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SECURITIES AND EXCHANGE
COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the registrant /X/
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Check the appropriate box:
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Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Materials Pursuant to Exchange Act Rule 14a-11(c) or Rule 14a-12
MET-PRO CORPORATION
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(Name of registrant as specified in its charter)
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[LOGO OMITTED]
160 Cassell Road, Harleysville, Pennsylvania 19438
NOTICE OF ANNUAL MEETING
OF STOCKHOLDERS
To Be Held On June 20, 2001
To the Stockholders of
MET-PRO CORPORATION:
Notice is hereby given that the Annual Meeting of Stockholders of MET-PRO
CORPORATION, a Delaware corporation (the "Company"), will be held at the Best
Western Inn at Towamencin, Sumneytown Pike, Kulpsville, Pennsylvania, on June
20, 2001, at the hour of 9:30 a.m. for the following purposes:
1. To elect two Directors to serve until the 2004 Annual Meeting of
Stockholders.
2. To consider and act upon a proposal to adopt the 2001 Equity Incentive
Plan.
3. To ratify the selection of Margolis & Company P.C. as independent
certified public accountants for the Company's fiscal year ending
January 31, 2002.
4. To transact such other business as may properly come before the
meeting.
Only stockholders of record at the close of business on April 30, 2001, the
record date fixed by the Board of Directors, are entitled to notice of, and to
vote at, said meeting.
Gary J. Morgan,
Secretary
Harleysville, Pennsylvania
May 14, 2001
Whether or not you plan to attend the meeting, please sign and date the
enclosed proxy, which is solicited by the Board of Directors of the Company, and
return it to the Company. The proxy may be revoked at any time before it is
voted, and stockholders executing proxies may attend the meeting and vote there
in person, should they so desire.
MET-PRO CORPORATION
160 Cassell Road, Harleysville, Pennsylvania 19438
PROXY STATEMENT
The Board of Directors of Met-Pro Corporation (the "Company" or "Met-Pro")
presents this proxy statement to all stockholders and solicits their proxies for
the Annual Meeting of Stockholders to be held on June 20, 2001. All proxies duly
executed and received will be voted on all matters presented at the meeting in
accordance with the specifications made in such proxies. In the absence of
specified instructions, proxies so received will be voted for the named nominees
to the Company's Board of Directors and in favor of each of the other proposals
set forth in the Notice of Annual Meeting of Stockholders and described in this
Proxy Statement. Management does not know of any other matters that may be
brought before the meeting nor does it foresee or have reason to believe that
proxy holders will have to vote for a substitute or alternate nominee. In the
event that any other matter should come before the meeting or any nominee is not
available for election, the persons named in the enclosed proxy will have
discretionary authority to vote all proxies not marked to the contrary with
respect to such matters in accordance with their best judgment. The proxy may be
revoked at any time before being voted by written notice to such effect received
by the Company, 160 Cassell Road, Harleysville, Pennsylvania 19438, attention:
President, prior to exercise of the proxy, by delivery of a later proxy or by a
vote cast in person at the meeting. The Company will pay the entire expense of
soliciting these proxies, which solicitation will be by use of the mail.
The total number of shares of Common Stock of the Company outstanding as of
April 30, 2001 was 6,099,364. The Common Stock is the only class of securities
of the Company entitled to vote, each share being entitled to one noncumulative
vote. Only stockholders of record as of the close of business on April 30, 2001
will be entitled to vote. All matters to be voted upon at the Annual Meeting,
other than the election of Directors, are determined by a majority of the votes
cast. Directors are elected by a plurality of the votes cast. Shares represented
by proxies that are marked "withhold authority" with respect to the election of
one or more nominees as Directors, by proxies that are marked "abstain" on other
proposals, and by proxies that are marked to deny discretionary authority on
other matters that may be properly brought before the meeting will be counted as
present for quorum purposes but will not be counted in determining whether a
majority vote was obtained in such matters. In instances where brokers are
prohibited from exercising discretionary authority for beneficial owners who
have not returned proxies to the brokers (so-called "broker non-votes"), those
shares will be counted as present for quorum purposes but will not be included
in the vote totals and, therefore, will have no effect on the vote.
A list of stockholders entitled to vote at the meeting will be available at
the Company's offices, 160 Cassell Road, Harleysville, Pennsylvania 19438, for a
period of ten days prior to the meeting for examination by any stockholder.
These proxy materials were first mailed to stockholders of the Company on
or about May 14, 2001.
1. ELECTION OF DIRECTORS
The Company's Restated Certificate of Incorporation, as amended, provides
for a classified Board of Directors, with the Board divided into three classes
whose terms expire at different times. At the meeting, two Directors, William L.
Kacin and Nicholas DeBenedictis, whose terms of office expire with this meeting,
will be nominated for re-election for terms that expire at the 2004 Annual
Meeting. Information regarding the Board's two nominees is set forth on page 2.
Information regarding the Directors whose terms do not expire with the 2001
Annual Meeting is also set forth on page 2.
Unless otherwise indicated in valid proxies received pursuant to this
solicitation, such proxies will be voted for the election of the persons listed
below as nominees for the terms set forth below. Management has no reason to
believe that the nominees will not be available or will not serve if elected,
but these proxies may not be voted for more than two persons if any of Messrs.
Kacin or DeBenedictis should become unavailable to serve as a Director, full
discretion is reserved to the persons named as proxies to vote for such other
person as may be nominated.
The following sets forth certain information as to the nominees for
election as Directors and for each other person whose term of office as a
Director will continue after this Annual Meeting of Stockholders:
1
FIRST YEAR
OF SERVICE
NAME AGE PRINCIPAL OCCUPATION AS A
DIRECTOR
NOMINEES FOR TERMS TO EXPIRE IN 2004
William L. Kacin 69 Mr. Kacin has been the Chief Executive Officer, President 1993
and a Director of the Company since February 1993, and
was elected Chairman of the Board in June 1999. Prior to
February 1993, he was Vice President and General Manager of
the Company's Sethco Division for seventeen years.
Nicholas DeBenedictis 54 Mr. DeBenedictis is Chairman of the Board, Chief Executive 1997
Officer and President of Philadelphia Suburban Corporation
and Chairman of the Board of Philadelphia Suburban Water
Company, positions that he has held for more than five
years. Mr. DeBenedictis is also a Director of Provident
Mutual Life Insurance Company and P.H. Glatfelter Company
as well as a member of the Board of Trustees of Drexil
University. Mr. DeBenedictis has served as the Chairman of
the Company's Compensation and Stock Option Committee
since 1999, and also serves on the Company's Audit
Committee.
The Board of Directors recommends a vote FOR the election of the above nominees as Directors.
DIRECTORS WHOSE TERMS EXPIRE IN 2003
Alan Lawley 67 Dr. Lawley is the Grosvenor Professor of Metallurgy in the 1990
Department of Materials Engineering at Drexel University,
Philadelphia, Pennsylvania. He is a member of the National
Academy of Engineering, a Fellow of ASM and APMI
International, a former President of the Metallurgical
Society (1982) and of AIME (1987), and is Editor-in-Chief
of the International Journal of Powder Metallurgy. He is an
expert in physical and mechanical metallurgy, powder
metallurgy, composite materials, and materials engineering
design. He has consulted, lectured and published in these
areas. Dr. Lawley has served as the Chairman of the
Company's Audit Committee since 1998, and also serves on
the Company's Compensation and Stock Option Committee.
Gary J. Morgan 46 Mr. Morgan has been the Vice President-Finance, Secretary, 1998
Treasurer and Chief Financial Officer of the Company since
October 1997. He is a Certified Public Accountant.
Immediately prior to October 1997, Mr. Morgan was the
Corporate Controller of the Company. He has been employed
by the Company since 1980.
DIRECTORS WHOSE TERMS EXPIRE IN 2002
Michael J. Morris 66 Mr. Morris is the retired Chief Executive Officer and 1999
President of both Transport International Pool (TIP) and GE
Modular Buildings (GEM). Mr. Morris is a member of the
Board of Managers of Beneficial Savings Bank and a Director
of Philadelphia Consolidated Holding Corporation. Mr.
Morris serves on the Company's Audit Committee as well as
the Compensation and Stock Option Committee.
Jeffrey H. Nicholas 47 Mr. Nicholas is a partner in the Philadelphia law firm of 1998
Fox, Rothschild, O'Brien & Frankel, LLP. Mr. Nicholas has
practiced law since 1981. His practice areas include
securities and corporate finance, general corporate and
commercial law matters. He has served as the Company's
Chief Counsel for five years. Mr. Nicholas also serves as a
Director of Worldwide Medical Corporation, Irvine,
California, a company that expects to become a reporting
company under the Securities Exchange Act of 1934, as well
as Fifth Generation Computer Corporation, New York, New
York, a non-reporting company.
2
BOARD AND BOARD COMMITTEE MEETINGS
The Board of Directors of the Company held six (6) meetings during the
fiscal year ended January 31, 2001.
The Audit Committee of the Board of Directors is composed of Dr. Lawley,
Chairman, and Messrs. DeBenedictis and Morris. The Board of Directors of Met-Pro
has determined that each of the members of the Audit Committee is independent of
management of Met-Pro and is free of any relationship that would interfere with
his exercise of independent judgment as a committee member. The Audit Committee
met twice during fiscal year 2001.
The focus of the Audit Committee is upon: (i) the adequacy of the Company's
internal controls and financial reporting process and the reliability of the
Company's financial statements; (ii) the independence and performance of the
Company's independent auditors; and (iii) the Company's compliance with
designated legal and regulatory requirements. Further information regarding the
functions of the Audit Committee are set forth in the "Report of the Audit
Committee" below and "Audit Committee Charter" which is included as Appendix A
to this Proxy Statement.
The Compensation and Stock Option Committee of the Board (composed of Mr.
DeBenedictis, Chairman, Dr. Lawley and Mr. Morris) reviews and recommends to the
Board appropriate action with respect to all matters pertaining to officers'
compensation as well as stock option grants for Directors, officers and other
key employees of the Company. See the Committee's report on pages 7 and 8 of
this proxy statement. The Compensation and Stock Option Committee met two times
in fiscal year 2001.
Each Director of the Company attended at least 75% of the meetings held by
the Board of Directors and by the Committees on which he served.
The Company does not have a standing nominating committee charged with the
search for and recommendation to the Board of potential nominees for Board
positions. This function is performed by the Board as a whole. It has been, and
continues to be, the Board's policy to entertain stockholder recommendations for
prospective Board nominees. Any such recommendations may be submitted to the
Board, in writing, addressed to the Chairman.
REPORT OF THE AUDIT COMMITTEE
The Audit Committee reviews the Company's financial reporting process on
behalf of the Board of Directors. Management has the primary responsibility for
the financial statements and the reporting process, including the system of
internal controls.
In this context, the Committee has met and held discussions with management
and the independent auditors. Management represented to the Committee that the
Company's consolidated financial statements were prepared in accordance with
generally accepted accounting principles, and the Committee has reviewed and
discussed the consolidated financial statements with management and the
independent auditors. The Committee discussed with the independent auditors
matters required to be discussed by Statement on Auditing Standards No. 61
(Communication With Audit Committees).
In addition, the Committee has discussed with the independent auditors the
auditors' independence from the Company and its management, including the
matters in the written disclosures required by the Independence Standards Board
Standard No. 1 (Independence Discussions With Audit Committees). The Committee
has also considered whether the independent auditors' other non-audit services
to the Company are compatible with the auditors' independence and has concluded
that they are.
Prior to the commencement of the audit, the Committee discussed with the
Company's independent auditors the overall scope and plans for their respective
audits. The Committee meets with the independent auditors, with management
present, to discuss the results of their examinations, the evaluations of the
Company's internal controls, and the overall quality of the Company's financial
reporting.
In reliance on the reviews and discussions referred to above, the Committee
recommended to the Board of Directors, and the Board has approved, that the
audited financial statements be included in the Company's Annual Report on Form
10-K for the fiscal year ended January 31, 2001, for filing with the Securities
and Exchange Commission. The Committee and the Board also have recommended the
selection of the Company's independent auditors.
Dr. Alan Lawley (Chairman)
Nicholas DeBenedictis
Michael J. Morris
April 4, 2001
3
INDEPENDENT AUDITORS FEES
Audit Fees
The aggregate fees billed by Margolis & Company P.C. for the annual audit
of Met-Pro's consolidated financial statements for the fiscal year ended January
31, 2001 and the reviews of the Company's Quarterly Reports on Form 10-Q for the
same fiscal year were $90,500.
All Other Fees
The aggregate fees billed by Margolis & Company P.C. for other services for
the fiscal year ended January 31, 2001 were $48,000.
COMPENSATION OF DIRECTORS
The present policies of the Board as to Director compensation are as
follows: non-employee Directors receive (i) a retainer of $10,000 per year, paid
quarterly; (ii) a meeting fee of $1,250 for each Board meeting (but no fees for
telephone meetings or for stockholders meetings) and $700 for each Committee
meeting; and (iii) an annual stock option grant of up to 5,000 shares of Common
Stock of the Company on terms that are intended to be substantially similar to
the terms of the options granted to the Company's officers. These terms, which
the Board has the authority to change from time to time, subject to the terms of
the Company's stock option plans, in general, are as follows: an exercise price
that is equal to the market price of the Company's Common Stock on the date of
grant; a vesting period of two years, with one-third of the shares covered by
the option being immediately exercisable; provided, however, in the event of a
"change of control", any unvested portion of the option shall become immediately
exercisable. The term of the option shall be for up to ten (10) years, subject
to earlier termination under various conditions. Those Directors who are
employees of the Company do not receive any compensation for their services as
Directors.
In connection with this, on February 26, 2001, the Board granted options on
the foregoing terms to purchase 5,000 shares to Messrs. DeBenedictis, Lawley,
Morris and Nicholas at the closing price of the Company's Common Stock as quoted
on the New York Stock Exchange on the date of grant, or $12.10 per share.
The Board's current policy as to an annual grant of options for
non-employee Directors was intended to replace participation by non-vested
Directors in the Directors' Retirement Plan that the Board had established in
1994 (the "Directors' Plan"). Of the Company's current Directors, only Messrs.
Kacin and Lawley will receive benefits in the future under the Directors' Plan
as a result of the fact that each such person was vested as of December 16,
1999, the date of the Board's action on this plan. The accrual of benefits under
the Directors' Plan for Dr. Lawley ceased as of December 16, 1999, in that Dr.
Lawley elected to receive options as aforementioned for continued Director
service in lieu of participation under the Directors' Plan. The Directors' Plan,
which was established in 1994, provides that Directors who have completed six
(6) years of service will be eligible to receive deferred compensation after
they cease to serve or reach age 70, whichever last occurs. Payment will be made
in annual installments based on $1,000 for each year of service as a Director,
up to a maximum of $10,000, and for a period equal to the length of service, up
to a maximum of 15 installments. Directors who have served as a Chief Executive
Officer for at least six years will be eligible to receive additional annual
deferred compensation at the rate of $1,000 for each year of service as an
officer and/or Director, up to a maximum of $20,000, for a period equal to the
length of such service, up to twenty (20) years. In the event of death before
payments have been completed, the remaining annuity payments will be paid to the
Director's surviving spouse. If there is no surviving spouse, a lump sum payment
will be paid to the Director's estate equal to the total amount payable over the
entire period, less the total paid prior to death.
The Directors' Plan further provides that if a Director's services are
terminated at or after a "change in control" of the Company, the Director is
entitled to an immediate lump sum payment of the benefits then applicable to
such Director, and future payments due under the Plan to former Directors shall
be accelerated and shall be immediately due and payable. For purposes of the
Plan, a "change in control" shall be deemed to occur if any person or group of
persons as defined shall become the beneficial owner of 30% or more of the
Company's voting securities, or there shall be a change in the majority
composition of a Company's Board of Directors, or the stockholders of the
Company shall approve a merger or other similar reorganization in which the
persons who were stockholders of the Company prior to such merger do not
immediately thereafter own more than 50% of the voting securities of the
Company, or in the event of a change of control as defined in any other
agreement or plan of the Company.
4
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
Directors and executive officers, and persons who own more than ten percent of a
registered class of the Company's equity securities to file with the Securities
and Exchange Commission 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 stockholders are required by Securities
and Exchange Commission regulations to furnish the Company with copies of all
Section 16(a) forms that they file.
Based solely upon a review of the copies of the forms furnished to the
Company, or written representations from certain reporting persons that no Forms
5 were required, the Company believes that all filing requirements applicable to
its officers and Directors were complied with during the fiscal year ended
January 31, 2001. During this fiscal year, the Company was advised by Mr. Kimmer
of an inadvertent failure to file a Form 4 during the prior fiscal year with
respect to a purchases of Met-Pro Common Stock. Mr. Kimmer filed a Form 5 for
these purchases in February 2001.
5
SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as of January 31, 2001 the number and
percentage of shares held by all persons who, to the knowledge of the Company's
management, are the record and/or beneficial owners of, or who otherwise
exercise voting or dispositive control over, 5% or more of the Company's
outstanding shares of Common Stock. This table also includes security ownership
as of January 31, 2001 by each Director and nominee for Director of the Company,
each executive officer of the Company named in the Summary Compensation Table
and by all Directors, nominees and executive officers as a group. Unless
otherwise stated, the beneficial owners exercise sole voting and/or investment
power over their shares.
Company Common Stock
Right to Acquire
Ownership Under Options Percent
Name of Beneficial Owner Shares Owned Exercisable Within 60 Days of Class (a)
- ------------------------ ------------ -------------------------- ------------
Dimensional Fund Advisors, Inc. 366,319(b) - 5.8%
1299 Ocean Avenue
Santa Monica, CA 90401
Met-Pro Corporation 326,386 - 5.2%
Salaried Employee Stock Ownership Trust
Harleysville, PA 19438
William L. Kacin 58,692(c) 61,025 1.9%
Nicholas DeBenedictis 7,200 11,924 *
Alan Lawley 33,985 10,999 *
Gary J. Morgan 11,557(d) 19,366 *
Michael J. Morris 8,000 4,332 *
Jeffrey H. Nicholas 6,923 11,399 *
Mark Betchaver 22,589(e) 14,800 *
Raymond J. De Hont 1,613(f) 14,300 *
Robert P. Replogle 39,145(g) 15,450 *
All Directors, nominees and 212,590(h) 217,095 6.8%
executive officers as a group (16 persons)
- ----------
(a) Any securities not currently outstanding, but subject to options
exercisable within 60 days of January 31, 2001, are deemed to be
outstanding for the purpose of computing the percentage of outstanding
securities of the class owned by such persons.
(b) Dimensional Fund Advisors Inc. ("Dimensional"), a registered investment
advisor, is deemed to have beneficial ownership of 366,319 shares, as
described in a Schedule 13G filed with the Securities and Exchange
Commission on February 2, 2001. These shares are held in portfolios of DFA
Investment Dimensions Group Inc., a registered open-end investment company,
or in series of the DFA Investment Trust Company, a Delaware business
trust, or the DFA Group Trust and DFA Participation Group Trust, investment
vehicles for qualified employee benefit plans, all of which Dimensional
Fund Advisors, Inc. serves as investment manager. Dimensional disclaims
beneficial ownership of all such shares.
(c) The number of shares held by Mr. Kacin include 23,839 shares of Common
Stock beneficially held through the Met-Pro Corporation Salaried Employee
Stock Ownership Trust and through the Company's 401(k) Plan.
(d) The number of shares held by Mr. Morgan include 7,212 shares of Common
Stock beneficially held through the Met-Pro Corporation Salaried Employee
Stock Ownership Trust and through the Company's 401(k) Plan.
6
(e) The number of shares held by Mr. Betchaver include 16,089 shares of Common
Stock beneficially held through the Met-Pro Corporation Salaried Employee
Stock Ownership Trust and through the Company's 401(k) Plan.
(f) The number of shares held by Mr. De Hont include 1,612 shares of Common
Stock beneficially held through the Met-Pro Corporation Salaried Employee
Stock Ownership Trust and through the Company's 401(k) Plan.
(g) The number of shares held by Mr. Replogle include 20,963 shares of Common
Stock beneficially held through the Met-Pro Corporation Salaried Employee
Stock Ownership Trust and through the Company's 401(k) Plan.
(h) The number of shares held by all seventeen executive officers and Directors
as a group include 85,505 shares of Common Stock beneficially held through
the Met-Pro Corporation Salaried Employee Stock Ownership Trust and through
the Company's 401(k) Plan.
(*) Less than one percent of the Company's outstanding share of Common Stock.
COMPENSATION AND STOCK OPTION COMMITTEE
REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee and the Stock Option Committee (the
"Compensation Committee") is composed only of non-employee Directors. The
Committee makes recommendations to the Board concerning compensation policies
for the Company's executive officers and Directors. The Committee makes every
effort to ensure that the Company's compensation program is consistent with the
values of Met-Pro Corporation and furthers its business strategy.
During the fiscal year ended January 31, 2000, the Compensation Committee
undertook a significant review of the Company's executive compensation policies.
As part of this, the Board engaged an independent compensation consulting firm
to prepare an analysis of the Company's executive compensation practices
relative to those of other comparable companies.
One of the principal results of the Compensation Committee's review has
been the articulation of a compensation plan (the "Management Incentive Plan")
applicable to the Chief Executive Officer, the Chief Operating Officer (a newly
created position to which Raymond J. De Hont was appointed during the fiscal
year ended January 31, 2001), the Chief Financial Officer, and the operating
officers of the Company's divisions and subsidiaries (herein collectively
"divisions") who generally have the title of Vice President/General Manager.
This compensation policy is based upon three primary components: salary;
eligibility for a bonus; and eligibility for an award of stock options. These
components are intended to facilitate fulfillment of the following compensation
objectives: (i) aligning the interests of management with those of the Company's
stockholders; (ii) retaining competent management; (iii) relating executive
compensation to the achievement of the Company's goals and financial
performance; and (iv) rewarding management for the attainment of short and
long-term accomplishments.
Consistent with these objectives, in adopting the Management Incentive
Plan, the Board, following the Committee recommendations, set salary ranges for
each of the various officer positions. In establishing these salary ranges, as
well as in determining the other features of the Management Incentive Plan, the
Committee drew in part upon the data supplied to it by the independent
compensation consulting firm.
Under the terms of the Management Incentive Plan instituted by the Board,
in order to be eligible for a bonus, certain objective threshold results must be
met. For Vice Presidents/General Managers of divisions, the threshold is the
attainment of a stated operating income for the division managed by the Vice
President/General Manager. For the Company's Chief Executive Officer, Chief
Operating Officer and Chief Financial Officer, the threshold is the attainment
of a stated earnings per share result for the Company for the fiscal year. The
stated figures are determined during the Company's annual budgeting process and
are tied to the operating plan that the Board approves on an annual basis prior
to the commencement of the fiscal year. In the event of a failure to attain the
threshold figure, the individual is not eligible for a bonus.
The incentive level of the bonuses are at stated percentages of the year's
salary that increase with responsibility. If the threshold performance goal has
been attained so as to qualify the executive for a bonus, the actual amount of
the bonus is a function of attainment of other stated goals, such as a stated
net sales figure, a stated operating income figure, and stated personal
objectives, which can be "quantitative", such as being linked to inventory
turnover or accounts receivable days outstanding, as well as "qualitative", such
as being linked to improved divisional leadership. The Management Incentive Plan
7
further provides that each of the stated goals is assigned a stated percentage
set by the Chief Executive Officer within a stated range set by the Board. The
percentages for the Chief Executive Officer are set by the Compensation
Committee.
The Committee notes that the Management Incentive Plan provides for an
accrual of the bonus amount in the reported results of operations for the fiscal
year to which the bonus relates.
As to the stock option component of the Management Incentive Plan adopted
by the Board, the Chief Executive Officer is requested to make recommendations
as to the award to the Company's executive officers (other than for himself) of
stock options up to a stated maximum amount per year, subject to the maximum
grant amounts that the Board has set for each of the officer positions. In
addition, the Chief Executive Officer is requested to make recommendations as to
salary changes for the Company's executive officers, other than for himself.
Action by the Compensation Committee with respect to the Management
Incentive Plan is taken following the end of the fiscal year. For the fiscal
year ended January 31, 2001 (which was the first year of the Company's
implementation of the Management Incentive Plan), the Compensation Committee
awarded bonuses under the terms of the plan to the Company's Vice
Presidents/General Managers whose respective divisions met the threshold
operating income targets.
In addition, Mr. De Hont, who served as the Vice President/General Manager
of the Dean Pump and Fybroc Divisions for part of the fiscal year prior to his
appointment as Chief Operating Officer, qualified for a bonus based upon the
attainment of the threshold operating income figures for the divisions that he
managed. The Company's Chief Financial Officer and Chief Executive Officer both
qualified for a bonus based upon the attainment of the threshold earnings per
share figure approved by the Board for the fiscal year.
The Committee believes that the bonuses that it has approved under the
terms of the Management Incentive Plan for the fiscal year ended January 31,
2001 appropriately rewarded superior performance and will serve to effectively
induce and encourage superior performance in the following fiscal year.
In considering the levels of executive salaries for the fiscal year ending
January 31, 2002, the Committee takes note of the Board's policy under the
Management Incentive Plan to provide for increases in salary within the ranges
previously set by the Board, and further notes the Board's focusing on the
incentive components in the bonus and stock option eligibility.
The Committee, after discussing with the Chief Executive Officer his
recommendations as to salary increases and stock option awards for the Company's
officers other than for himself, has largely accepted the Chief Executive
Officer's recommendations. As to the salary and stock option award set by the
Compensation Committee for Mr. Kacin, the Compensation Committee notes that it
has utilized the same measures used for all executive officers of the Company
under the terms of the Management Incentive Plan. The salary and stock options
awarded to Mr. Kacin reflect the Committee's view of the leadership, vision and
focus that he has provided to Met-Pro during the fiscal year ended January 31,
2001.
Nicholas DeBenedictis (Chairman)
Dr. Alan Lawley
Michael J. Morris
February 26, 2001
COMPENSATION AND STOCK OPTION COMMITTEE
INTERLOCKS AND INSIDER PARTICIPATION
Mr. Kacin, the Company's Chairman, Chief Executive Officer and President,
makes general recommendations to and reviews with the Compensation and Stock
Option Committee the compensation of the Company's executive officers, other
than his own. This information is carefully considered by the Committee.
8
EXECUTIVE COMPENSATION AND OTHER INFORMATION
Summary of Cash and Certain Other Compensation
The following table shows, for the fiscal years ended January 31, 1999,
2000 and 2001, the cash compensation paid by the Company, as well as certain
other compensation paid or accrued for those years, to each of the five most
highly compensated executive officers of the Company where cash compensation
exceeded $100,000 (the "Named Executive Officers") in all capacities in which
they served.
SUMMARY COMPENSATION TABLE
Annual Compensation Long-Term Compensation
---------------------------------- ----------------------
Awards
------
Fiscal All Other
Name and Principal Year Ended Salary Bonus(a) Options(b) Compensation (c)
Position January 31, ($) ($) (#) ($)
- ------------------ ----------- ------ -------- --------- -----------------
William L. Kacin 2001 $330,000 $142,146 15,000 $1,323
Chairman, Chief 2000 327,813 80,000 15,000 6,538
Executive Officer 1999 310,000 80,000 0 4,329
& President
Raymond J. De Hont 2001 $163,375 $48,000 7,500 $2,250
Chief Operating 2000 124,917 20,000 4,200 3,061
Officer 1999 112,750 16,000 0 3,484
Gary J. Morgan 2001 $145,000 $50,500 6,500 $2,491
Vice President-Finance, 2000 138,438 35,000 5,550 3,709
Secretary/Treasurer & 1999 128,750 35,000 13,500 4,329
Chief Financial Officer
Robert P. Replogle 2001 $119,000 $44,625 4,200 $2,336
Vice President & Director, 2000 115,500 13,000 4,200 2,672
International Sales Division 1999 106,250 13,000 0 3,227
& Mefiag Division
Mark A. Betchaver 2001 $118,000 $29,095 3,000 $2,316
Vice President & 2000 114,500 11,000 4,200 2,603
General Manager, 1999 108,750 11,000 0 3,240
Sethco Division
- ----------
(a) The amounts shown under the Bonus column represent cash bonuses awarded for
the indicated fiscal years.
(b) The number of options under the Option column represents stock options
awarded for the indicated fiscal years.
(c) The total amount shown in this column for fiscal year ended January 31,
1999 are contributions to the Salaried Employee Stock Ownership Trust
(ESOT) as described on page 12. The amounts for fiscal years ended January
31, 2000 and 2001 are employer contributions to the Company's 401(k) plan
as described on page 11. There are no other Long-Term Compensation Programs
other than a Pension Plan and Directors' Retirement Plan as discussed on
page 4, 11 and 12.
9
Stock Option Plans
The Company's 1992 Stock Option Plan (the "1992 Plan") was adopted by the
Company's Board of Directors on October 10, 1991 and by its stockholders on June
3, 1992. The Company's 1997 Stock Option Plan (the "1997 Plan") was adopted by
the Company's Board of Directors on February 24, 1997 and by its stockholders on
June 4, 1997. All available options under the 1992 Plan have been granted, and
an aggregate of 186,725 options for the Company's Common Stock are presently
available for grant under the 1997 Plan, plus an indeterminate number of
additional shares resulting from anti-dilution adjustments.
These Plans provide for the grant of options ("Incentive Stock Options"),
which are intended to satisfy the requirements of Section 422 of the Internal
Revenue Code of 1986 (the "Code"), as well as options which are not intended to
satisfy such requirements ("Nonstatutory Stock Options").
The following table sets forth stock options granted for the fiscal year
ended January 31, 2001 to each of the Company's executive officers named in the
Summary Compensation Table and stock options granted to all employees as a
group. The table also sets forth the hypothetical gains that would exist for the
options at the end of their ten (10) year terms for the executive officers named
in the Summary Compensation Table and for all employees as a group (assuming
their options had ten year terms) at assumed compound rates of stock
appreciation of 5% and 10%. The actual future value of the options will depend
on the market value of the Company's Common Stock. All options exercise prices
are based on market price on the date of grant.
OPTION GRANTS
Potential Realizable Value
Number of Percentage of of Assumed Annual Rates
Securities Total Options of Stock Price Appreciation
Underlying Granted to Exercise Latest for Option Term (a)
Date of Options Employees Price Expiration -------------------------------
Name Grant Granted in Fiscal Year $/Share Date 5% ($) 10% ($)
---- ------- ---------- -------------- -------- ---------- -------------------------------
William L. Kacin 2/26/01 15,000 24.67% $12.10 2/26/11 $ 114,144 $ 289,264
Raymond J. De Hont 2/26/01 7,500 12.34% 12.10 2/26/11 57,072 144,632
Gary J. Morgan 2/26/01 6,500 10.69% 12.10 2/26/11 49,463 125,348
Robert P. Replogle 2/26/01 4,200 6.91% 12.10 2/26/11 31,960 80,994
Mark A. Betchaver 2/26/01 3,000 4.93% 12.10 2/26/11 22,829 57,853
All Employees as a Group 2/26/01 60,800 100.0% $12.10 2/26/11 $ 462,664 $ 1,172,485 (b)
5% 10%
-- ---
Total potential stock price appreciation from February 26, 2001 to February 26,
2011 for all stockholders at assumed rates of stock appreciation. (c) $46,343,796 $117,444,277
Potential actual realizable value of options granted to all employees, assuming
ten year option terms, as a percentage of total potential stock price
appreciation from February 26, 2001 to February 26, 2011 for all stockholders
at assumed rates of stock price appreciation. 1.00% 1.00%
- ----------
(a) These amounts, based on assumed appreciation rates of 5% and 10% prescribed
by the Securities and Exchange Commission rules, are not intended to
forecast possible future appreciation, if any, of the Company's stock
price.
(b) No gain to the optionees is possible without an increase in stock price,
which will benefit all stockholders.
(c) Based on the closing price of $12.10 per share on February 26, 2001, and a
total of 6,090,155 shares of Common Stock outstanding.
10
Option Exercises and Holdings
The following table sets forth the number of shares acquired on exercise of
stock options and the aggregate gains realized on exercise in the fiscal year
ended January 31, 2001 by the Company's executive officers named in the Summary
Compensation Table. The table also sets forth the number of shares covered by
exercisable and unexercisable options held by such executives on January 31,
2001 and aggregate gains that would have been realized had these options been
exercised on January 31, 2001, even though these options were not exercised and
the unexercised options could not have been exercised on January 31, 2001.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUE
Value of Unexercised
Shares Number of Unexercised In-The-Money
Acquired Options at Options at FY-End (b)
On Value FY-End (#) ($)
Exercise Realized (a) -------------------------- --------------------------
Name (#) ($) Exercisable Unexercisable Exercisable Unexercisable
---- -------- ------------ ----------- ------------- ----------- -------------
William L. Kacin - $ - 61,075 15,850 $201,206 $8,775
Raymond J. De Hont - - 14,300 6,400 27,864 2,457
Gary J. Morgan - - 19,366 6,184 6,494 3,247
Robert P. Replogle - - 15,450 4,200 33,602 2,457
Mark A. Betchaver - - 14,800 3,400 32,964 2,457
- ----------
(a) Market value on the date of exercise of shares covered by options
exercised, less option exercise price.
(b) Market value of shares covered by in-the-money options on January 31, 2001
less option exercise price. Options are in-the-money if the market value of
the shares covered thereby is greater than the option exercise price.
Termination of Employment and Change of Control Arrangements
Mr. Kacin is party to a Key Employee Severance Agreement with the Company
which provides that in the event the Company terminates his employment, other
than for cause, within eighteen (18) months following a "change of control", or
if Mr. Kacin voluntarily terminates such employment within eighteen (18) months
subsequent to a "change of control", the Company shall be obligated to pay him a
sum of money equal to two (2) years' base compensation. Payment would be made in
a lump sum upon cessation of employment or, at Mr. Kacin's option, in equal
monthly installments over a two (2) year period. Subsequent to January 31, 2000,
the terms of this agreement were amended to conform the definition of "change of
control" to that provided for by the Directors' Plan. The base annual salary
currently payable to Mr. Kacin is $345,000.
Messrs. De Hont and Mr. Morgan are each also party to a Key Employee
Severance Agreement on terms that are identical to those to which Mr. Kacin is
party, except that the amount of compensation is equal to eighteen (18) months
of base compensation. Mr. De Hont's base annual salary is currently $185,000,
and Mr. Morgan's base annual salary is currently $155,000.
The Directors' Plan also provides for the payment of certain benefits in
the event of a "change of control", as discussed under "Board and Committee
Participation/Compensation of Directors" elsewhere herein. In addition, as
disclosed in such section of this Proxy Statement, the Company's stock option
agreements provide for the immediate vesting of all unvested stock options upon
a "change of control".
401(k) Profit Sharing Plan
Effective April 1, 1999, the Company implemented a 401(k) Profit Sharing
Plan (the "401(k) Plan"). All non-bargaining unit employees of the Company in
the United States are eligible to participate in the 401(k) Plan following
completion of one year of service and attaining age 21. Pursuant to this 401(k)
Plan, employees can contribute up to 15% of their compensation to the 401(k)
Plan. The Company will match, in the form of Met-Pro Common Stock, up to 50% of
the employee's contribution up to 4% of compensation. During the Company's two
fiscal years ended January 31, 2001, the Company made contributions to the
401(k) Plan in the amount of $7,861 for William L. Kacin, $5,311 for Raymond J.
De Hont, $6,200 for Gary J. Morgan, $5,008 for Robert P. Replogle, $4,919 for
Mark A. Betchaver and $51,683 for all executive officers as a group (12
persons).
Salaried Employee Stock Ownership Plan
Pursuant to the Company's Salaried Employee Stock Ownership Plan (the
"Ownership Plan"), the Company makes discretionary contributions to the
Company's Salaried Employee Stock Ownership Trust (the "Trust") either in cash
or in Company Common Stock. The Trust uses the cash contributions and dividends
received to purchase shares of the Company's Common Stock. All full-time
11
salaried employees who are at least 21 years of age and who have been employed
by the Company on a full-time basis for at least one year are eligible to
participate in the Ownership Plan. All shares acquired by the Trust are
allocated to the accounts of eligible employees based on their respective
salaries. Employees nearing retirement have discretion to diversify a portion of
their investment. During the Company's three fiscal years ended January 31,
2001, the Company made contributions to the Trust in the aggregate amount of
$4,329 for William L. Kacin, $3,484 for Raymond J. De Hont, $4,329 for Gary J.
Morgan, $3,287 for Robert P. Replogle, $3,240 for Mark A. Betchaver and $32,485
for all executive officers as a group (12 persons). On January 31, 2001, the
Ownership Plan held an aggregate of 326,386 shares of the Company's Common
Stock.
Pension Plans
The Salaried Pension Plan (the "Retirement Plan") is a funded,
tax-qualified noncontributory defined benefit pension plan that covers certain
employees, including the Named Executive Officers. Benefits under our Retirement
Plan are calculated as an annuity of one percent of the participant's final
average earnings for the five highest consecutive years of the last ten years
multiplied by year of service. Earnings covered by the Retirement Plan include
annual salary and cash bonus paid pursuant to the Company's Management Incentive
Plan. The amount of annual earnings that may be considered in calculating
benefits under the Retirement Plan is limited by law. For 2001, the annual
limitation is $170,000.
Effective February 1, 2000, the Board of Directors adopted a Pension
Restoration Plan for Messrs. Kacin and Morgan. Mr. De Hont was added to the
Pension Restoration Plan effective February 1, 2001. The Pension Restoration
Plan is an unfunded supplemental plan that provides out of our general assets an
amount substantially equal to the difference between the amount that would have
been payable under the Retirement Plan, in the absence of legislation limiting
pension benefits and earnings that may be considered in calculating pension
benefits, and the amount actually payable under the Retirement Plan.
The following table shows the estimated annual Retirement Plan and Pension
Restoration Plan benefits on a straight life (no death benefit) basis payable
for various earnings levels upon retirement at age 65, after 15, 20, 25, 30 and
35 years of credited service to the Company:
Years of Service
----------------
Final Five Year Average Earnings 15 20 25 30 35
- -------------------------------- ----- ----- ----- ----- -----
$100,000 $15,000 $20,000 $25,000 $30,000 $35,000
125,000 18,750 25,000 31,250 37,500 43,750
150,000 22,500 30,000 37,500 45,000 52,500
170,000 25,500(a) 34,000(a) 42,500(a) 51,000(a) 59,500(a)
175,000 26,250 35,000 43,750 52,500 61,250
200,000 30,000 40,000 50,000 60,000 70,000
225,000 33,750 45,000 56,250 67,500 78,750
250,000 37,500 50,000 62,500 75,000 87,500
300,000 45,000 60,000 75,000 90,000 105,000
350,000 52,500 70,000 87,500 105,000 122,500
400,000 60,000 80,000 100,000 120,000 140,000
450,000 67,500 90,000 112,500 135,000 157,500
500,000 75,000 100,000 125,000 150,000 175,000
(a) Internal Revenue Code Section 401(a)(17) limits earnings used to calculate
Retirement Plan benefits to $170,000 for 2000 and 2001, respectively.
As of January 31, 2001, Messrs. Kacin, De Hont and Morgan had accrued 25, 5
and 20 years service under the Retirement Plan and the related Pension
Restoration Plan. Messrs. Replogle and Betchaver had accrued 27 and 28 years of
service under the Retirement Plan for this same period.
A Supplemental Executive Retirement Plan or SERP has been established for
Mr. Kacin. This Plan, which is a non qualified and unfunded plan, was approved
by the Board of Directors in 2000 and is intended to provide Mr. Kacin with a
total retirement benefit, in combination with the Retirement Plan, Pension
Restoration Plan and Directors Retirement Pension Plan, that is commensurate
with the retirement benefits for the Chief Executive Officers of other
companies. Under the terms of the SERP, Mr. Kacin will be eligible to receive
benefits under the SERP at normal retirement equal to the difference between (i)
the monthly benefit that would be payable under the Retirement Plan, except that
the amount shall be determined without regard to the ERISA limitations and the
one percent in the Retirement Plan will be replaced with two percent and (ii)
the benefits payable under the Retirement Plan, Pension Restoration Plan,
Directors Pension Plan and Social Security Retirement benefit. If Mr. Kacin
retires from the Company at the mandatory retirement age for Board of Director
members, the SERP is projected to provide an estimated annual benefit of
$36,000.
Certain Business Relationships
The Company utilized the services of the law firm of Fox, Rothschild,
O'Brien and Frankel, LLP, during the fiscal year ended January 31, 2001. Jeffrey
H. Nicholas, a Director of the Company, is a partner in that law firm.
12
Stock Performance Graph
The following graph sets forth the Company's total cumulative stockholder return
as compared to the Russell 2000 Index, the New Peer Group(a), the Former Peer
Group(b) and the AMEX Market Index. Due to changes in the businesses of the
Former Peer Group, and in an effort to select companies more similar to Met-Pro
both in terms of the lines of business and the size of the companies, the
Company has changed its industry peer group index. Accordingly, for the fiscal
year ended January 31, 2001, we are replacing the Former Peer Group with the New
Peer Group.
On June 18, 1998, the Company's shares ceased trading on the American Stock
Exchange and began trading on the New York Stock Exchange. As a result, the
Company no longer believes that the AMEX Index is an appropriate index against
which to measure the performance of the Company's stock. As a broad equity
index, the Company has selected the Russell 2000 Index beginning with the fiscal
year ended January 31, 2001.
The total return on investment assumes $100 invested at the beginning of the
period in (i) the Common Stock of the Company, (ii) the Russell 2000 Index,
(iii) the New Peer Group, (iv) the Former Peer Group and (v) the AMEX Market
Index. Total return assumes reinvestment of dividends. Historical stock price
performance is not necessarily indicative of future price performance.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
Met-Pro Corporation, Russell 2000 Index,
New Peer Group Index, Former Peer Group Index and AMEX Market Index
$450 o Met-Pro Corporation
* Russell 2000
- New Peer Group
# Former Peer Group #
$400 + AMEX Market
$350
$300
#
#
$250
$200
#
*
o *
$150 +
o# -* * o+-
-* + +o -
+ o
$100 #o*+- -
$50 ---------------------------------------------------------------------------
1996 1997 1998 1999 2000 2001
Met-Pro Corporation 100.00 139.09 160.14 121.86 110.12 133.42
Russell 2000 Index 100.00 117.14 136.36 135.46 157.34 161.18
New Peer Group Index 100.00 120.92 136.90 98.90 125.17 146.30
Former Peer Group Index 100.00 139.04 191.84 266.54 292.02 411.13
AMEX Market Index 100.00 107.63 122.76 127.19 149.90 140.43
(a) The New Peer Group is made up of the following securities: BHA Group
Holding Inc.; Crown Anderson Inc.; Cuno Inc.; Flanders Corporation;
Flowserve Corporation; Gorman-Rupp Company; Idex Corporation; Ionics Inc.;
Met-Pro Corporation; Osmonics Inc.; Peerless Manufacturing; Robbins & Myers
Inc.; Roper Industries Inc.; and Waterlink Inc. Flanders Corporation, Cuno
Inc. and Waterlink Inc. started public trading in February 1996, September
1996 and June 1997, respectively.
(b) The Former Peer Group consists of the following securities: Alanco
Technologies; Ampco-Pittsburgh Corporation; ATMI Inc.; BHA Group Holdings
Inc.; Crown Andersen Inc.; Daw Technologies Inc.; Display Technologies
Inc.; Donaldson Company Inc.; Environmental Elements Corporation;
Environmental Techtonics; Farr Company; Flanders Corporation; Flow
International Corporation; Gorman-Rupp Company; Grayco Inc.; Idex
Corporation; Imtec Inc.; ITEQ Inc.; Met-Pro Corporation; MFRI Inc.; Nordson
Corporation; Osmonics Inc.; Peerless Manufacturing; Pentair Inc.;
Regal-Beloit Corporation; Robbins & Myers Inc.; Roper Industries Inc.;
Spinnaker Industries; Stake Technologies, Ltd.; Taylor Devices Inc.; TB
Woods Corporation; and Tyco International, Ltd. Intec Inc. and Farr Co.
were acquired effective April 2000 and May 2000, respectively.
13
2. APPROVAL OF THE MET-PRO CORPORATION YEAR 2001 EQUITY INCENTIVE PLAN
On April 4, 2001, the Board of Directors (the "Board") adopted the Met-Pro
Corporation Year 2001 Equity Incentive Plan (the "Plan"), which will become
effective upon stockholder approval. The maximum number of shares of the
Company's Common Stock available for issuance under the Plan is three hundred
fifty thousand (350,000), subject to adjustments for stock splits, stock
dividends, and recapitalizations.
The following summary of the Plan is qualified by reference to the complete
text of the Plan, which is attached as Appendix B to this Proxy Statement.
Purpose of the Plan
The purpose of the Plan is to enhance the ability of the Company to attract
and retain employees and other persons who are in a position to make significant
contributions to the growth and success of the Company's business and to
encourage such employees and other persons to advance the long-term interests of
the Company through ownership of shares of the Company's Common Stock.
Description of the Plan
If approved by the stockholders of the Company, the 2001 Equity Incentive
Plan will be effective on June 20, 2001 and terminate on June 19, 2011, unless
earlier terminated by the Board. The 2001 Equity Incentive Plan will be
administered by the Compensation Committee of the Board (the "Committee")
subject to the oversight of the Board. The 2001 Equity Incentive Plan authorizes
the Board to grant (i) "incentive stock options" within the meaning of Section
422 of the Code, (ii) nonqualified stock options, (iii) stock appreciation
rights, (iv) restricted stock grants, (v) deferred stock awards, and (vi) other
stock based awards (collectively, the "Awards") to employees and other persons
who, in the opinion of the Board, are in a position to make a significant
contribution to the success of the Company and its subsidiaries. The Board will
determine (i) the recipients of Awards under the Plan, (ii) the times at which
Awards will be made, (iii) the size and type of Awards, (iv) the form of payment
acceptable in respect to the exercise of an Award, and (v) the terms,
conditions, limitations and restrictions of Awards, including without limitation
the duration of the option, vesting terms, and, as to non-qualified stock
options, early termination provisions.
Eligibility
Those eligible to receive Awards under the Plan will be persons in the
employ of the Company or any of its subsidiaries designated by the Board and
other persons or entities who, in the opinion of the Board, are in a position to
make a significant contribution to the success of the Company or its
subsidiaries, including without limitation, directors of the Company who are not
employees of the Company, consultants and agents of the Company or any
subsidiary.
Awards
Stock Options. The Board can grant either incentive stock options or
nonqualified stock options. Only employees of the Company and its subsidiaries
may be granted incentive stock options. The exercise price of an incentive stock
option shall not be less than the fair market value, or, in the case of a 10% or
greater stockholder of the Company, 110% of the fair market value of the
Company's Common Stock on the date of grant. For purposes of the Plan, fair
market value is defined as the arithmetic mean of the highest and lowest selling
prices of the Common Stock as reported by the New York Stock Exchange, or by
such exchanges or markets as may heretofore be utilized by the Company or as
reported by a nationally recognized broker/dealer which makes a market for the
Common Stock, on such valuation date. The term of an incentive stock option and
the time or times at which such option is exercisable shall be set by the Board
in accordance with the Internal Revenue Service rules or regulations when
applicable. As to non-qualified stock options, the Board has the authority to
set the exercise price, which may be less than the current market value, as well
as all other terms thereof, except for the duration of the option, which shall
not exceed 10 years. Payment of the exercise price of any option may be made in
cash, in shares of Common Stock, or a combination of both at the discretion of
the Board.
Stock Appreciation Rights. The Board may grant stock appreciation rights
("SAR") either alone or in combination with an underlying stock option. The term
of an SAR and the time or times at which an SAR shall be exercisable shall be
set by the Board; provided, that an SAR granted in tandem with an option will be
exercisable only at such times and to the extent that the related option is
exercisable. SARs entitle the participants to receive an amount in cash or
shares of Common Stock with a value equal to the excess of the fair market value
of a share of Common Stock on the date of exercise over the fair market value of
a share of Common Stock on the date the SAR was granted, which represents the
same economic value that would have been derived from the exercise of an option.
Payment may be made in cash, in shares of Common Stock or a combination of both
at the discretion of the Board. If an SAR granted in combination with an
underlying stock option is exercised, the right under the underlying option to
purchase shares of Common Stock will terminate.
14
Restricted Stock Grants. The Board may grant shares of Common Stock under a
restricted stock grant which shall set forth the applicable restrictions,
conditions and forfeiture provisions which shall be determined by the Board and
which may include restrictions on transfer, continuous service with the Company
or any of its subsidiaries, achievement of business objectives, and individual,
subsidiary and Company performance. Shares of Common Stock may be granted
pursuant to a restricted stock grant for no consideration or for any
consideration as determined by the Board. A participant shall be entitled to
vote the shares of Common Stock and receive any dividends thereon prior to the
termination of any applicable restrictions, conditions or forfeiture provisions.
Deferred Stock Awards. The Board may grant shares of Common Stock under a
deferred stock award, with the delivery of such shares of Common Stock to take
place at such time or times and on such conditions as the Board may specify.
Shares of Common Stock may be granted pursuant to deferred stock awards for no
consideration or for any consideration as determined by the Board.
Other Stock Based Awards. The Board shall have the right to grant other
stock based awards under the 2001 Equity Incentive Plan to eligible
participants.
Federal Income Tax Consequences
Stock Options. The grant of an incentive stock option or a nonqualified
stock option does not result in income for the participant or in a deduction for
the Company. The exercise of a nonqualified stock option results in ordinary
income for the participant and a business deduction for the Company measured by
the difference between the option's exercise price and the fair market value of
the shares of Common Stock received at the time of exercise. If the Company is
required to withhold income taxes in connection with the exercise of a
nonqualified stock option, the Board may, in its discretion, permit such
withholding obligation to be satisfied by the delivery of shares of Common Stock
held by the participant or to be delivered to the participant upon exercise of
the option.
The exercise of an incentive stock option does not result in income for the
participant or in a business deduction for the Company, provided that the
employee does not dispose of the shares of Common Stock acquired upon exercise
within two years after the date of grant of the option and one year after the
transfer of the shares of Common Stock upon exercise, and provided further that
the employee is employed by the Company or a subsidiary of the Company from the
date of grant until three months before the date of exercise. If these
requirements are met, the employee's basis in the shares of Common Stock will be
the exercise price. Any gain related to the subsequent disposition of the shares
of Common Stock will be taxed to the employee as a long-term capital gain and
the Company will not be entitled to any deduction. The excess of the fair market
value of the Common Stock on the date of exercise over the exercise price is an
item of tax preference for the employee, potentially subject to the alternative
minimum tax.
If an employee should dispose of the shares of Common Stock acquired
pursuant to the exercise of an incentive stock option prior to the expiration of
either of the designated holding periods, the employee recognizes ordinary
income and the Company is entitled to a business deduction in an amount equal to
the lesser of the fair market value of the shares of Common Stock on the date of
exercise minus the option exercise price or the amount realized on disposition
of the shares of Common Stock minus the option exercise price. Any gain in
excess of the ordinary income recognized by the employee is taxable as long-term
or short-term capital gain, depending on the holding period. If an option,
intended to be an incentive stock option, does not satisfy all of the
requirements of an incentive stock option pursuant to Section 422 of the Code
when granted, the employee recognizes ordinary income upon exercise of the
option and the Company is entitled to a business deduction in an amount equal to
the fair market value of the shares of Common Stock on the exercise date minus
the option exercise price. Income tax withholding is required, in such a case.
SARS. The grant of an SAR does not result in income for the participant or
in a business deduction for the Company for federal income tax purposes. Upon
the exercise of an SAR, the participant recognizes ordinary income and the
Company is entitled to a business deduction measured by the fair market value of
the shares of Common Stock plus any cash received. Income tax withholding is
required for employees of the Company and its subsidiaries.
Restricted Stock Grants and Deferred Stock Awards. If the shares of Common
Stock issued pursuant to a restricted stock grant or deferred stock award are
subject to restrictions resulting in a "substantial risk of forfeiture" pursuant
to the meaning of such term under Section 83 of the Code, the restricted stock
grant or deferred stock award does not result in income for the participant or
in a business deduction for the Company for federal income tax purposes. If
there are no such restrictions, conditions, limitations or forfeiture
provisions, the participant recognizes ordinary income and the Company is
entitled to a business deduction upon receipt of the shares of Common Stock.
Dividends paid to the participant while the stock remained subject to any
restrictions shall be treated as compensation for federal income tax purposes.
At the time the restrictions lapse, the participant receives ordinary income and
the Company is entitled to a business deduction measured by the fair market
value of the shares of Common Stock at the time of lapse. Income tax withholding
is required for employees of the Company and its subsidiaries.
15
Other Stock Based Awards. Any employee of the Company or any of its
subsidiaries who receives shares of Common Stock as bonus compensation or in
lieu of the employee's cash compensation shall recognize ordinary income, and
the Company shall be entitled to a business deduction measured by the fair
market value of the shares of Common Stock issued to the employee.
Vote Required
Approval and adoption by the Company's stockholders of the 2001 Equity
Incentive Plan requires the affirmative vote of a majority of the votes of the
stockholders entitled to vote at this meeting of stockholders.
The Board of Directors recommends a vote FOR the adoption of the Met-Pro
Corporation Year 2001 Equity Incentive Plan.
3. RATIFICATION OF SELECTION OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Unless instructed to the contrary, the persons named in the enclosed proxy
intend to vote the same in favor of the ratification of the selection of
Margolis & Company P.C. as independent certified public accountants to the
Company to serve until the next Annual Meeting of Stockholders, unless such
engagement shall be earlier terminated. That firm, which has acted as
independent auditors of the Company's accounts since 1971, has reported to the
Company that none of its members has any direct financial interest or material
indirect financial interest in the Company.
A representative of Margolis & Company P.C. is expected to attend the
meeting and have an opportunity to make a statement and/or respond to
appropriate questions from stockholders.
The Board of Directors recommends a vote FOR the ratification of the
selection of Margolis & Company P.C. as independent certified public accountants
for the fiscal year ending January 31, 2002.
4. Other Business
The Board of Directors is not aware of any other matters to come before
this meeting. However, if any other matters properly come before the meeting, it
is the intention of the persons named in the enclosed proxy to vote said proxy
in accordance with their judgment in such matters.
16
STOCKHOLDER PROPOSALS
Any stockholder wishing to submit a proposal for inclusion in the written
proxy statement for the 2002 Annual Meeting of Stockholders must submit the
proposal to Secretary, Met-Pro Corporation, 160 Cassell Road, P.O. Box 144,
Harleysville, PA 19438 prior to January 15, 2002 in order to be considered for
inclusion in the proxy statement. The submission of such proposals by
stockholders and the consideration of such proposals by the Company for
inclusion in next year's proxy statement and form of proxy are subject to
applicable rules and regulations of the Securities and Exchange Commission.
Stockholders who wish to present Director nominations or any other business
at the 2002 Annual Meeting of Stockholders, which the Company expects to hold on
June 19, 2002, are required by the Company's By-laws to notify the Secretary in
writing, prior to March 21, 2002. The notice from the stockholder must provide
certain information that is described in Section 13 of the Company's By-Laws. A
copy of these By-Law requirements will be provided upon written request to the
Secretary at the address given in the preceding paragraph, and the notice to the
Secretary containing the required information should be sent to this address as
well.
The Company retains discretion to vote proxies it receives with respect to
proposals received after March 21, 2002. The Company retains discretion to vote
proxies it receives with respect to proposals received prior to March 21, 2002
provided (i) the Company includes in its proxy statement advice on the nature of
the proposal and how it intends to exercise its voting discretion, and (ii) the
proponent does not issue his or her own proxy statement.
Gary J. Morgan,
Secretary
Harleysville, Pennsylvania
May 14, 2001
THE COMPANY WILL FURNISH WITHOUT CHARGE TO EACH PERSON WHOSE PROXY IS BEING
SOLICITED, UPON THE WRITTEN REQUEST OF ANY SUCH PERSON, A COPY OF THE COMPANY'S
ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED JANUARY 31, 2001, AS FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION, INCLUDING THE FINANCIAL STATEMENTS
AND SCHEDULES THERETO. REQUESTS FOR COPIES OF SUCH REPORT SHOULD BE DIRECTED TO
GARY J. MORGAN, SECRETARY, MET-PRO CORPORATION, 160 CASSELL ROAD, P.O. BOX 144,
HARLEYSVILLE, PENNSYLVANIA 19438.
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Appendix A
MET-PRO CORPORATION
AUDIT COMMITTEE CHARTER
Status
The Audit Committee is a committee of the Board of Directors.
Membership
The Committee shall consist of three or more directors all of whom in the
judgment of the Board of Directors shall be independent. Each Member shall in
the judgment of the Board of Directors have the ability to read and understand
the Company's basic financial statements or shall at the time of appointment
undertake training for that purpose. At least one member of the Committee shall
in the judgment of the Board of Directors have accounting or financial
management expertise.
Responsibilities
1. Review with members of the public accounting firm selected as outside
auditors for the Company, the scope of the prospective audit, the estimated fees
therefor and such other matters pertaining to such audit as the Committee may
deem appropriate and receive copies of the annual comments from the outside
auditors on accounting procedures and systems of control; and review with them
any questions, comments or suggestions they may have relating to the internal
controls, accounting practices or procedures of the Company or its subsidiaries.
2. Review, at least annually, the then current and future programs of the
Company's employees performing the internal audit procedures, including the
procedure for assuring implementation of accepted recommendations made by these
employees; receive summaries of all reports issued by the employees performing
the internal audit function; and review the significant matters contained in
such reports.
3. Make or cause to be made, from time to time, such other examinations or
reviews as the Committee may deem advisable with respect to the adequacy of the
systems of internal controls and accounting practices of the Company and its
subsidiaries and with respect to current accounting trends and developments, and
take such action with respect thereto as may be deemed appropriate.
4. Recommend annually the public accounting firm to be outside auditors for
the Company, for the approval by the Board of Directors and set their
compensation.
5. Review with management and the public accounting firm selected as
outside auditors for the Company the annual and quarterly financial statements
(to the extent communications are required by the auditor's professional
standards) of the Company and any material changes in accounting principles or
practices used in preparing the statements prior to the filing of a report on
Form 10K and 10Q with the Securities and exchange Commission. Such review should
include the items required by SAS 61 as in effect at that time in the case of
the annual statements and SAS 71 as in effect at that time in the case of the
quarterly statements.
6. Receive from the outside auditors the report required by Independence
Standards Board Standard No. 1 as in effect at that time and discuss it with the
outside auditors.
7. Review the status of compliance with laws, regulations, and internal
procedures, contingent liabilities and risks that may be material to the
Company, the scope and status of systems designed to assure Company compliance
with laws, regulations and internal procedures, through reports from management,
legal counsel and other third parties as determined by the Committee on such
matters, as well as major legislative and regulatory developments which could
materially impact the Company's contingent liabilities and risks.
Meetings
The Committee shall meet two times each year and at such other times as it
deems necessary to fulfill its responsibilities.
Report
The Committee shall prepare a report each year concerning its compliance
with this charter for inclusion in the Company's proxy statement relating to the
election of directors.
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Appendix B
MET-PRO CORPORATION YEAR 2001 EQUITY INCENTIVE PLAN
1. Purpose.
The purpose of this Met-Pro Corporation Year 2001 Equity Incentive Plan
(the "Plan") is to advance the interests of Met-Pro Corporation (the "Company")
and its subsidiaries by enhancing the ability of the Company to (i) attract and
retain employees and other persons or entities who are in a position to make
significant contributions to the success of the Company and its subsidiaries;
(ii) reward such persons for such contributions; and (iii) encourage such
persons or entities to take into account the long-term interest of the Company
through ownership of shares of the Company's Common Stock (the "Common Stock").
The Plan is intended to accomplish these objectives by enabling the Company
to grant awards ("Awards") in the form of incentive stock options ("ISOs"),
nonqualified stock options ("Nonqualified Options")(ISOs and Nonqualified
Options shall be collectively referred to herein as "Options"), stock
appreciation rights ("SARs"), restricted stock ("Restricted Stock"), deferred
stock ("Deferred Stock"), or other stock based awards ("Other Stock Based
Awards"), all as more fully described below.
2. Administration.
The Plan will be administered by the Compensation Committee (the
"Committee") of the Board of Directors of the Company (the "Board"), provided,
however, that in the event that no such Committee is appointed by the Board, the
Board shall have all duties and powers reserved to the Committee, and the term
"Committee" as used herein shall refer to the Board. In any event, the Committee
is subject to the oversight of the Board. The Committee may be constituted to
permit the Plan to comply with the "Non-Employee Director" requirement of Rule
16b-3 promulgated under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), or any successor rules, and to comply with the "outside
director" requirement of Section 162(m)(4)(C)(i) of the Internal Revenue Code of
1986, as amended (the "Code"), and the regulations promulgated thereunder, or
any successor rules. The Committee will determine the recipients of Awards, the
times at which Awards will be made, the size and type or types of Awards to be
made to each recipient, and will set forth in each such Award the terms,
conditions and limitations applicable to the Award granted. Awards may be made
singly, in combination or in tandem. Relative to optionees, the Committee will
have full and exclusive power to interpret the Plan, to adopt rules, regulations
and guidelines relating to the Plan, to grant waivers of Plan restrictions and
to make all of the determinations necessary for its administration. Such
determinations and actions of the Committee, and all other determinations and
actions of the Committee made or taken under authority granted by any provision
of the Plan, will be conclusive and binding on all parties.
3. Effective Date and Term of Plan.
The Plan will become effective on June 20, 2001. Awards under the Plan may
be made prior to that date, subject to stockholder approval of the Plan.
The Plan will terminate on June 19, 2011, subject to earlier termination of
the Plan by the Board pursuant to Section 18 herein. No Award may be granted
under the Plan after the termination date of the Plan, but Awards previously
granted may extend beyond that date pursuant to the terms of such Awards.
4. Shares Subject to the Plan.
Subject to adjustment as provided in Section 16 herein, the aggregate
number of shares of Common Stock reserved for issuance pursuant to Awards
granted under the Plan shall be three hundred fifty thousand (350,000). The
shares of Common Stock delivered under the Plan may be either authorized but
unissued shares of Common Stock or shares of the Company's Common Stock held by
the Company as treasury shares, including shares of Common Stock acquired by the
Company in open market and private transactions. No fractional shares of Common
Stock will be delivered pursuant to Awards granted under the Plan and the
Committee shall determine the manner in which fractional share value will be
treated.
If any Award requiring exercise by a Participant for delivery of shares of
Common Stock is cancelled or terminates without having been exercised in full,
or if any Award payable in shares of Common Stock or cash is satisfied in cash
rather than Common Stock, the number of shares of Common Stock as to which such
Award was not exercised or for which cash was substituted will be available for
future Awards of Common Stock; provided, however, that Common Stock subject to
an Option cancelled upon the exercise of an SAR shall not again be available
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for Awards under the Plan unless, and to the extent that, the SAR is settled in
cash. Shares of Restricted Stock and Deferred Stock forfeited to the Company in
accordance with the Plan and the terms of the particular Award shall be
available again for Awards under the Plan unless the Committee determines
otherwise.
5. Eligibility and Participation.
Those eligible to receive Awards under the Plan (each, a "Participant") and
collectively, the ("Participants") will be persons in the employ of the Company
or any of its subsidiaries designated by the Committee ("Employees") and other
persons or entities who, in the opinion of the Committee, are in a position to
make a significant contribution to the success of the Company or its
subsidiaries, including without limitation, non-employee Directors of the
Company, consultants and agents of the Company or any subsidiary; provided, that
such consultants and agents have been actively engaged in the conduct of the
business of the Company or any subsidiary. A "subsidiary" for purposes of the
Plan will be a present or future corporation of which the Company owns or
controls, or will own or control, more than 50% of the total combined voting
power of all classes of stock or other equity interests.
6. Options.
(a) Nature of Options. An Option is an Award entitling the Participant to
purchase a specified number of shares of Common Stock at a specified exercise
price. Both ISOs, as defined in Section 422 of the Code, and Nonqualified
Options may be granted under the Plan; provided however, that ISOs may be
awarded only to Employees.
(b) The exercise price of each Option shall be equal to the "Fair Market
Value" (as defined below) of the Common Stock on the date the Award is granted
to the Participant; provided, however, that (i) in the Committee's discretion,
the exercise price of a Nonqualified Option may be less than the Fair Market
Value of the Common Stock on the date of grant; (ii) with respect to a
participant who owns more than ten percent (10%) of the total combined voting
power of all classes of stock of the Company, the exercise price of an ISO
granted to such Participant shall not be less than one hundred and ten percent
(110%) of the Fair Market Value of the Common Stock on the date the Award is
granted; and (iii) with respect to any Option repriced by the Committee, the
exercise price shall be equal to the Fair Market Value of the Common Stock on
the date such Option is repriced unless otherwise determined by the Committee.
For purposes of this Plan, Fair Market Value is defined as the arithmetic mean
of the highest and lowest selling prices of the Common Stock as reported by the
New York Stock Exchange or exchanges or markets as may heretofore be utilized by
the Company or as reported by a nationally recognized broker/dealer which makes
a market in the Common Stock, on such valuation date.
(c) Duration of Options. The term of each Option granted to a Participant
pursuant to an Award shall be determined by the Committee; provided, however,
that in no case shall an Option be exercisable more than ten (10) years (five
(5) years in the case of an ISO granted to a ten-percent stockholder as defined
in (b) above) from the date of the Award.
(d) Exercise of Options and Conditions. Except as otherwise provided in
Sections 16 and 17 herein, and except as otherwise provided below with respect
to ISOs, Options granted pursuant to an Award will become exercisable at such
time or times, and subject to such conditions, as the Committee may specify at
the time of the Award. The Options may be subject to such restrictions,
conditions and forfeiture provisions as the Committee may determine, including,
but not limited to, restrictions on transfer, continuous service with the
Company or any of its subsidiaries, achievement of business objectives, and
individual, division and Company performance. To the extent exercisable, an
Option may be exercised either in whole at any time or in part from time to
time. With respect to an ISO granted to a Participant, the Fair Market Value of
the shares of Common Stock on the date of grant which are exercisable for the
first time by a Participant during any calendar year shall not exceed $100,000.
To qualify for capital gains treatment, the recipient of an ISO must hold the
Common Stock purchased in exercise thereof for a period of two years from the
date of the grant of the ISO but not less than one year after the shares of
Common Stock have been transferred to him and must remain in the employ of the
Company for the entire time from the date the ISO is granted until three months
before the date of the exercise thereof.
(e) Payment for and Delivery of Stock. Full payment for shares of Common
Stock purchased will be made at the time of the exercise of the Option, in whole
or in part. Payment of the purchase price will be made in cash or in such other
form as the Committee may, in its sole discretion, permit, including, without
limitation, delivery of shares of Common Stock, duly endorsed for transfer to
the Company with a Fair Market Value on the date of exercise of an Option or
date of issuance of any other Award equal to the aggregate exercise price of the
Options or exercised portion thereof, or the full consideration to be paid for
any other Award. If payment for the Common Stock is to be made in cash, then
full payment will be made at the time of the exercise of an Option and at the
time of issuance of any other Award. If the Committee permits payment for the
Common Stock acquired to be made in Common Stock owned by the Participant, then
the Company shall provide written notice to the Participant of the number of
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shares of Common Stock which must be delivered in full payment of the Option
exercise price or the consideration required to be paid for any other Award, and
the Participant shall deliver such number of shares of Common Stock to the
Company within two (2) business days of the receipt of such notice from the
Company.
7. Stock Appreciation Rights.
(a) Nature of Stock Appreciation Rights. A SAR is an Award entitling the
recipient to receive payment, in cash and/or shares of Common Stock, determined
in whole or in part by reference to appreciation in the value of a share of
Common Stock. A SAR entitles the recipient to receive in cash and/or shares of
Common Stock, with respect to each SAR exercised, the excess of the Fair Market
Value of a share of Common Stock on the date of exercise over the Fair Market
Value of a share of Common Stock on the date the SAR was granted.
(b) Grant of SARs. SARs may be subject to Awards in tandem with, or
independently of, Options granted under the Plan. A SAR granted in tandem with
an Option which is not an ISO may be granted either at or after the time the
Option is granted. A SAR granted in tandem with an ISO may be granted only at
the time the ISO is granted and may expire no later than the expiration of the
underlying ISO.
(c) Exercise of SARs. A SAR not granted in tandem with an Option will
become exercisable at such time or times, and on conditions, as the Committee
may specify. A SAR granted in tandem with an Option will be exercisable only at
such times, and to the extent, that the related Option is exercisable. A SAR
granted in tandem with an ISO may be exercised only when the market price of the
shares of Common Stock subject to the ISO exceeds the exercise price of the ISO,
and the SAR may be for no more than one hundred percent (100%) of the difference
between the exercise price of the underlying ISO and the Fair Market Value of
the Common Stock subject to the underlying ISO at the time the SAR is exercised.
At the option of the Committee, upon exercise, an SAR may be settled in cash,
Common Stock or a combination of both.
8. Restricted Stock.
A Restricted Stock Award entitles the recipient to acquire shares of Common
Stock, subject to certain restrictions or conditions, for no cash consideration,
if permitted by applicable law, or for such other consideration as may be
determined by the Committee. The Award may be subject to such restrictions,
conditions and forfeiture provisions as the Committee may determine, including,
but not limited to, restrictions on transfer, continuous service with the
Company or any of its subsidiaries, achievement of business objectives, and
individual, division and Company performance. Subject to such restrictions,
conditions and forfeiture provisions as may be established by the Committee, any
Participant receiving an Award of Restricted Stock will have all the rights of a
stockholder of the Company with respect to the shares of Restricted Stock,
including the right to vote the shares and the right to receive any dividends
thereon.
9. Deferred Stock.
A Deferred Stock Award entitles the recipient to receive shares of Common
Stock to be delivered in the future. Delivery of the shares of Common Stock will
take place at such time or times, and on such conditions, as the Committee may
specify. At the time any Deferred Stock Award is granted, the Committee may
provide that the Participant will receive an instrument evidencing the
Participant's right to future delivery of Deferred Stock.
10. Other Stock Based Awards.
The Committee shall have the right to grant Other Stock Based Awards under
the Plan to Employees which may include, without limitation, the grant of shares
of Common Stock as bonus compensation and the issuance of shares of Common Stock
in lieu of an Employee's cash compensation.
11. Award Agreements.
The grant of any Award under the Plan may be evidenced by an agreement
which shall describe the specific Award granted and the terms and conditions of
the Award. Any Award shall be subject to the terms and conditions of any such
agreement required by the Committee.
12. Transfers.
No Award (other than an outright Award in the form of Common Stock without
any restrictions) may be assigned, pledged or transferred other than by will or
by the laws of descent and distribution and, during a Participant's lifetime,
will be exercisable only by the Participant or, in the event of a Participant's
incapacity, by the Participant's guardian or legal representative.
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13. Rights of a Stockholder.
Except as specifically provided by the Plan, the receipt of an Award will
not give a Participant rights as a stockholder of the Company. The Participant
will obtain such rights, subject to any limitations imposed by the Plan, or the
instrument evidencing the Award, upon actual receipt of shares of Common Stock.
14. Conditions on Delivery of Stock.
The Company will not be obligated to deliver any shares of Common Stock
pursuant to the Plan or to remove any restrictions or legends from shares of
Common Stock previously delivered under the Plan until (a) in the opinion of the
Company's counsel, all applicable federal and state laws and regulations have
been complied with and (b) all other legal matters in connection with the
issuance and delivery of such shares of Common Stock have been approved by the
Company's counsel. If the sale of shares of Common Stock has not been registered
under the Securities Act of 1933, as amended (the "Act"), and qualified under
the appropriate "blue sky" laws, the Company may require, as a condition to
exercise of the Award, such representations and agreements as counsel for the
Company may consider appropriate to avoid violation of such Act and laws and may
require that the certificates evidencing such shares of Common Stock bear an
appropriate legend restricting transfer.
If an Award is exercised by a Participant's legal representative, the
Company will be under no obligation to deliver shares of Common Stock pursuant
to such exercise until the Company is satisfied as to the authority of such
representative.
15. Tax Withholding.
The Company will have the right to deduct from any cash payment under the
Plan taxes that are required to be withheld and to condition the obligation to
deliver or vest shares of Common Stock under this Plan upon the Participant's
paying the Company such amount as the Company may request to satisfy and
liability for applicable withholding taxes. The Committee may in its discretion
permit Participants to satisfy all or part of their withholding liability either
by delivery of shares of Common Stock held by the Participant or by withholding
shares of Common Stock to be delivered to a Participant upon the grant or
exercise of an Award.
16. Adjustment of Award.
(a) In the event that a dividend shall be declared upon the Common Stock
payable in shares of Common Stock, the number of shares of the Common Stock then
subject to any Award and the number of shares of the Common Stock which may be
issued under the Plan but not yet covered by an Award shall be adjusted by
adding to each share the number of shares which would be distributable thereon
if such shares had been outstanding on the date fixed for determining the
stockholders entitled to receive such stock dividend.
(b) In the event that the outstanding shares of Common Stock shall be
changed into or exchanged for a different number or kind of shares of Common
Stock or other securities of the Company or of another corporation or for cash,
whether through reorganization, recapitalization, stock split, combination of
shares, sale of assets, merger or consolidation, then, there shall be
substituted for each share of the Common Stock then subject to any Award, the
number and kind of shares of stock or other securities or the amount of cash
into which each outstanding share of the Common Stock shall be so changed or for
which each such share shall be exchanged.
(c) Any adjustment in the numbers of shares of Common Stock shall apply
proportionately to only the unexercised portion of an Option granted hereunder.
If a fraction of a share of Common Stock would result from any such adjustment,
the adjustment shall be revised to the next lower whole number of shares.
17. Termination of Service.
Upon a Participant's termination of service with the Company or a
subsidiary (if an employee only of a subsidiary), any outstanding Award shall be
subject to the terms and conditions set forth below, unless otherwise determined
by the Committee:
(a) In the event a Participant leaves the employ or service of the Company
or a subsidiary, whether voluntarily or otherwise but other than by reason of
the Participant's death or "disability" (as such term is defined in Section
22(e)(3) of the Code), each ISO granted to the Participant shall terminate upon
the earlier to occur of (i) the expiration of the period three (3) months after
the date of such termination or (ii) the date specified in the ISO Award;
provided, that, prior to the termination of such ISO, the Participant shall be
able to exercise any part of the ISO which is exercisable as of the date of
termination unless the Award shall otherwise so provide. Further, each
outstanding share of Restricted Stock and each outstanding Deferred Stock Award
B-4
which remains subject to any restrictions or conditions of the Award shall be
forfeited to the Company upon such date of termination. For purposes of the
Plan, the retirement of a Participant either pursuant to a pension or retirement
plan adopted by the Company or at the normal retirement date prescribed from
time to time by the Company shall be deemed to be the termination of such
Participant's employment. For purposes of this subparagraph, an employee who
leaves the employ of the Company to become an employee of a subsidiary or parent
corporation of the Company or a corporation which has assumed the Option of the
Company as a result of a corporate reorganization, etc. shall not be considered
to have terminated his employment.
(b) Except as otherwise provided in this Paragraph 17(b), in the event a
Participant's employment with or service to the Company or its subsidiaries
terminates by reason of the Participant's death or "disability" (as such term is
defined in Section 22(e)(3) of the Code), each ISO granted to the Participant
shall become immediately exercisable and shall terminate upon the earlier to
occur of (i) the expiration of the period one (1) year after the date of such
termination or (ii) the date specified in the ISO. An ISO may not be exercised
and an Award may not be deemed unrestricted pursuant to this subparagraph except
to the extent that the Participant was entitled to exercise the ISO or take the
Award free of all restrictions at the time of termination of employment by
reason of death or disability.
18. Amendments and Termination.
The Committee will have the authority to make such amendments to any terms
and conditions applicable to outstanding Awards as are consistent with this
Plan; provided, that, (i) except for adjustments under Section 16 hereof, no
such action will modify such Award in a manner adverse to the Participant
without the Participant's consent except as such modification is provided for or
contemplated in the terms of the Award, and (ii) except for adjustments provided
for in Section 16 of this Plan, the exercise price of any ISO, or the
consideration due the Company with respect to any other Award, shall not be
repriced or otherwise amended without the approval of the Company's
stockholders.
The Board may amend, suspend or terminate the Plan, except that no such
action may be taken, without stockholder approval, which would effectuate any
change for which stockholder approval is required pursuant to Section 16 of the
Exchange Act or Section 162(m) of the Code. In any event, no action may, without
the consent of a Participant, alter or impair any Award previously granted to
the Participant under the Plan.
19. Successors and Assigns.
The provision of this Plan shall be binding upon all successors and assigns
of any such Participant including, without limitation, the estate of any such
Participant and the executors, administrators, or trustees of such estate, and
any receiver, trustee in bankruptcy or representative of the creditors of any
such Participant.
20. Miscellaneous.
(a) This Plan shall be governed by and construed in accordance with the
laws of the State of Delaware.
(b) Any and all funds received by the Company under the Plan may be used
for any corporate purpose.
(c) Nothing contained in the Plan or any Award granted under the Plan shall
confer upon a Participant any right to be continued in the employment of the
Company or any subsidiary, or interfere in any way with the right of the
Company, or its subsidiaries, to terminate the employment relationship at any
time.
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[GRAPHIC OMITTED]
Please date, sign and mail your
proxy card back as soon as possible
Annual Meeting of Stock holders
MET-PRO CORPORATION
June 20, 2001
Please Detach and Mail in the Envelope Provided
- --------------------------------------------------------------------------------
Please mark ---
your votes as X
indicated in ---
this example.
1. ELECTION OF DIRECTORS.
NOMINEES: Two Directors for a term expiring in 2004
William L. Kacin
Nicholas DeBenedictis
For the nominees listed above [ ]
Withhold Authority to vote for the nominees listed above [ ]
(To withhold authority to vote for any nominee(s), write
the name(s) of the nominee(s) in the space that follows)
- ---------------------------------------------------------
For Against Abstain
2. Proposal to approve the adoption of the Met-Pro Year 2001 Equity Incentive [ ] [ ] [ ]
Plan.
3. Proposal to Ratify the appointment of Margolis & Company P.C. as independent [ ] [ ] [ ]
certified public accountants.
4. In their discretion, the Proxies are authorized to vote upon such other business as may properly come
before the meeting.
This Proxy when properly executed, will be voted in the manner directed here by
the undersigned stockholder. If no direction is made, this Proxy will be voted
FOR Proposals 1, 2 and 3.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
Signature _____________________________ Signature if held jointly _________________________________ Dated: ____________, 2001
Note: Please sign exactly as name appears. When shares are held by joint tenants, both should sign, When signing as attorney,
executor, administrator, trustee or guardian, pleas give your full title. If a corporation, please sign in full corporate name
by President or other authorized officer. If a partnership, please sign in partnership name by authorized person.
PROXY
MET-PRO CORPORATION
160 Cassell Road
Harleysville, Pennsylvania 19438
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints William L. Kacin and Alan Lawley as
Proxies, each with the power to appoint his substitute, and hereby authorizes
them to represent and vote, as designated on the reverse side, all the shares of
Common Stock of Met-Pro Corporation held of record by the undersigned on April
30, 2001 at the Annual Meeting of the Stockholders to be held on June 20, 2001
or any adjournment thereof.
(Continued on reverse side)