<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement / / Confidential, for Use of the
/X/ Definitive Proxy Statement Commission Only
/ / Definitive Additional Materials (as permitted by Rule
/ / Soliciting Material Pursuant to 14a-6(e)(2))
Rule 14a-11(c) or Rule 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/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) TITLE OF EACH CLASS OF SECURITIES TO WHICH TRANSACTION APPLIES:
- ------------------------------------------------------------------------------
(2) AGGREGATE NUMBER OF SECURITIES TO WHICH TRANSACTIONS APPLIES:
- ------------------------------------------------------------------------------
(3) PER UNIT PRICE OR OTHER UNDERLYING VALUE OF TRANSACTION COMPUTED
PURSUANT TO EXCHANGE ACT RULE 0-11 (SET FORTH THE AMOUNT ON WHICH THE FILING
FEE IS CALCULATED AND STATE HOW IT WAS DETERMINED):
- ------------------------------------------------------------------------------
(4) PROPOSED MAXIMUM AGGREGATE VALUE OF TRANSACTION:
- ------------------------------------------------------------------------------
(5) TOTAL FEE PAID:
- ------------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
- ------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- ------------------------------------------------------------------------------
(3) Filing Party:
- ------------------------------------------------------------------------------
(4) Date Filed:
- ------------------------------------------------------------------------------
<PAGE> 2
[FALCON LOGO]
FALCON PRODUCTS, INC.
9387 DIELMAN INDUSTRIAL DRIVE
ST. LOUIS, MISSOURI 63132
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
St. Louis, Missouri
January 27, 1998
The annual meeting of the stockholders of Falcon Products, Inc., will be
held on Friday, March 6, 1998, at 4:00 p.m. in Grand Ballroom F of the Hyatt
Regency at St. Louis Union Station, St. Louis, Missouri, 63103 for the purposes
of:
1. Electing three Class B directors for a term expiring in 2001;
2. Considering and voting upon a proposal to adopt the Company's 1997
Employee Stock Purchase Plan;
3. Considering and voting upon a proposal to adopt the Company's
Non-Employee Directors' Deferred Compensation Plan; and
4. Transacting such other business as may properly come before the meeting.
Stockholders of record at the close of business on January 16, 1998, 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.
A copy of the Annual Report for fiscal 1997 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 in Grand Ballroom F of the Hyatt Regency at St. Louis
Union Station, St. Louis, Missouri 63103 on Friday, March 6, 1998, 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 January 27, 1998.
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 16, 1998, 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 persons named herein as nominees for Class B
directors of the Company, for a term expiring at the 2001 annual
meeting of stockholders, (or until successors are duly elected and
qualified);
(2) FOR the approval of the Company's 1997 Employee Stock Purchase Plan;
(3) FOR the approval of the Company Non-Employee Directors' Deferred
Compensation Plan; 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 Class B 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 16, 1998, there were 9,263,179 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 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.
2
<PAGE> 4
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 "By-Laws"), the vote required for 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. The
vote required for 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 any such other matter.
Abstentions from voting and broker non-votes will operate as neither a vote
for nor a vote against any or all nominees for directors, the approval of the
1997 Employee Stock Purchase Plan or the approval of Non-Employee Directors'
Deferred Compensation Plan. Abstentions from voting on any other matter properly
brought before the meeting effectively will operate as a vote against such
proposals or such other matters. 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 16, 1998, the following persons were known to the Company who
may, individually or as a group, be deemed to be the beneficial owners 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 2,017,802<F2> 21.4%
Chairman of the Board and
Chief Executive Officer of the Company
9387 Dielman Industrial Drive
St. Louis, Missouri 63132
David L. Babson & Company, Inc. 1,030,120<F3> 11.1%
One Memorial Drive
Cambridge, MA 02142-1300
Robert Fleming Inc. 858,260<F4> 9.3%
320 Park Avenue, 11th Floor
New York, NY 10022
Putnam Investments, Inc. 494,450<F5> 5.3%
One Post Office Square
Boston, MA 02109
<FN>
- --------
<F1> Reflects the number of shares outstanding on January 16, 1998, and, with
respect to each person, assumes the exercise of all stock options held by
such person that are exercisable currently or within 60 days of the date of
this proxy statement (such options being referred to hereinafter as
"currently exercisable options").
<F2> Includes 84,389 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 170,500 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 (4) to the table under "Security Ownership of Management."
<F3> According to Schedule 13G, provided to the Company in accordance with the
Securities and Exchange Act of 1934.
<F4> According to Schedule 13G, provided to the Company in accordance with the
Securities and Exchange Act of 1934. Beneficial owner has shared voting
power for all such shares.
<F5> According to Schedule 13G, provided to the Company in accordance with the
Securities and Exchange Act of 1934. Includes 262,250 shares as to which
such beneficial owner has shared voting power.
</TABLE>
- --------
3
<PAGE> 5
SECURITY OWNERSHIP OF MANAGEMENT
On January 16, 1998, 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................................. 267,785<F2> 2.9%
Melvin F. Brown................................... 3,330<F3> <F*>
Donald P. Gallop.................................. 246,277<F4> 2.7%
James L. Hoagland................................. 32,102<F5> <F*>
Franklin A. Jacobs................................ 2,017,802<F6> 21.4%
S. Lee Kling...................................... 169,162<F7> 1.8%
Lee M. Liberman................................... 42,292<F8> <F*>
Darryl Rosser..................................... 98,859<F9> 1.1%
James Schneider................................... 337,876<F10> 3.6%
Michael J. Dreller................................ 8,045<F11> <F*>
Richard Hnatek.................................... 96,149<F12> 1.0%
Michael J. Kula................................... 3,635<F13> <F*>
All Directors, Nominees and Executive
Officers as a Group (12 individuals).............. 3,323,314<F14> 34.6%<F15>
<F*> Represents less than 1% of the class.
<FN>
- --------
<F1> See Note (1> o 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 8,250 shares of Common Stock.
<F3> Includes currently exercisable options to acquire 330 shares of
Common Stock.
<F4> 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,
49,627 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 8,250
shares of Common Stock.
<F5> Includes currently exercisable options to acquire 8,250 shares of
Common Stock.
<F6> See Note (2> o the table under "Voting Securities, Principal Holders
Thereof and Cumulative Voting Rights."
<F7> Includes 130,716 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 8,250 shares of Common Stock.
<F8> Includes currently exercisable options to acquire 13,200 shares of
Common Stock.
<F9> Includes currently exercisable options to acquire 67,792 shares of
Common Stock.
<F10> 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 9,900 shares of Common Stock.
<F11> Includes currently exercisable options to acquire 4,000 shares of Common
Stock.
<F12> Includes currently exercisable options to acquire 51,300 shares of Common
Stock.
<F13> Includes currently exercisable options to acquire 3,000 shares of Common
Stock.
<F14> Includes 58,300 shares subject to currently exercisable options held by
non-director executive officers of the Company and 294,722 shares subject to
currently exercisable options held by directors of the Company.
4
<PAGE> 6
<F15> For purposes of determining the aggregate amount and percentage of shares
deemed beneficially owned by directors and executive officers of the Company
individually and by all directors, nominees and executive officers as a
group, exercise of all currently exercisable options listed in the footnotes
hereto is assumed. For such purpose, 9,616,201 shares of Common Stock are
deemed to be outstanding.
</TABLE>
- --------
PROPOSAL 1--ELECTION OF DIRECTORS
INFORMATION ABOUT THE NOMINEES
The Company's Certificate of Incorporation and By-Laws provide for a
division of the Board of Directors into three classes. One of the classes is
elected each year to serve a three-year term. The term of each of the current
Class B directors expires at the 1998 Annual Meeting of Stockholders. It is the
intention of the persons named in the accompanying proxy, unless otherwise
directed, to vote for the election of the Class B nominees listed below to serve
until the 2001 Annual Meeting of Stockholders.
The following table shows for each nominee and director continuing in office
his age, his principle occupation for at least the last five years, his present
position with the Company, the year in which he was first 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 the
class and expiration of his term as director.
<TABLE>
CLASS B--TO BE ELECTED TO SERVE AS DIRECTOR UNTIL 2001
<CAPTION>
SERVICE AS
NAME AGE PRINCIPAL OCCUPATION DIRECTOR SINCE
---- --- -------------------- --------------
<S> <C> <C> <C>
Raynor E. Baldwin 58 President of Woodsmiths, Incorporated, a manufacturer of table tops, 1977
<F1> for more than the last five years.
James Schneider 66 Broker--International Monetary Market, Chicago Mercantile Exchange, 1989
<F2> for more than the last five years.
Darryl C. Rosser 46 President and Chief Operating Officer of the Company since December 1996
1995; prior thereto, Executive Vice President--Operations since May
1995; prior thereto, Senior Vice President--Operations since 1993; and
prior thereto, Vice President--Operations since January 1988.
CLASS A--TO CONTINUE TO SERVE AS DIRECTOR UNTIL 2000
<CAPTION>
SERVICE AS
NAME AGE PRINCIPAL OCCUPATION DIRECTOR SINCE
---- --- -------------------- --------------
<S> <C> <C> <C>
Melvin F. Brown 62 Vice Chairman of Deutsche Financial Services, a commercial finance 1997
company, since January 1997; prior thereto, President and Chief
Executive Officer of Deutsche Financial Services, since May 1995;
prior thereto, President of ITT Commercial Finance Corporation, for
more than the last five years.
James L. Hoagland 75 Retired. Prior to September 1, 1989, President and Chief Executive 1990
Officer of Graybar Electric Company, Inc., a distributor of electrical
and telecommunications equipment, for more than five years.
Lee M. Liberman 76 Chairman emeritus and consultant to Laclede Gas Company, a retail 1985
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
CPI Corporation, Furniture Brands International and DT Industries,
Inc.
</TABLE>
5
<PAGE> 7
<TABLE>
CLASS C--TO CONTINUE TO SERVE AS DIRECTOR UNTIL 1999
<CAPTION>
SERVICE AS
NAME AGE PRINCIPAL OCCUPATION DIRECTOR SINCE
---- --- -------------------- --------------
<S> <C> <C> <C>
Donald P. Gallop 65 Attorney-at-law; Chairman of the law firm of Gallop, Johnson & Neuman, 1963
<F3><F4> L.C., for more than the last five years; Director of Magna Group,
Inc., and Data Research Associates, Inc.
Franklin A. Jacobs 65 Chairman of the Board and Chief Executive Officer of the Company for 1957
<F2><F4> 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 69 Chairman of the Board of Kling Rechter & Co., L.P., a merchant banking 1969
<F4> company, for more than the last five years; Director of Bernard Chaus,
Inc., Electro Rent Corporation, 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 1997, four meetings of the Board of Directors were held.
During such fiscal year, each director attended 75 percent 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), Baldwin and Brown. 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 and oversees the Company's policies concerning
internal controls. During fiscal 1997, four Audit Committee meetings were held.
The Company also has a standing Compensation Committee consisting of Messrs.
Hoagland (Chairman), Gallop, Kling and Schneider. The purpose of the
Compensation Committee is to review and determine the annual salary, bonus and
other benefits of all executive officers of the Company, which determinations
are subject to the approval of the Board of Directors, and to administer the
Company's stock option and other benefit plans. The Compensation Committee also
serves as a nominating committee to evaluate and recommend to the Board of
Directors qualified nominees for election or appointment as directors and
qualified persons for selection as senior officers. See the "COMPENSATION
COMMITTEE REPORT" beginning on page 9 for a discussion of the key elements and
policy of the Company's executive compensation program. The Compensation
Committee will give appropriate consideration to a written recommendation by a
stockholder for the nomination of a qualified person to serve as a director of
the Company, provided that such recommendation contains sufficient information
regarding the proposed nominee for the Committee to properly evaluate such
nominee's qualifications to serve as a director. During fiscal 1997, one
Compensation Committee meeting was held.
COMPENSATION OF DIRECTORS
Directors that are not salaried employees of the Company receive an annual
fee of $15,500. Director's fees of $102,042 were paid during fiscal 1997.
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 at a per
share exercise price equal to the fair market value of the Common Stock on the
date the option is granted. 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 or the options become immediately exercisable upon a director's
retirement, death or disability. Six non-employee directors of the Company
were each granted options to purchase 1,650 shares of Common Stock under the
plan in December 1996 at an exercise price of $14.50 per share.
6
<PAGE> 8
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
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
1997, 1996 and 1995 with respect to the Company's chief executive officer and
each of the four other most highly compensated executive officers whose fiscal
1997 salaries and bonuses combined exceeded $100,000 in each instance.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
ANNUAL COMPENSATION LONG TERM COMPENSATION
--------------------------------------------------------------------
AWARDS PAYOUTS
-------------------------------
OTHER RESTRICTED SECURITIES ALL OTHER
ANNUAL STOCK UNDERLYING LTIP COM-
FISCAL COMPENSA- AWARD OPTIONS PAYOUTS PENSA-
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS TION ($)<F1> ($)<F2> (#)<F3> ($) TION ($)
(A) (B) (C) ($) (D) ($) (E) (F) (G) (H) (I)
--------------------------- ------ ------- -------- ------------ ---------- ---------- ------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Franklin A. Jacobs 1997 562,569 0 20,800 0 0 0 3,126<F5>
Chairman of the Board 1996 528,019 0 20,560 0 0 0 3,081<F5>
and Chief Executive Officer 1995 480,692 0 16,040 0 0<F4> 0 2,688<F5>
Darryl Rosser 1997 266,923 0 5,408 0 25,000 0 0
President and Chief Operating 1996 218,580 25,777 5,512 0 10,000 0 0
Officer<F6> 1995 162,908 24,760 5,408 28,700 22,000 0 0
Michael J. Dreller 1997 127,648 0 5,080 0 10,000 0 0
Vice President--Finance and 1996 93,240 13,175 0 0 5,000 0 0
Chief Financial Officer<F7> 1995 0 0 0 0 0 0 0
Richard Hnatek 1997 149,031 0 5,346 0 10,000 0 0
Senior Vice President--Sales 1996 144,995 16,497 5,448 0 5,000 0 0
1995 133,750 20,328 5,025 31,825 22,000 0 0
Michael J. Kula 1997 155,000 0 2,580 0 10,000 0 0
Vice President--Operations<F8> 1996 48,885 5,913 0 0 5,000 0 0
1995 0 0 0 0 0 0 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
was 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.
<F7> Mr. Dreller was appointed Vice President--Finance and Chief Financial
Officer, Secretary and Treasurer in January 1996.
<F8> Mr. Kula was appointed Vice President--Operations in July 1996.
</TABLE>
7
<PAGE> 9
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 percent of the
average of the plan participant's salary or wages up to $75,000 per year after
November 1, 1992, and up to $50,000 per year before November 1, 1992, for each
year of service. Estimated benefit amounts listed in the above table are not
subject to any deduction for Social Security benefits or other offset amounts.
The credited years of service under the retirement plan for each of the
executive officers listed in the Summary Compensation Table are as follows:
<TABLE>
<S> <C> <C> <C>
Franklin A. Jacobs 39 Richard Hnatek 17
Darryl Rosser 9 Michael J. Dreller 4
Michael J. Kula 2
</TABLE>
INFORMATION AS TO STOCK OPTIONS
The following table provides certain information as to option grants in
fiscal 1997 to the persons named in the Summary Compensation Table.
<TABLE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
----------------------------------------------------------- VALUE
NUMBER OF AT ASSUMED ANNUAL
SECURITIES PERCENT OF RATES OF STOCK PRICE
UNDERLYING TOTAL OPTIONS APPRECIATION FOR
OPTIONS GRANTED TO EXERCISE OR OPTION TERM<F2>
GRANTED EMPLOYEES BASE PRICE EXPIRATION --------------------
NAME (#)<F1> IN FISCAL YEAR ($/SHARE) DATE 5% ($) 10% ($)
(A) (B) (C) (D) (E) (F) (G)
---- --------- -------------- ----------- ----------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Franklin A. Jacobs....... -- -- -- -- -- --
Darryl Rosser............ 25,000 15.7% 14.50 12/16/06 227,974 577,732
Michael J. Dreller....... 10,000 6.3% 14.50 12/16/06 91,190 231,093
Richard Hnatek........... 10,000 6.3% 14.50 12/16/06 91,190 231,093
Michael J. Kula.......... 10,000 6.3% 14.50 12/16/06 91,190 231,093
<FN>
- --------
<F1> Each option listed above was granted at fair market value on date of grant
and is exercisable in 20 percent 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.
<F2> 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>
- --------
8
<PAGE> 10
The following table lists option exercises in fiscal 1997 and the value of
options held as of the end of fiscal 1997 by the persons listed in the Summary
Compensation Table.
<TABLE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED IN-
UNDERLYING UNEXERCISED THE-MONEY OPTIONS
OPTIONS AT FISCAL YEAR-END AT FISCAL YEAR-END
(#) ($)
SHARES
ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE (#) REALIZED ($) UNEXERCISABLE UNEXERCISABLE
(A) (B) (C) (D) (E)
---- ------------ ------------ ------------- -------------
<S> <C> <C> <C> <C>
Franklin A. Jacobs............ 0 0 132,000/60,500 782,681/351,438
Darryl Rosser................. 0 0 48,692/58,300 355,144/182,977
Michael J. Dreller............ 0 0 1,000/14,000 2,562/19,618
Richard Hnatek................ 1,320 14,565 36,200/39,300 204,944/158,674
Michael J. Kula............... 0 0 1,000/14,000 937/13,118
</TABLE>
- --------
Notwithstanding anything to the contrary set forth in any of the Company's
previous filings under the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended, that might incorporate by reference future
filings, including this Proxy Statement, in whole or in part, the following
Compensation Committee Report and Performance Graph shall not be incorporated by
reference into any such filings.
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 stockholder 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 stockholders
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.
9
<PAGE> 11
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 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 taking 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
increases 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 1997, the
Compensation Committee took into account the Company's success in achieving its
net income goals and per-share book value in fiscal 1996, 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, 1997, of $570,000,
representing an increase of approximately 8.8% over calendar year 1996.
ANNUAL BONUSES
The Company's executive officers are eligible for annual cash bonuses under
the 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. The
Compensation Committee recommended and the Board of Directors approved a bonus
approximating 11.5% of the base salary for the Company's officers, except Mr.
Jacobs, attributable to fiscal 1996. In light of the Company's earnings levels
in fiscal 1997, the Compensation Committee did not recommend, nor did the Board
of Directors authorize, a bonus for any of the Company's officers attributable
to fiscal 1997. Mr. Jacobs did not participate in the Officer Bonus Plan for
fiscal 1997 and, accordingly, was not considered.
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. Because Mr. Gallop may not be a
"Non-Employee Director" for purposes of Rule 16b-3 promulgated under the
Securities Exchange Act of 1934, he does not participate in any discussion of
and abstains from voting on any matters involving the grant of options to
officers and employees of the Company.
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
10
<PAGE> 12
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 NYSE Composite
Index of U.S. Companies and a peer group index of public companies 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.; Herman Miller, Inc.; Hon Industries, Inc.; and Knape & Vogt
Manufacturing Co.
The chart assumes a $100 investment made October 30, 1992, and the
reinvestment of all dividends.
[PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
10/30/92 10/29/93 10/28/94 10/27/95 11/01/96 10/31/97
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Falcon Products, Inc..................... 100.00 96.9 101.9 128.3 147.3 161.1
NYSE Stock Market (U.S. Companies)....... 100.00 115.9 119.1 147.1 181.0 237.8
Self-Determined Peer Group............... 100.00 153.1 146.6 156.9 209.7 365.4
<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 former 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 1997,
payments of $50,000 were made to A.P., Inc. under the agreement. This agreement
expires at the end of fiscal 1998.
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.
11
<PAGE> 13
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 1997, the Company received
payments of $191,706 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
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 1997.
PROPOSAL 2--APPROVAL OF THE 1997 EMPLOYEE STOCK PURCHASE PLAN
On September 3, 1997, the Board of Directors of the Company adopted the 1997
Employee Stock Purchase Plan (the "Plan") and directed that the Plan be
submitted to the stockholders of the Company for their approval. The purpose of
the Plan is to provide a method whereby employees of the Company and its
subsidiaries will have an opportunity to acquire a proprietary interest in the
Company through the purchase of shares of the Company's Common Stock. The
maximum number of shares of Common Stock which may be issued by the Company
under the Plan is 550,000.
Any person who is actively employed by the Company on November 1, of each
year of the Plan (the "Commencement Date") is eligible to participate in the
Plan. Eligible employees become participants in the Plan by delivering an
application and authorization for payroll deductions to the Company. On each
Commencement Date, eligible employees are deemed to have been granted an option
to purchase a number of shares of common stock at an exercise price of
eighty-five percent (85%) of the lower of the fair market value of the Company's
common stock on (i) the Commencement Date or (ii) the following October 31
(together, the "Grant Date"). The number of shares underlying such an option
is determined by dividing the amount of the participant's compensation which has
been elected to be withheld by 85% of the fair market value of the Company's
common stock on the applicable Grant Date.
The Plan is intended to qualify as an "Employee Stock Purchase Plan" under
Section 423 of the Internal Revenue Code of 1986, as amended. Under these
provisions, no income will be taxable to a participant at the time of the grant
of the option or purchase of shares under the Plan. Upon sale or other
disposition of the shares the participant will be subject to tax and the amount
of tax will depend on the length of time the shares were held. Generally, if the
shares are held more than two years after the applicable Commencement Date and
one year after the date the shares are purchased, any gain or loss will be
treated as capital gain or loss. If the shares are sold or otherwise disposed of
less than two years from the applicable Commencement Date or less than one year
from the date the shares were purchased, the participant will recognize ordinary
income measured as the lesser of (a) the excess of fair market value of the
shares over the purchase price or (b) 15% of the fair market value as of the
applicable Commencement Date.
The Board of Directors may at any time amend or terminate the Plan. No
amendment may make any changes in an option granted prior thereto which
adversely affects the rights of any participant without the consent of such
participant. No amendment may be made to the Plan without prior approval of the
shareholders of the Company if such amendment would increase the number of
shares which may be issued under the Plan during any one year, amend the
eligibility requirements for participation or permit members of the committee
that is charged with the administration of the Plan to purchase stock under the
Plan.
The affirmative vote of a majority of the Votes Cast will be required to
approve the Plan. For this purpose, "Votes Cast" is defined to be the shares
of the Company's Common Stock represented and voting at the annual meeting. In
addition, the affirmative votes must constitute at least a majority of the
required quorum, which quorum is a majority
12
<PAGE> 14
of the shares outstanding as of January 16, 1998. Votes that are cast against
the proposal will be counted for the purpose of determining both (i) the
presence or absence of a quorum and (ii) the total number of Votes Cast with
respect to the proposal. Abstentions and broker non-votes will be counted for
purposes of determining the presence or absence of a quorum for the transaction
of business but will not be included in the total number of Votes Cast with
respect to this proposal.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE ADOPTION OF
THE COMPANY'S 1997 EMPLOYEE STOCK PURCHASE PLAN, WHICH IS ITEM NO. 2 ON THE
PROXY CARD.
PROPOSAL 3--APPROVAL OF THE NON-EMPLOYEE DIRECTORS'
DEFERRED COMPENSATION PLAN
The purpose of the Falcon Products, Inc. Non-Employee Directors' Deferred
Compensation Plan (the "Directors' Plan") is to help align the common interest
of directors and stockholders in enhancing the value of the Company's Common
Stock. It is also intended that the Directors' Plan will assist the Company in
attracting and retaining qualified individuals to serve as directors. If
approved by stockholders, Directors' Plan will give those directors who are not
also employees of the Company an opportunity to defer receipt, and therefore the
recognition as income for federal income tax purposes, of the amounts payable to
them as compensation including but not limited to annual retainers, board and
committee fees and other cash remuneration payable by the Company for their
services as a director (the "Deferred Fees").
The Directors' Plan provides that any director who is not also an employee
of the Company may elect to defer all or a portion of the compensation payable
to him for services as a director during a fiscal year by delivering written
notice to the Company setting forth his election to participate in the
Directors' Plan, the amount or percentage of his compensation to be deferred and
the timing of the distribution of the deferred compensation.
Pursuant to the Directors' Plan, any Deferred Fees of the directors will be
credited to a bookkeeping reserve account and converted into a number of stock
units equal to 120% of the Deferred Fees divided by the fair market value of a
share of the Company's Common Stock on the last day of the month in which the
amount of Deferred Fees would have been paid but for the deferral. Such stock
units will then be credited to a participating directors' stock unit account. In
addition, each stock unit account will be credited with a number of stock units
equal to the per share dividend payable with respect to a share of the Company's
Common Stock multiplied by the number of stock units held in such stock unit
account as of the first business day prior to such dividend payment date divided
by the fair market value of the Company's Common Stock on such date.
Upon a director's termination of service as director, death, or other date
specified by such director in his deferral election, the payment of the balance
in his account would be made to the director or his beneficiary, if applicable,
in shares of the Company's Common Stock. Upon distribution, the director or his
beneficiary will receive one share of the Company's Common Stock for each whole
stock unit allocated to the director's account as of the date of the
distribution and cash in lieu of any fractional shares.
No income will be recognized by a director at the time that stock units are
credited to his account. At the time of distribution, the director generally
will be required to include as taxable ordinary income, an amount equal to the
fair market value of the shares of the Company's Common Stock received.
The maximum number of stock units that may be granted under the Directors'
Plan during its term is 50,000. The Directors' Plan will be administered by the
Compensation Committee. The Directors' Plan may be terminated or amended by the
Board of Directors; however, such termination shall not adversely affect stock
units then outstanding.
The affirmative vote of a majority of the Votes Cast will be required to
approve the Directors' Plan. In addition, the affirmative votes must constitute
a majority of the required quorum, which quorum is a majority of the shares
outstanding as of January 16, 1998. Votes that are cast against the proposal
will be counted for purposes of determining both (i) the presence or absence of
a quorum and (ii) the total number of Votes Cast with respect to the proposal.
Abstentions and broker non-votes will be counted for purposes of determining the
presence or absence of a quorum for the transaction of business but will not be
included in the total number of Votes Cast with respect to this proposal.
13
<PAGE> 15
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE ADOPTION OF
THE COMPANY'S NON-EMPLOYEE DIRECTORS' DEFERRED COMPENSATION PLAN, WHICH IS ITEM
NO. 3 ON THE PROXY CARD.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP, the Company's independent public accountants for the
fiscal year ended November 1, 1997, has been selected as its independent public
accountants for the fiscal year ending October 31, 1998. 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 1997 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 1999
annual meeting of stockholders must be received by the Company not later than
September 29, 1998, for inclusion in the Company's 1999 proxy statement and form
of proxy relating to the 1999 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.
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 1997 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
January 27, 1998
14
<PAGE> 16
REVOCABLE PROXY
FALCON PRODUCTS, INC.
/X/ PLEASE MARK VOTES
AS IN THIS EXAMPLE
THIS PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS.
ANNUAL MEETING OF STOCKHOLDERS
MARCH 6, 1998
The undersigned hereby appoints Franklin A. Jacobs and Michael J. Dreller,
and each of them severally, with full power of substitution, the true and lawful
attorneys in fact, agents and proxies of the undersigned vote at the Annual
Meeting of Stockholders of Falcon Products, Inc. to be held on Friday, March 6,
1998, commencing at 4:00 p.m. in Grand Ballroom F of the Hyatt Regency at St.
Louis Union Station, St. Louis, Missouri 63103 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
January 27, 1998.
-----------------------------
Please be sure to sign and date Date
this Proxy in the box below.
- --------------------------------------------------------------------------------
- -----------Stockholder sign above----------Co-holder (if any) sign above--------
With- For All
For hold Except
1. Election of Class B Directors: / / / / / /
FOR all nominees listed below
(except as marked to the contrary
below):
CLASS B:
RAYNOR E. BALDWIN DARRYL C. ROSSER JAMES SCHNEIDER
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, MARK
"FOR ALL EXCEPT" AND WRITE THAT NOMINEE'S NAME IN THE SPACE PROVIDED BELOW.
- --------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
2. Approval of the Company's 1997 / / / / / /
Employee Stock Purchase Plan.
3. Approval of the Company's Non- / / / / / /
Employee Directors Deferred
Compensation Plan.
4. In their discretion with respect to the transaction of such other business
as may properly come before the meeting or any adjournments thereof.
- --------------------------------------------------------------------------------
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 THE DIRECTORS UNDER PROPOSAL 1, FOR PROPOSAL 2,
FOR PROPOSAL 3, AND IN THE DIRECTION OF THE PROXIES WITH RESPECT TO THE
TRANSACTION OF SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING OR
ANY ADJOURNMENTS THEREOF.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
^ DETACH ABOVE CARD, SIGN, DATE AND MAIL IN POSTAGE PAID ENVELOPE PROVIDED. ^
FALCON PRODUCTS, INC.
- --------------------------------------------------------------------------------
The above signed hereby acknowledges receipt of copies of Notice of Annual
Meeting of Stockholders and Proxy Statement, each dated January 27, 1998 and
the Annual Report of the Company for fiscal 1997.
Please sign name(s) exactly as it appears on this proxy. In 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 trustees
should so indicate when signing. If executed by a partnership, this proxy
should be signed by an authorized partner.
PLEASE ACT PROMPTLY
SIGN, DATE & MAIL YOUR PROXY CARD TODAY
- --------------------------------------------------------------------------------
<PAGE> 17
APPENDIX
Page 11 of the printed proxy contains a Five Year Total Return Graph.
The information contained in the graph is depicted in the table immediately
following the graph.
