN>
(1) Amounts reported in respect of a particular fiscal year reflect bonuses
earned for services rendered in that fiscal year but paid in the following
fiscal year.
(2) Represents (i) compensation in the amount of $175,000 paid indirectly to Mr.
Lubin through Lubin, Delano & Company pursuant to the 1994 compensation
package with Lubin, Delano & Company for his services rendered as an
executive officer of the Company and (ii) fees paid to Mr. Lubin for serving
as a member of the Company's Board of Directors. Lubin, Delano & Company is
an investment banking and consulting firm of which Messrs. Lubin and Delano
are the two partners. See "Compensation Committee Report on Executive
Compensation" and "Certain Relationships and Transactions."
(3) The Company has not yet determined whether Lubin, Delano & Company will be
paid transaction-related fees in respect of 1994. See "Compensation
Committee Report on Executive Compensation."
(4) Represents (i) compensation in the amount of $50,000 paid indirectly to Mr.
Lubin through Lubin, Delano & Company for his services rendered as an
executive officer of the Company, (ii) compensation in the amount of
$100,000 paid indirectly to Mr. Lubin through Lubin, Delano & Company
pursuant to an Investment Banking and Consulting Agreement and (iii) fees
paid to Mr. Lubin for serving as a member of the Company's Board of
Directors. See "Certain Relationships and Transactions."
(footnotes continued on next page)
- 8 -
<PAGE> 11
(footnotes continued from prior page)
(5) Represents 50% of a $328,410 fee paid to Lubin, Delano & Company, pursuant
to an Investment Banking and Consulting Agreement, for services rendered in
connection with the restructuring of the Company's indebtedness, which was
consummated on January 18, 1994. The fee was comprised of cash compensation
of $250,000 and 100,000 shares of the Company's Common Stock having an
estimated fair market value, as of January 18, 1994, of $78,410 (based upon
recent known large block trades executed at arms' length as well as
conversations with market-makers in the Company's Common Stock). See
"Certain Relationships and Transactions."
(6) Represents (i) compensation in the amount of $175,000 paid indirectly to Mr.
Delano through Lubin, Delano & Company pursuant to the 1994 compensation
package with Lubin, Delano & Company for his services rendered as an
executive officer of the Company and (ii) fees paid to Mr. Delano for
serving as a member of the Company's Board of Directors. See "Compensation
Committee Report on Executive Compensation" and "Certain Relationships and
Transactions."
(7) Represents (i) compensation in the amount of $50,000 paid indirectly to Mr.
Delano through Lubin, Delano & Company for his services rendered as an
executive officer of the Company, (ii) compensation in the amount of
$100,000 paid indirectly to Mr. Delano through Lubin, Delano & Company
pursuant to an Investment Banking and Consulting Agreement and (iii) fees
paid to Mr. Delano for serving as a member of the Company's Board of
Directors. See "Certain Relationships and Transactions."
(8) Represents (i) Company contributions of $7,064, $5,265 and $3,865 made to
Mr. Welhouse's account under the Company's 401(k) Plan in 1994, 1993 and
1992, respectively; (ii) the fair market value of 342 shares of Common Stock
distributed to Mr. Welhouse in connection with the termination of the
Company's Employee Stock Ownership Plan in 1992; and (iii) insurance
premiums in the amount of $461, $437 and $249 paid by the Company in respect
of term life insurance owned by Mr. Welhouse in 1994, 1993 and 1992,
respectively.
</TABLE>
No stock options were granted to, exercised by or adjusted or amended
with respect to any of the persons named in the Summary Compensation Table above
during 1994. No stock appreciation rights have been issued to any of such
persons. The following table sets forth, for each of such persons, certain
information concerning stock options exercised during 1994 and concerning
unexercised stock options, all of which were exercisable as of December 31,
1994.
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR
----------------------------------------------
AND FY-END OPTION VALUES
------------------------
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS OPTIONS
SHARES AT FY-END (#) AT FY-END ($)
ACQUIRED ON VALUE REALIZED EXERCISABLE/ EXERCISABLE/
NAME EXERCISE (#) ($) UNEXERCISABLE UNEXERCISABLE
- ----------------------- ------------ --------------- -------------- -----------------
<S> <C> <C> <C> <C>
Michael A. Lubin 20,000 -0-(1) -0- -0-
Warren Delano 20,000 -0-(1) -0- -0-
Dennis J. Welhouse 10,000 3,150(2) 5,000(3) 625(4)
- ---------------------------------------
<FN>
(1) Prior, to April 4, 1994, there existed no active trading of the Company's
Common Stock. The estimated fair market value of the Common Stock of the
Company did not exceed the exercise price of these options, which were
exercised on March 11, 1994.
(2) Amount based on an estimated market value of $1.94 per share on April 8,
1994, the exercise date.
(3) All options were exercisable as of December 31, 1994.
(4) Amount based on an estimated market value of $1.75 per share on December 31,
1994.
</TABLE>
- 9 -
<PAGE> 12
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee is composed of two non-employee directors of
the Company. The Compensation Committee is responsible, subject to the approval
of the Board of Directors, for establishing the Company's compensation program.
COMPENSATION PHILOSOPHY AND POLICY
The Company's compensation program generally is designed to motivate and
reward the Company's executive officers and other personnel responsible for
attaining financial, operational and strategic objectives that will contribute
to the overall goal of enhancing stockholder value. In administering the plan,
the Compensation Committee assesses the performance of individuals and the
Company relative to those objectives.
The Company's compensation program generally provides incentives to
achieve annual and longer term objectives. The principal elements of the
compensation plan include base salary, cash bonus awards and stock awards in the
form of grants of restricted Common Stock. These elements generally are blended
in order to provide compensation packages which provide competitive pay, reward
the achievement of financial, operational and strategic objectives designed to
enhance stockholder value and align the interests of the Company's executive
officers and other high level personnel with those of the Company's
stockholders.
BASE SALARY. Messrs. Delano and Lubin are compensated indirectly by the
Company through payments made to Lubin, Delano & Company, an investment banking
and consulting firm of which they are the only partners. During 1994, the
aggregate annual payments made to Lubin, Delano & Company for services provided
by Messrs. Delano and Lubin in the capacities of President and Chairman of the
Board, respectively, were $350,000. The Company's arrangements with Lubin,
Delano & Company also provided for additional compensation as agreed upon for
services provided by Lubin, Delano & Company in connection with any
acquisitions, divestitures, financings or similar transactions involving the
Company. Pursuant to these arrangements, the Company paid $250,000 to Lubin,
Delano & Company and issued 50,000 shares of its Common Stock to each of Messrs.
Delano and Lubin, as designees of Lubin, Delano & Company, for services provided
by Lubin, Delano & Company in connection with a restructuring of the Company's
indebtedness which was completed on January 18, 1994.
The Company and Lubin, Delano & Company agreed upon a cash compensation
package for Lubin, Delano & Company for 1994, which provides for the payment of
(i) a basic fee payable to Lubin, Delano & Company of $400,000; (ii) an
incentive fee based upon the Company's performance as measured against its 1994
budgeted operating profit (see "Incentive Compensation Plan" below) and (iii)
additional fees as may be agreed to by the Company and Lubin, Delano & Company
in connection with acquisitions, divestitures, financings and other similar
transactions. The new compensation package payable to Lubin, Delano & Company
for the services of Messrs. Delano and Lubin as executive officers of the
Company comports with the Compensation Committee's subjective perception of the
base compensation levels of chief executives employed by other industrial
companies, both public and private. Prior to the establishment of this
compensation package, the compensation paid to Lubin, Delano & Company for
investment banking and financial advisory services was determined as a result of
negotiations between the Company and Lubin, Delano & Company prior to the
commencement of the investment banking and financial advisory relationship in
1987. Such arrangements were scheduled to expire on March 12, 1994. The
compensation paid for the combined services of Messrs. Delano and Lubin as
President and Chairman of the Board of the Company, respectively, was determined
at the time they were elected Chief Operating Officer and Chief Executive
Officer, respectively, in 1988 by considering the competitive marketplace for
executive talent and the responsibilities of such positions after taking into
account the compensation payable to Lubin, Delano & Company for investment
banking and financial advisory services.
The Company, through the Compensation Committee, and Lubin, Delano &
Company are discussing the compensation arrangements for 1995 and any
transaction-related compensation payable in respect of 1994. Pending the
resolution of such discussions, Lubin, Delano & Company is being compensated for
the services provided by Messrs. Delano and Lubin to the Company at the same
rates as were paid during 1994.
In determining the base pay levels and increases therein for the other
executive officers and key employees of the Company, the Compensation Committee
considers the compensation paid by a group of industrial companies which are
generally similar to the Company. The number and composition of the group with
which the Company compares itself for this purpose is subject to change as the
companies change size or focus,
- 10 -
<PAGE> 13
merge or are acquired. Base pay levels, prior to taking into account other
factors considered by the Compensation Committee, are at the mid-range of base
pay levels for such group of companies. The Compensation Committee believes that
the Company's most direct competitors are private companies which do not
publicly disclose executive compensation, financial condition or operating
performance information. The Compensation Committee also believes that the
companies with which the Company compares itself for determining executive
compensation are not necessarily included in the indices used to compare
stockholder returns which are contained elsewhere in the Proxy Statement in
which this report appears. In determining the salary component of the cash
compensation packages and base pay levels and increases for these officers and
employees, the Compensation Committee also takes into consideration the recent
performance of the individual and the Company, the experience of the individual
and the scope and complexity of the position. The Compensation Committee does
not assign weights to these factors nor consider any one more important than the
others.
In evaluating the performance and setting the compensation of Messrs.
Delano and Lubin and the Company's other senior management during 1994, the
Compensation Committee took particular note of management's success in
restructuring the Company's operations over the last five years to maximize
efficiencies by (i) closing and consolidating certain of the Company's
facilities, (ii) improving the profitability of continuing operations by
creating specialized plants focused on niche products and introducing
technological improvements designed to permit the Company to service these
markets efficiently, (iii) acquiring and integrating complementary businesses,
(iv) constructing new facilities and relocating certain operations and (v)
discontinuing unprofitable divisions, as well as efforts relating to the
Company's financial restructuring and expansion of its working capital financing
arrangements. These factors are being considered in connection with the present
discussions with Lubin, Delano & Company concerning transaction-related
compensation payable to Lubin, Delano & Company in respect of 1994.
INCENTIVE COMPENSATION PLAN. The Company has an incentive compensation
plan which provides for the payment of cash bonus awards to certain officers and
key employees of the Company to provide incentive to increase profitability
while efficiently managing the Company's assets. Cash bonus awards are paid to
eligible officers and key employees selected by an operating company president
and the president of the Company from bonus funds accumulated based upon the
performance of the Company, its operating companies or its manufacturing
facilities, as appropriate, during the prior year. The amount of an employee's
award under the plan is based upon the attainment of predetermined targets for
Company, operating company or manufacturing facility operating profit and sales
as well as such employee's personal performance and aggregate base salary
received during the year. The Compensation Committee of the Company's Board of
Directors is responsible for the supervision of the plan. Messrs. Delano and
Lubin were eligible to receive compensation under the incentive compensation
plan for 1994 as described above, but were not eligible to receive such
compensation during 1993 or prior thereto. Neither Messrs. Delano, Lubin or
Welhouse received any cash bonus award for services rendered during 1994. Mr.
Welhouse received $35,100 pursuant to the Company's incentive compensation plan
for services rendered by him during 1993.
STOCK AWARDS. To promote the Company's long-term objectives, stock
awards are made to officers and certain key employees who are in a position to
make a significant contribution to the Company's long-term success. The stock
awards are made pursuant to the Company's 1986 Restricted Stock Award Plan, in
the form of grants of restricted Common Stock.
Restricted stock awards consist of a specified number of shares of the
Company's Common Stock with an appropriate restrictive legend affixed thereto.
Shares of restricted Common Stock may not be sold or otherwise transferred by an
employee until ownership vests in the employee, at the time and in the manner
specified by the Compensation Committee at the time of the award.
Since the restricted stock awards vest and may grow in value over time,
these components of the Company's compensation plan are designed to reward
performance over a sustained period and to enhance stockholder value through the
achievement of corporate objectives. The Company intends that these awards will
strengthen the focus of its officers and other key employees on managing the
Company from the perspective of a person with an equity stake in the Company.
Stock awards are not granted each year. In selecting recipients and the
size of grants, the Compensation Committee considers various factors such as the
potential of the recipient, prior grants, a comparison of awards made to
officers in comparable positions at similar companies and Company performance.
The assessment of Company performance may include an analysis of (i) growth in
earnings and market share; and (ii) Company
- 11 -
<PAGE> 14
earnings as compared to earnings growth of other precision component parts
manufacturers. No stock awards were made during 1994 since the Compensation
Committee believed that an appropriate level of stock awards had been made in
prior years.
TAX DEDUCTIBILITY OF EXECUTIVE COMPENSATION. Beginning in 1994, the
Internal Revenue Code (the "Code") imposed limitations upon the federal income
tax deductibility of compensation paid to the Company's chief executive officer
and to each of the other four most highly compensated executive officers. Under
these limitations, the Company may deduct such compensation only to the extent
that during any fiscal year the compensation does not exceed $1,000,000 or meets
certain specified conditions (such as stockholder approval). Based on the
Company's current compensation plans and policies and recently released proposed
regulations interpreting the Code, the Company and the Compensation Committee
believe that, for the near future, there is little risk that the Company will
lose any significant tax deduction for executive compensation. The Company's
compensation plans and policies will be modified to ensure full deductibility of
executive compensation if the Company and the Compensation Committee determine
that such an action is in the best interests of the Company.
COMPENSATION COMMITTEE
William B. Conner, Chairman
Phillips E. Patton
- 12 -
<PAGE> 15
STOCK PRICE PERFORMANCE
Set forth below is a line graph comparing the yearly cumulative total
stockholder return on the Common Stock, based on the market price of the Common
Stock, with the cumulative total return of companies in the S&P 500 Stock Index
and the NASDAQ Market Index.
COMPARISON OF FIVE YEAR TOTAL RETURN
FOR LEXINGTON PRECISION CORPORATION, S&P 500 STOCK INDEX AND NASDAQ MARKET INDEX
<TABLE>
<CAPTION>
Measurement Period LEXINGTON
(Fiscal Year Covered) PRECISION S&P 500 NASDAQ
<S> <C> <C> <C>
1989 100 100 100
1990 15 97 85
1991 15 126 136
1992 15 136 159
1993 62 150 181
1994 108 152 177
</TABLE>
LEXINGTON PRECISION S&P 500 NASDAQ
For the period May 1, 1991 through December 31, 1994, no material
trading data for the Company's Common Stock has been publicly available. For
purposes of the above graph, the Company utilized a bid quotation for the
Company's Common Stock of $0.25 per share as of December 31, 1991 and 1992, and
$1.00 per share as of December 31, 1993 based upon conversations with
market-makers in the Company's Common Stock. Since April 8, 1994, trading
information has been available from the OTC Bulletin Board provided by the
National Association of Securities Dealers. Using this information the Company
has estimated that the market price of the Company's common stock as of December
31, 1994 was $1.75 per share. The Company believes that four brokerage firms
currently make a market in the Company's Common Stock, although both bid and
asked quotations may at times be limited.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of the Board of Directors consists of Messrs.
Conner and Patton. Mr. MacAlonan served as a member of the Compensation
Committee until May 24, 1994. Until June 1, 1993, Mr. Conner was the President
of Robinson-Conner, Inc., an insurance brokerage firm which specialized in
providing a complete line of commercial insurance coverage, life and accident
insurance and third-party administration of health claims. Robinson-Conner, Inc.
was purchased by Acordia, Inc., a holding company for insurance brokerage,
claims administration and employees benefits consulting companies, in April
1991. Mr. Conner has been a director of Acordia, Inc. since April 1991 and was
Executive Vice President of Acordia, Inc. from April 1991 until March 1993.
After a competitive bidding process, the Company has from time to time secured
large portions of its insurance coverage through and purchased its third-party
administration services from certain subsidiaries of Acordia, Inc. During 1994,
Acordia of Western Pennsylvania, a subsidiary of Acordia, Inc., acted as agent
in connection with the purchase of certain insurance coverages which resulted in
the payment of premiums to insurance companies in the amount of $1,319,000. The
Company also paid Acordia National, a subsidiary of Acordia, Inc., fees in the
amount of $70,000 for the administration of certain of the Company's group
health insurance plans. Mr. MacAlonan retired from the position of Vice Chairman
of the Board of Directors and Senior Vice President of the Company in 1986.
- 13 -
<PAGE> 16
CERTAIN RELATIONSHIPS AND TRANSACTIONS
Warren Delano and Michael A. Lubin beneficially own 26.4% and 29.4%,
respectively, of the Common Stock of the Company.
Messrs. Delano and Lubin are successors to the rights of L&D Precision
Limited Partnership ("Precision") under a 1985 agreement between Precision and
the Company. Pursuant to the agreement, the Company enlarged its Board of
Directors and elected Messrs. Delano and Lubin, as Precision's representatives,
to the Company's Board of Directors and Executive Committee. Mr. Delano also was
elected to the Company's Compensation Committee and Mr. Lubin was elected to the
Company's Audit Committee. The agreement provides that so long as Precision or
its nominees holds beneficially and of record at least 325,000 shares of Common
Stock (subject to adjustment) issued to Precision in connection with a 1985
private placement (the "Private Placement"), the Company will utilize its best
efforts to ensure that (i) each of the representatives of Precision elected to
the Company's Board of Directors (or his successor designated by Precision) will
be nominated to serve in such capacity for each succeeding term of such
director, (ii) each of the two representatives of Precision then serving as a
director of the Company also will serve as a member of the Company's Executive
Committee and (iii) at least one of such representatives will serve on each of
the Audit Committee and the Compensation Committee of the Company's Board of
Directors. The agreement also provides that, so long as Precision holds
beneficially and of record at least 200,000 of such shares (subject to
adjustment), the Company will utilize its best efforts to ensure that (i) one of
the representatives of Precision elected to the Board of Directors (or his
successor designated by Precision) will be nominated to serve in such capacity
for each succeeding term of such director, (ii) such representative of Precision
also will serve as a member of the Executive Committee and (iii) such
representative will serve on each of the Audit Committee and the Compensation
Committee of the Board of Directors. Messrs. Delano and Lubin have waived their
rights to have representatives serve on the Executive Committee, the Audit
Committee and the Compensation Committee until such further time as they desire
to invoke such right.
Messrs. Delano and Lubin are also the partners of Lubin, Delano &
Company, an investment banking and consulting firm. During 1994, the Company
paid a fee to Lubin, Delano & Company of $350,000 as compensation for the
combined services of Messrs. Delano and Lubin as President and Chairman of the
Board of the Company, respectively. For services provided in connection with a
restructuring of the Company's indebtedness (the "Restructuring"), on November
26, 1993, the Board of Directors of the Company approved the payment to Lubin,
Delano & Company of a fee consisting of $250,000 in cash and 100,000 shares of
Common Stock. In connection with the completion of the Restructuring on January
18, 1994, the Company paid to Lubin, Delano & Company $250,000 in cash and
issued 50,000 shares of its Common Stock to each of Messrs. Delano and Lubin, as
designees of Lubin, Delano & Company. Effective January 1, 1994, the Company
retained Lubin, Delano & Company to provide operating management services and to
furnish investment banking and financial advisory services in connection with
future acquisitions, divestitures, financings and other transactions consummated
by the Company during a period ending on December 31, 1994 for an annual fee of
$400,000, an incentive fee based upon the Company's performance as measured
against its 1994 budgeted operating profit and additional compensation as may be
agreed to in the future by the Company and Lubin, Delano & Company in connection
with acquisitions, divestitures, financings and other transactions consummated
by the Company. The Company also has agreed to reimburse Lubin, Delano & Company
for certain expenses.
The Company, through the Compensation Committee, and Lubin, Delano &
Company are discussing the compensation arrangements for 1995 and any
transaction-related compensation payable in respect of 1994. Pending the
resolution of such discussions, Lubin, Delano & Company is being compensated for
the services provided by Messrs. Delano and Lubin to the Company at the same
rates as were paid during 1994.
In connection with an exchange offer conducted as a part of the
Restructuring, the holders of $25,275,000 principal amount of the Company's
12 3/4% Subordinated Notes due February 1, 1997 (the "Old Notes") (representing
the entire principal amount of the Old Notes then outstanding) tendered their
Old Notes for exchange and received $1,255 principal amount of new 12 3/4%
Senior Subordinated Notes due February 1, 2000 (the "New Notes") and cash in the
amount of $143.76 for each $1,000 principal amount of Old Notes exchanged.
Accordingly, all Old Notes were cancelled and the indenture between the Company
and United States Trust Company of New York, as Trustee, pursuant to which the
Old Notes were issued, was terminated. Such indenture had contained, among other
provisions, a requirement that the Company would, under certain circumstances
relating to the termination of Messrs. Delano and Lubin as directors of the
Company and their ownership of less than 5% of the Company's Voting Stock, and,
subject to certain limitations, offer to purchase all
- 14 -
<PAGE> 17
of the Company's Old Notes then outstanding for cash at 100% of the principal
amount thereof plus accrued interest thereon to the date of purchase. The
indenture governing the New Notes does not contain a comparable provision.
Messrs. Delano and Lubin had agreed with the Company that they would,
for a period ending upon the expiration of the foregoing covenant, at all times
be jointly or severally the "beneficial owner" of a number of shares of Voting
Stock at least equal to five percent of the Voting Stock issued and outstanding
on March 12, 1987, provided that the Company shall not theretofore have breached
in any material respect or wrongfully terminated the agreement pursuant to which
the Company has retained Lubin, Delano & Company to provide investment banking
and financial advisory services.
The Company made cash payments in respect of fees and expenses of
approximately $400,000 to the law firm of Nixon, Hargrave, Devans & Doyle during
1994. Kenneth I. Greenstein, Secretary and a director of the Company, is a
stockholder of a professional corporation which is a partner in such law firm.
PROPOSAL 2 - RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors, on the recommendation of the Audit Committee,
has appointed the firm of Ernst & Young LLP, independent public accountants, to
audit the accounts of the Company for the year ending December 31, 1995. Ernst &
Young LLP has been employed by the Company as its independent auditor since the
year ended May 31, 1989.
Stockholders are asked to approve the action of the Board of Directors
in appointing Ernst & Young LLP. It is intended that, unless marked to the
contrary, the shares represented by proxy shall be voted for the ratification of
such appointment.
It is expected that a representative of Ernst & Young LLP will be
present at the Annual Meeting to answer questions of stockholders and will have
the opportunity, if desired, to make a statement.
STOCKHOLDER PROPOSALS
Proposals by stockholders intended to be presented at the next annual
meeting (to be held in 1996) must be received by the Secretary of the Company on
or before December 13, 1995 in order to be included in the proxy statement and
the proxy for that meeting. Proposals should be directed to Kenneth I.
Greenstein, Secretary, Lexington Precision Corporation, 767 Third Avenue, New
York, New York 10017.
OTHER MATTERS
Management does not know of any other matters which are likely to be
brought before the Annual Meeting. However, in the event that any other matters
properly come before the Annual Meeting, the persons named in the enclosed proxy
will vote in accordance with their judgment on such matters.
A copy of the Company's Report to Stockholders for the year ended
December 31, 1994, which includes financial statements and related data,
accompanies this Proxy Statement.
According to SEC rules, the information presented in this Proxy
Statement under the captions "Compensation Committee Report on Executive
Compensation" and "Stock Price Performance" shall not be deemed to be
"soliciting material" or to be filed with the SEC under the Securities Act of
1933 or the Securities Exchange Act of 1934 and nothing contained in any
previous filings made by the Company under such Acts shall be interpreted as
incorporating by reference the information presented under the specified
captions.
By Order of the Board of Directors,
Kenneth I. Greenstein
Secretary
Dated: April 20, 1995
New York, New York
- 15 -
<PAGE> 18
LEXINGTON PRECISION CORPORATION
767 THIRD AVENUE
NEW YORK, NEW YORK 10017
P
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
R THE COMPANY FOR THE ANNUAL MEETING OF STOCKHOLDERS ON MAY 16, 1995
The undersigned hereby appoints as Proxies, MICHAEL A. LUBIN and
O DENNIS J. WELHOUSE, each with full power to appoint his substitute,
and hereby authorizes them to represent and to vote, as designated
X below, all shares of capital stock of Lexington Precision
Corporation held of record by the undersigned on April 3, 1995,
Y at the Annual Meeting of Stockholders to be held on May 16, 1995
and any adjournments thereof.
<TABLE>
<S> <C>
Nominees for election as directors: COMMENTS OR CHANGE OF ADDRESS
Warren Delano ___________________________________________
Kenneth I. Greenstein
___________________________________________
___________________________________________
(If you have written in the above space,
please mark the corresponding box on the
reverse side of this card.)
</TABLE>
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED. 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. IF
NO DIRECTION IS GIVEN WITH RESPECT TO A PARTICULAR PROPOSAL, THIS
PROXY WILL BE VOTED FOR SUCH PROPOSAL. THE PROXIES CANNOT VOTE YOUR
SHARES UNLESS YOU SIGN AND RETURN THIS CARD.
PLEASE MARK, DATE, SIGN AND RETURN THIS PROXY CARD PROMPTLY, USING
THE ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE
UNITED STATES OF AMERICA.
SEE REVERSE
SIDE
<PAGE> 19
<TABLE>
<S> <C> <C>
X PLEASE MARK YOUR SHARES IN YOUR NAME
VOTES AS IN THIS
EXAMPLE.
</TABLE>
<TABLE>
<CAPTION>
FOR WITHHELD FOR AGAINST ABSTAIN
<S> <C> <C> <C> <C> <C>
1. Election of / / / / 2. Ratify the appointment / / / / / /
Directors of Ernst & Young LLP
(see reverse) as independent auditors.
For, except vote withheld from the following nominee(s): 3. In their discretion, the proxies are authorized to vote
________________________________________________________ upon any other business that may properly come
before the meeting.
Comments / /
or
Change of
Address
Plan to / /
Attend
Meeting
IF SHARES ARE REGISTERED IN MORE THAN ONE NAME,
THE SIGNATURES OF ALL SUCH PERSONS ARE REQUIRED.
A CORPORATION SHOULD SIGN IN ITS FULL CORPORATE
NAME BY A DULY AUTHORIZED OFFICER STATING HIS
TITLE. TRUSTEES, GUARDIANS, EXECUTORS AND
ADMINISTRATORS SHOULD SIGN IN THEIR OFFICIAL
CAPACITY GIVING THEIR FULL TITLE AS SUCH.
IF A PARTNERSHIP, PLEASE SIGN IN THE PARTNERSHIP
NAME BY AUTHORIZED PERSONS.
SIGNATURE(S)_______________________________________________ DATE__________
SIGNATURE(S)_______________________________________________ DATE__________
NOTE: Please sign exactly as name appears hereon.
</TABLE>
