Lxe Inc – ‘DEF 14A’ for 12/31/95

As of:  Monday, 4/1/96   ·   For:  12/31/95   ·   Accession #:  872865-96-4   ·   File #:  0-19051

in

this entire Filing. an “Entity” Search.

Show

Documents searched

and

each “hit”. the 1st “hit”.

↓↑Hints

Definitive Proxy Solicitation Material   —   Schedule 14A
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: DEF 14A     Definitive Proxy Solicitation Material                15±    67K 

Document Table of Contents

LXE INC.                    

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS                    
TO BE HELD ON APRIL 26, 1996                    

Notice is hereby given that the Annual Meeting of                     
Shareholders of LXE Inc. (the "Company") will be held at 4:00                   
p.m. local Atlanta time on  April 26, 1996, at the Atlanta                      
Mariott Norcross, 475 Technology Parkway,  Norcross, Georgia, for               
the following purposes:                                                         

(1) To elect six members of the Board of Directors to serve           
during the ensuing year; and                                                    

(2) To transact such other business as may properly come              
before the Meeting or any adjournment thereof.                                  

Only holders of record of common stock of the Company at the          
close of business on March 8, 1996, will be entitled to notice of               
and to vote at the Meeting or any adjournment thereof.                          

               By Order of the Board of Directors,

        WILLIAM S. JACOBS, Secretary

Norcross, Georgia                                                               
March 28, 1996                                                                  

WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING OF                         
SHAREHOLDERS, YOU ARE REQUESTED TO FILL IN AND SIGN THE ENCLOSED                
FORM OF PROXY AND MAIL IT IN THE ENCLOSED RETURN ENVELOPE, WHICH                
REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.  IT IS                      
IMPORTANT THAT PROXIES BE RETURNED PROMPTLY.   IF YOU DO ATTEND                 
THE MEETING AND DECIDE THAT YOU WISH TO VOTE IN PERSON, YOU MAY                 
WITHDRAW YOUR PROXY.                                                            

LXE INC.                  
303 Research Drive, Technology Park/Atlanta                   
Norcross, Georgia  30092                    

PROXY STATEMENT                   

FOR THE ANNUAL MEETING OF SHAREHOLDERS                      
TO BE HELD ON APRIL 26, 1996                    

GENERAL INFORMATION                   

Shareholders' Meeting                                                           

This Proxy Statement is furnished in connection with the              
solicitation by the Board of Directors of LXE Inc. (the                         
"Company") of proxies to be used at the Annual Meeting of                       
Shareholders to be held at 4:00 p.m. local Atlanta time on April                
26, 1996, at the Atlanta Mariott Norcross,  Norcross, Georgia.                  
This Proxy Statement is being mailed to shareholders on                         
approximately April 1, 1996.                                                    

Matters to be Acted Upon                                                        

The following matters will be acted upon at the Annual                
Meeting of Shareholders:                                                        

(1)  The election of six members of the Board of Directors, each                
to serve a term of one year and thereafter until his successor is               
duly elected and qualified; and                                                 

(2)  The transaction of such other business as may properly come                
before the Meeting or any adjournment thereof.                                  

Revocation of Proxies                                                           

A proxy form is enclosed herewith.  Any shareholder who               
executes and delivers a proxy may revoke it at any time prior to                
its use by giving written notice of such revocation to the                      
Secretary of the Company at 303 Research Drive, Technology                      
Park/Atlanta, Norcross, Georgia  30092, or by executing and                     
delivering to the Secretary of the Company a proxy bearing a                    
later date.  A proxy may also be revoked at the Annual Meeting by               
any shareholder present at the Annual Meeting who elects to vote                
in person.                                                                      

Voting of Proxies                                                               

When the enclosed proxy is properly executed and returned,            
the shares that it represents will be voted at the Annual Meeting               
in accordance with the instructions noted thereon.  In the                      
absence of such instructions, the shares represented thereby will               
be voted in favor of the six nominees for election to the Board                 
of Directors.  The Board of Directors does not know of any other                
business to be brought before the Meeting, but it is intended                   
that as to such other business, if any, a vote may be cast                      
pursuant to the proxy in accordance with the judgment of the                    
person or persons acting thereunder.                                            

Only holders of record of issued and outstanding shares of            
common stock of the Company at the close of business on March 8,                
1996, are entitled to notice of, or to vote at, the Annual                      
Meeting.  Each holder is entitled to one vote for each share of                 
common stock held on the record date.  On March 8, 1996, there                  
were 5,554,644 shares of common stock outstanding and entitled to               
vote.                                                                           

Cost of Solicitation                                                            

The cost of soliciting proxies will be borne by the Company.          
Officers, directors and employees of the Company may solicit                    
proxies by telephone, telegraph or personal interview.                          

1997 Shareholder Proposals                                                      

Any proposals by shareholders intended for presentation at            
the 1997 Annual Meeting must be received by the Company at its                  
principal executive offices, attention of the Secretary, no later               
than December 1, 1996, in order to be included in the proxy                     
materials for that Meeting.                                                     

ELECTION OF DIRECTORS                     

The Company's Bylaws provide that the number of members of            
the Board of Directors may be determined by the Board, which has                
set such number at six.  Unless otherwise directed, it is the                   
intention of the persons named in the enclosed form of proxy to                 
vote such proxy in favor of the election of the six persons named               
below as directors of the Company.  Each such person elected will               
serve until the next Annual Meeting of Shareholders and                         
thereafter until his successor is elected and has qualified.  In                
case any of the named nominees should become unable to serve, or                
for good cause will not serve, as a director, the persons named                 
in the proxy will have the right to use their discretion to vote                
for a substitute or substitutes or to vote only for the remaining               
nominees.                                                                       

Assuming the presence of a quorum at the Meeting, the                 
nominees will be elected by favorable vote of a plurality of the                
shares actually voted.  Abstentions and broker non-vote shares                  
will be considered as present for the purposes of determining the               
presence of a quorum, but will not otherwise be considered in                   
determining the outcome of the vote.  Shares for which authority                
to cast a favorable vote is affirmatively withheld will be                      
treated as voting shares in determining whether the requisite                   
plurality has been achieved.  It is the intention of                            
Electromagnetic Sciences, Inc., which holds 81% of the Company's                
outstanding shares, to vote in favor of the election of each of                 
the nominees, in which case their election would be assured.                    

The table on the following page lists the nominees and their          
ages, their other positions with the Company, their principal                   
occupations at present and during the past five years, and the                  
year each was first elected as a director. All nominees are                     
currently directors of the Company and were elected by the                      
shareholders at the last Annual Meeting.                                        

                                    Year First
Name and Principal Occupations                        Elected                   
For the Last Five Years               Age          Director               

W. Frank Blount                          57             1991                    
Chief Executive Officer of Telstra                                              
Telecommunications Corporation -                                                
formerly Australia and Overseas                                                 
Telecommunications Corporation                                                  
(since 1991), which operates the                                                
Australian domestic and inter-                                                  
national telecommunications system.                                             
Previously, Mr. Blount served in                                                
various executive positions with                                                
American Telephone and Telgraph                                                 
Co., including Group President,                                                 
Communications Products Group (1989-                                            
1991), and during 1991 was appointed                                            
President and Chief Executive Officer                                           
of the New American School Devel-                                               
opment Corporation.  Mr. Blount is                                              
a member of the Board of Directgors                                             
of Entergy Corporation, New Orleans,                                            
Louisiana.                                                                      

William F. Evans                         48             1992                    
Executive Vice President and Chief                                              
Financial Officer, ProSource Distri-                                            
bution Services, Coral Gables,                                                  
Florida, a distributor to fast food                                             
and casual dining restaurant chains                                             
(since 1995); Former Senior Vice                                                
President, H&R Block Inc., Kansas                                               
City, Missouri, a leading provider                                              
of income tax preparation and                                                   
other services (June 1992-October                                               
1994); Executive Vice President and                                             
Chief Financial Officer, Dun &                                                  
Bradstreet Software Services, Inc.,                                             
Atlanta, Georgia, which develops and                                            
markets business application software                                           
(1989-1992).  Mr. Evans is a member of                                          
the Board of Directors of Interim                                               
Services, Inc., Ft. Lauderdale, Florida.                                        

John B. Mowell                           61             1989                    
President, Mowell Financial Group,                                              
Inc., Tallahassee, Florida, an                                                  
investment counseling firm.  Mr.                                                
Mowell is also a member of the                                                  
Board of Directors of Electromagnetic                                           
Sciences, Inc.                                                                  

John E. Pippin                           68             1989                    
Chairman of the Board of                                                        
Electromagnetic Sciences, Inc.;                                                 
Chief Executive Officer of the                                                  
Company and Electromagnetic                                                     
Sciences, Inc. (until 1994)                                                     

Thomas E. Sharon                         50             1989                    
Chairman of the Board and Chief                                                 
Executive Officer of the Company                                                
(since 1994); President, Chief                                                  
Executive Officer (since 1994),                                                 
and a member of the Board of                                                    
Directors of Electromagnetic                                                    
Sciences, Inc.; previously,                                                     
President and Chief Operating                                                   
Officer of Electromagnetic                                                      
Sciences, Inc.                                                                  

Francis X. Stankard                      64             1991                    
Vice Chairman, American Express                                                 
Bank, Ltd., a subsidiary of                                                     
American Express Co. engaged in                                                 
international banking operations                                                
in 40 countries around the world                                                
(since 1994).  Chairman, FXS, Inc.,                                             
a consulting firm for international                                             
financial matters (1991-1994).                                                  
Previously, Mr. Stankard was Chair-                                             
man of the Chase Manhattan Overseas                                             
Banking Corporation (1987-1992).                                                
From 1975 until his retirement in                                               
1991, Mr. Stankard was an Executive                                             
Vice President of The Chase Manhattan                                           
Bank, N.A.                                                                      

Committees and Meetings of the Board of Directors                               

The Board of Directors has designated a Compensation                  
Committee composed of Dr. Pippin and Messrs. Blount, Evans,                     
Mowell and Stankard; this committee reviews and recommends to the               
Board compensation and benefits for the Company's executive                     
officers, and administers the Company's stock option plan with                  
respect to the participation of employees who are officers and                  
directors.  The Compensation Committee met three times during the               
last fiscal year.  The Board has also designated an Audit                       
Committee, which met once during the past year, composed of                     
Messrs. Blount, Evans and Stankard.  The principal functions of                 
this committee are to meet annually with the Company's                          
independent auditors, to review the Company's fiscal year                       
consolidated financial statements, to review the independence,                  
qualifications and activities of the independent auditors, to                   
recommend to the Board of Directors the appointment of the                      
independent auditors, and to review transactions in which                       
Electromagnetic Sciences, Inc. ("ELMG") or other related parties                
have an interest.   The Company does not have a separate                        
nominating committee.  The Stock Incentive Plan Committee of the                
Board consists of Drs. Pippin and Sharon and Mr. Mowell; this                   
committee is generally responsible for administering the                        
Company's stock option plan with respect to the participation of                
employees who are not officers or directors.                                    

During the last fiscal year, there were six meetings of the           
Company's Board of Directors.  No director attended fewer than                  
75% of the aggregate of (i) the total number of meetings of the                 
Board of Directors and (ii) the total number of meetings held by                
all committees on which he served.                                              

Directors who are employees of the Company or ELMG are not            
separately compensated for services as directors of the Company.                
Other directors are compensated at the rate of $3,000 per quarter               
plus $1,000 per meeting attended, and $500 for attending any                    
committee meetings not held in conjunction with a meeting of the                
Board.  In addition, each director who is not an employee of the                
Company or ELMG receives, on the date first elected as a member                 
of the Board, an automatically granted option to acquire 10,000                 
shares of common stock at its fair market value on the date of                  
grant; such options become exercisable in three equal annual                    
installments beginning six months after date of grant, if the                   
individual continues at that time to serve as a director, and                   
once exercisable remain so until the sixth anniversary of the                   
date of grant.                                                                  

SECURITY OWNERSHIP                

The following table sets forth certain information, as of             
March 8, 1996,  concerning shares of the Company's common stock                 
beneficially owned by the Company's directors and named executive               
officers, by the directors and executive officers as a group, and               
by persons who beneficially own more than 5% of the common stock.               
Except as otherwise indicated, each person possessed sole voting                
and investment power with respect to the shares shown.                          

                               LXE Inc. Common Stock   Approximate
                                    Amount of         Percent of
Name                                  Beneficial Ownership      Class           

Electromagnetic Sciences, Inc.             4,523,200             81.4%          
660 Engineering Drive                                                           
Norcross, Georgia 30092                                                         

W. Frank Blount                               10,000 (1)           *            
William F. Evans                              11,000 (1)           *            
John J. Farrell                                  -0-               -            
John B. Mowell                                26,900 (1)           *            
John E. Pippin                               114,210 (1)          2.0%          
Thomas E. Sharon                              48,219 (1)           *            
Francis X. Stankard                           10,000 (1)           *            
John F. Mewshaw                               26,563 (1)           *            
William J. Roeder                             27,647 (1)           *            
All directors and executive                                                     
officers as a group (11 persons)           285,631 (1)          5.1%        

* Percentage of shares beneficially owned does not exceed 1%                    

(1) Includes shares that are subject to currently                     
exercisable options in the amounts of 10,000 for Mr. Blount,                    
10,000 for Mr. Evans, 15,900 for Mr. Mowell, 95,400 for Dr.                     
Pippin, 40,893 for Dr. Sharon, 10,000 for Mr. Stankard, 22,376                  
for Mr. Mewshaw, 27,325 for Mr. Roeder and 7,000 for other                      
officers.  The total for Mr. Mowell also includes 1,000 shares,                 
and for an officer 300 shares, as to which each shares voting and               
investment power with a family member, but disclaims beneficial                 
interest.                                                                       

The table below sets forth certain information, as of March           
8, 1996, regarding the beneficial ownership of the common stock                 
of ELMG by each of the Company's directors  and named executive                 
officers, and by the Company's directors and executive officers                 
as a group.  Except as otherwise noted, the indicated persons                   
hold sole voting and investment power with respect to all shares                
of ELMG common stock set forth opposite their names.                            

Electromagnetic Sciences, Inc. Common Stock           

                                LXE Inc. Common Stock    Approximate
                                    Amount of           Percent of
Name                                  Beneficial Ownership        Class         

W. Frank Blount                               -                    *            
William F. Evans                            3,048 (1)              *            
John J. Farrell                             6,000                  *            
John B. Mowell                             27,543 (1)              *            
John E. Pippin                            223,207 (1)             3.0%          
Thomas E. Sharon                          165,950 (1)             2.2%          
Francis X. Stankard                           -                    *            
John F. Mewshaw                             1,250 (1)              *            
William J. Roeder                           2,700 (1)              *            
All directors and executive                                                     
officers as a group (9 persons)         496,927 (1)             6.6%        

* Percentage of shares beneficially owned does not exceed 1%                    

(1) Includes shares that are subject to currently                     
exercisable options in the amounts of 11,697 for Mr. Evans,                     
10,456 for Mr. Mowell, 94,975 for Dr. Pippin, 118,591 for Dr.                   
Sharon, 1,250 for Mr. Mewshaw, 2,700 for Mr. Roeder and 7,400 for               
other officers.  For Mr. Mowell, Dr. Pippin and another officer,                
these totals include 5,000, 42,593 and 6,150 shares,                            
respectively, as to which each person shares voting and                         
investment power with family members, but disclaims beneficial                  
interest.                                                                       

        EXECUTIVE COMPENSATION AND OTHER INFORMATION

The following table discloses, for the years ended December 31, 1995, 
1994 and 1993, the cash compensation paid by the Company and its                
subsidiaries, as well as certain other compensation paid, accrued or granted    
for those years, to each  executive officer whose combined salary and bonus     
compensation paid by the Company for 1995 exceeded $100,000.  The Company's     
Chief Executive Officer, Thomas E. Sharon, is not an employee of the Company    
and receives no compensation from it.  Dr. Sharon's  compensation is paid by    
Electromagnetic Sciences, Inc (ELMG), which is paid by the Company              
for various services, including those of Dr. Sharon, as described below at      
"Relationship with ELMG."                                                       

                                                        [Enlarge/Download Table]

                                   Summary Compensation Table                                           

                            Annual Compensation                Long-Term Compensation                   
                                                                   Awards            Payouts            
                                               Other                   Securities                All    
                                               Annual    Restricted    Underlying               Other   
    Name and                                   Compen-      Stock     Options/SAR's   LTIP      Compen- 
Principal Positions  Year   Salary     Bonus   sation(2)    Awards    (No. of Shares) Payouts  sation(1)

                                                                                                        
John J. Farrell      1995  $107,699   $  -0-   $  -0-      $78,000       20,000       $ -0-    $  610   
President and                                                            20,000 ELMG                    
Chief Operating                                                                                         
Officer (since                                                                                          
May 1995)                                                                                               

William H. Roeder    1995    99,085      -0-      -0-          -0-          -0-         -0-     5,090   
Vice President,      1994    95,283   20,000      -0-          -0-        2,000 ELMG    -0-     4,274   
Product Marketing    1993    93,244      -0-      -0-          -0-          -0-         -0-     3,924   

John F. Mewshaw      1995    88,465   34,791(3)   -0-          -0-          -0-         -0-     8,997   
Vice President,      1994    82,130   89,581(3)   -0-          -0-        3,000 ELMG    -0-     7,937   
Sales                1993    76,619   58,239(3)   -0-          -0-        2,500         -0-     5,610   


Footnotes to Compensation Table:                                                

(1) For 1995, includes, in the case of Mr. Farrell, $9,650 in                   
benefits associated with a split-dollar life insurance arrangement              
and $611 under the ELMG age-weighted defined contribution                       
retirement plan; in the case of Mr. Roeder, $1,429  in 401(k)                   
matching contributions and $3,661 under  the defined contribution               
retirement plan; and in the case of Mr. Mewshaw, $1,318 in 401(k)               
matching contributions and $7,679  under the defined contribution               
retirement plan.                                                                

(2) Does not include personal benefits that do not exceed the                   
applicable reporting threshold for any officer.                                 

(3) Mr. Mewshaw's bonus is determined under pre-agreed formulas.                
In general, the formulas depend on net new orders during the year,              
and to a lesser extent on gross margin achieved on products shipped             
during the year, and in each case on the relationship of actual                 
amounts to plan amounts for the year.                                           

Option Exercises During Last Fiscal Year and Year-End Option Values             

The following chart sets forth certain information with respect to the
Chief Executive Officer and the named executive officers concerning the         
exercise in 1995 of options in the Company's common stock, and unexercised      
options in the Company's stock held as of December 31, 1995:                    

                                                        [Enlarge/Download Table]


                        Year Ended          Number of Unexercised        Value of Unexercised    
                      December 31, 1995         Options Held At            In-the-Money Options  
                      Shares                   December 31, 1995           At December 31, 1995  
                     Acquired      Value                                                         
Name               on Exercise    Realized  Exercisable  Unexercisable  Exercisable Unexercisable

                                                                                                 
Thomas E. Sharon       -0-          -0-       40,983            -0-      $ 188,312           -0- 
John J. Farrell        -0-          -0-          -0-         20,000            -0-           -0- 
William J. Roeder      -0-          -0-       27,325         15,900        114,220        43,169 
John F. Mewshaw        -0-          -0-       22,376         15,900         91,449        43,169 


Option Grants During Last Fiscal Year                                           

 In connection with his employment as President in May 1995, Mr. Farrell
was granted options in the Company's stock and ELMG stock as set forth in       
the following table.  No other named executive officer                          
received option grants during 1995.                                             

                                                        [Enlarge/Download Table]


                   Number        Percentage                                           
                  of Shares     Total Options                                         
                 Underlying      Granted to    Exercise or                            
                   Options      Employees in    Base Price  Expiration   Grant Date   
Name               Granted       Fiscal 1995   (per share)     Date     Present Value*

                                                                                      
John J. Farrell    20,000           100%         $ 15.00      5/15/04    $ 101,200    
                   20,000 ELMG       29%           13.00      5/15/04      115,400    


Footnote to table:                                                              

* Based upon the Black-Scholes option pricing model, assuming 0.65 expected     
volatility, a 6.0% risk-free rate of return, no dividend yield, and six         
years to exercise.                                                              

Employment Arrangements with President                                          

Mr. Farrell was employed as the Company's new President and           
Chief Operating Officer in May 1995.  The Company and Mr. Farrell               
have not entered into a contract providing for a minimum period of              
employment, but the Company has agreed to continue his                          
compensation, which initially is at the rate of $175,000 per year,              
for nine months in the event of Mr. Farrell's termination (other                
than by voluntary resignation or termination for cause) during the              
first year of this employment.  Mr. Farrell's employment                        
arrangements also provide for the grant by ELMG of 6,000 shares of              
its common stock with forfeiture restrictions that lapse over                   
three years of continued employment; grants of options to acquire               
20,000 shares of the stock of each of ELMG and the Company,                     
vesting in equal increments after each of the third, fourth, fifth              
and sixth years of employment; supplemental life insurance                      
benefits; and $60,000 in loans that will be forgiven as to                      
principal and interest over five years of employment.                           

Compensation Committee Report on Executive Compensation                         

The Compensation Committee of the Board of Directors has              
furnished the following report with respect to certain aspects of               
executive compensation:                                                         

The Company is an 81%-owned subsidiary of                   
Electromagnetic Sciences, Inc. ("ELMG").  The Company's Chief                 
Executive Officer, Treasurer and Chief Financial Officer, and                 
General Counsel are each full-time employees of ELMG and are                  
compensated by ELMG and not directly by the Company.  Their                   
services are made available to the Company pursuant to the                    
Services Agreement between the Company and ELMG described below               
at "Relationship with ELMG."  For this reason, the Compensation               
Committee and its policies do not determine the compensation of               
these three officers, except with respect to the grant of stock-based         
incentive compensation under the 1989 Stock Incentive                         
Plan.                                                                         

The Compensation Committee does review and make             
recommendations to the Board concerning compensation                          
arrangements with the Company's officers who are also Company                 
employees.  In making these recommendations, the Committee                    
believes it is important to adopt compensation policies that                  
attract and retain experienced and well-qualified executive                   
officers, and that provide significant incentives for financial               
and business achievements that benefit the Company's                          
shareholders.  As a result, the Compensation Committee seeks to               
maintain the salary component of each officer's compensation at               
a moderate level, provides bonuses based on financial                         
performance, and in the past has provided stock options whose                 
value depends on appreciation in the market value of the                      
Company's common stock.  Except with respect to the Vice                      
President, Sales, the Company and the Committee have not                      
employed formulas that tie executive compensation to specific                 
performance measures in a pre-determined manner.  In exercising               
its judgment on compensation matters, and in seeking to adhere                
to the foregoing guidelines, the Committee considers, but does                
not use in any pre-determined manner, information provided                    
through the American Electronics Association annual compensation              
survey, particularly data for electronics companies having                    
revenues similar to those of the Company.  Members of the                     
Committee also familiarize themselves with, but do not use on                 
any specific quantitative basis, published information about                  
compensation policies and practices of competitors and other                  
companies with related product lines.  The Committee's policies               
are similar to those of the Compensation Committee of ELMG,                   
whose Chairman also serves as Chairman of the Committee.                      

The Committee believes that bonus compensation paid to      
executive officers should be highly dependent upon the Company's              
financial performance during the year in question, primarily as               
reflected in the level of and change in earnings.  Because of                 
the significant decline in earnings during 1993, no bonuses were              
paid for that year, other than to Mr. Mewshaw, whose base salary              
is set at a level below that of the other vice president and                  
whose bonus compensation is determined by a formula based on net              
new orders and gross margins on sales.  For 1994, the Company's               
earnings increased to record levels, and substantial bonuses                  
were paid.  In 1995, the Company operated at a loss, and no                   
discretionary bonuses were paid.                                              

In determining salary levels and bonuses for                
individual officers, the Committee  considers  each officer's                 
performance of his responsibilities, relying  heavily in this                 
regard on the CEO's evaluations of performance.                               

In addition to salary and annual bonuses, the Company       
has from time to time in the past granted stock options to the                
CEO and other executive officers (including those who are                     
employees of ELMG) in order to provide long-term incentive                    
compensation directly linked to growth in shareholder value.                  
However, no options for Company stock have been granted to                    
executive officers since 1992, except those granted to Mr.                    
Farrell in 1995 in connection with his acceptance of employment               
as the Company's President.   The current intention of the                    
Committee and the Compensation and Stock Incentive Committees of              
the ELMG Board is for the Company's executive officers to                     
periodically receive ELMG stock options (as occurred in 1994),                
reflecting the growing interdependence of the business                        
strategies of LXE and the other ELMG operating subsidiaries.                  

This report is provided by the members of the Compensation  
Committee:                                                                      
                        John B. Mowell
(Chairman)                                                                      
                         W. Frank Blount
                          William F. Evans
                        John E. Pippin
                             Francis X. Stankard

Compensation Committee Interlocks                                               
And Insider Participation                                                       

As stated above, the members of the Compensation Committee  
are Dr. Pippin and Messrs. Blount, Evans, Mowell and Stankard.  Dr.             
Pippin is a former officer of the Company, having served as Chairman            
of the Board and Chief Executive Officer until July 1994.                       

Shareholder Return                                                              

The changes for the period shown in the following graph     
are based on the assumption that $100 had been invested in the                  
common stock of LXE Inc. and each index on April 11, 1991, which is             
the date the Company's initial public offering became effective and             
trading of its common stock commenced on the NASDAQ National Market             
System.                                                                         

Comparison of Cumulative Total Return             
LXE Inc. Common Stock (LXEI)            
S&P Composite-500 and S&P High Technology Composite Indices           

Company Index       Dec 90     Dec 91    Dec 92    Dec 93    Dec 94   Dec 95    

S&P 500 Index        100       130.47    140.41    154.56    156.60   215.45    

S&P High Tech Comp   100       114.08    118.79    146.13    170.31   245.32    

LXEI                 100       210.53    123.68    110.53    160.52    88.20    

RELATIONSHIP WITH ELMG                                                          

From the Company's inception until April 1991, it was       
wholly owned by ELMG, which currently owns 81% of the outstanding               
common stock.  ELMG has the power, acting alone, to elect the                   
entire Board of Directors of the Company and, except as may                     
otherwise be provided by law, to approve any action requiring                   
shareholder approval, and three of the six nominees for election                
as directors during the coming year are also nominees to serve as               
members of the ELMG Board of Directors during that year.  The                   
retention by ELMG of more than a majority of the outstanding                    
voting stock of the Company will preclude a change in control of                
the Company not favored by ELMG.                                                

During the past fiscal year, ELMG has provided the          
Company with a variety of services, and ELMG and the Company have               
entered into a variety of transactions.  It is the intention of                 
the Company and ELMG that all transactions between them, or                     
between the Company and any other affiliated party, will be                     
beneficial to the Company and will be approved by disinterested                 
members of the Board of Directors.  In this regard, transactions                
with ELMG or other affiliates are reviewed and approved by the                  
Audit Committee members who are not otherwise affiliated with                   
ELMG.  Reviews of continuing relationships, such as those under                 
the Services Agreement or with respect to the retirement and group              
health plans, as described below, occur no less often than                      
annually.  The following is a description of transactions between               
ELMG and the Company since the beginning of the past fiscal year.               

Administrative and Other Services                                               

Pursuant to a Services Agreement that is updated            
annually, ELMG provides administrative and other services to the                
Company.  Under this Agreement, ELMG is obligated for a one-year                
term, and during any subsequent renewals, to provide services as                
reasonably required by LXE.  The Services Agreement covers                      
accounting services, services related to facilities operations and              
maintenance, data processing services, investor relations                       
services, and engineering design services.  Amounts to be paid are              
determined by reference to allocation formulas that are reviewed                
each year and are intended to reimburse ELMG for the cost of                    
providing each category of services, including overhead costs                   
associated with the personnel and facilities involved.  The 1995                
Services Agreement also provides for the allocation to the Company              
of approximately 50% of the compensation and overhead costs of                  
ELMG's Chief Executive Officer, Chief Financial Officer and                     
General Counsel, each of whom also serves the Company in a similar              
capacity.  This allocation was determined after consideration of                
anticipated relative time commitments and of anticipated relative               
net sales of the two companies for that year.  For all services                 
under the 1995 Services Agreement, the Company paid $1,724,000 to               
ELMG, and anticipates that the amount to be paid in 1996 will not               
significantly differ from the 1995 amount.                                      

In order to reduce the number of items for which            
allocations are made, the Services Agreement provides that, to the              
extent feasible, all third-party suppliers will submit invoices                 
directly to the Company for goods or services provided for the                  
Company's benefit; to the extent separate invoicing is not                      
feasible, third-party invoices are allocated between the Company                
and ELMG on a basis determined by ELMG to fairly reflect the                    
respective benefits to the Company and ELMG.                                    

The Company believes that it will continue to be            
beneficial for the foreseeable future for the Company to obtain a               
significant portion of its administrative services from ELMG,                   
because of the efficiencies involved in utilizing a larger-scale,               
existing administrative structure.                                              

Employee Benefit Plans                                                          

LXE personnel participate in a defined-contribution         
retirement plan maintained by ELMG and under which annual                       
contributions are determined from year to year by the ELMG Board                
of Directors.  ELMG has charged the Company $477,000 for the year               
ended December 31, 1995, representing the actual contributions                  
allocated to the accounts of the Company's employees for the year.              
The Company also is responsible for a pro rata share of plan                    
overhead expenses.                                                              

LXE personnel participate in the group health plans         
maintained by ELMG; for the year ended December 31, 1995, ELMG                  
charged the Company $1,346,000 for expenses incurred under these                
plans, based on the Company's proportionate share of the covered                
employee census.  The Company expects that its personnel will                   
continue to participate in the ELMG group health plans for the                  
foreseeable future.                                                             

LXE personnel are also eligible to participate in the       
stock purchase and 401(k) savings plans maintained by ELMG.  Under              
the stock purchase plan, the Company matches, on a one-for-four                 
basis, employee salary deductions, up to a maximum matching                     
contribution of 1-1/4% of base compensation; the employee                       
deductions and LXE contributions are forwarded to a custodian to                
be applied to the purchase for the employee's account of ELMG                   
common stock.  Under the ELMG 401(k) savings plan, the Company                  
matches, on a one-for-four basis, up to a maximum matching                      
contribution of 1-1/2% of eligible compensation, salary deductions              
for employee personal savings plan accounts.  During the year                   
ended December 31, 1995, the Company's contributions with respect               
to the participation of its employees in these plans were $23,000               
for the stock purchase plan and $106,000 for the 401(k) savings                 
plan.                                                                           

Technology Park Buildings                                                       

In 1991, the Company acquired from ELMG the 112,000         
square-foot 125 Technology Park Building, which had previously                  
been occupied by ELMG and had been renovated to the Company's                   
specifications.  A portion of the purchase price of this building               
is being financed by ELMG under a note providing for monthly                    
installments of principal and interest over a 10-year period,                   
bearing interest at the prime rate, and secured by a junior                     
mortgage on the building.  During 1995, the principal balance of                
this note was reduced from $1,947,000 to $1,672,000, and the                    
Company paid $177,000 to ELMG as interest.  During 1995, ELMG used              
approximately 8,000 square feet of the 125 Technology Park                      
Building for certain of its production operations.  For such                    
usage, ELMG paid the Company rent of $3.70 per square foot per                  
year, plus operating expenses.  The rental payment equals the                   
Company's cost, based on actual depreciation charges, interest                  
cost on the unamortized investment, taxes and insurance.   Also                 
during 1995, ELMG used approximately 20,000 square feet of space                
in another building located in Technology Park in which the                     
Company has leased approximately 36,000 square feet.  ELMG paid                 
the Company rent for such space equal to the Company's own lease                
payments, or $8.52 per square foot per annum, plus operating                    
expenses.  The amount of such space used by ELMG during 1996 will               
be approximately the same as in 1995.                                           

COMPLIANCE WITH REPORTING OBLIGATIONS                                           

Pursuant to Section 16(a) of the Securities Exchange        
Act, each executive officer, director and beneficial owner of 10%               
or more of the Company's common stock is required to file certain               
forms with the Securities and Exchange Commission.  A report of                 
beneficial ownership of the Company's common stock on Form 3 is                 
due at the time such person becomes subject to the reporting                    
requirements and reports on Forms 4 and 5 must be filed to reflect              
changes in beneficial ownership occurring thereafter.  Based on                 
written statements and copies of forms provided to the Company by               
persons subject to the reporting requirements, the Company                      
believes that all Forms 3, 4 and 5 required to be filed by such                 
reporting persons during or for 1995 were filed on a timely basis.              

INDEPENDENT PUBLIC ACCOUNTANTS                                                  

KPMG Peat Marwick LLP acted as the Company's independent    
public accountants during the last fiscal year and, it is                       
anticipated, will continue to act as such during the current                    
fiscal year.  A representative of KPMG Peat Marwick LLP is                      
expected to be present at the Annual Meeting to respond to                      
appropriate questions, and will have the opportunity to make a                  
statement if he desires to do so.                                               

AVAILABLE INFORMATION             
The Company files Annual Reports on Form 10-K with the      
Securities and Exchange Commission.   A copy of the Annual Report               
for the fiscal year ended December 31, 1995  (except for exhibits               
thereto) may be obtained, free of charge, upon written request by               
any shareholder to LXE Inc., Attn:  Don T. Scartz, Treasurer, 303               
Research Drive, P. O. Box 926000, Norcross, Georgia 30092-9200.                 
Copies of all exhibits to the Annual Report are available upon a                
similar request, subject to payment of a $.15 per page charge to                
reimburse the Company for its expenses.                                         

Norcross, Georgia                                                               
March 28, 1996                                                                  

Dates Referenced Herein   and   Documents Incorporated by Reference

This ‘DEF 14A’ Filing		Date		Other Filings
		12/1/96
		4/26/96
Filed on:		4/1/96		10-K
		3/28/96
		3/8/96		4
For Period End:		12/31/95		10-K
		12/31/94
		12/31/93
				List all Filings