<PAGE>
<PAGE>
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 (as permitted
/ / Definitive Additional Materials by Rule 14a-6(e)(2))
/ / Soliciting Material Pursuant to
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 TRANSACTION 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>
<PAGE>
[Falcon Logo]
FALCON PRODUCTS, INC.
9387 DIELMAN INDUSTRIAL DRIVE
ST. LOUIS, MISSOURI 63132
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
St. Louis, Missouri
February 5, 1999
The annual meeting of the stockholders of Falcon Products, Inc., will be
held on Wednesday, March 10, 1999, at 4:00 p.m. at the St. Louis Club, 7701
Forsyth Boulevard, Clayton Missouri, 63105 for the purposes of:
1. Electing three Class C directors for a term expiring in 2002; and
2. Transacting such other business as may properly come before the meeting.
Stockholders of record at the close of business on January 20, 1999, 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 1998 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>
<PAGE>
FALCON PRODUCTS, INC.
9387 DIELMAN INDUSTRIAL DRIVE
ST. LOUIS, MISSOURI 63132
PROXY STATEMENT
SOLICITATION OF PROXIES
The enclosed proxy is solicited by the Board of Directors of Falcon
Products, Inc. (the "Company"), for use at the annual meeting of the Company's
stockholders to be held at the St. Louis Club, 7701 Forsyth Boulevard, Clayton,
Missouri 63105 on Wednesday, March 10, 1999, at 4:00 p.m. and at any
adjournments thereof. Whether or not you expect to attend the meeting in
person, please return your executed proxy in the enclosed envelope and the
shares represented thereby will be voted in accordance with your wishes. This
proxy statement and the enclosed form of proxy are being first sent to
stockholders on or about February 5, 1999.
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 20, 1999, 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
C directors of the Company, for a term expiring at the 2002 annual
meeting of stockholders (or until successors are duly elected and
qualified); and
(2) 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 C 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 20, 1999, there were 9,027,607 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.
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 Restated By-Laws, as amended (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
2
<PAGE>
<PAGE>
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. 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 20, 1999, 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 2,027,724<F2> 22.0%
Chairman of the Board and
Chief Executive Officer of the Company
9387 Dielman Industrial Drive
St. Louis, Missouri 63132
David L. Babson & Company, Inc. 1,069,820<F3> 11.9%
One Memorial Drive
Cambridge, MA 02142-1300
Robert Fleming, Inc. 842,979<F4> 9.3%
320 Park Avenue, 11th Floor
New York, NY 10022
Royce Funds, Inc. 825,400<F5> 9.1%
1414 Avenue Of The Americas
New York, NY 10022
Dimensional Fund Advisors, Inc. 478,736<F6> 5.3%
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401
<FN>
- -------
<F1> Reflects the number of shares outstanding on January 20, 1999, 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 81,789 shares held by Joyce Jacobs, the wife of Mr. Jacobs, and
39,553 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 192,500 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 <F4> 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> Provided to the Company by a representative from Robert Fleming, Inc.
Beneficial owner has shared voting power for all shares.
<F5> Provided to the Company by a representative from Royce Funds, Inc.
Beneficial owner has shared voting power for all shares.
<F6> Provided to the Company by a representative from Dimensional Fund
Advisors, Inc. Beneficial owner has shared voting power for all shares.
- -------
</TABLE>
3
<PAGE>
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT
On January 20, 1999, 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..................... 234,505<F2> 2.6%
Melvin F. Brown....................... 4,060<F3> <F*>
Donald P. Gallop...................... 247,206<F4> 2.7%
James L. Hoagland..................... 33,822<F5> <F*>
Franklin A. Jacobs.................... 2,027,724<F6> 22.0%
S. Lee Kling.......................... 170,882<F7> 1.9%
Lee M. Liberman....................... 44,012<F8> <F*>
Darryl Rosser......................... 120,617<F9> 1.3%
James Schneider....................... 339,456<F10> 3.8%
Michael J. Dreller.................... 14,583<F11> <F*>
Richard Hnatek........................ 105,786<F12> 1.2%
Michael J. Kula....................... 10,045<F13> <F*>
All Directors, Nominees and Executive
Officers as a Group (14
individuals)........................ 3,365,451<F14> 35.6%<F15>
<FN>
<F*> Represents less than 1% of the class.
- -------
<F1> See Note <F1> to the table under "Voting Securities, Principal Holders
Thereof and Cumulative Voting Rights."
<F2> Includes 69,294 shares held in a pension trust as to which Mr. Baldwin
serves as sole trustee and principal beneficiary and 24,048 shares owned
by his wife. Also includes currently exercisable options to acquire 9,970
shares of Common Stock.
<F3> Includes currently exercisable options to acquire 1,060 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 9,970 shares of Common Stock.
<F5> Includes currently exercisable options to acquire 9,970 shares of Common
Stock.
<F6> See Note <F2> to 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
9,970 shares of Common Stock.
<F8> Includes currently exercisable options to acquire 9,970 shares of Common
Stock.
<F9> Includes currently exercisable options to acquire 89,592 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 11,620 shares of Common Stock.
<F11> Includes currently exercisable options to acquire 9,000 shares of Common
Stock.
<F12> Includes currently exercisable options to acquire 60,100 shares of Common
Stock.
<F13> Includes currently exercisable options to acquire 8,000 shares of Common
Stock.
4
<PAGE>
<PAGE>
<F14> Includes 84,725 shares subject to currently exercisable options held by
non-director executive officers of the Company and 344,622 shares subject
to currently exercisable options held by directors of the Company.
<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, 9,456,954 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 C directors expires at the 1999 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 C nominees listed below to
serve until the 2002 annual meeting of stockholders.
The following table shows for each nominee and director continuing in
office his age, his principal 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 ("SEC"), and the class and expiration of his term as
director.
<TABLE>
<CAPTION>
CLASS C--TO BE ELECTED TO SERVE AS DIRECTOR UNTIL 2002
SERVICE AS
NAME AGE PRINCIPAL OCCUPATION DIRECTOR SINCE
---- --- -------------------- --------------
<S> <C> <C> <C>
Donald P. Gallop 66 Attorney-at-law; Chairman of the law firm of Gallop, 1963
<F1><F2> Johnson & Neuman, L.C., for more than the last five
years; Director of Data Research Associates, Inc.
Franklin A. Jacobs 66 Chairman of the Board and Chief Executive Officer of 1957
<F2><F3> the Company for more than the last five years and
President of the Company until December 1995;
Director of Top Air Manufacturing, Inc.
S. Lee Kling 70 Chairman of the Board of Kling Rechter & Co., L.P., 1969
<F2> a merchant banking company, for more than the last
five years; Director of Bernard Chaus, Inc., Electro
Rent Corporation, Hanover Direct, Inc., Lewis Galoob
Toys, Inc., National Beverage Corp., Top Air
Manufacturing, Inc. and Union Planters Corporation.
<CAPTION>
CLASS A--TO CONTINUE TO SERVE AS DIRECTOR UNTIL 2000
SERVICE AS
NAME AGE PRINCIPAL OCCUPATION DIRECTOR SINCE
---- --- -------------------- --------------
<S> <C> <C> <C>
Melvin F. Brown 63 Chairman Emeritus of Deutsche Financial Services, a 1997
commercial finance company, since June 30, 1998;
prior thereto, Vice Chairman of Deutsche Financial
Services, 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 76 Retired. Prior to September 1, 1989, President and 1990
Chief Executive Officer of Graybar Electric Company,
Inc., a distributor of electrical and
telecommunications equipment, for more than five
years.
5
<PAGE>
<PAGE>
<CAPTION>
SERVICE AS
NAME AGE PRINCIPAL OCCUPATION DIRECTOR SINCE
---- --- -------------------- --------------
<S> <C> <C> <C>
Lee M. Liberman 77 Chairman emeritus and consultant to Laclede Gas 1985
Company, a retail natural gas distribution public
utility, since January 1994; prior thereto, Chairman
of the Board and, until August 1991, Chief Executive
Officer of Laclede Gas Company, for more than five
years; Director of CPI Corporation, Furniture Brands
International and DT Industries, Inc.
<CAPTION>
CLASS B--TO CONTINUE TO SERVE AS DIRECTOR UNTIL 2001
SERVICE AS
NAME AGE PRINCIPAL OCCUPATION DIRECTOR SINCE
---- --- -------------------- --------------
<S> <C> <C> <C>
Raynor E. Baldwin 59 President of Woodsmiths, Incorporated, a 1977
<F4> manufacturer of table tops, for more than the last
five years.
James Schneider 67 Broker--International Monetary Market, Chicago 1989
<F3> Mercantile Exchange, for more than the last five
years.
Darryl C. Rosser 47 President and Chief Operating Officer of the Company 1996
since December 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.
<FN>
- -------
<F1> 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.
<F2> Members of Executive Committee.
<F3> Messrs. Jacobs and Schneider are brothers-in-law.
<F4> Mr. Baldwin has served continuously as a director, except for the period
from January 1982 through January 1988.
</TABLE>
INFORMATION CONCERNING BOARD OF DIRECTORS
During fiscal 1998, 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 oversee the Company's policies
concerning internal controls. During fiscal 1998, 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 11 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 1998, one
Compensation Committee meeting was held.
6
<PAGE>
<PAGE>
COMPENSATION OF DIRECTORS
Directors that are not salaried employees of the Company receive an annual
fee of $15,500. The Company's Directors have the opportunity to defer all or a
portion of the fees payable to such Directors under the Company's Non-Employee
Directors' Deferred Compensation Plan (the "Directors' Plan"). Any fees
deferred under the Directors' Plan are 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. Directors' fees of $108,500 were
earned during fiscal 1998 to which $81,375 were deferred under the Directors'
Plan.
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 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. Options granted under the plan are exercisable in
increments of 20 percent of the underlying shares commencing upon the date of
grant and thereafter on each of the four successive anniversaries of the date
of grant, however, such options become immediately exercisable upon retirement,
death or disability of the director. Seven non-employee directors of the
Company were each granted options to purchase 1,650 shares of Common Stock
under the plan in December 1997 at an exercise price of $14.50 per share. The
Non-Employee Director Stock Option Plan was amended in December 1998 to
increase the number of shares underlying the options granted thereunder from
1,650 to 2,000.
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.
7
<PAGE>
<PAGE>
EXECUTIVE COMPENSATION
The following table reflects compensation paid or payable for fiscal years
1998, 1997 and 1996 with respect to the Company's chief executive officer and
each of the four other most highly compensated executive officers whose fiscal
1998 salaries and bonuses combined exceeded $100,000 in each instance.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
ANNUAL COMPENSATION LONG TERM COMPENSATION
----------------------------------------------------------------------------------
AWARDS PAYOUTS
--------------------------------------
OTHER RESTRICTED SECURITIES ALL OTHER
ANNUAL STOCK UNDERLYING LTIP COM-
NAME AND PRINCIPAL FISCAL COMPENSA- AWARD OPTIONS PAYOUTS PENSA-
POSITION YEAR SALARY BONUS TION ($)<F1> ($) (#)<F2> ($) TION ($)
(A) (B) (C) ($) (D) ($) (E) (F) (G) (H) (I)
------------------ ------ ------- ------- ------------ ---------- ---------- ------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Franklin A. Jacobs 1998 598,377 0 0 0 0 0 737<F3>
Chairman of the Board 1997 562,569 0 20,800 0 0 0 3,126<F3>
and Chief Executive 1996 528,019 0 20,560 0 0 0 3,081<F3>
Officer
Darryl Rosser 1998 297,535 0 0 0 30,000 0 0
President and Chief 1997 266,923 0 5,408 0 25,000 0 0
Operating Officer<F4> 1996 218,580 25,777 5,512 0 10,000 0 0
Michael J. Dreller 1998 142,519 0 0 0 10,000 0 0
Vice President--Finance 1997 127,648 0 5,080 0 10,000 0 0
and Chief Financial 1996 93,240 13,175 0 0 5,000 0 0
Officer<F5>
Richard Hnatek 1998 155,008 0 0 0 10,000 0 0
Senior Vice 1997 149,031 0 5,346 0 10,000 0 0
President--Sales 1996 144,995 16,497 5,448 0 5,000 0 0
Michael J. Kula 1998 163,346 0 0 0 10,000 0 0
Vice President-- 1997 155,000 0 2,580 0 10,000 0 0
Corporate Technology 1996 48,885 5,913 0 0 5,000 0 0
and Development<F6>
<FN>
- --------
<F1> Consists of Company matching contributions under the Falcon Products, Inc.
Amended and Restated Stock Purchase Plan. This plan was terminated at the
end of fiscal 1997 and replaced with the 1997 Employee Stock Purchase Plan
under which employees of the Company may acquire shares of common stock at
85% of the lesser of the fair market value on the grant date or the
exercise date. No shares were acquired under the 1997 Employee Stock
Purchase Plan during fiscal 1998.
<F2> 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.
<F3> Consists of the economic benefit of premiums paid for a survivorship life
insurance policy on the lives of Mr. Jacobs and his spouse.
<F4> In December 1995, Mr. Rosser was appointed President and Chief Operating
Officer of the Company.
<F5> Mr. Dreller was appointed Vice President--Finance and Chief Financial
Officer, Secretary and Treasurer in January 1996.
<F6> Mr. Kula was appointed Vice President--Operations in July 1996 and was
named Vice President--Corporate Technology and Development in November
1998.
</TABLE>
8
<PAGE>
<PAGE>
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>
$ 25,000........................ $ 1,875 $ 3,750 $ 5,635 $ 7,500 $ 9,375 $11,250 $13,125
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
100,000........................ 7,500 15,000 22,500 30,000 37,500 45,000 52,500
150,000........................ 11,250 22,500 33,750 45,000 56,250 67,500 78,750
175,000........................ 13,125 26,250 39,375 52,500 65,625 78,750 91,875
</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 the maximum amount
permitted under the Internal Revenue Code (currently $160,000). The plan
provides for a maximum of salary and wages of up to $75,000 per year from
November 1, 1992 to November 1, 1997, and up to $50,000 per year prior to
November 1, 1992, for each year of service. Estimated benefit amounts listed in
the above table are not subject to any deduction for Social Security benefits
or other offset amounts.
The credited years of service under the retirement plan for each of the
executive officers listed in the Summary Compensation Table are as follows:
Franklin A. Jacobs 40 Richard Hnatek 18
Darryl Rosser 10 Michael J. Dreller 5
Michael J. Kula 3
9
<PAGE>
<PAGE>
INFORMATION AS TO STOCK OPTIONS
The following table provides certain information as to option grants in
fiscal 1998 to the persons named in the Summary Compensation Table.
<TABLE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
-------------------------------------------------------------- VALUE
NUMBER OF PERCENT OF AT ASSUMED ANNUAL
SECURITIES TOTAL OPTIONS RATES OF STOCK PRICE
UNDERLYING GRANTED TO APPRECIATION FOR
OPTIONS EMPLOYEES EXERCISE OR OPTION TERM<F2>
GRANTED IN FISCAL BASE PRICE EXPIRATION --------------------
NAME (#)<F1> YEAR ($/SHARE) DATE 5% ($) 10% ($)
(A) (B) (C) (D) (E) (F) (G)
---- ---------- ------------- ----------- ---------- ------ -------
<S> <C> <C> <C> <C> <C> <C>
Franklin A. Jacobs............. -- -- -- -- -- --
Darryl Rosser.................. 30,000 14.6% 14.125 12/21/07 266,493 675,348
Michael J. Dreller............. 10,000 4.9% 14.125 12/21/07 88,831 225,116
Richard Hnatek................. 10,000 4.9% 14.125 12/21/07 88,831 225,116
Michael J. Kula................ 10,000 4.9% 14.125 12/21/07 88,831 225,116
<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 SEC,
compounded annually and, therefore, are not intended to forecast possible
future appreciation, if any, of the Company's stock price.
- -------
</TABLE>
The following table lists option exercises in fiscal 1998 and the value of
options held as of the end of fiscal 1998 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
(#) ($)
SHARES
ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE (#) REALIZED ($) UNEXERCISABLE UNEXERCISABLE
(A) (B) (C) (D) (E)
---- --------------- ------------ -------------------------- ------------------------
<S> <C> <C> <C> <C>
Franklin A. Jacobs....... 0 0 170,500/22,000 167,746/16,001
Darryl Rosser............ 0 0 72,792/69,200 128,051/15,600
Michael J. Dreller....... 0 0 4,000/21,000 0/0
Richard Hnatek........... 5,000 19,413 46,300/34,200 30,861/5,600
Michael J. Kula.......... 0 0 4,000/21,000 0/0
- ---------
</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.
10
<PAGE>
<PAGE>
COMPENSATION COMMITTEE REPORT
GENERAL POLICY
The Company's executive compensation program is linked to corporate
performance and returns to stockholders. 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 its stockholders, to other companies of similar size. The annual
compensation reviews permit an evaluation of the link between the Company's
performance and its executive compensation in the context of the compensation
programs of other companies.
The Compensation Committee determines the compensation of corporate
executives elected by the Board of Directors, including the individuals whose
compensation is detailed in this proxy statement. In reviewing the individual
performance of the executives whose compensation is detailed in this proxy
statement, other than Franklin A. Jacobs (the Company's Chief Executive
Officer), the Compensation Committee takes into account the views of Mr.
Jacobs.
The key elements of the Company's executive compensation program consist of
base salary, annual bonus and stock options. The Compensation Committee's
policies with respect to each of these elements, including the bases for the
compensation awarded to Mr. Jacobs, are discussed below. The Compensation
Committee also takes into account the full compensation package afforded by the
Company to the individual, including pension benefits, insurance and other
benefits, as well as the programs described below. The Compensation Committee
continues to monitor qualifying compensation paid to the Company's executive
officers with respect to its deductibility under Section 162(m) of the Internal
Revenue Code.
BASE SALARIES
Base salaries for executive officers are initially determined by evaluating
the responsibilities of the position held and the experience of the individual,
and by reference to the competitive marketplace for executive talent, including
a comparison to base salaries for comparable positions at other companies. The
comparative group is not limited to 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 1998, the
Compensation Committee took into account the Company's financial results in
fiscal 1997, 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, 1998, of
$604,000, representing an increase of approximately 6.0% over calendar year
1997.
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
11
<PAGE>
<PAGE>
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 year 1996. In
light of the Company's earnings levels in fiscal years 1997 and 1998, 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
years 1997 and 1998. Mr. Jacobs did not participate in the Officer Bonus Plan
for fiscal years 1997 and 1998 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
12
<PAGE>
<PAGE>
FIVE YEAR TOTAL RETURN CHART
The following chart compares the Company's cumulative yearly stockholder
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 29, 1993, and the
reinvestment of all dividends.
[GRAPH]
<TABLE>
<CAPTION>
10/29/93 10/28/94 10/27/95 11/01/96 10/31/97 10/30/98
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Falcon Products, Inc................... 100.00 110.0 134.8 151.9 166.2 114.5
NYSE Stock Market (U.S. Companies)..... 100.00 102.6 127.2 156.5 205.3 237.8
Self-Determined Peer Group............. 100.00 94.0 102.9 136.4 238.7 208.5
<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>
13
<PAGE>
<PAGE>
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
1998, payments of $50,000 were made to A.P., Inc. under the agreement. This
agreement expires at the end of fiscal 1999.
Donald P. Gallop, a director of the Company, is Chairman of the law firm of
Gallop, Johnson & Neuman, L.C., which has provided legal services to the
Company in prior years and is expected to provide legal services to the Company
in the future.
Raynor E. Baldwin, a director of the Company, is President and sole
stockholder of Woodsmiths, Incorporated, a manufacturer of table tops, which
purchases products from the Company. During fiscal 1998, the Company received
payments of $179,768 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 SEC. Such individuals are
required by SEC regulation to furnish the Company with copies of all Section
16(a) forms they file. Based solely on its 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 1998.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP, the Company's independent public accountants for the
fiscal year ended October 31, 1998, have been selected as its independent
public accountants for the fiscal year ending October 30, 1999. 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 1998 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 2000
annual meeting of stockholders must be received by the Company not later than
October 8, 1999, for inclusion in the Company's 2000 proxy statement and form
of proxy relating to the 2000 annual meeting.
In addition, under the SEC's proxy rules, if a stockholder wishes to bring
a proposal before the annual meeting of stockholders outside the proxy
inclusion process discussed above but does not provide written notice of the
proposal to the Company at least 45 days before the anniversary date of the day
that proxy materials were first mailed for the prior year's annual meeting of
stockholders, such notice will be untimely and any proxies received by the
Board of Directors from stockholders in response to its solicitation will be
voted by the Company's designated proxies in their discretion on such matter,
regardless of whether specific authority to vote on such matter has been
received from the stockholders submitting such proxies. Accordingly, any
stockholder who wishes to submit a proposal at the 2000 annual meeting of
stockholders and also wishes to avoid, in certain instances, the possibility of
discretionary voting by the Company's proxies on such matter must give written
notice to the Secretary of the Company on or before December 22, 1999.
14
<PAGE>
<PAGE>
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 mail, 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 1998 FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION (INCLUDING RELATED FINANCIAL
STATEMENTS AND SCHEDULES) IS AVAILABLE TO STOCKHOLDERS WITHOUT CHARGE, UPON
WRITTEN REQUEST TO THE SECRETARY, FALCON PRODUCTS, INC., 9387 DIELMAN
INDUSTRIAL DRIVE, ST. LOUIS, MISSOURI 63132.
By Order of the Board of Directors
MICHAEL J. DRELLER
Secretary
St. Louis, Missouri
February 5, 1999
15
<PAGE>
<PAGE>
/ X / PLEASE MARK VOTES REVOCABLE PROXY
AS IN THIS EXAMPLE FALCON PRODUCTS, INC.
THIS PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS.
ANNUAL MEETING OF STOCKHOLDERS
MARCH 10, 1999
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 to vote at the Annual
Meeting of Stockholders of Falcon Products, Inc. to be held on Wednesday,
March 10, 1999, commencing at 4:00 p.m. in the main dining room, 10th floor
of the St. Louis Club, 7701 Forsyth Boulevard, Clayton, Missouri 63105 and at
any and all adjournments thereof, according to the number of votes which the
undersigned would possess if personally present for the purpose of considering
and taking action upon the following as more fully set forth in the Proxy
Statement of the Company dated February 5, 1999.
WITH- FOR ALL
FOR HOLD EXCEPT
1. Election of Class C Directors:
FOR all nominees listed below / / / / / /
(except as marked to the contrary
below):
CLASS C:
DONALD P. GALLOP FRANKLIN A. JACOBS S. LEE KLING
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.
- --------------------------------------------------------------------------------
2. 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 AND IN THE
DISCRETION OF THE PROXIES WITH RESPECT TO THE TRANSACTION OF SUCH OTHER BUSINESS
AS MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENTS THEREOF.
- --------------------------------------------------------------------------------
-----------------------------------
Please be sure to sign and date Date
this Proxy in the box below.
- --------------------------------------------------------------------------------
- --- Stockholder sign above --------- Co-holder (if any) sign above -------------
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 February 5, 1999 and the
Annual Report of the Company for fiscal 1998.
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>
<PAGE>
APPENDIX
Page 13 of the printed Proxy contains a Performance Graph. The information
contained in the graph appears in the table immediately following the graph.
