LINCOLN SNACKS COMPANY
30 Buxton Farm Road
Stamford, Connecticut 06905
---------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
November 30, 2000
--------------
To the Stockholders:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
Lincoln Snacks Company (the "Company") will be held on November 30, 2000 at
10:00 a.m., Eastern Standard Time, at the offices of Lincoln Snacks Company
located at 30 Buxton Farm Road, Stamford, Connecticut 06905, for the
following purposes:
(1) To elect six 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 13, 2000 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, 2000 is enclosed herewith.
By Order of the Board of Directors,
/s/ Hendrik J. Hartong III
----------------------------------
Hendrik J. Hartong III, President
Stamford, Connecticut
October 26, 2000
---------------------------
TO ENSURE THAT YOUR SHARES WILL BE REPRESENTED AT THE MEETING, YOU ARE
REQUESTED TO COMPLETE, SIGN, DATE AND RETURN AS PROMPTLY AS POSSIBLE THE
ENCLOSED PROXY IN THE ENVELOPE PROVIDED, WHICH REQUIRES NO POSTAGE IF MAILED
IN THE UNITED STATES. IF YOU ATTEND THE MEETING, AND WISH TO VOTE IN
PERSON, YOUR PROXY WILL BE RETURNED TO YOU AT THE MEETING UPON REQUEST TO
THE SECRETARY OF THE MEETING.
<PAGE>
LINCOLN SNACKS COMPANY
30 Buxton Farm Road
Stamford, Connecticut 06905
----------------
PROXY STATEMENT
-----------------
Annual Meeting of Stockholders
November 30, 2000
-----------------
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 30, 2000, at 10:00 a.m., Eastern Standard Time, at the offices of
Lincoln Snacks Company located at 30 Buxton Farm Road, 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 are being mailed or given to stockholders beginning
on or about November 3, 2000. 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, the proxy will vote the shares represented thereby FOR the nominees
for directors 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 business other than that specified in the
Notice of Annual Meeting 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 from the
secretary of the Meeting 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 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 incurred in forwarding proxy material to the
beneficial owners of such stock.
The close of business on October 13, 2000, 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 6,331,790 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 entitled to vote must be present in
person or represented by proxy at the Meeting 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
votes cast 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
will 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.
Recent Developments
On October 2, 2000, Joanne W. Prier became Vice President, Chief
Financial Officer, Secretary and Treasurer of the Company; and Kristine A.
Crabs, then Vice President, Chief Financial Officer, Secretary and Treasurer
of the Company, resigned.
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The table below sets forth certain information as of October 13, 2000
regarding the beneficial ownership of 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 and nominee
for 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>
Name and Address of Number of Percentage
Beneficial Owner Shares<F1> Owned<F2>
------------------------------------ ---------- -----------
<S> <C> <C>
5% Stockholders
Brynwood Partners III L.P.<F3>
2 Soundview Drive
Greenwich, CT 06830 5,381,454 84.99%
Directors and Nominees for Director
Hendrik J. Hartong, Jr. 5,381,454<F3> 84.99%
John T. Gray 5,381,454<F3> 84.99%
Ian B. MacTaggart 30,000<F4> *
C. Alan MacDonald 35,000<F5> *
Hendrik J. Hartong III 100,000<F6> 1.55%
Robert Zwartendijk 20,000<F7> *
Named Executive Officers
Hendrik J. Hartong III 100,000<F6> 1.55%
Kristine A. Crabs 60,750<F8> *
David D. Clarke 32,000<F9> *
All executive officers and directors
as a group (includes 9 persons) 5,659,204<F10> 89.38%
-----------------------------
* Represents beneficial ownership of less than 1%
<FN>
<F1> 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 exercisable within
60 days from the date of determination which was October 13, 2000.
<F2> Based on 6,331,790 shares of Common Stock issued and outstanding on
October 13, 2000. In addition, treated as outstanding for the purpose
of computing the percentage ownership of each director, each nominee
for director and each Named Executive Officer and 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 which are exercisable within 60 days from the date of
determination.
<F3> Consists of 5,381,454 shares owned by Brynwood Partners III L.P.
Messrs. Hartong, Jr. and Gray are general partners of Brynwood
Management III L.P., which serves as general partner of Brynwood
Partners III L.P. Messrs. Hartong, Jr. and Gray each have voting and
investment power over the shares owned of record by Brynwood Partners
III L.P.
<F4> Consists of 30,000 shares issuable upon exercise of vested options to
purchase Common Stock granted by the Company.
<F5> Consists of 5,000 shares held by Mr. MacDonald directly and 30,000
shares issuable upon exercise of vested options to purchase Common
Stock granted by the Company.
<F6> Consists of 100,000 shares issuable upon exercise of options to
purchase Common Stock granted by the Company which are exercisable
within 60 days of the date of determination.
<F7> Consists of 20,000 shares issuable upon exercise of vested options to
purchase Common Stock granted by the Company.
<F8> Consists of 22,750 shares held by Ms. Crabs directly and 38,000 shares
issuable upon exercise of options to purchase Common Stock granted by
the Company which are exercisable within 60 days of the date of
determination.
<F9> Consists of 32,000 shares issuable upon exercise of options to
purchase Common Stock granted by the Company which are exercisable
within 60 days of the date of determination.
<F10> Includes 250,000 shares issuable upon exercise of options granted by
the Company which are exercisable within 60 days of the date of
determination and 5,381,454 shares owned by Brynwood Partners III L.P.
(see Note 3).
</FN>
</TABLE>
PROPOSAL NO. 1
Election of Directors
At the Meeting, six directors are to be elected. The six nominees for
election as directors are John T. Gray, Hendrik J. Hartong, Jr., Hendrik J.
Hartong III, C. Alan MacDonald, Ian B. MacTaggart and Robert Zwartendijk.
Each nominee is presently serving as a director of the Company and each
nominee has consented to serve if elected. Unless otherwise specified, the
enclosed proxy will be voted in favor of the nominees named herein for
election. 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. The number of directors which constitutes the full Board of
Directors is currently fixed at six. The By-laws of the Company provide
that the number of directors which constitutes 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 may shorten the term of any
incumbent director.
The Board recommends a vote FOR each of the nominees listed below.
<PAGE>
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 of the director nominees 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 of
the Company. Each director holds office until the next annual meeting of
stockholders of the Company and until his successor has been elected and
qualified or until such director's earlier resignation or removal. Officers
serve at the discretion of the Board of Directors. The age of each of the
director nominees and executive officers is given as of October 27, 2000.
John T. Gray, age 64, has been a member of the Board of Directors of the
Company since June 1998. Mr. Gray has been a general partner since 1996 of
Brynwood Management III, the general partner of Brynwood Partners III L.P.,
a private investment partnership. During the period 1984 through 1995, Mr.
Gray served as President and Chief Executive Officer of The Genie Company
and was Executive Vice President from 1982 to 1984. Prior to that, from
1974 through 1982, Mr. Gray served as Vice President and General Manager of
the Norelco Division of North American Philips Corporation. Mr. Gray is a
director of Associated Materials, Incorporated.
Hendrik J. Hartong, Jr., age 61, has been a member of the Board of
Directors of the Company since June 1998. Mr. Hartong, Jr. is a general
partner of Brynwood Management III and Brynwood Management IV, L.P., the
general partner Brynwood Partners III L.P. and Brynwood Partners IV, L.P.
Mr. Hartong is also a general partner of Brynwood Management II, L.P., the
general partner of Brynwood Partners II, L.P. and until December 31, 1998
was a general partner of Brynwood Management, the general partner of
Brynwood Partners Limited Partnership, private investment partnerships. Mr.
Hartong, Jr. is a director of Hurco Companies, Inc.
C. Alan MacDonald, age 67, has been a member of the Board of Directors
of the Company since July 1998. Mr. MacDonald is President of The Club
Management Company, LLC, a golf club management company. Prior to this he
was Managing Partner of Directorship, Inc., a full service board governance
consulting firm from 1997 to 1999. During the period 1995 through 1997, Mr.
MacDonald was a General Partner of The Marketing Partnership. Prior to
that, from 1992 to 1994, Mr. MacDonald was the Chief Executive Officer of
Lincoln. Mr. MacDonald also served as President and Chief Executive Officer
of Nestle Foods Corporation from 1983 to 1991. Mr. MacDonald is a director
of Lord, Abbett & Company and CARESIDE, Inc.
Ian B. MacTaggart, age 34, has been a member of the Board of Directors
of the Company since June 1998. Since 1996, Mr. MacTaggart has been an
associate at Brynwood Partners III L.P., a private investment partnership.
Since January 2000, Mr. MacTaggart has been a General Partner at Brynwood
Partners IV, L.P. Prior to joining Brynwood Partners, Mr. MacTaggart served
as a Senior Associate in the Corporate Finance Department at Merrill Lynch &
Company from 1993 to 1996. From 1991 to 1993, Mr. MacTaggart attended the
Fuqua School of Business receiving his MBA.
Robert Zwartendijk, age 61, recently retired from Ahold nv the Dutch
supermarket retailer. From 1989 to 1999, Mr. Zwartendijk served as
President and Chief Executive Officer of Ahold USA Inc. During the period
from 1977 to 1998, Mr. Zwartendijk held various management positions at
Ahold and was a member of the Corporate Executive Board of Ahold nv from
1981 to 1999. Mr. Zwartendijk is a supervisory board member to Koninklijke
Numico nv, Nutreco Holding nv, Buhrmann nv, Randstad Holding nv,
Innoconcepts nv, Blokker Holding nv, Ahold Supermercados S.A. (Spain),
Telepanel Systems, Inc. (Canada) and Luis Paez S.A. (Spain).
Hendrik J. Hartong III, age 33, has been President and Chief Executive
Officer of the Company since October 1998. Prior to joining the Company,
Mr. Hartong III served as Vice President of Marketing at Activision, Inc., a
developer of computer and video game software, from April 1998. From March
1996 to March 1998 Mr. Hartong III held various product marketing functions
at Activision, Inc. Prior to joining Activision, Inc., Mr. Hartong held
various sales and marketing positions with Baskin Robbins from 1995 to 1996
and Nestle Foods Corporation from 1989 to 1993. From 1994 to 1995, Mr.
Hartong III attended the Harvard School of Business receiving his MBA. Mr.
Hartong III is the son of Mr. Hartong, Jr.
Kristine A. Crabs, age 37, had been Vice President and Chief Financial
Officer of the Company since July 1996, and had served as Vice President of
Finance and Administration since January 1993. Prior to joining Lincoln,
Ms. Crabs was a Senior Audit Manager with KPMG Peat Marwick LLP,
specializing in the food and consumer products industries. Ms. Crabs
resigned from the Company effective October 5, 2000.
Joanne W. Prier, age 42, has been Vice President and Chief Financial
Officer of the Company since October 2, 2000. Prior to joining the Company,
Ms. Prier was Controller of BICC Cables Corporation-Utility Cable Division,
a power cable manufacturer, from 1992 to 2000. Ms. Prier attended
Georgetown University receiving her BS and New York University receiving her
MBA.
David D. Clarke, age 33, has been Executive Vice President of the
Company since June 2000. Mr. Clarke had previously been Vice President of
Sales of the Company since October 1998. Prior to joining the Company, Mr.
Clarke served as Vice President of Sales and Marketing for Preferred Brands,
Inc., a manufacturer of ethnic food products, from October 1996. Prior to
joining Preferred Brands, Mr. Clarke was Vice President of Sales and
Marketing for Clarke Ice Cream Company, a distributor of nationally branded
ice cream products in Florida from October 1994, and was New Business
Development Manager at Pepsi-Cola International from 1992 to October 1994.
Mr. Clarke attended Wake Forest University receiving both his BA and MBA.
Meetings and Committees of the Board
The Board of Directors has standing Executive, Audit and Compensation
Committees. There is no formal Nominating Committee; the Board of Directors
or the Executive Committee performs this function.
The Executive Committee currently consists of Messrs. Hartong, Jr.,
Gray and Hartong III. Mr. Hartong III is an employee and officer of the
Company. 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 delegated powers are limited by the Delaware General
Corporation Law. The Executive Committee did not meet during the fiscal
year ended June 30, 2000.
The Audit Committee currently consists of Messrs. MacDonald,
MacTaggart and Zwartendijk. The Audit Committee consults with the
independent auditors of the Company and such other persons as the committee
deems 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 books,
accounts 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, 2000.
The Compensation Committee currently consists of Messrs. Gray,
MacDonald and Zwartendijk. The Compensation Committee has all of the powers
of the Board of Directors relating to compensation and incentives for the
officers, directors, employees and other persons performing substantial
services for the Company. The Compensation Committee met once during the
fiscal year ended June 30, 2000.
During the fiscal year ended June 30, 2000, the Board of Directors
held five meetings. Each of the nominees then in office attended at least
80% of the total number of such meetings and the meetings of all committees
of the Board of which he was a member, except for Mr. Zwartendijk.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's executive officers and directors, and persons who own
more than ten percent of the Common Stock, to file reports of ownership and
changes in ownership of such equity securities with the Securities and
Exchange Commission ("SEC") and to furnish the Company with copies of such
reports.
Based solely upon its review of the copies of such forms furnished to
the Company by such reporting persons during the fiscal year ended June 30,
2000, and written representations from the Company's directors and executive
officers 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,
2000 all filing requirements under Section 16(a) applicable to its executive
officers, directors and greater than ten percent beneficial owners were
complied with in a timely manner, except that Brynwood Partners III L.P. was
late in filing two Forms 4 relating to three transactions. Mr. Hartong, Jr.
and Mr. Gray, general partners of Brynwood Partners III L.P., were also late
in filing Forms 4 with respect to these transactions.
<PAGE>
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth certain information regarding
compensation awarded or paid to, or earned by the person who served as the
Chief Executive Officer or acted in such capacity during the fiscal year
ended June 30, 2000, and the Company's other executive officers as of June
30, 2000 who received total salary and bonus compensation during the fiscal
year ended June 30, 2000 in excess of $100,000 (collectively, the "Named
Executive Officers").
<TABLE>
<CAPTION>
Long Term
Annual Compensation Compensation
----------------------------------------- ------------
Other Securities All
Annual Underlying Other
Name and Principal Compen- Options Compen-
Position Year<F1> Salary($) Bonus($) sation($) (# of Shares) sation($)
------------------- ------- --------- -------- --------- ------------- ---------
<S> <C> <C> <C> <C> <C> <C>
Hendrik J. Hartong III 2000 175,000 100,000 3,602<F2> 100,000<F3> 2,625<F6>
President and Chief 1999 128,125<F7> 50,000 35,928<F2> 200,000<F4> -
Executive Officer 1998 - - - - -
Kristine A. Crabs 2000 120,578 30,000 - 40,000<F3> 2,912<F6>
Vice President and 1999 120,578 25,000 - 37,500<F5> 2,902<F6>
Chief Financial 1998 120,578 22,000 - - 3,003<F6>
Officer<F8>
David D. Clarke 2000 100,000 45,000 - 40,000<F3> 1,500<F6>
Executive Vice 1999 73,125<F7> 25,000 - 60,000<F5> -
President 1998 - - - - -
<FN>
<F1> Reference to 2000, 1999 and 1998 herein means each fiscal year ending
June 30, respectively.
<F2> Includes relocation cost reimbursement of $30,528 and $3,602.
<F3> Awarded August 4, 1999 pursuant to the Company's 1993 Stock Option
Plan.
<F4> Awarded October 1, 1998 and November 19, 1998 pursuant to the
Company's 1993 Stock Option Plan.
<F5> Awarded November 19, 1998 pursuant to the Company's 1993 Stock Option
Plan.
<F6> Consists of amounts contributed by the Company to the Named Executive
Officer's account under the Company's 401(k) plan.
<F7> Mr. Hartong III and Mr. Clarke began employment with the Company in
October 1998. Amounts represent nine months of compensation.
<F8> Ms. Crabs resigned from the Company effective October 5, 2000.
</FN>
</TABLE>
Option Grants During the Fiscal Year Ended June 30, 2000
The following table sets forth information regarding grants of stock
options made during the fiscal year ended June 30, 2000 to the Named
Executive Officers and their potential realizable values.
<TABLE>
<CAPTION>
Potential Realizable
Value at Assumed
Annual Rates of
Stock Price
Appreciation
Individual Grants for Option Term
---------------------------------------------------- -----------------------
Number of % of Total
Shares Options
Underlying Granted to Exercise or
Options Employees in Base Price Expiration
Name Granted Fiscal Year ($/Sh) Date 5%($) 10%($)
------------- ---------- ------------ ----------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
Hendrik J.
Hartong III 100,000<F1> 32% 1.75 08/04/09 160,552<F2> 359,311<F2>
Kristine A.
Crabs 40,000<F1> 13% 1.75 08/04/09 64,221<F2> 143,724<F2>
David D.
Clarke 40,000<F1> 13% 1.75 08/04/09 64,221<F2> 143,724<F2>
<FN>
<F1> Granted on August 4, 1999 pursuant to the Company's 1993 Stock Option
Plan. The options vest twenty percent per year over a 5 year period
from the date of grant.
<F2> The assumed rates of annual appreciation are calculated from the
date of grant through the assumed expiration date. If the options
had remained outstanding, actual gains, if any, on stock option
exercises and Common Stock holdings would have been dependent on the
future performance of the Common Stock.
</FN>
</TABLE>
<PAGE>
Aggregate Option Exercises in the Fiscal Year ended June 30, 2000 and Option
Values at June 30, 2000
The following table sets forth information relating to options
exercised by the Named Executive Officers during the fiscal year ended June
30, 2000 and the number and value of unexercised stock options held by each
of the Named Executive Officers at that date. The Company does not have any
outstanding stock appreciation rights.
<TABLE>
<CAPTION>
Number of Securities
Underlying Unexercised Value of Unexercised
Options at Fiscal In-the-Money Options at
Year-End(#) Fiscal Year-End<F1>($)
-------------------------- --------------------------
Shares
Acquired Value
on Exer- Realized
Name cise(#) ($) Exercisable Unexercisable Exercisable Unexercisable
----------------- --------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Hendrik J. Hartong III - - 100,000 200,000 $36,000 $69,500
Kristine A. Crabs - - 38,000 62,000 $17,405 $26,720
David D. Clarke - - 32,000 68,000 $ 9,920 $21,080
______________________
<FN>
<F1> Based on a closing price of the Common Stock on June 30, 2000 as
reported on the OTC Bulletin Board of $2.06 per share.
</FN>
</TABLE>
<PAGE>
Compensation of Directors
Directors of the Company who are officers or employees of the Company
receive no additional compensation for service as a member of the Board or
any committee thereof. Pursuant to the Company's Non-Employee Directors'
Stock Option Plan, as amended, each non-employee director, following such
person's 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. Messrs. Hartong, Jr. and Gray, general partners of Brynwood Partners
III L.P., have elected not to receive any options for their service as
members of the Board. A $1,500 quarterly retainer and cash compensation of
$1,000 for each meeting attended is paid to non-employee directors for their
service as a member of the Board of Directors. Messrs. Gray, Hartong, Jr.
and MacTaggart have elected not to receive retainers or cash compensation
for their service as members of the Board. All directors are reimbursed for
their out-of-pocket expenses incurred in connection with their service as
directors, including travel expenses.
Employment Contracts and Termination of Employment and Change in Control
Arrangements
Mr. Hartong III has entered into an employment letter with the Company
pursuant to which Mr. Hartong III may be entitled to up to one year's
severance payment in the event of an involuntary termination of his
employment, subject to forfeiture in the event Mr. Hartong III secures
employment with a competitor of the Company.
Ms. Crabs has entered into an employment letter with the Company pursuant
to which Ms. Crabs may be entitled to up to one year's severance payment in
the event of an involuntary termination of her employment.
Mr. Clarke has entered into an employment letter with the Company
pursuant to which Mr. Clarke may be entitled to up to one year's severance
payment in the event of an involuntary termination of his employment.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Pursuant to rules adopted by the SEC designed to enhance disclosure
regarding executive compensation, set forth below is a report submitted on
behalf of and by the members of the Compensation Committee addressing the
Company's compensation policies for the fiscal year ended June 30, 2000.
Compensation Policies Regarding Executive Officers
Compensation paid to the Named Executive Officers during the fiscal year
ended June 30, 2000 consisted of salary and bonus.
The executive compensation policies of the Company are intended to
provide competitive levels of compensation to attract and retain qualified
executives and to align managements' and stockholders' interests in the
enhancement of stockholder value over the long term. The Company's 1993
Stock Option Plan is utilized to provide long-term incentives to executive
officers by enabling such officers to share in the future growth of the
Company's business through the grant of options to purchase a significant
amount of Common Stock. The Company has also established a 401(k) plan to
assist in retaining qualified executives.
The Compensation Committee and the Board believe 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
and the Board of Directors believe that the Company competes with such
organizations for qualified executives and is therefore required to adopt
competitive salary structures. In setting compensation, the Committee and
the Board consider 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 and the Board of Directors on an annual basis. In
setting such base salaries, the Compensation Committee and the Board of
Directors consider the factors set forth in the preceding paragraph.
While the Compensation Committee and the Board of Directors consider
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 and the Board of
Directors believe that relying solely on such criteria may stress short term
performance at the cost of long term growth. To address such concern,
decisions as to annual bonuses include the Compensation Committee's and the
Board's informal evaluation of subjective criteria of individual performance
as well as objective criteria. 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 criteria and determined the
amount of the executive officers' annual bonuses for the fiscal year ended
June 30, 2000. The determinations of the Compensation Committee and Board
of Directors were based principally on the role played by the Company's
executive officers in the accomplishments of the Company during such fiscal
year.
The Company's 401(k) Plan is a broad-based employee benefit plan in which
the Company's executive officers are permitted to participate on the same
terms as non-executive employees, subject to certain legal limitations on
the amounts that may be contributed and 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
Company's 401(k) Plan are not tied to Company performance.
All of the above compensation policies regarding executive officers
applies to all Named Executive Officers including the Chief Executive
Officer.
Compensation Deduction Limitation. Section 162(m) of the Internal Revenue
Code of 1986, as amended, currently limits to $1 million per year the
federal income tax deduction available to public reporting 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 Compensation Committee and Board routinely consider ways to maximize the
deductibility of executive compensation, while retaining the discretion the
Compensation Committee and Board deem necessary to compensate executive
officers in a manner commensurate with performance and the competitive
environment for executive talent. Under present employment arrangements, no
officer received compensation in excess of this limitation during the fiscal
year ended June 30, 2000.
John T. Gray, Chairman C. Alan MacDonald Robert Zwartendijk
This report is submitted by Mr. Gray on behalf of the members of the
Compensation Committee in office during the fiscal year ended June 30, 2000
who participated in the adoption and implementation of the compensation
programs discussed above. Messrs. Gray, MacDonald and Zwartendijk
participated in the approval of bonuses for 2000.
Compensation Committee Interlocks and Insider Participation
Messrs. Gray, MacDonald and Zwartendijk are the current members of the
Compensation Committee and during the last completed fiscal year none of
them was an officer or employee of the Company. From 1992 to 1994, Mr.
MacDonald was the Chief Executive Officer of the Company.
<PAGE>
STOCK PERFORMANCE CHART
The chart set forth below compares the cumulative total stockholder
return on the Common Stock for the period beginning July 1, 1995 and ending
on June 30, 2000 with the cumulative total return on the NASDAQ Broad Market
Index and the Media General Confectionery Goods Index over the same period.
The comparison assumes $100 was invested on July 1, 1995 in the Common Stock
and in each of the foregoing indices and that all dividends paid by
companies included in each index were reinvested. The stock price
performance shown on the graph is not necessarily indicative of future stock
price or index performance.
<TABLE>
<CAPTION>
June 30, June 30, June 30, June 30, June 30, June 30,
1995 1996 1997 1998 1999 2000
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Lincoln Snacks Company 100.00 44.00 42.00 62.00 32.00 65.92
NASDAQ Broad Market Index 100.00 125.88 151.64 201.01 281.68 423.84
Media General Confectionery
Goods Index 100.00 121.59 174.17 239.13 217.74 190.06
Source: Media General Financial Services.
</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, 2001. A representative of Arthur Andersen LLP is not expected to
be present at the Meeting. Arthur Andersen LLP has advised the Company that
neither it nor any of its members had any direct financial interest in the
Company as a promoter, underwriter, voting trustee, director, officer or
employee. All professional services rendered by Arthur Andersen LLP during
the fiscal year ended June 30, 2000 were furnished at customary rates.
DEADLINE FOR STOCKHOLDER PROPOSALS
Stockholder proposals submitted for inclusion in the proxy statement
relating to the Company's 2001 Annual Meeting of Stockholders must be
received by the Company at 30 Buxton Farm Road, Stamford, Connecticut 06905
on or before July 6, 2001. Additionally, unless notice that a stockholder
intends to present a proposal at the Company's 2001 Annual Meeting of
Stockholders is received by the Company at 30 Buxton Farm Road, Stamford,
Connecticut 06905, Attention: Secretary on or before September 19, 2001, the
Company will have discretionary authority to vote on any stockholder
proposal presented at such annual meeting. The Company has not received
notice of any stockholder proposal intended for presentation at the Meeting.
As a result, the Company will have discretionary authority to vote on any
stockholder proposal presented at the Meeting.
ANNUAL REPORT ON FORM 10-K
The Company's Annual Report on Form 10-K for the fiscal year ended
June 30, 2000, as filed with the SEC, is available to beneficial owners on
request and may be obtained by writing to: Lincoln Snacks Company, 30
Buxton Farm Road, Stamford, Connecticut 06905, Attention: Ms. Joanne W.
Prier, Secretary. Such request must include a representation that the
person making the request was the beneficial owner of securities entitled to
vote at the Meeting. A copy of the Company's Annual Report to Stockholders
for the fiscal year ended June 30, 2000 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/ Hendrik J. Hartong III
----------------------------
Hendrik J. Hartong III, President
Dated: Stamford, Connecticut
October 26, 2000
