<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
January 26, 2000
The annual meeting of the stockholders of Falcon Products, Inc., will
be held on Thursday, March 16, 2000, at 4:00 p.m. at the St. Louis Club,
7701 Forsyth Boulevard, Clayton Missouri, 63105 for the purposes of:
1. Electing three Class A directors for a term expiring in 2003;
2. Considering and voting upon a proposal to amend the Falcon Products,
Inc. Amended and Restated 1991 Stock Option Plan;
3. Considering and voting upon a proposal to amend the Falcon Products,
Inc. Non-Employee Director Stock Option Plan; and
4. Transacting such other business as may properly come before the
meeting.
Stockholders of record at the close of business on January 18, 2000
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 1999 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 Thursday, March 16, 2000, 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 26, 2000.
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 18, 2000
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 A directors of the Company, for a term expiring at the
2003 annual meeting of stockholders (or until successors are
duly elected and qualified);
(2) FOR the amendment to the Falcon Products, Inc. Amended and
Restated 1991 Stock Option Plan;
(3) FOR the amendment to the Falcon Products, Inc. Non-Employee
Director Stock Option 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 A director
become unavailable for any reason, it is intended that the persons named in
the proxy will vote for the election of such other person in his stead as
may be designated by the Board of Directors. The Board of Directors is not
aware of any reason that might cause any nominee to be unavailable.
VOTING SECURITIES, PRINCIPAL HOLDERS THEREOF
AND CUMULATIVE VOTING RIGHTS
On January 18, 2000, there were 8,712,774 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
2
<PAGE>
<PAGE>
"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 vote required for the other matters
described in this proxy statement and any other matter properly brought
before the meeting is the affirmative vote of the majority of the shares of
Common Stock present in person or represented by proxy at the annual
meeting of stockholders and entitled to vote on the proposal to approve 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 18, 2000, 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
dispositive 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 2,047,220<F2> 23.0%
Chairman of the Board and
Chief Executive Officer of the Company
9387 Dielman Industrial Drive
St. Louis, Missouri 63132
Royce Funds, Inc. 982,900<F3> 11.3%
1414 Avenue Of The Americas
New York, NY 10022
Robert Fleming, Inc. 824,479<F4> 9.5%
320 Park Avenue, 11th Floor
New York, NY 10022
David L. Babson & Company, Inc. 727,547<F5> 8.4%
One Memorial Drive
Cambridge, MA 02142-1300
Dimensional Fund Advisors, Inc. 556,256<F6> 6.4%
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401
<FN>
- -------
<F1> Reflects the number of shares outstanding on January 18, 2000, 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 3,500 shares held by Marilyn Mann Jacobs, the wife of Mr. Jacobs,
39,551 shares held in revocable trusts for the benefit of Mr. Jacobs'
children as to which Mr. Jacobs serves as sole trustee, and 97,785 shares
held by the Jacobs Family Foundation, a charitable trust in which Mr.
Jacobs has no pecuniary interest but is the 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 (4) to the table under "Security Ownership of Management."
<F3> Provided to the Company by a representative from Royce Funds, Inc.
Beneficial owner has sole voting and dispositive power for all shares.
<F4> Provided to the Company by a representative from Robert Fleming, Inc.
Beneficial owner has sole voting and dispositive power for all shares.
<F5> Provided to the Company by a representative from David L. Babson &
Company, Inc. Beneficial owner has shared voting and dispositive power for
94,815 of the shares and has sole voting and dispositive power for the
remaining 632,732 shares.
<F6> Provided to the Company by a representative from Dimensional Fund
Advisors, Inc. Beneficial owner has sole voting and dispositive power for
all shares.
</TABLE>
3
<PAGE>
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT
On January 18, 2000, 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 dispositive 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..................... 235,895<F2> 2.7%
Melvin F. Brown....................... 4,790<F3> <F*>
Donald P. Gallop...................... 248,596<F4> 2.8%
James L. Hoagland..................... 35,212<F5> <F*>
Franklin A. Jacobs.................... 2,047,220<F6> 23.0%
S. Lee Kling.......................... 185,272<F7> 2.1%
Lee M. Liberman....................... 40,452<F8> <F*>
Darryl Rosser......................... 154,823<F9> 1.8%
James Schneider....................... 360,986<F10> 4.1%
Michael J. Dreller.................... 32,420<F11> <F*>
Richard Hnatek........................ 118,369<F12> 1.3%
Michael J. Kula....................... 25,550<F13> <F*>
All Directors, Nominees and Executive
Officers as a Group
(14 individuals).................... 3,538,123<F14> 38.3%<F15>
<FN>
- -------
<F*> Represents less than 1% of the class.
<F1> See Note (1) to the table under "Voting Securities, Principal Holders
Thereof and Cumulative Voting Rights."
<F2> Includes 69,294 shares held in a pension trust as to which Mr. Baldwin
serves as sole trustee and principal beneficiary and 24,048 shares owned
by his wife. Also includes currently exercisable options to acquire
11,360 shares of Common Stock.
<F3> Includes currently exercisable options to acquire 1,790 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 11,360 shares of Common Stock.
<F5> Includes currently exercisable options to acquire 11,360 shares of Common
Stock.
<F6> See Note (2) 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
9,710 shares of Common Stock.
<F8> Includes currently exercisable options to acquire 11,360 shares of Common
Stock.
<F9> Includes currently exercisable options to acquire 117,250 shares of
Common Stock.
<F10> Includes 296,963 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 13,010 shares of Common Stock.
<F11> Includes currently exercisable options to acquire 24,500 shares of Common
Stock.
<F12> Includes currently exercisable options to acquire 71,500 shares of Common
Stock.
<F13> Includes currently exercisable options to acquire 22,500 shares of Common
Stock.
<F14> Includes 153,545 shares subject to currently exercisable options held by
non-director executive officers of the Company and 379,700 shares subject
to currently exercisable options held by directors of the Company.
4
<PAGE>
<PAGE>
<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, 9,246,019 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 A directors expires at the 2000 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 A
nominees listed below to serve until the 2003 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>
CLASS A--TO BE ELECTED TO SERVE AS DIRECTOR UNTIL 2003
<CAPTION>
SERVICE AS
NAME AGE PRINCIPAL OCCUPATION DIRECTOR SINCE
---- --- -------------------- --------------
<S> <C> <C> <C>
Melvin F. Brown 64 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 77 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.
Lee M. Liberman 78 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<F2> 60 President of Woodsmiths, Incorporated, a 1977
manufacturer of table tops, for more than the last
five years.
James Schneider<F3> 68 Member--International Monetary Market, Chicago 1989
Mercantile Exchange, for more than the last five
years.
Darryl C. Rosser 48 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.
5
<PAGE>
<PAGE>
<CAPTION>
CLASS C--TO CONTINUE TO SERVE AS DIRECTOR UNTIL 2002
SERVICE AS
NAME AGE PRINCIPAL OCCUPATION DIRECTOR SINCE
---- --- -------------------- --------------
<S> <C> <C> <C>
Donald P. Gallop<F1><F4> 67 Attorney-at-law; Chairman of the law firm of Gallop, 1963
Johnson & Neuman, L.C., for more than the last five
years; Director of Data Research Associates, Inc.
Franklin A. Jacobs<F1><F3> 67 Chairman of the Board and Chief Executive Officer of 1957
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<F1> 71 Chairman of the Board of Kling Rechter & Co., L.P., 1969
a merchant banking company, for more than the last
five years; Director of Bernard Chaus, Inc., Electro
Rent Corporation, National Beverage Corp., Top Air
Manufacturing, Inc. and Union Planters Corporation.
<FN>
- -------
<F1> Members of Executive Committee.
<F2> Mr. Baldwin has served continuously as a director, except for the period
from January 1982 through January 1988.
<F3> Messrs. Jacobs and Schneider are brothers-in-law.
<F4> 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.
</TABLE>
INFORMATION CONCERNING BOARD OF DIRECTORS
During fiscal 1999, four regular 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 1999, 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 10 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 1999, 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 1999, all
of which 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 2,000 shares
of Common Stock under the plan in December 1998 at an exercise price of
$11.75 per share.
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 1999, 1998 and 1997 with respect to the Company's chief executive
officer and each of the four other most highly compensated executive
officers whose fiscal 1999 salaries and bonuses combined exceeded $100,000
in each instance.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
ANNUAL COMPENSATION LONG TERM COMPENSATION
--------------------------------------------------------------------
AWARDS PAYOUTS
-------------------------------------
OTHER RESTRICTED
ANNUAL STOCK SECURITIES ALL OTHER
FISCAL SALARY COMPENSA- AWARD UNDERLYING LTIP COMPEN-
NAME AND PRINCIPAL POSITION YEAR ($) BONUS TION ($)<F1> ($) OPTIONS (#) PAYOUTS ($) SATION ($)
- --------------------------- ------ --- ----- ------------ ---------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Franklin A. Jacobs 1999 653,846 60,000 0 0 0 0 737<F2>
Chairman of the Board 1998 598,377 0 0 0 0 0 737<F2>
and Chief Executive Officer 1997 562,569 0 20,800 0 0 0 3,126<F2>
Darryl Rosser 1999 326,923 66,472 6,361 0 45,000 0 0
President and Chief 1998 297,535 0 0 0 30,000 0 0
Operating Officer 1997 266,923 0 5,408 0 25,000 0 0
Michael J. Dreller 1999 157,462 32,035 3,068 0 30,000 0 0
Vice President--Finance 1998 142,519 0 0 0 10,000 0 0
and Chief Financial 1997 127,648 0 5,080 0 10,000 0 0
Officer
Richard Hnatek 1999 159,340 32,035 1,553 0 20,000 0 0
Senior Vice 1998 155,008 0 0 0 10,000 0 0
President--Quality 1997 149,031 0 5,346 0 10,000 0 0
Michael J. Kula 1999 169,154 34,037 1,320 0 25,000 0 0
Vice President-- 1998 163,346 0 0 0 10,000 0 0
Corporate Technology 1997 155,000 0 2,580 0 10,000 0 0
and Development<F3>
<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
7
<PAGE>
<PAGE>
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.
<F2> Consists of the economic benefit of premiums paid for a life insurance
policy on the life of Mr. Jacobs.
<F3> Mr. Kula was appointed Vice President--Operations in July 1996 and was
named Vice President--Corporate Technology and Development in
November 1998.
</TABLE>
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 $170,000). 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 $50,000 per year prior
to November 1, 1992, for each year of service. Estimated benefit amounts
listed in the above table are not subject to any deduction for Social
Security benefits or other offset amounts.
The credited years of service under the retirement plan for each of the
executive officers listed in the Summary Compensation Table are as follows:
Franklin A. Jacobs 41 Richard Hnatek 19
Darryl Rosser 11 Michael J. Dreller 6
Michael J. Kula 4
8
<PAGE>
<PAGE>
INFORMATION AS TO STOCK OPTIONS
The following table provides certain information as to option grants in
fiscal 1999 to the persons named in the Summary Compensation Table.
<TABLE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
--------------------------------------------------------------- VALUE AT ASSUMED
PERCENT OF ANNUAL RATES OF
NUMBER OF TOTAL OPTIONS STOCK PRICE
SECURITIES GRANTED TO APPRECIATION FOR
UNDERLYING EMPLOYEES EXERCISE OR OPTION TERM<F3>
OPTIONS IN FISCAL BASE PRICE EXPIRATION ---------------------
NAME GRANTED (#) YEAR ($/SHARE) DATE 5% ($) 10% ($)
---- ----------- ------------- ----------- ---------- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C>
Franklin A. Jacobs..... -- -- -- -- -- --
Darryl Rosser.......... <F1> 30,000 5.4% 11.750 12/15/08 221,685 561,794
<F2> 15,000 2.7% 8.875 3/11/09 83,722 212,167
Michael J. Dreller..... <F1> 15,000 2.7% 11.750 12/15/08 110,842 280,897
<F2> 15,000 2.7% 8.875 3/11/09 83,722 212,167
Richard Hnatek......... <F1> 10,000 1.8% 11.750 12/15/08 73,895 187,265
<F2> 10,000 1.8% 8.875 3/11/09 55,814 141,445
Michael J. Kula........ <F1> 10,000 1.8% 11.750 12/15/08 73,895 187,265
<F2> 15,000 2.7% 8.875 3/11/09 83,722 212,167
<FN>
- -------
<F1> Such options were granted at fair market value on date of grant and are
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> Such options were granted at fair market value on date of grant and are
exercisable in 50 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.
<F3> The potential realizable value amounts shown illustrate the values that
might be realized upon exercise immediately prior to expiration of their
term using 5 percent and 10 percent appreciation rates set by the 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 1999 and the value
of options held as of the end of fiscal 1999 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
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
SHARES OPTIONS AT FISCAL YEAR-END (#) AT FISCAL YEAR-END ($)
ACQUIRED VALUE
NAME ON EXERCISE (#) REALIZED ($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
---- --------------- ------------ ------------------------------ -------------------------
<S> <C> <C> <C> <C>
Franklin A. Jacobs..... 0 0 192,500/0 0/0
Darryl Rosser.......... 0 0 109,750/69,000 50,850/1,875
Michael J. Dreller..... 0 0 16,000/39,000 0/1,875
Richard Hnatek......... 5,000 12,225 66,500/29,000 0/1,250
Michael J. Kula........ 0 0 15,000/35,000 0/1,875
</TABLE>
9
<PAGE>
COMPENSATION COMMITTEE REPORT
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.
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 that 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 1999,
the Compensation Committee took into account the Company's financial
results in fiscal 1998, 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, 1999, of $664,000, representing an increase of
approximately 9.9% over calendar year 1998.
10
<PAGE>
<PAGE>
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 20.5% of the base salary for the
Company's officers, except Mr. Jacobs who was awarded a $60,000 bonus,
attributable to fiscal year 1999. 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
11
<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 28, 1994 and the
reinvestment of all dividends.
[GRAPH]
<TABLE>
<CAPTION>
10/28/94 10/27/95 11/01/96 10/31/97 10/30/98 10/29/99
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Falcon Products, Inc.................. 100.0 122.5 138.2 151.2 104.1 87.6
NYSE Stock Market (U.S. Companies).... 100.0 124.0 152.6 200.1 231.8 271.6
Self-Determined Peer Group............ 100.0 109.5 145.1 253.9 221.7 212.5
<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>
TRANSACTIONS WITH ISSUER AND OTHERS
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 1999, the Company
received payments of $301,000 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.
12
<PAGE>
<PAGE>
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
1999.
PROPOSAL 2--AMENDMENT TO THE FALCON PRODUCTS, INC.
AMENDED AND RESTATED 1991 STOCK OPTION PLAN
BACKGROUND
The Company is seeking stockholder approval of an amendment to the
Company's Amended and Restated 1991 Stock Option Plan (the "1991 Plan")
that was approved by the Board of Directors on April 1, 1999 (the "1991
Plan Amendment"). The 1991 Plan Amendment increased the number of shares
issuable pursuant to options granted under the 1991 Plan from 1,100,000 to
1,500,000.
DESCRIPTION OF 1991 PLAN
The 1991 Plan is designed to provide additional incentives for officers
and other key employees of the Company to promote the success of the
business and to enhance the Company's ability to attract and retain the
service of qualified persons. The Board of Directors believes that option
grants under the 1991 Plan will continue to be an important ingredient in
the successful recruitment and retention of management personnel.
Accordingly, the purpose of the 1991 Plan Amendment is to enable the
Company to continue to provide the incentives discussed above in
furtherance of the purposes of the 1991 Plan and to allow for the retention
of new options by the optionees holding the same, as discussed under "Grant
of New Options" below.
The 1991 Plan is administered by the Compensation Committee of the
Board of Directors of the Company. The 1991 Plan authorizes the
Compensation Committee to grant to key employees, including officers as
selected by such Committee, incentive stock options and nonqualified stock
options. The 1991 Plan will expire on, and no options may be granted
thereunder after November 30, 2001, subject to the right of the Board of
Directors to terminate the 1991 Plan at any time prior thereto. The Board
of Directors may amend the 1991 Plan at any time.
An option enables the optionee to purchase shares of Common Stock at
the option price. The option price per share may not be less than the fair
market value of the Common Stock at the time the option is granted,
provided that in the event of the grant of an incentive stock option to an
optionee who is or would be the beneficial owner of more than 10% of the
total combined voting power of all classes of the Company's stock, the
option price may not be less than 110% of the fair market value of the
Common Stock on the date of grant. No person may be granted incentive stock
options under the 1991 Plan that are first exercisable during any calendar
year for shares having an aggregate fair market value as of the date of
grant of more than $100,000. In order to obtain the shares, a participant
must pay the full option price to the Company at the time of exercise of
the option. The purchase price may be paid in cash or, with the consent of
the Compensation Committee, stock of the Company, including stock acquired
under the same option. Incentive stock options are intended to qualify
under Section 422 of the Internal Revenue Code of 1986, as amended.
The 1991 Plan provides that stock options may be granted with terms of
no more than ten years from the date of grant, provided that with respect
to the grant of an incentive stock option to an optionee who is or would be
the beneficial owner of more than 10% of the total combined voting power of
all classes of the Company's stock, the term of such option may not exceed
five years. Options will survive for a limited period of time after the
optionee's death, disability or normal retirement from the Company. Any
shares as to which an option expires, lapses unexercised or is terminated
or canceled may be subject to a new option.
FEDERAL INCOME TAX CONSEQUENCES
An optionee will not realize any income, nor will the Company be
entitled to a deduction, at the time an incentive stock option is granted.
If an optionee does not dispose of the shares acquired on the exercise of
an incentive stock option within one year after the transfer of such shares
to him or within two years from the date
13
<PAGE>
<PAGE>
the incentive stock option was granted to him, for federal income tax
purposes: (a) the optionee will not recognize any income at the time of
exercise of his incentive stock option; (b) the amount by which the fair
market value (determined without regard to any restriction other than a
restriction which by its terms will never lapse) of the shares at the
time of exercise exceeds the exercise price is an item of tax preference
subject to the alternative minimum tax on individuals; and (c) the
difference between the incentive stock option price and the amount
realized upon sale of the shares of the optionee will be treated as
long-term capital gain or loss. The Company will not be entitled to a
deduction upon the exercise of an incentive stock option.
Except in the case of a disposition following the death of an optionee
and certain other very limited exceptions, if the stock acquired pursuant
to an incentive stock option is not held for the minimum periods described
above, the excess of the fair market value of the stock at the time of
exercise over the amount paid for the stock generally will be taxed as
ordinary income to the optionee in the year of disposition. In such case,
the Company is entitled to a deduction for federal income tax purposes at
the time and in the amount in which income is taxed to the optionee as
ordinary income by reason of the sale of stock acquired upon the exercise
of an incentive stock option.
An optionee will not realize any income at the time a nonqualified
stock option is granted, nor will the Company be entitled to a deduction at
the time. Upon exercise of a nonqualified stock option, the optionee will
recognize ordinary income (whether the nonqualified stock option price is
paid in cash or by the surrender of previously owned Common Stock), in an
amount equal to the difference between the option price and the fair market
value of the shares to which the nonqualified stock option pertains. The
Company will be entitled to a tax deduction in an amount equal to the amount
of ordinary income realized by the optionee.
GRANT OF NEW OPTIONS
In fiscal year 1999, prior to the 1991 Plan Amendment, which increased
the number of shares issuable under the 1991 Plan by an additional 400,000
shares, the Company had 134,713 shares available for issuance under the
1991 Plan, but granted options covering an aggregate of 553,000 shares to
certain key employees of the Company. Accordingly, net of cancellations of
previously granted options, options covering an aggregate of 270,117 were
granted in excess of the 1991 Plan limits (the "New Options"). The exercise
price under each option granted in fiscal 1999 is the fair market value of
the Common Stock on the date of grant of such option. Such options are
exercisable either in 20% annual increments beginning on the first
anniversary date of grant and on each anniversary date thereafter through
the fifth anniversary date or are exercisable in 50% annual increments on
the first anniversary date of grant and the second anniversary date of
grant, and expire 10 years from the date of grant, subject generally to
early termination upon cessation of employment. Accordingly, options
granted in fiscal 1999 which may not otherwise qualify for incentive stock
option treatment could so qualify if the 1991 Plan Amendment is approved by
the stockholders of the Company. The 1991 Plan Amendment will be approved
by the stockholders of the Company only if the holders of a majority of the
issued and outstanding shares of Common Stock present at the annual meeting
in person or by proxy vote for the approval of the 1991 Plan Amendment.
The following table sets forth information with respect to the options
granted in fiscal 1999 for (i) the persons named in the Summary
Compensation Table on page 7, (ii) all executive officers of the Company as
a group, and (iii) all employees, including all current officers who are
not executive officers, as a group.
<TABLE>
<CAPTION>
NUMBER OF
SHARES UNDERLYING
OPTIONHOLDER(S) OPTIONS
--------------- -----------------
<S> <C>
Franklin A. Jacobs
Chairman of the Board and Chief Executive Officer........... --
Darryl Rosser
President and Chief Operating Officer....................... 45,000
Michael J. Dreller
Chief Financial Officer..................................... 30,000
Richard Hnatek
Senior Vice President--Quality.............................. 20,000
Michael J. Kula
Vice President--Corporate Technology and Development........ 25,000
Executive Group............................................. 195,000
Non-Executive Employee Group................................ 358,000
</TABLE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE APPROVAL OF THE
AMENDMENT TO THE FALCON PRODUCTS, INC. AMENDED AND RESTATED 1991 STOCK
OPTION PLAN, WHICH IS ITEM 2 ON THE PROXY CARD.
14
<PAGE>
<PAGE>
PROPOSAL 3--AMENDMENT TO THE FALCON PRODUCTS, INC.
NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
GENERAL
The Company is seeking stockholder approval of an amendment to the
Company's Non-Employee Director Stock Option Plan (the "Director Stock
Option Plan"), that was approved by the Board of Directors on December 15,
1999, (the "Director Plan Amendment"). The Director Plan Amendment
increased the number of shares issuable pursuant to options granted under
the Director Stock Option Plan from 82,500 to 165,000. The Director Plan
Amendment will be approved by the stockholders of the Company only if the
holders of a majority of the issued and outstanding shares of Common Stock
present at the annual meeting, in person or by proxy, vote for the approval
of the Director Plan Amendment.
The Director Stock Option Plan is a formula plan providing for the
grant of stock options to directors who are neither executive officers of
the Company nor are otherwise compensated by the Company on the basis of
employment or consulting arrangements. The Director Stock Option Plan is
designed to provide additional incentives for directors to promote the
success of the Company's business and to enhance the Company's ability to
attract and retain the service of qualified directors.
Under the Director Stock Option Plan, as amended and adjusted to
reflect stock splits and stock dividends, non-employee directors are
granted an option to acquire 2,000 shares of Common Stock on December 17 of
each year (or, if such date is not a business day, the first business day
after such date) at the closing sale price of the Common Stock on the New
York Stock Exchange on the date of grant. Such options are exercisable in
five installments, with 20% of the total shares underlying the option
becoming available for exercise, on a cumulative basis, on the date of
grant and on the first through the fourth anniversary dates thereof.
As of January 18, 2000, options granted under the Director Stock Option
Plan to acquire 26,200 shares of Common Stock were outstanding and not
currently exercisable. Of such amount, options to acquire 3,790 shares were
held by each of the following six non-employee directors--Messrs. Baldwin,
Gallop, Hoagland, Kling, Liberman, Schneider, and options to acquire 3,460
shares were held by Mr. Brown.
FEDERAL INCOME TAX CONSEQUENCES
In general, the taxation of options granted under the Director Stock
Option Plan (considered nonqualified stock options for tax purposes) is
determined under Section 83 of the Code. Optionees will not recognize
taxable income at the time such an option is granted. Upon exercise of an
option, the optionee generally will recognize ordinary income in an amount
equal to the difference between the aggregate exercise price of the shares
as to which the option is being exercised and the aggregate fair market
value of such shares as of the exercise date. Income recognition is
generally deferred with respect to options exercised within six months of
the date of grant until the expiration of such six-month period. The amount
of ordinary income realized by the optionee will be deductible by the
Company at the same time that the optionee is required to recognize
ordinary income.
The optionee's basis in shares acquired upon exercise of an option is
the amount taxed as ordinary income, if any, plus the cost of the shares to
the optionee (i.e., the exercise price). The holding period for determining
whether capital gain or loss realized on a subsequent sale of the shares is
long-term or short-term begins on the date the option is exercised.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE APPROVAL OF THE
AMENDMENT TO THE NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN, WHICH IS ITEM 3
ON THE PROXY CARD.
15
<PAGE>
<PAGE>
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP, the Company's independent public accountants for
the fiscal year ended October 30, 1999, have been selected as its
independent public accountants for the fiscal year ending October 28, 2000.
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 1999 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 2001
annual meeting of stockholders must be received by the Company not later
than September 28, 2000, for inclusion in the Company's 2001 proxy
statement and form of proxy relating to the 2001 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 2001 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 12, 2000.
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 1999
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION (INCLUDING RELATED
FINANCIAL STATEMENTS AND SCHEDULES) IS AVAILABLE TO STOCKHOLDERS WITHOUT
CHARGE, UPON WRITTEN REQUEST TO MICHAEL J. DRELLER, 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 26, 2000
16
<PAGE>
<PAGE>
[X] PLEASE MARK VOTES AS IN THIS EXAMPLE
REVOCABLE PROXY
FALCON PRODUCTS, INC.
THIS PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS.
ANNUAL MEETING OF STOCKHOLDERS
MARCH 16, 2000
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 Thursday, March 16, 2000, commencing at
4:00 p.m. in the main dining room, 16th 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 January 26, 2000.
<TABLE>
<S> <C> <C> <C>
WITH- FOR ALL
FOR HOLD EXCEPT
1. Election of Class A Directors: FOR all nominees listed below / / / / / /
(except as marked to the contrary below):
</TABLE>
CLASS A:
MELVIN F. BROWN JAMES L. HOAGLAND LEE M. LIBERMAN
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. Amendment to the Falcon Products, Inc., Amended and Restated 1991
Stock Option Plan.
/ / FOR / / AGAINST / / ABSTAIN
3. Amendment to the Falcon Products, Inc., Non-Employee Director Stock
Option Plan.
/ / FOR / / AGAINST / / ABSTAIN
4. In their discretion with respect to the transaction of such other
business as may properly come before the meeting or any adjournments
thereof.
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 PROPOSALS 2 AND 3 AND IN THE DISCRETION OF THE PROXIES WITH RESPECT
TO THE TRANSACTION OF SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE
THE MEETING OR ANY ADJOURNMENTS THEREOF.
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.
<PAGE>
<PAGE>
- ---------------------------------------------------------------------------
FALCON PRODUCTS, INC.
The above signed hereby acknowledges receipt of copies of Notice of
Annual Meeting of Stockholders and Proxy Statement, each dated January
26, and the Annual Report of the Company for fiscal 1999.
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 A TO 2000 PROXY STATEMENT
----------------------------------
This appendix is being filed pursuant to Instruction No. 3 of Item 10 of
Schedule 14A. In accordance with such instruction, this appendix is not part
of the 2000 proxy statement and has not been sent to the Company's stockholders.
FALCON PRODUCTS, INC.
---------------------
AMENDED AND RESTATED 1991 STOCK OPTION PLAN
-------------------------------------------
I. PURPOSE OF THE PLAN
-------------------
The Falcon Products, Inc. Amended and Restated 1991 Stock
Option Plan (the "Plan") is intended to provide a means whereby certain
----
key employees of Falcon Products, Inc., a Delaware corporation (the
"Company"), may develop a sense of proprietorship and personal
-------
involvement in the development and financial success of the Company and
its subsidiaries, and to encourage them to remain with and devote their
best efforts to the business of the Company and its subsidiaries,
thereby advancing the interests of the Company and its stockholders.
Accordingly, the Company may make awards to certain employees in the
form of stock options ("Options") with respect to shares of the
-------
Company's common stock, par value $0.02 per share (the "Stock").
-----
Options may either be nonqualified stock options ("Non-qualified
-------------
Options") or options ("Incentive Stock Options") which are intended to
- ------- -----------------------
qualify as incentive stock options under Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code").
----
II. ADMINISTRATION
--------------
The Plan shall be administered by a committee of the Board
of Directors of the Company (the "Board") consisting of not less than
-----
three members of the Board as the Board may appoint (the "Committee");
---------
provided that so long as the Company is subject to the reporting
requirements of the Securities Exchange Act of 1934 ("1934 Act"), the
--------
members of the Committee shall be "disinterested persons" within the
meaning of paragraph (c)(2)(i) of Rule 16b-3 which has been adopted by
the Securities and Exchange Commission under the 1934 Act, as such Rule
or its equivalent is then in effect ("Rule 16b-3"). Committee members
----------
may resign at any time by delivering written notice to the Board.
Vacancies in the Committee, however caused, shall be filled by the
Board. The Committee is authorized to interpret the Plan and may from
time to time adopt such rules and regulations, not inconsistent with the
provisions of the Plan, as may deem advisable to carry out the Plan.
The Committee shall act by a majority of its members in office and the
Committee may act either by vote at a telephonic or other meeting or by
a memorandum or other written instrument signed by all of the members of
the Committee.
The Committee shall have the sole authority to: determine
the terms and provisions of the option agreements (the "Agreements")
----------
entered into under the Plan; prepare and distribute, in such manner as
the Committee determines to be appropriate, information about the Plan;
and make all other determinations deemed necessary or advisable for the
administration of
<PAGE>
<PAGE>
the Plan. The Committee may vary the terms and provisions of the
individual Agreements in its discretion.
The day-to-day administration of the Plan may be carried out
by such officers and employees of the Company as shall be designated
from time to time by the Committee. All expenses and liabilities
incurred by the Committee in connection with the administration of the
Plan shall be borne by the Company. The Committee may employ attorneys,
consultants, accountants, appraisers, brokers or other persons, and the
Committee, the Board, the Company and the officers and employees of the
Company shall be entitled to rely upon the advice, opinions or
valuations of any such persons. The interpretation and construction by
the Committee of any provisions of the Plan and any determination by the
Committee under any provision of the Plan shall be final and conclusive
for all purposes. Neither the Committee nor any member thereof shall be
liable for any act, omission, interpretation, construction or
determination made in connection with the Plan in good faith, and the
members of the Committee shall be entitled to indemnification and
reimbursement by the Company in respect of any claim, loss, damage or
expense (including counsel fees) arising therefrom to the fullest extent
permitted by law. The members of the Committee shall be named as
insureds in connection with any directors and officers liability
insurance coverage that may be in effect from time to time.
The Committee shall have authority: (i) to grant Options;
and (ii) to determine the purchase price of the Stock covered by each
option (the "Exercise Price"), the terms and duration of each Option,
--------------
the key employees to whom, and the times at which, Options shall be
granted, whether the Option shall be a Nonqualified Option or an
Incentive Stock Option and the number of shares to be covered by each
Option.
Only key employees of the Company and its subsidiaries shall
be eligible to receive Options under the Plan. In granting Options to
an employee, the Committee shall take into consideration the
contribution the employee has made or may make to the success of the
Company or its subsidiaries and such other considerations as the
Committee shall determine. The Committee shall also have the authority
to consult with and receive recommendations from officers and other
employees of the Company and its subsidiaries with regard to these
matters. In no event shall any employee, his legal representatives,
heirs, legatees, distributees, or successors have any right to
participate in the Plan, except to such extent, if any, as the Committee
shall determine.
III. SHARES SUBJECT TO THE PLAN
--------------------------
The aggregate number of shares which may be issued under the
Plan shall not exceed 200,000 shares of Stock. Such shares may consist
of authorized but unissued shares of Stock or previously issued shares
reacquired by the Company. Any of such shares which remain unsold and
which are not subject to outstanding Options at the termination of the
Plan shall cease to be subject to the Plan, but until termination of the
Plan and the expiration of all Options granted under the Plan, the
Company shall at all times make available a sufficient number of shares
to meet the requirements of the Plan and the outstanding Options. If
any Option, in whole or in part, expires or terminates unexercised or is
cancelled or forfeited, the shares theretofore subject to such Option
may again be subject to an Option granted under the Plan. The aggregate
2
<PAGE>
<PAGE>
number of shares which may be issued under Options granted under the
Plan shall be subject to adjustment as provided in Article V hereof.
Exercise of an option in any manner shall result in a decrease in the
number of shares of Stock which may thereafter be available for purposes
of the Plan by the number of shares as to which the Option is exercised
or cancelled.
IV. GRANTS OF OPTIONS
-----------------
Options granted under the Plan shall be of such type
(Nonqualified Option or Incentive Stock Option) and for such number of
shares of Stock and subject to such terms and conditions, which may
include, without limitation, the achievement of specific goals, as the
Committee shall designate. The Committee may grant Options at any time
and from time to time through, but not after, November 30, 2001 to any
individual eligible to receive the same. For purposes of the Plan, the
date on which an Option is granted is referred to as the "Grant Date."
No employee shall be eligible to receive any Incentive Stock
Option if, on the Grant Date, such employee owns (including ownership
through the attribution provisions of Section 424(d) of the Code) in
excess of 10% of the outstanding voting stock of the Company or a
subsidiary (a "10% Stockholder"), unless the Exercise Price for the
---------------
shares of Stock subject to the Incentive Stock Option is at least 110%
of the fair market value of the shares of Stock on the Grant Date and
such Option by its terms is not exercisable after the expiration of five
years from the Grant Date.
To the extent that the aggregate fair market value
(determined at the Grant Date) of Stock with respect to which Incentive
Stock Options (determined without regard to this sentence) are
exercisable for the first time by any individual during any calendar
year (under all plans of the Company and its subsidiaries) exceeds
$100,000, such Options shall be treated as Nonqualified Options (this
sentence shall be applied by taking Incentive Stock Options into account
in the order in which they were granted).
The Committee may fix such waiting and/or vesting periods,
exercise dates or other limitations as it shall deem appropriate with
respect to Options granted under the Plan including, without limitation,
the achievement of specific goals.
Options granted pursuant to the Plan shall be evidenced by
Agreements that shall comply with and be subject to the following terms
and conditions and may contain such other provisions, consistent with
the Plan, as the Committee shall deem advisable. References herein to
"Agreements" shall include, to the extent applicable, any amendments to
such Agreements.
A. Payment of Option Exercise Price. Upon exercise of an
--------------------------------
Option, the full Exercise Price for the shares with respect to
which the Option is being exercised shall be payable to the
Company: (i) in cash or by check payable and acceptable to the
Company; (ii) subject to the approval of the Committee, by
tendering to the Company shares of Stock owned by the optionee
having an aggregate Market Value Per Share (as defined below) as
of the date of exercise and tender that is not greater than the
full Exercise Price for the shares with respect to which the
Option is being exercised and by paying any remaining amount of
the Exercise Price as provided in (i) above; or (iii) subject to
the approval of the Committee and to such instructions as the
Committee may specify, at the
3
<PAGE>
<PAGE>
optionee's written request the Company may deliver certificates
for the shares of Stock for which the Option is being exercised to
a broker for sale on behalf of the optionee, provided that the
optionee has irrevocably instructed such broker to remit directly
to the Company on the optionee's behalf the full amount of the
Exercise Price from the proceeds of such sale; provided, that in
--------
the case of an Incentive Stock Option, (ii) and (iii) above shall
apply only if Committee approval is given on or prior to the Grant
Date and the Agreement expressly provides for such optional
payment terms. In the event that the optionee elects to make
payment as allowed under clause (ii) above, the Committee may,
upon confirming that the optionee owns the number of shares of
Stock being tendered, authorize the issuance of a new certificate
for the number of shares being acquired pursuant to the exercise
of the Option less the number of shares being tendered upon the
exercise and return to the optionee (or not require surrender of)
the certificate for the shares of Stock being tendered upon the
exercise. Payment instruments will be received subject to
collection.
B. Number of Shares. Each Agreement shall state the
----------------
total number of shares of Stock that are subject to the Option.
C. Exercise Price. The Exercise Price for each Option
--------------
shall be fixed by the Committee at the Grant Date, but in no event
may the Exercise Price per share be less than the Market Value Per
Share on the Grant Date.
D. Market Value Per Share. The "Market Value Per Share"
----------------------
as of any particular date shall be determined as follows: if the
Stock is listed for trading on a national or regional stock
exchange, the closing price quoted on such exchange which is
published in The Wall Street Journal for the trading day
-----------------------
immediately preceding the day of the grant, or if no trade of the
Stock shall have been reported for such date, the closing price
quoted on such exchange which is published in The Wall Street
---------------
Journal for the next day prior thereto on which a trade of the
-------
Stock was so reported; if the shares are not so listed or admitted
to trading, the average of the highest reported bid and lowest
reported asked prices as furnished by the National Association of
Securities Dealers, Inc., through NASDAQ, or through a similar
organization if NASDAQ is no longer reporting such information, in
any case for the first day immediately preceding the Grant Date on
which the Stock is traded. If shares of the Stock are not listed
or admitted to trading on any exchange or quoted through NASDAQ or
any similar organization, the "Market Value Per Share" shall be
determined by the Committee in good faith using any fair and
reasonable means selected in its discretion.
E. Term. The term of each Option shall be determined by
----
the Committee at the Grant Date; provided, however, that each
Option shall, notwithstanding anything in the Plan or an Agreement
to the contrary, expire not more than ten years (five years with
respect to an Incentive Stock Option granted to an employee who is
a 10% Stockholder) from the Grant Date or, if earlier, the date
specified in the Agreement.
F. Date of Exercise. In the discretion of the Committee,
----------------
each Agreement may contain provisions stating that the Option
granted therein may not be exercised in whole or in part for a
period or periods of time or until the achievement of specific
goals,
4
<PAGE>
<PAGE>
in either case as specified in such Agreement, and except as so
specified therein, any Option may be exercised in whole at any
time or in part from time to time during its term. The Committee
may, however, at any time, in its sole discretion, amend any
outstanding Option, other than an Incentive Stock Option, to
accelerate the time that such Option shall be exercisable or to
provide that the time for exercising such Option shall be
accelerated upon the occurrence of a specified event.
Notwithstanding the foregoing, however, in no event shall an
Option, or any portion thereof, be exercisable until at least six
months after the date of grant of such Option.
G. Termination of Employment. In the event an
-------------------------
individual's employment with the Company and its subsidiaries
shall terminate for reasons other than: (i) retirement in
accordance with the terms of a retirement plan of the Company or
one of its subsidiaries ("retirement"); (ii) permanent disability
----------
(as defined in Section 22(e)(3) of the Code); or (iii) death, the
individual's Options shall terminate as of the date of such
termination of employment and shall not be exercisable to any
extent as of and after such time.
If any termination of employment is due to retirement or
permanent disability, the individual shall have the right to
exercise any Option at any time within the 12 month period (three
month period in the case of retirement for Options that are
Incentive Stock Options) following such termination of employment,
but only to the extent that the Option was exercisable immediately
prior to such termination of employment.
Whether any termination of employment is due to retirement
or permanent disability and whether an authorized leave of absence
or absence for military or government service or for other reasons
shall constitute a termination of employment for purposes of the
Plan shall be determined by the Committee in its sole discretion.
If an individual shall die while entitled to exercise an
Option, the individual's estate, personal representative or
beneficiary, as the case may be, shall have the right to exercise
the Option at any time within the 12 month period following the
date of the optionee's death, to the extent that the optionee was
entitled to exercise the same on the day immediately prior to the
optionee's death.
The right of an individual to exercise an Option shall
terminate to the extent that such Option is exercised.
Options may be granted under the Plan from time to time in
substitution for stock options and stock appreciation rights held by
employees of corporations who become key employees of the Company or of
any of its subsidiaries as a result of a merger or consolidation of the
employer corporation with the Company or any such subsidiary, or the
acquisition by the Company or a subsidiary of assets of the employer
corporation or the acquisition by the Company or a subsidiary of stock
of the employer corporation, with the result that such employer
corporation becomes a subsidiary of the Company.
5
<PAGE>
<PAGE>
V. RECAPITALIZATION OR REORGANIZATION
----------------------------------
The existence of the Plan and the Options granted hereunder
shall not affect in any way the right or power of the Board or the
stockholders of the Company to make or authorize any adjustment,
recapitalization, reorganization or other change in the Company's
capital structure or its business, any merger or consolidation of the
Company, any issue of bonds, debentures, preferred or prior preference
stocks ahead of or affecting Stock or the rights thereof, the
dissolution or liquidation of the Company or any sale or transfer of all
or any part of its assets or business, or any other corporate act or
proceeding.
The shares with respect to which Options may be granted are
shares of Stock as presently constituted, but if, and whenever, prior to
the termination of the Plan or the expiration of an Option theretofore
granted, the Company shall effect a subdivision or consolidation of
shares of Stock or the payment of a stock dividend on Stock without
receipt of consideration by the Company, the remaining shares of Stock
available under the Plan and the number of shares of Stock with respect
to which such Option may thereafter be exercised: (i) the event of an
increase in the number of outstanding shares, shall be proportionately
increased and the Exercise Price per share shall be proportionately
reduced; and (ii) in the event of a reduction in the number of
outstanding shares, shall be proportionately reduced and the Exercise
Price per share shall be proportionately increased.
Except as may otherwise be expressly provided in the Plan,
the issuance by the Company of shares of capital stock of any class or
securities convertible into shares of capital stock of any class, for
cash, property, labor or services, upon direct sale, upon the exercise
of rights or warrants to subscribe therefor, or upon conversion of
shares or obligations of the Company convertible into such shares of
capital stock or other securities, and in any case whether or not for
fair value, shall not affect, and no adjustment by reason thereof shall
be made with respect to, the number of shares of Stock available under
the Plan or subject to Options theretofore granted or the Exercise Price
per share with respect to outstanding options.
If the Company effects a recapitalization or otherwise
materially changes its capital structure (both of the foregoing are
herein referred to as a "Fundamental Change"), then thereafter upon any
------------------
exercise of an Option theretofore granted the optionee shall be entitled
to purchase under such option, in lieu of the number of shares of Stock
as to which such Option shall then be exercisable, the number and class
of shares of capital stock and securities to which the optionee would
have been entitled pursuant to the terms of the Fundamental Change if,
immediately prior to such Fundamental Change, the optionee had been the
holder of record of the number of shares of Stock as to which such
Option is then exercisable.
VI. EMPLOYEE'S AGREEMENT
--------------------
If, at the time of the exercise of any Option, in the
opinion of counsel for the Company, it is necessary or desirable, in
order to comply with any then applicable laws or regulations relating to
the sale of securities, for the individual exercising the Option to
agree to hold any shares issued to the individual for investment and
without intention to resell or distribute the same and for the
individual to agree to dispose of such shares only in compliance
6
<PAGE>
<PAGE>
with such laws and regulations, the individual shall be required, upon
the request of the Company, to execute and deliver to the Company an
agreement to such effect.
VII. TERMINATION OF AUTHORITY TO GRANT AWARDS
----------------------------------------
No Options will be granted pursuant to this Plan after
November 30, 2001.
VIII. AMENDMENT AND TERMINATION
-------------------------
The Board may from time to time and at any time alter,
amend, suspend, discontinue or terminate this Plan and any Options
hereunder; provided, that no change in any Option theretofore granted
may be made which would impair the rights of the optionee without the
consent of such optionee.
IX. EFFECTIVE DATE OF PLAN
----------------------
The Plan shall become effective upon adoption by the Board
and approval by the Company's stockholders; provided, however, that
prior to approval of the Plan by the Company's stockholders but after
adoption by the Board, Options may be granted under the Plan subject to
obtaining such approval; and provided further, however, that if
stockholder approval is not obtained within twelve months after the date
the Plan is adopted by the Board, no Incentive Stock Options shall be
granted under the Plan.
X. PREEMPTION BY APPLICABLE LAWS AND REGULATIONS
---------------------------------------------
Anything in the Plan or any Agreement entered into pursuant
to the Plan to the contrary notwithstanding, if, at any time specified
herein or therein for the making of any determination with respect to
the issuance or other distribution of shares of Stock, any law,
regulation or requirement of any governmental authority having
jurisdiction in the premises shall require either the Company or the
employee (or the employee's beneficiary), as the case may be, to take
any action in connection with any such determination, the issuance or
distribution of such shares or the making of such determination shall be
deferred until such action shall have been taken.
XI. MISCELLANEOUS
-------------
A. No Employment Contract. Nothing contained in the Plan
----------------------
shall be construed as conferring upon any employee the right to
continue in the employ of the Company or any of its subsidiaries.
B. Employment with Subsidiaries. Employment by the
----------------------------
Company for the purpose of this Plan shall be deemed to include
employment by, and to continue during any period in which an
employee is in the employment of, any subsidiary.
C. No Rights as a Stockholder. An employee shall have no
--------------------------
rights as a stockholder with respect to shares covered by such
employee's Option until the date of
7
<PAGE>
<PAGE>
the issuance of shares to the employee pursuant thereto. No
adjustment will be made for dividends or other distributions or
rights for which the record date is prior to the date of such
issuance.
D. No Right to Corporate Assets. Nothing contained in
----------------------------
the Plan shall be construed as giving any employee, such
employee's beneficiaries or any other person any equity or other
interest of any kind in any assets of the Company or any
subsidiary or creating a trust of any kind or a fiduciary
relationship of any kind between the Company or any subsidiary and
any such person.
E. No Restriction on Corporate Action. Nothing contained
----------------------------------
in the Plan shall be construed to prevent the Company or any
subsidiary from taking any corporate action that is deemed by the
Company or such subsidiary to be appropriate or in its best
interests, whether or not such action would have an adverse effect
on the Plan or any Option made under the Plan. No employee,
beneficiary or other person shall have any claim against the
Company or any subsidiary as a result of any such action.
F. Non-assignability. Neither an employee nor an
-----------------
employee's beneficiary shall have the power or right to sell,
exchange, pledge, transfer, assign or otherwise encumber or
dispose of such employee's or beneficiary's interest arising under
the Plan or any Option received under the Plan; nor shall such
interest be subject to seizure for the payment of an employee's or
beneficiary's debts, judgments, alimony, or separate maintenance
or be transferable by operation of law in the event of an
employee's or beneficiary's bankruptcy or insolvency and to the
extent any such interest arising under the Plan or an Option
received under the Plan is awarded to a spouse pursuant to any
divorce proceeding, such interest shall be deemed to be terminated
and forfeited notwithstanding any vesting provisions or other
terms herein or in the agreement evidencing such Option.
G. Application of Funds. The proceeds received by the
--------------------
Company from the sale of shares of Stock pursuant to the Plan
shall be used for general corporate purposes.
H. Governing Law; Construction. All rights and
---------------------------
obligations under the Plan shall be governed by, and the Plan
shall be construed in accordance with, the laws of the State of
Delaware without regard to the principles of conflicts of laws.
Titles and headings to Sections herein are for purposes of
reference only, and shall in no way limit, define or otherwise
affect the meaning or interpretation of any provisions of the Plan.
8
<PAGE>
<PAGE>
AMENDMENT TO
FALCON PRODUCTS, INC.
AMENDED AND RESTATED 1991 STOCK OPTION PLAN
WHEREAS, Falcon Products, Inc. (the "Company") has heretofore
adopted the Falcon Products, Inc. Amended and Restated 1991 Stock Option
Plan (the "Plan"), under which an aggregate of 300,000 shares of the
Company's common stock, par value $.02 per share, may be issued upon the
exercise of incentive and nonqualified stock options granted pursuant to
and in accordance with the terms of such Plan;
WHEREAS, the Company has granted options, some of which have been
exercised, to eligible individuals under the Plan to purchase the
maximum allowable number of shares issuable under the Plan; and
WHEREAS, based upon the recommendation of the Compensation
Committee of the Board of Directors of the Company that the Plan be
amended to increase the number of shares issuable upon exercise of
options granted under the Plan from 300,000 to 600,000, the Board of
Directors has authorized such proposed amendment to the Plan and
resolved to present such amendment to the 1994 Annual Meeting of
Shareholders of the Company;
NOW, THEREFORE, Article III of the Plan is hereby deleted in its
entirety and the following substituted in lieu thereof:
"III. Shares Subject to the Plan
--------------------------
The aggregate number of shares which may be issued under the Plan
shall not exceed 600,000 shares of Stock. Such shares may consist of
authorized but unissued shares of Stock or previously issued shares
reacquired by the Company. Any of such shares which remain unsold and
which are not subject to outstanding Options at the termination of the
Plan shall cease to be subject to the Plan, but until termination of the
Plan and the expiration of all Options granted under the Plan, the
Company shall at all times make available a sufficient number of shares
to meet the requirements of the Plan and the outstanding Options. If
any Option, in whole or in part, expires or terminates unexercised or is
cancelled or forfeited, the shares theretofore subject to such Option
may again be subject to an Option granted under the Plan. The aggregate
number of shares which may be issued under Options granted under the
Plan shall be subject to adjustment as provided in Article V hereof.
Exercise of an Option in any manner shall result in a decrease in the
number of shares of Stock which may thereafter be available for purposes
of the Plan by the number of shares as to which the Option is exercised
or canceled."
IN WITNESS WHEREOF, this Amendment is dated as of the 20th day of
December, 1993.
By: /s/ Franklin A. Jacobs
----------------------------------------
Franklin A. Jacobs, Chairman of the
Board, President and Chief
Executive Officer
9
<PAGE>
<PAGE>
AMENDMENT NO. 2
TO
FALCON PRODUCTS, INC.
AMENDED AND RESTATED 1991 STOCK OPTION PLAN
WHEREAS, Falcon Products, Inc. (the "Company") has heretofore
adopted the Falcon Products, Inc. Amended and Restated 1991 Stock Option
Plan (the "Plan"), under which Plan, as heretofore amended, an aggregate
of 600,000 shares of the Company's common stock, par value $.02 per
share, may be issued upon the exercise of incentive and nonqualified
stock options granted pursuant to and in accordance with the terms of
such Plan;
WHEREAS, the Company has granted options, some of which have been
exercised, to eligible individuals under the Plan to purchase the
maximum allowable number of shares issuable under the Plan; and
WHEREAS, based upon the recommendation of the Compensation
Committee of the Board of Directors of the Company that the Plan be
amended to increase the number of shares issuable upon exercise of
options granted under the Plan from 600,000 to 1,000,000, the Executive
Committee of the Board of Directors has authorized such proposed
amendment to the Plan and resolved to present such amendment to the 1995
Annual Meeting of Shareholders of the Company;
NOW, THEREFORE, subject to the approval of the stockholders of the
Company within 12 months of the date hereof, the first sentence of
Article III of the Plan be and hereby is deleted in its entirety, and
the following substituted in lieu thereof to constitute the first
sentence of said Article III from and after the effectiveness of this
amendment:
"The aggregate number of shares which may be issued under
the Plan shall not exceed 1,000,000 shares of Stock."
IN WITNESS WHEREOF, this Amendment is dated as of the 20th day of
December, 1994.
By: /s/ Franklin A. Jacobs
----------------------------------------
Franklin A. Jacobs, Chairman of the
Board, President and Chief
Executive Officer
10
<PAGE>
<PAGE>
AMENDMENT NO. 3
TO
FALCON PRODUCTS, INC.
AMENDED AND RESTATED 1991 STOCK OPTION PLAN
WHEREAS, Falcon Products, Inc. (the "Company") has heretofore
adopted the Falcon Products, Inc. Amended and Restated 1991 Stock Option
Plan (the "Plan"), under which Plan, as heretofore amended (and taking
into effect stock dividends and splits), an aggregate of 1,100,000
shares of the Company's common stock, par value $.02 per share, may be
issued upon the exercise of incentive and nonqualified stock options
granted pursuant to and in accordance with the terms of such Plan;
WHEREAS, the Company desires to grant or has granted options,
notwithstanding the fact that the number of shares of Common Stock for
which options may currently be granted under the Plan is insufficient to
cover all granted options; and
WHEREAS, based upon the current circumstances, the Compensation
Committee of the Board of Directors of the Company has recommended that
the Plan be amended to increase the number of shares issuable upon
exercise of options granted under the Plan from 1,100,000 to 1,500,000,
and accordingly, the Board of Directors has authorized such proposed
amendment to the Plan and resolved to present such amendment to the 2000
Annual Meeting of Shareholders of the Company;
NOW, THEREFORE, subject to the approval of the stockholders of the
Company within 12 months of the date hereof, the first sentence of
Article III of the Plan be and hereby is deleted in its entirety, and
the following substituted in lieu thereof to constitute the first
sentence of said Article III from and after the effectiveness of this
amendment:
"The aggregate number of shares which may be issued under
the Plan shall not exceed 1,500,000 shares of Stock."
IN WITNESS WHEREOF, this Amendment is dated as of the 1st day of
April, 1999.
By: /s/ Franklin A. Jacobs
----------------------------------------
Franklin A. Jacobs, Chairman of the
Board, President and Chief
Executive Officer
11
<PAGE>
<PAGE>
APPENDIX B TO 2000 PROXY STATEMENT
----------------------------------
This appendix is being filed pursuant to Instruction No. 3 of Item 10 of
Schedule 14A. In accordance with such instruction, this appendix is not part
of the 2000 proxy statement and has not been sent to the Company's stockholders.
NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
---------------------------------------
Compilation of Resolutions Adopted by the Board of
Directors Constituting the Plan
Resolutions adopted by the Board of Directors at a meeting on March 14, 1991:
- ----------------------------------------------------------------------------
RESOLVED that, in consideration of the efforts of the directors of
the Corporation who are neither executive officers of the Corporation
nor are otherwise compensated by the Corporation on the basis of
employment or consulting arrangements, such directors be and hereby are
granted options to purchase five hundred (500) shares of the common
stock of the Corporation times the number of years that each such
director has served as a director, up to a maximum of ten years of
service, which options shall be granted at the option exercise price of
$1.00 per share and shall be exercisable in five installments, with a
number of shares equal to one-fifth (1/5th) of the total shares under
option becoming available for exercise, on a cumulative basis, on the
date of this grant and on the first through the fourth anniversary dates
thereof;
RESOLVED, FURTHER, that, in accordance with the foregoing
resolution, the following directors shall be issued options on the
above-described terms to purchase the following number of shares:
Name Qualified Years of Service Option Shares
- ---- -------------------------- -------------
Raynor E. Baldwin '77-'82
'88-'91 = 8 years 4,000
Donald P. Gallop '63-'91 = 10 years (max.) 5,000
James L. Hoagland '90-'91 = 1 yr. 500
S. Lee Kling '69-'91 = 10 years (max.) 5,000
Lee M. Liberman '85-'91 = 6 years 3,000
James Schneider '89-'91 = 2 years 1,000
------
TOTAL NUMBER OF SHARES ISSUABLE: 18,500
======
<PAGE>
<PAGE>
RESOLVED, FURTHER, that, on March 31 (or the next business day
after March 31, if such date is not a business day) of each year
hereafter, unless and until otherwise provided by resolution of the
board of directors, the Corporation shall grant options to directors who
meet the criteria set forth in the initial resolution set forth above
(excluding therefrom the 10 years of service maximum) to purchase 500
additional shares of common stock of the Corporation on the same terms
as hereinabove set forth; provided, however, that, in the case of any
stock split, stock dividend or other change in the capitalization of the
Corporation, the number of shares to be issued to such directors shall
be appropriately adjusted.
RESOLVED, FURTHER, that the officers of the Corporation be and
hereby are directed to take such actions as may be deemed necessary or
appropriate for the foregoing plan of issuance of options to qualify
under Rule 16b-3 of the Securities Exchange Act of 1934, including
without limitation, submission of such plan to shareholders for approval
at the 1992 annual meeting of shareholders, if such submission is deemed
necessary by the Corporation, in consultation with its legal counsel, in
order to qualify issuance of options under Rule 16b-3.
RESOLVED, FURTHER, that the appropriate officers be and hereby are
authorized and directed to execute and deliver to each option grantee a
stock option agreement consistent with the foregoing terms, the form of
which stock option agreement the Secretary of the Corporation is hereby
directed to attach to the minutes of the meeting at which these
resolutions are adopted.
Resolutions adopted by the Board of Directors at a meeting on December
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15, 1998:
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RESOLVED, that the Corporation hereby amends its Non-Employee
Director Stock Option Plan (the "Plan") to provide for the award of
2,000 shares of the Common Stock of the Corporation on December 17, 1998
and on each succeeding December 17 (or the first business day
thereafter, if such day is not a business day) (the "Date of Grant") to
each Non-Employee Director who is serving as a Director of the
Corporation on the Date of Grant in question, at the exercise price per
share equal to the closing price of the Corporation's common stock as
quoted on the New York Stock Exchange on such Date of Grant; and
RESOLVED, FURTHER, that the proper officers of the Corporation be,
and they each hereby are, severally, authorized and directed, in the
name and on behalf of the Corporation, to take any and all actions which
they may deem necessary or advisable to carry out the terms of the Plan,
as heretofore amended and as amended hereby.
Resolutions adopted by the Board of Directors by consent dated December
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15, 1999:
- --------
WHEREAS, the Board of Directors of the Company (the "Board"),
through the adoption of certain resolutions, adopted its Non-Employee
Director Stock Option Plan (the "Plan"); and
WHEREAS, the Board has been informed that the Compensation
Committee of the Board desires to grant or has granted stock options
(the "Options") under the Plan to certain
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directors to purchase shares of the $0.02 par value Common Stock of the
Company (the "Common Stock"); and
WHEREAS, the Board has determined that the number of shares
currently available for issuance upon exercise of option under the Plan
is 82,500 shares; and
WHEREAS, the number of shares of Common Stock for which options
may currently be granted under the Plan is insufficient to cover all
Options; and
WHEREAS, it is the judgment of the Company that, in order to allow
the grant of the Options recommended by the Compensation Committee and
to allow for the Compensation Committee to make future grants under the
Plan, the number of shares of Common Stock currently subject to the Plan
should be increased from 82,500 to 165,000.
NOW THEREFORE, BE IT RESOLVED.
1. Amendment of Non-Employee Director Stock Option Plan.
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RESOLVED, that the Plan be, and it hereby is, amended (the "Plan
Amendment"), to increase the number of shares of the Company's Common
Stock, par value $.02 per share (the "Common Stock"), issuable upon
exercise of options granted under the Plan from 82,500 to 165,000;
RESOLVED FURTHER, that 82,500 additional shares of the authorized
but unissued Common Stock of the Company (the "Additional Shares") be,
and they hereby are, reserved for issuance in connection with the Plan,
for a total of 165,000 shares reserved therefor;
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APPENDIX
Page 12 of the printed Proxy contains a Performance Graph. The information
contained in the graph appears in the table immediately following the graph.
