<PAGE> 1
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SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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:
<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)
XXXXXXXXXXXXXXXX
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies: .......
(2) Aggregate number of securities to which transaction applies: ..........
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined): ............
(4) Proposed maximum aggregate value of transaction: ......................
(5) Total fee paid: .......................................................
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid: ...............................................
(2) Form, Schedule or Registration Statement No.: .........................
(3) Filing Party: .........................................................
(4) Date Filed: ...........................................................
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<PAGE> 2
LEXINGTON PRECISION CORPORATION
767 THIRD AVENUE
NEW YORK, NEW YORK 10017
-------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 23, 2000
The Annual Meeting of Stockholders of LEXINGTON PRECISION CORPORATION
(the "Company") will be held at the offices of Nixon Peabody LLP, 437 Madison
Avenue, 24th Floor, New York, New York, on Tuesday, May 23, 2000, at 10:30 A.M.,
for the purpose of considering and acting upon the following matters:
1. The election of four 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, 2000; and
3. The transaction of such other business as may properly come before
the meeting and any adjournments thereof.
Pursuant to the provisions of the Bylaws, the Board of Directors has
fixed the close of business on April 10, 2000, as the record date for
determining the stockholders of the Company entitled to receive notice of and to
vote at the meeting and any adjournments thereof.
PLEASE SIGN, DATE, AND MAIL THE ENCLOSED PROXY PROMPTLY. A POSTAGE-PAID
ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE.
By Order of the Board of Directors,
Kenneth I. Greenstein
Secretary
April 28, 2000
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 23, 2000
This Proxy Statement is being mailed to stockholders on or about April
28, 2000, in connection with the solicitation of proxies by the Board of
Directors of LEXINGTON PRECISION CORPORATION, a Delaware corporation (the
"Company"), to be voted at the annual meeting of stockholders of the Company to
be held on May 23, 2000 (the "Annual Meeting"). Accompanying this Proxy
Statement are the Notice of Annual Meeting of Stockholders and a form of proxy
for such meeting and a copy of the Company's Annual Report for the year ended
December 31, 1999, which contains financial statements and related data.
All proxies that 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 prior to the exercise thereof upon
written notice to the Secretary of the Company. Stockholders who are present at
the Annual Meeting may withdraw their proxies and vote in person if they so
desire.
The cost of preparing and mailing the accompanying form of proxy and
related materials and the cost of soliciting proxies will be borne by the
Company. The Company has requested brokers, custodians, and other like parties
to distribute proxy materials to the beneficial owners of shares and to solicit
their proxies and will reimburse such persons for their services in doing so.
Without additional compensation, officers and regular employees of the Company
may solicit proxies personally or by telephone. The cost of additional
solicitation incurred other than by use of the mails is estimated not to exceed
$3,000.
Only stockholders of record at the close of business on the record
date, April 10, 2000, are entitled to notice of, and to vote at, the Annual
Meeting and any adjournments thereof. As of the record date, there were
outstanding 4,828,036 shares of the Company's common stock, $0.25 par value (the
"Common Stock"), and 3,300 shares of its $8 Cumulative Convertible Preferred
Stock, Series B, $100 par value (the "Series B Preferred Stock"), each entitling
the holder thereof to one vote per share. The affirmative vote of a plurality of
the shares of 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. All other matters require the affirmative vote of a
majority of the shares of Common Stock and Series B Preferred Stock present in
person or represented by proxy and entitled to vote at the Annual Meeting.
With regard to the election of directors, votes may be cast in favor or
withheld. Votes withheld from the election of directors will be counted to
determine the presence or absence of a quorum for the transaction of business at
the Annual Meeting, but they 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 and will have the same
effect as votes against the subject proposal at the Annual Meeting. Broker
nonvotes (that is, proxies from brokers or nominees indicating that such persons
have not received instructions from the beneficial owners or other persons
entitled to vote shares on a
<PAGE> 4
particular matter as to which the brokers or nominees do not have discretionary
power) are counted for purposes of determining a quorum for the transaction of
business at the Annual Meeting but are not considered as votes for purposes of
determining the outcome of a vote.
PRINCIPAL STOCKHOLDERS
The following table sets forth the beneficial ownership of the
Company's Common Stock, as of April 10, 2000, by each person known by the
Company to be the beneficial owner of more than 5% of its outstanding Common
Stock.
<TABLE>
<CAPTION>
NAME AND ADDRESS OF SHARES OF COMMON STOCK PERCENT OF
BENEFICIAL OWNER BENEFICIALLY OWNED (1) CLASS OWNED
------------------- ---------------------- -----------
<S> <C> <C>
Michael A. Lubin 1,516,242(2) 31.4%
Lubin, Delano & Company
767 Third Avenue
New York, New York 10017
Warren Delano 1,385,855(3) 28.7
Lubin, Delano & Company
767 Third Avenue
New York, New York 10017
</TABLE>
(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, subject to community property laws, where applicable, 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 children,
with respect to which Mr. Lubin acts as custodian under the New York
Uniform Gifts to Minors Act, (ii) 50,000 shares owned by an Individual
Retirement Account of Mr. Lubin, and (iii) 89,062 shares owned by a
retirement benefit plan of which Mr. Lubin is a beneficiary.
(3) Includes (i) 110,750 shares owned by Individual Retirement Accounts of Mr.
Delano and (ii) 89,062 shares owned by a retirement benefit plan of which
Mr. Delano is a beneficiary.
PROPOSAL 1 -- ELECTION OF DIRECTORS
The Bylaws of the Company provide for the election of directors for
terms expiring in 2001. The stockholders will be asked to vote at the Annual
Meeting for the election of four directors, each to serve until the annual
meeting of stockholders to be held in 2001 and until his successor has been
elected and qualified. 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 the persons named in the accompanying proxy to vote such
proxy for the election of William B. Conner, Warren Delano, Kenneth I.
Greenstein, and Michael A. Lubin as directors, to serve until the 2001 annual
meeting of stockholders and until their respective successors shall have been
elected and qualified. Messrs. Conner, Delano, Greenstein, and Lubin are
presently members of the Board of Directors. The proxies cannot be voted for a
greater number of persons than four in respect of Proposal 1. Management has no
reason to believe that the named
-2-
<PAGE> 5
nominees will be unable or unwilling to serve, if elected. However, in such
case, it is intended that the individuals named in the accompanying proxy will
vote for the election of such substituted nominees as the Board of Directors may
recommend.
Certain information concerning the nominees is set forth in the
following table.
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION, BUSINESS
NAME AGE EXPERIENCE, AND DIRECTORSHIPS
---- --- ------------------------------
<S> <C> <C>
William B. Conner 67 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 the Company
since 1981.
Warren Delano 49 President of the Company for more than five years. 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 70 Secretary of the Company since September 1979. Consultant since January
1998. Prior thereto, stockholder of a professional corporation that was a
partner in Nixon, Hargrave, Devans & Doyle LLP, a law firm, for more than
five years. Director of the Company since 1978.
Michael A. Lubin 50 Chairman of the Board of the Company for more than five years. Partner of
Lubin, Delano & Company, an investment banking and consulting firm, for
more than five years. President and Chief Operating Officer of Salant
Corporation, a manufacturer of men's, women's, and children's apparel,
from April 1997 through July 1997 and Executive Vice President and Chief
Operating Officer of Salant Corporation from October 1995 through March
1997. On December 29, 1998, Salant Corporation filed a petition seeking
relief from creditors under chapter 11 of the U.S. Bankruptcy Code.
Director of the Company since 1985.
</TABLE>
BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD
The Board of Directors met five times during 1999. During 1999, each
director attended all meetings held by the Board of Directors and the meetings
held by the Committees of the Board of Directors on which such person served.
The Board of Directors has a standing Audit Committee and a standing
Compensation Committee. As of April 28, 2000, the members of those committees
are as follows:
<TABLE>
<CAPTION>
NAME OF COMMITTEE CHAIRMAN OTHER MEMBER
----------------- -------- ------------
<S> <C> <C>
Audit Committee Kenneth I. Greenstein William B. Conner
Compensation Committee William B. Conner Kenneth I. Greenstein
</TABLE>
-3-
<PAGE> 6
The Audit Committee, which is composed of two non-employee members of
the Board of Directors, met twice during 1999. Its functions include 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 deems advisable.
The Compensation Committee, which is composed of two non-employee
members of the Board of Directors who are not eligible to receive restricted
stock awards pursuant to the Company's 1986 Restricted Stock Award Plan, met
twice during 1999. Its functions included reviewing salaries, cash bonus awards,
and existing or potential compensation plans for the Company's executive
officers and other eligible employees and making recommendations to the Board of
Directors regarding such salaries, cash bonus awards, and compensation plans.
Additionally, the Committee administers the Company's 1986 Restricted Stock
Award Plan and is responsible for determining the employees of the Company to
whom, and the times at which, awards will be granted.
Each member of the Board of Directors receives an annual fee of
$12,000. 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 or Committee
meeting attended by telephone. There are no other fees paid to directors for
services rendered as members of the Board.
EXECUTIVE OFFICERS
The following table sets forth certain information concerning the
executive officers of the Company.
<TABLE>
<CAPTION>
NAME POSITION AND OFFICES AGE
---- -------------------- ---
<S> <C> <C>
Michael A. Lubin Chairman of the Board 50
Warren Delano President and Director 49
Dennis J. Welhouse Senior Vice President, Chief Financial 51
Officer, and Assistant Secretary
Kelly L. MacMillan Treasurer 34
</TABLE>
Mr. Lubin has been Chairman of the Board of the Company for more than
five years. For more than five years, Mr. Lubin has been a partner of Lubin,
Delano & Company, an investment banking and consulting firm. Mr. Lubin was
President and Chief Operating Officer of Salant Corporation, a manufacturer of
men's, women's, and children's apparel, from April 1997 through July 1997 and
was Executive Vice President and Chief Operating Officer of Salant Corporation
from October 1995 through March 1997. On December 29, 1998, Salant Corporation
filed a petition seeking relief from creditors under chapter 11 of the U.S.
Bankruptcy Code.
Mr. Delano has been President of the Company for more than five years.
For more than five years, Mr. Delano has been a partner of Lubin, Delano &
Company, an investment banking and consulting firm.
Dennis J. Welhouse has been Senior Vice President, Chief Financial
Officer, and Assistant Secretary of the Company for more than five years.
-4-
<PAGE> 7
Kelly L. MacMillan has been Treasurer of the Company since July 1995.
Ms. MacMillan served as Assistant Treasurer of the Company from November 1991
through June 1995.
Each of the Company's executive officers 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 Common Stock, as of April 10, 2000, 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>
SHARES OF COMMON STOCK PERCENT OF
NAME OF BENEFICIAL OWNER BENEFICIALLY OWNED (1) CLASS OWNED
------------------------ --------------------------- -----------
<S> <C> <C>
Michael A. Lubin 1,516,242(2) 31.4%
Warren Delano 1,385,855(3) 28.7
William B. Conner 219,906(4) 4.6
Dennis J. Welhouse 90,842(5) 1.9
Kenneth I. Greenstein 35,636(6) *
Kelly L. MacMillan - -
Directors and executive officers
as a group (6 persons) 3,248,481(7) 67.3
</TABLE>
* Less than 1 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 shown as beneficially
owned by them, subject to community property laws, where applicable, 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 children,
with respect to which Mr. Lubin acts as custodian under the New York
Uniform Gifts to Minors Act, (ii) 50,000 shares owned by an Individual
Retirement Account of Mr. Lubin, and (iii) 89,062 shares owned by a
retirement benefit plan of which Mr. Lubin is a beneficiary.
(3) Includes (i) 110,750 shares owned by Individual Retirement Accounts of Mr.
Delano and (ii) 89,062 shares owned by a retirement benefit plan of which
Mr. Delano is a beneficiary.
(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 25,000 shares granted to Mr. Welhouse on January 28, 2000,
pursuant to the Company's Restricted Stock Award Plan.
(6) Includes 8,170 shares owned by a retirement benefit plan of which
Mr. Greenstein is the sole beneficiary.
(7) See footnotes 1 through 6, above.
-5-
<PAGE> 8
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934, as amended, and
the rules promulgated thereunder require the Company's officers and directors
and persons who own more than 10 percent of the Common Stock 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.
Based solely upon a review of (i) copies of Forms 3, 4, and 5, and
amendments thereto, furnished to the Company during and with respect to 1999,
and (ii) written representations from certain reporting persons, the Company is
not aware that any director, executive officer, or beneficial owner of more than
10% of the Common Stock failed to file on a timely basis any report required by
Section 16(a) of the Securities Exchange Act of 1934, as amended, during 1999.
EXECUTIVE COMPENSATION
The following table summarizes, for the Company's past three fiscal
years, the compensation paid to each of the Company's executive officers whose
total annual salary and bonus exceeded $100,000.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION
NAME AND FISCAL --------------------------- ALL OTHER
PRINCIPAL POSITION YEAR SALARY($) BONUS($)(1) COMPENSATION($)
- ------------------------------ ------ ---------- ----------- ---------------
<S> <C> <C> <C> <C>
Michael A. Lubin 1999 267,000(2) 93,750 -
Chairman of the Board 1998 214,125(2) - -
1997 215,750(2) - -
Warren Delano 1999 267,000(3) 93,750 -
President and Director 1998 214,125(3) - -
1997 215,750(3) - -
Dennis J. Welhouse 1999 144,200 32,445 7,645(4)
Senior Vice President, 1998 140,000 - 7,576(4)
Chief Financial Officer, and 1997 135,000 - 7,772(4)
Assistant Secretary
</TABLE>
(1) Amounts reported in a particular year reflect bonuses earned for services
rendered in that year and paid in that year or the following year.
(2) Includes (i) compensation, paid indirectly to Mr. Lubin through Lubin,
Delano & Company, in the amounts of $250,000 during 1999 and $200,000
during 1998 and 1997, for 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 only
partners. See "Compensation Committee Report on Executive Compensation" and
"Certain Relationships and Transactions."
(3) Includes (i) compensation, paid indirectly to Mr. Delano through Lubin,
Delano & Company, in the amounts of $250,000 during 1999 and $200,000
during 1998 and 1997, for 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."
-6-
<PAGE> 9
(4) Includes (i) Company contributions of $7,219, $7,000, and $7,241, made to
Mr. Welhouse's account under the Company's 401(k) Plan in 1999, 1998, and
1997, respectively, and (ii) insurance premiums of $426, $576, and $531
paid by the Company in 1999, 1998, and 1997, respectively, for term life
insurance owned by Mr. Welhouse.
No stock options or stock appreciation rights were granted to,
exercised by, or held by any of the persons named in the Summary Compensation
Table above during 1999, 1998, or 1997.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee is composed of two non-employee members of
the Company's Board of Directors. The Compensation Committee is responsible,
subject to the approval of the Board of Directors, for reviewing salaries, cash
bonus awards, and existing or potential compensation plans for the Company's
executive officers and other eligible employees and making recommendations to
the Board of Directors regarding such salaries, cash bonus awards, and
compensation plans. Additionally, the Committee administers the Company's 1986
Restricted Stock Award Plan and is responsible for determining to whom, and the
times at which, awards will be granted.
COMPENSATION PHILOSOPHY AND POLICY
The Company's compensation program generally is designed to motivate
and reward the Company's executive officers for attaining financial,
operational, and strategic objectives that will contribute to the overall goal
of enhancing stockholder value. The principal elements of the compensation plan
include base salary and cash bonus awards.
BASE SALARY. In determining the base pay levels for executive officers
of the Company, the Compensation Committee considers the compensation paid by a
group of industrial companies that are generally similar to the Company. The
group of companies with which the Company compares itself for this purpose is
subject to change as the companies change size or focus, 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 that do not publicly disclose information
regarding executive compensation, financial condition, or operating performance.
The Compensation Committee also believes that the companies with which the
Company compares itself for the purpose of determining executive compensation
are not necessarily included in the indices used to compare stockholder returns
that are contained elsewhere in the Proxy Statement in which this report
appears. In determining the salary component of compensation packages for
executive officers, 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 and does not consider any one
factor more important than another.
INCENTIVE COMPENSATION PLAN. To provide incentives to increase
profitability, the Company has an incentive compensation plan that provides for
the payment of cash bonus awards to executive officers and other eligible
employees of the Company. Bonus awards for eligible divisional employees are
based upon the attainment of predetermined profit targets at each respective
division. Bonus awards for executive officers and other eligible corporate
employees are based upon the attainment of predetermined consolidated profit
targets. The Compensation Committee is responsible for the supervision of the
plan.
-7-
<PAGE> 10
The Company also has a restricted stock plan but did not utilize the plan for
incentive compensation during 1999, 1998, and 1997.
COMPENSATION OF MESSRS. DELANO AND LUBIN. 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 1999, the aggregate payments made to Lubin, Delano & Company
for services provided by Messrs. Delano and Lubin in their capacities as
President and Chairman of the Board, respectively, were $500,000. The Company's
arrangements with Lubin, Delano & Company also provide for an incentive fee
based upon the attainment of predetermined consolidated profit targets and
additional compensation, as mutually agreed upon, for services provided by
Lubin, Delano & Company in connection with acquisitions, divestitures,
financings, or other similar transactions involving the Company. Messrs. Delano
and Lubin received payments for 1999 in the aggregate amount of $187,500 under
the incentive compensation plan. These amounts were paid during March 2000.
The compensation paid for the combined services of Messrs. Delano and
Lubin as President and Chairman of the Board of the Company, respectively, was
agreed to after considering the responsibilities of such positions and the
competitive marketplace for executive talent. The Compensation Committee
believes that the compensation package payable to Lubin, Delano & Company for
the combined services of Messrs. Delano and Lubin in 1999 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.
COMPENSATION COMMITTEE
William B. Conner, Chairman
-8-
<PAGE> 11
STOCK PRICE PERFORMANCE
Set forth below is a line graph comparing the yearly cumulative total
return on the Company's Common Stock, based on the market price of the Common
Stock, with the yearly cumulative total return on the common stock of companies
in the S & P 500 Index and the NASDAQ Composite Index.
COMPARISON OF FIVE-YEAR TOTAL RETURN FOR
LEXINGTON PRECISION CORPORATION, NASDAQ COMPOSITE
INDEX AND S&P 500
[LINE GRAPH]
<TABLE>
<CAPTION>
Lexington Precision Corporation
Shares of Common Stock S&P 500 Index NASDAQ Composite Index
-------------------------------- ------------------------ ----------------------------
Closing Indexed Indexed Indexed
Date Price 12/31/94 Close 12/31/94 Close 12/31/94
- --------------- -------------------------------- ------------------------ -----------------------------
<S> <C> <C> <C> <C> <C> <C>
12/31/94 $1.7500 $100.00 459.27 $100.00 751.96 $100.00
12/31/95 2.5000 142.86 615.93 134.11 1,052.14 139.92
12/31/96 2.1250 121.43 740.74 161.29 1,291.03 171.69
12/31/97 2.6875 153.57 970.43 211.30 1,570.35 208.83
12/31/98 1.5000 85.71 1,229.23 267.65 2,192.69 291.60
12/31/99 1.1875 67.86 1,469.25 319.91 4,069.31 541.16
</TABLE>
At December 31, 1994, no material trading data for the Company's Common
Stock was publicly available. Based upon then-current conversations with
market-makers in the Common Stock, the Company believes that the bid quotation
for the Common Stock was $1.75 per share at December 31, 1994. At December 31,
1994, 1995, 1996, 1997, 1998, and 1999, the last trade listed on the OTC
Bulletin Board, provided by the National Association of Securities Dealers, was
$1.75, $2.50, $2.125, $2.6875, $1.50, and $1.1875 per share, respectively. The
Company believes that twelve brokerage firms currently make a market in the
Company's Common Stock, although both bid and asked quotations may at times be
limited.
CERTAIN RELATIONSHIPS AND TRANSACTIONS
Warren Delano and Michael A. Lubin beneficially own 28.7% and 31.4%,
respectively, of the Common Stock of the Company.
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 1999, the aggregate
payments made to Lubin, Delano & Company for services provided by Messrs. Delano
and Lubin in their capacities as President and Chairman of the Board,
respectively, were $500,000. The Company's arrangements with Lubin, Delano &
Company also provide for an incentive fee based upon the attainment of
predetermined consolidated profit targets and additional
-9-
<PAGE> 12
compensation, as mutually agreed upon, for services provided by Lubin, Delano &
Company in connection with acquisitions, divestitures, financings, or other
similar transactions involving the Company. Messrs. Delano and Lubin received
payments for 1999 in the aggregate amount of $187,500 under the incentive
compensation plan.
Messrs. Delano and Lubin and their affiliates are holders of $1,500,000
principal amount of the Company's 12 3/4% Senior Subordinated Notes due February
1, 2000, and $347,000 principal amount of the Company's 14% Junior Subordinated
Nonconvertible Notes due May 1, 2000. On February 1, 2000, Messrs. Delano and
Lubin converted the $1,000,000 principal amount of the Company's 14% Junior
Subordinated Convertible Notes due May 1, 2000, into 440,000 shares of Common
Stock in accordance with the terms of such notes. In 1999, Messrs. Delano and
Lubin and their affiliates received interest payments on these notes in the
aggregate amount of $379,783.
PROPOSAL 3 -- 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, 2000. Ernst &
Young LLP has been employed by the Company as its independent auditor since the
fiscal 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 any proxy is marked
to the contrary, the shares represented by such 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 2001) must be received by the Secretary of the Company on
or before December 20, 2000, in order to be included in the proxy statement and
the proxy for that meeting. Stockholder proposals intended to be raised at the
2001 Annual Meeting but not intended to be included in next year's proxy
materials must be received by the Secretary of the Company on or before March 4,
2001. Proposals should be directed to the Secretary, Lexington Precision
Corporation, 767 Third Avenue, New York, NY 10017 and must comply with the
applicable requirements of the federal securities laws and the Company's Bylaws.
OTHER MATTERS
Management does not know of any other matters that 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 Annual Report for the year ended December 31,
1999, which includes financial statements and related data, accompanies this
Proxy Statement.
-10-
<PAGE> 13
According to SEC rules, the information presented in this Proxy
Statement under the captions "Compensation Committee Report on Executive
Compensation" and "Stock Price Performance" will 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 28, 2000
New York, New York
-11-
<PAGE> 14
PROXY
LEXINGTON PRECISION CORPORATION
767 Third Avenue
New York, New York 10017
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
THE COMPANY FOR THE ANNUAL MEETING OF STOCKHOLDERS ON MAY 23, 2000
The undersigned hereby appoints as Proxies, each of WARREN DELANO and
DENNIS J. WELHOUSE, each with full power to appoint his substitute,
and hereby authorizes them to represent and to vote, as designated
below, all shares of capital stock of Lexington Precision Corporation
held of record by the undersigned on April 10, 2000, at the Annual
Meeting of Stockholders to be held on May 23, 2000, and any
adjournments thereof.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED. YOU ARE
ENCOURAGED TO SPECIFY YOUR CHOICE 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)
...............................................................................
DETACH CARD
<PAGE> 15
LEXINGTON PRECISION CORPORATION
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. [ ]
[ ]
<TABLE>
<CAPTION>
FOR WITHHELD FOR ALL
ALL ALL EXCEPT:
<S> <C> <C> <C> <C> <C>
1. Election of 4 Directors / / / / / / 3. In their discretion, the Proxies are
William B. Conner, Warren Delano, Kenneth I. authorized to vote upon any other business
Greenstein, Michael A. Lubin that may properly come before the
meeting.
- ------------------------------------
(Except nominee(s) written above) FOR AGAINST ABSTAIN
Plan to Attend Meeting / /
2. Ratify the appointment of Ernst & Young LLP as / / / / / /
independent auditors.
Address change requested / /
</TABLE>
Date: , 2000
------------------
-----------------------------
-----------------------------
Signature(s)
NOTE: Please sign exactly as
name appears hereon.
If shares are registered in more than
one name, the signatures of all such
persons are required. A corporation
should sign in the 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.
................................................................................
[ARROW] FOLD AND DETACH HERE [ARROW]
PLEASE VOTE, SIGN, DATE, AND RETURN THIS PROXY FORM PROMPTLY
USING THE ENCLOSED ENVELOPE.
