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]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for use of the Commission only (as permitted by Rule
14a-6(e)(2)
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Materials Pursuant to Exchange Act Rule 14a-11(c) or Rule
14a-12
- --------------------------------------------------------------------------------
MET-PRO CORPORATION
(Name of registrant as specified in its charter)
- --------------------------------------------------------------------------------
Payment of Filing Fee (Check the appropriate box)::
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials:
- --------------------------------------------------------------------------------
[ ] Check box if any part of fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
- --------------------------------------------------------------------------------
(1) Amount previously paid:
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(2) Form, Schedule or Registration Statement No.:
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(4) Date Filed:
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[LOGO]
160 CASSELL ROAD, HARLEYSVILLE, PENNSYLVANIA 19438
NOTICE OF ANNUAL MEETING
OF STOCKHOLDERS
TO BE HELD ON JUNE 4, 1997
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
DOUBLETREE GUEST SUITES, 640 WEST GERMANTOWN PIKE (AT HICKORY ROAD) IN PLYMOUTH
MEETING, PENNSYLVANIA, on June 4, 1997, at the hour of 11:30 a.m. for the
following purposes:
1. To elect three Directors to serve until the 2000 Annual Meeting
of Stockholders.
2. To amend the Company's Certificate of Incorporation to increase
the number of shares of Common Stock authorized thereunder from
10,000,000 to 18,000,000.
3. To consider and act upon a proposal to ratify the adoption of
the Company's 1997 Stock Option Plan.
4. To ratify the selection of Margolis & Company P.C. as
independent certified public accountants for the Company's
fiscal year ending January 31, 1998.
5. To transact such other business as may properly come before the
meeting.
Only stockholders of record at the close of business on April 11,
1997 are entitled to notice of and to vote at such meeting or any adjournment
thereof.
William F. Moffitt,
Secretary
Harleysville, Pennsylvania
April 25, 1997
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 4, 1997. 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 nominee to the Company's Board of Directors and in favor of each of the
other proposals set forth in the Notice of the 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 proxyholders will have to vote for a substitute or
alternate nominee. In the event that any other matter should come before the
meeting or the nominee is not available for election, the person 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 mails.
The total number of shares of Common Stock of the Company
outstanding as of April 11, 1997 was 7,095,673 (excluding treasury shares). 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 11, 1997 will be entitled to vote. All
matters submitted 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 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 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, 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 April 25, 1997.
1. ELECTION OF DIRECTORS
The Company's Board of Directors presently consists of six members
who have been divided into three classes: one class of one Director, one class
of two Directors and one class of three Directors, as provided in the Company's
Certificate of Incorporation, as amended.
Unless otherwise indicated in valid proxies received pursuant to
this solicitation, such proxies will be voted for the election of the person(s)
listed below as nominee(s) for the term set forth below. Management has no
reason to believe that the nominee(s) will not be available or will not serve if
elected, but if they should become unavailable to serve as a Director, full
discretion is reserved to the persons named as proxies to vote for such other
person(s) 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
NUMBER AND
PERCENTAGE OF SHARES
OF COMMON STOCK
YEAR OWNED BENEFICIALLY
FIRST (DIRECTLY OR
BECAME INDIRECTLY) AS OF
NAME AGE PRINCIPAL OCCUPATION DIRECTOR APRIL 11, 1997*
NOMINEES FOR TERM TO EXPIRE IN 2000
Alan Lawley 63 Dr. Lawley is the Grosvenor Professor of 1990 33,985 0.5%
Metallurgy in the Department of Materials
Engineering at Drexel University, Philadelphia,
Pennsylvania. He is a Fellow of ASM, 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.
Thomas F. Hayes 74 Mr. Hayes was President of Philadelphia Gear 1985 28,500 0.4%
Corporation, a privately held corporation, from
1969 to 1984, when he retired. He is a West Point
graduate, and a member of the board of Managers of
Beneficial Savings Bank, Philadelphia,
Pennsylvania, and a former Director of PM Company,
Philadelphia, Pennsylvania.
William F. Moffitt 47 Mr. Moffitt has been Vice President of Finance, 1993 54,478 0.8%
Secretary, Treasurer and Chief Financial Officer
of the Company since 1986. He is a Certified
Public Accountant.
The Board of Directors recommends a vote FOR the election of the above nominees as Directors.
DIRECTOR WHOSE TERM EXPIRES IN 1999
Walter A. Everett 75 Mr. Everett is the former President and current 1968 68,461 1.0%
Chairman of the Board of the Company. Except for a
brief period prior to August 15, 1990, he has been
a Director of the Company for the past
twenty-seven years.
*Includes stock options currently exercisable.
2
NUMBER AND
PERCENTAGE OF SHARES
OF COMMON STOCK
YEAR OWNED BENEFICIALLY
FIRST (DIRECTLY OR
BECAME INDIRECTLY) AS OF
NAME AGE PRINCIPAL OCCUPATION DIRECTOR APRIL 11, 1997*
DIRECTORS WHOSE TERM EXPIRES IN 1998
William L. Kacin 65 Mr. Kacin was elected President, Chief Executive 1993 89,642 1.2%
Officer and a Director of the Company on February
18, 1993. Prior to that, he was Vice President and
General Manager of the Company's Sethco Division
for seventeen years.
Richard P. Klopp 76 Mr. Klopp, from 1968 to 1983, was Chairman of the 1987 61,603 0.9%
Board, President and Chief Executive Officer of
Catalytic, Inc., a company engaged in the design
and manufacture of equipment related to the
chemical and petrochemical industries. Mr. Klopp
is presently retired.
*Includes stock options currently exercisable.
BOARD AND COMMITTEE PARTICIPATION
The Board of Directors of the Company held six (6) meetings during
the fiscal year ended January 31, 1997. All Directors were in attendance at each
of such meetings.
The Audit Committee of the Board (composed of Mr. Hayes, Chairman,
and Dr. Lawley) reviews the activities of the Company's independent auditors
(including fees, services and scope of the audit), reviews the Company's
internal audit policies and procedures and the preparation of the Company's
financial statements, and reports and makes recommendations to the Board with
respect thereto. The Audit Committee met once during fiscal 1997.
The Compensation Committee of the Board (composed of Mr. Klopp,
Chairman, and Dr. Lawley) reviews and recommends to the Board appropriate action
with respect to all matters pertaining to compensation of officers and other key
employees of the Company. See the Committee's report on page 7 of this proxy
statement. The Compensation Committee met once in fiscal 1997.
The Stock Option Committee (composed of Mr. Hayes, Chairman, and
Mr. Klopp) met four times during fiscal 1997.
The Company does not have a 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 Walter A. Everett, Chairman.
Non-employee Directors currently receive a fee of $1,250 per regular
meeting, but no fee for committee meetings, telephone meetings or stockholder
meetings. A retainer fee of $7,500 per year is also paid to all Directors in
quarterly installments.
3
PRINCIPAL SECURITY HOLDERS
The following table sets forth as of April 11, 1997 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 and the holdings of all of the Company's
officers and Directors as a group:
NAME AND ADDRESS APPROXIMATE
OF OWNER OR AMOUNT OF PERCENTAGE
IDENTITY OF GROUP SHARES OWNED OF CLASS
- ----------------- ------------ -----------
Dimensional Fund Advisors, Inc. 411,119(1) 5.7%
1299 Ocean Avenue
Santa Monica, CA 90401
All officers and Directors as a group 584,518(2)(3) 8.1%
(14 persons)
- ----------------
(1) Dimensional Fund Advisors Inc. ("Dimensional"), a registered investment
advisor, is deemed to have beneficial ownership of 411,119 shares of
Met-Pro Corporation stock as of December 31, 1996, all of which 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.
(2) Includes exercisable options to purchase 126,001 shares of Common Stock.
(3) Excludes 24,539 shares beneficially owned by Carl W. Dean's wife and
children, as to which he disclaims any beneficial interest.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee is responsible for reviewing compensation
plans, programs and policies relating to cash remuneration, monitoring
performance and cash compensation of executive officers and reporting to the
Board concerning that area of executive compensation. In formulating its
recommendations, the Committee considers the Company's after-tax earnings and
sales volume as compared to previous years, taking into account expenditures
generated in pursuit of long-term growth objectives.
Officers' salaries are keyed to maintaining compensation at competitive
levels to assure continued availability of highly qualified personnel, with due
consideration given to economic conditions in the locale where officers are
employed.
Compensation opportunities consist of year-end salary increases and
bonuses. Salary increases for Vice Presidents managing the Company's divisions
or subsidiaries are based on managerial performance, significant problem
solving, cost control, contribution of a division or subsidiary to pre-tax
earnings, development of new products, exploitation of markets and other growth
factors. Salary increases and bonuses of the Chief Executive Officer and the
Financial Vice President are based on the overall financial results of
operations and their perceived skills, as demonstrated in problem solving and
daily management, as well as in planning and carrying out short-term and
long-term objectives.
The Company's bonus program for officers is not designed to establish a
category of "at risk" compensation. It is rather an extra award for satisfactory
to exceptional performance. Where bonuses are granted, they generally range from
3% to 10% of annual salary, but can be as high as 25% in cases of unusual
achievement.
4
The Chief Executive Officer presents to the Committee a written
evaluation of each officer's performance and his recommendation as to salary
increases and bonuses and this is carefully considered by the Committee and
discussed with the Chairman of the Board and the Chief Executive Officer.
Richard P. Klopp (Chairman)
Dr. Alan Lawley
December 18, 1996
EXECUTIVE COMPENSATION AND OTHER INFORMATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table shows, for the fiscal years ended January 31, 1995,
1996 and 1997, the cash compensation paid by the Company, as well as certain
other compensation paid or accrued for those years, to each of the most highly
compensated executive officers of the Company where cash compensation exceeded
$100,000 (the "Named Executive Officers") in all capacities in which they
served.
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION LONG-TERM COMPENSATION
---------------------------------------- ------------------------------
AWARDS
------
ALL OTHER
NAME AND PRINCIPAL SALARY BONUS OPTIONS COMPENSATION
POSITION YEAR ($) ($) (#) ($) (1)
- ------------------ ---- -------- ------- ------ ------------
W. A. Everett 1997 $121,500 $ 0 13,500 (2) $3,252
Chairman 1996 121,500 0 0 3,627
1995 114,000 0 0 2,655
W. L. Kacin 1997 $251,750 $50,000 0 $4,014
President & Chief 1996 234,625 42,000 30,000 (2) 4,477
Executive Officer 1995 219,375 35,000 0 3,438
W. F. Moffitt 1997 $153,750 $30,000 0 $4,014
Vice President Finance, 1996 143,750 24,000 18,000 (2) 4,477
Secretary/Treasurer, 1995 130,625 20,000 0 3,438
Chief Financial Officer
L. T. Secrest 1997 $93,750 $350,000 (3) 7,500 $4,014
Vice President &
General Manager
Strobic Air Corporation
C. W. Dean 1997 $93,587 $29,166 0 $2,906
Vice President & 1996 89,503 3,000 9,000 (2) 2,761
General Manager 1995 87,253 1,000 0 2,023
Dean Pump Division
- --------------------
(1) The total amount shown in this column for all fiscal years are contributions
to the Salaried Employee Stock Ownership Trust (ESOT) as described on page
7. There are no other Long-Term Compensation Programs other than a Pension
Plan and Directors' Retirement Plans as discussed on page 6.
(2) Adjusted for 3-for-2 stock split which occurred on July 8, 1996.
(3) Reference "Employment Agreement" on page 6 for detailed commentary.
OPTION EXERCISES AND HOLDINGS
The following table sets forth information with respect to the named
executive officers, concerning the exercise of options during the last fiscal
year and unexercised options held as of the fiscal year ended January 31, 1997:
5
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR,
AND FISCAL YEAR END OPTION VALUE
VALUE OF UNEXERCISED
SHARES NUMBER OF UNEXERCISED IN-THE-MONEY
ACQUIRED OPTIONS AT OPTIONS AT FY-END
ON VALUE FY-END (#) ($)(2)
EXERCISE REALIZED ---------------------------- --------------------------
NAME (#) ($) (1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ------- -------- ----------- ------------- ----------- -------------
W. A. Everett 0 $0 13,500 0 $104,625 $ 0
W. L. Kacin 0 0 36,876 9,999 236,336 46,695
W. F. Moffitt 0 0 34,500 6,000 246,615 28,020
L. T. Secrest 0 0 2,500 5,000 2,188 4,375
C. W. Dean 0 0 13,087 3,000 101,512 14,010
(1) Market rate of underlying securities at date of exercise, minus the
exercise price.
(2) Market value of underlying securities at year-end, minus the exercise
price.
DIRECTORS' RETIREMENT PLAN
With a view to encouraging long-term service by Directors and
continuity of management, while making such service more attractive to possible
replacements when necessary, the Company adopted a deferred compensation program
for the Directors on October 12, 1994. The Plan 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, a lump sum will be paid to the
deceased's spouse or estate equal to the total amount payable over ten years,
less the total paid prior to death.
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.
EMPLOYMENT AGREEMENT
In connection with the Company's acquisition by way of merger of
Strobic Air Corporation on September 12, 1996, the Company entered into a
three-year employment agreement with Lynn T. Secrest to serve as Vice President
and General Manager of the Company's new wholly owned subsidiary. The agreement
provided for an initial bonus of $350,000, and an annual salary of $250,000,
payable in semi-monthly installments. The agreement provides for a bonus in the
amount of $150,000 payable on the last day of employment. The Company has no
other employment agreements.
TERMINATION OF EMPLOYMENT AND CHANGE OF CONTROL ARRANGEMENTS
Certain executive officers of the Company are party to a written
agreement with the Company which provides that in the event the Company
terminates their employment, other than for cause, within nine (9) months
following a change of control, or if such employee voluntarily terminates such
employment within nine (9) 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 such person's option, in equal monthly installments over a two (2) year
period. Change of control is defined under the agreement as either the
acquisition by any person or group of persons acting in concert of 35% or more
beneficial ownership of the Company's voting securities or a change in the
majority composition of the Company's Board of Directors. The base annual
salaries currently payable to Messrs. Kacin and Moffitt are $260,000 and
$155,000, respectively.
The Directors' Retirement Plan also provides for the payment of
certain benefits in the event of a change of control, as discussed above.
6
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
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,
1997, the Company made contributions to the Trust in the aggregate amount of
$9,534 for Walter A. Everett, $11,929 for William L. Kacin, $11,929 for William
F. Moffitt, $4,014 for Lynn T. Secrest, $7,690 for Carl W. Dean and $80,505 for
all executive officers as a group (11 persons).
STOCK OPTION PLANS
The Company's 1987 Stock Option Plan (the "1987 Plan") was adopted
by the Company's Board of Directors on April 9, 1987 and by its stockholders on
June 3, 1987. 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. All options granted under the 1987 Plan expire no later than
April 9, 1997. All options granted under the 1992 Plan expire on October 10,
2001.
Both 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 total
number of shares of the Company's Common Stock which may be issued pursuant to
each Plan may not exceed one hundred thousand (100,000) shares plus an
indeterminate number of additional shares resulting from anti-dilution
adjustments.
On June 5, 1996, the Company granted Nonstatutory Stock Options to
buy 27,000 shares each at $6.00 per share (valued at $9.00 prior to 3-for-2
stock split of July 8, 1996) to Mr. Everett and Dr. Lawley. During the year,
Incentive Stock Options to buy a total of 21,000 shares were also granted to two
officers and one employee at market prices. The following table relates to
certain of the options which expire on either April 9, 1997 or October 10, 2001,
respectively.
POTENTIAL REALIZABLE VALUE
NUMBER OF PERCENTAGE OF OF ASSUMED ANNUAL RATES OF
SECURITIES TOTAL OPTIONS STOCK PRICE APPRECIATION
UNDERLYING GRANTED TO FOR OPTION TERM
OPTIONS EMPLOYEES ---------------------------------
NAME GRANTED IN FISCAL YEAR 5% ($) 10% ($)
---- ------- -------------- ------ -------
(a) (b) (c) (d) (e)
W. A. Everett 13,500 21.95% $111,047 $116,335
W. L. Kacin 0 - - -
W. F. Moffitt 0 - - -
L. T. Secrest 7,500 12.20% 26,677 58,952
C. W. Dean 0 - - -
PENSION PLAN
Participants in the Company's pension plans receive retirement
income based on their salaries for the final five years of service, their age at
retirement and their total number of years of service to the Company. The
following table indicates the estimated benefits payable for various salary
levels upon retirement at age 65, after 20, 25, 30 and 35 years of credited
service to the Company:
YEARS OF SERVICE
--------------------------------------------------------
FINAL FIVE YEAR AVERAGE SALARY 20 25 30 35
------------------------------ -- -- -- --
$ 50,000 $10,000 $12,500 $15,000 $17,500
75,000 15,000 18,750 22,500 26,250
100,000 20,000 25,000 30,000 35,000
125,000 25,000 31,250 37,500 43,750
150,000 30,000 37,500 45,000 52,500
200,000 35,000 43,750 52,500 61,250
Costs of the Company's pension plans are not and cannot be readily
allocated to individual employees. The Company's contributions to these plans
during its fiscal year ended January 31, 1997 approximated 1.1% of the total
remuneration paid to all plan participants.
7
CERTAIN TRANSACTIONS
Everett Process Systems, owned by Bruce Everett (the son of Walter
A. Everett), received commissions for the sale of certain products sold to
customers. The commissions, which amounted to $59,718 during the past fiscal
year, were at rates and terms applicable generally to the Company's distributors
in the normal course of business.
PERFORMANCE GRAPH
COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN
Met-Pro Corporation,
AMEX Market Index and Peer Group Index
[GRAPH]
1992 1993 1994 1995 1996 1997
Met-Pro Corporation 100.00 79.71 109.69 131.01 171.52 238.56
Peer Group Index 100.00 105.28 124.64 120.11 161.29 215.72
AMEX Market Index 100.00 98.21 117.27 102.35 131.19 141.19
(A) The graph above compares the performance of Met-Pro Corporation with that
of the AMEX Market Index and a Peer Group made up of the following
securities: Advanced Tech Materials; Air-Cure Technologies; Alanco
Environmental Resources; Ampco-Pittsburgh Corporation; BHA Group; BWIP
Inc.; Camco International, Inc.; Crown Andersen, Inc.; Daw Technologies,
Inc.; Donaldson Company, Inc.; Dresser Industries, Inc.; Duriron, Inc.;
Environ Elements Corporation; Environmental Tectonics; Farr Company; Flow
International Corporation; Gorman-Rupp Company; Goulds Pumps, Inc.;
Grayco Inc.; Haskel International, Inc.; Index Corporation;
IMO Industries, Inc.; Imtec, Inc.; Industrial Acoustics, Inc.; Interlake
Corporation; Ionic Fuel Technology; La-Man Corporation; Met-Pro
Corporation; MFRI, Inc.; Nordson Corporation; Noxso Corporation;
Osmonics, Inc.; Peerless Manufacturing; Pentair, Inc.; Purus, Inc.;
Regal-Beloit Corporation; Robbins & Myers, Inc.; Roper Industries, Inc.;
Soligen Technologies, Inc.; Spinnaker Industries; Stake Technologies,
Ltd.; Sundstrand Corporation; Taylor Devices, Inc.; Trion, Inc.; Tyco
International, Ltd.; United Air Specialists; and Waste Technology
Corporation.
(B) The comparison of total return on investment (change in year-end stock
price plus reinvested dividends) for each of the periods assumes that
$100 was invested on January 31, 1992 in each of Met-Pro Corporation, the
AMEX Market Index and the Peer Group Index.
(C) The Company was required to develop a "Peer Group Index" for the fiscal
year ended January 31, 1997 and the last five (5) preceding years, based
on selected Standard Industry Codes to replace the AMEX Capital Goods
Index which was discontinued by the American Stock Exchange as of
December 31, 1996.
8
2. AMENDMENT TO CERTIFICATE OF INCORPORATION
TO INCREASE AUTHORIZED CAPITALIZATION
The Board of Directors has recommended an amendment to the Company's
Certificate of Incorporation to increase the number of shares of Common Stock,
par value $.10 per share, which the Company shall be authorized to issue from
10,000,000 to 18,000,000. The Board believes it is essential to increase the
authorized capital of the Company in order to have additional shares available
for acquisitions, financings, present and future employee benefit programs and
other corporate purposes. However, Met-Pro has no plans, arrangements,
understandings or commitments at this time for the issuance of additional shares
of Common Stock. The additional shares may be issued from time to time as the
Board of Directors may determine without further action of the stockholders of
the Company. The Board of Directors considers it advisable to have the
authorization to issue such additional shares in order to enable Met-Pro, as the
need may arise, to move promptly to take advantage of market conditions and the
availability of other favorable opportunities without the delay and expense
involved in calling a stockholders' meeting for such purpose.
Stockholders of the Company do not currently possess, nor upon the
adoption of the proposed amendment will they acquire preemptive rights, which
would entitle such persons, as a matter of right, to subscribe for the purchase
of any security of the Company. Issuance of additional shares of Common Stock
could, under such circumstances, dilute the voting rights, equity and earnings
per share of existing common stockholders. Nevertheless, Met-Pro anticipates
that it would receive value for additional shares issued, minimizing or
eliminating the economic effect of any such dilution to stockholders.
The affirmative vote of the holder of a majority of the outstanding
shares of Common Stock of the Company is required for approval of this proposal.
The change effected by this amendment is to Article Fourth of the
Certificate of Incorporation, which as amended would read:
"FOURTH; The total number of shares of stock which the Corporation
shall have authority to issue is Eighteen Million (18,000,000), each
share to be designated Common Stock and to have a par value of Ten
Cents ($.10), amounting to aggregate capital of One Million Eight
Hundred Thousand Dollars ($1,800,000)."
The Board of Directors recommends a vote FOR the adoption of the
foregoing proposal.
3. PROPOSAL TO RATIFY ADOPTION
OF THE COMPANY'S 1997 STOCK OPTION PLAN
At the Meeting, there will be submitted to the Company's stockholders a
proposal to ratify the adoption by the Board of Directors, on February 24, 1997,
of the Company's 1997 Stock Option Plan (the "1997 Plan"). In the event that the
Company's stockholders shall fail to ratify the 1997 Plan, such plan will be
terminated. The following summary of the provisions of the 1997 Plan is
qualified in its entirety by express reference to the text of the 1997 Plan
attached hereto as Exhibit A.
PURPOSE
The purpose of the 1997 Plan is to advance the interests of the Company
by inducing persons of outstanding ability and potential to join and remain with
the Company, by encouraging and enabling employees to acquire proprietary
interests in the Company and by providing the participating employees with
additional incentive to promote the success of the Company. Options to purchase
shares under the 1997 Plan may be granted thereunder to any of the Company's
employees subject to certain eligibility requirements (see "Eligibility").
ADMINISTRATION
The 1997 Plan provides for its administration by a committee consisting
of two (2) disinterested Directors who have not received any grants of options
or Common Stock of the Company for at least one year and who have been
designated by the Board of Directors (the "Committee"). The Committee will have
discretionary authority (subject to certain restrictions) to determine the
individuals to whom, the times at which and the exercise price for which,
options will be granted. The Committee will also interpret the 1997 Plan and
prescribe rules, regulations and forms relating to its administration. The
ownership of unexercised options by a member of the Committee will not preclude
his vote on any matter in connection with the administration of or
interpretation of the 1997 Plan.
9
SHARES SUBJECT TO THE 1997 PLAN
A total of 350,000 authorized but currently unissued shares of the
Company's Common Stock has been reserved for issuance under the 1997 Plan. The
1997 Plan provides for appropriate adjustments in the event of stock dividends,
stock splits, recapitalizations and other changes in the Company's capital
structure.
NATURE OF OPTIONS
The Committee may grant options under the Plan which are intended to
meet the requirements of Section 422 of the Internal Revenue Code of 1986 as
amended (the "Code") (the "Incentive Stock Options"). In addition, the Committee
may grant options under the 1997 Plan which are not intended to meet the
requirements of Section 422 of the Code (the "Nonstatutory Stock Options"). The
Federal income tax consequences of both Incentive Stock Options and Nonstatutory
Stock Options are described below under "Federal Income Tax Consequences".
ELIGIBILITY
Subject to certain limitations set forth in the 1997 Plan, options to
purchase shares may be granted thereunder to persons, other than Committee
members who, in the case of Incentive Stock Options, are full-time employees
(including officers and Directors) of either the Company or any subsidiary of
the Company, or, in the case of Nonstatutory Stock Options, are employees or
non-employee Directors of the Company or any subsidiary.
OPTION PRICE
The option price of shares of Common Stock subject to an Incentive Stock
Option under the 1997 Plan may not be less than the fair market value of the
shares on the date upon which such option is granted. In addition, in the case
of an optionee of an Incentive Stock Option who owns, at the time the option is
granted, more than 10% of the total combined voting power of all classes of
stock of the Company or of a subsidiary of the Company (a "10% Stockholder"),
the purchase price of the shares may not be less than 110% of the fair market
value of the shares on the date upon which such option is granted. On April 11,
1997, the closing price of the Company's Common Stock upon the American Stock
Exchange was $12.50 per share.
The option price of shares subject to Nonstatutory Stock Options shall
be determined by the Committee in its sole discretion.
NON-TRANSFERABILITY
Options granted under the 1997 Plan are not transferable other than by
will, the laws of descent and distribution, or pursuant to a qualified domestic
relations court order, and such options are exercisable, during a holder's
lifetime, only by him.
LIMITATION ON EXERCISE
In order to comply with the Code, the aggregate market value of the
shares with respect to which any Incentive Stock Option is exercisable for the
first time during any year under any incentive stock option plan maintained by
the Company or a parent and subsidiary of the Company, shall not exceed
$100,000.
No Incentive Stock Option granted under the 1997 Plan shall be
exercisable after the expiration of ten (10) years from the date of its grant.
If, however, an Incentive Stock Option is granted to a 10% Stockholder, such
option shall not be exercisable after the expiration of five (5) years from the
date of its grant.
DEATH, DISABILITY OR TERMINATION OF EMPLOYMENT
If the employment of an option holder under the 1997 Plan shall be
terminated voluntarily by the employee or if such termination shall be made for
cause, or if the services of a non-employee Director shall be terminated
voluntarily by the Director or for cause, such option shall expire immediately.
If such employment or services shall terminate other than by reason of death,
voluntarily by the employee or non-employee Director or for cause, such option
may be exercised at any time within three (3) months after such termination (but
in no event after the expiration of the option). For the purposes of the 1997
Plan, the retirement of an individual 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 a termination of such
individual's employment other than voluntarily by the employee or for cause.
If an option holder under the 1997 Plan (i) dies or becomes permanently
or totally disabled while employed by the Company or while serving as a
non-employee Director of the Company, or (ii) dies within three (3) months after
the termination of his employment or service other than voluntarily or for
cause, such option may be exercised by the option holder or his legatee,
legatees, his personal representatives or distributees at any time within one
(1) year after his death or termination of employment due to disability.
10
AMENDMENT AND TERMINATION
The 1997 Plan (but not options previously granted thereunder) shall
terminate on February 24, 2007. The 1997 Plan may be amended or terminated at an
earlier date by the Company's Board of Directors or by a majority of the
outstanding shares entitled to vote thereon. No such termination, however, may
adversely affect the rights of holders of then outstanding options without the
consent of such persons.
FEDERAL INCOME TAX CONSEQUENCES
NONSTATUTORY STOCK OPTIONS
Under the Code and the Treasury Department Regulations thereunder (the
"Regulations"), a Nonstatutory Stock Option does not ordinarily have a "readily
ascertainable fair market value" when it is granted. This rule will apply to the
Company's grant of Nonstatutory Stock Options. Consequently, the grant of a
Nonstatutory Stock Option to an optionee will result in neither income to him
nor a deduction to the Company. Instead, the optionee will recognize
compensation income at the time he exercises the option in an amount equal to
the excess, if any, of the then fair market value of the shares transferred to
him over the option price. Subject to the applicable provisions of the Code and
the Regulations, a deduction will be allowable to the Company in the year of
exercise in the same amount as is includible in the optionee's income.
For purposes of determining the optionee's gain or loss on the sale or
other disposition of the shares transferred to him upon exercise of a
Nonstatutory Stock Option, the optionee's basis in such shares will be the sum
of his option price plus the amount of compensation income recognized by him on
exercise. Such gain or loss will be long-term or short-term capital gain
depending on whether he has held the shares for more than one year, or for one
year or less.
INCENTIVE STOCK OPTIONS
Options granted under the Plan which qualify as Incentive Stock Options
under Section 422 of the Code will be treated as follows:
No tax consequences will result to the optionee or the Company from the
grant of an Incentive Stock Option to, or (except as stated below with respect
to the "alternative minimum tax") upon the exercise of an Incentive Stock Option
by, the optionee. Instead, the optionee will recognize gain or loss when he
sells or disposes of the shares transferred to him upon exercise of the option.
For purposes of determining such gain or loss, the optionee's basis in such
shares will be his option price. If the date of sale or disposition of such
shares is at least two (2) years after the date of the grant of the Incentive
Stock Option and at least one (1) year after the transfer of the shares to him
upon exercise of the option, the optionee will be entitled to long-term capital
gain treatment upon their sale or disposition.
The Company generally will not be allowed a deduction with respect to an
Incentive Stock Option. However, if an optionee fails to meet the foregoing
holding-period requirements, any gain recognized by the optionee upon sale or
disposition of the shares transferred to him upon exercise of an Incentive Stock
Option will be treated in the year of such sale or disposition as ordinary
income, rather than capital gain, to the extent of the excess, if any, of the
fair market value of the shares at the time of exercise (or, if less, in certain
cases the amount realized on such sale or disposition) over their option price,
and in that case the Company will be allowed a corresponding deduction.
The amount, if any, by which the fair market value of the shares
transferred to the optionee upon the exercise of an Incentive Stock Option
exceeds the option price will constitute an "item of tax preference" subject in
certain circumstances to the "alternative minimum tax". Such item for tax
preference will increase the optionee's basis in his stock for purposes of the
alternative minimum tax.
The foregoing is only a brief summary of the applicable federal income
tax laws and should not be relied upon as being a complete statement. The
federal tax laws are complex, and they are subject to legislative changes and
new or revised judicial or administrative interpretations. In addition to the
Federal income tax consequences described herein, the grant of options under the
Plan or the receipt of shares upon exercise thereof may also have state and
local tax consequences.
Ratification of the adoption of the 1997 Plan, as set forth above,
requires the affirmative vote of the holders of a majority of the Company's
outstanding shares of Common Stock present in person or by proxy at the Meeting.
The Board of Directors recommends a vote FOR ratification of this
proposal.
11
4. RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
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
employment 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, 1998.
STOCKHOLDER PROPOSALS
Stockholder proposals intended to be presented at the Company's 1998
Annual Meeting of Stockholders pursuant to the provisions of Rule 14a-8 of the
Securities and Exchange Commission, promulgated under the Securities Exchange
Act of 1934, as amended, must be received at the Company's offices in
Harleysville, Pennsylvania, by January 1, 1998, for inclusion in the Company's
proxy statement and form of proxy relating to that meeting.
William F. Moffitt,
Secretary
Harleysville, Pennsylvania
April 25, 1997
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, 1997, 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
WILLIAM L. KACIN, PRESIDENT, MET-PRO CORPORATION, 160 CASSELL ROAD,
HARLEYSVILLE, PENNSYLVANIA 19438.
12
EXHIBIT A
MET-PRO CORPORATION
1997 STOCK OPTION PLAN
1. PURPOSE OF THE PLAN. The Met-Pro Corporation 1997 Stock Option Plan
(the "Plan") is intended to advance the interests of Met-Pro Corporation (the
"Company") by inducing persons of outstanding ability and potential to join and
remain with the Company by encouraging and enabling employees to acquire
proprietary interests in the Company, and by providing the participating
employees with an additional incentive to promote the success of the Company.
This is accomplished by providing for the granting of "Options" (which term
includes, as used herein, both "Incentive Stock Options" and "Nonstatutory Stock
Options", as later defined) to qualified employees and non-employee Directors.
2. ADMINISTRATION. The Plan shall be administered by a committee (the
"Committee") of two disinterested Directors who shall be appointed annually by
the Board of Directors at the Annual Meeting of the Board of Directors for the
election of officers. If a vacancy should occur in the Committee, the Directors
may appoint a substitute, who shall also be a disinterested Director, at any
subsequent meeting of the Board of Directors. For the purposes hereof, a
Director shall be deemed "disinterested" if such Director shall not have been
granted or awarded equity securities of the Company under any of its plans
during such Director's period of service as a member of the Committee and for
the year prior thereto. Excepting as herein provided, the interpretation or
construction by the Committee of any provision of the Plan or of any Option
granted under it shall he final and conclusive. The Committee shall have full
authority to select plan participants. The ownership of an unexercised Option by
a member of the Committee shall not preclude such member's vote on any matters
in connection with the administration or interpretation of the Plan, provided
that such member shall be duly qualified to serve.
3. SHARES SUBJECT TO THE PLAN. The stock subject to grant under the Plan
shall be shares of the Company's Common Stock, par value $.10 per share (the
"Common Stock"), whether authorized but unissued or held in the Company's
treasury or purchased from stockholders expressly for use under the Plan. The
maximum number of shares of Common Stock which may be issued pursuant to Options
granted under the Plan shall not exceed Three Hundred Fifty Thousand (350,000),
subject to adjustment in accordance with the provisions of Section 12 hereof.
The Company shall, at all times while the Plan is in force, reserve such number
of shares of Common Stock as will be sufficient to satisfy the requirements of
all outstanding Options granted under the Plan. In the event any Option granted
under the Plan shall expire or terminate for any reason without having been
exercised in full or shall, for any reason, cease to be exercisable in whole or
in part, the unpurchased shares subject thereto shall again be available for
Options under the Plan.
4. PARTICIPATION. The class of persons eligible to receive Options under
the Plan shall be (i) with respect to Incentive Stock Options described in
Section 6 hereof, all salaried full-time employees (including officers) of the
Company or of any parent or subsidiary corporation of the Company, and (ii) with
respect to Nonstatutory Stock Options described in Section 7 hereof, all
salaried full-time employees (including officers) and any non-employee Directors
of the Company or of any parent or subsidiary corporation of the Company. The
Committee, in its sole discretion but subject to the provisions of the Plan,
shall determine the employees and the non-employee Directors of the Company or
its subsidiary or parent corporations to whom Options shall be granted and the
number of shares to be covered by each Option, taking into account the nature of
the employment or services rendered by the individuals being considered, their
annual compensation, their present and potential contributions to the success of
the Company and such other factors as the Committee may deem relevant.
5. STOCK OPTION AGREEMENT. Each Option granted under the Plan shall be
authorized by the Committee and shall be evidenced by a Stock Option Agreement
which shall be executed by the Company and by the person to whom such Option is
granted. The Stock Option Agreement shall specify the number of shares of Common
Stock as to which the Option is granted, the period during which the Option is
exercisable and the Option price thereof and may contain such other provisions
as the Committee shall deem appropriate.
6. INCENTIVE STOCK OPTIONS. The Committee may grant Options (designated
herein as "Incentive Stock Options") under the Plan which are intended to meet
the requirements of Section 422 of the U.S. Internal Revenue Code of 1986 as
amended (the "Code") and which are subject to the following terms and conditions
and any other terms and conditions as may at any time be required by Section 422
or any other applicable section of the Code:
(a) No Incentive Stock Option shall be granted to individuals other than
full-time salaried employees of the Company or of a subsidiary or parent
corporation of the Company or to anyone holding Ten Percent or more of the
Company's outstanding Common Stock, unless the requirements of Section 6(d)
below with respect to option purchase price and five year limitation on exercise
shall be met.
(b) Each Incentive Stock Option under the Plan must be granted prior to
February 24, 2007, which is within ten ( 10) years from the date the Plan was
adopted by the Board of Directors.
13
(c) The option price of the shares subject to any Incentive Stock Option
shall be not less than the fair market value of the Common Stock at the time
such Incentive Stock Option is granted.
(d) No Incentive Stock Option granted under the Plan shall be
exercisable after the expiration of ten (10) years from the date of its grant.
However, if an Incentive Stock Option is granted to an individual who owns, at
the time the Incentive Stock Option is granted, more than ten percent (10%) of
the total combined voting power of all classes of stock of the Company or of a
parent or subsidiary corporation of the Company, such Incentive Stock Option
shall not be exercisable after the expiration of five (5) years from the date of
its grant and shall be exercisable at a price equal to 110% of fair market value
at the date of grant. Every Incentive Stock Option granted under the Plan shall
be subject to earlier termination as expressly provided in Section 10 hereof.
(e) The holder of an Incentive Stock Option must hold the stock
purchased in exercise thereof for a period of two years from the date of the
grant of the Incentive Stock Option but not less than one year after the shares
have been transferred to him and must remain in the employ of the Company for
the entire time from the date the Option is granted until three (3) months
before the date of the exercise thereof, excepting as provided in Section 10
hereof
(f) For purposes of the Plan, fair market value shall be determined by
the Committee. If the stock subject to the Option is listed on a national
securities exchange or traded in the Over-the-Counter market as reported by the
National Quotation Bureau or NASDAQ the fair market value shall be the closing
price on the day before the grant of the Option. If there is no trading on that
day, the mean of the high bid and low asked price on that day, or if there are
no bid and asked prices on that day, the closing price on the most recent day
preceding the day as of which such price was to be determined shall be used.
(g) For the purposes of Subsection (c) of this Section 6, the
attribution rules set forth in Section 318 of the Code shall apply.
7. NONSTATUTORY STOCK OPTIONS. The Committee may grant Options under the
Plan which are not intended to meet the requirements of Section 422 of the Code,
as well as Options which are intended to meet such requirements, but the terms
of which provide that they will not be treated as Incentive Stock Options
(referred to herein as "Nonstatutory Stock Options"). Nonstatutory Stock Options
shall be subject to the following terms and conditions:
(a) They may be granted to any person eligible to receive an Option
under the Plan pursuant to Section 4(ii) hereof.
(b) The option price of the shares subject to a Nonstatutory Stock
Option shall be determined by the Committee, in its absolute discretion, at the
time of the grant of such Option, but shall not, in any event, be less than the
par value of the shares as to which the Option is granted.
(c) A Nonstatutory Stock Option granted under the Plan may be of such
duration, not longer than ten (10) years, as shall be determined by the
Committee, and shall be subject to earlier termination as expressly provided in
Section 10 hereof.
8. LIMITATION OF RIGHTS OF OPTION HOLDERS. The holder of any Option
granted under the Plan shall have none of the rights of a stockholder with
respect to the shares covered by his Option until such shares shall be issued to
him upon the exercise of the Option.
9. TRANSFERABILITY. No Option granted under the Plan shall be
transferable by the individual to whom it was granted otherwise than by Will
or the laws of descent and distribution. During the lifetime of such
individual, such option shall not be exercisable by any other person, but
only by such Optionee.
10. TERMINATION OF EMPLOYMENT OR DEATH.
(a) Subject to the provisions of this Section 10, if the employment of
an employee by, or the services of a non-employee Director of, the Company or a
subsidiary or parent corporation of the Company, shall be terminated voluntarily
by the Employee or the non-employee Director, or for cause, his Option shall
expire on the effective date of such termination. If such employment or services
shall terminate otherwise than by reason of death, voluntarily or for cause,
such Option may be exercised at any time within three (3) months after the
effective date of such termination, subject to the provisions of subparagraph
(d) of this Section 10. For purposes of the Plan, the retirement of an
individual 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 termination of such individual's employment
14
other than voluntarily or for cause. For the 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) If the holder of an Option under the Plan dies (i) while employed by
or while serving as a non-employee Director of the Company or of a parent or
subsidiary corporation of the Company, or (ii) within three (3) months after the
termination of his employment or services other than voluntarily or for cause,
such Option may, subject to the provisions of subparagraph (d) of this Section
10, be exercised by his estate or by the person who acquired the right to
exercise the Option by bequest or inheritance or by reason of the death of such
employee or non-employee Director at any time within one (1) year after such
death.
(c) If the holder of an Option under the Plan ceases employment because
of permanent and total disability as defined in the Code while employed or while
serving as a non-employee Director, such Option may, subject to the provisions
of subparagraph (d) of this Section 10, be exercised at any time within one (1)
year after his termination of employment or directorship due to the disability.
(d) An Option may not be exercised pursuant to this Section 10 excepting
to the extent that the original holder was entitled to exercise it at the time
of termination of employment, termination of directorship, or death, and, in any
event, may not be exercised after the expiration of the Option.
(e) For purposes of this Section 10, the employment relationship of an
employee of the Company or of a subsidiary or parent of the Company will be
treated as continuing intact while he is on military or sick leave or other bona
fide leave of absence if such leave does not exceed ninety (90) days, or, if
longer, so long as his right to reemployment is guaranteed by statute or by
contract or is granted pursuant to established policy of the Company.
11. EXERCISE OF OPTIONS.
(a) Unless otherwise provided in the Stock Option Agreement, any Option
granted under the Plan shall be exercisable in whole at any time, or in part
from time to time, prior to its expiration, but in no case may any Option be
exercised as to less than One Hundred (100) shares at any one time (or as to the
remaining shares if less than One Hundred). The Committee may, in its absolute
discretion, provide in any Stock Option Agreement that the exercise of any
Option granted under the Plan shall be subject (i) to such condition or
conditions as it may impose, including but not limited to a condition that the
holder thereof remain in the employ or service of the Company or a subsidiary or
parent of the Company for such period or periods from the date of grant of the
Option as the Committee, in its absolute discretion, shall determine; and (ii)
to such limitations as it may impose, including but not limited to a limitation
that the aggregate fair market value of the Common Stock with respect to which
Incentive Stock Options are exercisable for the first time by any employee
during any calendar year under all plans of the Company, its subsidiaries and
its parents shall not exceed One Hundred Thousand Dollars ($100,000). For the
purposes of this Section, "ma rket value" shall be the market value determined
at the time of grant of the Option. In addition, in the event that under any
Stock Option Agreement the aggregate fair market value of the Common Stock with
respect to which Incentive Stock Options are exercisable for the first time by
any employee during any calendar year under all plans of the Company and its
parent and subsidiary corporations exceeds One hundred Thousand Dollars
($100,000), the Committee may, when shares are transferred upon exercise of such
Options, designate those shares which shall be treated as transferred upon
exercise of an Incentive Stock Option and those shares which shall be treated as
transferred upon exercise of a Non-Statutory Stock Option. This limitation shall
be applied to the unexercised Incentive Stock Options in the order in which they
were granted.
(b) An Option granted under the Plan shall be exercised by the delivery
by the holder thereof to the Company at its principal office (attention of the
President) of written notice of the number of shares with respect to which the
Option is being exercised. Such notice shall be accompanied by payment. Payment
methods may include any of the following, as determined by the Committee at the
date of grant and provided for in the Option Agreement:
(i) By check payable to the order of the Company for the full
price of the shares purchased;
(ii) By delivery of a notice instructing the Company to deliver
the shares being purchased to a bank or broker, subject to the bank's or
broker's delivery of cash to the Company equal to the purchase price; or
(iii) By delivery of a promissory note for the entire purchase
price bearing interest at the then prime rate offered by the Company's principal
bank and maturing in no more than thirteen months after the date thereof. Such
note shall be secured by the delivery of shares of the Company's Common Stock
having a market value on the date of delivery, as determined pursuant to Section
6(f) hereof, equal to 150% of the face value of the note.
15
Notwithstanding the foregoing, an optionee who is subject to Section
16(b) of the Securities Exchange Act may use the payment methods described in
clauses (ii) and (iii) only if (A) the option being exercised was granted at
least six months prior to the date of exercise and (B) the Optionee has not sold
any shares of the Company's Common Stock within such period.
12. ADJUSTMENT UPON CHANGE IN CAPITALIZATION.
(a) In the event that the outstanding Common Stock of the Company is
hereafter changed by reason of reorganization, merger, consolidation,
recapitalization, reclassification, stock split-up, combination of shares, stock
dividends or the like, an appropriate adjustment shall be made by the Committee
in (i) the aggregate number of shares available under the Plan, (ii) the number
of shares and option price per share subject to outstanding Options and (iii)
any limitation on exercisability referred to in Section 11(a)(ii) hereof which
is set forth in outstanding Incentive Stock Options. If the Company shall be
reorganized, consolidated or merged with another corporation, or if all, or
substantially all, of the assets of the Company shall be sold or exchanged, the
holder of an Option shall, at the time of issuance of the stock under such a
corporate event, be entitled to receive upon exercise of the Option, the same
number and kind of shares of stock or the same amount of property, cash or
securities as he would have been entitled to receive upon the happening of such
corporate event if he had been, immediately prior to such event, the holder of
the number of shares covered by his Option; provided, however, that in such
event, the Committee shall have the discretionary power to take any action
necessary or appropriate to prevent the Incentive Stock Options granted
hereunder from being disqualified as "incentive stock options" under the then
existing provisions of the Code or any law amendatory thereof or supplemental
thereto.
(b) Any adjustment in the number of shares shall apply proportionately
to only the unexercised portion of an Option granted hereunder. If a fraction of
a share would result from any such adjustment, the adjustment shall be revised
to the next lower whole number of shares.
13. FURTHER CONDITIONS OF EXERCISE.
(a) Unless prior to the exercise of the Option, the shares issuable upon
such exercise have been registered with the Securities and Exchange Commission
pursuant to the Securities Act of 1933, as amended, the notice of exercise shall
be accompanied by a representation or agreement of the individual exercising the
Option to or with the Company to the effect that such shares are being acquired
for investment and not with a view to the resale or distribution thereof, or
such other documentation as may be required by the Company, unless in the
opinion of counsel to the Company such representation, agreement or
documentation is not necessary to comply with such Act.
(b) The Company shall not be obligated to deliver any Common Stock until
it has been listed on each securities exchange on which the Common Stock may
then be listed or until there has been qualification under or compliance with
such State or Federal laws, rules or regulations as the Company may deem
applicable. The Company shall use reasonable efforts to effect such listing,
qualifications and compliance.
14. EFFECTIVENESS OF THE PLAN. The Plan was originally adopted by the
Board of Directors on February 24, 1997 The Plan shall be subject to approval by
the affirmative vote of a majority of the outstanding shares of Common Stock of
the Company present in person or by proxy at a meeting of stockholders of the
Company convened for such purpose prior to February 24, 1998, that being within
one ( 1) year of adoption of the Plan by the Board of Directors. In the event
such stockholder approval is withheld or otherwise not received prior to
February 24, 1998, the Plan and all Options which may have been granted
thereunder shall become null and void.
15. TERMINATION, MODIFICATION AND AMENDMENT.
(a) The Plan (but not Options previously granted under the Plan) shall
terminate on February 24, 2007, which is within ten ( 10) years from the date of
its adoption by the Board of Directors, or sooner as hereinafter provided, and
no Option shall be granted after termination of the Plan.
(b) The Plan may be terminated or may, from time to time, be modified or
amended by the affirmative vote of the holders of a majority of the outstanding
shares of Common Stock of the Company present in person or by proxy at a meeting
of stockholders of the Company convened for such purpose.
(c) The Board of Directors may at any time on or before February 24,
2007, terminate the Plan, or from time to time make such modifications or
amendments to the Plan as it may deem advisable; provided, however, that the
Board of Directors shall not, without approval by the affirmative vote of the
holders of a majority of the outstanding shares of Common Stock of the Company
present in person or by proxy at a meeting of stockholders of the Company
convened for such purpose, increase (excepting as provided in Section 12 hereof)
the maximum number of shares as to which Incentive Stock Options may be granted
16
or change the designation of the employees or class of employees eligible to
receive Options or make any other change which would prevent an Option intended
to be granted as an Incentive Stock Option from qualifying as such within the
meaning of the then existing provisions of the Code or any law amendatory
thereof or supplemental thereto.
(d) No termination, modification or amendment of the Plan may, without
the consent of the individual to whom an Option shall have been previously
granted under the Plan, adversely affect the rights conferred by such Option.
16. NOT A CONTRACT OF EMPLOYMENT. Nothing contained in the Plan or in
any Stock Option Agreement executed pursuant to the Plan shall be deemed to
confer upon any individual to whom an Option is or may be granted hereunder any
right to remain in the employ or service of the Company or a subsidiary or
parent of the Company.
17. USE OF PROCEEDS. The proceeds from the sale of shares pursuant to
Options granted under the Plan shall constitute general funds of the Company.
18. INDEMNIFICATION OF THE COMMITTEE. In addition to such other rights
of indemnification as they may have, the members of the Committee shall be
indemnified by the Company to the extent permitted under applicable law against
all costs and expenses reasonably incurred by them in connection with any
action, suit or proceeding to which they or any of them may be a party by reason
of any action taken or failure to act under or in connection with the Plan or
any rights granted thereunder, and against all amounts paid by them in
settlement thereof or in satisfaction of a judgment or decision in any such
action, suit or proceeding, excepting a judgment based upon a finding of bad
faith. Upon the institution of any such action, suit or proceeding, the
Committee member or members shall notify the Company in writing, giving the
Company an opportunity at its own cost to defend the same before such Committee
member or members undertake to defend the same on their own behalf.
19. DEFINITIONS. For purposes of the Plan, the terms "parent
corporation" and "subsidiary corporation" shall have the meanings set forth
in the Code, and the masculine shall include the feminine.
20. GOVERNING LAW. The Plan shall be governed by, and all questions
shall be determined in accordance with, the laws of the State of Delaware.
17
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 Walter A. Everett and Richard P. Klopp 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
11, 1997 at the Annual Meeting of Stockholders to be held on June 4, 1997 or any
adjournment thereof.
(Continued on reverse side)
*FOLD AND DETACH HERE*
Please mark your votes
This Proxy when properly executed will be voted as indicated in
in the manner directed here by the undersigned this example [x]
stockholders. If no direction is made, this Proxy
will be voted FOR Proposals 1, 2, 3 and 4.
1. Election of Three Directors for a term expiring in 2000:
FOR WITHHOLD Thomas F. Hayes, Alan Lawley, William F. Moffitt
AUTHORITY (To withhold authority to vote for any nominee(s), write the
TO VOTE FOR name(s) of the nominee(s) in the space that follows)
[ ] [ ]
-------------------------------------------------
2. Proposal to Amend Certificate of Incorporation to increase the number of
shares of Common Stock authorized from 10,000,000 to 18,000,000.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. Proposal to Ratify the adoption of the Company's 1997 Stock Option Plan.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
4. Proposal to Ratify the Appointment of Margolis & Company P.C. as independent
auditors.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
5. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
Please sign exactly as name appears. When shares are held by joint tenants,
both should sign. When signing as an attorney, executor, administrator,
trustee, or guardian, please give full title as such. 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.
Dated:______________________________,1997
_________________________________________
Signature
_________________________________________
Signature if held jointly
PLEASE MARK, SIGN, DATE AND RETURN THIS
PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE
*FOLD AND DETACH HERE*