<PAGE>
- --------------------------------------------------------------------------------
FLOW INTERNATIONAL CORPORATION
---------------------------------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
AUGUST 25, 1999
To the Shareholders of Flow International Corporation:
NOTICE IS HEREBY GIVEN that the Annual Meeting of the Shareholders of Flow
International Corporation, a Washington corporation, will be held on Wednesday,
August 25, 1999, at 10:00 a.m., Pacific Daylight Time, at Benaroya Hall, 200
University Street, Seattle, Washington, for the following purposes as described
in the attached Proxy Statement:
1. To elect three directors to hold office for three-year terms ending at the
2002 Meeting of Shareholders or until their respective successors are
elected and qualified.
2. To approve an amendment to the 1995 Long-Term Incentive Compensation Plan to
increase the number of shares available for grant under the Plan from
1,350,000 to 3,350,000.
3. To transact such other business as may properly come before such meeting or
any adjournment thereof.
Pursuant to the Bylaws, the Board of Directors has fixed the close of
business on July 9, 1999, as the record date for determination of shareholders
of the Company entitled to receive notice of and to vote at the Annual Meeting.
PLEASE NOTE THAT THE MEETING WILL BE HELD AT BENAROYA HALL,
A DIFFERENT LOCATION THAN IN PRIOR YEARS.
So far as Management is aware, no business will properly come before the
Annual Meeting other than the matters set forth above.
IF YOU CANNOT BE PRESENT AT THE MEETING, YOU ARE REQUESTED TO SIGN, DATE, AND
RETURN THE ENCLOSED PROXY CARD APPOINTING RONALD W. TARRANT AND JOHN S. LENESS,
OR EITHER OF THEM, AS YOUR PROXIES.
John S. Leness
Secretary
KENT, WASHINGTON
July 23, 1999
IT IS IMPORTANT THAT YOUR STOCK BE VOTED
<PAGE>
FLOW INTERNATIONAL CORPORATION
23500 - 64TH AVENUE SOUTH
KENT, WASHINGTON 98032
------------------------
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD AUGUST 25, 1999
------------------------
The following proxy statement is made in connection with solicitation by the
Board of Directors of Flow International Corporation (the "Company") of the
enclosed proxy for use at the Annual Meeting of Shareholders.
Shares presented by properly executed proxy in the accompanying form will be
voted at the meeting and, where instructions have been given by the shareholder,
will be voted in accordance with such instructions. AS STATED IN THE PROXY, IF
NO INSTRUCTIONS ARE GIVEN, THE SHAREHOLDER'S SHARES WILL BE VOTED ACCORDING TO
THE RECOMMENDATIONS OF THE BOARD OF DIRECTORS. The proxy may be revoked at any
time before its exercise by sending written notice of revocation to the
Secretary of the Company, or by signing and delivering a proxy which is dated
later, or, if the shareholder attends the meeting in person, by giving notice of
revocation to the meeting judge.
At the date of this statement, the only matters that management intends to
present are the election of directors and the approval of an increase in the
shares available for grant under the Company's 1995 Long-Term Incentive
Compensation Plan (the "1995 Plan"). If any other matters are properly brought
before the meeting, the enclosed proxy gives discretionary authority to the
persons named in such proxy to vote the shares in their best judgment.
The 1999 Annual Report of the Company is enclosed herewith. The approximate
mailing date of this proxy material is July 23, 1999.
OUTSTANDING SECURITIES AND
VOTING RIGHTS
The Company has only one class of capital stock outstanding entitled to be
voted at the Annual Meeting, Common Stock with voting rights. On July 9, 1999,
the record date for determining the shareholders entitled to vote at the Annual
Meeting, there were 14,700,067 shares of Common Stock outstanding and entitled
to vote. The last sale on the record date of the Company's Common Stock, as
reported by NASDAQ, was $11.875 per share.
Each share entitles the holder to one vote on all matters presented for
shareholder approval including one vote for each director. There are no
cumulative voting rights. The presence in person or by proxy of holders of a
majority of the outstanding shares of Common Stock is required to constitute a
quorum for the transaction of business at the Annual Meeting. Under Washington
law and the Company's Articles of Incorporation, if a quorum is present, a
nominee for election to a position on the Board of Directors will be elected as
a director if the votes cast for the nominee exceed the votes cast against the
nominee and exceed the votes cast for any other nominee for that position.
Abstentions and "broker non-votes" (shares held by a broker or nominee that does
not have the authority, either express or discretionary, to vote on a particular
matter) are counted for purposes of determining the presence or absence of a
quorum for the transaction of business at the Annual Meeting. For the election
of directors, abstentions and broker non-votes will have the effect of neither a
vote for nor a vote against the nominee. Approval of the amendment to the 1995
Plan requires the affirmative vote of a
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majority of the shares of Common Stock represented in person or by proxy and
entitled to vote on the matter. Accordingly, abstention and broker non-votes,
because they are not affirmative votes, will have the effect of a vote against
the proposal.
ELECTION OF DIRECTORS
(PROXY PROPOSAL NUMBER 1)
According to the Articles of Incorporation and Bylaws, the Board of
Directors shall be composed of no more than nine directors who are divided (as
closely as possible) into three equal classes.
At the meeting three directors will be elected to serve for three-year terms
expiring on the date of the 2002 Annual Meeting of Shareholders. Of the
remaining directors, three are serving terms that will not expire until the 2000
Annual Meeting of Shareholders and three are serving terms that will not expire
until the 2001 Annual Meeting of Shareholders. Each director elected will
continue in office until his or her successor has been elected, or until his or
her resignation or removal in the manner provided by the Articles of
Incorporation and Bylaws of the Company.
The names of those persons nominated by the Board of Directors for the
position of director of the Company and the names of the directors of the
Company whose terms will continue after the Annual Meeting are listed below,
accompanied by brief biographies. Shares represented by a properly executed
proxy in the accompanying form will be voted for such nominees. Discretionary
authority is reserved to vote such shares in the best judgment of the persons
named in the proxy in the event that any person or persons other than the
nominees listed below are to be voted upon at the meeting due to the
unavailability of any nominee so listed.
There are no family relationships between any nominee, director, or
executive officer of the Company.
The affirmative vote of a plurality of the votes cast by shareholders
present in person or by proxy and entitled to vote at the meeting, a quorum
being present, is required to elect the nominees listed below.
The names of the nominees for directors and the continuing directors,
together with certain information regarding them, are as follows:
NOMINEES (FOR TERMS OF THREE YEARS):
KATHRYN L. MUNRO (age 51) held a variety of senior management positions in
both the commercial and retail areas of Seafirst Bank and Bank of America, most
recently as Chief Executive for Bank of America's Southwest Banking Group. She
began her banking career in 1980 and was first elected to the Board in 1996. Ms.
Munro currently serves on the corporate boards of Central Newspapers, Inc.,
Arizona Public Service Company and Sun Community Bancorp. She also serves on the
board of The Bank Administration Institute in Chicago and numerous community
boards in Phoenix, including Valley of the Sun United Way, Greater Phoenix
Leadership, Barrow Neurological Institute, the Heard Museum and national board
of advisors for University of Arizona School of Business.
SANDRA F. ROREM (age 59) is a founder and Chief Executive of Distinctive
Solutions, LLC, a development and management company for senior cooperative
community housing. Ms. Rorem was first elected to the Board in 1996. She served
from 1994 to 1998 as Chief Executive Officer of Medalia HealthCare in Seattle,
Washington, a primary care medical group of over 300 doctors in over forty
clinics throughout Puget Sound. Prior to joining Medalia in 1994, she served 17
years with the Seattle-based Sisters of Providence Medical Center, where she
held various positions, including Administrator of the Physician Division and
Associate Administrator of Clinics and Hospital Support Services. She is also a
member of the American College of Health Care Executives, the American College
of Medical Group Administrators, the Society of Teachers of Family Medicine, and
the Society of Ambulatory Care Professionals. Ms. Rorem holds an M.B.A. from the
University of Washington.
DEAN D. THORNTON (age 70) retired from The Boeing Company in 1994 where he
had been Executive Vice President, a member of the executive council, and since
1985, President of Boeing Commercial Airplane Group. Mr. Thornton has served as
a director of the Company since 1993. Mr. Thornton joined Boeing in 1963 as
Assistant Treasurer and was elected Treasurer in 1966.
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He served in a variety of executive assignments including Vice President of
Finance, contracts and international operations for the commercial airplane
company and Vice President -- General Manager of the 767 Division. Mr. Thornton
is a member of the Board of Trustees of the Seattle Art Museum. Mr. Thornton
received a B.S. in business from the University of Idaho in 1952.
THE BOARD OF DIRECTORS
RECOMMENDS A VOTE FOR THE
ELECTION OF THE ABOVE NOMINEES
FOR THE BOARD OF DIRECTORS
CONTINUING DIRECTORS:
RON D. BARBARO (age 67) was President of The Prudential Insurance Company of
America, responsible for world-wide operations, and he retired in 1993. Mr.
Barbaro is currently Chair and CEO of the Ontario Casino Corporation and Ontario
Lottery Corporation. Mr. Barbaro was elected to the Board in 1995 and his
current term expires in 2001. He was responsible for Prudential's Canadian
operation from 1985 to 1990. Mr. Barbaro also serves on the boards of The
Thomson Corporation, Equifax, Inc., The Prudential Life Insurance Company
(Canada), VoxCom, Inc. and ChoicePoint, Inc.
DANIEL J. EVANS (age 73) has been Chairman of Daniel J. Evans Associates, a
consulting firm in Seattle, since 1989. Mr. Evans was appointed to the Company's
Board of Directors in 1991 and his current term expires with the 2000 Annual
Meeting. From 1965 through 1977 Mr. Evans was Governor of the State of
Washington. From 1977 through 1983 he was President of The Evergreen State
College. In 1983 he was appointed to the United States Senate to fill the seat
of the late Senator Henry M. Jackson and won a special election to serve the
remaining five years of the term. He did not seek a second term. Mr. Evans
chaired the National Academy of Sciences Commission on Policy Options for Global
Warming and is co-chair of the Washington Wildlife and Recreation Coalition. Mr.
Evans serves as director of Western Wireless Inc., VoiceStream Wireless
Corporation, Tera Computer Company, Attachmate, Inc., and Puget Sound Energy
Company, and as trustee for The Evergreen State College Foundation. Mr. Evans
also serves on the Board of Regents of the University of Washington. Mr. Evans
received a B.S. in 1948, and an M.S. in 1949, in civil engineering from the
University of Washington.
ARLEN I. PRENTICE (age 61) is Co-Chairperson and Chief Executive Officer of
Kibble & Prentice, Inc., which provides insurance and financial consulting
services. He has served as a director of the Company since 1993 and his current
term expires in 2001. He has been Chairman or President of Kibble & Prentice for
the past 26 years. Mr. Prentice serves as a director of Northland
Telecommunications Corporation; Western Drug Distributors, Inc.; Starbucks
Coffee Company and Percon, Inc.
J. MICHAEL RIBAUDO (age 57) is Chairman and Chief Executive Officer of
Surgical Synergies, Inc., a company that develops, acquires and operates surgery
centers. Dr. Ribaudo was elected to the Board in 1995 and his current term
expires in 2001. He also serves as a consultant to Healthsouth, a provider of
rehabilitation services, which he joined in January of 1995 when Outpatient
Surgery Center, a chain of free-standing ambulatory surgery centers he founded
in 1985, merged with Healthsouth. Dr. Ribaudo graduated from Louisiana State
University in 1963 and Louisiana State Medical School in 1967 with graduate
medical school training at Emory University, Washington University and New York
University. He received postgraduate training at Harvard Law School, Kellogg
Business School and Stanford Graduate School of Business.
KENNETH M. ROBERTS (age 53) is President and Chief Investment Officer of Ken
Roberts Investment Management, Inc., an investment advisory firm. Mr. Roberts is
also President and Chief Executive Officer of Ken Roberts Financial Services,
Inc. Mr. Roberts was appointed to the Company's Board of Directors in 1991 and
his current term expires with the 2000 Annual Meeting. Mr. Roberts was, until
November 1994, President and Chief Investment Officer of Ken Roberts Advisory
Group, an investment advisory firm and subsidiary of the Spokane, Washington,
office of Smith Barney Shearson, Inc. From 1981 to 1991 he was Vice President of
Shearson Asset Management and Foster & Marshall Management, investment advisors,
and President of Shearson Lehman Fundamental Value Fund, a registered investment
company. From 1987 to 1991, Mr. Roberts was also a director of Shearson Lehman
Fundamental Value Fund. Mr. Roberts received a B.A. from Whitworth
3
<PAGE>
College in 1968 and an M.B.A. from the Harvard Graduate School of Business in
1971.
RONALD W. TARRANT (age 62) assumed the position of President and Chief
Executive Officer in 1991. Mr. Tarrant succeeded Mr. Lloyd Andrews as Chairman
following the 1994 Annual Meeting of Shareholders. Mr. Tarrant was appointed to
the Board in 1991 and his current term expires with the 2000 Annual Meeting. He
came to the Company from Augat, Inc., a New York Stock Exchange listed company,
where, since 1987, he had been a corporate officer and Division Vice President
of the Augat Communications Division, a manufacturer of equipment for the cable
television and telecommunications industries. Mr. Tarrant was President of
Telzon, Inc., prior to Augat's purchase of Telzon in 1984, and President of the
subsidiary from 1984 to 1986. Mr. Tarrant also serves on the boards of Western
Garnet, a Canadian company, Phenix Bio-Composites, Poncho and as a trustee of
Asbury College. Mr. Tarrant received a B.A. from Asbury College in 1959.
The Board of Directors held four meetings during the fiscal year ended April
30, 1999. All directors attended at least 75% of all Board and Committee
meetings. The numbers of meetings of each Committee of the Board are described
below.
COMMITTEES OF THE
BOARD OF DIRECTORS
The Company has an Audit Committee, a Compensation and Plan Administrator
Committee, a Mergers and Acquisitions Committee and a Nominating Committee.
AUDIT COMMITTEE. The function of the Audit Committee is to monitor the
effectiveness of the audit effort and the Company's financial and accounting
organization and financial reporting and to select a firm of certified public
accountants whose duty it is to audit the books and accounts of the Company for
the fiscal year for which they are appointed. The Audit Committee has adopted a
charter requiring, among other things, that members of the Committee be
independent of management, free of any relationship that would interfere with
their independent judgment and have a minimum level of financial competency. The
members of the Audit Committee are Dean D. Thornton, Kathryn L. Munro, J.
Michael Ribaudo and Kenneth M. Roberts. The Audit Committee held four meetings
in the fiscal year ended April 30, 1999.
COMPENSATION AND PLAN ADMINISTRATOR COMMITTEE. The function of the
Compensation and Plan Administrator Committee is to structure the Company's
executive compensation program, to set compensation guidelines for officers and
management of the Company and to review and approve compensation for the
Chairman and the Chief Executive Officer. The Committee also acts as
Administrator of the Company's stock option plans, determining the terms,
amounts and recipients of stock option grants. The members are Arlen I.
Prentice, Ron D. Barbaro and Daniel J. Evans. There were two meetings of the
Compensation Committee during the fiscal year ended April 30, 1999.
MERGERS AND ACQUISITIONS COMMITTEE. The function of the Mergers and
Acquisitions Committee is to review potential opportunities for acquisitions,
mergers or similar transactions. The members of the Mergers and Acquisitions
Committee are Kenneth M. Roberts, Ron D. Barbaro and Ronald W. Tarrant. There
was one meeting of the Mergers and Acquisitions Committee during the fiscal year
ended April 30, 1999.
NOMINATING COMMITTEE. The function of the Nominating Committee is to
recommend to the Board individuals to fill Board vacancies and to consider
issues of Board composition and organization. Ronald W. Tarrant, Arlen I.
Prentice and Sandra F. Rorem serve on the Nominating Committee. The Nominating
Committee met once during the fiscal year ended April 30, 1999.
The Company pays directors who are not employees of the Company an annual
retainer of $6,000, $1,000 for each Board and Committee meeting attended in
person or $500 for each Committee or telephonic meeting, up to a maximum of one
Board and one Committee fee per day, and $600 per day or $300 per half-day or
part thereof, for time spent on business of the Company at the request of the
Chairman of the Board of Directors, and reimburses them for related
out-of-pocket travel and other expenses. Committee chairmen are paid $750 per
Committee meeting in lieu of the regular $500 fee. Directors also receive grants
of
4
<PAGE>
options under the 1987 Stock Option Plan for Nonemployee Directors. The Company
has adopted a retirement policy providing that directors will receive, following
their retirement, annual amounts equal to the annual retainer paid to them at
the time of retirement, for a period equal to the director's years of service on
the Board, up to a maximum of nine years.
MANAGEMENT
EXECUTIVE OFFICERS
The executive officers of the Company are:
<TABLE>
<CAPTION>
NAME AGE POSITION
<S> <C><C>
- ---------------------- ----------------------------------------------------------
TERRY D. ALKIRE 45 EXECUTIVE VICE PRESIDENT, INTERNATIONAL OPERATIONS
R. BRAD LAWRENCE 52 EXECUTIVE VICE PRESIDENT AND CHIEF OPERATING OFFICER
RICHARD A. LEBLANC 44 EXECUTIVE VICE PRESIDENT OF SALES, AMERICAS
JOHN S. LENESS 39 GENERAL COUNSEL AND CORPORATE SECRETARY
STEPHEN D. REICHENBACH 37 EXECUTIVE VICE PRESIDENT, TREASURER AND CHIEF FINANCIAL
OFFICER
RONALD W. TARRANT 62 CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER
</TABLE>
Each executive officer of the Company is elected or appointed annually by
the Board of Directors.
TERRY D. ALKIRE joined the Company in 1985. Mr. Alkire has served as Manager
of Sales in Europe, Director of Environmental Applications in the United States,
Vice President European Sales and Marketing, General Manager, Foracon, Vice
President International Operations, and he became Executive Vice President in
August 1998.
R. BRAD LAWRENCE joined the Company in August 1996 as Executive Vice
President -- Automated Systems and Services and was appointed Executive Vice
President in March 1997 and became Chief Operating Officer in 1997. Mr. Lawrence
was Chief Executive Officer of Conductive Rubber Technologies, a manufacturer of
keypads, for five years prior to joining the Company, had previously served as
Assistant General Manager for the Kenworth Truck Company, and had spent twenty
years with Rockwell International culminating as the Vice President and General
Manager of Rockwell's Gas Products Business Unit.
RICHARD A. LEBLANC joined the Company in 1994 as Vice President of Sales.
Mr. LeBlanc became Executive Vice President in August 1998. Prior to joining the
Company, he was employed by the ASI Robotic Systems Division of Cargill Detroit
Corporation for 10 years, serving as Manager of Sales and Marketing and before
that in direct sales.
JOHN S. LENESS joined the Company in June 1990 as its Corporate Counsel,
became General Counsel in December 1990, was appointed Assistant Secretary in
January 1991 and Secretary in February 1991. Prior to joining the Company, Mr.
Leness had been associated since 1986 with the Perkins Coie law firm.
STEPHEN D. REICHENBACH joined the Company in September 1992 when the Company
acquired Spider Staging Corporation, was appointed Treasurer in March 1993, Vice
President of Finance in 1996 and Executive Vice President in March 1997. Prior
to joining the Company, Mr. Reichenbach had been associated since 1989 with
Spider Staging Corporation as its Controller and had been with Ernst & Whinney
from 1985 to 1989.
RONALD W. TARRANT (Biographical information for Mr. Tarrant appears above).
5
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STOCK OWNERSHIP OF MANAGEMENT AND OF PRINCIPAL SHAREHOLDERS
The following table sets forth information as of July 9, 1999, with respect
to each shareholder known by the Company to be the beneficial owner of more than
five percent (5%) of any class of voting securities of the Company, each
director, those executive officers listed in the Summary Compensation Table
below and all directors and executive officers of the Company as a group.
Currently, the Company's sole class of voting securities outstanding is Common
Stock. Except as noted below, each person has sole voting and investment powers
with respect to the shares shown. The address for each of the persons listed
below, is 23500 64th Avenue South, Kent, Washington 98032.
MANAGEMENT
<TABLE>
<CAPTION>
PERCENT OF
OUTSTANDING
NAME AND POSITION NUMBER OF SHARES SHARES
- ------------------------------------------------ ---------------- -----------
<S> <C> <C>
TERRY D. ALKIRE, EXECUTIVE OFFICER.............. 47,513(1) *
RON D. BARBARO, DIRECTOR........................ 38,000(2) *
DANIEL J. EVANS, DIRECTOR....................... 94,000(3) 0.6%
R. BRAD LAWRENCE, EXECUTIVE OFFICER............. 83,999(4) *
RICHARD A. LEBLANC, EXECUTIVE OFFICER........... 21,204(5) *
JOHN S. LENESS, EXECUTIVE OFFICER............... 137,541(6) 0.9%
KATHRYN L. MUNRO, DIRECTOR...................... 26,000(7) *
ARLEN I. PRENTICE, DIRECTOR..................... 98,579(8) 0.7%
STEPHEN D. REICHENBACH, EXECUTIVE OFFICER....... 65,231(9) 0.4%
J. MICHAEL RIBAUDO, DIRECTOR.................... 167,874(10) 1.1%
KENNETH M. ROBERTS, DIRECTOR.................... 140,000(11) 1.0%
SANDRA F. ROREM, DIRECTOR....................... 29,860(7) *
RONALD W. TARRANT, DIRECTOR..................... 429,786(12) 2.9%
DEAN D. THORNTON, DIRECTOR...................... 55,000(13) *
ALL DIRECTORS AND OFFICERS -- AS A GROUP (14 1,434,587(14) 9.8%
PERSONS)........................................
</TABLE>
- ------------------------
* Less than 0.5% beneficial ownership of Company Common Stock.
(1) Includes options exercisable within 60 days for 36,733 shares of Company
Common Stock.
(2) Includes options exercisable within 60 days for 38,000 shares of Company
Common Stock.
(3) Includes options exercisable within 60 days for 70,000 shares of Company
Common Stock.
(4) Includes options exercisable within 60 days for 75,000 shares of Company
Common Stock.
(5) Includes options exercisable within 60 days for 18,176 shares of Company
Common Stock.
(6) Includes options exercisable within 60 days for 107,000 shares of Company
Common Stock.
(7) Includes options exercisable within 60 days for 26,000 shares of Company
Common Stock.
(8) Includes options exercisable within 60 days for 55,000 shares of Company
Common Stock.
(9) Includes options exercisable within 60 days for 45,225 shares of Company
Common Stock.
(10) Includes options exercisable within 60 days for 38,000 shares of Company
Common Stock.
(11) Includes options exercisable within 60 days for 50,000 shares of Company
Common Stock.
(12) Includes options exercisable within 60 days for 381,500 shares of Company
Common Stock.
(13) Includes options exercisable within 60 days for 45,000 shares of Company
Common Stock.
(14) Includes options exercisable within 60 days for 1,011,634 shares of
Company Common Stock.
6
<PAGE>
OTHER BENEFICIAL OWNERS
<TABLE>
<CAPTION>
PERCENT OF
NUMBER OF OUTSTANDING
NAME AND POSITION SHARES SHARES
- --------------------------------------------------------------------------------------------- ------------ -------------
<S> <C> <C>
BROWN CAPITAL MANAGEMENT, INC. .............................................................. 1,085,000** 7.4%
809 CATHEDRAL STREET
BALTIMORE, MARYLAND
ICM ASSET MANAGEMENT, INC. .................................................................. 948,350** 6.5%
W. 601 MAIN AVE., SUITE 917
SPOKANE, WASHINGTON 99201
LORD ABBETT & CO. ........................................................................... 939,790** 6.4%
767 FIFTH AVENUE
NEW YORK CITY, NEW YORK 10153
</TABLE>
- ------------------------
** Based on filings made pursuant to Sections 13(a) and (g) of the Exchange Act.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, and persons who own more than 10% of a
registered class of the Company's equity securities, to file with the Securities
and Exchange Commission ("SEC") initial reports of ownership and reports of
changes in ownership of Common Stock. Officers, directors and greater-than-ten
percent shareholders are required by SEC regulations to furnish the Company with
copies of all Section 16(a) forms they file. To the Company's knowledge, based
solely on review of the copies of such reports furnished to the Company and
representations that no other reports were required, during the fiscal year
ended April 30, 1999, all Section 16(a) filing requirements were complied with.
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<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth information for the years ended April 30,
1999, 1998 and 1997, with respect to the Chief Executive Officer and each of the
four other highest paid executive officers of the Company whose aggregate cash
compensation in fiscal 1999 exceeded $100,000:
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
------------
ANNUAL COMPENSATION NUMBER OF
--------------------- STOCK ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS COMPENSATION*
- ----------------------------------- ---- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C> <C>
RONALD W. TARRANT ................. 1999 $374,042 $ 0 75,000 $ 59,119
CHAIRMAN, PRESIDENT AND CHIEF 1998 350,000 277,500 75,000 29,981
EXECUTIVE OFFICER 1997 362,790 0 120,000 23,075
R. BRAD LAWRENCE .................. 1999 $199,186 $ 0 100,000 $ 35,570
EXECUTIVE VICE PRESIDENT & CHIEF 1998 178,178 105,328 50,000 19,915
OPERATING OFFICER 1997 111,153 0 50,000 8,000
STEPHEN D. REICHENBACH ............ 1999 $136,260 $ 0 100,775 $ 35,617
EXECUTIVE VICE PRESIDENT, 1998 129,423 83,500 18,000 16,595
TREASURER AND CHIEF FINANCIAL 1997 108,251 2,500 20,000 8,984
OFFICER
TERRY D. ALKIRE ................... 1999 $180,003 $ 0 40,717 $ 36,517
EXECUTIVE VICE PRESIDENT, 1998 157,976 17,316 35,100 13,109
INTERNATIONAL OPERATIONS 1997 108,792 43,813 0 12,827
RICHARD A. LEBLANC ................ 1999 $180,003 $ 0 30,274 $ 13,153
EXECUTIVE VICE PRESIDENT OF SALES, 1998 114,426 133,778(1) 15,100 11,925
AMERICAS 1997 96,160 108,637(1) 0 12,715
</TABLE>
- ------------------------
* Includes Company contributions to the 401(k) Plan and the Flow International
Corporation Executive Deferral Plan and interest paid on loans.
(1) Includes commissions.
8
<PAGE>
OPTION GRANTS TABLE
FISCAL 1999
The following table sets forth certain information regarding options granted
to the Company's Chief Executive Officer and each of the individuals named in
the Summary Compensation table during the fiscal year ended April 30, 1999.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
- ---------------------------------------------------------------------------------- POTENTIAL REALIZABLE
PERCENT OF VALUE AT ASSUMED ANNUAL
TOTAL RATES OF STOCK PRICE
OPTIONS APPRECIATION FOR OPTION
NUMBER OF GRANTED TO EXERCISE TERM (10 YEARS)
OPTIONS EMPLOYEES IN PRICE EXPIRATION --------------------------
NAME GRANTED FISCAL YEAR ($/SHARE) DATE 5% 10%
- ------------------------------ --------- ------------ ---------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
ALL FLOW SHAREHOLDERS*........ $238,858,799 $380,390,488
RONALD W. TARRANT............. 25,000 3.77% $ 9.31 08/25/08 $ 146,672 $ 370,172
50,000 7.55% $ 8.88 03/02/09 $ 279,563 $ 705,563
R. BRAD LAWRENCE.............. 25,000 3.77% $ 9.31 08/25/08 $ 146,672 $ 370,172
75,000 11.32% $ 8.88 03/02/09 $ 419,344 $ 1,058,349
STEPHEN D. REICHENBACH........ 25,000 3.77% $ 9.31 08/25/08 $ 146,672 $ 370,172
75,775 11.44% $ 8.88 03/02/09 $ 423,677 $ 1,069,280
TERRY D. ALKIRE............... 10,000 1.51% $10.69 05/08/08 $ 67,334 $ 169,939
10,000 1.51% $10.06 12/31/08 $ 63,394 $ 159,994
20,717 3.13% $ 8.88 03/02/09 $ 115,834 $ 292,343
RICHARD A. LEBLANC............ 10,000 1.51% $ 9.31 08/25/08 $ 58,669 $ 148,069
20,274 3.06% $ 8.88 03/02/09 $ 113,357 $ 256,092
</TABLE>
- ------------------------
* Based on a total value of the Company's outstanding Common Stock at April
30, 1999, of $146,657,700.
AGGREGATED OPTION EXERCISES IN FISCAL 1999
AND FISCAL YEAR-END OPTION VALUES
The following table sets forth certain information regarding options
exercised during the year ended April 30, 1999, by the Company's Chief Executive
Officer and each of the individuals named in the Summary Compensation Table.
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
TOTAL NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS
SHARES OPTIONS AT FISCAL YEAR-END AT FISCAL YEAR-END (1)
ACQUIRED ON VALUE --------------------------- ---------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------------ ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
RONALD W. TARRANT............. 0 0 381,500 208,500 $ 1,647,580 $108,958
R. BRAD LAWRENCE.............. 0 0 75,000 125,000 50,000 101,562
STEPHEN D. REICHENBACH........ 0 0 45,225 109,775 75,922 102,434
TERRY D. ALKIRE............... 0 0 31,733 58,267 43,256 26,432
RICHARD A. LEBLANC............ 0 0 18,176 37,824 25,860 30,308
</TABLE>
- ------------------------
(1) Calculated using $10.00, the closing price of the Company's Common Stock as
reported by NASDAQ on April 30, 1999.
9
<PAGE>
COMPENSATION COMMITTEE REPORT
The Compensation and Plan Administrator Committee has adopted the following
philosophy statement:
Flow International believes that the purpose of compensation is to
attract, motivate, and retain excellently performing employees throughout
the Company. Furthermore, Flow also believes that pay programs, especially
those for top executives, should be designed in a manner that aligns
employee interests with those of the shareholders. In view of these two
beliefs, executive compensation programs at Flow International will be
designed to meet the following objectives:
- Base salaries will be targeted at the 75th percentile of competitive
practice based on the results of surveys.
- Bonus or incentive compensation will be based on individual, unit, and/or
total company performance. At least 50% of executive bonuses will be tied
directly to overall Company results.
- Stock options will be granted, as appropriate, by the Board in accordance
with the current stock compensation plan.
- To more closely align executive interests with those of the shareholders,
executives will be required to achieve established stock ownership goals
in accordance with the Stock Ownership Plan.
The administration of the compensation programs will be directed toward
ensuring that executives are paid fairly and competitively while maintaining
a strong relationship between the overall performance of Flow International
and the level of compensation.
The Committee's decisions are presented to and are subject to final approval
by the Board of Directors. The Committee also believes that the shareholders'
interests will be best served if all employees of the Company are also
shareholders. The Company has implemented programs to grant options to all
employees so that they will become shareholders. In order to implement its
philosophy, the Committee has implemented an executive compensation program with
the following elements:
BASE SALARY. Consistent with the Committee's philosophy, base salaries for
fiscal 2000 were based on comparisons to salary levels at comparable companies
with the goal of setting levels at the seventy-fifth percentile. In its review,
the Committee relied on data compiled by the Company's Human Resources group and
outside survey data for each Company executive. For fiscal 1999, executive
salaries were adjusted to bring them into line with the seventy-fifth percentile
level at comparable companies.
BONUS PROGRAM. The Committee believes that shareholder return in the short
term will be maximized by ensuring that the Company achieves good operating
results. The Committee has structured the Company's executive bonus program so
that annual bonuses are payable based on achievement of target levels for
operating income, net of bonuses, return on managed assets (or cash, inventories
and accounts receivable), and shareholder return, which the Committee believes
are the best measures of the Company's financial performance. No bonuses were
paid to executives for fiscal 1999. For fiscal 2000, as in fiscal 1999, in order
to align the Company's practice with comparable practice, target bonus levels
were established at 45% of base salary for executive officers and 70% for the
Chairman, President and Chief Executive Officer. The bonuses payable will vary
depending on the Company's and executive's performance against the established
targets.
STOCK OPTIONS. In order to provide management with incentives to maximize
long-term shareholder returns, the Committee, as administrator of the Company's
stock option plans, grants stock options to management. The Committee believes
that such grants will encourage management to pursue long-term strategies that
will increase the price of the Company's shares. The grants are generally made
annually at the time of the Committee's annual review of executive compensation.
Grants to company executives for fiscal 2000 were made in March, 1999, in
connection with the Committee's annual review of overall executive compensation.
10
<PAGE>
STOCK OWNERSHIP. Because the Committee believes that executives who share
the same risks as the Company's shareholders will be more likely to manage the
Company to maximize shareholder value, the Committee implemented in fiscal 1994,
and continued for fiscal 2000, a requirement that executives acquire and
maintain minimum holdings of the Company's stock. The Committee intends that the
plan encourage executives to hold at least five percent of the Company's
outstanding Common Stock. Stock ownership goals have been established for each
executive officer based on individual responsibilities and salary level and
range from 150,000 shares to 45,000 shares. Executives are given five years to
reach their goals. The Committee will reduce future stock option awards to those
executives who fail to meet their ownership goals.
CHIEF EXECUTIVE OFFICER. The Committee specifically reviews the performance
of the Chairman, President and Chief Executive Officer in the course of its
review of the Company's executive compensation program. The Committee's
evaluation of the compensation for the President, Chairman and Chief Executive
Officer is based not only on the Company's financial performance during the
fiscal year, but also on achievement of long-term strategic goals. In order to
ensure the Company of the continuing services of its Chief Executive Officer,
the Committee negotiated an employment contract with Mr. Tarrant. Under the
terms of this agreement, Mr. Tarrant will remain as Chairman and active in
management for three years and as Chairman or consultant for an additional three
years. The Company has agreed to pay a base salary of $400,000 per year, subject
to annual review, and an annual bonus of up to 70% of the base salary, based on
an annual increase of 20% in earnings per share. During the course of the year
the Committee monitors the Company's performance and meets both with and without
management to evaluate the Company's results.
The Board of Directors has also approved agreements with the Company's
senior executives that provide for continuation of their salaries in the event
their jobs are eliminated or their responsibilities materially reduced following
a change in control of the Company. The Board believes this will ensure that
executives will evaluate any possible offers for the Company in an objective
manner consistent with the best interests of the Company's shareholders.
In August of 1993, the Internal Revenue Code ("the Code") was amended to
impose a limitation on the deductibility of nonperformance based annual
executive compensation in excess of $1.0 million. The Compensation Committee
presently anticipates that the Company's executive compensation will either be
below such levels or will be structured to qualify as "performance-based
compensation" which is exempt from such limitation.
This report is submitted by the members of the Compensation and Plan
Administrator Committee. This report shall not be deemed incorporated by
reference by any general statement incorporating by reference this proxy
statement into any filing under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, and shall not be deemed filed under
such acts.
COMPENSATION AND PLAN
ADMINISTRATOR COMMITTEE
Arlen I. Prentice -- Chairman
Daniel J. Evans
Ron D. Barbaro
COMPENSATION COMMITTEE MEMBERSHIP
The Compensation and Plan Administration Committee is composed of
independent outside directors, none of whom serve on boards of companies whose
boards include Company executives.
11
<PAGE>
STOCK PERFORMANCE GRAPH
The following graph sets forth the cumulative total shareholder return
(assuming reinvestment of dividends) to the Company's shareholders during the
five-year period ending April 30, 1999, as well as overall stock market index
(NASDAQ) and for those peer group indices selected for each of the Company's
product lines (S & P Machine Tools and Dow Jones Factory Equipment). The Company
has paid no dividends on its Common Stock.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
AMONG FLOW INTERNATIONAL CORPORATION,
THE S & P SMALLCAP 600 INDEX, THE NASDAQ STOCK MARKET (U.S.) INDEX
AND THE DOW JONES FACTORY EQUIPMENT INDEX
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
FLOW INTERNATIONAL S & P SMALLCAP NASDAQ STOCK MARKET DOW JONES FACTORY
CORPORATION 600 (U.S.) EQUIPMENT
<S> <C> <C> <C> <C>
4/94 100 100 100 100
4/95 146 106 116 98
4/96 172 144 166 105
4/97 154 149 175 97
4/98 186 219 262 132
4/99 174 195 356 120
</TABLE>
* $100 INVESTED ON 4/30/94 IN STOCK OR INDEX -- INCLUDING REINVESTMENT
OF DIVIDENDS. FISCAL YEAR ENDING APRIL 30.
12
<PAGE>
APPROVAL OF AMENDMENT TO THE
1995 LONG-TERM INCENTIVE PLAN
(PROXY PROPOSAL NO. 2)
The Board of Directors believes that employees will best serve the interests
of the Company's shareholders if they are also shareholders and share the same
risks and rewards. In order to ensure that all employees become shareholders,
the Board has implemented programs to grant options to all employees. THERE ARE
CURRENTLY NO FURTHER OPTIONS AVAILABLE FOR GRANT TO EMPLOYEES UNDER THE
COMPANY'S STOCK OPTION PLANS, and the Board of Directors has approved an
amendment that would increase the number of shares available for issuance.
Without approval by shareholders of the increase, the Board believes it will be
forced to suspend its programs and find other means to attract, retain and
motivate employees. The Board believes such alternate means would be more costly
and would not serve the interests of shareholders.
The 1995 Long-Term Incentive Plan (the "1995 Plan") was adopted by the
Company's Board of Directors on June 6, 1995, and approved by shareholders at
the Annual Meeting on August 30, 1995. The purpose of the 1995 Plan is to
enhance the long-term profitability and shareholder value of the Company by
offering incentives and rewards to those employees, consultants, advisors and
agents of the Company and its subsidiaries who are key to the Company's growth
and success, and to encourage them to remain in the service of the Company and
to acquire and maintain stock ownership in the Company. The proposed amendment
would increase the number of shares available for grant under the 1995 Plan from
1,350,000 to 3,350,000.
As of July 9, 1999, 2,221,865 shares, or 15% of
the shares outstanding on that date were subject to outstanding option awards
made to employees under the 1995 Plan and predecessor stock option plans. These
grants include grants of 300,000 shares to Mr. Tarrant, 75,000 shares to Mr.
Lawrence, 75,775 shares to Mr. Reichenbach, 20,717 shares to Mr. Alkire and
20,274 shares to Mr. LeBlanc that were made subject to shareholder approval of
an increase in the shares available for grant under the Plan. An additional
360,000 shares were subject to options granted directors under the 1987
Nonemployee Director Plan.
GENERAL DESCRIPTION OF 1995 PLAN TERMS
The 1995 Plan provides for grants of stock options, stock appreciation
rights, stock awards (including restricted stock), other stock-based awards and
dividend equivalent rights. Awards may be made singly, in combination or in
tandem so that the settlement or payment of one automatically reduces or cancels
the other. Awards may be granted under the 1995 Plan to those officers and key
employees (including directors who are also employees) of the Company and its
subsidiaries as the plan administrator from time to time selects. Awards may
also be made to consultants, advisors and agents who provide services to the
Company and its subsidiaries.
Shares issued pursuant to the 1995 Plan will be drawn from authorized and
unissued shares or shares now held or subsequently acquired by the Company. Any
shares of Common Stock that have been made subject to an award that cease to be
subject to the award (other than by reason of exercise or payment of the award
to the extent it is exercised for or settled in shares), including, without
limitation, in connection with the cancellation of an award and the grant of a
replacement award, will be available for issuance in connection with future
grants of awards under the 1995 Plan.
STOCK OPTION GRANTS. Options granted under the 1995 Plan may be "incentive
stock options" (as defined in Section 422 of the Code) or "nonqualified stock
options." The option price for each option granted under the 1995 Stock Option
Plan will be determined by the plan administrator, but will not be less than
100% of the Common Stock's fair market value on the date of grant with respect
to incentive stock options.
The exercise price for shares purchased upon exercise of options must be
paid in cash, except that the plan administrator may authorize payment in cash
and/or already owned Common Stock, a promissory note, delivery of a properly
executed exercise notice, together with irrevocable instructions to a broker, or
such other consideration as the plan administrator may specify. The optionee
must pay to the Company applicable withholding taxes upon exercise of the option
as a
13
<PAGE>
condition to receiving the stock certificates. Withholding tax may be paid in
cash or by the withholding or delivery of Company Common Stock.
The option term will be fixed by the plan administrator and, if not so
fixed, will be 10 years. Each option will be exercisable pursuant to a vesting
schedule determined by the plan administrator. If not so determined, each option
will be exercisable in two equal annual installments beginning one year after
the date of grant. If not established by the plan administrator, options
generally will be exercisable for three years after termination of services as a
result of retirement, early retirement at the Company's request, disability or
death and for 90 days after all other terminations. An option will not be
exercisable if the optionee's services are terminated for cause.
STOCK APPRECIATION RIGHTS. A stock appreciation right gives its holder the
right to receive an appreciation distribution from the Company equal to the
difference between the value of the Common Stock subject to the right at the
time of exercise and the exercise price of the right. For stock appreciation
rights granted in tandem with options, the exercise price will be the same as
the option exercise price. For other stock appreciation rights, the exercise
price will be as determined by the plan administrator. The appreciation
distribution will be paid in shares of Common Stock or cash or any combination
of shares and cash, as the plan administrator may determine. Unless otherwise
provided by the plan administrator, the provisions of the 1995 Plan regarding
exercisability of options after the termination of a holder's services shall
apply equally, to the extent applicable, to stock appreciation rights.
STOCK AWARDS. The plan administrator is authorized to make awards of Common
Stock to participants on such terms and conditions and subject to such
restrictions, if any (whether based on performance standards, periods of
services or otherwise), as the plan administrator may determine. Restrictions
may include repurchase or forfeiture rights in favor of the Company.
The plan administrator may grant other stock-based awards under the 1995
Plan pursuant to which shares of Common Stock are or may in the future be
acquired, or awards denominated in stock units, including awards valued using
measures other than market value. Such other stock-based awards may be granted
alone, in addition to, or in tandem with any award of any type granted under the
1995 Plan and must be consistent with the 1995 Plan's purpose.
DIVIDEND EQUIVALENT RIGHTS. Any awards under the 1995 Plan may, in the plan
administrator's discretion, earn dividend equivalent rights that entitle the
holder to be credited with an amount equal to the cash or stock dividends or
other distributions that would have been paid on the shares of Common Stock
covered by such award had such covered shares been issued and outstanding on
such dividend record date. The plan administrator may establish such rules and
procedures governing the crediting of dividend equivalent rights, including the
timing, form of payment and payment contingencies, as it deems are appropriate
or necessary.
TRANSFERABILITY. No option, stock appreciation right, other stock-based
award or dividend equivalent right will be assignable or otherwise transferable
by the holder other than by will or the laws of descent and distribution and,
during the holder's lifetime, may be exercised only by the holder, except, in
the plan administrator's sole discretion, to the extent permitted by Rule 16b-3
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or
Section 422 of the Code.
ADJUSTMENT OF SHARES. In the event of any changes in the outstanding stock
of the Company by reason of stock dividends, stock splits, spin-offs,
combinations or exchanges of shares, recapitalizations, mergers, consolidations,
distributions to shareholders other than a normal cash dividend, or other
changes in the Company's corporate or capital structure, the plan administrator,
in its sole discretion, shall make any equitable adjustments as it deems
appropriate in (a) the maximum number of and class of securities subject to the
1995 Plan, (b) the maximum number and class of securities that may be made
subject to awards to any participant, and (c) the number and class of securities
that are subject to any outstanding award and the per share price of such
securities, without any change in the aggregate price to be paid therefor.
CORPORATE TRANSACTION. In the event of certain mergers or consolidations or
a sale of substantially all the assets or a liquidation of the Company, each
option,
14
<PAGE>
stock appreciation right or restricted stock award that is at the time
outstanding will automatically accelerate so that each such award shall,
immediately prior to such corporate transaction, become 100% vested, except that
such acceleration will not occur if, in the opinion of the Company's
accountants, it would render unavailable "pooling of interest" accounting for a
transaction that would otherwise qualify for such accounting treatment. The
successor corporation or its parent corporation may elect to convert all such
options or awards into comparable rights to purchase shares of the capital stock
of the successor corporation or its parent corporation.
ADMINISTRATION. The 1995 Plan is administered by a committee or committees
appointed by, and consisting of one or more members of, the Company's Board of
Directors. The Board may delegate the responsibility for administering the 1995
Plan with respect to designated classes of eligible participants to different
committees, subject to such limitations as the Board deems appropriate.
Committee members will serve for such term as the Board may determine, subject
to removal by the Board at any time. The composition of any committee
responsible for administering the 1995 Plan with respect to officers and
directors of the Company who are subject to Section 16 of the Exchange Act with
respect to securities of the Company will comply with the requirements of Rule
16b-3 promulgated under Section 16(b) of the Exchange Act, or any successor
provision.
AMENDMENT AND TERMINATION. The 1995 Plan may be terminated, modified or
amended by the shareholders of the Company. The Company's Board of Directors may
also terminate the 1995 Plan, or modify or amend it, subject to shareholder
approval in certain instances, as set forth in the 1995 Plan. No incentive stock
options may be granted under the 1995 Plan 10 years after the date the 1995 Plan
is adopted by the Board.
FEDERAL INCOME TAX CONSEQUENCES
The federal income tax consequences to the Company and to any person granted
an award of options or stock appreciation rights under the 1995 Plan under the
existing applicable provisions of the Code and the regulations thereunder are
substantially as follows. Under present law and regulations, no income will be
recognized by a participant upon the grant of stock options or stock
appreciation rights.
On the exercise of a nonqualified stock option, the optionee will recognize
taxable ordinary income in an amount equal to the excess of the fair market
value of the shares acquired over the option price. Upon a later sale of those
shares, the optionee will have short-term or long-term capital gain or loss, as
the case may be.
Upon the exercise of an incentive stock option, for regular tax purposes the
optionee will recognize no income at the time of exercise and no deduction will
be allowed to the Company for federal income tax purposes in connection with the
grant or exercise of the option. If the acquired shares are sold or exchanged
after the later of (a) one year from the date of exercise of the option and (b)
two years from the date of grant of the option, the difference between the
amount realized by the optionee on that sale or exchange and the option price
will be taxed to the optionee as a long-term capital gain or loss. If the shares
are disposed of before such holding period requirements are satisfied, then the
optionee will recognize taxable ordinary income.
Special rules apply to a director or officer subject to liability under
Section 16(b) of the Exchange Act.
In all the foregoing cases the Company will be entitled to a deduction at
the same time and in the same amount as the participant recognizes ordinary
income, subject to the following limitations. Under Section 162(m) of the Code,
certain compensation payments in excess of $1 million are subject to a
limitation on deductibility for the Company. The limitation on deductibility
applies with respect to that portion of a compensation payment for a taxable
year in excess of $1 million to either the Company's Chief Executive Officer or
any one of the other four most highly compensated executive officers. Certain
performance-based compensation is not subject to the limitation on
deductibility. Options and stock appreciation rights can qualify for this
performance-based exception, but only if they are granted at fair market value,
the total number of shares that can be granted to an executive for any period is
stated, and shareholder and Board approval is obtained. Restricted stock does
not satisfy the definition of performance-based compensation unless the lapse of
the restriction period is based on the attainment of specified performance goals
approved by the issuer's shareholders. Restricted stock grants under the 1995
Plan will not satisfy the performance-based criteria. The
15
<PAGE>
option and stock appreciation right portions of the 1995 Plan have been drafted
to allow compliance with those performance-based criteria.
VOTE REQUIRED AND BOARD RECOMMENDATION
The affirmative vote of holders of a majority of the shares of Common Stock
represented in person or by Proxy and entitled to vote at the Annual Meeting is
required to approve the amendment to the 1995 Plan.
THE BOARD OF DIRECTORS
RECOMMENDS A VOTE FOR
APPROVAL OF THE AMENDMENT
TO THE 1995 PLAN
INDEPENDENT ACCOUNTANTS
The firm of PricewaterhouseCoopers LLP has examined the financial statements
of the Company since 1981. It is anticipated that representatives of
PricewaterhouseCoopers LLP will be present at the Annual Meeting to answer
shareholders' questions and will have the opportunity to make a statement if
they so desire.
FORM 10-K AND FINANCIAL STATEMENTS
The Company's 1999 Annual Report has been mailed to you with this Proxy
Statement. The Annual Report contains the Consolidated Financial Statements of
the Company and its subsidiaries and accompanying notes as of April 30, 1999 and
1998, and the report thereon by PricewaterhouseCoopers LLP.
If any shareholder entitled to vote at this Annual Meeting wishes to receive
a copy of the Company's Annual Report or Form 10-K, the Company will furnish
that person, without charge, copies upon written request. Requests should be
addressed:
John S. Leness, Secretary
Flow International Corporation
23500 64th Avenue South
Kent, Washington 98032
SHAREHOLDER PROPOSALS
To be considered for presentation to the 2000 Annual Meeting of
Shareholders, a shareholder proposal must be received at the offices of the
Company, 23500 64th Avenue South, Kent, Washington 98032, not later than March
21, 2000.
SOLICITATION AND EXPENSES OF SOLICITATION
Proxies may be solicited by officers, directors and regular supervisory and
executive employees of the Company, none of whom will receive any additional
compensation for their services. The Company has retained ChaseMellon
Shareholder Services, L.L.C. to assist in the solicitation of proxies. Proxies
may be solicited personally or by mail, telephone, facsimile or messenger. The
Company will also pay persons holding shares of the Common Stock in their names
or in the names of the nominees, but not owning such shares beneficially, such
as brokerage houses, banks and other fiduciaries, for the expense of forwarding
soliciting materials to their principals. All of the costs of the solicitation
of proxies will be paid by the Company.
OTHER MATTERS
The Board of Directors knows of no other business which will be presented to
the meeting. If any other business is properly brought before the meeting, it is
intended that proxies in the enclosed form will be voted in respect thereof in
accordance with the judgment of the persons voting the proxies.
Whether you intend to be present at this meeting or not, you are urged to
return your proxy promptly.
By order of the Board of Directors.
Ronald W. Tarrant
Chairman of the Board
16
<PAGE>
- -------------------------------------------------------------------------------
SOLICITED BY THE BOARD OF DIRECTORS
FLOW INTERNATIONAL CORPORATION
ANNUAL MEETING OF STOCKHOLDERS
AUGUST 25, 1999
The undersigned hereby appoints Ronald W. Tarrant and John S. Leness, or
either of them, with power of substitution, proxies for the undersigned and
authorizes them to represent and vote, as designated, all of the shares of
stock of the Company which the undersigned may be entitled to vote at the
Annual Meeting of Stockholders to be held at Benaroya Hall, 200 University
Street, Seattle, Washington, on August 25, 1999, and at any adjournment of
such meeting, for the following purposes and with discretionary authority as
to any other matters that may properly come before the meeting, all in
accordance with and as described in the Notice and accompanying Proxy
Statement.
If this Proxy is executed by you without indicating a choice regarding
the nominees for director or without indicating a choice regarding Proposal 2,
it will be deemed to grant authority to vote FOR the nominees for director
and FOR Proposal 2.
- -------------------------------------------------------------------------------
- FOLD AND DETACH HERE -
<PAGE>
- -------------------------------------------------------------------------------
Please mark
your votes as / X /
indicated in
this example
Proposal 1 - Election of Directors
The Board of Directors recommends a vote FOR the nominees for Director.
Election of three Directors:
Vote FOR the nominees listed WITHHOLD AUTHORITY
below (except as marked to to vote for the nominees
the contrary below) listed below
/ / / /
INSTRUCTIONS: To withhold authority to vote for any individual nominee,
strike a line through that nominee's name.
NOMINEES for Three-Year Terms:
Kathryn L. Munro
Sandra F. Rorem
Dean D. Thornton
FOR AGAINST ABSTAIN
Proposal 2 - Approval of Amendment
to 1995 Long-Term Incentive / / / / / /
Compensation Plan
The Board of Directors recommends a vote FOR the Amendment.
FLOW INTERNATIONAL CORPORATION
THIS PROXY IS SOLICITED BY MANAGEMENT. A majority of said
proxies, including any substitutes, or if only one of them
be present then that one, may exercise all powers granted
hereunder at said meeting or any adjournment thereof. This
proxy revokes any proxy to vote such shares at such meeting
or any adjournment thereof heretofore given by the undersigned
to anyone other than those named above.
Signature(s) _________________________________________ Dated ___________, 1999
Signature must be that of him/herself. If shares are held jointly, each
shareholder named should sign. If the signer is a corporation, please sign
the full corporate name by duly authorized officer. If the signer is a
partnership, please sign partnership name by authorized person. Executors,
administrators, trustees, guardians, attorneys-in-fact, etc., should so
indicate when signing.
- --------------------------------------------------------------------------------
- FOLD AND DETACH HERE -
