SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
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[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss. 240.14a-11(c) or ss. 240.14a-12
Lucille Farms, Inc.
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(Name of Registrant as Specified In Its Charter)
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LUCILLE FARMS, INC.
150 River Road P.O. Box 517
Montville, NJ 07045
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS, DECEMBER 4, 2001
---------------------
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 December 4, 2001 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, 2002; 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 18,
2001 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
Montville, New Jersey
October 24, 2001
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
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PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD DECEMBER 4, 2001
-----------------
SOLICITATION 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 December 4, 2001 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 Cooperman & Company, LLP as the Company's independent
auditors for the year ending March 31, 2002 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, par value $0.01 per share (the "Common Stock"), and will
reimburse such holders for their reasonable expenses in connection therewith.
The approximate date of mailing of this proxy statement is November 2 , 2001.
Only stockholders of record at the close of business on October 18,
2001, will be entitled to notice of, and to vote at, the Annual Meeting. At the
close of business on such record date, 2,971,342 shares of Common Stock were
issued and outstanding. Each share entitles the holder thereof to one vote. The
holders of a majority of the shares of Common Stock outstanding on the record
date and entitled to voted at the meeting, present in person, or by proxy, will
constitute a quorum for the transaction 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
Six 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 six 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 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
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 for Election to the Board of Directors
Nominees Age Office Director Since
------------------------------ ----------------- ----------------------------------------- ----------------
Gennaro Falivene 71 Vice Chairman of the Board of 1976
Directors, Executive Vice
President-Quality Control
Alfonso Falivene 59 Director, President and Chief 1976
Executive Officer
Stephen M. Katz 66 Director, Vice President -Finance and 1993
Administration, Chief Financial
Officer and Secretary
Howard S. Breslow 62 Director 1993
Jay M. Rosengarten 56 Director 1998
Dr. Mali S. Reddy 54 Director 2001
Mr. Gennaro Falivene is a 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 Directors and Executive Vice President -Quality
Control.
Mr. Alfonso Falivene is a founder of the Company and has been a
director of the Company since inception in 1976. He served as Vice President and
Secretary 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 from 1970 to 1997. 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.
Mr. Howard S. Breslow has been director of the Company since April
1993. He has been a practicing attorney in New York for more than 35 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 products, 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 design and sale of computer based security systems, and FIND/SVP, Inc., a
publicly held company engaged in the development and marketing of business
information services.
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.
Dr. Mali S. Reddy has been a director of the Company since June 4,
2001. He is currently the president of ADFAC (American Dairy and Food Culturing
Labs.), a position he has held for over fifteen years. He holds approximately
one hundred and fifty U.S. and international patents. Dr. Reddy was the
recipient of the prestigious Richard M. Hoyt Memorial Award from the American
Dairy Science Association. He has served as a consultant to more than sixty-five
firms in the U.S. and abroad.
Board of Directors and Committees
Gennaro Falivene is the uncle of Alfonso Falivene. No other family
relationship exists between any director or executive officer of the Company.
The Company currently does not compensate its directors for their
services in such capacity, except for 5,000 shares of Common Stock issuable
under outstanding options granted to Mali S. Reddy.
The Board of Directors held one meeting during the year ended March 31,
2001, which was attended by all directors. The Company currently has no standing
compensation or nominating committees of the Board of Directors, or committees
performing similar functions. The Company has an audit committee consisting of
Howard S. Breslow, Jay Rosengarten and Mali S. Reddy. 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, 2001.
Audit Committee Report
In connection with the preparation and filing of the Lucille Farms,
Inc. Annual Report on form 10K for the year ended March 31, 2001:
(1) The Audit committee reviewed and discussed the audited
financial statements with management;
(2) The Audit Committee discussed with the independent auditors
the material required to be discussed by SAS 61 (as may be
modified or supplemented);
(3) The Audit Committee reviewed the written disclosures and the
letter from the independent accountants required by the
Independence Standards Board Standard No.1, as may be modified
or supplemented, and discussed with the independent accountant
the independent accountant's independence; and
(4) Based on the review and discussions referred to above, the
Audit Committee recommended to the Board that the audited
financial statements be included in the 2001 Annual Report on
Form 10K.
All members of the Audit Committee are independent as defined in Rule
4200(a)(15) of the National Association of Securities Dealers listing standards.
Audit Committee
Howard S. Breslow
Jay Rosengarten
Mali S. Reddy
PRINCIPAL STOCKHOLDERS
The following table sets forth, as of October 18, 2001, certain
information regarding the beneficial ownership of Common Stock and Series A
Convertible Redeemable Preferred Stock (the "Series A Preferred Stock") by (i)
each stockholder known by the Company to be the beneficial owner of more than 5%
of the outstanding shares thereof; (ii) each director of the Company; (iii) each
named executive officer of the Company; and (iv) all of the Company's current
directors and executive officers as a group. Unless expressly indicated
otherwise, each stockholder exercises sole voting and investment power with
respect to the shares beneficially owned.
Amount and Nature
Name and Address of Principal of Beneficial
Title of Class Stockholder Ownership (1) Percent of Class
--------------------- ---------------------------------- --------------------- -----------------------
Common Stock The Estate of Philip Falivene 219,917 7.4%
Box 125
Swanton, VT 05488
Common Stock Gennaro Falivene 327,417 11.0%
Box 125
Swanton, VT 05488
Common Stock Alfonso Falivene (2) 464,917 15.6%
Box 517
150 River Road
Montville, NJ 07045
Common Stock Stephen M. Katz (3) 85,750 2.9%
Box 517
150 River Road
Montville, NJ 07045
Common Stock B & W Investment Associates 193,799 6.5%
c/o Howard S. Breslow
14 Parkwood Lane
Dix Hills, NY 11746
Common Stock Howard S. Breslow 193,799 (4) 6.5%
14 Parkwood Lane
Dix Hills, NY 11746
Common Stock Jay M. Rosengarten 15,000 (5) 0.5%
Box 517
Montville, NJ 07045
Common Stock Mali S. Reddy 7,500 (6) 0.3%
1250 South Parker Road
Denver, CO 80231
Common Stock Joseph J. Arcata 60,000 (7) 2.0%
170 Prospect Avenue
Hackensack, NJ 07601
Series A International Ingredient Corporation 216 100.0%
Preferred Stock 4240 Utah Street
St. Louis, MO 63116
Common Stock All beneficial owners of 5% or more 1,206,050 40.6%
(4 persons)
Common Stock All officers and directors as a 1,154,383 (8) 37.8 %
group (7 persons)
Series A Preferred All beneficial owners of 5% or more 216 100.0%
Stock (1 person)
Series A All officers and directors as a group 0 0.0%
Preferred Stock (7 persons)
----------------------
(1) Shares of Common Stock of the Company subject to options and warrants
currently exercisable or exercisable within 60 days are deemed outstanding
for computing the number of shares and the percentage of the outstanding
shares held by a person holding such options or warrants, but are not
deemed outstanding for computing the percentage of any other person. Except
as indicated by footnote, and subject to community property laws where
applicable, the Company believes that the persons named in the table have
sole voting and investment power with respect to all shares shown as
beneficially owned by them.
(2) 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.
(3) Includes for purposes of this table 40,000 shares owned by Mr. Katz's wife.
(4) 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.
(5) Includes 15,000 shares of Common Stock of the Company issuable under
outstanding options.
(6) Includes 7,500 shares of Common Stock issuable under outstanding options.
(7) Includes 60,000 shares of Common Stock issuable under outstanding options.
(8) Includes 82,500 shares of Common Stock issuable under outstanding options.
Section 16(a) Beneficial Ownership Reporting Compliance
The Company's officers, directors and beneficial owners of more than
10% of any class of its equity securities registered pursuant to Section 12 of
the Securities Exchange Act of 1934 ("Reporting Persons") are required under
that Act to file reports of ownership and changes in beneficial ownership of the
Company's equity securities with the Securities and Exchange Commission. Copies
of those reports must also be furnished to the Company. Based solely on a review
of the copies of reports furnished to the Company pursuant to that Act, the
Company believes that during the fiscal year ended March 31, 2001, all filing
requirements applicable to Reporting Persons were complied with, except that the
Initial Statement of Beneficial Ownership of Securities for Jay M. Rosengarten,
a director of the Company, which was due on February 17, 1998, was filed on
January 16, 2001, and for Joseph J. Arcata, an officer of the Company, which was
due on August 29, 2000, was filed on April 3, 2001.
EXECUTIVE OFFICERS OF THE REGISTRANT
The executive officers of the Company are as follows:
Name Age Position and Offices with the Company
------------------------- ------------- -------------------------------------------
Gennaro Falivene 71 Vice Chairman of the Board of Directors,
Executive Vice President-Quality Control
Alfonso Falivene 59 Director, President and Chief Executive
Officer
Stephen M. Katz 66 Director, Vice President-Finance and
Administration, Chief Financial Officer and
Secretary
David McCarty 45 Vice President-Sales and Marketing
Joseph J. Arcata 55 Vice President-Production
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 VP Corp., a "New
Age" beverage corporation.
Joseph J. Arcata has been Vice-President - Production since December 6,
2000. Prior thereto, from 1992 to 1999, Mr. Arcata was the Vice President of
Operations for Concord Marketing Inc., where was responsible for production and
general operations. Mr. Arcata has done consulting work for Sorrento Cheese,
Land O' Lakes and other cheese manufacturers.
EXECUTIVE COMPENSATION AND RELATED INFORMATION
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 $100,000 during the year ended March 31, 2001 (collectively, the
"Named Executive Officers"):
Summary Compensation Table
Annual Compensation Long Term Compensation
------------------- ----------------------
Awards Payouts
-------------------------- --------------------------
Restricted
Other Annual Stock Options/ LTIP All Other
Name and Principal Fiscal Salary Bonus Compensation(1) Award(s) SARs(2) Payouts Compensation
Positions Year ($) ($) ($) ($) (#) ($) ($)
---------------------- -------- ---------- ----------- ----------------- ------------- ----------- ----------- -------------
Alfonso Falivene 2001 106,000 -- 9,000 -- -- -- --
President and Chief 2000 110,000 -- 8,000 -- -- -- --
Executive Officer 1999 110,000 -- 8,000 -- -- -- --
Gennaro Falivene 2001 106,000 -- 5,000 -- -- -- --
Executive Vice 2000 108,000 -- 5,000 -- -- -- --
President - 1999 106,000 -- 4,000 -- -- -- --
Quality Control
Joseph J. Arcata (3) 2001 63,000(4) 33,000(4) 6,000(4) -- 150,000 -- --
Vice President - 2000 -- -- -- -- -- -- --
Production 1999 -- -- -- -- -- -- --
---------------
(1) Represents automobile allowances and/or automobile lease payments for the
benefit of such employee.
(2) Options to acquire shares of Common Stock of the Company.
(3) Mr. Arcata did not become an executive officer of the Company until August
14, 2000, and therefore information regarding his compensation for the
years 2000 and 1999 has not been included.
(4) Includes compensation received by Mr. Arcata while an employee of the
Company prior to becoming an executive officer.
Option/SAR Grants in Year-Ended March 31, 2001
In the fiscal year ended March 31, 2001, the Company issued options to
purchase shares of Common Stock to each of the Named Executive Officers, as
follows:
Number of Securities Percent of Total
Underlying Options/SARs granted Exercise or
Name and Principal Options/SAR's to Employees in Fiscal Base Price Expiration
Positions granted (#) (1) Year ($/Sh) Date
--------------------- ----------------------- ------------------------ ----------------- ----------------
Alfonso Falivene -- -- -- --
Gennaro Falivene -- -- -- --
Joseph J. Arcata 150,000 100% $3.9375 August 14, 2010
---------------
(1) Options to acquire shares of Common Stock.
Aggregated Options/SAR Exercises and Option/SAR Values for the Fiscal Year Ended
March 31, 2001
The following table provides information related to options exercised
by each of the Named Executive Officers during the year ended March 31, 2001
fiscal year and the number and value of options held at March 31, 2001. The
Company does not have any outstanding stock appreciation rights. None of the
options were in the money at year ended March 31, 2001.
Number of Securities Value of Unexercised
Underlying Unexercised in the money
Options/SAR Options/SAR
At Fiscal Year End (#) At Fiscal Year End ($) (1)
---------------------- --------------------------
Shares Acquired Value
Name On Exercise (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
---------- --------------- ------------ ----------- ------------- ----------- -------------
Alfonso Falivene -- -- -- -- -- --
Gennaro Falivene -- -- -- -- -- --
Joseph J. Arcata -- -- 30,000 120,000 -- --
---------------
(1) The closing price for the Common Stock as reported on the Nasdaq on March
31, 2001 was $2.375.
Employee Agreements
On August 14, 2000, the Company entered into an employment agreement
with Joseph J. Arcata, Jr. to serve as Vice President - Production of the
Company, pursuant to which he will receive, among other things, (a) an annual
salary of $100,000, (b) a quarterly bonus of $12,500, (c) stock options to
purchase 150,000 shares of the Common Stock at a price equal to no less than the
fair market value thereof on the date of the grant, (d) participation in the
Company's executive officer bonus pool, (e) an automobile allowance of $850 a
month, and (f) three weeks of vacation time. Mr. Arcata's initial term of
employment ended August 14, 2001, however, per his employment agreement he
remains in the employ of the Company on a month-to-month basis until such time
as a new agreement is entered into or either the Company or Mr. Arcata gives
notice of termination.
Report of the Board of Directors on Executive Compensation
During the fiscal year ended March 31, 2001, 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, 2001 was determined by the Board of Directors (without the vote of Mr.
Alfonso Falivene) based on the Company's performance in fiscal 2000, anticipated
performance in fiscal 2001, 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.
BOARD OF DIRECTORS
Alfonso Falivene
Gennaro Falivene
Jay Rosengarten
Howard S. Breslow
Stephen M. Katz
Compensation Committee Interlocks and Inside Participation
During the year ended March 31, 2001, Messrs. Alfonso Falivene, Gennaro
Falivene, and Stephen M. 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, 2001, Alfonso Falivene, Gennaro Falivene and the estate of
Philip Falivene each was indebted to the Company in the amount of $30,667,
$30,666, and $36,365, respectively. Such indebtedness is represented by
promissory notes, dated as of June 1, 1992, with the principal due on June 1,
2002. The notes bear interest at the rate of 9% per annum, which interest is
payable annually.
The Company leases a parcel of land adjacent to its facility. This
parcel is owned by two of its officers, Messrs. Alfonso Falivene and Gennaro
Falivene, and the Estate of Philip Falivene. 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 years ended March 31, 2001 and 2000 was
$9,000 and $9,000, respectively. 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 conjunction with the Whey Plant financing.
The Company leases a portion of its Montville, New Jersey offices from
Messrs. Alfonso Falivene, Gennaro Falivene, and the Estate of Philip Falivene
the joint owners of the office condominium unit. During the fiscal years ended
March 31, 1999, 2000,and 2001, 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, Gennaro Falivene, and the Estate of Philip 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, 1999, 2000, and 2001.
Philip Falivene is the father of Alfonso Falivene and the brother of
Gennaro Falivene.
Howard S. Breslow is a partner in Breslow & Walker, LLP, the Company's
legal counsel. In the fiscal year ended March 31, 2001, the Company paid Breslow
& Walker, LLP approximately $31,123 for legal services.
The Company has retained Jay Rosengarten as an independent sales
consultant. Mr. Rosengarten has been paid $50,000 for his services.
The Company has retained Mali S. Reddy as an independent consultant
with respect to the development of neutraceuticals and value added products. Dr
Reddy was issued a 10 year stock option to purchase an aggregate of 5,000 shares
of Common Stock in connection with 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 (subject to tender) 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,
1996 through the fiscal year ended March 31, 2001 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, 1996, and in each
of the stocks included in the NASDAQ Composite Index and the Company Peer Group.
[Chart Omitted)]
Legend
CRSP Total Returns Index For: 3/96 3/97 3/98 3/99 3/00 3/01
LUCILLE FARMS, INC. 100.0 56.3 31.3 81.3 131.3 59.4
NASDAQ Stock Market
(US Companies) 100.0 111.1 168.5 227.6 423.4 169.3
NASDAQ Stocks
(SIC 5140-5149 US Companies)
Groceries and Related
Products: 100.0 146.5 270.4 241.4 204.1 286.3
Notes:
A. The lines represent monthly index levels derived from compounded 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 03/31/1996.
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.
Recommendation of the Board of Directors
The Board of Directors recommends a vote FOR ratification of the
selection of Citrin Cooperman & Company, LLP as the independent auditors for the
Company for the fiscal year ending March 31, 2002.
Audit Fees
Citrin Cooperman & Company, LLP has billed the Company $34,000, in the
aggregate, for professional services rendered for the audit of the Company's
annual financial statements for the fiscal year ended March 31, 2001 and the
reviews of the interim financial statements included in the Company's Quarterly
Reports on Form 10-Q for the fiscal year ended March 31, 2001.
Financial Information Systems Design and Implementation Fees
Citrin Cooperman & Company, LLP provided no information technology
services relating to financial information systems design and implementation
during the fiscal year ended March 31, 2001.
All Other Fees
There are no additional fees billed or expected to be billed by Citrin
Cooperman & Company, LLP for services rendered to the Company in addition to
those described above under "Audit Fees."
STOCKHOLDER PROPOSALS
Stockholders who wish to present proposals for action at the 2002
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,
2002 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 2002 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, 2002. 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 Company for the year ended
March 31, 2001, including audited consolidated financial statements, has been
mailed to the stockholders concurrently herewith, but such report is not
incorporated in this Proxy Statement 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
matters come 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 judgments.
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 24, 2001
STOCKHOLDERS ARE 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, P.O. 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 24, 2001 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,
to appear and vote all the shares of stock of Lucille Farms, Inc., standing in
the name of the undersigned on the books of aid corporation on October 18, 2001,
at the Annual Meeting of Stockholders of Lucille Farms, Inc. to be held at the
Embassy Suites Hotel, 909 Parsippany Blvd., Parsippany, New Jersey 07045 on
December 4, 2001, at 10:30 A.M., Eastern Standard Time, and any adjournments
thereof.
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 Statement.
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 Mali S. Reddy
(INSTRUCTION: to withhold 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, 2002.
FOR____ AGAINST____ ABSTAIN____
3. TO VOTE, IN THE DISCRETION OF THE PROXIES, ON SUCH OTHER MATTERS THAT MAY
PROPERLY COME BEFORE THE MEETING AND ANY ADJOURNMENTS THEREOF.
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
corporation, please sign in full corporate name by President or other authorized
officer. If a partnership, please sign in partnership name by authorized person.
DATED: __________________,2001
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Signature
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Signature if held jointly
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY IN THE ENCLOSED
ENVELOPE