<PAGE>
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 Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-12
Flow International Corporation
--------------------------------------------------------------------------------
(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>
--------------------------------------------------------------------------------
FLOW INTERNATIONAL CORPORATION
---------------------------------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
AUGUST 31, 2000
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 Thursday,
August 31, 2000, 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
2003 Meeting of Shareholders or until their respective successors are
elected and qualified.
2. 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 7, 2000, as the record date for determination of shareholders
of the Company entitled to receive notice of and to vote at the Annual Meeting.
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
August 3, 2000
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 31, 2000
------------------------
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 matter that management intends to
present is the election of directors. 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 fiscal 2000 Annual Report of the Company is enclosed herewith. The
approximate mailing date of this proxy material is August 3, 2000.
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 7, 2000,
the record date for determining the shareholders entitled to vote at the Annual
Meeting, there were 14,739,965 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 $10.50 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.
ELECTION OF DIRECTORS
According to the Articles of Incorporation and Bylaws, the Board of
Directors shall be composed of no more than nine directors who are
1
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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 2003 Annual Meeting of Shareholders. Of the
remaining directors, three are serving terms that will not expire until the 2001
Annual Meeting of Shareholders and three are serving terms that will not expire
until the 2002 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):
DANIEL J. EVANS (age 74) 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, Cray Inc., Attachmate, Inc., National Information Consortium and
Tidemark Solutions. Mr. Evans also serves as a member of the Board of Regents of
the University of Washington. Mr. Evans received a B.S. in 1948, and a M.S. in
1949, in civil engineering from the University of Washington.
KENNETH M. ROBERTS (age 54) 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 College in 1968 and a M.B.A. from the Harvard Graduate School of
Business in 1971.
RONALD W. TARRANT (age 63) 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,
2
<PAGE>
a manufacturer of equipment for the cabletelevision 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 Corporation, a Canadian
company, Phenix International, MicroSurgical Technology, Hart Crowser, Inc. and
Northwest Industry Partnership. He is also a member of the Board of Trustees for
PONCHO and Asbury College. Mr. Tarrant received a B.A. from Asbury College in
1959.
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 68) was President of The Prudential Insurance Company of
America, responsible for world-wide operations, and he retired in 1993. He was
responsible for Prudential's Canadian operation from 1985 to 1990. Mr. Barbaro
is currently Chairman and Chief Executive Officer of the Ontario Lottery and
Gaming Corporation. Mr. Barbaro was elected to the Board in 1995 and his current
term expires in 2001. Mr. Barbaro also serves on the boards of The Thomson
Corporation, Trans-Global Life Insurance Company (Alberta), VoxCom, Inc. and
ChoicePoint, Inc. (Atlanta).
KATHRYN L. MUNRO (age 52) is Chairman and Chief Executive Officer of Bridge
West, a technology investment company. She previously 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. Ms. Munro began her banking career in 1980. She was
elected to the Board in 1996 and her current term expires in 2002. Ms. Munro
currently serves on the corporate boards of Central Newspapers, Inc., Pinnacle
West, Tosco Corporation 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. Ms. Munro holds an M.B.A. from the
University of Washington.
ARLEN I. PRENTICE (age 62) 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, Optiva Corporation and Starbucks Coffee Company.
J. MICHAEL RIBAUDO (age 58) 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.
SANDRA F. ROREM (age 60) is the founder and Chief Executive of Distinctive
Solutions, LLC, a development, management and consulting company. Ms. Rorem was
first elected to the Board in 1996 and her current term expires in 2002. 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 Health System,
where she held various positions including Associate Administrator, Providence
Medical Center, Seattle and Administrator of the Physician Division for
Providence Health System, Washington. She is also a member of the
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<PAGE>
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 71) 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 been
serving as a director of the Company since 1993 with his current term expiring
in 2002. Mr. Thornton joined Boeing in 1963 as Assistant Treasurer and was
elected Treasurer in 1966. 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 and is on the corporate board of Cray Inc. Mr. Thornton received a B.S.
in business from the University of Idaho in 1952.
The Board of Directors held four meetings during the fiscal year ended
April 30, 2000. 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 and
Kenneth M. Roberts. The Audit Committee held four meetings in the fiscal year
ended April 30, 2000.
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 was one meeting of the
Compensation and Plan Administrator Committee during the fiscal year ended
April 30, 2000.
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, Sandra F. Rorem, J. Michael Ribaudo and Ronald
W. Tarrant. There was one meeting of the Mergers and Acquisitions Committee
during the fiscal year ended April 30, 2000.
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, Daniel J. Evans
and Sandra F. Rorem serve on the Nominating Committee. The Nominating Committee
met once during the fiscal year ended April 30, 2000.
The Company pays directors who are not employees of the Company an annual
retainer of $6,000, $1,000 for each Board 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
4
<PAGE>
Chairman of the Board of Directors, and reimburses them for related
out-of-pocket travel and other expenses. Committee chairs are paid $750 per
Committee meeting in lieu of the regular $500 fee. Directors also receive grants
of 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 46 EXECUTIVE VICE PRESIDENT, INTERNATIONAL OPERATIONS
R. BRAD LAWRENCE 53 EXECUTIVE VICE PRESIDENT AND CHIEF OPERATING OFFICER
RICHARD A. LEBLANC 45 EXECUTIVE VICE PRESIDENT OF SALES, AMERICAS
JOHN S. LENESS 40 GENERAL COUNSEL AND CORPORATE SECRETARY
STEPHEN D. REICHENBACH 38 EXECUTIVE VICE PRESIDENT, TREASURER AND CHIEF
FINANCIAL OFFICER
RONALD W. TARRANT 63 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
<PAGE>
STOCK OWNERSHIP OF MANAGEMENT AND OF PRINCIPAL SHAREHOLDERS
The following table sets forth information as of July 7, 2000, 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.......................... 82,217(1) 0.6%
RON D. BARBARO, DIRECTOR.................................... 55,000(2) 0.3%
DANIEL J. EVANS, DIRECTOR................................... 109,250(3) 0.7%
R. BRAD LAWRENCE, EXECUTIVE OFFICER......................... 170,893(4) 1.2%
RICHARD A. LEBLANC, EXECUTIVE OFFICER....................... 41,193(5) 0.3%
JOHN S. LENESS, EXECUTIVE OFFICER........................... 181,541(6) 1.2%
KATHRYN L. MUNRO, DIRECTOR.................................. 40,000(7) 0.3%
ARLEN I. PRENTICE, DIRECTOR................................. 108,579(8) 0.7%
STEPHEN D. REICHENBACH, EXECUTIVE OFFICER................... 137,119(9) 0.9%
J. MICHAEL RIBAUDO, DIRECTOR................................ 179,874(10) 1.2%
KENNETH M. ROBERTS, DIRECTOR................................ 150,000(11) 1.0%
SANDRA F. ROREM, DIRECTOR................................... 43,860(7) 0.3%
RONALD W. TARRANT, DIRECTOR................................. 640,246(12) 4.3%
DEAN D. THORNTON, DIRECTOR.................................. 65,000(13) 0.4%
ALL DIRECTORS AND OFFICERS -- AS A GROUP (14 PERSONS)....... 2,004,772(14) 13.6%
</TABLE>
------------------------
(1) Includes options exercisable within 60 days for 74,642 shares of Company
Common Stock.
(2) Includes options exercisable within 60 days for 50,000 shares of Company
Common Stock.
(3) Includes options exercisable within 60 days for 80,000 shares of Company
Common Stock.
(4) Includes options exercisable within 60 days for 162,500 shares of Company
Common Stock.
(5) Includes options exercisable within 60 days for 40,863 shares of Company
Common Stock.
(6) Includes options exercisable within 60 days for 148,000 shares of Company
Common Stock.
(7) Includes options exercisable within 60 days for 40,000 shares of Company
Common Stock.
(8) Includes options exercisable within 60 days for 65,000 shares of Company
Common Stock.
(9) Includes options exercisable within 60 days for 117,113 shares of Company
Common Stock.
(10) Includes options exercisable within 60 days for 50,000 shares of Company
Common Stock.
(11) Includes options exercisable within 60 days for 60,000 shares of Company
Common Stock.
(12) Includes options exercisable within 60 days for 594,000 shares of Company
Common Stock.
(13) Includes options exercisable within 60 days for 55,000 shares of Company
Common Stock.
(14) Includes options exercisable within 60 days for 1,577,118 shares of
Company Common Stock.
6
<PAGE>
Other Beneficial Owners
<TABLE>
<CAPTION>
PERCENT OF
OUTSTANDING
NAME AND POSITION NUMBER OF SHARES SHARES
----------------- ---------------- -----------
<S> <C> <C>
BROWN CAPITAL MANAGEMENT, INC. ............................. 1,767,800** 12.0%
1201 NORTH CALVERT STREET
BALTIMORE, MARYLAND 21202
LORD ABBETT & CO. .......................................... 1,457,960** 9.9%
767 FIFTH AVENUE
NEW YORK CITY, NEW YORK 10153
ICM ASSET MANAGEMENT, INC. ................................. 1,340,200** 9.1%
W. 601 MAIN AVE., SUITE 600
SPOKANE, WASHINGTON 99201
</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, 2000, all Section 16(a) filing requirements were complied with.
7
<PAGE>
Executive Compensation
Summary Compensation Table
The following table sets forth information for the years ended April 30,
2000, 1999 and 1998, 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 2000 exceeded $100,000:
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION
COMPENSATION -------------
------------------- NUMBER OF ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS STOCK OPTIONS COMPENSATION*
--------------------------- -------- -------- -------- ------------- -------------
<S> <C> <C> <C> <C> <C>
RONALD W. TARRANT ................................ 2000 $399,043 $133,333(1) 250,000 $84,492
CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER 1999 374,042 0 75,000 59,119
1998 350,000 277,500 75,000 29,981
R. BRAD LAWRENCE ................................. 2000 $209,633 $ 0 0 $45,110
EXECUTIVE VICE PRESIDENT & CHIEF OPERATING 1999 199,186 0 100,000 35,570
OFFICER 1998 178,178 105,328 50,000 19,915
STEPHEN D. REICHENBACH ........................... 2000 $149,490 $ 0 0 $55,240
EXECUTIVE VICE PRESIDENT, TREASURER AND CHIEF 1999 136,260 0 100,775 35,617
FINANCIAL OFFICER 1998 129,423 83,500 18,000 16,595
TERRY D. ALKIRE .................................. 2000 $189,623 $ 0 0 $14,839
EXECUTIVE VICE PRESIDENT, INTERNATIONAL 1999 180,003 0 40,717 36,517
OPERATIONS 1998 157,976 17,316 35,100 13,109
RICHARD A. LEBLANC ............................... 2000 $191,113 $ 0 0 $14,161
EXECUTIVE VICE PRESIDENT OF SALES, AMERICAS 1999 180,003 0 30,274 13,153
1998 114,426 133,778(2) 15,100 11,925
</TABLE>
------------------------
* Includes Company contributions to the 401(k) Plan and the Flow International
Corporation Executive Deferral Plan and amounts paid on loans.
(1) Paid in connection with the execution of an employment agreement. See
"Compensation Committee Report."
(2) Includes commissions.
8
<PAGE>
Option Grants Table
Fiscal 2000
The following table sets forth certain information regarding options granted
to the Company's Chief Executive Officer and each of the individuals named in
the Summary Compensation table during the fiscal year ended April 30, 2000.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
------------------------------------------------------------------------------------------ POTENTIAL REALIZABLE
PERCENT OF VALUE AT ASSUMED
TOTAL ANNUAL RATES OF STOCK
OPTIONS PRICE APPRECIATION FOR
NUMBER GRANTED TO EXERCISE OPTION TERM (10 YEARS)
OF OPTIONS EMPLOYEES IN PRICE EXPIRATION -----------------------
NAME GRANTED FISCAL YEAR ($/SHARE) DATE 5% 10%
---- ---------- ------------ --------- ---------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
RONALD W. TARRANT..................... 250,000(1) 4.4% $9.88 05/07/09 $682,070 $1,507,196
R. BRAD LAWRENCE...................... 0 -- -- -- -- --
STEPHEN D. REICHENBACH................ 0 -- -- -- -- --
TERRY D. ALKIRE....................... 0 -- -- -- -- --
RICHARD A. LEBLANC.................... 0 -- -- -- -- --
</TABLE>
------------------------
(1) Granted in connection with the execution of an employment contract. See
"Compensation Committee Report."
Aggregated Option Exercises in Fiscal 2000
and Fiscal Year-End Option Values
The following table sets forth certain information regarding options
exercised during the year ended April 30, 2000, by the Company's Chief Executive
Officer and each of the individuals named in the Summary Compensation Table.
<TABLE>
<CAPTION>
TOTAL NUMBER OF VALUE OF UNEXERCISED
UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS
SHARES 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 0 456,500 383,500 $2,226,386 $558,645
R. BRAD LAWRENCE................. 0 0 150,000 50,000 278,281 113,281
STEPHEN D. REICHENBACH........... 0 0 104,613 50,387 256,781 114,200
TERRY D. ALKIRE.................. 0 0 69,642 20,358 139,822 33,348
RICHARD A. LEBLANC............... 0 0 35,863 20,137 82,692 36,563
</TABLE>
------------------------
(1) Calculated using $11.25, the closing price of the Company's Common Stock as
reported by NASDAQ on May 1, 2000.
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.
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 2000, 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, and return on managed assets (or cash,
inventories and accounts receivable), which the Committee believes are the best
measures of the Company's financial performance. No bonuses were paid to
executives for fiscal 2000. 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.
No grants were made to company executives in fiscal 2000 in connection with the
Committee's annual review of overall executive compensation.
CHIEF EXECUTIVE OFFICER. The Committee specifically reviews the performance
of the Chairman,
10
<PAGE>
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 has
negotiated an employment contract with Mr. Tarrant. As an inducement to enter
into the agreement, Mr. Tarrant was paid a bonus and granted options to purchase
shares of the Company's stock. Under the terms of this agreement, Mr. Tarrant
will remain as Chairman and active in management for two 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, and an annual bonus of up to 70% of the base
salary. 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 that 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 Administrator Committee is composed of independent
outside directors, none of whom serve on boards of companies whose boards
include Company executives. Arlen I. Prentice, chairman of the Committee is a
co-chairman and the chief executive officer of Kibble & Prentice, Inc., a
company that, together with its wholly-owned subsidiary, provides insurance
brokerage and employee benefits, administrative and consulting services to the
Company. During fiscal 2000, payments by the Company to Kibble & Prentice, Inc.
and such subsidiary for such services totaled $113,722. Mr. Prentice abstains
from participating in matters where he may have a conflict of interest.
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, 2000, 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.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
4/95 4/96 4/97 4/98 4/99 4/00
<S> <C> <C> <C> <C> <C> <C>
FLOW INTERNATIONAL CORPORATION 100 118 106 128 119 134
S & P SMALLCAP 600 100 136 141 207 184 207
NASDAQ STOCK MARKET (U.S.) 100 143 151 226 309 471
DOW JONES FACTORY EQUIPMENT 100 119 115 137 99 182
</TABLE>
12
<PAGE>
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 fiscal 2000 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, 2000 and 1999, 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 2001 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
April 10, 2001.
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 Corporate Investor
Communications, Inc. 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
13
<PAGE>
PROXY
SOLICITED BY THE BOARD OF DIRECTORS
FLOW INTERNATIONAL CORPORATION
ANNUAL MEETING OF STOCKHOLDERS
August 31, 2000
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 31, 2000, 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, it will be deemed to grant authority to vote FOR
the nominees for director.
IMPORTANT -- TO BE SIGNED AND DATED ON REVERSE SIDE
--------------------------------------------------------------------------------
-- FOLD AND DETACH HERE --
<PAGE>
Please mark /X/
your votes
as indicated
in this
example
WITHHELD
PROPOSAL 1 -- ELECTION OF DIRECTORS FOR FOR ALL
The Board of Directors recommends a vote FOR / / / /
the nominees for Director.
Election of three Directors:
NOMINEES for Three-Year Terms:
Daniel J. Evans
Kenneth M. Roberts
Ronald W. Tarrant
INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE
A LINE THROUGH THAT NOMINEE'S NAME.
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 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.
Signature __________________ Signature __________________ Date ___________, 2000
IMPORTANT: PLEASE INSERT
--------------------------------------------------------------------------------
-- FOLD AND DETACH HERE --
