Schedule 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant |X|
Filed by a Party other than the Registrant |_|
Check the appropriate box:
|_| Preliminary Proxy Statement |_| Confidential, For Use of the
Commission Only (as permitted
by Rule 14a-6(e)(2))
|X| Definitive Proxy Statement |_| Definitive Additional Materials
|_| Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
FLANDERS 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 the table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(5) Total fee paid:
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|_| _____Fee paid previously with preliminary materials:
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|_| 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:
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(4) Date Filed:
<PAGE>
[Company Letterhead]
December 5, 2000
Dear Shareholders:
You are cordially invited to attend the annual meeting of the shareholders
of Flanders Corporation (the "Company") to be held at 2399 26th Avenue North,
Saint Petersburg, Florida 33713 on December 18, 2000, at 10:00 a.m. local time.
The purposes of the annual meeting are:
1. To elect four directors of the Company;
2. To ratify the appointment of Grant Thornton LLP as the Company's
independent auditors for fiscal year 2000; and
3. To transact any other business that may properly be presented at the
annual meeting.
If you were a shareholder of record at the close of business on November 24,
2000, you may vote at the annual meeting. The foregoing items of business are
more fully described in the proxy statement attached to this notice.
Whether or not you expect to attend the annual meeting, and regardless of
the number of shares you own, we urge you to read the attached proxy statement
and to promptly date, sign and mail the enclosed proxy card in the envelope
provided.
Sincerely,
Robert R. Amerson
President and Chief Executive Officer
<PAGE>
FLANDERS CORPORATION
2399 26th Avenue North, Saint Petersburg, Florida 33713
------------------------------------
NOTICE OF
ANNUAL MEETING OF SHAREHOLDERS
-----------------------------
The annual meeting of the shareholders of Flanders Corporation will be held
at 2399 26th Avenue North, Saint Petersburg, Florida 33713, on December 18,
2000, at 10:00 a.m. local time. At the annual meeting, you will be asked to:
1. Elect four directors of the Company;
2. Ratify the appointment of Grant Thornton LLP as the Company's
independent auditors for fiscal year 2000; and
3. Transact any other business that may properly be presented at the annual
meeting.
If you were a shareholder of record at the close of business on November 24,
2000, you may vote at the annual meeting and at any postponements or
adjournments thereof.
You are cordially invited to attend the annual meeting. Your vote is
important. If you plan to attend the annual meeting, please notify me so that I
can prepare identification for you. Whether you plan to attend or not, please
mark, sign, date and promptly return the enclosed proxy card. A return envelope,
which requires no postage if mailed in the United States, has been provided for
your use.
Debra E. Hill
Corporate Secretary
December 5, 2000
2
<PAGE>
FLANDERS CORPORATION
2399 26th Avenue North
Saint Petersburg, Florida 33713
------------------------------
PROXY STATEMENT
------------------------------
GENERAL
Flanders Corporation, a North Carolina corporation (the "Company"), is
soliciting this proxy on behalf of its Board of Directors for use at the 2000
annual meeting of shareholders to be held on Monday, December 18, 2000 at 10:00
a.m. local time, at 2399 26th Avenue North, Saint Petersburg, Florida, 33713,
and at any adjournments thereof. This proxy statement, the proxy card, and the
Company's 2000 Annual Report on Form 10-K will be mailed to shareholders
beginning on or about December 5, 2000.
VOTING PROCEDURES
Record holders of shares of the Company's common stock, par value $.001 per
share, at the close of business on November 24, 2000 may vote at the meeting.
Each shareholder has one vote for each share of common stock the shareholder
owns. At the close of business on November 24, 2000, there were 26,652,629
shares of common stock outstanding and entitled to vote at the meeting.
Votes cast by proxy or in person at the annual meeting will be tabulated by
the inspectors of election appointed for the meeting who will also determine
whether or not a quorum is present. The Company's bylaws provide that the
holders of a majority of the issued and outstanding shares of the Company
entitled to vote, represented in person or by proxy, constitute a quorum at any
shareholders' meeting. Abstentions and broker non-votes are counted as present
for establishing a quorum but as unvoted for determining the approval of any
matter submitted to the shareholders for a vote. A broker non-vote occurs when a
broker votes on some matters on the proxy card but not on others because he does
not have the authority to do so.
You may revoke your proxy by filing a written notice of revocation with the
Company. You may also revoke your proxy by (1) filing a new proxy bearing a
later date with the Company, or (2) by attending the meeting and voting in
person.
Your shares will be voted as you direct on your signed proxy card. If you do
not specify on your proxy card how you want to vote your shares, we will vote
signed returned proxies "for " the Board's nominees and "for" the ratification
of the appointment of Grant Thornton LLP as the Company's independent certified
public accountants for 2000. The Company does not know of any other business
that may be presented at the annual meeting. If a proposal other than the two
listed in the Notice is presented at the annual meeting, your signed proxy card
gives authority to Robert R. Amerson and Steven K. Clark to vote your shares on
such matters in their discretion.
3
<PAGE>
PROPOSAL ONE -- ELECTION OF DIRECTORS
General
The Board of Directors current consists of four directors and the Board has
nominated four directors for election at the 2000 annual meeting. If you elect
them, they will hold office until the next annual meeting and their successors
are elected and qualified, or until they sooner retire, die or are removed.
Cumulative voting is not permitted in the election of directors. Unless you
specify otherwise, your returned signed proxy will be voted in favor of each of
the nominees. If any of the nominees is unable to serve as a director, your
proxy may be voted for another person nominated by the Board to fill that
vacancy, or the Board may reduce the number of directors to be elected. The
following information concerning each nominee is as of November 24, 2000.
Information Regarding Nominees for Directors
The nominees for directors of the Company are as follows:
Robert R. Amerson. Mr. Amerson, age 50, has been President and Chief Executive
Officer of the Company since 1987. Mr. Amerson is also a director, a position he
has held since 1988. Mr. Amerson has a Bachelor of Science degree in Business
Administration from Atlantic Christian College.
Steven K. Clark. Mr. Clark, age 47, was named as Vice President and Chief
Financial Officer of the Company as of December 15, 1995, and a director of the
Company as of December 29, 1995. Mr. Clark acted as a consultant to the Company
from November 15, 1995 through December 15, 1995. From July 1992 through October
1995, he was the Chief Financial Officer of Daw Technologies, Inc., a specialty
cleanroom contractor and major customer of the Company. While Chief Financial
Officer of Daw Technologies, Mr. Clark was late in filing a Form 3 amendment and
certain Form 4s and Form 5s. He agreed to a cease and desist order with respect
to these violations. No violations other than the timeliness of filing those
reports were alleged by the Securities and Exchange Commission ("SEC"). Prior to
this he was a senior partner of Miller & Clark, an accounting and management
services firm. Mr. Clark spent four years with Price Waterhouse, and an
additional four years with Arthur Andersen, both accounting firms. He is a
Certified Public Accountant, has Bachelor of Arts degrees in Accounting and
Political Science and a Master of Business Administration degree, all from the
University of Utah.
Linwood Allen Hahn Mr. Hahn, age 52, is nominated to be an outside director of
the Company. Mr. Hahn has been a director since November 1999. Mr. Hahn has
practiced Real Property Law, Estates, Municipal Law and Corporate Law in
Greenville, North Carolina for more than 26 years. Mr. Hahn graduated from the
University of North Carolina at Chapel Hill with a BA degree in 1970, the
University of Tennessee College of Law, JD degree in 1973. He is currently a
member of the North Carolina State Bar Association and the North Carolina Trial
Lawyers' Association as well as serving on the advisory boards of several
private charitable organizations.
J. Russell Fleming Mr. Fleming, age 51, is nominated to be an outside director
of the Company. Mr. Fleming has been a director since November 1999. Mr. Fleming
is Owner/President of Cape Point Development Co., Inc., located in Greenville,
North Carolina, specializing in land development and commercial/multi-family
construction. Mr. Fleming is also Owner/President of New East Management &
Realty, Inc., also located in Greenville, North Carolina, which manages
residential and commercial rental properties. Mr. Fleming attended East Carolina
University prior to obtaining his General Contractor and Real Estate Broker
licenses.
Vote Required
A plurality of the shares represented at the meeting after a quorum is
established is required to elect a director.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT
SHAREHOLDERS VOTE FOR EACH OF THE NOMINEES FOR DIRECTOR.
4
<PAGE>
PROPOSAL TWO -- RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
On November 23, 1999, the Board of Directors approved the (i) engagement of
Grant Thornton LLP as the independent auditors for Flanders Corporation and (ii)
dismissal of McGladrey & Pullen LLP as such independent auditors. On December
22, 1999, the shareholders of the Company ratified this selection. On November
24, 2000, the Board of Directors reaffirmed the engagement of Grant Thornton LLP
as the independent auditors for Flanders Corporation for the fiscal year ended
December 31, 2000. The shareholders are being asked to ratify this selection.
During the two fiscal years ended December 31, 1998 and the subsequent
interim period through November 23, 1999, (i) there were no disagreements with
McGladrey & Pullen LLP on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedures, which
disagreements if not resolved to its satisfaction would have caused it to make
reference in connection with its report to the subject matter of the
disagreement, and (ii) McGladrey & Pullen LLP did not advise the registrant
regarding any "reportable events" as defined in Item 304 (a)(1)(v) of Regulation
S-K. During the past two years, Grant Thornton LLP has not advised the
registrant regarding any "reportable event" as defined in Item 304 (a)(1)(v) of
Regulation S-K.
The accountants' report of McGladrey & Pullen LLP on the consolidated
financial statements of Flanders Corporation and subsidiaries as of and for the
years ended December 31, 1998, 1997 and 1996 did not contain any adverse opinion
or disclaimer of opinion, and was not qualified or modified as to uncertainty,
audit scope, or accounting principles.
Neither Grant Thornton LLP nor its members has any financial interest,
direct or indirect in the company nor does Grant Thornton LLP or any of its
members ever been connected with the Company as a promoter, underwriter,
trustee, director, officer or employee. Representatives of Grant Thornton LLP
are not expected to attended the meeting.
Ratification of the appointment of Grant Thornton LLP is not required under
the Company's bylaws or otherwise, but the Board of Directors decided to seek
such ratification as a matter of good corporate practice. If such ratification
is not approved by the shareholders, the Board may reconsider its selection of
the firm of independent auditors for the Company.
Vote Required
A plurality of the shares represented at the meeting after a quorum is
established is required to ratify the engagement of independent auditors.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE
FOR THE RATIFICATION OF THE APPOINTMENT OF GRANT THORNTON LLP AS THE
COMPANY'S INDEPENDENT AUDITORS.
EXECUTIVE OFFICERS
Set forth below is information regarding the current executive officers of
the Company (in addition to Messrs. Amerson and Clark) who are not also
directors of the Company.
Linda Palmatier. Ms. Palmatier, age 47, has been Vice President of Retail Sales
for the Company since October 2000. She is responsible for all marketing and
sales efforts directed toward national retail accounts. Prior to that time, Ms.
Palmatier was the Company's Director of Procurement, since December 1998. From
December 1996 through December 1998, she worked as a designer/sales
representative for Com-Net Software Specialist and Signature Electronics. From
August 1995 through December 1996, she worked as Director of Merchandising for
J. Bill Circuit, Inc., a contract manufacturer of electronics. She has also
worked as director of merchandising for audio products for Circuit City, and has
fifteen years of experience with Bell Labs and AT&T Microelectronics in quality
control engineering, manufacturing operations management and purchasing. Ms.
Palmatier holds a Bachelor of
5
<PAGE>
Science degree in business statistics from Virginia Commonwealth University and
a Master of Science degree in humanities from the University of Richmond.
Skiter Kowalski. Mr. Kowalski, age 48, has been Vice President of National
Accounts for the Company since October 2000. Prior to that time, Mr. Kowalski
was the Company's Manager of Paint Products, since July 1999. Mr. Kowalski has
been active in the filtration industry for fifteen years, and is a recognized
expert in dealing with all aspects of the paint industry's air filter
requirements. He is a member of ASHRAE, a NAFA-Certified Air Filter Specialist
and was on the NAFA Certification Committee which drafted the NAFA Guide to Air
Filtration.
Knox Oakley. Mr. Oakley, age 42, has been Vice President of Fore-Market Sales
since October 2000 and Vice President of Sales for Flanders Filters, Inc., a
subsidiary of the Company, since June 1994. Mr. Oakley oversees all marketing
and sales to customers engaged in new construction or substantial renovation of
high technology and other facilities. Mr. Oakley has worked in the air filter
manufacturing industry since he was 16, and has held a variety of positions,
including Director of North American Sales for American Air Filter (now AAF
International), a competitor of the Company. Mr. Oakley received his Bachelor of
Science degree in biology from the Citadel.
John Houmis. Mr. Houmis, age 53, has been Vice President Engineering since
December 1998. He has direct responsibility for manufacturing engineering,
quality control and production control systems. From May 1998 to December 1998,
he was Director of Special Project - Plants for Precisionaire, a wholly owned
subsidiary. From 1993 to October 1997, Mr. Houmis was the general manager of
Precisionaire's main manufacturing facility in Florida. Mr. Houmis has Bachelor
of Science and Master of Science degrees in engineering from the University of
South Florida.
Leonard J. Fetcho. Mr. Fetcho, age 60, has been Vice President of Operations
since December 1999. He is also President of Eco-Air Products, Inc., which was
acquired by the Company in June 1998. Mr. Fetcho has held the position of
President of Eco-Air Products, Inc., since 1993. Mr. Fetcho has extensive
experience in the air filtration industry, including being manager of national
accounts for Farr Corporation, and director of sales and marketing for Cambridge
Filter Corporation, both competitors. Mr. Fetcho has a Bachelor of Science
degree in accounting from Morrisville College.
John L. Cherry. Mr. Cherry, age 57, has been Vice President of Engineered
Products since December 1999. At that time, he was appointed General Manager of
Flanders Filters, Inc., and Flanders/CSC, both wholly owned subsidiaries. Mr.
Cherry served as President of Flanders/CSC from March 1997 through December 1999
and as Vice President/General Manager before that, beginning in 1980. Mr. Cherry
has an Associates Degree in design technology from Thomas Nelson Community
College.
BENEFICIAL OWNERSHIP OF SECURITIES
The following table sets forth certain information regarding the beneficial
ownership of the Company's common stock, as of November 24, 2000, with respect
to (i) each person known by the Company to own beneficially more than 5% of the
common stock, (ii) each of the Company's directors, (iii) each of the executive
officers, and (iv) all directors and executive officers of the Company as a
group. Beneficial ownership of shares, as determined in accordance with
applicable SEC rules, includes shares as to which a person has sole or shared
voting power or sole or shared investment power.
<TABLE>
<CAPTION>
Shares of Common Percentage of
Name and Address of Stock Beneficially Outstanding Shares of
Beneficial Owner Owned Common Stock (1)
-------------------------------------- --------------------- -----------------------
<S> <C> <C>
Robert R. Amerson (2) 7,914,370 27.62%
531 Flanders Filters Road
Washington, NC 27889
6
<PAGE>
Shares of Common Percentage of
Name and Address of Stock Beneficially Outstanding Shares of
Beneficial Owner Owned Common Stock (1)
-------------------------------------- --------------------- -----------------------
Steven K. Clark (2) 5,170,183 18.04%
2399 26th Avenue North
Saint Petersburg, Florida 33713
John Cherry (3) 68,000 *
Linwood Allen Hahn (4) 52,500 *
Leonard J. Fetcho (5) 40,000 *
J. Russell Fleming(4) 70,000 *
Dimensional Fund Advisors Inc. 1,980,500 7.43%
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401
Becker Capital Management, Inc. 2,194,700 8.23%
1211 SW 5th Avenue, Suite 2185
Portland, OR 97204
John Houmis
Officers and Directors as a
Group (6 persons) (2),(3),(4),(5),(6) 13,414,580 43.45%
</TABLE>
---------------------------------------
* Represents less than 1% of the total issued and outstanding shares of common
stock.
(1) Applicable percentage of ownership is based on 26,652,629 shares of common
stock outstanding as of November 24, 2000, together with all applicable
options for unissued securities for such shareholders exercisable within 60
days. Shares of common stock subject to options exercisable within 60 days
are deemed outstanding for computing the percentage ownership of the person
holding such options, but are not deemed outstanding for computing the
percentage of any other person.
(2) Includes 1,000,000 shares which are subject to an option to purchase such
shares from the Company at $2.50 per share; and 1,000,000 shares which are
subject to an option to purchase such shares from the Company at $7.50 per
share.
(3) Includes 10,000 shares which are subject to an option to purchase such
shares from the Company at $6.94 per share, 10,000 shares which are subject
to an option to purchase such shares from the Company at $7.125 per share,
and 20,000 shares which are subject to an option to purchase such shares
from the Company at $4.75 per share.
(4) Includes 50,000 shares which are subject to an option to purchase such
shares from the Company at $2.50 per share.
(5) Includes 40,000 shares which are subject to an option to purchase such
shares from the Company at $5.375 per share.
(6) Includes 16,800 shares which are subject to an option to purchase such
shares from the Company at $2.50 per share, 10,000 shares which are subject
to an option to purchase such shares from the Company at $7.50 per share,
10,000 shares which are subject to an option to purchase such shares from
the Company at $7.125 per share, and 5,000 shares which are subject to an
option to purchase such shares from the Company at $3.938 per share.
7
<PAGE>
OTHER INFORMATION REGARDING THE BOARD OF DIRECTORS
Board Meetings and Committees
During 1999, the Board of Directors met two (2) times and also approved
various resolutions by written actions in lieu of meetings. All directors were
in attendance at each of these meetings. The Board of Directors has an Audit
Committee and a Compensation Committee. The Audit Committee reviews the results
and scope of the audit and other services provided by the Company's independent
auditors, reviews and evaluates the Company's internal audit and control
functions, and monitors transactions between the Company and its employees,
officers and directors. The Compensation Committee administers the Company's
equity incentive plans and designates compensation levels for officers and
directors of the Company, including employment contracts. The Audit Committee
met two (2) times during 1999. The Compensation Committee met two (2) times
during 1999.
Currently, the Audit Committee consists of Messrs. Fleming, Allen and Clark.
The Compensation Committee consists of Messrs. Fleming, Allen and Amerson.
Director Compensation
Directors who are Company employees receive no additional or special
remuneration for serving as directors. Each non-employee directors is each paid
$500 plus out-of-pocket expenses for each meeting of the Board of Directors he
attends and, upon meeting certain qualifications, receives an option to purchase
5,000 shares of the Company's common stock at or above the market price of the
common stock on the date of the grant on the first day of every year he remains
a director. During 1999, each non-employee director received an option to
purchase 50,000 shares of the Company's common stock at an exercise price of
$2.50 per share.
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth the aggregate cash compensation paid by the
Company for services rendered during the last three years to the Company's Chief
Executive Officer and to each of the Company's other executive officers whose
annual salary, bonus and other compensation exceeded $100,000 in 1999.
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
------------------------------------- -----------------------------------
Awards Payouts
------------------------- --------
Securities
Other Restricted Underlying
Annual Stock Options/ LTIP
Compen- Award(s) SARs Payouts
Name and Principal Position Year Salary ($) Bonus ($) sation ($) ($) (#) ($)
------------------------------------------ ----------- ---------- ------------ ----------- ------------ --------
<S> <C> <C> <C> <C> <C> <C> <C>
Robert R. Amerson(1)(2) 1999 254,808 - - - 1,000,000(2) -
President and CEO 1998 250,000 - - - -
1997 250,000 - 5,500 - - -
Steven K. Clark(1)(2) 1999 250,000 - - - 1,000,000(2) -
Vice President Finance/CFO 1998 250,000 - - - - -
1997 250,000 - - - - -
Leonard J. Fetcho(3) 1999 164,827 - 11,787 - - -
Vice President Operations 1998 206,008 2,000,000 - - 40,000 -
1997 265,927 - - - - -
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
------------------------------------- -----------------------------------
Awards Payouts
------------------------- --------
Securities
Other Restricted Underlying
Annual Stock Options/ LTIP
Compen- Award(s) SARs Payouts
Name and Principal Position Year Salary ($) Bonus ($) sation ($) ($) (#) ($)
------------------------------------------ ----------- ---------- ------------ ----------- ------------ --------
<S> <C> <C> <C> <C> <C> <C> <C>
John L. Cherry 1999 150,408 - 12,452 - 10,000 -
Vice President Engineered 1998 149,600 - 10,771 - 10,000 -
Products 1997 145,006 - 12,089 - 10,000 -
John Houmis(4) 1999 106,164 - - - - -
Vice President Engineering 1998 59,828. - - - - -
1997 68,009 - - - - -
</TABLE>
1 Mr. Amerson's and Mr. Clark each have an annual salary of $250,000, plus a
possible bonus each year, under their respective Employment Agreements, as
amended. See "Employment Agreements."
2 Messrs. Amerson and Clark each had options to purchase 1,000,000 shares at
$2.50 per share whose expiration date was extended, on December 22, 1999,
from February 22, 2001 to February 22, 2006. This extension resulted in the
establishment of a new measurement date for the value of the options for
financial statement reporting purposes. On the date of grant, the closing
market price for the Company's stock was equal to or above the options'
strike price.
3 Mr. Fetcho joined the Company as of June 30, 1998, when the Company acquired
Eco-Air. Mr. Fetcho's total compensation for 1998 since the date of
acquisition was $93,149. Information for 1998 includes amounts paid during
such year to Mr. Fetcho by Eco-Air ($112,859) and by the Company ($93,149).
Mr. Fetcho's current annual salary is $165,000, plus a possible bonus each
year, under his Employment Agreement. See "Employment Agreements". Prior to
acquisition, Eco-Air paid Mr. Fetcho $112,859 in salary during 1998 and a
$2,000,000 bonus for his role in negotiating the sale of Eco-Air. During
1997, Eco-Air paid Mr. Fetcho $265,927.
4 Mr. Houmis' compensation for 1997 reflects six months of salary. Mr. Houmis'
compensation for 1998 reflects seven months' of salary.
Options/SARs Granted in Last Fiscal Year
The following table sets forth information regarding all individual grants of
options made during 1999 to the named executive officers.
<TABLE>
<CAPTION>
Individual Grants
--------------------------------------------------------------------------------------------------------------------
Potential Realizable
Value at
Number of % of Total Assumed Annual
Securities Options/SARs Rates of Stock
Underlying Granted to Exercise or Price Appreciation
Options/SARs Employees in Base Price Expiration for Option Term
-----------------------------
Name Granted (#) Fiscal Year ($/Sh) Date 5% ($)(1) 10% ($)(1)
------- --------------- --------------- -------------- ------------ -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Robert R. Amerson 1,000,000(2) 46.3% $ 2.50 2/22/2006 $ 918,382 $2,174,135
Steven K. Clark 1,000,000(2) 46.3% 2.50 2/22/2006 918,382 2,174,135
Leonard J. Fetcho - - - - - -
John L. Cherry 10,000 0.5% 4.75 7/23/2004 - 6,113
John Houmis - - - - - -
</TABLE>
9
<PAGE>
1 The potential realizable value portion of the foregoing table illustrates
value that might be realized upon exercise of the options immediately prior
to the expiration of their term, assuming the specified compounded rates of
appreciation on the common stock over the term of the options. These numbers
do not take into account plan provisions providing for termination of the
option following termination of employment or non-transferability.
2 Messrs. Amerson and Clark each had options to purchase 1,000,000 shares at
$2.50 whose expiration date was extended from February 22, 2001 to February
22, 2006 effective December 22, 1999.
Aggregated Option/SAR Exercises in Last Fiscal Year and Fiscal Year-End
Option/SAR Values
The following table sets forth the aggregate number and value of stock options
and SAR's exercised during 1999 by the Company's Chief Executive Officer and by
each of the Company's other executive officers whose annual salary, bonus and
other compensation exceed $100,000.
<TABLE>
<CAPTION>
Number of Securities
Shares Underlying Unexercised Value of Unexercised
Acquired Options/SARs at Fiscal In-the-Money Options/
On Value Year-End (#) SARs at Fiscal Year-End
Name Exercise (#) Realized ($) Exercisable/Unexercisable Exercisable/Unexercisable
--------------------------------------- ------------- ------------------------------- -------------------------------
<S> <C> <C> <C>
Robert R. Amerson - $ - 3,150,000 / - $ 1,725,000 / -
Steven K. Clark - - 3,150,000 / - 1,725,000 / -
Leonard J. Fetcho - - 40,000 / - - / -
John L. Cherry - - 40,000 / - - / -
John Houmis - - - / - - / -
</TABLE>
Employment Agreements
The Company has entered into employment agreements with Messrs. Amerson and
Clark effective as of December 15, 1995. These employment agreements, as
amended, provide for an annual base salary of $250,000 for both Mr. Amerson and
Mr. Clark and terminate in 2010. These employment agreements also provide that
the executive shall be entitled to the following termination payments: (i) 100%
of his current base salary if the employment is terminated as a result of his
death or disability; (ii) up to 200% of his current base salary if the
employment is terminated by the Company for any reason other than death,
disability or for cause, or (iii) up to 250% of the executive's gross income
during the year preceding his termination if the agreement is terminated by the
executive for good reason or by the Company for any reason other than death,
disability or cause and the termination occurs within two years after a change
of control of the Company has occurred.
The Company has entered into an employment agreement with Mr. Cherry
effective as of March 1996. His agreement, as amended, provides for an annual
base salary of $145,000, and terminates in December 2002. His employment
agreement also provides that the executive shall be entitled to the following
termination payments: (i) 100% of his current base salary if the employment is
terminated as a result of his death or disability; (ii) up to 200% of his
current base salary if the employment is terminated by the Company for any
reason other than death, disability or for cause, or is terminated by the
employee for good reason.
10
<PAGE>
Long-Term Incentive Plan
In 1996, the Company adopted the Long-Term Incentive Plan ("LTI Plan") to
assist the Company in securing and retaining key employees and consultants. The
LTI Plan authorizes grants of incentive stock options, nonqualified stock
options, stock appreciation rights ("SARs"), performance shares, restricted
stock awards, dividend equivalents or other stock-based awards to individuals
who are officers, key employees or outside consultants of the Company. There are
1,986,800 shares of common stock reserved for award under the LTI Plan.
The Plan is administered by the Compensation Committee. The Compensation
Committee determines the total number and type of award granted in any year, the
number and selection of employees or consultants to receive awards, the number
and type of awards granted to each grantee and the other terms and provisions of
the awards, subject to the limitations set forth in the LTI Plan.
Stock Option Grants. The Compensation Committee has the authority to select
individuals who are to receive options under the LTI Plan and to specify the
terms and conditions of each option so granted (incentive or nonqualified), the
exercise price (which must be at least equal to the fair market value of the
common stock on the date of grant with respect to incentive stock options), the
vesting provisions and the option term. Unless otherwise provided by the
Compensation Committee, any option granted under the LTI Plan expires the
earlier of (1) ten years from the date of grant; (2) two months after the
optionee's termination of service with the Company for any reason other than
death; or (3) 15 months after the optionee's death. As of November 24, 2000,
there were 738,200 options outstanding under the LTI Plan.
Stock Appreciation Rights. The Compensation Committee may grant SARs
separately or in tandem with a stock option award. A SAR is an incentive award
that permits the holder to receive (per share covered thereby) an amount equal
to the amount by which the fair market value of a share of common stock on the
date of exercise exceeds the fair market value of such share on the date the SAR
was granted. Under the LTI Plan, the Company may pay such amount in cash, in
common stock or a combination of both. Unless otherwise provided by the
Compensation Committee at the time of grant, the provisions of the LTI Plan
relating to the termination of employment of a holder of a stock option will
apply equally, to the extent applicable, to the holder of a SAR. A SAR granted
in tandem with a related option will generally have the same terms and
provisions as the related option with respect to exercisability. A SAR granted
separately will have such terms as the Compensation Committee may determine,
subject to the provisions of the LTI Plan. As of November 24, 2000, no SARs were
outstanding under the LTI Plan.
Performance Shares. The Compensation Committee is authorized under the LTI
Plan to grant performance shares to selected employees. Performance shares are
rights granted to employees to receive cash, stock, or other property, the
payment of which is contingent upon achieving certain performance goals
established by the Compensation Committee. As of November 24, 2000, no
performance shares were outstanding under the LTI Plan.
Restricted Stock Awards. The Compensation Committee is authorized under the
LTI Plan to issue shares of restricted common stock to eligible participants on
such terms and conditions and subject to such restrictions, if any, as the
Compensation Committee may determine. As of November 24, 2000, no restricted
stock awards were outstanding under the LTI Plan.
Dividend Equivalents. The Compensation Committee may also grant dividend
equivalent rights to participants subject to such terms and conditions as may be
selected by the Compensation Committee. Dividend equivalent rights entitle the
holder to receive payments equal to dividends with respect to all or a portion
of the number of shares of stock subject to an option award or SARs, as
determined by the Committee. As of November 24, 2000, no dividend equivalents
were outstanding under the LTI Plan.
11
<PAGE>
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
General
The Compensation Committee of the Board of Directors is composed of two
independent directors, Messrs. Fleming and Hahn, who have no "interlocking
relationships" (as defined by the SEC) and the Chief Executive Officer, Mr.
Amerson, who recuses himself from votes and discussions on his own compensation.
We are engaged in highly competitive businesses and compete nationally for
personnel at the executive and technical staff level. Outstanding candidates are
aggressively recruited, often at premium salaries. Highly qualified employees
are essential to our success. We are committed to providing competitive
compensation that helps attract, retain, and motivate the highly skilled people
we require. We strongly believe that a considerable portion of the compensation
for the Chief Executive Officer and other top executives must be tied to the
achievement of business objectives, completing acquisitions, and to business
unit and overall financial performance, both current and long-term.
Executive Compensation
Our executive compensation program is administered by the Compensation
Committee. The role of the Compensation Committee is to review and approve
salaries and other compensation of the executive officers of the Company, to
administer the executive officer bonus plan and stock option plans, and to
review and approve stock option grants to all employees including the executive
officers of the Company.
General Compensation Philosophy
Our compensation philosophy is that total cash compensation should vary with the
performance of the Company and any long-term incentive should be closely aligned
with the interest of the stockholders. Total cash compensation for the executive
officers consists of the following components:
o Base salary
o An executive officer bonus that is related to growth in sales and
operating earnings of the Company.
Long-term incentives are realized through the granting of stock options to
executives and key employees through the LTI Plan. We have also granted certain
non-qualified options to our executive officers. We have no other long-term
incentive plans for our officers and employees.
Base Salary and Executive Officer Bonus Target
Current base salaries for the executive officers were determined by arms' length
negotiations with the Board of Directors. Messrs. Clark, Amerson, Fetcho and
Cherry have employment contracts with the Company which set base salaries and
allow for bonus targets and levels to be set at the sole discretion of this
committee. During 1998 and 1999, none of the executive officers reached their
bonus targets, and hence no bonuses were awarded to executive officers in 1999,
nor will bonuses be awarded in 2000 for performance in 1999.
Chief Executive Officer Compensation
The current base salary for the Chief Executive Officer of $250,000 is set
according to his employment contract, which also includes provision for annual
bonuses at the sole discretion of this committee. No bonuses were awarded to the
Chief Executive Officer in 1999, and none were accrued based upon 1999
performance.
Stock Options
Stock options are granted to aid in the retention of executive and key employees
and to align the interests of executive and key employees with those of the
stockholders. The level of stock options granted (i.e., the number of
12
<PAGE>
shares subject to each stock option grant) is based on the employee's ability to
impact future corporate results. An employee's ability to impact future
corporate results depends on the level and amount of job responsibility of the
individual. Therefore, the level of stock options granted is proportional to the
Compensation Committee's evaluation of each employee's job responsibility. For
example, Robert R. Amerson, as the Chief Executive Officer, has the highest
level of responsibility and would typically be awarded the highest level of
stock options. Stock options are granted at a price not less than the fair
market value on the date granted.
Respectfully submitted,
COMPENSATION COMMITTEE:
Linwood Allen Hahn J. Russell Fleming
Robert R. Amerson
Comparative Stock Performance Graph
The following graph1 shows a comparison of cumulative total returns for the
Company, the NASDAQ Stock Market -- U.S. Index and the NASDAQ NM Industrial
Index during the period commencing February 26, 1996 and ending September 30,
2000. The comparison assumes $100 was invested on February 26, 1996 in the
Company's common stock with the reinvestment of all dividends, if any. Total
shareholder returns for prior periods are not an indication of future returns.
[GRAPH OMITTED]
<TABLE>
<CAPTION>
2/96 12/96 12/97 12/98 12/99 9/00
<S> <C> <C> <C> <C> <C> <C>
Flanders Corporation 100 380 370 163 100 91
Nasdaq Stock Market (U.S.) 100 117 142 198 368 332
Nasdaq NM Industrial 100 110 123 131 225 206
</TABLE>
REPORT OF THE AUDIT COMMITTEE
General
The Audit Committee of the Board of Directors is composed of two independent
directors who have no "interlocking relationships" as defined by the Commission,
Messrs. Fleming and Hahn, and the Chief Financial Officer, Messr. Clark.
13
<PAGE>
The Audit Committee reviews the results and scope of the audit and other
services provided by the Company's independent auditors, reviews and evaluates
the Company's internal audit and control functions, and monitors transactions
between the Company and its employees, officers and directors.
Audit Committee Charter
During 2000, the Audit Committee recommended the approval of a formal Charter, a
copy of which is attached to this Proxy as Appendix A, which expanded the Audit
Committee's primary duties and responsibilities to include:
o Serve as an independent and objective party to monitor the Company's
financial reporting processes and internal control systems.
o Review and appraise the audit efforts of the Company's independent
accountants and internal finance department.
o Provide an open avenue of communication between the independent
accountants, financial and senior management, the internal finance
department, and the Board of Directors.
o Review quarterly and annual financial statements submitted to the
Securities and Exchange Commission, or the public, including any
certification, opinion or review rendered by the Company's independent
accountants.
It is not the responsibility of the Audit Committee to render an opinion
regarding the Company's financial statements, but to monitor the Company's
internal controls and reporting processes, as well as the Company's relationship
with its internal auditors.
Review of Annual Results
The Audit Committee reviewed and discussed the Company's financial statements
for the year ended December 31, 1999, with the Company's management. The Audit
Committee also discussed the statements with the Company's independent auditors,
both with members of management present and independently. In particular, the
Audit Committee discussed with the independent auditors the matters required by
SAS 61.
The Audit Committee received the written disclosures and the letter from the
independent accountants required by Independence Standards Board Standard No. 1,
and has discussed with the independent accountant the independent accountant's
indepence.
Based on its review and the discussions noted above, the Audit Committee
recommended to the Board of Directors that the Company's Consolidated Financial
Statements for the years ended December 31, 1999, 1998 and 1997 be included in
the Company's Annual Report on Form 10-K for 1999.
Respectfully submitted,
Linwood Allen Hahn J. Russell Fleming
Steven K. Clark
14
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
At November 24, 2000, Steven K. Clark owed the Company $2,883,736 (including
accrued interest) which he previously borrowed to settle claims, to make certain
payments under an indemnity agreement he entered into with the Company and to
purchase certain shares from Thomas T. Allan, a former officer and director. To
evidence the amount owed, effective February 11, 1997, Mr. Clark issued a note
to the Company in the amount of $109,013 with interest at the variable rate of
LIBOR plus 1.25% per annum, payable in full on February 10, 1999. On April 25,
1997, Mr. Clark issued a note to the Company in the amount of $250,000 at the
above interest rate, payable in full on April 24, 1999. On September 5, 1997,
Mr. Clark assumed a note between Thomas T. Allan for a principal amount of
$409,750, at the above interest rate, payable in full on September 4, 1999. On
April 15, 1998, Mr. Clark issued a note to the Company in the amount of
$1,580,609 with interest at the rate of 7% per annum, payable in full on
December 31, 2003. On April 24, 1999, the Board of Directors agreed to
consolidate and refinance Mr. Clark's debts to the Company, whereby Mr. Clark
issued a note to the Company in the amount of $2,569,871 with interest accruing
at the rate of LIBOR plus 1%, payable in full on December 31, 2010 or upon
demand by the Company, and canceled all of the other above-described notes.
At November 24, 2000, Robert R. Amerson owed the Company $2,034,881
(including accrued interest) which he previously borrowed to settle claims, to
make certain payments under an indemnity agreement he entered into with the
Company and to purchase certain shares from Thomas T. Allan, a former officer
and director of the Company. To evidence the amount owed, effective February 11,
1997, Mr. Amerson issued a note to the Company in the amount of $109,013 with
interest at the rate of LIBOR plus 1.25% per annum, payable in full on February
10, 1999. On April 25, 1997, Mr. Amerson issued a note to the Company in the
amount of $250,000 at the above-described interest rate, payable in full on
April 24, 1999. On September 25, 1997, Mr. Amerson assumed a note between Thomas
T. Allan for a principal amount of $409,750, at the above interest rate, payable
in full on September 4, 1999. On April 15, 1998, Mr. Amerson issued a note to
the Company in the amount of $440,194 with interest at the rate of 7% per annum,
payable in full on December 31, 2003. On April 24, 1999, the Board of Directors
agreed to consolidate and refinance Mr. Amerson's debt to the Company, whereby
Mr. Amerson issued a note to the Company in the amount of $1,555,802 with
interest accruing at the rate of LIBOR plus 1%, payable in full on December 31,
2010 or upon demand by the Company, and canceled all of the other
above-described notes.
COMPLIANCE WITH SECTION 16(A) OF THE 1934 ACT
Section 16(a) of the 1934 Act requires the Company's directors, executive
officers, and persons who own more than ten percent of a registered class of the
Company's equity securities to file with the SEC initial reports of ownership
and reports of changes in ownership of common stock and other equity securities
of the Company. Officers, directors, and greater than ten-percent beneficial
owners are required by SEC regulation to furnish the Company with copies of all
Section 16(a) reports they file.
Based solely upon review of the copies of such reports furnished to the
Company and written representations that no other reports were required, the
Company believes that there was compliance for the fiscal year ended December
31, 1999 with all Section 16(a) filing requirements applicable to the Company's
officers, directors, and greater than ten-percent beneficial owners.
SHAREHOLDER PROPOSALS FOR 2001 ANNUAL MEETING
If you wish to submit proposals to be included in the Company's 2001 proxy
statement, we must receive them on or before Tuesday, July 17, 2001. Please
address your proposals to Corporate Secretary, Flanders Corporation, 531
Flanders Filters Road, Washington, North Carolina 27789.
Under the Company's bylaws, if you wish to raise a matter before the
shareholders at the 2001 annual meeting:
o You must notify the Secretary in writing by not later than September 19,
2001 but not prior to August 20, 2001.
15
<PAGE>
o Your notice must contain the specific information required by the
Company's bylaws.
Please note that these requirements relate only to matters you wish to bring
before your fellow shareholders at the annual meeting. They are separate from
the SEC's requirements to have your proposal included in the proxy statement.
METHOD OF PROXY SOLICITATION
The Company is soliciting this proxy on behalf of its Board of Directors.
The Company will pay the costs of soliciting the proxies. These costs will
include the expenses of preparing and mailing the proxy materials for the annual
meeting and reimbursement paid to brokerage firms and others for their expenses
incurred in forwarding the proxy materials. Directors, officers and regularly
engaged employees of the Company may also solicit proxies without additional
compensation therefor.
A list of shareholders entitled to vote will be available for examination at
the meeting by any shareholder for any purpose germane to the meeting. The list
will also be available on the same basis for ten days prior to the meeting at
our corporate headquarters, 2399 26th Avenue North, Saint Petersburg, Florida
33713.
ANNUAL REPORTS ON FORM 10-K
The Company's Annual Report on Form 10-K for the fiscal year ended December
31, 1999 has been enclosed with this proxy statement. The Form 10-K includes a
list of exhibits on page 35. The Company will furnish copies of any of the
exhibits to its 1999 Annual Report on Form 10-K upon the request of any
shareholder, upon the payment of $25 to the Company in reimbursement for the
Company's reasonable expenses of furnishing the exhibit. Requests should be
directed to Debra Hill at (252) 946-8081.
Debra E. Hill
Corporate Secretary
Washington, North Carolina
December 5, 2000
16
<PAGE>
Appendix A
Charter of the Audit Committee of the Board of Directors
17
<PAGE>
CHARTER
of the
AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
for
Flanders Corporation
I. PURPOSE
The primary function of the Audit Committee is to assist the Board of
Directors in fulfilling its oversight responsibilities by reviewing: the
financial reports and other financial information provided by the Company to any
government body or the public; the Company's systems of internal controls
regarding finance, accounting, legal compliance and ethics that management and
the Board have established; and the Company's auditing, accounting and financial
reporting processes generally. Consistent with this function, the Audit
Committee should encourage continuous improvement of, and should foster
adherence to, the corporation's policies, procedures and practices at all
levels. The Audit Committee's primary duties and responsibilities are to:
o Serve as an independent and objective party to monitor the Company's
financial reporting processes and internal control systems.
o Review and appraise the audit efforts of the Company's independent
accountants and internal finance department.
o Provide an open avenue of communication among the independent
accountants, financial and senior management, the internal finance
department, and the Board of Directors.
The Audit Committee will primarily fulfill these responsibilities by carrying
out the activities enumerated in Section IV of this Charter.
II. COMPOSITION
The Audit Committee shall be comprised of three or more directors as
determined by the Board; at least two of whom shall be independent directors,
and free from any relationship that, in the opinion of the Board, would
interfere with the exercise of his or her independent judgment as a member of
the Committee. Relationships or events which would automatically exclude an
independent director from being considered as an Audit Committee member include
the following:
o Being employed by the corporation or any of its affiliates for the
current year or any of the past three years;
o Accepting any compensation from the Company or its affiliates in
excess of $60,000 during the previous fiscal year (except for Board
service or non-discretionary compensation);
o An immediate family member of any member of the Board or any Officer
of the Company or its affiliates, or any individual who has been a
member of the Board or an Officer of the Company or its affiliates
in the past three years;
<PAGE>
o Been a partner, controlling shareholder or executive officer of any
business to which the Company made, or from which it received,
payments (other than those which arise solely from investments in
the Company's securities) that exceed $200,000 in any of the past
three years; or
o Been employed as an executive of another entity where any of the
Company's executives serve on that entity's Board of Directors.
All members of the Committee shall have or will obtain a working familiarity
with basic finance and accounting practices. At least one member of the
Committee shall have past employment experience in finance or accounting, with
requisite professional certification in accounting, or other comparable
experience or background, including a current or past position as a chief
executive or financial officer or other senior officer with financial oversight
responsibilities.
The members of the Committee shall be elected by the Board at the annual
organizational meeting of the Board or until their successors shall be duly
elected and qualified. Unless a Chair is elected by the Board, the members of
the Committee may designate a Chair by majority vote of the full Committee
membership.
III. MEETINGS
The Committee shall meet at least four times annually, or more frequently as
circumstances dictate. As part of its job to foster open communication, the
Committee should meet at least annually with management, the Chief Financial
Officer, and the independent accountants in separate executive sessions to
discuss any matters that the Committee or any of these groups believe should be
discussed privately. In addition, the Committee should meet with the independent
accountants and management quarterly to review the Company's financial
statements and reports to the Securities and Exchange Commission consistent with
Section IV below.
IV. RESPONSIBILITIES AND DUTIES
To fulfill its responsibilities and duties, the Committee shall:
Document Review
1. Review and update this Charter periodically, at least annually, as
conditions dictates.
2. Review the Company's annual and quarterly financial statements and any
reports or other financial information submitted to the Securities and
Exchange Commission, or the public, including any certification, report,
opinion or review rendered by the independent accountant.
3. Review the regular internal reports to management prepared by the
finance department and management's response to same.
4. Review with financial management and the independent accountant the Form
10-Q and the Form 10-K prior to its filing and prior to the release of
earnings.
Independent Accountants
5. Recommend to the Board the selection of the independent accountant,
considering independence and effectiveness.
6. Approve the fees and other compensation to be paid to the independent
accountant. On an annual basis, the Committee should review and discuss
with the independent accountant all significant relationships the
accountant has with the Company to determine the accountant's
independence.
2
<PAGE>
7. Consider, in consultation with the independent auditor and the Chief
Financial Officer, the audit scope and plan of the independent auditor,
and approve any significant changes in the independent auditor's audit
plans.
8. Review the performance of the independent accountant, and approve any
proposed discharge of the independent accountant when circumstances
warrant.
9. Periodically consult with the independent accountant out of the presence
of management about internal controls and the fullness and accuracy of
the organization's financial statements.
10. Review with the independent auditor and the Chief Financial Officer the
coordination of audit efforts to assure completeness of coverage,
reduction of redundant efforts, and the effective use of audit
resources.
11. Review with management, the Chief Financial Officer and the independent
auditor any significant findings during the year, including the status
of previous audit recommendations.
12. Instruct the independent auditor that the Board of Directors, as the
stockholders' representative, is the auditor's client.
Financial Reporting Processes
13. In consultation with the independent accountants and the Company's
finance department, review the integrity of the Company's financial
reporting processes, both internal and external.
14. Consider the independent accountant's judgments about the quality and
appropriateness of the Company's accounting principles as applied in its
financial reporting.
15. Consider and approve, if appropriate, major changes to the Company's
auditing and accounting principles and practices as suggested by the
independent accountant, management or the Company's finance department.
16. Inquire of management, the independent auditor, and the Chief Financial
Officer about significant risks or exposures to the Board or the Company
from the preparation of the financial statements and other reports and
assess the steps management has taken to minimize such risks, giving
special attention to estimates and contingencies.
17. Inquire as to the independent auditor's views about whether management's
choices of accounting principles are conservative, moderate or
aggressive from the perspective of income, asset and liability
recognition, and whether those principles are common practices or are
minority practices.
18. Determine, as regards to new transactions or events, the auditor's
reasoning for the appropriateness of the accounting principles and
disclosure practices adopted by management.
19. Inquire as to the auditor's views about how the Company's choices of
accounting principles and disclosure practices may affect shareholders
and public views and attitudes about the Company.
Process Improvement
20. Establish regular and separate systems of reporting to the Committee by
each of management, the independent accountant and the Company's finance
department regarding any significant judgments made in management's
preparation of the financial statements and the review of each as to
appropriateness of such judgments.
3
<PAGE>
21. Following completion of the annual audit, review separately with each of
management, the independent accountant and the Company's finance
department any significant difficulties encountered during the course of
the audit, including any restrictions on the scope of work or access to
required information.
22. Review any significant disagreement among management and the independent
accountant or the Company's finance department in connection with the
preparation of the financial statements.
23. Review with the independent accountant, the Company's finance department
and management the extent to which changes or improvements in financial
or accounting practices, as approved by the Committee, have been
implemented. This review should be conducted periodically as appropriate
subsequent to the implementation of changes or improvements, as decided
by the Committee.
Ethical and Legal Compliance
24. Establish, review and update periodically a Code of Ethical Conduct and
ensure that management has established a system to enforce this Code.
25. Review management's monitoring of the Company's compliance with its
Ethical Code, and ensure that management has the proper review system in
place to ensure that the Company's financial statements, reports and
other financial information disseminated to the Securities and Exchange
Commission and the public satisfy legal requirements.
26. Review activities, organization structure, and qualifications of the
Company's finance department.
27. Review, with the Company's counsel, legal compliance matters including
corporate securities trading policies.
28. Review, with the Company's counsel, any legal matter that could have a
significant impact on the Company's financial statements.
29. Perform any other activities consistent with this Charter, the Company's
By-laws and governing law, as the Committee or the Board deems necessary
or appropriate.
30. Conduct or authorize investigations into any matters within the
Committee's scope of responsibilities. The Committee shall be empowered
to retain independent counsel, accountants, or other to assist it in the
conduct of any investigation.
4
<PAGE>
PROXY
FLANDERS CORPORATION
PROXY SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS FOR THE
ANNUAL MEETING OF THE SHAREHOLDERS
This Proxy is solicited on behalf of the Board of Directors which
recommends a vote for all nominees and ratification of Grant Thornton, L.L.P. as
the Company's independent auditors.
The undersigned hereby appoints Robert R. Amerson and Steven K. Clark,
and each of them, proxies to represent the undersigned with full power of
substitution at the Annual Shareholders Meeting of Flanders Corporation, to be
held on December 18, 2000, at 10:00 a.m. local time at 2399 26th Avenue North,
Saint Petersburg, Florida 33713 and at any and all adjournments thereof.
UNLESS OTHERWISE INDICATED
THIS PROXY WILL BE VOTED FOR EACH PROPOSAL SET FORTH BELOW
1. ELECTION OF DIRECTORS. This proxy will be voted FOR each of the nominees
identified in the proxy statement at the Annual Meeting of Shareholders
unless authority to vote for one or more nominees is expressly withheld. To
withhold authority for one or more individual nominees, cross out the name
or names of such persons.
|_| FOR all nominees
|_| WITHHOLD AUTHORITY FOR CERTAIN NOMINEES. If you wish
to withhold authority to vote for any individual
nominee, strike a line through the nominee's name in
the list below (shares will be voted for nominees
whose names are not stricken):
Robert R. Amerson Steven K. Clark
L. Allen Hahn J. Russell Fleming
|_| WITHHOLD AUTHORITY FOR ALL NOMINEES
2. RATIFICATION OF APPOINTMENT OF GRANT THORNTON, L.L.P. AS THE COMPANY'S
INDEPENDENT AUDITORS
|_| FOR |_| AGAINST |_| ABSTAIN
3. OTHER MATTERS: Unless a line is stricken through this sentence, the proxies
herein named may in their discretion vote the shares represented by this
Proxy upon such other matters as may properly come before the Annual
Meeting.
The shares represented by this Proxy will be voted in the manner directed herein
only if this Proxy is properly executed and timely returned. If the undersigned
does not specify a choice, the shares will be voted FOR the nominees for
director listed hereon, FOR the proposal to ratify the appointment of Grant
Thornton, LLP as the company's independent auditors, and in the discretion of
the proxies for other matters which may properly come before the meeting.
Dated ________________, 2000. _________________________________________
_________________________________________
Signature of Shareholder(s)
Note: Signature should agree with the name
on stock certificates as printed thereon.
Executors, administrators and other
fiduciaries should indicate the capacity
in which they are signing
|_| I plan to personally attend the Annual Meeting of the Shareholders
PLEASE DATE, SIGN AND RETURN THIS PROXY IN THE ENCLOSED ENVELOPE.
THANK YOU.
