SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934
(Amendment No. )
Filed by the Registrant--X--
Filed by a Party other than the Registrant-----
Check the appropriate box:
- --- Preliminary Proxy Statement
- --- Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
- -X- Definitive Proxy Statement
- --- Definitive Additional Materials
- --- Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
LINCOLN SNACKS COMPANY
(Name of Registrant as Specified In Its Charter)
- ------------------------------------------------------------------------------
(Name of Person(s) Filing the Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
- -X- $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1) or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
- --- $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)3.
- --- Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies: N/A
2) Aggregate number of securities to which transaction applies: N/A
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined): N/A
4) Proposed maximum aggregate value of transaction: N/A
5) Total fee paid: N/A
- --- Fee paid previously with preliminary materials.
- --- Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid: N/A
2) Form, Schedule or Registration Statement No.: N/A
3) Filing Party: N/A
4) Date Filed: N/A
<PAGE>
LINCOLN SNACKS COMPANY
4 High Ridge Park
Stamford, Connecticut 06905
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
November 12, 1996
To the Stockholders:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Lincoln
Snacks Company (the "Company") will be held on November 12, 1996 at 10:00 a.m.
Eastern Standard Time at the offices of the Company at 4 High Ridge Park,
Stamford, Connecticut 06905 for the following purposes:
(1) To elect four members of the Board of Directors to serve until the next
annual meeting of stockholders and until their successors are duly elected
and qualified; and
(2) To transact such other business as may properly be brought before the
meeting or any adjournment thereof.
The Board of Directors has fixed October 16, 1996 as the record date for the
determination of the stockholders entitled to notice of and to vote at such
meeting or any adjournment thereof, and only stockholders of record at the
close of business on that date are entitled to notice of and to vote at such
meeting.
A copy of the Company's Annual Report to Stockholders for the fiscal year
ended June 30, 1996 is enclosed herewith.
By Order of the Board of Directors.
/s/ Kristine A. Crabs
-----------------------------
Kristine A. Crabs, Secretary
Dated: Stamford, Connecticut
October 17, 1996
YOU ARE REQUESTED TO COMPLETE AND RETURN THE ENCLOSED PROXY IN THE ENCLOSED
ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. IF YOU
ATTEND THE MEETING, YOUR PROXY WILL BE RETURNED TO YOU AT THE MEETING UPON
REQUEST TO THE SECRETARY OF THE MEETING.
LINCOLN SNACKS COMPANY
4 High Ridge Park
Stamford, Connecticut 06905
PROXY STATEMENT
Annual Meeting of Stockholders
November 12, 1996
This Proxy Statement and accompanying form of proxy are being furnished in
connection with the solicitation of proxies by the Board of Directors of
Lincoln Snacks Company, a Delaware corporation ("Lincoln" or the "Company"),
for use at the Annual Meeting of Stockholders to be held on November 12, 1996,
at 10:00 a.m. Eastern Standard Time at the offices of the Company at 4 High
Ridge Park, Stamford, Connecticut 06905, or any adjournment thereof
(the "Meeting"). Copies of this Proxy Statement, the attached Notice of
Annual Meeting of Stockholders, and the enclosed form of proxy were first
mailed to stockholders on or about October 17, 1996. The principal executive
offices of Lincoln are located at 4 High Ridge Park, Stamford, Connecticut
06905. The telephone number of Lincoln's principal executive offices is
(203) 329-4545.
A proxy in the accompanying form, which is properly executed, duly
returned to the Board of Directors and not revoked, will be voted in
accordance with the instructions contained in the proxy. If no
instructions are given with respect to any matter specified in the
Notice of Annual Meeting to be acted upon at the Meeting, the proxy
will vote the shares represented thereby FOR the nominees for directors
set forth below, and in accordance with his or her best judgment on any
other matters which may properly be brought before the Meeting. The
Board of Directors currently knows of no other business that
will be presented for consideration at the Meeting.
Each stockholder who has executed a proxy and returned it to the Board of
Directors may revoke the proxy by written request to the Secretary of the
Company, or by attending the Meeting in person and requesting the return of
the proxy, in either case at any time prior to the voting of the proxy.
Presence at the Meeting does not itself revoke the proxy. The cost of the
solicitation of proxies will be paid by the Company. In addition to the
solicitation of proxies by the use of the mails, management and regularly
engaged employees of the Company may, without additional compensation therefor,
solicit proxies on behalf of the Company by personal interviews, telephone or
other means, as appropriate. The Company will, upon request, reimburse brokers
and others who are only record holders of the Company's common stock, par value
$.01 per share ("Common Stock"), for their reasonable expenses in forwarding
proxy material to, and obtaining voting instructions from, the beneficial
owners of such stock.
The close of business on October 16, 1996, has been fixed as the record
date (the "Record Date") for determining the stockholders entitled to notice
of and to vote at the Meeting or any adjournment thereof. As of the Record
Date, there were 6,340,890 shares of Common Stock issued and outstanding and
entitled to vote.
Each share of Common Stock entitles the holder thereof to one vote. A
majority of the shares of Common Stock issued, outstanding and entitled to
vote must be present in person or represented by proxy at the Meeting in
order to constitute a quorum for the transaction of business. Abstentions
and broker non-votes (i.e. shares held by brokers or nominees as to which (i)
the broker or nominee does not have discretionary authority to vote on a
particular matter and (ii) instructions have not been received from the
beneficial owners) are counted as present in determining whether the quorum
requirement is satisfied.
The election of directors shall be determined by a plurality of the
shares of Common Stock present in person or represented by proxy at the
Meeting. Only shares that are voted in favor of a particular nominee will
be counted towards such nominee's achievement of a plurality. For the
election of directors, abstentions and broker non-votes shall be treated as
present at the Meeting, but will not be treated as votes cast. Thus for
such purposes, abstentions and broker non-votes will have no effect on the
outcome of the vote.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The table below sets forth certain information as of October 16, 1996
as to the beneficial ownership of the Common Stock and the common stock,
par value $.10 per share, of Noel Group, Inc. ("Noel Common Stock") by
(i) each person known by the Company to own beneficially more than 5% of
the issued and outstanding shares of Common Stock, (ii) each current
director, (iii) each of the Named Executive Officers (as defined in the
section entitled "Executive Compensation"), and (iv) all current directors
and executive officers as a group.
<TABLE>
<CAPTION>
Noel Common Stock Lincoln Common Stock
- ----------------------------------------------------------- ------------------------
Name and Address of Number of Percentage Number of Percentage
Beneficial Owner Shares<F1> Owned<F2> Shares<F3> Owned<F4>
- ----------------------------------------------------------- ------------------------
<S> <C> <C> <C> <C>
5% Stockholders
Noel Group, Inc. - - 3,769,755 59.5%
667 Madison Avenue
New York, New York 10021
Lawrence, Kamin, Saunders - - 489,000<F5> 7.7%
& Uhlenhop on behalf of
Gofen & Glossberg, Inc.
208 S. LaSalle St., Suite 1750
Chicago, IL 60604
Directors
Karen Brenner 233,334<F6> 1.1% 215,001<F7> 3.4%
C. Larry Davis 0 - 73,000<F8> 1.1%
Alexander P. Lynch 0 * 27,500<F9> *
James G. Niven 22,223<F10> * 27,500<F11> *
Named Executive Officers
Karen Brenner 233,334<F6> 1.1% 215,001<F7> 3.4%
R. Scott Kirk 0 - 80,610<F12> 1.3%
Kristine A. Crabs 0 - 28,181<F13> *
All executive officers and
directors as a group
(includes 6 persons) 255,557<F14> 1.3% 451,791<F15> 7.1%
* Less than 1%
<FN>
<F1> Unless otherwise indicated, each of the parties listed has sole voting
and investment power over the shares of Noel Common Stock owned. The
number of shares of Noel Common Stock indicated includes in each case
the number of shares of Noel Common Stock issuable upon exercise of
options to purchase Noel Common Stock to the extent that such options
are currently exercisable. For purposes of this table, such options are
deemed to be "currently exercisable" if they may be exercised within 60
days following the date of mailing of this Proxy Statement.
<F2> Based on 20,187,705 shares of Noel Common Stock issued and outstanding on
October 16, 1996. In addition, treated as outstanding for the purpose of
computing the percentage ownership of each director or Named Executive
Officer and of all executive officers and directors as a group are shares
of Noel Common Stock issuable to such individual or group upon exercise
of options to purchase Noel Common Stock to the extent currently
exercisable.
<F3> Unless otherwise indicated, each of the parties listed has sole voting
and investment power over the shares of Common Stock owned. The number
of shares of Common Stock indicated includes in each case the number of
shares of Common Stock issuable upon exercise of outstanding stock
options, to the extent that such options are currently exercisable. For
purposes of this table, such options are deemed to be "currently
exercisable" if they may be exercised within 60 days following the date
of mailing of this Proxy Statement.
<F4> Based on 6,331,790 shares of Common Stock issued and outstanding on
October 16, 1996. In addition, treated as outstanding for the purpose
of computing the percentage ownership of each director or Named Executive
Officer and of all executive officers and directors as a group are shares
of Common Stock issuable to such individual or group upon exercise of
options to purchase Common Stock to the extent currently exercisable.
<F5> The information set forth in the table and in this footnote regarding
shares beneficially owned by Gofen & Glossberg, Inc. ("Gofen &
Glossberg") is based on a Schedule 13G dated February 12, 1996 filed
with the Securities and Exchange Commission by Gofen & Glossberg.
<F6> Consists of shares issuable upon exercise of options to purchase Noel
Common Stock.
<F7> Consists of 9,100 shares held by Ms. Brenner directly, 39,234 shares
issuable upon exercise of options granted by the Company and 166,667
shares issuable upon exercise of the Noel Option, but does not include
an additional 33,333 shares issuable pursuant to the Noel Option which
are not currently exercisable.
<F8> Consists of 25,500 shares held by Mr. Davis directly, 20,000 shares held
by Mr. Davis' wife as trustee for Mrs. Davis' children, with respect to
which shares Mr. Davis disclaims beneficial ownership, and 27,500 shares
issuable upon exercise of options granted by the Company.
<F9> Consists of 27,500 shares issuable upon exercise of options to purchase
Common Stock granted by the Company.
<F10> Consists of 22,223 shares issuable upon exercise of options to purchase
Noel Common Stock granted by Noel.
<F11> Consists of 9,100 shares held by Mr. Niven directly and 18,400 shares
issuable upon exercise of options to purchase Common Stock granted by
the Company.
<F12> Consists of 68,250 shares held by Mr. Kirk directly and 12,360 issuable
upon exercise of options to purchase Common Stock granted by the Company
which are currently exercisable. The number indicated does not include
an additional 53,390 shares issuable pursuant to options granted by the
Company which are not currently exercisable.
<F13> Consists of 22,750 shares held by Ms. Crabs directly and 5,431 shares
issuable upon exercise of options to purchase Common Stock granted by
the Company which are currently exercisable. The number indicated does
not include an additional 17,069 shares issuable pursuant to options to
purchase Common Stock granted by the Company which are not currently
exercisable.
<F14> Consists of 255,557 shares issuable upon exercise of options granted by
Noel.
<F15> Includes 317,092 shares issuable upon exercise of options granted by
the Company and Noel and certain shares with respect to which beneficial
ownership is disclaimed.
</FN>
</TABLE>
Election of Directors
At the Meeting, four directors are to be elected by the stockholders,
each to hold office until the next Annual Meeting of Stockholders and until
their successors are duly elected and qualified. The four nominees for
election as directors are, Karen Brenner, C. Larry Davis, Alexander P.
Lynch and James G. Niven. The four nominees are presently serving as
directors of the Company. Unless otherwise specified, the enclosed proxy
will be voted in favor of the nominees named herein for election. The
proxies cannot be voted for a greater number of persons than the number
of nominees named. Should any nominee named herein for election become
unavailable for any reason, it is intended that votes will be cast
pursuant to the accompanying proxy for such substitute nominees as the
Board of Directors may recommend unless the Board reduces the number of
directors to be elected. Each of the nominees has consented to serve
if elected.
The number of directors which constitutes the full Board of Directors is
currently fixed at four. The By-laws of the Company provide that the number
of directors which shall constitute the full Board may be changed from time
to time by resolution adopted by the Board of Directors or the stockholders,
provided that no decrease made in such manner shall shorten the term of any
incumbent director.
Information Concerning Director Nominees and Executive Officers
The information set forth below, furnished to the Board of Directors
by the respective individuals, shows as to each director, director nominee
and each of the executive officers of the Company (i) his or her name and
age; (ii) his or her principal position with the Company; (iii) his or her
principal occupation or employment, if different, and (iv) the month and
year in which he or she began to serve as a director or executive officer.
Directors hold office until the next annual meeting of stockholders of the
Company and until their successors have been elected and qualified or until
their earlier resignation or removal. Officers serve at the discretion of
the Board of Directors. No family relationship exists among any of the
executive officers and directors of the Company.
<TABLE>
<CAPTION>
Principal
Occupation
Principal or Director or
Position Employment, Executive
Name and Age With Lincoln If Different Officer Since
- ------------------------------------------------------------------------------
<S> <C> <C> <C>
Karen Chairman and Managing Director, Director since
Brenner(40) Chief Executive Noel Group, August, 1992;
Officer; Inc. Chairman and
Director <F1><F2> Chief Executive
Officer since
June 1994
C. Larry Director<F3><F4> Chairman, Chief August, 1992
Davis(55) Executive Officer
and Principal
of Farmhouse
Foods Company
Alexander P. Director<F1><F2> Co-President November, 1993
Lynch(44) and Co-Chief
Executive
Officer of The
Bridgeford Group
James G. Director<F3><F4> Managing Director, October, 1992
Niven(50) Burson-
Marsteller
R. Scott Kirk(44) Executive Vice Mr. Kirk was
President and appointed to
Chief Operating this office in
Officer May 1995. Mr.
Kirk had
served as Vice
President-
General
Manager since
September, 1992
Kristine A. Crabs(33) Vice President and Ms. Crabs was
Chief Financial appointed to
Officer, this office
Secretary and in July 1996.
Treasurer Ms. Crabs had
served as
Vice President-
Finance and
Administration,
Secretary and
Treasurer since
January, 1993
<FN>
<F1> Member of the Executive Committee.
<F2> Member of the Compensation Committee.
<F3> Member of the Long Term Equity Incentive Committee.
<F4> Member of the Audit Committee.
</FN>
</TABLE>
Biographical Information
The following sets forth the principal occupations of each of the
Company's executive officers and director nominees during the previous five
years, as well as the names of any other public or registered investment
companies of which they are directors.
Karen Brenner has served as Chairman and Chief Executive Officer since
June 20, 1994. Ms. Brenner has also served as a director of Lincoln since its
inception and has served as a director of Noel Group, Inc., a company which
conducts its principal operations through small and medium-sized operating
companies (including Lincoln) in which it holds controlling or other
significant equity interests, from October 1989 until November 1991, and as a
Vice President of Noel from April 1989 until November 1991, when she became a
Managing Director. Prior to joining Noel, Ms. Brenner was a principal in a
management and financial consulting business, specializing in managing
turnaround situations for venture capital and leveraged buyout companies.
In February 1996, Ms. Brenner was elected Vice Chairman, director and
consultant of Belding Heminway Company, Inc., ("Belding Heminway") and on
May 9, 1996, she was elected Chairman of the Board. Belding Heminway
manufactures and markets industrial threads and consumer threads and is a
distributor of home sewing and crafts products, principally buttons. Ms.
Brenner is a director of On Assignment, Inc., a leading nationwide provider
of science professionals on temporary assignments to laboratories in the
biotechnology, environmental, chemical, pharmaceutical, food and beverage and
petrochemical industries. Ms. Brenner is currently a member of the Board of
Trustees of Prep for Prep, a charitable organization dedicated to providing
preparatory education to disadvantaged children, and a trustee of the City
Parks Foundation of New York.
C. Larry Davis has served as a director of Lincoln since its inception.
He is Chairman of the Board, Chief Executive Officer and a principal of
Farmhouse Foods Company. Mr. Davis has a broad food and beverage industry
background with over 25 years experience at Nestle S.A. (1973-1992) and
PepsiCo Inc. (1967-1973) in both domestic and international business
operations. During the period from 1984 through 1991, Mr. Davis served
as Group Vice President and President of the $500 million Nestle Specialty
Products Company where he was primarily involved in the successful turnaround
of under-performing businesses, the creation of new business growth divisions,
and acquisitions and divestitures.
Alexander P. Lynch has served as a director of Lincoln since November
1993. Mr. Lynch has been Co-President and Co-Chief Executive Officer of The
Bridgeford Group ("Bridgeford"), a financial advisory firm, since January
1995. From April 1991 to December 1994 he served as a Senior Managing
Director of Bridgeford. From 1985 until April 1991, Mr. Lynch was a
Managing Director of Lehman Brothers, a division of Shearson Lehman Brothers
Inc. Mr. Lynch is also a director of Illinois Central Corporation, a railroad
holding company, and a member of the Board of Directors of Patina Oil & Gas
Corporation, an independent oil and gas company engaged in exploration and
development.
James G. Niven has served as a director of Lincoln since October 1992.
He is currently a Managing Director of Burson-Marsteller, a public relations
firm, and, since 1982, has been a general partner of Pioneer Associates, a
venture capital investment company. He is also a director and Co-Chairman of
The Lynton Group, Inc., a company engaged in aircraft charter and maintenance,
a Chairman of Omar Torres, Inc., a jewelry design company, and is also a
director of Noel Group, Inc., The Prospect Group, Inc., a company which prior
to its adoption in 1990 of a Plan of Complete Liquidation and Distribution
conducted its major operations through subsidiaries acquired in leveraged
buyout transactions, Global Natural Resources, Inc., a company engaged in the
exploration, development and production of oil and gas, Tatham Offshore, Inc.,
an independent energy company engaged in the development, exploration and
production of offshore oil and gas reserves, HealthPlan Services Corporation,
a leading managed healthcare service company, Hudson River Capital LLC, a
limited liability company which conducts its operations through medium and
large sized entities in which it holds either controlling or non-controlling
equity interests, CBT Bancshares, Inc., a multi-financial holding company, and
an advisory director of Houston National Bank, a commercial bank. He is a
member of the Board of Managers of Memorial Sloan-Kettering Cancer Center, and
a trustee of the Museum of Modern Art and the National Center for Learning
Disabilities, Inc.
R. Scott Kirk has served as Executive Vice President and Chief Operating
Officer since May 26, 1995. Prior to this appointment Mr. Kirk served as Vice
President-General Manager of Lincoln since September 14, 1992. Mr. Kirk began
his career with Amstar Corporation (Domino Sugar) in New York as an internal
auditor in 1974 and held various positions of increasing responsibility
culminating in his appointment as Assistant Manager of General Credit. In
1982, Mr. Kirk joined Continental Grain Company, in New York as Director-
Corporate Credit with worldwide responsibility for credit granting and trade
finance. Joining Nestle in 1985 as General Credit Manager, Mr. Kirk was
responsible for managing the credit exposure of a $2 billion in sales and a
$100 million receivables portfolio. In 1987, Mr. Kirk became Business
Controller for the Developing Business Group within Nestle; a mixture of
seven diverse businesses with total sales in excess of $400 million. In
August 1990, Mr. Kirk was promoted to Vice President-Finance and Chief
Financial Officer of Nestle Dairy Systems.
Kristine A. Crabs joined Lincoln in January 1993 as Vice President of
Finance and Administration, and on July 18, 1996 was promoted to Vice
President and Chief Financial Officer. Prior to joining Lincoln, Ms. Crabs
was a Senior Audit Manager with KPMG Peat Marwick, specializing in the food
and consumer products industries.
Meetings and Committees of the Board
The Board of Directors has standing Executive, Audit, Compensation and
Long Term Equity Incentive Committees. There is no formal Nominating
Committee; the Board of Directors or the Executive Committee performs this
function. None of the directors who serve on any of such Committees is an
employee or officer of the Company except that Ms. Brenner, who serves on the
Executive and Compensation Committees is Chairman of the Board and Chief
Executive Officer.
The Executive Committee, consists of Ms. Brenner and Mr. Lynch. The
Executive Committee has all the powers of the Board of Directors in the
management of the business and affairs of the Company, except as such powers
are limited by the Delaware General Corporation Law. The Executive Committee
did not meet during the fiscal year ended June 30, 1996.
The Audit Committee, consists of Messrs. Niven and Davis. The Audit
Committee consults with the auditors of the Company and such other persons as
the members deem appropriate, reviews the preparations for and scope of the
audit of the Company's annual financial statements, reviews drafts of such
statements, recommends to the Board such action, including the engagement and
fees of the independent auditors, as the Committee deems appropriate, and
monitors the functioning of the Company's accounting and internal control
systems by meeting with representatives of management and the independent
auditors, and performs such other duties relating to the financial statements
and other matters of the Company as the Board of Directors may assign from
time to time. The Audit Committee met once during the fiscal year ended
June 30, 1996.
The Compensation Committee, consists of Ms. Brenner and Mr. Lynch. The
Compensation Committee has all of the powers of the Board of Directors,
relating to the compensation of or providing incentives for the officers,
directors, employees and other persons performing substantial services for
the Company, other than those matters delegated by the Board to the Long
Term Equity Incentive Committee. During the fiscal year ended June 30,
1996, the Compensation Committee met once.
The Long Term Equity Incentive Committee, consists of Messrs. Niven and
Davis. The Long Term Equity Incentive Committee has all of the powers of
the Board of Directors with respect to the administration of the 1993 Stock
Option Plan and the Non-Employee Directors' Plan (collectively, the "Stock
Option Plans"), including with respect to the 1993 Stock Option Plan, the
authority to grant options to qualified persons to purchase shares of Common
Stock upon the terms set forth in such plan and the authority to issue shares
of Common Stock in respect of such issuance. During the fiscal year ended
June 30, 1996, the Long Term Equity Incentive Committee met once.
During the fiscal year ended June 30, 1996, the Board of Directors held
four meetings. All of the directors attended at least 75% of the total
number of meetings held, during the fiscal year ended June 30, 1996, by (i)
the Board and (ii) the Board Committees of which they were members.
Beneficial Ownership Reporting Compliance with Section 16(a) of the
Securities Exchange Act of 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's officers and directors, and persons who own more than ten percent
of a registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the SEC and to furnish the Company
with copies of such reports.
Based solely on its review of the copies of such forms furnished to the
Company by such reporting persons during the fiscal year ended June 30, 1996,
or written representations from such reporting persons that no Forms 5 were
required for those persons with respect to such period, the Company believes
that during the fiscal year ended June 30, 1996 all filing requirements
applicable to its officers, directors, and greater than ten-percent
beneficial owners were complied with.
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth certain information regarding compensation
awarded or paid to, or earned by, during each of the last three fiscal years,
the person who served as the Chairman and Chief Executive Officer during the
fiscal year ended June 30, 1996, and the Company's executive officers (other
than the Chairman and Chief Executive Officer) who were serving as executive
officers during the fiscal year ended June 30, 1996 and whose total salary
and bonus during the fiscal year ended June 30, 1996 exceeded $100,000 (the
"Named Executive Officers").
<TABLE>
<CAPTION>
Long Term Compensation
--------------------------------------
Annual Compensation Awards Payouts
------------------------------------ ------------------------ ----------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Other
Annual Restricted All Other
Name and Compen- Stock LTIP Compen-
Principal Bonus sation Award(s) Options/ Payouts sation
Position Year<F1> Salary ($) ($) ($)<F2> ($) SARs(#) ($) ($)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Karen Brenner 1996 - - - - 5,000<F3> - 175,000<F4>
Chairman and 1995 - - - - 2,500<F3> - 175,000<F4>
Chief Executive 1994 - - - - 200,000<F5> - 5,966<F6>
Officer
R. Scott Kirk<F7> 1996 160,000 30,000 - - - - 3,200<F8>
Executive Vice 1995 143,000 4,000 - - 7,000<F9> - 2,860<F8>
President and 1994 141,667 - - - - - 2,833<F8>
Chief Operating
Officer
Kristine A. Crabs 1996 105,400 20,000 - - - - 2,108<F10>
Vice President and 1995 95,400 4,000 - - 5,000<F9> - 1,908<F10>
Chief Financial 1994 92,700 0 - - - - 1,854<F10>
Officer
<FN>
<F1> Reference to 1996, 1995 and 1994 herein means each fiscal year ending
June 30, respectively.
<F2> The dollar value of perquisites and other personal benefits for each of
the Named Executive Officers was less than established reporting
thresholds.
<F3> Awarded to Ms. Brenner pursuant to the Company's Non-Employee
Directors' Stock Option Plan.
<F4> Consists of $175,000 paid by Noel. Reference is made to "Employment
Contracts and Termination of Employment and Change in Control
Arrangements" for a description of Ms. Brenner's employment arrangement
with Noel.
<F5> Effective June 20, 1994, Noel granted Ms. Brenner an option to purchase
200,000 shares of the Company's Common Stock held by Noel (the "Noel
Option").
<F6> Consists of $5,966 paid by Noel.
<F7> On May 23, 1995, Mr. Kirk was appointed Executive Vice President and
Chief Operating Officer by the Board of Directors. Mr. Kirk had served
as Vice-President - General Manager since September 14, 1992.
<F8> Consists of amounts contributed by the Company to Mr. Kirk's account
under the Company's 401(k) plan.
<F9> Awarded on December 15, 1994 pursuant to the Company's 1993 Stock Option
Plan.
<F10> Consists of amounts contributed by the Company to Ms. Crabs' account
under the Company's 401(k) plan.
</FN>
</TABLE>
Options/SAR Grants During the Fiscal Year Ended June 30, 1996
The following table sets forth, information regarding individual grants
of stock options made during the fiscal year ended June 30, 1996 to each of
the Named Executive Officers, and their potential realizable values.
<TABLE>
<CAPTION>
Potential Realizable Value at
Assumed Annual Rates of
Stock Price Appreciation for
Individual Grants Option Term
- ------------------------------------------------------------------------------------------- ------------------------------
(a) (b) (c) (d) (e) (f) (g)
Number of % of Total
Shares Options/SAR's
Underlying Granted to Exercise or
Options/SAR's Employees in Base Price Expiration
Name Granted Fiscal Year ($/Sh) Date 5% ($) 10% ($)
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Karen Brenner 5,000<F1> - $2.70 11/14/05 - $4,332
R. Scott Kirk - - - - - -
Kristine A. Crabs - - - - - -
<FN>
<F1> Granted on November 14, 1995 pursuant to the Company's
Non-Employee Directors' Stock Option Plan.
</FN>
</TABLE>
Aggregate Option/SAR Exercises During the Fiscal Year and Fiscal Year End
Option/SAR Values
The following table provides information related to options exercised
by the Named Executive Officers during the fiscal year ended June 30, 1996
and the number and value of unexercised stock options held by the Named
Executive Officers at that date. The Company does not have any outstanding
stock appreciation rights.
<TABLE>
<CAPTION>
Value of Unexercised
Number of Unexercised In-the-Money
Options/SARs at Options/SARs
Fiscal Year-End (#) at Fiscal Year-End <F1>($)
----------------------------- -----------------------------
(a) (b) (c) (d) (e)
Shares Acquired
Name on Exercise (#) Value Realized ($) Exercisable Unexercisable Exercisable Unexercisable
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Karen Brenner - - 185,067 33,333 0 0
R. Scott Kirk - - 32,050 23,700 0 0
Kristine A. Crabs - - 9,500 8,000 0 0
<FN>
<F1> Based on a closing price of Common Stock on June 30, 1996
of $1.375 per share.
</FN>
</TABLE>
Compensation of Directors
Prior to November, 1995 non-employee directors were paid an annual
retainer of $5,000 for serving as directors of the Company. In November,
1995 the non-employee directors elected not to receive an annual retainer
for calendar 1996 and thereafter. Directors of the Company are also
reimbursed for their out-of-pocket expenses incurred in connection with
their service as directors, including travel expenses. Pursuant to the
Company's Non-Employee Directors' Stock Option Plan, as amended, each non-
employee director, following initial election to the Board, automatically
receives an option to purchase 20,000 shares of Common Stock at an exercise
price equal to the fair market value per share on the date of grant, and each
non-employee director automatically receives an option to purchase 5,000
shares of Common Stock immediately following such director's re-election at
an exercise price equal to the fair market value of a share of Common Stock
on the date of grant.
Prior to September, 1995, the Company engaged C. Larry Davis, a director
of the Company, on a year-to-year basis, to act as export agent for all of
the Company's export business other than Canada. Mr. Davis was paid a fee of
2% of net billings, i.e. the price to the Company paid by customers after
deduction of returns and allowances. The Company now handles all export
customers internally and an export broker commission is no longer being paid
to Mr. Davis. During the period from July 1, 1995 through June 30, 1996,
the Company paid Mr. Davis approximately $9,200 pursuant to this agreement
as well as $1,900 in director's fees. The Company believes that the terms
of the arrangement with Mr. Davis were no less favorable to the Company
than those that would have been available from an unrelated party.
Employment Contracts and Termination of Employment and Change in Control
Arrangements
Pursuant to a letter agreement dated March 1, 1996 by and between
Ms. Brenner and Noel, as amended by letter dated March 21, 1996, Ms. Brenner
is employed in an executive capacity by Noel for a period of two years. The
term may be extended by mutual agreement. Pursuant to the agreement, Ms.
Brenner has agreed to perform such executive services in connection with Noel
and entities in which Noel holds interests, including Lincoln, as shall
reasonably be assigned to Ms. Brenner by the Board of Directors or Chief
Executive Officer of Noel. $175,000 of the salary paid to Ms. Brenner
pursuant to this agreement is deemed to be paid for services rendered
to Lincoln.
In addition, as evidenced by a letter agreement dated March 22, 1995,
in consideration for Ms. Brenner agreeing to serve as Chairman and Chief
Executive Officer, effective June 20, 1994, Noel granted Ms. Brenner an
option to purchase 200,000 shares of the Company's Common Stock held by Noel
at a price of $1.50 per share. Options to purchase 166,667 of such shares
are currently exercisable. The balance is exercisable on the earlier to
occur of (x) the eighth anniversary of the date of grant, provided that Ms.
Brenner shall have continued to serve as Chief Executive Officer continuously
through such date, and (y) from and after the date the stock price reaches
$5.00. The vested options will terminate on the fourth anniversary of the date
Ms. Brenner ceases to so serve as Chief Executive Officer or the tenth
anniversary of the date of grant whichever is earlier. The shares purchasable
by Ms. Brenner pursuant to the forgoing options have been registered under
the Securities Act of 1933, as amended, permitting the resale of such shares
to the public following exercise of such options by Ms. Brenner.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Decisions regarding compensation of the Company's executive officers
(other that the Chairman and Chief Executive Officer), are generally made
by the Compensation Committee, formed in February 1993, and the Long Term
Equity Incentive Committee, formed in November 1993. Prior to the formation
of such Committees, decisions regarding executive compensation were made by
the Board of Directors. The current members of the Compensation Committee are
Alexander P. Lynch and Karen Brenner. Except for Ms. Brenner, none of the
members of the Compensation Committee during the fiscal year ended June 30,
1996 were officers or employees of the Company. The current members of the
Long Term Equity Incentive Committee are James G. Niven and C. Larry Davis.
Pursuant to rules adopted by the SEC designed to enhance disclosure of
companies regarding executive compensation, set forth below is a joint report
submitted by the members of the Compensation Committee and the Long Term
Equity Incentive Committee (sometimes collectively referred to as the
"Committee") addressing the Company's compensation policies for the fiscal
year ended June 30, 1996 as they affected the Company's executive officers
generally and, in particular, as they affected Ms. Brenner, the Chairman and
Chief Executive Officer of the Company.
Compensation of Chairman
SEC regulations require the Committee to disclose the Committee's bases
for compensation reported for Ms. Brenner during the fiscal year ended
June 30, 1996 and to discuss the relationship between such compensation
and the Company's performance during such period.
No salary or bonus was paid to Ms. Brenner by the Company during the
fiscal year ended June 30, 1996. Pursuant to Ms. Brenner's agreement with
Noel, Ms. Brenner has agreed to perform such executive services in connection
with Noel and entities in which Noel holds interests, including Lincoln, as
shall reasonably be assigned to Ms. Brenner by the Board of Directors or Chief
Executive Officer of Noel. $175,000 of the salary paid to Ms. Brenner
pursuant to this agreement is deemed to be paid for services rendered to
Lincoln. In addition, pursuant to the Non-Employee Directors' Plan,
effective November 14, 1995, Ms. Brenner received an option to purchase 5,000
shares of Common Stock at an exercise price of $2.70 per share.
Compensation Policies Regarding Executive Officers
Compensation paid to the Named Executive Officers (other than the
Chairman and Chief Executive Officer) during the fiscal year ended June
30, 1996 consisted of salary and annual bonus.
The executive compensation policies of the Company are intended to
provide competitive levels of compensation in order to attract and retain
qualified executives and to align managements' and stockholders' interests
in the enhancement of stockholder value over the long term. In addition,
through the grant to the executive officers of options to purchase a
significant amount of Common Stock, the Long Term Equity Incentive Committee
has in the past utilized the Company's 1993 Stock Option Plan to provide
long-term incentives to executive officers by enabling them to share in the
future growth of the Company's business. The Company has also established a
401(k) plan to assist in retaining qualified executives.
The Committee believes that the Company's executive officers should be
compensated comparably with executive officers of other publicly held
companies engaged in the business of manufacturing, distributing and
marketing snack food products. The Compensation Committee believes that the
Company competes with such organizations for qualified executives and is
therefore required to adopt competitive salary structures. In setting
compensation, the Committee considers on an informal basis compensation paid
by other corporations in businesses similar to the Company, as well as the
individual contributions to the Company which each of the executives has made
and could be expected to make in the future and such other factors as the
Committee may deem relevant at the time of making such determinations.
Base salaries for the Company's executive officers are determined by the
Compensation Committee on an annual basis. In setting such base salaries, the
Compensation Committee considered the factors set forth in the preceding
paragraph.
While the Compensation Committee considers objectively measurable
performance criteria such as profitability, revenue growth, return on equity,
market share and operating budget performance in determining annual bonuses,
the Compensation Committee believes that relying solely on such criteria may
tend to stress short term performance at the cost of long term growth.
Instead, the Compensation Committee's decisions as to annual bonuses are based
primarily on the Compensation Committee's informal evaluation of subjective
criteria of individual performance. Such subjective performance criteria
encompass evaluation of overall contribution to achievement of the Company's
business objectives, managerial ability, and the executive officer's
performance in any special projects that the officer may have undertaken.
The Compensation Committee evaluated performance under these subjective
criteria and determined the amount of the executive officers' annual bonuses
for the fiscal year ended June 30, 1996 after informal discussions with other
members of the Board of Directors. The Committee considered primarily the
part played by the Company's executive officers in the accomplishments of the
Company during such fiscal year.
The Long Term Equity Incentive Committee believes that stock-based
performance compensation arrangements are beneficial in aligning managements'
and stockholders' interests in the enhancement of stockholder value over the
long-term. Thus, the Long Term Equity Incentive Committee has in the past
utilized the Company's stock option plans as an element in the Company's
compensation packages for its executive officers. The Long Term Equity
Incentive Committee believes that by making option grants to executive
officers, such officers will be motivated to generate potential gains by
working to steadily increase the Common Stock's price over the long term.
No option awards were made pursuant to the 1993 Stock Option Plan during
the fiscal year ended June 30, 1996.
The Company's 401(k) Plan is a broad-based employee benefit plan in
which the executive officers are permitted to participate on the same terms
as non-executive employees, subject to any legal limitations on the amounts
that may be contributed or the benefits that may be payable under the plan.
The Company matches the contributions of participating employees, including
executive officers, up to a certain level determined by the Board of
Directors, subject to legal limitations. Benefits under the 401(k) Plan
are not tied to Company performance.
Compensation Deduction Limitation. As part of the 1993 Omnibus Budget
Reconciliation Act, Congress enacted Section 162(m) of the Internal Revenue
Code, effective in 1994, which limited to $1 million per year the federal
income tax deduction available to public companies for compensation paid to
its chief executive officer and its four other highest paid executive
officers, unless that compensation qualifies for certain "performance-based"
exceptions provided for in that section of the Code. The Committee will
consider ways to maximize the deductibility of executive compensation, while
retaining the discretion the Committee deems necessary to compensate executive
officers in a manner commensurate with performance and the competitive
environment for executive talent. Under present employment arrangements, it
is not anticipated that any officer will receive compensation subject to this
limitation during the fiscal year ending June 30, 1997.
SUBMITTED JOINTLY BY THE COMPENSATION COMMITTEE AND LONG TERM EQUITY INCENTIVE
COMMITTEE OF THE BOARD OF DIRECTORS:
Karen Brenner C. Larry Davis Alexander P. Lynch James G. Niven
Compensation Committee Interlocks and Insider Participation
In February 1993, the Board of Directors formed a Compensation Committee,
the current members of which are Alexander P. Lynch and Karen Brenner. Except
for Ms. Brenner, none of the members of the Compensation Committee during the
last completed fiscal year were officers or employees of the Company. In
November 1993, the Board of Directors formed a Long Term Equity Incentive
Committee to administer the 1993 Stock Option Plan and the Non-Employee
Directors' Plan, the current members of which are James G. Niven and C. Larry
Davis. None of the members of the Long Term Equity Incentive Committee during
the fiscal year ended June 30, 1996 were officers or employees of the
Company. During the fiscal year ended June 30, 1996, no executive officer of
the Company served as a director or a member of the Compensation Committee
(or other board committee performing equivalent functions) of another entity
one of whose executive officers served on the Compensation Committee, the
Long Term Equity Incentive Committee, or the Board of Directors of the Company.
STOCK PERFORMANCE CHART
The Stock Performance Chart set forth below compares the cumulative
total shareholder return (change in stock price plus reinvested dividends) on
the Common Stock for the period beginning January 14, 1994 and ending on
June 30, 1996 with the cumulative total return on the NASDAQ Index and the
Media General Confectionery Goods Index over the same period. The comparison
assumes $100 was invested on January 14, 1994 in the Common Stock and in each
of the foregoing indices and that all dividends paid by companies included
in each index were reinvested.
<TABLE>
<CAPTION>
Cumulative Total Return Among Lincoln Snacks Company
NASDAQ Market Index and MG Group Index
January 14, June 30, June 30, June 30,
Company 1994 1994 1995 1996
----------------------------------------------------
<S> <C> <C> <C> <C>
Lincoln Snacks Company $100.00 $ 35.14 $ 67.57 $ 29.73
Media General Industry Group Index $100.00 $ 96.06 $100.96 $121.70
NASDAQ Broad Market Index $100.00 $100.75 $118.17 $148.75
Assumes $100 Invested on Jan. 14, 1994
Assumes Dividend Reinvested
Fiscal Year Ending June 30, 1996
</TABLE>
AUDITORS
As recommended by the Audit Committee of the Board of Directors, the
Board has selected Arthur Andersen LLP., as independent public accountants to
audit the financial statements of the Company for the fiscal year ending June
30, 1997. A representative of Arthur Andersen LLP. is expected to be present
at the Meeting and he or she will have the opportunity to make a statement if
he or she desires to do so and he or she is expected to be available to
respond to appropriate questions.
DEADLINE FOR STOCKHOLDER PROPOSALS
Stockholder proposals intended to be presented at the next annual
meeting of stockholders, to be held in 1997, must be received by the Company
at 4 High Ridge Park, Stamford, Connecticut 06905 by June 30, 1997, to be
included in the proxy statement and form of proxy relating to that meeting.
ANNUAL REPORT ON FORM 10-K
The Company's Annual Report on Form 10-K for the fiscal year ended
June 30, 1996, as filed with the SEC, is available to stockholders on request
and may be obtained by writing to: Lincoln Snacks Company, 4 High Ridge
Park, Stamford, Connecticut 06905, Attention: Ms. Kristine A. Crabs,
Secretary. A copy of the Company's Annual Report to Stockholders for
the fiscal year ended June 30, 1996 is enclosed.
OTHER BUSINESS
The Board of Directors does not know of any matters to be brought
before the Meeting for formal action other than the matters specified in the
Notice of Annual Meeting accompanying this Proxy Statement. If, however, any
matters not set forth in the Notice of Annual Meeting are properly brought
before the Meeting or any adjournment thereof, it is the intention of the
persons named in the enclosed form of proxy to vote such proxy in accordance
with their best judgment on such matters.
By Order of the Board of Directors.
/s/Kristine A. Crabs
----------------------------
Kristine A. Crabs, Secretary
Dated: Stamford, Connecticut
October 17, 1996
<PAGE>
LINCOLN SNACKS COMPANY
SOLICITED BY BOARD OF DIRECTORS FOR
ANNUAL MEETING OF STOCKHOLDERS
at the offices of the Company at 4 High Ridge Park, Stamford, Connecticut 06905
November 12, 1996, 10:00 A.M. Eastern Standard Time
The Undersigned hereby appoints Karen Brenner, Kristine A. Crabs and R. Scott
Kirk, and each of them acting alone, with full power of substitution, proxies
to vote the Common Stock of the undersigned at the 1996 Annual Meeting of
Stockholders of Lincoln Snacks Company, and any adjournment thereof, for the
following purposes:
(1) To elect four members of the Board of Directors to serve until the next
annual meeting of stockholders and until their successors are duly elected
and qualified; and
(2) To transact such other business as may properly be brought before the
meeting or any adjournment thereof.
Receipt of the Notice of Annual Meeting of Stockholders and accompanying Proxy
Statement of the Board of Directors is acknowledged.
IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR THE ELECTION OF DIRECTORS
The Board of Directors recommends a vote FOR all nominees
(Continued, and to be dated and signed on the reverse side)
1. Election of four (4) directors as described in the Proxy Statement of the
Board of Directors.
--- FOR all nominees listed below --- WITHHOLD AUTHORITY to vote for
(except as marked to the contrary below) all nominees listed below.
(Instruction: To withhold authority to vote for any individual nominee,
cross out that nominee's name from the list below).
Nominees: KAREN BRENNER, C. LARRY DAVIS, ALEXANDER P. LYNCH and JAMES G. NIVEN
Please sign exactly as your name appears herein. If
you are signing for the stockholder, please sign the
stockholder's name, your name and state the capacity
in which you are signing.
Date:---------------------------------------------, 1996
--------------------------------------------------------
Signature
--------------------------------------------------------
Signature
SIGN, DATE AND RETURN THIS PROXY CARD
PROMPTLY USING THE ENCLOSED ENVELOPE.
Votes MUST be indicated (X) in Black
or Blue Ink.
