<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF
THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. )
<TABLE>
<S> <C>
Filed by the Registrant / /
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 Section240.14a-11(c) or
Section240.14a-12
</TABLE>
<TABLE>
<S> <C>
FLOUR CITY INTERNATIONAL, INC.
- ------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- ------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
</TABLE>
Payment of Filing Fee (Check the appropriate box):
<TABLE>
<S> <C> <C>
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction
applies:
----------------------------------------------------------
(2) Aggregate number of securities to which transaction
applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
----------------------------------------------------------
(5) Total fee paid:
----------------------------------------------------------
/ / 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:
----------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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</TABLE>
<PAGE>
FLOUR CITY INTERNATIONAL, INC.
----------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 4, 2000
The Annual Meeting of Stockholders of FLOUR CITY INTERNATIONAL, INC. (the
"Company") will be held on April 4, 2000 at 10:00 a.m. local time at the Hilton
San Francisco and Towers, 333 O'Farrell, San Francisco, California 94102 for the
purpose of considering and voting on the following matters:
1. Election of Directors.
2. Ratification of the appointment of GRANT THORNTON LLP as the Company's
independent auditors for the year ending October 31, 2000.
3. Such other business as may properly come before the meeting or any
adjournments or postponements thereof.
Only stockholders of record at the close of business on February 25, 2000
will be entitled to notice of and to vote at such meeting or any adjournments or
postponements thereof.
By Order of the Board of Directors
Edward M. Boyle, III
SECRETARY
Johnson City, Tennessee
February 25, 2000
IMPORTANT
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING IN PERSON, PLEASE READ THE
ENCLOSED PROXY STATEMENT AND SIGN AND RETURN THE ENCLOSED PROXY CARD AS
SOON AS POSSIBLE IN THE ENCLOSED POSTPAID ENVELOPE.
<PAGE>
FLOUR CITY INTERNATIONAL, INC.
915 RIVERVIEW DRIVE, SUITE 1
JOHNSON CITY, TENNESSEE 37601
(423) 928-2724
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation by the
Board of Directors of Flour City International, Inc. (the "Company") of proxies
relating to the annual meeting of stockholders (the "Annual Meeting") to be held
April 4, 2000 at 10:00 a.m. local time at the Hilton San Francisco and Towers,
333 O'Farrell, San Francisco, California 94102, or any adjournments or
postponements thereof.
Only stockholders of record at the close of business on the record date for
the meeting, February 25, 2000 (the "Record Date"), are entitled to vote at the
meeting. On the Record Date, there were outstanding and entitled to vote
5,375,408 shares of Common Stock of the Company (the "Common Stock"). Holders of
shares of Common Stock are entitled to one vote per share of Common Stock on
each matter to come before the meeting. Stockholders do not have cumulative
voting rights.
Pursuant to the bylaws of the Company, a majority of the shares of Common
Stock entitled to vote at a shareholders meeting, represented in person or by
proxy, constitutes a quorum, and broker non-votes and shares held by persons
abstaining will be counted in determining whether a quorum is present at the
Annual Meeting. Further, a meeting of stockholders commenced with a quorum may
continue to do business until an adjournment of the meeting, even if a
withdrawal of stockholders from the meeting leaves less than a quorum.
Directors are elected by plurality of votes cast at the election, and all
other proposals submitted to the stockholders must be approved by the vote of
the holders of a majority of the shares of Common Stock present at the meeting,
in person or by proxy. In the event a nominee (such as a brokerage firm) holding
shares for beneficial owners votes on certain matters pursuant to discretionary
authority or instructions from beneficial owners, but with respect to one or
more other matters does not receive instructions from beneficial owners and/or
does not exercise discretionary authority (a so-called "non-vote"), the shares
held by the nominee will be deemed present at the meeting for quorum purposes
but will not be deemed to have voted on such other matters. Accordingly,
abstentions and broker non-votes will have no effect upon the election of
directors but will have the same effect as votes against other matters to come
before the Annual Meeting.
If the enclosed proxy is properly executed and returned, the shares of
Common Stock represented thereby will be voted at the Annual Meeting in
accordance with the stockholder's instructions. If no instructions are given
with respect to the election of the nominees for director put forward by the
Company in this Proxy Statement, then the proxy will be voted FOR the nominees,
and if no instructions are given with respect to any other matter, the proxy
will be voted on such matter as determined by the proxyholders.
Any stockholder giving a proxy for the Annual Meeting in the accompanying
form may revoke it at any time prior to its being voted, either by filing prior
to the Annual Meeting with the Secretary of the Company at the Company's
principal executive offices, 915 Riverview Drive, Suite 1, Johnson City,
Tennessee 37601, an instrument of revocation or a duly executed proxy bearing a
later date, or by attending the meeting and voting in person.
The Proxy Statement and the enclosed proxy are being mailed to stockholders
on or about February 29, 2000. Solicitation of proxies may be made by directors,
officers and other employees of the Company by personal interview, telephone or
telegraph. No additional compensation will be paid for any such services. Costs
of solicitation, including preparation, assembly, printing and mailing of this
proxy statement, the proxy and any other information furnished to the
stockholders, will be borne by the Company. The Company will, upon request,
reimburse the reasonable charges and expenses of brokerage houses or other
nominees or fiduciaries for forwarding proxy materials to, and obtaining
authority to execute proxies from, beneficial owners for whose account they hold
shares of Common Stock.
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<PAGE>
PROPOSAL 1--ELECTION OF DIRECTORS
A board of five directors is to be elected at the Annual Meeting to serve
until the next Annual Meeting of Stockholders, and until their respective
successors are elected and qualified. John W. Tang, Johnson K. Fong, Eugene M.
Armstrong, Paul D. Lynam, and Mabel Chan have been nominated for election as
directors of the Company at the Annual Meeting. All of the nominees for director
currently serve on the Board of Directors.
It is intended that all proxies submitted in the accompanying form, unless
contrary instructions are given thereon, will be voted FOR the election of the
five nominees. If any nominee is unable or unwilling to serve as a director,
proxies may be voted for substitute nominees designated by the Board. The Board
has no reason to believe that any of the persons named below will be unable or
unwilling to serve as a director if elected. Pursuant to applicable Nevada law,
assuming the presence of a quorum, five directors will be elected from among
those persons duly nominated for such positions by a plurality of the votes
actually cast by stockholders entitled to vote at the meeting who are present in
person or by proxy. Thus, the five nominees who receive the highest number of
votes in favor of their election will be elected, regardless of the number of
abstentions or non-votes.
The following table sets forth certain information regarding each nominee as
of February 25, 2000.
<TABLE>
<CAPTION>
POSITIONS WITH COMMON STOCK PERCENTAGE
NAME AGE THE COMPANY BENEFICIALLY OWNED(1) OWNERSHIP
- ---- -------- ---------------------- --------------------- ----------
<S> <C> <C> <C> <C>
John W. Tang........................ 47 Chairman of the Board, 2,638,176(2) 49.1%
and Chief Executive
Officer, Director
Johnson K. Fong..................... 41 Executive Vice 15,000 0.3%
President, Director
Paul D. Lynam....................... 65 Director 7,000 0.1%
Eugene M. Armstrong................. 81 Director 5,000 0.1%
Mabel Chan.......................... 47 Director 0 0%
</TABLE>
- ------------------------
(1) Unless otherwise indicated, shares are held with sole voting and investment
power.
(2) Includes 1,918,674 shares of Common Stock held by Wilson International Ltd.,
a British Virgin Islands corporation, of which Mr. Tang is the sole
beneficial owner.
BUSINESS EXPERIENCE OF THE NOMINEES
Information regarding each of the five nominees is set forth below.
John W. Tang has been the Chairman of the Board of Directors of the Company
since January 1997 and was Secretary from January 1997 until January 2000. Since
August 1999, John W. Tang has served as Chief Executive Officer and has over 11
years in the custom curtain wall industry. From 1992 to 1997, he was a director
of Flour City Architectural Metals (Asia) Ltd. ("FCAM (Asia)"), a subsidiary of
the Company. From 1990 to 1992, he was a Senior Structural Engineer with Ove
Arup & Partners, a U.K.-based engineering consulting firm. Between 1987 and 1990
he was the managing director of Brinkley Holding Co., Ltd., a property
development company doing business in Canada. Mr. Tang is a registered
professional engineer in California and the U.S., a registered professional
engineer in the Province of Alberta, Canada, a chartered engineer in the United
Kingdom, and a member of the Institution of Structural Engineers in the United
Kingdom. He received his masters degree in Civil Engineering from the University
of California at Berkeley.
Johnson K. Fong became a Director of the Company in January 1997. In
November 1999, he joined the Company as Executive Vice President. Mr. Fong was a
partner in the accounting and consulting firm of Anderson & Schwartz McGuire LLP
from 1988 until October 1999. He is a licensed Certified Public
2
<PAGE>
Accountant and member of the California Society of Certified Public Accountants
and the Hong Kong Society of Accountants. Mr. Fong received a bachelors degree
from the University of California at Berkeley and completed graduate studies in
taxation at Golden Gate University.
Paul D. Lynam became a Director of the Company in May 1998. Mr. Lynam was
the Vice President, Director of Purchasing of Turner Construction Company from
1987 until his retirement in 1996. Mr. Lynam received a bachelors degree from
Bentley College.
Eugene M. Armstrong became a Director of the Company in May 1998.
Mr. Armstrong was the Executive Vice President of Morrison-Knudsen
Company, Inc. from 1979 until his retirement in 1983. From 1984 until 1996,
Mr. Armstrong was the President and Chief Executive Officer of Transisco
Industries, Inc. Mr. Armstrong received a bachelors of science degree from
Western State College of Colorado and completed graduate studies in aeronautical
engineering and industrial management at the University of California at Los
Angeles.
Mabel Chan became a director of the Company in March 1999. Since
December 1997, Ms. Chan has served as a director and manager of Gold Manor Ltd.,
an investment company. Beginning in 1987, Ms. Chan has served as a Director of
Brinkley Holdings Limited, a real estate development company located in
Vancouver, British Columbia. Ms. Chan received a bachelors degree from Canberra
University of Advanced Education.
BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD
The Board of Directors held four meetings during the 1999 fiscal year. It is
the Company's intention to hold regular meetings of the Board of Directors on a
quarterly basis and to call special meetings as necessary. Attendance of each of
the Board members for the 1999 fiscal year meetings was 75% or more.
The Board has an Audit Committee, comprised in fiscal year 1999 of Paul
Lynam and Johnson Fong. The functions of the Audit Committee are to make
recommendations to management concerning the engagement of independent public
accountants, review with the independent public accountants the plans and
results of the audit engagement, approve professional services provided by the
independent public accountants, review the independence of the independent
public accountants, consider the range of audit and non-audit fees and review
the adequacy of the Company's internal accounting controls. During the 1999
fiscal year, the Audit Committee held two meetings. Each member of the Audit
Committee attended these meetings.
The Board also has a Compensation Committee, comprised in fiscal 1999 of
Eugene Armstrong and John Tang. The function of the Compensation Committee is to
determine compensation of the Company's executive officers and to administer the
Company's 1997 Stock Incentive Plan (the "Stock Incentive Plan"). The current
executive officer salaries were set by the Board. During the 1999 fiscal year,
the Compensation Committee held two meetings. Each member of the Compensation
Committee attended these meetings.
EXECUTIVE OFFICERS
The present executive officers of the Company are John W. Tang, Chairman of
the Board and Chief Executive Officer, Edward M. Boyle, III, President and
Secretary, Johnson Fong, Executive Vice President, James Lawler, Interim Chief
Financial Officer and Treasurer and Roger Ulbricht, Executive Vice President and
President of FCAM.
Edward M. Boyle, III (age 39) has been the President of the Company since
August 1999 and was named Secretary as of January 2000. Since October of 1998,
Mr. Boyle has served as the Chief Operating Officer of Flour City Architectural
Metals (Asia) Ltd. Mr. Boyle has over 17 years of experience in the custom
curtain wall industry. From 1993 until 1998 Mr. Boyle worked for Harmon Ltd.,
where he served in various positions, including Director of Sales and Marketing
for Harmon CFEM Facades (UK) Ltd. and
3
<PAGE>
Harmon CFEM Facades S.A. and Director of Harmon Sitraco. Mr. Boyle received a
bachelors of science degree in landscape architecture from Louisiana State
University.
Mr. Lawler (age 50) became the Interim Chief Financial Officer of the
Company in March 1999. Since May 1992 Mr. Lawler has been a financial
consultant. From 1987 to 1992, Mr. Lawler was the controller for Inmac Corp., an
international direct marketing company. From 1977 to 1987 he served in the
positions of Vice President, Chief Financial Officer, Director of Finance, and
Controller at GoodMark Foods, Inc. Prior to 1977, Mr. Lawler was an auditor with
the public accounting firm KPMG LLP. Mr. Lawler received a bachelors degree in
Finance from the University of Santa Clara.
Roger Ulbricht (age 60) has been Executive Vice President of the Company and
President and Chief Executive Officer of Flour City Architectural Metals, Inc
since August 1999. Mr. Ulbricht has been with FCAM since June 1960 and has
served in various senior capacities including Engineering, Purchasing, Sales and
Technical Services. Prior to his current position, Mr. Ulbricht was Executive
Vice President of Flour City Architectural Metals, Inc. Mr. Ulbricht has a
technical background educated at Manhattan Technical Intsitute, Mechanics
Institute and Queens College in New York.
COMPENSATION OF EXECUTIVE OFFICERS
The following table discloses compensation received in the three fiscal
years ended October 31, 1999, by Mr. Tang, the Company's Chairman of the Board
and Chief Executive Office. Mr. Boyle, the Company's President and Secretary and
Mr. Ulbricht, the Company's Executive Vice President. Messrs. Tang, Boyle and
Ulbricht were the only executive officers serving as of the end of the 1999
fiscal year whose salaries and bonuses exceeded $100,000 in 1999 or 1998 (the
"Named Executive Officers"). No current executive officers of the Company had
salaries and bonuses that exceeded $100,000 in 1997.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG TERM
-------------------------------------- COMPENSATION
OTHER ANNUAL ------------ ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) COMPENSATION($) AWARD($) COMPENSATION
- --------------------------- -------- --------- -------- --------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
John W. Tang............... 1999 $160,000 $0 $0 $0 $0
Chairman of the Board 1998 $157,537 $0 $0 $0 $0
and Chief Executive
Officer
Edward M. Boyle, III....... 1999 $120,000 $0 $0 $0 $0
President and Secretary 1998 $0 $0 $0 $0
Roger Ulbricht............. 1999 $130,995 $0 $0 $0 $0
Executive Vice 1998 $108,854 $0 $0 $0 $0
President, President and
CEO FCAM
</TABLE>
OPTIONS GRANTED TO EXECUTIVE OFFICERS IN FISCAL 1999
In 1999, the Company granted a total of 462,202 nonqualified stock options
to its directors, executive officers and key employees. Messrs. Tang and Boyle
received 160,000 and 78,000 options, respectively. Each option vests with
respect to one quarter of the underlying shares at each of the first four
anniversaries of the grant date. Messrs. Fong, Lynam and Armstrong as Directors
each received 5,000 options that vest over one year. Mr. Ulbricht received
18,450 options that vest over a two-year period. Mrs. Rowena Tang, Mr. Tang's
wife and Office Manager of FCAM (Asia), was granted 42,000 options that also
vest over a four-year period. Mrs. Mabel Chan, as a newly elected Director
received 20,000 options that vest over a four-year period. All options were
granted at the fair market value of the Company's common stock on the dates of
grant. The weighted average exercise price per share for all options granted in
1999 is $2.29.
4
<PAGE>
The following table sets forth certain information regarding grants of stock
options made during the fiscal year ended October 31, 1999 to executive officers
named in the Summary Compensation Table. Since inception, the Company has not
granted any stock appreciation rights
<TABLE>
<CAPTION>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
- ------------------------------------------------------------------------------------------------------------
PERCENTAGE
NUMBER OF OF TOTAL POTENTIAL REALIZABLE
SECURITIES OPTIONS/ VALUE AT ASSUMED
UNDERLYING SARS ANNUAL RATES OF STOCK
OPTIONS/ GRANTED TO EXERCISE PRICE APPRECIATION FOR
SARS EMPLOYEES OR BASE OPTION TERM
GRANTED IN FISCAL PRICE PER EXPIRATION -----------------------
NAME (#) YEAR SHARE DATE 5% ($) 10% ($)
- ------------------------------- ---------- ---------- --------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
John W. Tang, CEO.............. 160,000 34.6% $2.25 August 2009 $77,582 $167,076
Edward M. Boyle, III........... 78,000 16.9% $2.25 August 2009 $37,821 $ 81,450
Roger Ulbricht................. 18,450 4.0% $2.25 August 2009 $ 4,255 $ 8,718
</TABLE>
REPORT OF THE COMPENSATION COMMITTEE:
The Company's Compensation Committee met twice in 1999. Set forth below is a
report of Compensation Committee with respect to the Company's compensation
policies during the 1999 fiscal year as they affect the Company's executive
officers.
The Company's executive officer compensation policies are designed to set
compensation levels that are competitive with those of similar companies,
thereby permitting the Company to attract and retain well-qualified executives.
Through a combination of base salary, annual performance-based bonuses and
equity-based compensation, these policies are intended to motivate executive
officers to meet the Company's near term and long-range business objectives,
thereby enhancing stockholder value. The cumulative effect of the Company's
compensation policies for executive officers is to tie such compensation closely
to the Company's performance.
Each of the Company's executive officers receives a base salary. The base
salary of Messrs. Tang and Fong are provided for in employment contracts. The
Company sets a base salary for its executive officers based upon a number of
factors, including the qualifications of the executive, levels of pay for
similar positions at public and private companies of comparable size and in
comparable businesses to those of the Company, the degree to which the executive
can help the Company achieve its goals, and direct negotiation with the
executive.
At present, the annual base salaries of Mr. Tang as Chairman of the Board
and Chief Executive Office, Mr. Boyle as President and Secretary, Mr. Fong as
Executive Vice President and Treasurer, and Mr. Ulbricht as Executive Vice
President are $160,000, $160,000, $150,000 and $150,000, respectively. Mr. Fong
joined the Company November 1, 1999 and also serves as a Director.
During the 1999 fiscal year, the Company did not pay bonuses to any of its
executive officers. The Company does not expect to pay any bonuses based on
results for the 1999 fiscal year. In future fiscal years, the Company may make
bonus payments to its executive officers if performance targets are met.
The other element of the Company's executive officer compensation package is
equity-based compensation. The Board of Directors believes that by providing
executive officers who do not otherwise own significant amounts of stock with
the opportunity to acquire an equity interest in the Company, those officers are
provided with additional incentives to work to maximize stockholder value over
the long term. In 1999, Messrs. Tang, Boyle and Ulbricht, as Executives of the
Company were granted options that vest over two to four-year periods. See
"Options Granted to Executive Officers in Fiscal 1999".
Incentives may also be provided by the granting of options under the
Company's Stock Incentive Plan, which was adopted by the Company and its
stockholders in December 1997. Under the Stock Incentive Plan, if options are
granted, they will vest when determined by the Compensation Committee. Options
5
<PAGE>
issued to executive officers under the Stock Incentive Plan will be for the
purposes of attracting, motivating and retaining key personnel. During the 1998
fiscal year, the Company did not grant options to executive officers under the
Stock Incentive Plan.
Compensation Committee of Flour City International, Inc.
John W. Tang, Eugene M. Armstrong,
COMPENSATION COMMITTEE--INTERLOCKS AND INSIDER PARTICIPATION
During the 1999 fiscal year, Mr. Tang, the Company's Chairman of the Board
and Chief Executive Officer, served on the Board of Directors and participated
in the deliberations of the Board of Directors concerning executive officer
compensation.
INDEBTEDNESS OF MANAGEMENT AND CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
From November 1, 1994 to November 1998, the Company's Chairman of the Board
and Secretary, Mr. Tang, was indebted to FCAM (Asia), a subsidiary of the
Company, in amounts in excess of $60,000. There were no maturity dates for these
loans, they did not bear interest and they were not evidenced by a written
instrument. The largest amount of this indebtedness outstanding since November
1994 was $646,107; as of February 25, 2000 no portion of this indebtedness
remained unpaid.
Beginning on November 1, 1994, Mrs. Rowena Tang, Mr. Tang's wife, made a
series of loans to FCAM (Asia) in an amount over $60,000. The proceeds of these
loans were used by FCAM (Asia) to supplement its cash flow, since much of the
cash of FCAM (Asia) was used to secure banking facilities in connection with
certain projects. There were no maturity dates for these loans, they bore
interest at the rate of 10% per annum and none of these loans were evidenced by
a written instrument. The largest amount of indebtedness owed by FCAM (Asia) to
Mrs. Tang since November 1994 was $282,291, and as of February 25, 2000, there
was no amount outstanding on these loans.
During the 1999 fiscal year, Mrs. Rowena Tang was employed by FCAM (Asia), a
subsidiary of the Company in the position of Office Manager. During the 1998
fiscal year, Mrs. Tang received total compensation of $120,000 in consideration
of her employment by FCAM (Asia).
EMPLOYMENT AGREEMENTS
Mr. Tang, has an employment agreement with the Company which provides for an
annual base salary of $160,000. The employment agreement of Mr. Tang is for a
term of five years commencing on December 15, 1997. The agreement with Mr. Tang
provides that, in the event of a termination of employment by the Company
without cause, the employee will be entitled to receive his then current salary
and benefits for a period of six months following the date of termination. The
employment agreement also contains a covenant not to compete with the Company
and not to solicit business away from the Company during the term of employment
and for one year thereafter.
The Company has an employment agreement with Mr. Fong (the "Agreement")
providing for his services as Executive Vice President of the Company pursuant
to which he is paid a current annual salary of $150,000, is entitled to
vacations, holidays, insurance and other benefits permitted under policies
established by the Board and as provided for in the Agreement. Also pursuant to
the Agreement and effective as of November 1, 1999, Mr. Fong received a stock
option granting him the right to purchase 75,000 shares of the Company's common
stock. This incentive based option is governed by the Stock Incentive Plan and
vests over a period of five years after the grant date. Either Mr. Fong or the
Company may terminate the Agreement with or without cause; provided, however,
that if the Company terminates the Agreement without cause or if Mr. Fong elects
to terminate because the Board fails to maintain him in office, the shareholders
fail to re-elect him to the Board, or if the Company is in material breach of
the Agreement, Mr. Fong shall continue to receive salary and benefits for 3
months (the "Severance Period")
6
<PAGE>
beyond the date of termination, and the fully vested right to purchase an
additional 30,000 shares of the Company's stock at $2.00 per share. If Mr. John
Tang is removed as Chairman of the Company or if Mr. Tang's percentage ownership
of the Company is 35% or less and in either such case Mr. Fong's employment with
the Company is terminated, then the Severance Period shall become 18 months and
all unvested shares shall become fully vested immediately upon such termination.
INDEMNIFICATION OF OFFICERS AND DIRECTORS
Nevada law provides that a corporation may include in its articles of
incorporation a provision indemnifying officers and directors against expenses
including attorney's fees, judgments, fines, and amounts paid in settlement
actually and reasonably incurred by such person in connection with the suit,
action or proceeding if such person acted in good faith and in a manner he or
she reasonably believed to be in the best interests of the corporation and with
respect to any criminal action or proceeding had no reasonable basis to conclude
that his or her conduct was unlawful. A Nevada corporation may also indemnify
any person who was or is a party or is threatened to be made a party to any
threatened, pending, or completed action or suit by reason of the fact that such
a person was an officer or director of the corporation if such person acted in
good faith and in a manner which he or she believed to be in the best interests
of the corporation.
To the fullest extent allowable under Nevada law, the Company's Articles and
Bylaws provide that the Company shall indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending, or completed
action or suit whether criminal, civil, administrative or investigative, by
reason of the fact that such a person, his testator or intestate was an officer,
director, of the corporation, or a predecessor of the corporation.
The Company's Bylaws also provide that the Company shall have the power to
purchase and maintain insurance on behalf of any person who is or was a
director, officer, employee or agent of the Company, or is or was serving at the
request of the Company as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against any
liability asserted against the person and incurred by the person in any such
capacity, or arising out of the person's status as such, whether or not the
Company would have the power to indemnify the person against such liability.
On January 7, 1998, the Company entered into indemnity agreements with
Messrs. Tang, and Fong. The indemnity agreements indemnify these officers and
directors against certain liabilities arising out of their services as directors
and/or officers.
COMPENSATION OF DIRECTORS
During the fiscal year ended October 31, 1999, directors who were not
employees of the Company or one of the Company's subsidiaries ("Non-Employee
Directors") were entitled to receive $5,000.00 annually, plus $500 for each
meeting of the Board and each meeting of a Committee of the Board (unless the
Committee meeting was held on the same day as a Board meeting) they attended,
plus reimbursement for reasonable expenses incurred. The Company incurred
liability to Non-Employee Directors for directors fees totaling $44,750 in the
1999 fiscal year.
Pursuant to the Stock Incentive Plan, each Non-Employee Director who was a
director at or immediately after the registration statement relating to the
Company's initial public offering became effective, was granted stock options to
purchase 20,000 shares of the Company's Common Stock at an exercise price of
$7.56 per share. Non-Employee Director options have a ten-year term and vest in
equal annual installments over a four-year term following the date of grant. A
total of 15,000 Non-Employee Director options vested during the fiscal year
ended October 31, 1999 and no such options were exercised during the 1999 fiscal
year. Pursuant to the Stock Incentive Plan, the Non-Employee Director options
held by Messrs. Armstrong, Lynam and Fong will vest with respect to 5,000 shares
of Common Stock each on May 21, 2000. The Non-Employee Director options held by
Mrs. Chan will vest with respect to 5,000 shares of Common Stock on March 30,
2000.
Directors who are employees of the Company are not separately compensated
for their services as directors.
7
<PAGE>
SECTION 16(a) BENEFICIAL REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, and persons who own more than ten percent
(10%) of the outstanding shares of the Company's Common Stock, to file with the
Securities and Exchange Commission and the Nasdaq Stock Market initial reports
of ownership (Form 3) and changes in ownership of such stock (Forms 4 and 5).
To the Company's knowledge, based solely upon review of the copies of such
reports furnished to it, during fiscal year ended October 31, 1999, all Section
16(a) filing requirements applicable to its executive officers and directors
were complied with except that a report on Form 4 was not timely filed to
reflect the purchase of 2,000 share of Flour City International, Inc.'s common
stock between March 26, 1999 and May 3, 1999 by Mr. Paul Lynam.
STOCK PRICE PERFORMANCE GRAPH
The following graph illustrates a comparison of the cumulative shareholder
return (change in stock price plus reinvested dividends) of the Company's Common
Stock with the Russell 2000 Index
Although Securities and Exchange Commission regulations generally require
the graph to cover a five-year period, the graph below covers approximately a
seventeen-month period because the Company's Common Stock has only been traded
on the NASDAQ Stock Market since approximately May 26, 1998. The comparisons in
the graph are required by the Securities and Exchange Commission and are not
intended to forecast or to indicate the possible future performance of the
Company's Common Stock.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
FCIN RUSSELL 2000
<S> <C> <C>
5/26/1998 $100 $100
10/30/1998 $67.24 $82.25
10/29/1999 $30.17 $93.22
</TABLE>
The comparison assumes a $100 investment made on May 26, 1998 (the
approximate date the Company's Common Stock was listed on the NASDAQ Market) in
the Company's Common Stock, and in the securities comprising the Russell 2000
Index.
8
<PAGE>
SECURITY OWNERSHIP BY CERTAIN BENEFICIAL OWNERS
The following table and the footnotes thereto set forth, as of February 25,
2000, certain information regarding the Common Stock of the Company beneficially
owned by each person who is known to the Company to be the beneficial owner of
more than 5% of the Common Stock of the Company, by each director and nominee
for director and by each executive officer named in the Summary Compensation
Table, and by all directors and executive officers of the Company as a group.
<TABLE>
<CAPTION>
NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT
BENEFICIAL OWNER BENEFICIAL OWNERSHIP(1) OF CLASS
- ------------------- ----------------------- --------
<S> <C> <C>
John W. Tang................................................ 2,638,176(2) 49.1%
Suite 1300, Hollywood Plaza,
610 Nathan Road,
Mongkok, Kowloon,
Hong Kong
Cynthia Lam................................................. 479,668(3) 8.9%
Gold Manor Ltd.
P.O. Box 957,
Offshore Corporations Center,
Road Town, Tortola,
British Virgin Islands
Ayumi Nakamura.............................................. 479,668(4) 8.9%
Markham Industries, Inc.
Offshore Group Chambers
PO Box CB-12751,
Nassau, New Providence, Bahamas
Edward M. Boyle, III........................................ 570 0%
Johnson K. Fong............................................. 15,000 0.3%
Roger Ulbricht.............................................. 18,589 0.3%
Eugene M. Armstrong......................................... 5,000 0.1%
Paul D. Lynam............................................... 7,000 0.1%
Mabel Chan.................................................. 0 0%
All directors and all Executive Officers of the Company as a
Group (3 individuals)..................................... 2,681,335(2) 49.9%
</TABLE>
- ------------------------
(1) Unless otherwise indicated, shares are held with sole voting and investment
power.
(2) Includes 1,918,674 shares held by Wilson International Ltd., a British
Virgin Islands corporation, of which Mr. Tang is the sole beneficial owner.
(3) Shares indicated as beneficially owned by Ms. Lam are held of record by Gold
Manor Ltd., a British Virgin Islands corporation, of which Ms. Lam is the
sole beneficial owner.
(4) Shares indicated as beneficially owned by Ayumi Nakamura are held of record
by Markham Industries, Inc., a British Virgin Islands corporation, of which
Mr. Nakamura is the sole beneficial owner.
(5) Shares indicated as beneficially owned by Mr. Boyle are held of record by
the trust account of Alesandra R. Boyle, of which Mr. Boyle is a custodian.
9
<PAGE>
PROPOSAL 2--RATIFICATION OF INDEPENDENT ACCOUNTANTS
The Board of Directors recommends to the stockholders the ratification of
the appointment of Grant Thornton LLP as the Company's independent accountants
for the 2000 fiscal year. Representatives of Grant Thornton LLP are expected to
be present at the Annual Meeting and will have the opportunity to make
statements if they desire to do so. Such representatives are also expected to be
available to respond to appropriate questions.
OTHER MATTERS
The accompanying proxy grants discretionary authority to the persons named
therein to vote on any other matter properly brought before the meeting or any
adjournment thereof, and the person or persons voting the proxies intend to vote
them in accordance with their best judgment.
This Proxy Statement will be accompanied by the Company's Annual Report for
the fiscal year ended October 31, 1999, when it is delivered to stockholders.
STOCKHOLDER PROPOSALS
Under the rules of the Securities and Exchange Commission, stockholders who
wish to submit proposals for inclusion in the Proxy Statement of the Board of
Directors for the annual meeting of stockholders to be held in 2001 must submit
such proposals so as to be received by the Company at 915 Riverview Drive,
Suite 1, Johnson City, Tennessee 37601, on or before November 1, 2000. In
addition, if the Company is not notified by January 15, 2001 of a proposal to be
brought before the 2001 Annual Meeting by a stockholder, then proxies held by
management may provide the discretion to vote against such proposal even though
it is not discussed in the proxy statement for such meeting.
10
<PAGE>
FLOUR CITY INTERNATIONAL INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 4, 2000
The undersigned hereby appoints John W. Tang, with full power of
substitution, as the proxyholder of the undersigned to represent the undersigned
and vote all shares of the capital stock of FLOUR CITY INTERNATIONAL, INC. (the
"Company") which the undersigned would be entitled to vote if personally present
at the annual meeting of stockholders of the Company, to take place at the
Hilton San Francisco and Towers, 333 O'Farrell, San Francisco, California 94102
at 10:00 a.m. on April 4, 2000, and at any adjournments or postponements of such
meeting, as follows:
1. To elect as directors, to hold office until the next
annual meeting of stockholders and until their
successors are elected, the nominees listed below:
/ / FOR all nominees / / WITHHOLD AUTHORITY
listed below, except to vote for all listed
those whose names are nominees.
handwritten on the
line below.
John W. Tang, Johnson K. Fong, Eugene M. Armstrong, Paul D. Lynam, and Mabel
Chan.
To withhold authority to vote for any of the above nominees, write the nominee's
name below:
- --------------------------------------------------------------------------------
2. To ratify the appointment of Grant Thornton LLP as the Company's independent
accountants for the fiscal year ending October 31, 2000.
/ / FOR / / AGAINST / / ABSTAIN
3. To transact such other business as properly may come before the meeting.
<PAGE>
THE BOARD RECOMMENDS THAT YOU VOTE FOR THE ABOVE PROPOSALS. THIS PROXY, WHEN
PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED ABOVE. WHEN NO CHOICE IS
INDICATED, THIS PROXY WILL BE VOTED FOR THE ABOVE PROPOSALS. THIS PROXY MAY BE
REVOKED BY THE UNDERSIGNED AT ANY TIME, PRIOR TO THE TIME IT IS VOTED BY ANY OF
THE MEANS DESCRIBED IN THE ACCOMPANYING PROXY STATEMENT.
Date: _____________________ , 2000
__________________________________
__________________________________
Signature(s) of Stockholder(s)
Date and sign exactly as name(s)
appear(s) on this proxy. If
signing for estates, trusts,
corporations or other entities,
title or capacity should be
stated. If shares are held
jointly, each holder should sign.
PLEASE COMPLETE, DATE AND SIGN THIS PROXY
AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE.
