<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark one)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended April 27, 1996
OR
[ ] TRANSACTION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ------------ to -------------
Commission File Number 1-11577
FALCON PRODUCTS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 43-0730877
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
9387 DIELMAN INDUSTRIAL DRIVE 63132
ST. LOUIS, MISSOURI (Zip Code)
(Address of principal executive offices)
(314) 991-9200
(Registrant's telephone number,
including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding twelve months, and (2) has been subject to such
filing requirements for the past 90 days. YES X NO
----- -----
As of June 1, 1996, the registrant had 9,668,635 shares of common stock,
$.02 par value, outstanding.
Page 1 of 12 pages
Exhibit Index is on page 11 of this report.
<PAGE> 2
PART I - FINANCIAL INFORMATION
----------------------
Item 1. - Financial Statements
--------------------
<TABLE>
Falcon Products, Inc. and Subsidiaries
--------------------------------------
Consolidated Balance Sheets
---------------------------
(Unaudited)
<CAPTION>
April 27, October 28,
1996 1995
----------- -----------
Assets
- ------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 5,598,730 $ 6,969,786
Accounts receivable, less allowances
of $388,000 and $369,000, respectively 14,704,151 17,438,415
Inventories 19,272,619 16,705,744
Prepaid expenses and other current assets 2,243,962 1,966,988
----------- -----------
Total current assets 41,819,462 43,080,933
----------- -----------
Property, plant and equipment:
Land 2,841,625 2,841,625
Buildings and improvements 12,414,492 11,871,150
Machinery and equipment 24,008,252 21,276,524
----------- -----------
39,264,369 35,989,299
Less accumulated depreciation 15,119,536 13,802,033
----------- -----------
Total property, plant and equipment 24,144,833 22,187,266
----------- -----------
Other assets, net of accumulated amortization:
Excess of cost over fair value of net assets acquired 7,292,578 6,858,152
Other 2,854,726 2,757,863
----------- -----------
Total other assets 10,147,304 9,616,015
----------- -----------
$76,111,599 $74,884,214
=========== ===========
<CAPTION>
Liabilities and Stockholders' Equity
- ------------------------------------
<S> <C> <C>
Current liabilities:
Accounts payable $ 6,311,518 $ 7,158,284
Accrued liabilities 3,837,540 5,031,264
Current maturities of long-term debt 1,104,782 963,976
----------- -----------
Total current liabilities 11,253,840 13,153,524
Long-term obligations:
Long-term debt 761,354 925,375
Pension liability 303,445 303,445
Deferred income taxes 1,185,722 1,185,722
Minority interest in consolidated subsidiary 989,587 1,009,502
----------- -----------
Total liabilities 14,493,948 16,577,568
----------- -----------
Stockholders' equity:
Common stock, $.02 par value: authorized 20,000,000 shares;
9,643,707 and 9,539,737 shares issued, respectively 192,874 190,795
Additional paid-in capital 43,225,549 42,760,776
Deferred compensation plan (55,042) (70,769)
Treasury stock, at cost (2,952 and 11,000 shares, respectively) (41,846) (135,000)
Cumulative translation adjustments 189,533 182,119
Retained earnings 18,106,583 15,378,725
----------- -----------
Total stockholders' equity 61,617,651 58,306,646
----------- -----------
$76,111,599 $74,884,214
=========== ===========
See accompanying notes to consolidated financial statements.
</TABLE>
-2-
<PAGE> 3
<TABLE>
Falcon Products, Inc. and Subsidiaries
--------------------------------------
Consolidated Statements of Earnings
-----------------------------------
(Unaudited)
<CAPTION>
Thirteen Thirteen Twenty-Six Twenty-Six
Weeks Ended Weeks Ended Weeks Ended Weeks Ended
April 27, 1996 April 29, 1995 April 27, 1996 April 29, 1995
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Net sales $25,831,548 $21,129,459 $51,264,904 $39,949,490
Cost of sales 17,104,613 13,623,292 34,931,447 26,618,186
----------- ----------- ----------- -----------
Gross margin 8,726,935 7,506,167 16,333,457 13,331,304
Selling, general and
administrative
expenses 5,322,061 4,751,416 10,354,409 8,572,297
----------- ----------- ----------- -----------
Operating profit 3,404,874 2,754,751 5,979,048 4,759,007
Interest income, net 22,104 37,594 49,117 74,117
Minority interest in
consolidated
subsidiary 3,408 (4,375) 19,915 (15,127)
----------- ----------- ----------- -----------
Earnings before
income taxes 3,430,386 2,787,970 6,048,080 4,817,997
Income tax expense 1,303,400 1,045,370 2,298,100 1,796,660
----------- ----------- ----------- -----------
Net earnings $ 2,126,986 $ 1,742,600 $ 3,749,980 $ 3,021,337
=========== =========== =========== ===========
Earnings per share<F*> $.22 $.18 $.38 $.31
==== ==== ==== ====
<FN>
<F*> Per share data has been adjusted to reflect the effects of the December
13, 1995, 10% stock dividend.
See accompanying notes to consolidated financial statements.
</TABLE>
-3-
<PAGE> 4
<TABLE>
Falcon Products, Inc. and Subsidiaries
--------------------------------------
Consolidated Statements of Stockholders' Equity
-----------------------------------------------
Twenty-Six Weeks Ended April 27, 1996, and April 29, 1995
---------------------------------------------------------
(Unaudited)
<CAPTION>
Deferred
Additional Compen- Cumulative Total
Common Paid-in sation Treasury Translation Retained Stockholders'
Stock Capital Plan Stock Adjustments Earnings Equity
----- ------- ---- ----- ----------- -------- ------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, October 29, 1994 $171,455 $30,510,061 $ -- $ -- $(38,621) $19,912,649 $50,555,544
Net earnings -- -- -- -- -- 3,021,337 3,021,337
Exercise of stock options 859 57,201 -- -- -- -- 58,060
Issuance of stock to Employee
Stock Purchase Plan 439 256,529 -- -- -- -- 256,968
Compensation expense under
restricted stock
and option plans -- 10,386 4,783 -- -- -- 15,169
Issuance of restricted stock 100 57,400 (57,400) -- -- -- 100
Translation adjustments -- -- -- -- 143,464 -- 143,464
Cash dividends -- -- -- -- -- (344,375) (344,375)
-------- ----------- -------- --------- -------- ----------- -----------
Balance, April 29, 1995 $172,853 $30,891,577 $(52,617) $ -- $104,843 $22,589,611 $53,706,267
======== =========== ======== ========= ======== =========== ===========
Balance, October 28, 1995 $190,795 $42,760,776 $(70,769) $(135,000) $182,119 $15,378,725 $58,306,646
Net earnings -- -- -- -- -- 3,749,980 3,749,980
Exercise of stock options 1,929 327,611 -- 742,501 -- (542,304) 529,737
Issuance of stock to Employee
Stock Purchase Plan 150 133,490 -- 198,857 -- -- 332,497
Compensation expense under
restricted stock and
option plans -- 3,672 15,727 -- -- -- 19,399
Translation adjustments -- -- -- -- 7,414 -- 7,414
Cash dividends -- -- -- -- -- (479,818) (479,818)
Treasury stock purchases -- -- -- (848,204) -- -- (848,204)
-------- ----------- -------- --------- -------- ----------- -----------
Balance, April 27, 1996 $192,874 $43,225,549 $(55,042) $(41,846) $189,533 $18,106,583 $61,617,651
======== =========== ======== ========= ======== =========== ===========
See accompanying notes to consolidated financial statements
</TABLE>
-4-
<PAGE> 5
<TABLE>
Falcon Products, Inc. and Subsidiaries
--------------------------------------
Consolidated Statements of Cash Flows
-------------------------------------
(Unaudited)
<CAPTION>
Twenty-Six Twenty-Six
Weeks Ended Weeks Ended
April 27, 1996 April 29, 1995
-------------- --------------
<S> <C> <C>
Cash flows from operating activities:
Net earnings $ 3,749,980 $ 3,021,337
----------- -----------
Adjustments to reconcile net earnings
to net cash provided by operating activities
Depreciation 1,355,237 979,035
Amortization of other assets 566,688 574,077
Translation adjustments 7,414 143,464
Compensation expense under non-qualified stock options 15,727 10,386
Minority interest in consolidated subsidiary (19,915) 15,127
Amortization of restricted stock awards 3,672 4,783
Change in assets and liabilities:
Decrease (increase) in:
Accounts receivable, net 2,815,008 2,938,879
Inventories (2,329,716) (2,225,042)
Prepaid expenses and other current assets (273,466) 76,391
Other assets, net (527,028) (829,595)
Increase (decrease) in:
Accounts payable (470,037) (382,301)
Accrued liabilities (1,643,724) (1,701,957)
----------- -----------
Total adjustments (500,140) (396,753)
----------- -----------
Net cash provided by operating activities 3,249,840 2,624,584
----------- -----------
Cash flows from investing activities:
Cost of businesses acquired (1,117,788) --
Additions to property, plant and equipment, net (2,864,105) (2,633,504)
----------- -----------
Net cash used in investing activities (3,981,893) (2,633,504)
----------- -----------
Cash flows from financing activities:
Repayment of long-term debt, net (173,215) (346,571)
Common stock issuances 862,234 315,128
Cash dividends (479,818) (344,375)
Treasury stock purchases (848,204) --
----------- -----------
Net cash used in financing activities (639,003) (375,818)
----------- -----------
Net decrease in cash and cash equivalents (1,371,056) (384,738)
Cash and cash equivalents-beginning of period 6,969,786 7,312,189
----------- -----------
Cash and cash equivalents-end of period $ 5,598,730 $ 6,927,451
=========== ===========
Supplemental Cash Flow Information:
Cash paid for interest $ 88,427 $ 100,999
=========== ===========
Cash paid for income taxes $ 1,860,138 $ 2,480,700
=========== ===========
See accompanying notes to consolidated financial statements.
</TABLE>
-5-
<PAGE> 6
Falcon Products, Inc. and Subsidiaries
--------------------------------------
Notes to Consolidated Financial Statements
------------------------------------------
Twenty-six Weeks Ended April 27,1996
------------------------------------
Note 1. - Interim Results
The financial statements contained herein are unaudited. In the
opinion of management, these financial statements reflect all adjustments,
consisting only of normal recurring adjustments, which are necessary for
fair presentation of the results of the interim periods presented.
Reference is made to the footnotes to the consolidated financial statements
contained in the Company's Annual Report on Form 10-K for the year ended
October 28, 1995, filed with the Securities and Exchange Commission.
Note 2. - Acquisitions
During September 1995, the Company acquired the interior decor business
and related assets, and assumed certain liabilities relating to that
business, from Omni Inc. The Company operates this business under the
tradename Decor Concepts, which was a tradename used by Omni Inc. for a
substantial portion of that business. Decor Concepts is a manufacturer of
furniture products such as seating, tables, and casegoods for restaurant
chains. The total purchase price for the transaction was approximately
$1,472,000. This purchase was funded by the Company with its available cash
reserves.
In February 1996, the Company acquired substantially all of the assets
and assumed certain liabilities of a manufacturing facility located in
Tijuana, Mexico (the Tijuana facility). This facility specializes in
manufacturing upscale wood and upholstered seating primarily for the lodging
and hospitality industries. The total purchase price for this facility was
approximately $500,000 and was funded by the Company with its available cash
reserves.
Item 2. - Management's Discussion and Analysis of Results of Operations and
-----------------------------------------------------------------
Financial Condition
- -------------------
RESULTS OF OPERATIONS
General
The following table sets forth, for the periods presented, certain
information relating to the operations of the Company, expressed as a
percentage of net sales:
<TABLE>
<CAPTION>
Thirteen Weeks Ended Twenty-Six Weeks Ended
---------------------- ----------------------
04/27/96 04/29/95 04/27/96 04/29/95
-------- -------- ----------------------
<S> <C> <C> <C> <C>
Net sales 100.0% 100.0% 100.0% 100.0%
Cost of sales 66.2 64.5 68.1 66.6
Gross margin 33.8 35.5 31.9 33.4
Selling, general and administrative expenses 20.6 22.5 20.2 21.5
Operating profit 13.2 13.0 11.7 11.9
Interest income, net .1 .2 .1 .2
Minority interest in consolidated subsidiary -- -- -- --
Earnings before income taxes 13.3 13.2 11.8 12.1
Income tax expense 5.1 5.0 4.5 4.5
Net earnings 8.2 8.2 7.3 7.6
</TABLE>
-6-
<PAGE> 7
Thirteen weeks ended April 27, 1996, compared to the thirteen weeks ended
April 29, 1995
Net earnings were $2,127,000 in the second quarter of 1996, compared to
$1,743,000 in 1995, an increase of 22.1%. Earnings per share were $.22 in
1996, compared to $.18 in 1995, a 22.2% increase.
Net sales for the second quarter of 1996 were $25.8 million, an increase
of 22.3% over 1995 second quarter net sales of $21.1 million. This increase
primarily resulted from strong sales performance from the Company's National
Accounts customers and incremental sales from the acquisition of Decor
Concepts. Net sales for the quarter, excluding sales resulting from the
acquisition of Decor Concepts, were approximately $23.5 million.
Cost of sales was $17.1 million for the 1996 second quarter, an increase
of 25.6% from $13.6 million in the second quarter of 1995. The overall
increase is a result of the increased sales volume. Gross margin increased
to $8.7 million for the second quarter of 1996, a 16.3% increase from $7.5
million in the same quarter of 1995. Gross margin as a percentage of net
sales decreased to 33.8% in 1996 from 35.5% in 1995. The lower gross margin
percentage during the second quarter of 1996 was due primarily to product
mix and certain production inefficiencies at the facilities acquired by the
Company in the Decor Concepts purchase.
Selling, general and administrative expenses were $5.3 million in the
second quarter of 1996, compared to $4.8 million in the second quarter of
1995, a 12.0% increase. The increase is primarily related to increased
sales and marketing programs, including salaries, travel expenses and
commissions. Selling, general and administrative expenses as a percentage
of net sales, decreased to 20.6% for the second quarter of 1996 as compared
to 22.5% for the same period of 1995. The decrease in the expense rate in
1996 is primarily the result of efficiencies from higher sales volume.
Net interest income was $22,000 for the second quarter of 1996, versus
$38,000 for the comparable period in 1995. The decrease in net interest
income is primarily due to the reduction of available funds invested in
interest-bearing securities due to the acquisition of Decor Concepts in late
1995 and the Tijuana facility in 1996.
Income tax expense increased by $258,000, or 24.7%, in the second
quarter of 1996 compared to the same period in 1995 due to higher earnings
and a slightly higher effective tax rate in 1996.
Twenty-six weeks ended April 27, 1996, compared to twenty-six weeks ended
April 29, 1995
Net earnings were $3,750,000 in the first half of 1996, compared to
$3,021,000 in 1995, an increase of 24.1%. Earnings per share reached $.38
in 1996, compared to $.31 in 1995, a 22.6% increase.
Net sales for the first half of 1996 were $51.3 million, an increase of
28.3% over net sales of $39.9 million recorded for the same period in 1995.
Net sales increased primarily due to increased sales from the Company's
National Accounts program and due to the acquisition of Decor Concepts
during 1995. Net sales, excluding sales resulting from this acquisition,
were approximately $46.5 million for the six months ended April 27, 1996.
Cost of sales was $34.9 million for the first half of 1996, an increase
of 31.2% from $26.6 million in the first half of 1995. The overall increase
is primarily related to the increased sales volume. Gross margin increased
to $16.3 million for the first half of 1996, a 22.5% increase from $13.3
million in the same period of 1995. Gross margin as a percentage of net
sales decreased to 31.9% in 1996 from 33.4% in 1995. The lower gross margin
percentage during the first half of 1996 was due primarily to product mix
and inefficiencies at the facilities acquired in the Decor Concepts
purchase.
-7-
<PAGE> 8
Selling, general and administrative expenses were $10.4 million in the
first half of 1996, compared to $8.6 million in 1995, a 20.8% increase. The
overall increase is primarily related to increased sales and marketing
programs, including salaries, travel expense and commissions. Selling,
general and administrative expenses as a percentage of net sales decreased
to 20.2% for the first half of 1996 as compared to 21.5% for the same period
of 1995, due to efficiencies from higher sales volume.
Net interest income was $49,000 for the first half of 1996, versus
$74,000 for the comparable period in 1995. The decrease in net interest
income is primarily due to the reduction of available funds invested in
interest-bearing securities due to the acquisitions of Decor Concepts
during late 1995 and the Tijuana facility in 1996.
Income tax expense was $2,298,000 for the first half of 1996, a 27.9%
increase compared to $1,797,000 for the same period in 1995. Income tax
expense increased in 1996 due to higher earnings and a slightly higher
effective tax rate.
LIQUIDITY AND CAPITAL RESOURCES
The Company's working capital at April 27, 1996, was $30.6 million and
its ratio of current assets to current liabilities was 3.7 to 1.0, compared
to $29.9 million and 3.3 to 1.0 at October 28, 1995.
During the first half of 1996, the Company acquired 67,000 shares of its
common stock for a total cost of approximately $850,000. The Company is
authorized to purchase up to 275,000 shares of its common stock under a
stock repurchase plan approved by the Board of Directors.
The Company has a $2 million unsecured revolving line of credit
agreement with a commercial bank. The revolving line of credit bears
interest at the London Interbank Offered Rate plus 1.75 percent and expires
on July 1, 1997. As of April 27, 1996, there were no amounts outstanding
under the revolving line of credit.
The Company expects that it will meet its ongoing working capital and
capital requirements from a combination of internally generated funds,
available cash reserves and available borrowings under its revolving credit
facility. The Company's operating cash flows constitute its primary source
of liquidity.
PART II - OTHER INFORMATION
-----------------
Item 1. - Legal Proceedings
-----------------
The Company is a defendant in a lawsuit filed on May 8, 1996,
in the United States District Court for the Northern District of
California that alleges certain business tort claims including trade
dress and copyright infringement, antitrust violation and unfair
business practices by the Company concerning new products that the
Company introduced for the lodging industry. The complaint seeks
actual damages in excess of $1.0 million and unspecified punitive
and other damages. The Company's management believes the suit is
without merit and intends to vigorously defend its position. While
the final outcome of the lawsuit cannot be determined, the Company
believes that it will not have a material adverse effect on the
Company's results of operations or its financial position.
There are no other material pending legal proceedings, other than
routine litigation incidental to the business, to which the
Company is a party or of which any of the Company's property
is the subject.
Item 2. - Changes in Securities
---------------------
None.
Item 3. - Defaults Upon Senior Securities
-------------------------------
None.
-8-
<PAGE> 9
Item 4. - Submission of Matters to a Vote of Security Holders
---------------------------------------------------
The Company held its Annual Meeting of Stockholders on March 16,
1996, for the purpose of electing a board of nine Directors in
three classes, to vote on an amendment to the Company's
Certificate of Incorporation that would classify the Board of
Directors into three separate classes, and to vote on an
amendment to the Company's Non-Employee Director Stock Option
Plan that would permit the exercise of stock options previously
granted, in full, in the event of a Director's retirement,
death or disability. The number of votes in favor, votes
withheld and votes abstained for each nominee for Director, and
the number of votes for, against and abstained for the
proposals to amend the Company's Certificate of Incorporation
and to amend the Company's Non-Employee Director Stock Option
Plan are as follows:
<TABLE>
<CAPTION>
Nominee Votes For Votes Withheld Votes Abstained
------- --------- -------------- ---------------
<S> <C> <C> <C>
Class A
-------
James L. Hoagland 8,607,240 8,896 48,465
Lee M. Liberman 8,607,019 9,117 48,465
Alan Peters 8,390,430 225,706 48,465
Class B
-------
Raynor E. Baldwin 8,604,668 11,468 48,465
Darryl Rosser 8,608,780 7,356 48,465
James Schneider 8,608,560 7,576 48,465
Class C
--------
Donald P. Gallop 8,392,410 223,726 48,465
Franklin A. Jacobs 8,608,670 7,466 48,465
S. Lee Kling 8,606,524 9,612 48,465
<CAPTION>
Votes For Votes Against Votes Abstained
--------- ------------- ---------------
<S> <C> <C> <C>
Amendment to the Company's
Certificate of Incorporation 7,106,174 1,536,044 22,383
Amendment to the Company's
Non-Employee Director
Stock Option Plan 8,434,390 178,035 52,176
</TABLE>
Item 5. - Other Information
-----------------
None.
Item 6. - Exhibits and Reports on Form 8-K
--------------------------------
(a) For exhibits, see Exhibit Index on page 11.
(b) No current reports on Form 8-K have been filed during the
thirteen weeks ended April 27, 1996.
-9-
<PAGE> 10
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
FALCON PRODUCTS, INC.
--------------------------
(Registrant)
Date: June 10, 1996 /s/ Franklin A. Jacobs
--------------------------
Franklin A. Jacobs
Chief Executive Officer
and Chairman of the Board
Date: June 10, 1996 /s/ Michael J. Dreller
--------------------------
Michael J. Dreller
Vice President and
Chief Financial Officer
-10-
<PAGE> 11
<TABLE>
EXHIBIT INDEX
--------------
<CAPTION>
Exhibit
Number Description
- ------ -----------
<C> <S>
3.1 Restated Certificate of Incorporation,
filed herewith.
3.2 Restated Bylaws, filed herewith.
10.26 Amendment to Non-Employee
Director Stock Option Plan, filed herewith.
11 Computation of Earnings
Per Share, filed herewith.
</TABLE>
-11-
<PAGE> 1
EXHIBIT 3.1
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 09:00 AM 06/06/1996
960164991-798607
RESTATED
CERTIFICATE OF INCORPORATION
OF
FALCON PRODUCTS, INC.
* * * * * * *
(Originally incorporated February 8, 1974, under the same name)
FIRST: The name of the corporation is
FALCON PRODUCTS, INC.
SECOND: The address of its registered office in the State of
Delaware is 100 West Tenth Street, in the City of Wilmington,
County of New Castle. The name of its registered agent at such
address is The Corporation Trust Company.
THIRD: The nature of the business or purposes to be conducted
or promoted are:
(a) To manufacture, sell, import and export at wholesale and
retail, furniture and fixtures of all types and descriptions, and
to do the same with any and all kinds of products, whether related
or not,
(b) To develop, manufacture, sell and otherwise deal in or
with products of all kinds,
(c) To buy, lease, contract for, invest in or otherwise
acquire any real or personal property or any interest therein, or
all or any part of the good will, rights, franchises, property and
business of any person, entity, partnership, association or
corporation, to pay for the same in cash or in stock of any class,
bonds, or other obligations of the corporation or otherwise, to
<PAGE> 2
hold, utilize and in any manner dispose of the whole or any part of
the rights and property so acquired, to assume in connection
therewith any liabilities of any such person, entity, partnership,
association or corporation, and conduct in any lawful manner the
whole or any part of the business thus acquired;
(d) To sell, lease, exchange, convey, mortgage, pledge,
transfer, assign and deliver and otherwise dispose of all or any
part of the property, assets and effects of the corporation, and
receive in payment therefor cash or stocks, bonds, notes,
debentures or other securities or evidences of indebtedness or
obligations of any individual, firm, corporation, company,
association, trust or organization on such terms and conditions as
the Board of Directors of the corporation shall determine, subject
to limitations, restrictions or requirements imposed by law;
(e) To act as principal, agent, broker, dealer, factor,
jobber, commission merchant or in any representative capacity in
transacting any business authorized herein;
(f) To manufacture, buy, sell, exchange, mortgage, encumber,
improve, develop, manage, control, assign, transfer, convey, lease,
pledge or otherwise acquire, hold, own, alienate or dispose of
property of any kind whatsoever, real, personal or mixed,
wheresoever situated, or any interest therein;
(g) To construct, improve, rebuild, alter, decorate,
maintain, manage, control, lease, encumber or otherwise to acquire,
hold and dispose of and deal in any and all kinds of improvements
upon land belonging to this corporation, or upon other land;
-2-
<PAGE> 3
(h) To lease, purchase, manufacture or otherwise acquire and
to own, hold, mortgage, pledge, assign, transfer or otherwise
dispose of, and generally to deal in and use building materials,
tools, equipment, furniture, fixtures and supplies incident to or
useful in connection with the purchase, sale, ownership,
construction, maintenance and management of real estate, buildings
and other structures;
(i) To acquire, hold, sell, use, assign, lease, grant
licenses in respect of, mortgage or otherwise dispose of letters
patent of the United States or of any foreign country, patent
rights, licenses and privileges, inventions, improvements and
processes, copyrights, trademarks and trade names, relating to or
useful in connection with any business of the corporation;
(j) To purchase, insofar as the same may be done without
impairing the capital of the corporation, and to hold, pledge and
reissue shares of its own capital stock, but such shares so
acquired and held shall not be entitled to vote, either directly or
indirectly, nor to receive dividends;
(k) To purchase or in any manner acquire, to own and hold,
receive and dispose of the income from, to guarantee, sell, assign,
transfer, mortgage, pledge or otherwise dispose of, and to exercise
all of the rights of individual natural persons with respect to any
bonds, securities and evidences of indebtedness of or shares of
stock in any corporation or joint stock company of any state,
territory or country, and while the owner of said stock, to
-3-
<PAGE> 4
exercise all of the rights, powers and privileges of ownership,
including the right to vote thereon;
(l) To purchase, incorporate and cause to be merged,
consolidated, reorganized or liquidated or any of the foregoing,
and to promote, take charge of and aid in any way permitted by law
the incorporation, merger, consolidation or liquidation of any
corporation, association or entity;
(m) To borrow or raise moneys for any of the purposes of the
corporation and from time to time, without limit as to amount, to
draw, make, accept, endorse, execute and issue promissory notes,
drafts, bills of exchange, warrants, bonds, debentures, convertible
or non-convertible, and other negotiable or non-negotiable
instruments and evidences of indebtedness, and to secure the
payment thereof and of the interest thereon by mortgage on or
pledge, conveyance or assignment in trust of the whole or any part
of the assets of the corporation, real, personal or mixed,
including contract rights, whether at the time owned or thereafter
acquired, and to sell, pledge or otherwise dispose of such
securities or other obligations of the corporation for its
corporate purposes;
(n) To enter into, make, perform and carry out contracts of
every sort and kind for any lawful purpose, with any person, firm,
association or corporation, whether public, private or municipal or
body politic, and with the government of the United States or any
state, territory or colony thereof, or any foreign government;
-4-
<PAGE> 5
(o) To conduct business in all other states, the District of
Columbia, the territories, possessions and dependencies of the
United States, and in any or all foreign countries, to have one or
more offices out of the State of Delaware, and to hold, purchase,
lease, let, mortgage and convey real and personal property out of
said state as well as therein;
(p) To do any and every thing necessary or convenient for the
accomplishment of any of the purposes or the attainment of any of
the objects or the furtherance of any of the powers hereinabove
enumerated, either for itself or as agent for any persons, firm or
corporation, either alone or in association with other
corporations, or with any firm or individual, to engage in any
other lawful business or operation deemed advantageous or
desirable, and to do any and every thing incidental to, growing out
of, or germane to any of the foregoing purposes or objects.
(q) To engage in any lawful act or activity for which
corporations may be organized under the General Corporation Law of
the State of Delaware.
The foregoing clauses shall be construed both as objects and
powers and shall be in furtherance and not in limitation of the
powers conferred by the laws of the State of Delaware and the
foregoing enumeration of specific powers shall not be held to alter
or restrict in any manner the general powers of this corporation.
FOURTH: The corporation shall have the authority to issue
20,000,000 shares of Common Stock, of the par value of two cents
-5-
<PAGE> 6
($0.02) per share each, amounting in the aggregate to Four Hundred
Thousand Dollars ($400,000.00).
FIFTH: In furtherance and not in limitation of the powers
granted by statute, the Board of Directors is authorized to make,
alter, or repeal the By-Laws of the corporation.
SIXTH: At all elections of directors of the corporation,
each holder of Common Stock shall be entitled to as many votes as
shall equal the number of votes which (except for this provision)
he would be entitled to cast for the election of directors,
multiplied by the number of directors to be elected by him, and he
may cast all of such votes for a single director or may distribute
them among the number to be voted for or any two or more of them,
as he may see fit.
SEVENTH: Whenever a compromise or arrangement is proposed
between this corporation and its creditors or any class of them
and/or between this corporation and its stockholders or any class
of them, any court of equitable jurisdiction with the State of
Delaware may, on the application in a summary way of this
corporation or of any creditor or stockholder thereof, or on the
application of any receiver or receivers appointed for this
corporation under the provisions of section 291 of Title 8 of the
Delaware Code or in the application of trustees in dissolution or
of any receiver or receivers appointed for this corporation under
the provisions of section 279 of Title 8 of the Delaware Code order
a meeting of the creditors or class of creditors, and/or of the
stockholders or class of stockholders of this corporation, as the
-6-
<PAGE> 7
case may be, to be summoned in such manner as the said court
directs. If a majority in number representing three-fourths in
value of the creditors or class of creditors, and/or of the
stockholders or class of stockholders of this corporation, as the
case may be, agree on any compromise or arrangement and to any
reorganization of this corporation as a consequence of such
compromise or arrangement, the said compromise or arrangement and
the said reorganization shall, if sanctioned by the court to which
the said application has been made, be binding on all the creditors
or class of creditors, and/or on all the stockholders or class of
stockholders, of this corporation, as the case may be, and also on
this corporation.
EIGHTH: The corporation reserves the right to amend, alter,
change or repeal any provision contained in this certificate of
incorporation, in the manner now or hereafter prescribed by
statute, and all rights conferred upon stockholders herein are
granted subject to this reservation.
NINTH: No director shall be personally liable to the
corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director; provided, however, this provision
shall not eliminate or limit the liability of a director: (i) for
any breach of the director's duty of loyalty to the corporation or
its stockholders; (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law;
(iii) under Section 174 of Title Eight of the Delaware Code
(relating to unlawful stock purchase or redemption); or (iv) for
-7-
<PAGE> 8
any transaction from which the director derived an improper
personal benefit. This provision shall not eliminate or limit the
liability of a director for any act or omission occurring prior to
the effective date of the adoption of this provision.
TENTH: 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
-8-
<PAGE> 9
resignation, removal or otherwise. If the number of directors has
changed, any increase or decrease in the number of directors shall
be apportioned among the classes so that the number of directors in
each class remains 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 a 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.
THE UNDERSIGNED, being the Chairman of the Board and Chief
Executive Officer of the corporation, for the purpose of restating
and integrating into a single instrument all of the provisions of
the corporation's certificate of incorporation which are now in
effect, hereby declares and certifies that this is his free act and
deed, that the facts herein stated are true, that this restated
certificate was duly adopted by the Executive Committee of the
-9-
<PAGE> 10
corporation's Board of Directors in accordance with the provisions
of Section 245 of the General Corporation Law of the State of
Delaware, that this restated certificate only restates and
integrates and does not further amend the provisions of the
corporation's certificate of incorporation as heretofore amended
and supplemented, and that there is no discrepancy between the
provisions of the corporation's certificate of incorporation as
heretofore amended and supplemented and this restated certificate.
/s/ Franklin A. Jacobs
---------------------------------------
Franklin A. Jacobs
Chairman of the Board and
Chief Executive Officer
Date: May 31, 1996
----------------------------------
-10-
<PAGE> 1
EXHIBIT 3.2
FALCON PRODUCTS, INC.
RESTATED BY-LAWS
----------------
ARTICLE I
OFFICES
Section 1. The registered office shall be in the City of
Wilmington, County of New Castle, State of Delaware.
Section 2. The corporation may also have offices at such
other places both within and without the State of Delaware as the
board of directors may from time to time determine or the business
of the corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. All meetings of the stockholders for the election
of directors shall be held at such places as may from time to time
be designated by resolution of the board of directors. Meetings of
stockholders for any other purpose may be held at such time and
place, within or without the State of Delaware, as shall be stated
in the notice of the meeting or in a duly executed waiver of notice
thereof.
Section 2. Annual meetings of stockholders, commencing with
the year 1974, shall be held on the first Thursday in March, if not
a legal holiday, and if a legal holiday, then on the next secular
day following, at 4:00 p.m., or at such other date and time as
shall be designated from time to time by the board of directors and
stated in the notice of the meeting, at which they shall elect by
a plurality vote a board of directors, and transact such other
business as may properly be brought before the meeting.
Section 3. Written notice of the annual meeting stating the
place, date and hour of the meeting shall be given to each
stockholder entitled to vote at such meeting not less than ten nor
more than fifty days before the date of the meeting, unless a
different period of notice be required by law, in which case,
notice shall be given in accordance therewith.
Section 4. The Secretary of the corporation shall prepare and
make, or shall cause to be prepared and made, at least ten days
before every meeting of stockholders, a complete list of the
stockholders entitled to vote at the meeting, arranged in
alphabetical order, and showing the address of each stockholder and
the number of shares registered in the name of each stockholder.
Such list shall be open to the examination of any stockholder, for
any purpose germane to the meeting, during ordinary business hours,
for a period of at least ten days prior to the meeting, either at
a place within the city where the meeting is to be held, which
place shall be specified in the notice of the meeting, or, if not
so specified, at the place where the meeting is to be held. The
list shall also be produced and kept at the time and place of the
<PAGE> 2
meeting during the whole time thereof, and may be inspected by any
stockholder who is present.
Section 5. Special meetings of the stockholders, for any
purpose or purposes, unless otherwise prescribed by statute or by
the certificate of incorporation, may be called by the President
and shall be called by the Chairman of the Board, President, or
Secretary at the request in writing of a majority of the board of
directors, or at the request in writing of stockholders owning a
majority in amount of the entire capital stock of the corporation
issued and outstanding and entitled to vote. Such request shall
state the purpose or purposes of the proposed meeting.
Section 6. Written notice of a special meeting stating the
place, date and hour of the meeting and the purpose or purposes for
which the meeting is called, shall be given not less than ten nor
more than fifty days before the date of the meeting, to each
stockholder entitled to vote at such meeting, unless a different
period of notice is required by law, in which case, notice shall be
given in accordance therewith.
Section 7. Business transacted at any special meeting of
stockholders shall be limited to the purposes stated in the notice.
Section 8. The holders of a majority of the shares of stock
issued and outstanding and entitled to vote thereat, present in
person or represented by proxy, shall constitute a quorum at all
meetings of the stockholders for the transaction of business except
as otherwise provided by statute or by the certificate of
incorporation. If, however, such quorum shall not be present or
represented at any meeting of the stockholders, the stockholders
entitled to vote thereat, present in person or represented by
proxy, shall have power to adjourn the meeting from time to time,
without notice other than announcement at the meeting, until a
quorum shall be present or represented. At such adjourned meeting
at which a quorum shall be present or represented, any business may
be transacted which might have been transacted at the original
meeting. If the adjournment is for more than thirty days, or if
after the adjournment, a new record date is fixed for the adjourned
meeting, a notice of the adjourned meeting shall be given to each
stockholder of record entitled to vote at the meeting.
Section 9. When a quorum is present at any meeting, the vote
of the holders of a majority of the stock having voting power,
present in person or represented by proxy, shall decide any
question brought before such meeting, except for questions of order
or procedure, unless the question is one upon which, by express
provision of statute or of the certificate of incorporation, a
different vote is required, in which case such express provision
shall govern and control the decision of such question. Questions
of order and procedure shall be decided by the Chairman of the
meeting.
Section 10. Each stockholder shall at every meeting of the
stockholders be entitled to one vote in person or by proxy for each
2
<PAGE> 3
share of the capital stock having voting power held by such
stockholder (except that each stockholder shall be entitled to vote
cumulatively for the election of directors), but no proxy shall be
voted or acted upon after three years from its date, unless the
proxy provides for a longer period. No proxy for an annual meeting
of stockholders shall be voted or acted upon otherwise than at such
annual meeting or any adjournment thereof.
Section 11. Any action required to be taken at any annual or
special meeting of stockholders of the corporation, or any action
which may be taken at any annual or special meeting of such
stockholders, may be taken without a meeting, without prior notice
and without a vote, if a consent in writing, setting forth the
action so taken, shall be signed by the holders of outstanding
stock having not less than the minimum number of votes that would
be necessary to authorize or take such action at a meeting at which
all shares entitled to vote thereof were present and voted. Prompt
notice of the taking of the corporate action without a meeting by
less than unanimous written consent shall be given to those
stockholders who have not consented in writing.
ARTICLE III
DIRECTORS
Section 1. 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 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. Directors shall, except as otherwise
required by law, the Certificate of Incorporation or Section 2 of
this Article, be elected by a plurality of the votes cast at a
3
<PAGE> 4
meeting of stockholders by the holders of shares entitled to vote
in the election. Beginning with the annual meeting of stockholders
to be held in 1997, no person shall be eligible to be elected,
reelected or appointed as a director of the corporation who has
reached the age of 73. Directors need not be stockholders.
Section 2. 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.
Section 3. The business of the corporation shall be managed
by its board of directors, which may exercise all such powers of
the corporation and do all such lawful acts and things as are not
by statute or by the certificate of incorporation or by these
by-laws directed or required to be exercised or done by the
stockholders.
MEETINGS OF THE BOARD OF DIRECTORS
Section 4. The board of directors of the corporation may hold
meetings, both regular and special, either within or without the
State of Delaware.
Section 5. The first meeting of each newly elected board of
directors shall be held immediately after, and in the same city as,
the annual meeting of the stockholders and no notice of such
meeting to the newly elected directors shall be necessary in order
legally to constitute the meeting, provided a quorum shall be
present thereat.
Section 6. Regular meetings of the board of directors may be
held without notice at such time and at such place as shall from
time to time be determined by the board.
Section 7. Special meetings of the board may be called by the
President on twenty-four hours' notice to each director, either
personally or by mail or by telegram; special meetings shall be
called by the Chairman of the Board, President or Secretary in like
manner and on like notice on the written request of two directors.
Section 8. At all meetings of the board, one-third of the
directors shall constitute a quorum for the transaction of business
and the act of a majority of the directors present at any meeting
at which there is a quorum shall be the act of the board of
directors, except as may be otherwise specifically provided by
4
<PAGE> 5
statute or by the certificate of incorporation. If a quorum shall
not be present at any meeting of the board of directors, the
directors present thereat may adjourn the meeting from time to
time, without notice other than announcement at the meeting, until
a quorum shall be present. Members of the board of directors, or
any committee thereof, may participate in any meeting of such board
or of such committee by means of conference telephone or similar
communications equipment by means of which all persons
participating in the meeting can hear each other, and participation
in such meeting by means of such equipment shall constitute
presence in person thereat.
Section 9. Any action required or permitted to be taken at
any meeting of the board of directors or of any committee thereof
may be taken without a meeting, if all members of the board or
committee, as the case may be, consent thereto in writing, and the
writing or writings are filed with the minutes of proceedings of
the board or committee.
COMMITTEES OF DIRECTORS
Section 10. The board of directors may, by resolution passed
by a majority of the whole board, designate one or more committees,
each committee to consist of one or more of the directors of the
corporation. The board may designate one or more directors as
alternate members of any committee, who may replace any absent or
disqualified member at any meeting of the committee. In the
absence or disqualification of a member of a committee, the member
or members thereof present at any meeting and not disqualified from
voting, whether or not he or they constitute a quorum, may
unanimously appoint another member of the board of directors to act
at the meeting in the place of any such absent or disqualified
member. Any such committee, to the extent provided in the
resolution of the board of directors, shall have and may exercise
all powers and authority of the board of directors in the
management of the business and affairs of the corporation, and may
authorize the seal of the corporation to be affixed to all papers
which may require it; but no such committee shall have the power or
authority in reference to amending the certificate of
incorporation, adopting an agreement of merger or consolidation,
recommending to the stockholders the sale, lease or exchange of all
or substantially all of the corporation's property and assets,
recommending to the stockholders a dissolution of the corporation
or a revocation of a dissolution, or amending the by-laws of the
corporation; and, unless the resolution expressly so provides, no
such committee shall have the power or authority to declare a
dividend or to authorize the issuance of stock. Such committee or
committees shall have such name or names as may be determined from
time to time by resolution adopted by the board of directors.
Section 11. Each committee shall keep regular minutes of its
meetings and report the same to the board of directors when
required.
5
<PAGE> 6
COMPENSATION OF DIRECTORS
Section 12. The board of directors shall have the authority
to fix the compensation of directors. The directors may be paid
their expenses, if any, of attendance at each meeting of the board
of directors and may be paid a fixed sum for attendance at each
meeting of the board of directors or a stated salary as director.
No such payment shall preclude any director from serving the
corporation in any other capacity and receiving compensation
therefor. Members of special or standing committees may be allowed
compensation for attending committee meetings.
ARTICLE IV
NOTICES
Section 1. Whenever, under the provisions of the statutes or
of the certificate of incorporation or of these by-laws, notice is
required to be given to any director or stockholder, it shall not
be construed to mean personal notice, but such notice may be given
in writing, by mail, addressed to such director or stockholder, at
his address as it appears on the records of the corporation, with
postage thereon prepaid, and such notice shall be deemed to be
given at the time when the same shall be deposited in the United
States mail. Notice to directors may also be given by telegram.
Section 2. Whenever any notice is required to be given under
the provisions of statutes or of the certificate of incorporation
or of these by-laws, a waiver thereof in writing, signed by the
person or persons entitled to said notice, whether before or after
the time stated therein, shall be deemed equivalent thereto.
ARTICLE V
OFFICERS
Section 1. The officers of the corporation shall be elected
by the board of directors and shall be a Chairman of the Board, a
President, a Vice President, a Secretary and a Treasurer. The
board of directors may also elect additional Vice Presidents, and
one or more Assistant Secretaries and Assistant Treasurers. Any
number of offices may be held by the same person.
Section 2. The board of directors, at its meeting following
each annual meeting of stockholders, shall elect a Chairman of the
Board, a President, one or more Vice Presidents, a Secretary and a
Treasurer, and may elect one or more Assistant Secretaries and
Assistant Treasurers.
Section 3. The board of directors may appoint such other
officers and agents as it shall deem necessary, who shall hold
their offices for such terms and shall exercise such powers and
perform such duties as shall be determined from time to time by the
board.
6
<PAGE> 7
Section 4. The salaries of all officers and agents of the
corporation shall be fixed by the board of directors.
Section 5. The officers of the corporation shall hold office
until their successors are chosen and qualify. Any officer elected
or appointed by the board of directors may be removed at any time
by the affirmative vote of a majority of the board of directors.
Any vacancy occurring in any office of the corporation may be
filled by the board of directors for the unexpired portion of the
term.
THE CHAIRMAN OF THE BOARD
Section 6. The Chairman of the Board shall be the chief
executive officer of the corporation and shall have general
supervision over the policies, affairs and finances of the
corporation. He shall keep the board of directors fully informed
and shall freely consult with the board of directors concerning the
business of the corporation and shall perform such other duties as
are incident to his office and are properly required of him by the
board of directors. The Chairman of the Board shall preside at all
meetings of the stockholders and the board of directors. Except
where by law the signature of the President is required and except
as otherwise provided by the board of directors, the Chairman may
sign all certificates, contracts, documents and other instruments
on behalf of the corporation.
THE PRESIDENT
Section 7. The President shall be the principal operating and
administrative officer of the corporation and shall be responsible
for the day-to-day operating affairs of the corporation. He may
sign, with the Secretary or Treasurer or any other proper officer
thereunto authorized by the board of directors, certificates for
shares of the corporation, any deeds, mortgages, bonds, contracts,
or other instruments which the board of directors have authorized
to be executed, except in cases where the signing and execution
thereof shall be expressly delegated by the board of directors or
by these by-laws to some other officer or agent of the corporation,
or shall be required by law to be otherwise signed or executed; and
in general shall perform all duties incident to the office of
President and such other duties as may be prescribed by the board
of directors from time to time. In the absence of the Chairman of
the Board, the President shall preside at all meetings of the
stockholders and the board of directors.
THE VICE PRESIDENTS
Section 8. In the absence of the President and the Chairman
of the Board or in the event of the inability or refusal of both to
act, the Vice President (or in the event there be more than one
Vice President, the Vice Presidents in the order designated by the
board of directors, or, if not so designated, in the order of their
election) shall perform the duties of the President, and when so
acting, shall have all the powers of and be subject to all the
7
<PAGE> 8
restrictions upon the President. Any Vice President shall perform
such other duties as from time to time may be assigned to him by
the President or by the board of directors.
THE SECRETARY
Section 9. The Secretary shall (a) keep the minutes of the
stockholders' and of the board of directors' meetings in one or
more books provided for that purpose; (b) assure that all notices
are duly given in accordance with the provision of these by-laws or
as required by law; (c) be custodian of the corporate records and
of the seal of the corporation and see that the seal of the
corporation (or its facsimile) is affixed to all certificates for
shares prior to the issue thereof and to all documents, the
execution of which on behalf of the corporation under its seal is
duly authorized in accordance with the provisions of these by-laws;
(d) keep a register of the post office address of each stockholder
which shall be furnished to the Secretary by such stockholder; (e)
sign with the President, or a Vice President, certificates for
shares of the corporation, the issue of which shall have been
authorized by resolution of the board of directors; (f) have
general charge of the stock transfer books of the corporation; and
(g) in general perform all duties incident to the office of
Secretary and such other duties as from time to time may be
assigned to him by the President or by the board of directors,
provided that, if the corporation shall have a transfer agent
and/or registrar for its shares, the Secretary shall not be
responsible for any of his duties which may be assigned to such
transfer agent and/or registrar, but shall assure that such
transfer agent and/or registrar properly discharges such duties.
THE TREASURER
Section 10. If required by the board of directors, the
Treasurer shall give a bond for the faithful discharge of his
duties in such sum and with such surety or sureties as the board of
directors shall determine. He shall: (a) have charge and custody
of and be responsible for all funds and securities of the
corporation; receive and give receipts for monies due and payable
to the corporation from any source whatsoever, and deposit all such
monies in the name of the corporation in such banks, trust
companies or other depositaries as shall be selected by the
corporation; (b) in general perform all the duties incident to the
office of Treasurer and such other duties as from time to time may
be assigned to him by the President or by the board of directors.
ASSISTANT TREASURERS AND
ASSISTANT SECRETARIES
Section 11. The Assistant Treasurers shall respectively, if
required by the board of directors, give bonds for the faithful
discharge of their duties in such sums and with such sureties as
the board of directors shall determine. Assistant Secretaries, as
thereunto authorized by the board of directors, may sign with the
President or a Vice President certificates for shares of the
8
<PAGE> 9
corporation, the issue of which shall have been authorized by a
resolution of the board of directors. The Assistant Treasurers and
Assistant Secretaries, in general, shall perform such duties as
shall be assigned to them by the Treasurer or the Secretary,
respectively, or by the President or the board of directors.
ARTICLE VI
CERTIFICATES OF STOCK
Section 1. Every holder of stock in the corporation shall be
entitled to have a certificate, signed by, or in the name of the
corporation by, the President or a Vice President and the Secretary
or an Assistant Secretary of the corporation, certifying the number
of shares owned by him in the corporation.
Section 2. Any or all of the signatures on a stock
certificate may be a facsimile. In case any officer, transfer
agent or registrar who has signed or whose facsimile signature has
been placed upon a certificate shall have ceased to be such
officer, transfer agent or registrar before such certificate is
issued, it may be issued by the corporation with the same effect as
if he were such officer, transfer agent or registrar at the date of
issue.
LOST CERTIFICATES
Section 3. The board of directors may direct a new
certificate or certificates to be issued in place of any
certificate or certificates theretofore issued by the corporation
alleged to have been lost, stolen or destroyed, upon the making of
an affidavit of that fact by the person claiming the certificate of
stock to be lost, stolen or destroyed. When authorizing such issue
of a new certificate or certificates, the board of directors may,
in its discretion and as a condition precedent to the issuance
thereof, require the owner of such lost, stolen or destroyed
certificate or certificates, or his legal representative, to
advertise the same in such manner as it shall require and/or to
give the corporation a bond in such sum as it may direct as
indemnity against any claim that may be made against the
corporation with respect to the certificate alleged to have been
lost, stolen or destroyed.
TRANSFERS OF STOCK
Section 4. Upon surrender to the corporation or the transfer
agent of the corporation of a certificate for shares duly endorsed
or accompanied by proper evidence of succession, assignment or
authority to transfer, accompanied by the amount of the applicable
transfer tax, if any, it shall be the duty of the corporation to
issue a new certificate to the person entitled thereto, cancel the
old certificate and record the transaction upon its books.
9
<PAGE> 10
FIXING RECORD DATE
Section 5. In order that the corporation may determine the
stockholders entitled to notice of or to vote at any meeting of
stockholders or any adjournment thereof, or to express consent to
corporate action in writing without a meeting, or entitled to
receive payment of any dividend or other distribution or allotment
of any rights, or entitled to exercise any rights in respect of any
change, conversion or exchange of stock or for the purpose of any
other lawful action, the board of directors may fix, in advance, a
record date, which shall not be more than sixty nor less than ten
days before the date of such meeting, nor more than sixty days
prior to any other action. A determination of stockholders of
record entitled to notice of or to vote at a meeting of
stockholders shall apply to any adjournment of the meeting;
provided, however, that the board of directors may fix a new record
date for the adjourned meeting.
REGISTERED STOCKHOLDERS
Section 6. The corporation shall be entitled to recognize the
exclusive right of a person registered on its books as the owner of
shares to receive dividends, and to vote as such owner, and to hold
liable for calls and assessments a person registered on its books
as the owner of shares, and shall not be bound to recognize any
equitable or other claim to or interest in such share or shares on
the part of any other person, whether or not it shall have express
or other notice thereof, except as otherwise provided by the laws
of Delaware.
ARTICLE VII
GENERAL PROVISIONS
DIVIDENDS
Section 1. Dividends upon the capital stock of the
corporation may be declared by the board of directors at any
regular or special meeting, pursuant to law. Dividends may be paid
in cash, in property, or in shares of capital stock, subject to the
provisions of the certificate of incorporation.
Section 2. Before payment of any dividend, there may be set
aside out of any funds of the corporation available for dividends
such sum or sums as the directors from time to time, in their
absolute discretion, think proper as a reserve or reserves to meet
contingencies, or for equalizing dividends, or for repairing or
maintaining any property of the corporation, or for such other
purpose as the directors shall think conducive to the interest of
the corporation, and the directors may modify or abolish any such
reserve in the manner in which it was created.
10
<PAGE> 11
ANNUAL STATEMENT
Section 3. The corporation shall present at or prior to each
annual meeting, a full and clear statement of the business and
condition of the corporation.
CHECKS
Section 4. All checks or demands for money and notes of the
corporation shall be signed by such officer or officers or such
other person or persons as the board of directors may from time to
time designate. Signatures on checks of the corporation may be
facsimile.
FISCAL YEAR
Section 5. The fiscal year of the corporation shall be a
52/53 week annual period ending on the last Saturday in October or
first Saturday in November, as appropriate, in each year.
ARTICLE VIII
AMENDMENTS
Section 1. These by-laws may be altered, amended or repealed
and new by-laws may be adopted by the board of directors at any
regular meeting of the board of directors or at any special meeting
of the board of directors if notice of such alteration, amendment,
repeal or adoption of new by-laws be contained in the notice of
such special meeting.
ARTICLE IX
INDEMNIFICATION OF DIRECTORS, OFFICERS,
EMPLOYEES AND AGENTS
Section 1. (a) The corporation 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, suit or proceeding,
whether civil, criminal, administrative, or investigative (other
than an action by or in the right of the corporation) by reason of
the fact that he is or was a director, officer, employee, or agent
of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee, or agent of another
corporation, partnership, joint venture, trust, or other
enterprise, against expenses (including attorneys' fees) incurred
by him in connection with such action, suit, or proceeding if he
acted in good faith and in a manner he reasonably believed to be in
or not opposed to the best interests of the corporation, and, with
respect to any criminal action or proceeding, had no reasonable
cause to believe his conduct was unlawful. The termination of any
action, suit, or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent
shall not, of itself, create a presumption that the person did not
act in good faith and in a manner which he reasonably believed to
11
<PAGE> 12
be in or not opposed to the best interests of the corporation, and,
with respect to any criminal action or proceeding, had reasonable
cause to believe that his conduct was unlawful.
(b) The corporation 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 by or in the right of the
corporation to procure a judgment in its favor by reason of the
fact that he is or was a director, officer, employee, or agent of
the corporation, or is or was serving at the request of the
corporation, as a director, officer, employee, or agent of another
corporation, partnership, joint venture, trust, or other enterprise
against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in
a manner he reasonably believed to be in or not opposed to the best
interests of the corporation and except that no indemnification
shall be made in respect of any claim, issue, or matter as to which
such person shall have been adjudged to be liable to the
corporation unless and only to the extent that the court in which
such action or suit was brought shall determine upon application
that, despite the adjudication of liability but in view of all the
circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the court shall deem
proper.
(c) To the extent that a director, officer, employee, or
agent of the corporation has been successful on the merits or
otherwise in defense of any action, suit, or proceeding referred to
in subparagraphs (a) and (b), or in defense of any claim, issue, or
matter therein, he shall be indemnified against expenses (including
attorneys' fees) actually and reasonably incurred by him in
connection therewith.
(d) Any indemnification under subparagraphs (a) and (b)
(unless ordered by a court) shall be made by the corporation only
as authorized in the specific case upon a determination that
indemnification of the director, officer, employee, or agent is
proper in the circumstances because he has met the applicable
standard of conduct set forth in subparagraphs (a) and (b). Such
determination shall be made (i) by the board of directors by a
majority vote of a quorum consisting of directors who were not
parties to such action, suit, or proceeding, or (ii) if such a
quorum is not obtainable, or, even if obtainable a quorum of
disinterested directors so directs, by independent legal counsel in
a written opinion, or (iii) by the stockholders.
(e) Expenses (including attorneys' fees) incurred by an
officer or director in defending any civil, criminal,
administrative or investigative action, suit or proceeding may be
paid by the corporation in advance of a final disposition of such
action, suit or proceeding upon receipt of an undertaking by or on
behalf of such director or officer to repay such amount if it shall
ultimately be determined that he is not entitled to be indemnified
by the corporation as authorized herein. Such expenses (including
12
<PAGE> 13
attorneys' fees) incurred by other employees and agents may be so
paid upon such terms and conditions, if any, as the board of
directors deems appropriate.
(f) The indemnification and advancement of expenses provided
by, or granted pursuant to, other subsections of this section shall
not be deemed exclusive of any other rights to which those seeking
indemnification or advancement of expenses may be entitled under
any by-law, agreement, vote of stockholders or disinterested
directors or otherwise, both as to action in his official capacity
and as to action in another capacity while holding such office.
(g) The corporation shall have power to purchase and maintain
insurance on behalf of any person who is or was a director,
officer, employee, or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer,
employee, or agent of another corporation, partnership, joint
venture, trust or other enterprise against any liability asserted
against him and incurred by him in any such capacity, or arising
out of his status as such, whether or not the corporation would
have the power to indemnify him against such liability under the
provisions of this section.
(h) For purposes of this section references to "the
corporation" shall include, in addition to the resulting
corporation, any constituent corporation (including any constituent
of a constituent) absorbed in a consolidation or merger which, if
a separate existence had continued, would have had the power and
authority to indemnify its directors, officers, and employees or
agents, so that any person who is or was a director, officer,
employee or agent of such constituent corporation, or is or was
serving at the request of such constituent corporation as a
director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, shall stand
in the same position under this section with respect to the
resulting or surviving corporation as he would have with respect to
such constituent corporation if its separate existence had
continued.
(i) For purposes of this section, references to "other
enterprises" shall include employee benefit plans; references to
"fines" shall include any excise taxes assessed on a person with
respect to an employee benefit plan; and references to "serving at
the request of the corporation" shall include any service as a
director, officer, employee, or agent of the corporation which
imposes duties on, or involves services by, such director, officer,
employee, or agent with respect to an employee benefit plan, its
participants, or beneficiaries; and a person who acted in good
faith and in a manner he reasonably believed to be in the interest
of the participants and beneficiaries of an employee benefit plan
shall be deemed to have acted in a manner "not opposed to the best
interests of the corporation" as referred to in this section.
(j) The indemnification and advancement of expenses provided
by, or granted pursuant to, this section shall, unless provided
13
<PAGE> 14
when authorized or ratified, continue as to a person who has ceased
to be a director, officer, employee, or agent and shall inure to
the benefit of the heirs, executors and administrators of such a
person.
Section 2. The corporation shall, to the fullest extent
permitted by Section 145 of the General Corporation Law of the
State of Delaware, as the same may be amended and supplemented from
time to time, indemnify any and all persons whom it shall have the
power to indemnify under said section from and against any and all
of the expenses, liabilities or other matters referred to in or
covered by said section, or any successor section thereto.
14
<PAGE> 1
EXHIBIT 10.26
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 herein 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 Disability (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 permanent and total
disability as defined in Section 22(e)(3) of the Internal
Revenue Code of 1986, as amended."
Adopted by the Board of Directors of the Company on December 11,
1995, and approved by the stockholders of the Company on March 14,
1996.
<PAGE> 1
<TABLE>
EXHIBIT NO. 11
Falcon Products, Inc. and Subsidiaries
--------------------------------------
COMPUTATION OF EARNINGS PER SHARE
(Unaudited)
<CAPTION>
Thirteen Weeks Ended Twenty-Six Weeks Ended
--------------------------- ---------------------------
April 27, April 29, April 27, April 29,
Primary Earnings Per Share: 1996 1995 1996 1995
- --------------------------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Net earnings $2,126,986 $1,742,600 $3,749,980 $3,021,337
========== ========== ========== ==========
Average number of common shares
outstanding 9,597,466 9,483,142 9,560,065 9,461,313
Assumed exercise of options
(treasury stock method) 237,120 233,200 216,308 220,348
---------- ---------- ---------- ----------
Shares for primary
computation 9,834,586 9,716,342 9,776,373 9,681,661
========== ========== ========== ==========
Earnings per share $.22 $.18 $.38 $.31
==== ==== ==== ====
Fully Diluted Earnings Per Share:
- ---------------------------------
Net earnings $2,126,986 $1,742,600 $3,749,980 $3,021,337
========== ========== ========== ==========
Average number of common shares
outstanding 9,635,339 9,483,142 9,649,041 9,461,313
Assumed exercise of options
(treasury stock method) 267,162 233,200 267,162 220,348
---------- ---------- ---------- ----------
Shares for fully diluted
computation 9,902,501 9,716,342 9,916,203 9,681,661
========== ========== ========== ==========
Fully diluted earnings per share $.22 $.18 $.38 $.31
==== ==== ==== ====
NOTE: Share data has been adjusted to reflect the effects of the December 13,
1995, 10% stock dividend.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from
SEC Form 10-Q for the quarterly period ended April 27, 1996, and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> NOV-02-1996
<PERIOD-START> OCT-29-1995
<PERIOD-END> APR-27-1996
<CASH> 5,598,730
<SECURITIES> 0
<RECEIVABLES> 14,704,151
<ALLOWANCES> 388,000
<INVENTORY> 19,272,619
<CURRENT-ASSETS> 41,819,462
<PP&E> 39,264,369
<DEPRECIATION> 15,119,536
<TOTAL-ASSETS> 76,111,599
<CURRENT-LIABILITIES> 11,253,840
<BONDS> 0
<COMMON> 192,874
0
0
<OTHER-SE> 61,424,777
<TOTAL-LIABILITY-AND-EQUITY> 76,111,599
<SALES> 51,264,904
<TOTAL-REVENUES> 51,264,904
<CGS> 34,931,447
<TOTAL-COSTS> 34,931,447
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (49,117)
<INCOME-PRETAX> 6,048,080
<INCOME-TAX> 2,298,100
<INCOME-CONTINUING> 3,749,980
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,749,980
<EPS-PRIMARY> .38
<EPS-DILUTED> .38
</TABLE>
