LUCILLE FARMS, INC.
150 River Road P.O. Box 517
Montville, NJ 07045
_____________________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS, NOVEMBER 18,1999
_____________________
TO THE STOCKHOLDERS OF LUCILLE FARMS, INC:
Notice is hereby given that the Annual Meeting of Stockholders of
Lucille Farms, Inc (the "Company") will be held at the Embassy Suites
Hotel, 909 Parsippany Blvd.., Parsippany, New Jersey 07405, on November
18, 1999 at 10:30 a.m., Eastern Standard Time, for the following
purposes:
1. To elect a Board of Directors to serve until the next Annual
Meeting of Stockholders and until their successors are duly elected and
qualified;
2. To ratify the selection by the Board of Directors of Citrin
Cooperman & Company, LLP to serve as independent auditors for the
fiscal year ending March 31, 2000, and
3. To transact such other business as may properly be presented for
action at the meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on
October 15,1999 as the record date for the determination of
stockholders entitled to notice of, and to vote at, this meeting
or any adjournment thereof.
Holders of a majority of the outstanding shares must be present
in person or by proxy in order for the meeting to be held. WHETHER OR
NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING, YOUR VOTE IS IMPORTANT.
ACCORDINGLY, YOU ARE REQUESTED TO MARK, SIGN AND DATE THE ENCLOSED
PROXY FORM AND RETURN IT IN THE ACCOMPYING ENVELOPE. The giving of
such proxy will not affect your right to revoke such proxy before it is
exercised or to vote in person should you later decide to attend the
meeting.
All stockholders are cordially invited to attend the meeting.
By order of the Board of Directors
Stephen M. Katz, Secretary
October 8, 1999
IT IS IMPORTANT THAT THE ENCLOSED PROXY FORM BE
COMPLETED AND RETURNED PROMPTLY.
LUCILLE FARMS, INC.
150 River Road P.O. Box 517
Montville, NJ 07045
_____________________
PROXY STATMENT
ANNUAL MEETING OF STOCKHOLDER TO BE HELD NOVMEMBER 18,1999
_________________
SOLICITATION OF REVOCATION OF PROXIES
This proxy statement is furnished in connection with the
solicitation by the Board of Directors of Lucille Farms, Inc., a
Delaware corporation (the "Company"),of proxies to be voted at
the Annual Meeting of Stockholders of the Company to be held on
November 18,1999 at 10:30 a.m., Eastern Standard Time, at the
Embassy Suites Hotel, 909 Parsippany Blvd., Parsippany, New Jersey
07045 and any adjournments thereof.
A form of proxy is enclosed for use at the meeting. The proxy
may be revoked by a stockholder at any time before it is voted by
execution of a proxy bearing a later date or by written notice to the
Secretary before the meeting, and any stockholder present at the
meeting may revoke his proxy thereat and vote in person if he so
desires. When such proxy is properly executed and returned, the shares
it represents will be voted at the meeting in accordance with any
instructions noted thereon. If no direction is indicated, all shares
represented by valid proxies received pursuant to this solicitation
(and not revoked prior to exercise) will be voted by the person named
in the form of proxy FOR the election of the nominees for directors
named herein, FOR the ratification of the appointment of Citrin and
Cooperman & Company, LLP as the Company's independent auditors for the
year ended March 31, 2000 and as recommended by the Board of Directors
with regard to all other matters, or if no such recommendation is
given, in the discretion of the named proxy.
The cost of soliciting proxies on behalf of the Board of
Directors will be borne by the Company. In addition to solicitation
by mail, proxies may be solicited by directors, officers or regular
employees of the Company (who will receive no extra compensation for
these services) in person or by telephone or telefax. The Company
will also request brokerage houses, custodians, fiduciaries and
nominees to forward these proxy materials to the beneficial owners of
the Company's common stock and will reimburse such holders for their
reasonable expenses in connection therewith. The approximate date of
mailing of this proxy statement is October 8, 1999.
Only stockholders of record at the close of business on October
15, 1999, will be entitled to notice of, and to vote at, the meeting.
At the close of business on such record date, the Company had issued
and outstanding 2,971,342 shares of Common Stock. Holders of share of
common stock are entitled to one share per share on all matters to be
acted upon at the meeting. The holders of a majority of common stock
outstanding on the record date and entitled to vote at the meeting,
presentation persons or 1 by proxy, will constitute a aurum for the
transactions of business at the meeting.
All votes will be tabulated by the inspector of election
appointed for the meeting, who will separately tabulate affirmative
and negative votes, abstentions and broker non-votes. Abstentions
will be counted towards the tabulation of votes cast on proposals
presented to the stockholders and will have the same effect as
negative votes. Broker non-votes are counted towards a quorum,
but are not counted for any purpose in determining whether a matter
has been approved.
NOMINATION AND ELECTION OF DIRECTORS
Five persons, all of whom are members of the present Board
of Directors, are nominees for election to hold office until the
next annual meeting and until their respective successors are
elected and qualified. Unless authority to vote for the election
of directors shall have been withheld, it is intended that proxies
in the accompanying form will be voted at the meeting for the
election of the five nominees named below. It is expected all
nominees will be able and willing to serve as directors. If any
nominee should refuse or be unable to serve, the shares represented
by the proxies will be voted for such person as shall be designed
by the Board of Directors to replace any such nominee. The Board of
Directors has no reason to believe that any of the persons named
will be unable or unwilling to serve as director if elected.
The following information is submitted concerning the
nominees named for election as directors based upon information
received by the Company from such persons. Approval of the
nominees for election to the Board requires the affirmative vote
of the holders of a plurality of the outstanding shares of
the outstanding shares of Common stock present at the meeting
in person or by proxy and entitled to vote.
Recommendation of the Board of Directors
The Board of Directors recommends that shareholders vote for
the election to the Board of all nominees listed below.
Nominees Age Office Director
Since
Gennaro Falivene .. 69 Vice Chairman of the Board 1976
of Directors, Executive Vice
President-Quality Control
Alfonso Falivene .. 57 Director, President and Chief 1976
Executive Officer
Stephen M. Katz .. 64 Director, Vice President- 1993
Finance and Administration,
Chief Financial Officer and
Secretary
Howard Breslow ... 60 Director 1993
Jay M. Rosengarten . 54 Director 1998
Mr. Gennaro Falivene is founder of the Company and has been
a director of the Company since inception in 1976. He served as
Vice President and Treasurer of the Company from inception until
April 1993 when he was appointed Vice Chairman of the Board of
Executive Vice President-Quality Control.
Mr. Alfonso Falivene is a founder of the Company and has been
a director of the Company until April 1993 when he was appointed
President and Chief Executive Officer.
Mr. Stephen M. Katz has been a director of the Company, its
Vice President-Finance and Administration and Chief Financial Officer
and Secretary since April 1993. Mr. Katz was a partner in the
certified public accountant firm of Drogin & Katz, a position he held
since 1970. Drogin & Katz was the company's accounting firm from
March 1973 to March 1993. Mr. Katz is a certified public accountant
licensed in New York and Florida.
Mr. Howard Breslow has been director of the Company since April
1993. He has been a practicing attorney in New York for more than 34
years and is a member of the law firm of Breslow & Walker, LLP, New
York, New York, which serves as general counsel to the Company.
Mr. Breslow currently serves as a director of Excel Technology, Inc.,
a publicly held company engaged in the development and sale of laser
systems, Cryomedical Science, Inc., a publicly held company engaged
in the research, development and sale of products for use in low
temperature medicine, Vikonics, Inc. a publicly held company engaged in
the development and marketing of business information services and
products.
Mr. Jay Rosengarten was appointed to the Board of Directors
effective February 1, 1998. Mr. Rosengarten, the former Board
Chairman of Shopwell, Chicago is an internationally recognized
consultant, author and lecturer on Consumer Marketing, Ethnic
Marketing and Business Management. Mr. Rosengarten has a J.D.
from Fordham University Law School. Mr. Rosengarten is a principal
in the Rosengarten Group, a management consulting firm, a position
he has held from 1993 to present.
BOARD OF DIRECTORS AND COMMITTEES
Philip Falivene and Gennaro Falivene are brothers. Philip
Falivene is also the father of Alfonso Falivene. No other family
relationship exists between any director or executive officer or
any other director or executive officer of the Company.
The Company does not currently compensate its directors for
their services in such capacity.
The Board of Directors held two meetings during the year ended
March 31, 1999, which were attended by all directors except that
Philip Falivene (since deceased) and Gennaro Falivene did not attend
one meeting. The Company currently has no standing compensation
committees of the Board of Directors, or committees performing similar
functions. The Company has an audit committee consisting of Stephen M.
Katz, Howard S. Breslow and Jay Rosengarten. The audit committee
reviews the adequacy of the Company's internal controls, and meets
periodically with management and the Company's independent auditors.
The audit committee met once during the year ended March 31, 1999.
BENEFICIAL OWNERSHIP OF THE COMPANYS SECURITIES
The following table sets fourth, as of Sept. 1, 1999, certain
information with respect to the beneficial ownership of the common
stock of each person known by the Company to be the beneficial
owner of five (5%) percent of the outstanding Common Stock by each
director of the Company, each executive officer named in the summary
Compensation Table below, and by all executive officers and
directors of the Company was a group. Unless expressly indicated
otherwise, each stockholder exercises sole voting and investment
power with respect to the shares benefically owned.
Amount and Nature
Name and Address of Beneficial Percent
Beneficial Owner Ownership of class
Philip Falivene 219,917 7.4%
Box 125
Swanton, Vt. 05488
Gennaro Falivene 327,417 11.0%
Box 125
Swanton, VT 05488
Alfonso Falivene (1) 464,917 15.6%
Box 517
150 River Road
Montville, NJ 07045
Stephen Katz (2) 85,750 2.9%
Box 517
150 River Road
Montville, NJ 07045
B&W Investment Associates 193,799 6.5%
c/o Howard S. Breslow
14 Parkwood Lane
Dix Hills, NY 11746
Howard S. Breslow 193,799 (3) 6.5%
14 Parkwood Lane
Dix Hills, NY 11746
Jay M. Rosengarten 25,000 (4) .8%
Box 517
150 River Road
Montville, NJ 07045
All officers and
Directors of Group (seven) 1,397,600 47.8%
(1) Includes for purposes of this table 7,500 shares owned by Mr.
Falivene's wife and 20,000 shares owned by one of his children.
(2) Includes for purposes of this table 40,000 shares owned by Mr.
Katz's wife.
(3) Represents all of the shares owned by B&W Investment Associates
a partnership of which Howard S. Breslow, a director of the
Company, is a partner.
(4) Includes 25,000 shares issuable under outstanding options.
SECTION 16 (A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The Company is not aware of any late filings of, or failure to file,
the reports required by sections 16(a)of the Securities Exchange Act of
1934, as amended.
EXECUTIVE OFFICERS OF THE REGISTRANT
The executive officers of the Company are as follows:
Name Age Position and Offices with the Company
Gennaro Falivene 69 Vice Chairman of the Board of Directors,
Executive Vice President-Quality Control
Alfonso Falivene 57 Director, President and Chief Executive
Officer
Stephen M. Katz 64 Director, Vice President-Finance and
Administration, Chief Financial Officer
and Secretary
David McCarty 43 Vice President-Sales and Marketing
Officers are appointed by and hold office at the pleasure of the
Board of Directors. Set forth below is a biographical description of
each executive officer of the Company who is not also a director
of the Company, based on information supplied by him.
David McCarty has been Vice President-Marketing and Sales of the
Company since April 1993. From July 1991 to March 1993, Mr. McCarty
was the Vice President of Braff & Company, Inc. From February 1990 to
July 1991, Mr. McCarty was the New York area Manager for Good Humor,
a division of Thomas J. Lipton, where he established a new distribution
network, created a sales promotion program and aided in reversing a
sales decline and increasing sales. From August 1986 to February
1990, Mr. McCarty was the Director of Marketing of Braff & Company Inc,
From 1982 to 1986, Mr. McCarty was the Director of Marketing (1985 and
1986) and National Sales Manager (1982-1985) for Ginseng UP Corp., a
"New Age" beverage corporation.
EXECUTIVE COMPENSATION
The following table sets forth certain information regarding
compensation paid by the Company during each of the Company's last
three fiscal years to the Company's Chief Executive Officer and to each
of the Company's executive officers who receive salary, bonus and
other compensation payments in excess of $100,000 during the year
ended March 31, 1999.
SUMMARY COMPENSATION TABLE
Annual Compensation
Fiscal Other Annual
Name and Principal Positions Year Salary Bonus Compensation
Alfonso Falivene 1999 $110,000 - $8,000
President and Chief 1998 $106,000 - $8,000
Executive Officer 1997 $112,700 - $8,000
Gennaro Falivene 1999 $106,000 - $5,000
Executive Vice 1998 $106,000 - $4,000
President-Quality Control 1997 $106,000 - -
(1) Represents automobile allowances and/or automobile lease payments
for the benefit of such employee
EMPLOYEE AGREEMENT
Effective April 1, 1999, there are no employee agreements in effect.
REPORT OF THE BOARD OF DIRECTORS ON EXECUTIVE COMPENSATION
During the fiscal year ended March 31, 1999, the entire Board
of Directors held primary responsibility for determining executive
compensation levels. The goals of the Company's compensation program
is to align compensation with business objectives and performance and
to enable the Company to attract, retain and reward executive officers
and other key employees who contribute to the long term success of
the Company.
The Chief Executive Officer's compensation for the fiscal year
ended March 31, 1999 was determined by the Board of Directors (without
the vote of Mr. Alfonso Falivene) based on the Company's performance
in fiscal 1998, anticipated performance in fiscal 1999, and the level
of salaries of chief executive officers in a peer group consisting of
cheese manufacturers and/or food processors having sales levels
comparable to the Company.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDE PARTICIPATION
During the year ended March 31, 1999, Messrs. Alfonso, Gennaro,
Philip Falivene and Stephen Katz were each officers of the Company
as well as directors of the Company who participated in deliberations
of the Company's Board of Directors concerning executive officer
compensation.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
At March 31, 1999, Mssrs Alfonso Falivene, Philip Falivene and
Gennaro Falivene each was indebted to the Company in the amount of
$30,000, $30,000, and $30,000, respectively. Such indebtedness is
represented by promissory notes, dated as of June 1, 1992, the
principal amount of which notes are payable in full on June 1, 2,000.
The notes bear interest at the rate of 9% per annum, which interest is
payable annually commencing June 1, 1994.
The Company leases a parcel of land adjacent to its facility.
This parcel is owned by three of its officers. The space is used as an
employee parking lot and its use was required in conjunction with the
construction of the new Whey drying facility. The lease is for a ten
year period. Rentals are $750.00 monthly for the first five years and
$900.00 monthly for the additional five year period. Rent expense for
the year ended March 31, 1999 was $6,000. This lease has a purchase
option to purchase at fair market value at the end of the ten year
period. This lease was assigned to the Bank in conjuntion with the
Whey Plant financing.
The Company leases a portion of its Montville, New Jersey offices
from mssrs. Alfonso Falivene, Philip Falivene, and Gennaro Falivene,
the joint owners of the office condominium unit. During the fiscal
years ended March 31, 1997, 1998,and 1999, the Company paid
approximately $14,000, $14,000 and $14,000, respectively, toward the
rental of such offices. The Company currently pays $1,200 per month
rent for such premises on a month-to-month basis. The Company also
leases an additional 900 adjacent square feet for $750.00 monthly on a
month-to-month basis. These premises are also owned by Messrs. Alfonso
Falivene, Philip Falivene, and Gennaro Falivene. This space is
primarily used for marketing operations. Rent expense for this space
was $9,000, $9,000, and $9,000, respectively, for the years ended
March 31, 1997, 1998, and 1999.
The Company has retained Jay Rosengarten as an independent sales
consultant. Mr Rosengarten has been paid $50,000 for his services.
The Company is the owner and beneficiary of life insurance
policies on the lives of Messrs. Falivene, each in the amount of
$300,000. In the event of the death of any such insured, the Company
has agreed to utilize the proceeds of such policy to purchase shares
of Common Stock from the deceased's estate at the market value of such
shares on the date of death.
STOCK PERFORMANCE GRAPH
The following chart compares the percentage change in the
cumulative total stockholder return of the common stock during the
period from March 31, 1994 through the fiscal year ended March 31, 1999
with the cumulative total return on the NASDAQ Composite Index and the
Company Peer Group. The comparison assumes $100,000 was invested in
the Common Stock on March 31, 1994, and in each of the stocks included
in the NASDAQ Composite Index and the Company Peer Group.
(GRAPH OMMITED)
Legend
CRSP Total Returns Index For: 3/94 3/95 3/96 3/97 3/98 3/99
LUCILLE FARMS, INC. 100.0 90.6 100. 56.3 31.3 81.3
Nasdaq Stock Market
(US Companies) 100.0 111.2 151.1 167.9 254.6 342.6
NASDAQ Stocks
(SIC 5140-5149 US Companies)
Groceries and Related
Products: 100.0 76.9 96.6 141.5 261.1 235.0
Notes:
A. The lines represent monthly index levels derived from compound
daily returns that include all dividends.
B. The indexes are reweighted daily, using market capitalization
on the previous trading day.
C. If the monthly interval, based on the fiscal year-end, is not a
trading day, the preceding trading day is used.
D. The index level for all series was set to $100.0 on 03/31/1994.
RATIFICATION OF APPOINTMENT OF AUDITORS
The Board of Directors has selected the accounting firm of
Citrin Cooperman & Company, LLP to serve as independent auditors
of the Company and proposes the ratification of such decision. A
representative of Citrin Cooperman& Company, LLP is expected to be
present at the meeting to make a statement if he wishes to do so and to
respond to appropriate stockholder questions.
The Board of Directors recommends a vote FOR ratification of the
selection of Citrin Cooperman, LLP as the independent auditors for the
Company for the fiscal year ending March 31, 2000.
STOCKHOLDER PROPOSALS
Stockholders who wish to present proposals for actions at the
2000 Annual Meeting should submit their proposals in writing to the
Secretary of the Company at the address of the Company set forth on
the first page of this Proxy Statement. Proposals must be received
by the Secretary no later than June 3, 2000 in order that they be
considered for inclusion in proxy statements and proxy card relating to
that meeting. Stockholders who intend to present a proposal at the
Company's 2000 Annual Meeting of Stockholders without inclusion of
such proposal in the Company's proxy materials are required to provide
notice of such proposal to the Company no later than August 18, 2000.
The Company reserves the right to reject,rule out of order, or take
other appropriate action with respect to any proposal that does not
comply with these and other applicable requirements.
ANNUAL REPORT TO STOCKHOLDERS
The Annual Report to stockholders of the Companyfor the year
ended March 31, 1999, including auditedconsolidated financial
statements, has been mailed tothe stockholders concurrently herewith,
but such reportis not incorporated in this Proxy Statements and is
not deemed to be a part of the proxy solicitation material.
OTHER MATTERS
The Board of Directors of the Company does not know of any other
matters that are to be presented for action at the meeting. Should any
other matterscome before the meeting or any adjournments thereof, the
persons named in the enclosed proxy will have the discretionary
authority to vote all proxies received with respect to such matters in
accordance with their judgements.
A copy of the Company's Annual Report on Form-10K, as filed with
the Securities and Exchange Commission (exclusion of exhibits), will be
furnished without charge to any stockholder upon written request to
Stephen M. Katz, Vice President-Finance and Administration and Chief
Financial Officer, 150 River Road, P.O. Box 517, Montville, NJ 07045
By Order of the Board of Directors
Stephen M. Katz, Secretary
Montville, New Jersey
October 8, 1999
STOCKHOLDERS AER URGED TO SPECIFY THEIR CHOICES, DATE, SIGN
AND RETURN THE ENCLOSED PROXY IN THE ENCLOSED ENVELOPE. PROMPT
RESPONSE IS HELPFUL AND YOUR COOPERATION WILL BE APPRECIATED.
- -----------------
LUCILLE FARMS INC
150 RIVER ROAD, PO BOX 517, MONTVILLE, NJ 07045
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned, acknowledging receipt of the proxy
statement dated October 8,1999 of Lucille Farms, Inc.
hereby constitutes and appoints Alfonso Falivene and
Stephen M. Katz and each or any of them, attorney, agent
and proxy of the undersigned, with full power of substitution
to each of them, for and in the name, place and stead
of the undersigned on the books of said corporation on
October 15, 1999, at the Annual Meeting of Stockholders
of Lucille Farms, Inc. to be held at the Embassy Suites
Hotel, 909 Parsippany Blvd., Parsippany, New Jersey 07054,
on November 18, 1999, at 10:30 A.M., Eastern Standard Time,
and any adjourments therof.
When properly executed, this proxy will be voted as
designated by the undersigned. If no choice is specified,
the proxy will be voted FOR the following proposals, which
are set forth in the Proxy Statment.
1. ELECTION OF DIRECTORS
--- For all nominees listed below
(except as marked to the contrary below)
---- Withhold Authority to vote for
all nominees listed below
Gennaro Falivene, Alfonso Falivene, Stephen M. Katz
Howard S. Breslow, Jay M. Rosengarten
(INSTRUCTION: to withold authority to vote for any individual
nominee, strike a line through or otherwise strike nominee's
name in the list above.)
2. PROPOSAL TO RATIFY THE SELECTION OF CITRIN COOPERMAN &
COMPANY, LLP AS INDEPENDENT AUDITORS FOR THE YEAR ENDING
MARCH 31, 2000.
FOR --- AGAINST--- ABSTAIN---
3. FOR SUCH OTHER MATTERS THAT MAY PROPERLY COME BEFORE
THE MEETING AND ANY ADJOURNMENTS THEREOF
FOR--- AGAINST--- ABSTAIN---
Please sign exactly as name appears below. When shares
are held by joint tenants, both should sign. When signing
as attorney, administrator, trustee or guardian, please
give full title as such. If a corportaion, please sign in
full corporate name by President or other authorized officer.
If a partnership, please sign in partnership name by
authorized person.
Dated:___________________,1999
______________________________
Signature
______________________________
Signature if held jointly
PLEASE MARK, SIGN, DATE AND RETURN THE
PROXY CARD PROMPTLY IN THE ENCLOSED
ENVELOPE
