<PAGE> 1
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/X/ Preliminary Proxy Statement / / Confidential, for Use of the
Commission Only (as permitted by
/ / Definitive Proxy Statement Rule 14a-6(e)(2))
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
Falcon Products, Inc.
----------------------------------------------------
(Name of Registrant as Specified In Its Charter)
----------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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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:
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5) Total fee paid:
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/ / 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
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<PAGE> 2
PRELIMINARY COPIES
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[LOGO]
FALCON PRODUCTS, INC.
9387 DIELMAN INDUSTRIAL DRIVE
ST. LOUIS, MISSOURI 63132
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
St. Louis, Missouri
February 1, 1996
The annual meeting of the stockholders of Falcon Products, Inc., will be
held on Thursday, March 14, 1996, at 4:00 p.m. at the St. Louis Club, 7701
Forsyth Boulevard, Clayton, Missouri 63105, for the purposes of:
1. Electing a board of nine directors, consisting of three directors for a
term expiring in 1997, three directors for a term expiring in 1998 and
three directors for a term expiring in 1999;
2. Considering and voting upon a proposal to amend the Company's Certificate
of Incorporation to provide for the classification of the Board of
Directors into three separate classes;
3. Considering and voting upon a proposal to amend the Company's Non-
Employee Director Stock Option Plan to permit the exercise of options
granted thereunder for a certain period of time following the
retirement, death or disability of a director; and
4. Transacting such other business as may properly come before the meeting.
Stockholders of record at the close of business on January 15, 1996, will be
entitled to vote at the meeting. A list of all stockholders entitled to vote at
the annual meeting, arranged in alphabetical order and showing the address of
and number of shares held by each stockholder, will be open at the principal
office of Falcon Products, Inc. at 9387 Dielman Industrial Drive, St. Louis,
Missouri 63132, during usual business hours, to the examination of any
stockholder for any purpose germane to the annual meeting for 10 days prior to
the date thereof at the office of the Company set forth above.
A copy of the Annual Report for fiscal 1995 accompanies this notice.
By Order of the Board of Directors
MICHAEL J. DRELLER
Secretary
WHETHER OR NOT YOU INTEND TO BE PRESENT AT THE MEETING, PLEASE MARK, SIGN,
DATE AND RETURN THE ACCOMPANYING PROXY PROMPTLY. A RETURN ADDRESSED ENVELOPE IS
ENCLOSED FOR YOUR CONVENIENCE.
<PAGE> 3
FALCON PRODUCTS, INC.
9387 DIELMAN INDUSTRIAL DRIVE
ST. LOUIS, MISSOURI 63132
PROXY STATEMENT
SOLICITATION OF PROXIES
The enclosed proxy is solicited by the Board of Directors of Falcon
Products, Inc. (the "Company"), for use at the annual meeting of the Company's
stockholders to be held at the St. Louis Club, 7701 Forsyth Boulevard, Clayton,
Missouri 63105, on Thursday, March 14, 1996, at 4:00 p.m. and at any
adjournments thereof. Whether or not you expect to attend the meeting in person,
please return your executed proxy in the enclosed envelope and the shares
represented thereby will be voted in accordance with your wishes. This proxy
statement and the enclosed form of proxy are being first sent to stockholders on
or about February 1, 1996.
REVOCABILITY OF PROXY
Any stockholder executing a proxy that is solicited hereby has the power to
revoke it prior to the voting of the proxy. Revocation may be made by attending
the annual meeting and voting the shares of stock in person, or by delivering to
the Secretary of the Company at the principal office of the Company prior to the
annual meeting a written notice of revocation or a later-dated, properly
executed proxy.
RECORD DATE
Stockholders of record at the close of business on January 15, 1996, will be
entitled to vote at the meeting.
ACTION TO BE TAKEN UNDER PROXY
Unless otherwise directed by the giver of the proxy, the persons named in
the enclosed form of proxy, to-wit, Franklin A. Jacobs and Michael J. Dreller,
or the one of them who acts, will vote:
(1) FOR the election of the nine persons named herein as nominees for
directors of the Company, consisting of three Class A directors for a term
expiring at the 1997 annual meeting of stockholders, three Class B directors
for a term expiring at the 1998 annual meeting, and three Class C directors
for a term expiring at the 1999 annual meeting (or, in each case, until
their respective successors are duly elected and qualified);
(2) FOR approval of an amendment to the Company's Certificate of
Incorporation to provide for the classification of the Board of Directors
into three separate classes;
(3) FOR approval of an amendment to the Company's Non-Employee Director
Stock Option Plan, which amendment would render all stock options previously
or subsequently granted under the plan exercisable for a certain period of
time following the retirement, death or disability of a director; and
(4) according to their judgment, on the transaction of such other
business as may properly come before the meeting or any adjournments
thereof.
Should any nominee named herein for election as a director become
unavailable for any reason, it is intended that the persons named in the proxy
will vote for the election of such other person in his stead as may be
designated by the Board of Directors. The Board of Directors is not aware of any
reason that might cause any nominee to be unavailable.
VOTING SECURITIES, PRINCIPAL HOLDERS THEREOF
AND CUMULATIVE VOTING RIGHTS
On January 15, 1996, there were 9,543,690 shares of Common Stock, par value
$.02 per share ("Common Stock"), outstanding, which constitute all of the
outstanding capital stock of the Company. Each share is entitled to one vote,
and stockholders are entitled to vote cumulatively in the election of directors;
that is, each stockholder may
2
<PAGE> 4
vote the number of his, her or its shares multiplied by the number of directors
to be elected and may cast all such votes for a single nominee or may distribute
them among any number of nominees. There is no condition precedent to the
exercise of these cumulative voting rights.
A majority of the outstanding shares present in person or represented by
proxy will constitute a quorum at the meeting. Under applicable state law and
provisions of the Company's Certificate of Incorporation (the "Certificate")
and Amended and Restated By-laws, the vote required for (i) the election of
directors is a plurality of the votes of the issued and outstanding shares of
Common Stock present in person or represented by proxy at the annual meeting of
stockholders and entitled to vote on the election of directors, (ii) the
approval of the amendment to the Certificate is the affirmative vote of a
majority of all of the Company's issued and outstanding shares of Common Stock,
and (iii) the approval of the amendment to the Company's Non-Employee Director
Stock Option Plan and any other matter properly brought before the meeting is
the affirmative vote of the majority of the shares of Common Stock present in
person or represented by proxy at the annual meeting of stockholders and
entitled to vote on the proposal to approve such amendment or on any such
other matter, as the case may be. Based on the above, abstentions from voting
and broker non-votes on the election of directors will operate as neither a
vote for nor a vote against any or all nominees for directors. Abstentions
from voting on the proposals to approve the amendment to the Certificate, the
amendment to the Non-Employee Director Stock Option Plan or on any other
matter properly brought before the meeting effectively will operate as a vote
against such proposals or such other matters. With regard to Proposal 2,
broker non-votes effectively will operate as a vote against such proposal.
With regard to Proposal 3 or such other matters, broker non-votes will have no
effect. Votes on all matters will be counted by duly appointed inspectors of
election, whose responsibilities are to ascertain the number of shares
outstanding and the voting power of each, determine the number of shares
represented at the meeting and the validity of proxies and ballots, count all
votes and report the results to the Company.
As of January 15, 1996, the following persons were known to the Company who
may, individually or as a group, be deemed to be the beneficial owners,
respectively, of more than 5% of the Common Stock, each having sole voting
and investment power over such Common Stock, except as indicated in the
footnotes hereto:
<TABLE>
<CAPTION>
AMOUNT AND NATURE PERCENT
NAME AND ADDRESS OF BENEFICIAL OWNERSHIP<F1> OF CLASS
---------------- --------------------------- --------
<S> <C> <C>
Franklin A. Jacobs, 2,052,584<F2> 21.3%
Chairman of the Board and
Chief Executive Officer of the Company
9387 Dielman Industrial Drive
St. Louis, Missouri 63132
David L. Babson & Company, Inc. 845,680<F3> 8.9%
One Memorial Drive
Cambridge, MA 02142-1300
Robert Fleming, Inc. 787,260<F4> 8.2%
1285 Avenue of the Americas, 16th Floor
New York, NY 10019
Putnam Investment Management 499,965<F5> 5.2%
One Post Office Sq.
Boston, MA 02109
<FN>
- --------
<F1> Reflects the number of shares outstanding on January 15, 1996, and assumes
the exercise of all stock options held by each person that are exercisable
currently or within 60 days of the date of this proxy statement (such
options hereinafter being referred to as "currently exercisable options").
<F2> Includes 85,390 shares held by Joyce Jacobs, the wife of Mr. Jacobs, and
36,953 shares held in revocable trusts for the benefit of Mr. Jacobs'
children as to which Mr. Jacobs serves as sole trustee. Also includes
currently exercisable options to acquire 93,500 shares of Common Stock.
Does not include 162,494 shares held in trust for the benefit of Mr.
Jacobs' children as to which Donald P. Gallop serves as sole trustee. See
Note (3) to the table under "Security Ownership of Management."
3
<PAGE> 5
<F3> Includes 247,885 shares as to which such beneficial owner has shared
voting power. Information provided by David L. Babson & Company, Inc.
<F4> Information provided by Robert Fleming, Inc.
<F5> Information provided by Putnam Investment Management.
</TABLE>
SECURITY OWNERSHIP OF MANAGEMENT
On January 15, 1996, the following represented beneficial ownership of
Common Stock by each director and nominee for election as a director, each of
the executive officers named in the Summary Compensation Table (see "Executive
Compensation" below), and by all current directors, nominees and executive
officers as a group (each director, nominee and officer having sole voting and
investment power over the shares listed opposite his name except as indicated in
the footnotes hereto):
<TABLE>
<CAPTION>
AMOUNT AND NATURE PERCENT
NAME OF BENEFICIAL OWNERSHIP<F1> OF CLASS
---- --------------------------- --------
<S> <C> <C>
Raynor E. Baldwin................................. 283,884<F2> 3.0%
Donald P. Gallop.................................. 245,249<F3> 2.6%
Frank E. Hancock.................................. 2,364<F4> <F*>
James L. Hoagland................................. 28,203<F5> <F*>
Franklin A. Jacobs................................ 2,052,584<F6> 21.3%
S. Lee Kling...................................... 173,512<F7> 1.8%
Lee M. Liberman................................... 38,394<F8> <F*>
Alan Peters....................................... 49,684 <F*>
James Schneider................................... 333,977<F9> 3.5%
Stephen L. Clanton................................ 58,040<F10> <F*>
Richard Hnatek.................................... 67,533<F11> <F*>
Darryl Rosser..................................... 65,748<F12> <F*>
Paul Weintraub.................................... 15,181 <F*>
All Directors, Nominees and Executive
Officers as a Group (13 individuals).............. 3,414,353<F13> 34.5%<F14>
<FN>
- --------
<F*> Represents less than 1% of the class.
<F1> See Note (1) to the table under "Voting Securities, Principal Holders
Thereof and Cumulative Voting Rights."
<F2> Includes 69,294 shares held in a pension trust as to which Mr. Baldwin
serves as sole trustee and principal beneficiary and 24,048 shares owned
by his wife. Also includes currently exercisable options to acquire
8,580 shares of Common Stock.
<F3> Includes 162,494 shares which are held in a trust for the benefit of Mr.
Jacobs' children as to which Mr. Gallop serves as sole trustee, 42,753
shares which are owned of record by Gallop, Johnson & Neuman, L.C., a
law firm of which Mr. Gallop is Chairman, and 1,324 shares which Mr.
Gallop owns of record as custodian for the benefit of his children. Mr.
Gallop disclaims beneficial ownership of all such shares. Also includes
currently exercisable options to acquire 34,043 shares of Common Stock.
<F4> Includes currently exercisable options to acquire 990 shares of Common
Stock.
<F5> Includes currently exercisable options to acquire 26,618 shares of Common
Stock.
<F6> See Note (2) to the table under "Voting Securities, Principal Holders
Thereof and Cumulative Voting Rights."
4
<PAGE> 6
<F7> Includes 139,469 shares owned by a revocable trust of which Mr. Kling and
his wife are the trustees. Mr. Kling shares voting and dispositive power
over such shares. Also includes currently exercisable options to acquire
34,043 shares of Common Stock.
<F8> Includes currently exercisable options to acquire 30,743 shares of Common
Stock.
<F9> Includes 276,963 shares owned by a partnership of which Mr. Schneider and
his children are general partners and as to which Mr. Schneider shares
voting and dispositive power, 28,734 shares held in a pension trust as to
which Mr. Schneider serves as sole trustee and 331 shares which Mr.
Schneider holds as custodian for his children. Also includes currently
exercisable options to acquire 6,270 shares of Common Stock.
<F10> Includes currently exercisable options to acquire 53,127 shares of Common
Stock.
<F11> Includes currently exercisable options to acquire 25,080 shares of Common
Stock.
<F12> Includes currently exercisable options to acquire 33,273 shares of Common
Stock.
<F13> Includes 111,480 shares subject to stock options held by non-director
officers of the Company and 234,787 shares subject to currently
exercisable options held by directors of the Company.
<F14> For purposes of determining the aggregate amount and percentage of shares
deemed beneficially owned by directors of the Company individually and by
all directors, nominees and officers as a group, exercise of all
currently exercisable options listed in the footnotes hereto is assumed.
For such purpose, 9,889,957 shares of Common Stock are deemed to be
outstanding.
</TABLE>
- --------
PROPOSAL 1--ELECTION OF DIRECTORS
INFORMATION ABOUT THE NOMINEES
The Company's Amended and Restated By-laws (the "By-laws") currently
provide for the annual election of directors. The Board of Directors has
approved an amendment to the Company's Certificate, under which, subject to
stockholder approval, the Board would be divided into three classes with each
class of directors to serve a three-year staggered term, except for the
initial year of the classified Board at which time all of the directors are to
be elected to the class and for the term indicated herein. The amendment to
the Certificate is discussed under Proposal 2 on page 13. If the amendment to
the Certificate is not approved by the stockholders, all of the persons
elected to serve as directors of the Company will serve one-year terms
expiring at the 1997 annual meeting of stockholders.
The Board of Directors has nominated nine persons, all of whom, except for
Mr. Rosser, are currently serving as directors. The following table shows each
nominee's age, his principal occupation for at least the last five years, his
present position with the Company, the year in which he first was elected or
appointed a director (each serving continuously since first elected or appointed
except as set forth in the footnotes hereto), his directorships with other
companies whose securities are registered with the Securities and Exchange
Commission, and his proposed class and term as director.
<TABLE>
<CAPTION>
CLASS A--TERM TO EXPIRE IN 1997
SERVICE AS
NAME AGE PRINCIPAL OCCUPATION DIRECTOR SINCE
---- --- -------------------- --------------
<S> <C> <C> <C>
James L. Hoagland 73 Retired. Prior to September 1, 1989, President and Chief 1990
Executive Officer of Graybar Electric Company, Inc., a
distributor of electrical and telecommunications equipment,
for more than five years; Director of Laclede Gas Company.
Lee M. Liberman 74 Chairman emeritus and consultant to Laclede Gas Company, a 1985
retail natural gas distribution public utility, since January
1994; prior thereto, Chairman of the Board and, until August
1991, Chief Executive Officer of Laclede Gas Company, for
more than five years; Director of Angelica Corporation,
Boatmen's Bancshares, Inc., CPI Corporation, Insituform
Mid-America, Inc., Interco Incorporated and DT Industries,
Inc.
Alan Peters 84 President of A.P., Inc., a firm providing consulting services 1969
to the Company for more than the last five years.
5
<PAGE> 7
<CAPTION>
CLASS B--TERM TO EXPIRE IN 1998
SERVICE AS
NAME AGE PRINCIPAL OCCUPATION DIRECTOR SINCE
---- --- -------------------- --------------
<S> <C> <C> <C>
Raynor E. Baldwin 56 President since February 1991 and Vice President--Sales from 1977
<F1> 1981 to February 1991, of Woodsmiths, Incorporated, a
manufacturer of table tops.
James Schneider 64 Broker--International Monetary Market, Chicago Mercantile 1989
<F2> Exchange, for more than the last five years.
Darryl Rosser 44 President and Chief Operating Officer of the Company since --
December 1995; prior thereto, Executive Vice Presi-
dent--Operations since May 1995; prior thereto, Senior Vice
President--Operations since 1993; and prior thereto, Vice
President--Operations since January 1988.
<CAPTION>
CLASS C--TERM TO EXPIRE IN 1999
SERVICE AS
NAME AGE PRINCIPAL OCCUPATION DIRECTOR SINCE
---- --- -------------------- --------------
<S> <C> <C> <C>
Donald P. Gallop 63 Attorney-at-law; Chairman of law firm of Gallop, Johnson & 1963
<F3><F4> Neuman, L.C., for more than the last five years; Director of
Magna Group, Inc., and Data Research Associates, Inc.
Franklin A. Jacobs 63 Chairman of the Board and Chief Executive Officer of the Com- 1957
<F2><F4> pany for more than the last five years and President of the
Company until December 1995; Director of Magna Group, Inc.
and Top Air Manufacturing, Inc.
S. Lee Kling 67 Chairman of the Board of Kling Rechter & Co., L.P., a 1969
<F4> merchant banking company which operates in partnership with
Barclays Bank PLC, since March, 1991; prior thereto, Chairman
of the Board of Landmark Bancshares Corporation, a bank
holding company located in St. Louis, Missouri, from 1974
through December 1991, when the company merged with Magna
Group, Inc.; Chief Executive Officer of Landmark Bancshares
Corporation from 1974 through October 1990; Director of Ber-
nard Chaus, Inc., E-Systems, Inc., Hanover Direct, Inc.,
Lewis Galoob Toys, Inc., Magna Group, Inc., National Beverage
Corp. and Top Air Manufacturing, Inc.
<FN>
- --------
<F1> Mr. Baldwin has served continuously as a director, except for the period
from January 1982 through January 1988.
<F2> Messrs. Jacobs and Schneider are brothers-in-law.
<F3> Mr. Gallop is a member of the law firm serving as corporate counsel to the
Company. See "Transactions with Issuer and Others" for further
information.
<F4> Members of Executive Committee.
</TABLE>
INFORMATION CONCERNING BOARD OF DIRECTORS
During fiscal 1995, four meetings of the Board of Directors were held.
During such fiscal year, each director attended 75% or more of the aggregate of
(i) the total number of meetings of the Board of Directors held during the
period and (ii) the total number of meetings held during the period by all
committees of the Board of Directors on which he served.
The Board of Directors of the Company has a standing Audit Committee
consisting of Messrs. Liberman (Chairman), Peters, Baldwin and Hancock (who is
not standing for reelection) and a standing Compensation Committee consisting
of Messrs. Hoagland (Chairman), Gallop, Kling and Schneider. The purpose of the
Audit Committee is to review the results and scope of the audit and services
provided by the Company's independent public accountants. The purpose of the
Compensation Committee is to act on behalf of the Board of Directors with
respect
6
<PAGE> 8
to the compensation of directors and executive officers. The Compensation
Committee also administers the Company's stock option and other benefit plans.
See the "COMPENSATION COMMITTEE REPORT" beginning on page 10 for a discussion
of the key elements and policy of the Company's executive compensation
program. On December 11, 1995, the Board of Directors delegated to the
Compensation Committee the additional responsibility of serving as a
nominating committee. In that capacity, the Compensation Committee is charged
with the duty to evaluate and recommend to the Board qualified nominees for
election or appointment as directors and qualified persons for selection as
senior officers.
During fiscal 1995, four Audit Committee meetings and one Compensation
Committee meeting were held.
In December 1995, the Board of Directors, upon the recommendation of the
Compensation Committee, enacted a by-law stating that no person who has attained
the age of 73 will be eligible to stand for election or appointment as a
director, except that Messrs. Hoagland, Liberman and Peters, all of whom have
reached the proposed age limitation, will be permitted to stand for reelection
at the 1996 annual meeting. Thereafter, they will no longer be eligible for
reelection or appointment as directors.
COMPENSATION OF DIRECTORS
On December 11, 1995, the Board of Directors approved increasing the annual
director's fee to each director who is not a salaried employee of or a
consultant to the Company from $12,000 to $15,500 and eliminating the $2,500
annual fee for members of the Audit and Compensation Committees. Director's fees
of $99,666 were paid during fiscal 1995.
The Company also maintains a Non-Employee Director Stock Option Plan, which
provides for an automatic annual grant in December of each year of a
nonqualified stock option to purchase 1,650 shares of Common Stock (as adjusted
to reflect the 10-percent stock dividend to stockholders of record on December
13, 1995, and distributed on January 2, 1996) at a per share exercise price
equal to the fair market value of the Common Stock on the date the option is
granted. Presently, the options become exercisable in increments of 20 percent
of the shares with respect to such options commencing upon the date of grant
and thereafter on each of the four successive anniversaries of the date of
grant. Under Proposal 3, which is discussed beginning on page 14, the options
previously and subsequently granted would become exercisable for a certain
period of time following the retirement, death or disability of a director.
Seven non-employee directors of the Company were each granted options to
purchase 1,650 shares of Common Stock under the plan in December 1994 at an
exercise price of $9.77.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Alan Peters, a director of the Company, is the President of A.P., Inc., a
firm which provides consulting services to the Company pursuant to an
Independent Contractor Agreement. The agreement, as heretofore amended, provides
for base payments to A.P., Inc. of $50,000 per year. During fiscal 1995,
payments of $50,000 were made to A.P., Inc. under the agreement. This agreement
was extended effective November 1, 1995, and will expire at the end of fiscal
1996.
Donald P. Gallop, a director of the Company, is Chairman of the law firm of
Gallop, Johnson & Neuman, L.C., which has provided legal services to the Company
in prior years and is expected to provide legal services to the Company in the
future.
EXECUTIVE COMPENSATION
The following table reflects compensation paid or payable for fiscal years
1995, 1994 and 1993 with respect to the Company's chief executive officer and
each of the four other most highly compensated executive officers whose fiscal
1995 salaries and bonuses combined exceeded $100,000 in each instance.
7
<PAGE> 9
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION LONG TERM COMPENSATION
------------------------------------- ------------------------------------
AWARDS PAYOUTS
------------------------------------
OTHER SECURITIES
ANNUAL RESTRICT- UNDERLYING
COMPENSA- ED STOCK OPTIONS/ LTIP
FISCAL TION AWARD(S) SARS PAYOUTS
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) ($)<F1> ($)<F2> (#)<F3> ($)
(A) (B) (C) (D) (E) (F) (G) (H)
--------------------------- ------ ---------- --------- --------- --------- ---------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Franklin A. Jacobs 1995 480,692 0 16,040 0 0<F4> 0
Chairman of the Board, President 1994 441,000 0 10,400 0 110,000 0
and Chief Executive Officer<F6> 1993 441,000 0 10,400 0 82,500 0
Stephen L. Clanton 1995 146,055 22,199 2,240 28,700 22,000 0
Executive Vice President--Finance 1994 128,269 28,134 840 0 22,000 0
and Chief Financial Officer<F7> 1993 114,922 12,000 0 0 16,500 0
Richard Hnatek 1995 133,750 20,328 5,025 31,825 22,000 0
Senior Vice President--Sales 1994 123,269 27,052 2,080 0 22,000 0
1993 112,969 11,500 2,080 0 16,500 0
Darryl Rosser 1995 162,908 24,760 5,408 28,700 22,000 0
Executive Vice President-- 1994 143,269 31,380 5,408 0 22,000 0
Operations<F6> 1993 132,292 13,500 5,254 0 16,500 0
Paul Weintraub 1995 114,583 0 2,750 0 5,500 0
Vice President--International 1994 83,513 23,806 3,000 0 11,000 0
Sales<F8> 1993 74,500 7,500 2,968 0 8,250 0
<CAPTION>
ALL OTHER
COMPENSA-
NAME AND PRINCIPAL POSITION TION ($)
(A) (I)
--------------------------- ---------
<S> <C>
Franklin A. Jacobs 2,688<F5>
Chairman of the Board, President 2,524<F5>
and Chief Executive Officer<F6> 2,373<F5>
Stephen L. Clanton 0
Executive Vice President--Finance 0
and Chief Financial Officer<F7> 0
Richard Hnatek 0
Senior Vice President--Sales 0
0
Darryl Rosser 0
Senior Vice President-- 0
Operations<F6> 0
Paul Weintraub 0
Vice President--International 0
Sales<F8> 0
<FN>
- ---------
<F1> Consists of Company matching contributions under the Falcon Products, Inc.
Amended and Restated Stock Purchase Plan.
<F2> Represents the dollar value of shares of restricted stock awarded to
certain named executive officers during fiscal 1995, calculated by
multiplying the closing market price of the Company's Common Stock on the
date of the award by the number of shares awarded. The shares of
restricted stock carry from the date of award the same dividend and
voting rights as unrestricted shares of Common Stock. The restrictions
lapse with regard to one-third of the shares of restricted stock in
fiscal 1996, one-third in fiscal 1997, and the remaining one-third in
fiscal 1998.
<F3> Option grants have been adjusted to reflect a 10-percent stock dividend to
stockholders of record on December 13, 1995, and distributed on January 2,
1996.
<F4> Mr. Jacobs did not accept the grant of an option to acquire 100,000
shares of the Company's Common Stock, at the then market price, which was
awarded by the Compensation Committee during fiscal 1995. Accordingly,
the grant has been rescinded.
<F5> Consists of the economic benefit of premiums paid for a survivorship life
insurance policy on the lives of Mr. Jacobs and his spouse.
<F6> In December 1995, Mr. Rosser was appointed President and Chief Operating
Officer of the Company. Mr. Jacobs continues to serve as Chairman of the
Board and Chief Executive Officer.
<F7> In January 1996, Mr. Clanton became Executive Vice President--Strategic
Development. Michael J. Dreller has been appointed Vice President,
Chief Financial Officer, Treasurer and Secretary.
<F8> Mr. Weintraub's employment with the Company ceased in September 1995.
</TABLE>
8
<PAGE> 10
PENSION PLAN TABLE
The following table sets forth the estimated annual benefits payable under
the Company's defined benefit pension plan upon normal retirement of covered
individuals. The estimates assume that benefits commence at age 65 under a
straight-life annuity form.
<TABLE>
<CAPTION>
YEARS OF SERVICE
--------------------------------------------------------------------------
REMUNERATION 5 10 15 20 25 30 35
------------ -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
$15,000......................................... $ 1,125 $ 2,250 $ 3,375 $ 4,500 $ 5,625 $ 6,750 $ 7,875
25,000......................................... 1,875 3,750 5,635 7,500 9,375 11,250 13,125
35,000......................................... 2,625 5,250 7,875 10,500 13,125 15,750 18,375
50,000......................................... 3,750 7,500 11,250 15,000 18,750 22,500 26,250
75,000......................................... 5,625 11,250 16,875 22,500 28,125 33,750 39,375
</TABLE>
The pension plan benefit is determined by calculating 1.5% of the average of
the plan participant's salary or wages up to $75,000 per year after November 1,
1992, and up to $50,000 per year before November 1, 1992, for each year of
service. Estimated benefit amounts listed in the above table are not subject to
any deduction for Social Security benefits or other offset amounts.
The credited years of service under the retirement plan for each of the
executive officers listed in the Summary Compensation Table are as follows:
<TABLE>
<S> <C> <S> <C>
Franklin A. Jacobs 37 Richard Hnatek 15
Darryl Rosser 7 Stephen L. Clanton 6
Paul Weintraub 4
</TABLE>
INFORMATION AS TO STOCK OPTIONS
The following table provides certain information as to option grants in
fiscal 1995 to the persons named in the Summary Compensation Table.
<TABLE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<CAPTION>
INDIVIDUAL GRANTS<F1>
------------------------------------------------------------------- POTENTIAL REALIZABLE
NUMBER OF VALUE AT ASSUMED
SECURITIES PERCENT OF TOTAL ANNUAL RATES OF STOCK
UNDERLYING OPTIONS/SARS PRICE APPRECIATION
OPTIONS/SARS GRANTED TO EXERCISE OR FOR OPTION TERM<F3>
GRANTED EMPLOYEES BASE PRICE EXPIRATION --------------------
NAME (#)<F2> IN FISCAL YEAR ($/SHARE) DATE 5% ($) 10% ($)
(A) (B) (C) (D) (E) (F) (G)
---- -------------- ---------------- ----------- -------------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Franklin A. Jacobs................. -- -- -- -- -- --
Stephen L. Clanton................. 22,000 13.5% 10.23 Dec. 18, 2004 141,501 358,592
Richard Hnatek..................... 22,000 13.5% 10.23 Dec. 18, 2004 141,501 358,592
Darryl Rosser...................... 22,000 13.5% 10.23 Dec. 18, 2004 141,501 358,592
Paul Weintraub..................... 5,500 3.4% 10.23 Dec. 18, 2004 35,375 89,648
<FN>
- --------
<F1> See footnote 3 to the Summary Compensation Table on page 8.
<F2> Each option listed above was granted at fair market value on date of grant
and is exercisable in 20% annual increments, beginning on the first
anniversary date of grant and on each anniversary date thereafter. All
options listed above expire ten years from date of grant, subject
generally to earlier termination upon cessation of employment.
<F3> The potential realizable value amounts shown illustrate the values that
might be realized upon exercise immediately prior to expiration of their
term using 5 percent and 10 percent appreciation rates set by the
Securities and Exchange Commission, compounded annually and, therefore,
are not intended to forecast possible future appreciation, if any, of the
Company's stock price.
</TABLE>
9
<PAGE> 11
The following table lists option exercises in fiscal 1995 and the value of
options held as of the end of fiscal 1995 by the persons listed in the Summary
Compensation Table.
<TABLE>
AGGREGATED OPTION/SAR EXERCISES IN LAST
FISCAL YEAR AND FISCAL YEAR-END OPTION/SAR VALUES
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED IN-
OPTIONS/SARS AT FISCAL THE-MONEY OPTIONS/SARS
YEAR-END AT FISCAL YEAR-END
SHARES (#) ($)
ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE (#) REALIZED ($) UNEXERCISABLE UNEXERCISABLE
(A) (B)<F1> (C) (D)<F1> (E)
---- ------------ ------------ ---------------------- ------------------------
<S> <C> <C> <C> <C>
Franklin A. Jacobs.................. 21,173 195,175 55,000/137,500 167,490/401,235
Stephen L. Clanton.................. 0 0 39,707/52,140 348,440/152,449
Richard Hnatek...................... 23,097 211,880 11,660/52,140 39,000/152,449
Darryl Rosser....................... 0 0 19,853/52,140 125,183/152,449
Paul Weintraub...................... 2,310 18,672 5,500/7,590 16,750/35,875
<FN>
- --------
<F1> See footnote 3 to the Summary Compensation Table on page 8.
</TABLE>
- --------
COMPENSATION COMMITTEE REPORT
GENERAL POLICY
The Company's executive compensation program is linked to corporate
performance and returns to shareholders. To this end, the Company has developed
a compensation strategy that ties a significant portion of executive
compensation to the Company's success in meeting performance goals and to
appreciation in the Company's stock price. The overall objectives of this
strategy are to attract and retain the best possible executive talent, to link
executive and shareholder interests through an equity-based plan and to provide
compensation levels that recognize individual contributions as well as overall
business results.
Each year the Compensation Committee reviews the Company's overall executive
compensation program in comparison to the Company's executive compensation,
corporate performance, stock price appreciation and total return to shareholders
to corporations of similar size. The annual compensation reviews permit an
evaluation of the link between the Company's performance and its executive
compensation in the context of the compensation programs of other companies.
The Compensation Committee determines the compensation of corporate
executives elected by the Board of Directors, including the individuals whose
compensation is detailed in this proxy statement. In reviewing the individual
performance of the executives whose compensation is detailed in this proxy
statement, other than Franklin A. Jacobs (the Company's Chief Executive
Officer), the Compensation Committee takes into account the views of Mr. Jacobs.
The key elements of the Company's executive compensation program consist of
base salary, annual bonus and stock options. The Compensation Committee's
policies with respect to each of these elements, including the bases for the
compensation awarded to Mr. Jacobs, are discussed below. The Compensation
Committee also takes into account the full compensation package afforded by the
Company to the individual, including pension benefits, insurance and other
benefits, as well as the programs described below. The Compensation Committee
continues to monitor qualifying compensation paid to the Company's executive
officers with respect to its deductibility under Section 162(m) of the Internal
Revenue Code.
BASE SALARIES
Base salaries for executive officers are initially determined by evaluating
the responsibilities of the position held and the experience of the individual,
and by reference to the competitive marketplace for executive talent, including
a comparison to base salaries for comparable positions at other companies. The
comparative group is not limited to
10
<PAGE> 12
companies which comprise the published industry index shown in the Company's
stock performance graph presented below.
Annual salary adjustments are determined by evaluating the performance of
the Company and of each executive officer, and also take into account new
responsibilities. The Compensation Committee exercises judgment and discretion
in the information it reviews and the analysis it considers, and where
appropriate, also considers non-financial performance measures. These include
increase in market share, manufacturing efficiency gains, improvements in
product quality and improvements in relations with customers, suppliers and
employees.
With respect to the base salary granted to Mr. Jacobs in fiscal 1995, the
Compensation Committee took into account the Company's success in exceeding its
net income and per-share book value in fiscal 1994, the increase in the market
price of the Company's common stock and the assessment by the Compensation
Committee of Mr. Jacob's individual performance. The Compensation Committee also
took into account the longevity of Mr. Jacob's service to the Company and its
belief that Mr. Jacobs is an excellent representative of the Company to the
public by virtue of his stature in the industry. The Compensation Committee did
not attribute specific values or weights to any of these factors. For the
reasons listed above, Mr. Jacobs was granted an annual base salary, commencing
January 1, 1995, of $489,000, representing an increase of approximately 10.9%
over calendar year 1994.
ANNUAL BONUSES
The Company's executive officers are eligible for annual cash bonuses under
terms of the Company's Officer Bonus Plan. Under such Plan, the Compensation
Committee establishes bonuses as a percentage of base salary to be paid if and
to the extent annual projections for net earnings are met or exceeded. In light
of the Company's earnings levels in fiscal 1995, the Compensation Committee
recommended and the Board of Directors authorized a bonus of 15.2% of base
salary for the Company's officers, except Mr. Jacobs, attributable to fiscal
1995. Mr. Jacobs did not participate in the Officer Bonus Plan for fiscal 1995
and, accordingly, did not receive a bonus for such fiscal year.
STOCK OPTIONS
The granting of stock options is a key part of the Company's overall
compensation program and is designed to provide its executive officers and other
key employees with incentives to maximize the Company's long-term financial
performance.
In determining whether and how many options should be granted, the
Compensation Committee may consider the responsibilities and seniority of each
of the executive officers, as well as the financial performance of the Company
and such other factors as it deems appropriate, consistent with the Company's
compensation policies. However, the Compensation Committee has not established
specific target awards governing the recipient, timing or size of option grants.
Thus, determinations by the Compensation Committee with respect to the granting
of stock options are subjective in nature.
An option granted to Mr. Jacobs in December 1994 to acquire 100,000 shares
at $11.25 per share (the then market value of the Common Stock) was not accepted
by and was rescinded at the request of Mr. Jacobs.
CONCLUSION
Through the programs described above, a significant portion of the Company's
executive compensation is linked directly to individual and corporate
performance. The Compensation Committee intends to continue the policy of
linking executive compensation to corporate performance, recognizing that the
volatility of the business cycle from time to time may result in an imbalance
for a particular period.
James L. Hoagland, Chairman of Compensation Committee
Donald P. Gallop, Member
S. Lee Kling, Member
James Schneider, Member
11
<PAGE> 13
FIVE YEAR TOTAL RETURN CHART
The following chart compares the Company's cumulative yearly shareholder
return over a five-year period, calculated monthly, with the NASDAQ Composite
Index and a peer group index of public companies traded on NASDAQ that in the
judgment of the Company manufacture and/or sell furniture and related products
similar to those of the Company. The companies included in the index, in
addition to Falcon Products, Inc. are: Chromcraft Revington, Inc.; Flexsteel
Industries, Inc.; Miller Herman, Inc.; Hon Industries, Inc.; and Knape & Vogt
Manufacturing Co.
The chart assumes a $100 investment made November 2, 1990, and the
reinvestment of all dividends.
[STOCK PRICE PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
1990 1991 1992 1993 1994 1995
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Falcon Products, Inc........................................ $ 100.00 $ 135.00 $ 325.00 $ 315.00 $ 331.30 $ 416.90
NASDAQ Composite Index<F1>.................................. $ 100.00 $ 165.20 $ 187.00 $ 241.00 $ 241.80 $ 322.80
Furniture Industrial........................................ $ 100.00 $ 109.30 $ 127.90 $ 195.70 $ 187.50 $ 200.70
<FN>
- --------
<F1> On December 6, 1995, the Common Stock was withdrawn by the Company from
trading on the NASDAQ/ National Market System and, on that date, was
listed and began trading on the New York Stock Exchange.
- --------
</TABLE>
TRANSACTIONS WITH ISSUER AND OTHERS
Alan Peters, a director of the Company, is the President of A.P., Inc., a
firm which provides consulting services to the Company pursuant to an
Independent Contractor Agreement. The agreement, as heretofore amended, provides
for base payments to A.P., Inc. of $50,000 per year. During fiscal 1995,
payments of $50,000 were made to A.P., Inc. under the agreement. This agreement
was extended effective November 1, 1995, and will expire at the end of fiscal
1996.
12
<PAGE> 14
Donald P. Gallop, a director of the Company, is Chairman of the law firm of
Gallop, Johnson & Neuman, L.C., which has provided legal services to the Company
in prior years and is expected to provide legal services to the Company in the
future.
Raynor E. Baldwin, a director of the Company, is President and sole
stockholder of Woodsmiths, Incorporated, a manufacturer of table tops, which
purchases products from the Company. During fiscal 1995, the Company received
payments of $163,884 in connection with transactions with Woodsmiths,
Incorporated.
The Company believes that the terms and conditions of the transactions with
affiliated persons described above were no less favorable to the Company than
those that would have been available to the Company in comparable transactions
with unaffiliated persons.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
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
10% of a registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission.
Such individuals are required by SEC regulation to furnish the Company with
copies of all Section 16(a) forms they file. Based solely on review of the
copies of such forms furnished to the Company or written representations that no
Form 5 reports were required to be filed, the Company believes that such persons
complied with all Section 16(a) filing requirements applicable to them with
respect to transactions during fiscal 1995.
PROPOSAL 2--AMENDMENT OF THE FALCON PRODUCTS, INC.
AMENDED AND RESTATED BY-LAWS
CONCERNING CLASSIFICATION OF THE BOARD DIRECTORS
On December 11, 1995, the Board of Directors approved an amendment (the
"Amendment") to the Company's Certificate of Incorporation that would provide
for the division of the Board of Directors into three classes, with each class
to be as nearly equal in number of directors as possible. The Amendment
provides that each class of directors will serve a three-year staggered term,
except for the initial year of classification at which time all the directors
are to be elected to the class and for the term indicated herein. For more
information about the election of directors, see Proposal 1--Election of
Directors beginning on page 5. In addition, if the Amendment is approved by
the stockholders, certain inconsistent By-law provisions will be deleted or
amended. The text of the Amendment is attached hereto as Exhibit A.
---------
The adoption of the Amendment is subject to the approval of the Company's
stockholders. If the Amendment is adopted, the Company's directors will be
divided into three classes and three directors will be elected for a term
expiring at the 1997 annual meeting of stockholders, three directors will be
elected for a term expiring at the 1998 annual meeting of stockholders, and the
remaining three directors will be elected for a term expiring at the 1999 annual
meeting of stockholders (or, in each case, until their respective successors are
duly elected and qualified). Starting with the 1997 annual meeting of
stockholders, one class of directors will be elected each year for a three-year
term. If the Amendment is not adopted, all nine directors will be elected for
terms expiring at the 1997 annual meeting of stockholders or until their
successors are duly elected and qualified.
The Amendment also provides that any new director elected by the remaining
directors to fill a vacancy on the Board will serve for the remainder of the
full term of the class in which the vacancy occurred rather than, as the case is
currently, until the next annual meeting of stockholders. It also provides that
no decrease in the number of directors shall shorten the term of any incumbent
director.
A classified Board could moderate the pace of any change in control of the
Board of Directors by extending the time required to elect a majority of the
directors. At least two stockholder meetings, instead of one, will be required
to effect a change in control of the Board. In addition, since the stockholders
may cumulate their votes in the election of directors and there will be fewer
directors to be elected at each annual meeting as a result of the Amendment, a
greater number of shares will be required to ensure the election of a single
director.
The Board believes that the longer time required to elect the majority of a
classified Board will help to assure the continuity and stability of the
Company's management and policies in the future, since a majority of the
directors at any given time will have prior experience as directors of the
Company. Although the Company has had no difficulty
13
<PAGE> 15
in the past in maintaining continuity, the Board of Directors considered it
advisable to provide the additional assurance of continuity that is afforded
by the classification of directors.
It should be noted also that the classification provision will apply to
every election of directors, whether or not a change in the Board would be
beneficial to the Company and its stockholders and whether or not a majority of
the Company's stockholders believes that such a change would be desirable.
Therefore, adoption of the Amendment may have significant effects on the ability
of the stockholders of the Company to change the composition of the incumbent
Board of Directors.
Under Delaware corporation law, the affirmative vote of the holders of a
majority of all of the Company's issued and outstanding shares of Common
Stock is required to adopt the Amendment to the Certificate concerning
classification of the Board. The Amendment has been approved by the Board and,
assuming requisite stockholder approval, will become effective upon the filing
of a Certificate of Amendment with the Delaware Secretary of State.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE AMENDMENT
TO THE CERTIFICATE, WHICH IS ITEM 2 ON THE PROXY CARD.
PROPOSAL 3--AMENDMENT OF THE FALCON PRODUCTS, INC.
NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
TO PROVIDE FOR THE IMMEDIATE EXERCISE OF OPTIONS GRANTED THEREUNDER
The Company's Non-Employee Director Stock Option Plan (the "Director Stock
Option Plan") is a formula plan providing for the grant of stock options to
directors who are neither executive officers of the Company nor are otherwise
compensated by the Company on the basis of employment or consulting
arrangements. The Director Stock Option Plan is designed to provide additional
incentives for directors to promote the success of the Company's business and to
enhance the Company's ability to attract and retain the service of qualified
directors.
Under the Director Stock Option Plan, as amended and adjusted to reflect
stock splits and stock dividends, non-employee directors are granted an option
to acquire 1,650 shares of Common Stock on December 17 of each year (or, if
such date is not a business day, the first business day after such date) at
the closing sale price of the Common Stock on the New York Stock Exchange on
the date of grant. Such options are exercisable in five installments, with 20%
of the total shares underlying the option becoming available for exercise, on
a cumulative basis, on the date of grant and on the first through the fourth
anniversary dates thereof.
The Board of Directors has approved the recomendation of the Compensation
Committee to amend the Director Stock Option Plan so as to provide that each
option previously and subsequently granted thereunder shall become exercisable
in full or, from time to time, in part for a period of one year beginning with
the date of a director's Retirement (as defined below), death or Disability
(as defined below), but in no event after the termination of the term of the
option. Options that are not exercised within such one-year period following
Retirement, death or Disability, will expire.
Retirement shall mean the cessation of service as a director upon the
director's resignation (if his term is unexpired) or the completion of his
term (if he does not stand for reelection), in either case, only after the
director has reached the age established in the By-laws after which a person
is no longer eligible for election or appointment as a director (currently,
73). See "INFORMATION CONCERNING BOARD OF DIRECTORS" beginning on page 6
for a discussion of the by-law regarding the age limitation. Disability shall
mean permanent and total disability as defined in Section 22(e)(3) of the
Internal Revenue Code of 1986, as amended (the "Code").
As of January 16, 1995, options granted under the Director Stock Option Plan
to acquire 24,090 shares of Common Stock were outstanding and not currently
exercisable. Of such amount, options to acquire 3,630 shares were held by each
of the following six non-employee directors--Messrs. Baldwin, Gallop, Hoagland,
Kling, Liberman and Schneider, and options to acquire 2,310 shares were held by
Mr. Hancock. The closing sale price of the Common Stock on January 15, 1996,
as quoted on the New York Stock Exchange, was $12.75.
The Board of Directors believes that the proposed amendment would be
beneficial in two respects. First, such amendment would eliminate the
possibility of unfair application to those directors approaching retirement age
or, for other reasons, are unable to continue to serve as a director of the
Company. Second, the Director Stock Option Plan,
14
<PAGE> 16
as amended to provide for full exercisability for up to one year after
Retirement, death or Disability, would be more attractive to prospective
directors, thereby enhancing the ability of the Company to attract qualified
directors.
The following is a summary of the significant federal income tax
consequences with respect to the receipt of options under the Director Stock
Option Plan. This discussion is for purposes of general information only and
does not address specific facts and circumstances that may apply to individual
optionees. All persons who receive awards under the Director Stock Option Plan
should consult their own tax advisor to determine the particular tax
consequences to them of the receipt and exercise of options.
The taxation of options granted under the Director Stock Option Plan
(considered nonqualified stock options for tax purposes) is determined under
Section 83 of the Code. Optionees will not recognize taxable income at the time
such an option is granted. Upon exercise of an option, the optionee generally
will recognize ordinary income in an amount equal to the difference between the
aggregate exercise price of the shares as to which the option is being exercised
and the aggregate fair market value of such shares as of the exercise date.
Income recognition is generally deferred with respect to options exercised
within six months of the date of grant until the expiration of such six-month
period. The amount of ordinary income realized by the optionee will be
deductible by the Company at the same time that the optionee is required to
recognize ordinary income.
The optionee's basis in shares acquired upon exercise of an option is the
amount taxed as ordinary income, if any, plus the cost of the shares to the
optionee (i.e., the exercise price). The holding period for determining whether
capital gain or loss realized on a subsequent sale of the shares is long-term or
short-term begins on the date the option is exercised.
Approval of the amendment to the Director Stock Option Plan requires the
affirmative vote of a majority of the shares of Common Stock present in
person or represented by proxy at the annual meeting of stockholders and
entitled to vote thereon.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE AMENDMENT
TO THE DIRECTOR STOCK OPTION PLAN, WHICH IS ITEM 3 ON THE PROXY CARD.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP, the Company's independent public accountants for the
fiscal year ended October 28, 1995, has been selected as its independent public
accountants for the fiscal year ending November 2, 1996. Representatives of
Arthur Andersen LLP are expected to attend the annual meeting and will have the
opportunity to make statements and respond to appropriate questions from
stockholders.
ANNUAL REPORT
The Annual Report of the Company for fiscal 1995 accompanies this Notice of
Annual Meeting and Proxy Statement.
FUTURE PROPOSALS OF SECURITY HOLDERS
All proposals of security holders intended to be presented at the 1997
annual meeting of stockholders must be received by the Company not later than
October 4, 1996, for inclusion in the Company's 1997 proxy statement and form of
proxy relating to the 1997 annual meeting.
OTHER BUSINESS
The Board of Directors knows of no business to be brought before the annual
meeting other than as set forth above. If other matters properly come before the
meeting, it is the intention of the persons named in the solicited proxy to vote
the proxy on such matters in accordance with their judgment.
15
<PAGE> 17
MISCELLANEOUS
The Company will pay the cost of soliciting proxies in the accompanying
form. In addition to solicitation by use of the mails, certain officers and
regular employees of the Company may solicit the return of proxies by telephone,
telegram or personal interview and may request brokerage houses, custodians,
nominees and fiduciaries to forward soliciting material to their principals and
will agree to reimburse them for their reasonable out-of-pocket expenses.
Stockholders are urged to mark, sign and send in their proxies without
delay.
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR FISCAL 1995 FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION (INCLUDING RELATED FINANCIAL
STATEMENTS AND SCHEDULES) IS AVAILABLE TO STOCKHOLDERS WITHOUT CHARGE, UPON
WRITTEN REQUEST TO THE SECRETARY, FALCON PRODUCTS, INC., 9387 DIELMAN INDUSTRIAL
DRIVE, ST. LOUIS, MISSOURI 63132.
By Order of the Board of Directors
MICHAEL J. DRELLER
Secretary
St. Louis, Missouri
February 1, 1996
16
<PAGE> 18
EXHIBIT A
AMENDMENT TO FALCON PRODUCTS, INC.
CERTIFICATE OF INCORPORATION
"RESOLVED, that the Certificate of Incorporation of the Company be amended
by the addition of an Article thereto, to be numbered ELEVENTH, to read as
follows:
ELEVENTH: The number of directors of the corporation which shall constitute
the Board of Directors shall be nine, but such number may
thereafter be changed from time to time by resolution of the Board of
Directors; provided, however, that the number of the directors of the
corporation shall not be less than three. The Board of Directors shall be
divided into three classes, as nearly equal in number as possible, which
shall be designated Class A, Class B and Class C. The class of each of the
directors elected at the 1996 annual meeting of stockholders (the "1996
Meeting") shall be designated by the Board. The term of office of each
member then designated as a Class A director shall expire at the annual
meeting of stockholders next ensuing the 1996 Meeting, that of each member
then designated as a Class B director at the annual meeting of
stockholders one year thereafter, and that of each member then designated
as a Class C director at the annual meeting of stockholders two years
thereafter. At each annual meeting of stockholders held after the election
and classification of the Board of Directors at the 1996 Meeting,
directors elected to succeed those whose terms then expire shall be
elected for a term of three years expiring at the third succeeding annual
meeting thereafter and until their respective successors are elected and
have qualified or until their earlier displacement from office by
resignation, removal or otherwise. If the number of directors has changed,
any increase or decrease in the number of directors shall be apportioned
by the Board among the classes so that the number of directors in each
class remain as nearly equal as possible; provided, however, that no
decrease in the number of directors shall shorten the term of any
incumbent director. Subject to the rights, if any, of the holders of any
class of capital stock of the corporation other than common stock then
outstanding, any vacancies in the Board of Directors that occur for any
reason prior to the expiration of the term of office of the class in
which the vacancy occurs, including vacancies that occur by reason of an
increase in the number of directors, may be filled only by the Board of
Directors of the corporation, acting by the affirmative vote of a majority
of the remaining directors then in office (even if less than quorum). A
director elected to fill a vacancy shall hold office during the term to
which his predecessor had been elected and until his successor shall have
been elected and shall qualify, or until his earlier death, resignation or
removal. Directors need not be stockholders."
<PAGE> 19
PRELIMINARY COPIES
------------------
FALCON PRODUCTS, INC.
9387 DIELMAN INDUSTRIAL DRIVE, ST. LOUIS, MISSOURI 63132
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
ANNUAL MEETING OF STOCKHOLDERS, MARCH 14, 1996
The undersigned hereby appoints Franklin A. Jacobs and Michael J. Dreller,
and each of them, with full power of substitution, the true and lawful attorneys
in fact, agents and proxies of the undersigned to vote at the Annual Meeting of
Stockholders of Falcon Products, Inc., to be held on Thursday, March 14, 1996,
commencing at 4:00 p.m., at the St. Louis Club, 7701 Forsyth Boulevard, Clayton,
Missouri 63105 and at any and all adjournments thereof, according to the number
of votes which the undersigned would possess if personally present for the
purpose of considering and taking action upon the following as more fully set
forth in the Proxy Statement of the Company dated February 1, 1996.
1. Election of Class A, Class B and Class C Directors:
/ / FOR all nominees listed below / / WITHHOLD AUTHORITY to vote for ALL
(except as marked to the nominees listed below
contrary below)
CLASS A: James L. Hoagland, Lee M. Liberman, Alan Peters
CLASS B: Raynor E. Baldwin, James Schneider, Darryl Rosser
CLASS C: Donald P. Gallop, Franklin A. Jacobs, S. Lee Kling
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name on the line provided below)
- --------------------------------------------------------------------------------
2. Amendment to the Falcon Products, Inc. Certificate of Incorporation:
/ / FOR / / AGAINST / / ABSTAIN
3. Amendment to the Falcon Products, Inc. Non-Employee Director Stock Option
Plan:
/ / FOR / / AGAINST / / ABSTAIN
4. In their discretion with respect to the transaction of such other business as
may properly come before the meeting or any adjournments thereof.
BE SURE TO SIGN AND DATE THE REVERSE SIDE OF THIS CARD
<PAGE> 20
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED FOR THE ELECTION OF ALL DIRECTORS IN ALL CLASSES UNDER PROPOSAL 1, FOR
---
PROPOSAL 2, FOR PROPOSAL 3 AND IN THE DISCRETION OF THE PROXIES WITH RESPECT TO
---
THE TRANSACTION OF SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING
OR ANY ADJOURNMENTS THEREOF.
The undersigned hereby acknowledges receipt of copies of the Notice of
Annual Meeting of Stockholders and Proxy Statement, each dated February 1, 1996
and the Annual Report of the Company for fiscal 1995.
Dated: ______________________ 1996
-------------------------------------------
-------------------------------------------
Please sign name(s) exactly as it appears
on this proxy. In the case of joint
holders, all should sign. If executed by a
corporation, this proxy should be signed
by a duly authorized officer. Executors,
administrators and trustee should so
indicate when signing. If executed by a
partnership, this proxy should be signed
by an authorized partner.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING
THE ENCLOSED ENVELOPE.
<PAGE> 21
[This amendment is being submitted to the Securities and Exchange Commission
pursuant to Instruction 3 to Item 10 of Schedule 14A. It will not be printed
in the definitive proxy statement to be sent to stockholders.]
AMENDMENT TO FALCON PRODUCTS, INC.
NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
RESOLVED, that the Falcon Products, Inc. Non-Employee Director Stock
Option Plan, dated March 14, 1991, as amended on September 15, 1992 (such
Plan, as heretofore amended, being herien called the "Plan"), be further
amended by the addition of the following provision:
"Notwithstanding anything to the contrary contained in the Plan, all
options granted under the Plan shall become exercisable in full or,
from time to time, in part for a period of one year beginning with the
date of a director's Retirement (as hereinafter defined), death or
Disablity (as hereinafter defined), but in no event after the termination
of the term of the option. As used herein, the term "Retirement" means the
cessation of service as a director upon the director's resignation (if
his term is unexpired) or the completion of his term (if he does not
stand for reelection), in either case, only after the director has
reached the age established in the Corporation's By-laws after which a
person is no longer eligible for election or appointment as a director.
The term "Disability" means the permanent and total disability as
defined in Section 22(e)(3) of the Internal Revenue Code of 1986, as
amended."
<PAGE> 22
APPENDIX
--------
The information contained in the Stock Performance Graph is restated
in the table that immediately follows the graph.
