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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:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
LEXINGTON HEALTHCARE GROUP, INC.
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(Name of Registrant as specified in its charter)
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(Name of Person(s) Filing Proxy Statement), if other than Registrant
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1) or 14a-6(i)(2).
[ ] $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:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
------------------------------------------------------------------------(A)
(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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LEXINGTON HEALTHCARE GROUP, INC.
1577 NEW BRITAIN AVENUE
FARMINGTON, CONNECTICUT 06032
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD DECEMBER 23, 1998
TO THE STOCKHOLDERS OF LEXINGTON HEALTHCARE GROUP, INC.
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Lexington
Healthcare Group, Inc. (the "Company") will be held at the Farmington Marriot
Hotel, 15 Farm Springs Road, Farmington, Connecticut, on December 23, 1998, at
10:00 A.M., local time for the following purposes:
1. To elect the Board of Directors of the Company for the ensuing year;
2. To ratify the appointment of DiSanto Bertoline & Company, P.C. as the
Company's independent certified public accountants for the ensuing
year; and
3. To transact such other business as may properly come before the meeting
and any continuations and adjournments thereof.
Stockholders of record at the close of business on November 27, 1998 are
entitled to notice of and to vote at the meeting.
In order to ensure a quorum, it is important that Stockholders representing
a majority of the total number of shares issued and outstanding and entitled to
vote, be present in person or represented by their proxies. Therefore, whether
you expect to attend the meeting in person or not, please sign, fill out, date
and return the enclosed proxy in the self-addressed, postage-paid envelope also
enclosed. If you attend the meeting and prefer to vote in person, you can revoke
your proxy.
In addition, please note that abstentions and broker non-votes are each
included in the determination of the number of shares present and voting, for
purposes of determining the presence or absence of a quorum for the transaction
of business. Neither abstentions nor broker non-votes are counted as voted
either for or against a proposal.
By Order of the Board of Directors
Jack Friedler
Chairman of the Board of Directors
Dated: December 11, 1998
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LEXINGTON HEALTHCARE GROUP, INC.
1577 NEW BRITAIN AVENUE
FARMINGTON, CONNECTICUT 06032
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PROXY STATEMENT
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ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD AT 10:00 A.M., DECEMBER 23, 1998
This Proxy Statement is being furnished in connection with the solicitation
by the Board of Directors of Lexington Healthcare Group, Inc. (herein called the
"Company") for use at the Annual Meeting of Stockholders of the Company to be
held at the Farmington Marriot Hotel, 15 Farm Springs Road, Farmington,
Connecticut at 10:00 A.M. on December 23, 1998, and at any continuation and
adjournment thereof. Anyone giving a proxy may revoke it at any time before it
is exercised by giving the Chairman of the Board of Directors of the Company
written notice of the revocation, by submitting a proxy bearing a later date or
by attending the meeting and voting. This statement, the accompanying Notice of
Meeting and form of proxy have been first sent to the Stockholders on or about
December 11, 1998.
All properly executed, unrevoked proxies on the enclosed form, which are
received in time will be voted in accordance with the stockholder's directions,
and unless contrary directions are given, will be voted for the election of
directors of the nominees described below.
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RECORD DATE AND SHARE OWNERSHIP
Only stockholders of record on the books of the Company at the close of
business on November 27, 1998, the date fixed by the Board of Directors in
accordance with the Company's By-Laws, are entitled to vote at the meeting. As
of November 27, 1998, the record date fixed for the determination of
stockholders entitled to vote at the annual meeting, there were issued and
outstanding 4,125,000 shares of common stock, $.01 par value per share ("Common
Stock").
Each outstanding share is entitled to one vote on all matters properly
coming before the meeting. A majority of the shares of the Common Stock
outstanding on the record date is necessary to constitute a quorum for the
meeting.
The following table sets forth certain information as of December 1, 1998
with respect to each beneficial owner of five percent (5%) or more of the
outstanding shares of Common Stock of the Company, each officer and director of
the Company and all officers and directors as a group. The table does not
include options or SARs that have not yet become exercisable and will not become
exercisable within 60 days of the date hereof. Unless otherwise indicated, the
address of each such person or entity is c/o Lexington Healthcare Group, Inc.,
1577 New Britain Avenue, Farmington, Connecticut 06032.
NAME AND ADDRESS NUMBER OF SHARES PERCENTAGE OF
OF BENEFICIAL OWNER BENEFICIALLY OWNED(2) COMMON STOCK(1)
- ------------------- --------------------- ---------------
Jack Friedler............................................ 2,046,500 49.4%
Harry Dermer............................................. 705,500 17.0%
Thomas E. Dybick......................................... 6,667 *
Mary Archambeault........................................ 73,333 1.8%
Dov Berkowitz, M.D....................................... 5,000 *
Gary Coltek.............................................. 5,000 *
All officers and directors as a group (6 persons)........ 2,842,000 67.8%
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* Less than 1%
(1) Pursuant to the rules and regulations of the Securities and Exchange
Commission, shares of Common Stock that an individual or group has a right
to acquire within 60 days pursuant to the exercise of options or warrants
are deemed to be outstanding for the purposes of computing the percentage
ownership of such individual or group, but are not deemed to be outstanding
for purposes of computing the percentage ownership of any other person shown
on the table.
(2) Number of shares beneficially owned includes 20,000 options out of the
60,000 granted to Mr. Friedler, 20,000 options out of the 60,000 granted to
Mr. Dermer, 6,667 options out of the 20,000 granted to Mr. Dybick, 13,333
options out of the 40,000 granted to Ms. Archambeault, 5,000 options out of
the 15,000 granted to Dr. Berkowitz, and 5,000 options out of the 15,000
granted to Mr. Coltek.
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PROPOSAL 1
ELECTION OF DIRECTORS
The By-Laws of the Company provide that the authorized number of directors
shall be as set by the Board of Directors but shall not be less three. The
authorized number is presently five. The directors hold office until the next
annual meeting of Stockholders and until their successors have been elected and
qualified. Directors of the Company do not receive any compensation for acting
in such capacities, but may be reimbursed for expenses incurred in connection
with their services as such.
Four Directors, constituting the entire Board of Directors of the Company,
are to be elected at the meeting to serve until the next Annual Meeting of
stockholders and until their successors have been elected and qualified. Unless
such authority is withheld, proxies will be voted for election of the four
persons named below, all of whom are now serving as Directors, and each of whom
has been designated as a nominee. The Company expects that each of the nominees
will be available for election, but if any of them is not a candidate at the
time the election occurs, it is intended that such proxy will be voted for the
election of another nominee to be designated by the Board of Directors to fill
any such vacancy or the number of directors to be elected at this time may be
reduced by the Board of Directors.
SHAREHOLDER VOTE REQUIRED
The election of the directors will require the affirmative vote of the
majority of the shares present in person or represented by proxy at the Annual
Meeting of stockholders.
NAME AGE POSITION WITH THE COMPANY
---- --- -------------------------
Jack Friedler.......................... 66 Chief Executive Officer, Chairman of the Board,
Director
Harry Dermer........................... 46 President, Chief Operating Officer, Director
Dov Berkowitz, M.D. ................... 44 Director
Gary Coltek............................ 41 Director
JACK FRIEDLER has been Chief Executive Officer and Chairman of the Board
since the Company's inception in February 1995. He managed Fairfield Manor
Health Care Center, Pond Point Health Care Center, Country Manor Health Care
Center and Bentley Gardens Health Care Center from 1979 to 1986. Mr. Frielder
co-founded Professional Relief Nurses, Inc. in 1981.
HARRY DERMER has served as President and Director of the Company since its
inception in February 1995. From the Company's inception in February 1995
through August 1996 Mr. Dermer served as the Company's Chief Financial Officer.
In August 1996, he was appointed to the position of Chief Operating Officer and
still serves in that capacity. Prior to February 1995, Mr. Dermer co-founded
Prometheus Pharmacy and Nursing Homes America, Inc., which are divisions of the
Olympus Healthcare Group, where he served as Chief Financial Officer from 1994
to 1995, and Mediscript Pharmacy, Inc., a division of Mediplex, where he served
as Chief Financial Officer from 1993 to 1994. Previously, from 1990 to 1993 he
was Vice President of Operations and Chief Financial Officer of Reliance
Pharmacy Corp. In addition, Mr. Dermer has a Connecticut nursing home
administrator's license.
DR. DOV BERKOWITZ has been an independent director of the Company since
January 1998. Since 1984, Dr. Berkowitz is in private practice as an Orthopedic
Surgeon. Dr. Berkowitz received his M.D. in Medicine from the Mount Sinai School
of Medicine in 1974 and received certification also an orthopedic surgeon from
Mount Sinai Hospital in 1984.
GARY COLTEK has been an independent director of the Company since January
1998. In September 1998, Mr. Coltek was appointed Chief Operating Officer of
International Clinical Oncology Network, an overseas manufacturer of
pharmaceuticals. From 1996 to the fall of 1998 Mr. Coltek was Executive Vice
President of Infumatrix, where he was responsible for infusion management. Also
since 1996, Mr. Coltek has been Vice President of Operations of Phymatrix, where
he is responsible for physician management. From
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1994 to 1996, Mr. Coltek was President of Care Group, where he was responsible
for infusion management. Mr. Coltek received a B.S. in Business in 1978 from the
State University of New York.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ELECTION TO THE
BOARD OF DIRECTORS OF THE COMPANY OF EACH OF THE NOMINEES.
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
The Company has one formal committee, the Audit Committee, which currently
consists of consists of Dr. Dov Berkowitz and Gary Coltek. The Company does not
currently have a Compensation Committee, a Stock Option Committee or a
Nominating Committee.
The Company's Board of Directors and the Audit Committee met on October 6,
1997. The Company's Board of Directors met on February 26, 1998. The Board of
Directors have taken no action by written consent on any occasion during the
years ended June 30, 1997 and June 30, 1998.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth all cash compensation for services rendered
in all capacities to the Company, for the year ended June 30, 1998 (referred to
as "1998" in this table), the year ended June 30, 1997 (referred to as "1997" in
this table) and the year ended June 30, 1996 (referred to as "1996" in this
table) paid to the Company's Chief Executive Officer as well as each executive
officer or other person whose compensation at the end of the above 1998, 1997
and 1996 years exceeded $100,000 per annum.
RESTRICTED
STOCK OPTIONS/
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS AWARDS SARS OTHER
- --------------------------- ---- ---------- ------- ---------- ------------ -----
Jack Friedler,................ 1996 $ 210,000(1) 0 0 0 0
Chief Executive............... 1997 $ 260,000 0 0 0 0
Officer, Director............. 1998 $ 266,250 0 0 60,000 0
Harry Dermer,................. 1996 $ 127,204 0 0 0 0
President, Director........... 1997 $ 174,980 0 0 0 0
Chief Operating Officer....... 1998 $ 179,196 0 0 60,000 0
Suzanne Nettleton,............ 1996 $122,237(1) $38,121 0 0 0
Executive Vice President,..... 1997 $ 132,492 $21,376 0 0 0
President of PRN.............. 1998 $ 161,232 0 0 0 0
Thomas E. Dybick,............. 1997 $ 72,037 0 0 0 0
Chief Financial Officer....... 1998 $ 110,318 0 0 20,000 0
Mary Archambault.............. 1996 $ 54,256 0 0 0 0
Executive Vice President,..... 1997 $ 159,783 0 0 0 0
Secretary, President of
BALZ........................ 1998 $ 107,088 0 0 40,000 0
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(1) In addition, Jack Friedler and Suzanne Nettleton each received director fees
of $40,000 for serving as directors of PRN, but are no longer entitled to
such fees after the Company's acquisition of PRN.
EMPLOYMENT AGREEMENTS
The Company currently has employment agreements with each of Jack Friedler,
Harry Dermer, and Mary Archambault. The agreements provide that such individuals
shall devote substantially all of their working time and attention to the
business of the Company, and each agreement contains certain non-compete
provisions. Each of the agreements have an initial term of five years and shall
be automatically renewable for successive one-year periods unless either the
Company or the employee elects not to renew his or her employment.
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Mr. Friedler's employment agreement provides that Mr. Friedler will receive
a $250,000 annual salary, with cost of living increases and a bonus equal to one
(1%) percent of the Company's net income before taxes. Mr. Dermer's employment
agreement is identical except that Mr. Dermer will be entitled to a $175,000
salary. The agreement with Ms. Archambault provides that Ms. Archambault will
receive a base annual salary of $100,000, subject to five (5%) percent annual
increases. In addition to her base salary, Ms. Archambault will be entitled to
receive 3.75% of BALZ's net profits before taxes.
On July 31, 1998, Suzanne Nettleton, the Former President of PRN, the
Company's home care subsidiary, initiated a lawsuit against Lexington Healtcare
Group, Inc., PRN, and the Company's Chairman and CEO, in connection with her
termination as President of PRN. The suit alleges breach of contract and
wrongful discharge against the Company. The Company will vigorously defend the
suit; it believes that plaintiff breached the contract, failed to perform in
good faith and was therefore terminated. At this time, it is not possible to
estimate the final cost to the Company to resolve this matter.
STOCK OPTIONS
STOCK OPTION PLAN
The Company has reserved 450,000 shares of its common stock for issuance
pursuant to stock options which may be granted pursuant to the Company's 1997
Stock Option Plan (the "Plan"). The Plan provides for grants to employees,
consultants and directors of the Company. Subject to the provisions of the Plan,
the Board of Directors has the authority to determine the individuals to whom
the stock options are to be granted, the number of shares to be covered by each
option, the exercise price, the type of option, the option period, the
restrictions, if any, on the exercise price of the option, the terms for payment
of the option price and other terms and conditions.
As of June 30, 1997, the Company had granted no stock options. During the
year ended June 30, 1998, the Company issued options to purchase 302,000 shares
of its common stock to directors and employees at exercise prices ranging from
$2.625 to $3.062 based on the market value of the date of the grant. Such
options vest at a rate of one-third per year and are fully vested on the third
anniversary of their issuance. The options expire December 16, 2003 and March
17, 2004 depending upon their date of issuance. Through June 30, 1998 no options
have been exercised.
The Company has adopted Statement of Financial Accounting Standards
("SFAS") No. 123, "Accounting for Stock-Based Compensation". In accordance with
the provisions of SFAS No. 123, the Company applies APB Opinion No. 25 in
accounting for its
stock option plans and, accordingly, does not recognize compensation cost at the
grant date.
OPTION GRANTS FOR FISCAL
YEAR ENDED JUNE 30, 1998
OPTION GRANTS
POTENTIAL REALIZABLE
VALUE AT ASSUMED ANNUAL
NUMBER OF % OF TOTAL RATES OF STOCK PRICE
SECURITIES OPTIONS APPRECIATION FOR
UNDERLYING GRANTED TO EXERCISE OPTION TERM
OPTIONS EMPLOYEES IN PRICE EXPIRATION -----------------------
NAME OF HOLDER GRANTED FISCAL YEAR ($/SHARE) DATE 5%($) 10%($)
- -------------- ---------- ------------ --------- ---------- --------- ----------
Jack Friedler........... 60,000 19.9% $2.625 12/16/03 $53,565 $121,521
Harry Dermer............ 60,000 19.9% $2.625 12/16/03 $53,565 $121,521
Thomas Dybick........... 20,000 6.6% $2.625 12/16/03 $17,855 $ 40,507
Mary Archambault........ 40,000 13.2% $2.625 12/16/03 $35,710 $ 80,014
Dov Berkowitz........... 15,000 4.9% $3.062 3/17/04 $15,621 $ 35,438
Gary Coltek............. 15,000 4.9% $3.062 3/17/04 $15,621 $ 35,438
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INTERESTS OF MANAGEMENT IN CERTAIN TRANSACTIONS
Between October 1995 and July 1996, the Company borrowed an aggregate of
$386,000 from Jack Friedler and Harry Dermer which loans bear interest at an
annual rate of 10%. A total of $104,000 was repaid to Mr. Friedler in August
1996. In May 1997, Mr. Friedler loaned another $100,000 to the Company in
connection with the reacquisition of shares from a private placement investor.
Mr. Friedler's balance of $266,000 was then offset against loans due from
Lexington House in May 1997. Mr. Friedler also instructed the Company to offset
interest due him from the Company of $10,000 each during May and June 1997
against the Lexington House loan. The Company completed its repayment in full of
the monies received from Mr. Dermer when it paid $16,215 to Mr. Dermer in July
1997.
In July 1995, the Company entered into an agreement to manage the
day-to-day business affairs of Lexington House, Inc., a nursing home with 67
licensed beds. Lexington House was owned by Jack Friedler and his wife until
October 1, 1998. As of June 30, 1997, Lexington House, Inc. was indebted to the
Company in the amount $290,000. Lexington House agreed to a payment schedule of
$10,000 per month.
During the year ended June 30, 1998, $23,000 was charged by the Company for
management fees and costs, interest of $26,000 accumulated, and an additional
$286,000 was advanced; $30,000 was repaid; the balance due at June 30, 1998 was
$595,000. In July 1998 an additional $50,000 was advanced and interest of $4,000
accumulated, making the balance due $649,000 at July 31, 1998.
During September 1998, the $649,000 balance was converted into an 8%
interest-bearing promissory note due from Mr. Friedler with $15,000 monthly
installments and a balloon payment of the remaining balance due May 31, 1999. As
security for the note, the officer has pledge the right to receive a $15,000
monthly payment and also pledged 600,000 of his shares of the common stock of
the Company, with the certificate representing such shares being held in escrow
by the Company's legal counsel. As a result, the entire balance of this note is
classified as a current asset in the consolidated balance sheet.
On October 14, 1997, the Company loaned $757,000 to its Chief Executive
Officer and principal stockholder in order for him to pay personal income taxes
due as a result of the reorganization of entities under common control (i.e.,
the Company's IPO). There was no cash compensation paid to him as part of the
reorganization. The borrowing was evidenced by a 9% interest earning note
receivable on which payments were made on December 26 ($157,000), December 31
($300,00), February 3 ($150,000), and May 5, 1998 ($150,000). Interest on the
loan (amounting to $20,000) was paid in full.
Effective July 1, 1995, the Company entered into a ten-year lease, which
was subsequently and retroactively amended, for four (4) of the nursing homes
operated by the Company. Jack Friedler, the Company's Chief Executive Officer is
a 33.33% limited partner of the lessor, Fairfield Group Health Care Centers
Limited Partnership ("Fairfield"). The Company's annual rent expense for the
year ended June 30, 1998 was $2,468,000. The Company believes that the terms of
the lease are as favorable to the Company as those that could have been obtained
from non-affiliated parties.
The partners owning the remaining 66.66% interest in Fairfield were also
owners of an aggregate of 50% of the capital stock of PRN which interest was
purchased by the Company for a total of $1,080,000. Jack Friedler was the owner
of 25% of PRN; in exchange for Mr. Friedler's interest in PRN, the Company
issued Mr. Friedler 108,000 shares of the Company's Common Stock valued at
$540,000, based on the public offering price. Suzanne J. Nettleton, Executive
Vice President of the Company, was owner of the remaining 25% of the capital
stock of PRN. The Company purchased Ms. Nettleton's interest for $540,000. Mr.
Friedler was the only owner of PRN who accepted stock for his interest in PRN.
The Company leases its corporate office space from an entity in which Jack
Friedler and Harry Dermer own 50% under an operating lease which expires in
February 2013 and has two five-year renewal option with rent at then market
rates. Annual gross rental expense under this lease is $120,000; subleases of
space intended for future expansion are expected to reduce the annual rental
expense to approximately $60,000; the Company's rent expense during the period
ended June 30, 1998 was $10,000. Further, the Company leases office and
warehouse space for BALZ from a related limited liability company owned in part
by
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Messrs. Friedler and Dermer and Ms. Archamanbault under an operating lease which
expires January 31, 2002. The Company's annual rent expense for the year ended
June 30, 1998 was $42,000.
The Company acquired all of the capital stock of BALZ from its existing
stockholders (including Jack Friedler, Harry Dermer and Mary Archambault) in
exchange for an aggregate of 300,000 shares of the Company's Common Stock
(valued at $1,500,000 based on the public offering price). The following number
of shares were issued to Officers and Directors of the Company in exchange for
their shares of BALZ:
Jack Friedler............................................... 72,000
Harry Dermer................................................ 60,000
Mary Archambault............................................ 60,000
Jack Friedler and Harry Dermer entered into a stockholder's agreement,
effective in May, 1997, which includes, among other things, the grant of a
mutual right of first refusal to purchase any shares of Common Stock
beneficially owned by the other stockholder, and a mutual agreement to vote for
the other stockholder as a Director of the Company.
With respect to each of the foregoing transactions, although the Company
has not obtained any independent fairness opinions, the Company believes that
the terms of such transactions were as fair to the Company as could be obtained
from an unrelated third party. In the event the Company enters into negotiations
to acquire any business or assets of a related party it will secure an
independent appraisal. Future transactions with affiliates will be on terms no
less favorable than could be obtained from unaffiliated parties and will be
approved by a majority of the independent and/or disinterested members of the
Board of Directors.
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CORPORATE PERFORMANCE GRAPH
The following graph shows a comparison of cumulative total stockholder
returns from May 14, 1997 through June 30, 1998 for the Company, the Nasdaq
Stock Market -- U.S. Index ("Nasdaq") and the S & P Health Care (Long Term Care)
Index ("S & P Health Care Index").
[PERFORMANCE GRAPH]
'LEXINGTON NASDAQ S & P HEALTH
HEALTHCARE STOCK CARE (LONG
GROUP, INC.' MARKET (U.S.) TERM CARE)
5/14/97 100.00 100.00 100.00
Jun-97 130.00 114.74 126.04
Jun-98 54.38 151.39 136.69
The graph assumes that the value of the investment in the Company's Common
Stock, Nasdaq and the S & P Health Care Index was $100 on May 14, 1997 and that
all dividends were reinvested. No dividends have been declared or paid on the
Common Stock.
SECTION 16(a) REPORTING
Under the securities laws of the United States, the Company's directors,
its executive (and certain other) officers, and any persons holding ten percent
(10%) or more of the Company's Common Stock must report on their ownership of
the Company's Common Stock and any changes in that ownership to the Securities
and Exchange Commission and to the National Association of Securities Dealers,
Inc.'s Automated Quotation System. Specific due dates for these reports have
been established. During the year ended June 30, 1998, the Company believes all
reports required to be filed by Section 16(a) were filed on a timely basis, if
at all.
PROPOSAL 2
RATIFICATION OF DISANTO BERTOLINE & COMPANY, P.C. AS THE
COMPANY'S INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS.
The Board of Directors has unanimously approved and unanimously recommends
that the stockholders approve the appointment of DiSanto Bertoline & Company,
P.C. as the Company's independent certified public accountants for the ensuing
year. Unless a shareholder signifies otherwise, the persons named in the proxy
will so vote.
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SHAREHOLDER VOTE REQUIRED
Ratification of the appointment of DiSanto Bertoline & Company, P.C. as
independent certified public accountants will require the affirmative vote of
the majority of the shares present in person or represented by proxy at the
Annual Meeting of Stockholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION
OF THE APPOINTMENT OF DISANTO BERTOLINE & COMPANY, P.C.
AS THE COMPANY'S CERTIFIED PUBLIC ACCOUNTANTS.
OTHER MATTERS
The Board of Directors does not know of any matters other than those
referred to in the Notice of Meeting which will be presented for consideration
at the meeting. However, it is possible that certain proposals may be raised at
the meeting by one or more stockholders. In such case, or if any other matter
should properly come before the meeting, it is the intention of the person named
in the accompanying proxy to vote such proxy in accordance with his or her best
judgment.
SOLICITATION OF PROXIES
The cost of soliciting proxies will be borne by the Company. Solicitations
may be made by mail, personal interview, telephone, and telegram by directors,
officers and employees of the Company. The Company will reimburse banks,
brokerage firms, other custodians, nominees and fiduciaries for reasonable
expenses incurred in sending proxy material to beneficial owners of the
Company's capital stock.
SHAREHOLDER PROPOSALS
In order to be included in the proxy materials for the Company's next
Annual Meeting of stockholders, shareholder proposals must be received by the
Company on or before October 31, 1999.
ANNUAL AND QUARTERLY REPORTS TO THE SECURITIES AND EXCHANGE
COMMISSION
Copies of the Company's Annual Report on Form 10-K for the year ended June
30, 1998, as filed with the Securities and Exchange Commission (without
exhibits), have been sent to the Stockholders free of charge as of the date of
this proxy. Copies of the Company's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1998 (without exhibits), are available to
Stockholders free of charge by writing to Lexington Healthcare Group, Inc., 1577
New Britain Avenue, Farmington, Connecticut, 06032, Attention: Corporate
Secretary.
By Order of the Board of Directors of
Lexington Healthcare
Group, Inc.
/s/ JACK FRIEDLER
Jack Friedler
Chairman of the Board of Directors
Date: December 11, 1998
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GENERAL PROXY -- ANNUAL MEETING OF STOCKHOLDERS OF LEXINGTON HEALTHCARE
GROUP, INC
The undersigned hereby appoints Jack Friedler, with full power of
substitution, proxy to vote all of the shares of Common Stock of the
undersigned and with all of the powers the undersigned would possess if
personally present, at the Annual Meeting of Stockholders of LEXINGTON
HEALTHCARE GROUP, INC. to be held at the Farmington Marriot Hotel, 15 Farm
Springs Road, Farmington, Connecticut on December 23, 1998 at 10:00 a.m.
and at all adjournments thereof, upon the matters specified below, all as
more fully described in the Proxy Statement dated December 11, 1998 and
with the discretionary powers upon all other matters which come before the
meeting or any adjournment thereof.
This Proxy is solicited on behalf of Lexington Healthcare Group, Inc.'s
Board of Directors.
1. To elect 4 directors to hold office for the ensuing year.
[ ] FOR ALL NOMINEES [ ] WITHHELD FOR ALL
NOMINEES
Jack Friedler Harry Dermer Dov Berkowitz, MD Gary Coltek
INSTRUCTION: To withhold authority to vote for any individual, write
that nominee's name in the space provided.
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2. To ratify the appointment of DiSanto Bertoline & Company, P.C. as the
Company's independent certified public accountants.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. In their discretion, upon such other matter or matters that may
properly come before the meeting, or any adjournments thereof.
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(Continued and to be signed on the other side)
13
(Continued from other side)
Every properly signed proxy will be voted in accordance with the
specifications made thereon. IF NOT OTHERWISE SPECIFIED, THIS PROXY WILL
BE VOTED FOR PROPOSALS 1, 2 and 3.
The undersigned hereby acknowledges receipt of a copy of the
accompanying Notice of Meeting and Proxy Statement and hereby revokes any
proxy or proxies heretofore given.
Please mark, date, sign and mail your proxy promptly in the envelope
provided.
Date:
----------------------------------,
1998
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(Print name of Stockholder)
----------------------------------
(Print name of Stockholder)
----------------------------------
Signature
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Signature
Number of Shares
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Note: Please sign exactly as name
appears in the Company's
records. Joint owners should
each sign. When signing as
attorney, executor or
trustee, please give title
as such.