================================================================================
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:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- --------------------------------------------------------------------------------
(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
================================================================================
MET-PRO
CORPORATION
160 CASSELL ROAD, HARLEYSVILLE, PENNSYLVANIA 19438
NOTICE OF ANNUAL MEETING
OF STOCKHOLDERS
TO BE HELD ON JUNE 3, 1998
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 3, 1998, at the hour of 11:30 a.m. for the
following purposes:
1. To elect two Directors to serve until the 2001 Annual
Meeting of Stockholders, one Director to serve until the 2000
Annual Meeting of Stockholders and one Director to serve until
the 1999 Annual Meeting of Stockholders.
2. To ratify the selection of Margolis & Company P.C. as
independent certified public accountants for the Company's
fiscal year ending January 31, 1999.
3. To transact such other business as may properly come before
the meeting.
Only stockholders of record at the close of business on April 10,
1998 are entitled to notice of and to vote at such meeting or any adjournment
thereof.
Gary J. Morgan,
Secretary
Harleysville, Pennsylvania
April 24, 1998
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 3, 1998. 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 10, 1998 was 6,999,298 (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 10, 1998 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 24, 1998.
1. ELECTION OF DIRECTORS
At the meeting, four Directors, William L. Kacin, Nicholas
DeBenedictis, Gary J. Morgan and Jeffrey H. Nicholas, are to be elected to serve
for terms that expire at the 2001, 2001, 2000 and 1999 Annual Meetings,
respectively. Richard P. Klopp, whose term as a Director will expire at the 1998
Annual Meeting, is not standing for reelection, having reached the mandatory
retirement age for Directors. Information regarding the Board's four nominees is
set forth at page 2. Information regarding the Directors whose terms expire in
2000, 1999 and 1998 is set forth at page 3.
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 10, 1998(1)
- ---- --- -------------------- -------- -------------------
NOMINEES FOR TERM TO EXPIRE IN 2001
William L. Kacin 66 Mr. Kacin has been the President, Chief 1993 100,438(2) 1.4%
Executive Officer and a Director of the
Company since February 1993. Prior to that,
he was Vice President and General Manager
of the Company's Sethco Division for
seventeen years.
Nicholas DeBenedictis 51 Mr. DeBenedictis is Chairman of the Board, 1997 2,000 *
President and Chief Executive Officer of
Philadelphia Suburban Corporation and
Chairman of the Board of Philadelphia
Suburban Water Company, positions that he
has held for more than five years.
NOMINEE FOR TERM TO EXPIRE IN 2000
Gary J. Morgan 43 Mr. Morgan has been the Vice President of 1998 8,489(3) *
Finance, Secretary, Treasurer and Chief
Financial Officer of the Company since
October 1997. He is a Certified Public
Accountant. Prior thereto, for more than
five years, Mr. Morgan was the Company's
Corporate Controller. He has been employed
by the Company since 1980.
NOMINEE FOR TERM TO EXPIRE IN 1999
Jeffrey H. Nicholas 44 Mr. Nicholas is a partner in the Corporate 1998 2,423 *
Department of the Philadelphia law firm of
Fox, Rothschild, O'Brien & Frankel, LLP,
working primarily out of the Lawrenceville,
New Jersey office. 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 two years.
(1) Any securities not currently outstanding, but subject to options
exercisable by such shareholders within 60 days of April 10, 1998, are
deemed to be outstanding for the purpose of computing the percentage of
outstanding securities of the class owned by such persons.
(2) The number of shares held by Mr. Kacin include currently exercisable
options to purchase an aggregate of 46,875 shares of the Company's Common
Stock and 20,565 shares of Common Stock beneficially held through the
Met-Pro Corporation Salaried Employee Stock Ownership Plan.
(3) The number of shares held by Mr. Morgan include currently exercisable
options to purchase an aggregate of 3,000 shares of the Company's Common
Stock and 5,489 shares of Common Stock beneficially held through the Met-Pro
Corporation Salaried Employee Stock Ownership Plan.
(*) Less than one percent of the Company's outstanding shares of Common Stock.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF
THE ABOVE NOMINEES AS DIRECTORS.
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 10, 1998(1)
- ---- --- -------------------- -------- -------------------
DIRECTORS WHOSE TERM EXPIRES IN 2000
Alan Lawley 64 Dr. Lawley is the Grosvenor Professor of 1990 33,985(2) *
Metallurgy in the Department of Materials
Engineering at Drexel University, Philadelphia,
Pennsylvania, where he has been employed as
a professor for more than five years. 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 75 Mr. Hayes was President of Philadelphia 1985 23,500 *
Gear 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.
DIRECTOR WHOSE TERM EXPIRES IN 1999
Walter A. Everett 76 Mr. Everett is the former President and 1968 65,275(3) *
current 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-eight
years.
DIRECTOR WHOSE TERM EXPIRES IN 1998
Richard P. Klopp 77 Mr. Klopp, from 1968 to 1983, was Chairman 1987 71,603(4) 1.0%
of the 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.
(1) Any securities not currently outstanding, but subject to options
exercisable by such shareholders within 60 days of April 10, 1998, are
deemed to be outstanding for the purpose of computing the percentage of
outstanding securities of the class owned by such persons.
(2) The number of shares held by Mr. Lawley include currently exercisable
options to purchase an aggregate of 9,000 shares of the Company's Common
Stock.
(3) The number of shares held by Mr. Everett include currently exercisable
options to purchase an aggregate of 10,000 shares of the Company's Common
Stock.
(4) The number of shares held by Mr. Klopp include currently exercisable
options to purchase an aggregate of 10,000 shares of the Company's Common
Stock.
(*) Less than one percent of the Company's outstanding shares of Common Stock.
3
BOARD AND COMMITTEE PARTICIPATION
The Board of Directors of the Company held six (6) meetings during
the fiscal year ended January 31, 1998. 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 1998.
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 6 of this proxy
statement. The Compensation Committee met once in fiscal 1998.
The Stock Option Committee (composed of Mr. Hayes, Chairman, and
Mr. Klopp) met four times during fiscal 1998.
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.
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 the 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, 1998, except for the inadvertent failure by Thomas F.
Hayes to report on Form 4 in the fiscal year ended January 31, 1998, the
transfer of shares by way of gift for the benefit of his children and
grandchildren. Such transfer was reported by Thomas F. Hayes on Form 5 on
February 9, 1998.
4
PRINCIPAL SECURITY HOLDERS
The following table sets forth as of April 10, 1998 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(1)
- ----------------- ------------ ------------
Dimensional Fund Advisors, Inc. 411,119 (2) 5.8%
1299 Ocean Avenue
Santa Monica, CA 90401
Emerald Advisor, Inc. 388,290 (3) 5.4%
1857 William Penn Way
Lancaster, PA 17601
All officers and Directors as a group 585,420 (4)(5)(6) 8.2%
(16 persons)
- ---------------------
(1) Any securities not currently outstanding, but subject to options
exercisable by such shareholders within 60 days of April 10, 1998, are
deemed to be outstanding for the purpose of computing the percentage of
outstanding securities of the class owned by such persons.
(2) 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.
(3) Emerald Advisor, Inc., a registered investment advisor, is deemed to have
beneficial ownership of 388,290 shares of Met-Pro Corporation stock, per
Schedule 13G, as most recently filed with the Securities and Exchange
Commission on February 13, 1998.
(4) The number of shares held by all sixteen officers and Directors as a group
include currently exercisable options to purchase an aggregate of 141,375
shares of the Company's Common Stock and 76,376 shares of Common Stock
beneficially held through the Met-Pro Corporation Employee Stock Ownership
Plan.
(5) Excludes 24,539 shares beneficially owned by Carl W. Dean's wife and
children, as to which he disclaims any beneficial interest.
(6) Includes 40,816 shares of Common Stock held in escrow, pursuant to the
acquisition of Strobic Air Corporation on September 12, 1996, for the
benefit of Lynn T. Secrest.
5
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.
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 17, 1997
6
EXECUTIVE COMPENSATION AND OTHER INFORMATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table shows, for the fiscal years ended January 31,
1996, 1997 and 1998, 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 1998 $121,500 $0 10,000 $2,838
Chairman 1997 121,500 0 13,500 (2) 3,252
1996 121,500 0 0 3,627
W. L. Kacin 1998 $272,500 $60,000 0 $3,738
President & Chief 1997 251,750 50,000 0 4,014
Executive Officer 1996 234,625 42,000 30,000 (2) 4,477
L. T. Secrest 1998 $251,250 $5,000 0 $3,738
Vice President & 1997 93,750 350,000 (3) 7,500 4,014
General Manager
Strobic Air Corporation
W. F. Moffitt (4) 1998 $165,308 $0 0 $3,738
Vice President Finance, 1997 153,750 30,000 0 4,014
Secretary/Treasurer, 1996 143,750 24,000 18,000 (2) 4,477
Chief Financial Officer
R. J. De Hont 1998 $101,500 $18,000 0 $2,791
Vice President & 1997 94,750 10,000 0 2,804
General Manager 1996 59,865 3,000 9,000 (2) 0
Fybroc Division
M. A. Betchaver 1998 $101,000 $12,000 0 $2,640
Vice President & 1997 93,875 12,000 0 2,834
General Manager 1996 87,125 12,000 13,500 (2) 2,959
Sethco 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
9. There are no other Long-Term Compensation Programs other than a Pension
Plan and Directors' Retirement Plans as discussed on page 9.
(2) Adjusted for 3-for-2 stock split which occurred on July 8, 1996.
(3) Reference "Employment Agreement" on page 9 for detailed commentary.
(4) Mr. Moffitt resigned in August 1997. Pursuant to a severance agreement, the
Company continued Mr. Moffitt's salary and benefits through February 28,
1998. The amounts shown reflect compensation paid through January 31, 1998.
7
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. 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. The 1987 Plan terminated on April 9, 1997, the
1992 Plan terminates on October 10, 2001 and the 1997 Plan terminates on
February 24, 2007.
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 total
number of shares of the Company's Common Stock which may be issued pursuant to
the 1992 Plan and the 1997 Plan may not exceed one hundred thousand (100,000)
and three hundred fifty thousand (350,000) shares, respectively, plus an
indeterminate number of additional shares resulting from anti-dilution
adjustments.
On October 27, 1997, the Company granted Nonstatutory Stock Options
to buy 10,000 shares each at $12.00 per share to Mr. Everett and Mr. Klopp.
Subsequent to the end of the fiscal year, Incentive Stock Options to buy a total
of 9,000 shares were also granted to one officer at market price. The following
table relates to an option which expires on February 24, 2007.
POTENTIAL REALIZABLE VALUE
NUMBER OF PERCENTAGE OF OF ASSUMED ANNUAL RATES OF
SECURITIES TOTAL OPTIONS STOCK PRICE APPRECIATION
UNDERLYING GRANTED TO FOR OPTION TERM
OPTIONS EMPLOYEES ---------------
NAME GRANTED IN FISCAL YEAR 5% ($) 10% ($)
- ------- ---------- -------------- ------ -------
(a) (b) (c) (d) (e)
W. A. Everett 10,000 34.48% $47,250 $49,500
W. L. Kacin 0 - - -
L. T. Secrest 0 - - -
W. F. Moffitt 0 - - -
R. J. De Hont 0 - - -
M. A. Betchaver 0 - - -
OPTION EXERCISES AND HOLDINGS
The following table sets forth information with respect to the named
executive officers, concerning the exercise of options during the last fiscal
year and unexercised options held as of the fiscal year ended January 31, 1998:
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR,
AND FISCAL YEAR END OPTION VALUE
VALUE OF UNEXERCISED
SHARES NUMBER OF UNEXERCISED IN-THE-MONEY
ACQUIRED OPTIONS AT OPTIONS AT FY-END
ON VALUE FY-END (#) ($)(2)
EXERCISE REALIZED -------------------------- --------------------------
NAME (#) ($) (1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- -------- -------- ----------- ------------- ----------- -------------
W. A. Everett 13,500 $90,281 10,000 0 $ 35,000 $ 0
W. L. Kacin 0 0 46,875 0 365,063 0
L. T. Secrest 0 0 5,000 2,500 13,125 6,563
W. F. Moffitt 0 0 40,500 0 345,510 0
R. J. De Hont 0 0 9,000 0 57,780 0
M. A. Betchaver 0 0 12,000 0 77,040 0
- --------------
(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.
8
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, 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 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 the employment agreement. The
Company has no other employment agreements.
TERMINATION OF EMPLOYMENT AND CHANGE OF CONTROL ARRANGEMENTS
Mr. Kacin is party to a written agreement with the Company which
provides that in the event the Company terminates his employment, other than for
cause, within nine (9) months following a change of control, or if Mr. Kacin
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 salary currently payable to Mr. Kacin is $300,000.
The Directors' Retirement Plan also provides for the payment of certain
benefits in the event of a change of control, as discussed above.
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,
1998, the Company made contributions to the Trust in the aggregate amount of
$9,717 for Walter A. Everett, $12,229 for William L. Kacin, $7,752 for Lynn T.
Secrest, $12,229 for William F. Moffitt, $5,595 for Raymond J. De Hont, $8,433
for Mark A. Betchaver and $87,280 for all executive officers as a group (11
persons).
9
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
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, 1998 approximated 1.0% of the total
remuneration paid to all plan participants.
CERTAIN TRANSACTIONS
During the year ended January 31, 1998, the Company paid
professional fees and costs aggregating $62,156 to the two law firms in which
Jeffrey H. Nicholas, the Company's Chief Counsel and a Director of the
Company, was a partner.
10
PERFORMANCE GRAPH
COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN
Met-Pro Corporation,
AMEX Market Index and Peer Group Index
$350 ------------------------------------------------------------------
| # |
| |
| |
300 |------------------------------------------------------------------ |
| # & |
| |
| |
250 |------------------------------------------------------------------ |
| |
| |
| # & |
200 |------------------------------------------------------------------ |
| |
| |
| # & * |
150 |------------------------------------------------------------------ |
| #& * * |
| * & |
| #&* * |
100 ------------------------------------------------------------------
1993 1994 1995 1996 1997 1998
Met-Pro Corporation # 100.00 137.61 164.35 215.18 299.28 344.59
Peer Group Index & 100.00 124.38 120.77 165.62 223.84 285.20
AMEX Market Index * 100.00 119.40 104.21 133.57 143.76 163.98
(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: Alanco Environmental Resources; Ampco-Pittsburgh Corporation;
ATMI, Inc.; BHA Group Holdings, Inc.; Camco International, Inc.; Crown
Andersen, Inc.; Daw Technologies, Inc.; Donaldson Company, Inc.; Dresser
Industries, Inc.; Environ Elements Corporation; Environmental Tectonics;
Farr Company; First South Africa Corporation; Flanders Corporation; Flow
International Corporation; Gorman-Rupp Company; Grayco Inc.; Haskel
International, Inc.; Helisys, Inc.; Idex Corporation; IMO Industries,
Inc.; Imtec, Inc.; Industrial Acoustics, Inc.; Interlake Corporation;
Ionic Fuel Technology; Iteq, Inc.; La-Man Corporation; Met-Pro
Corporation; MFRI, Inc.; Nordson Corporation; Osmonics, Inc.; Peerless
Manufacturing; Pentair, Inc.; Regal-Beloit Corporation; Robbins & Myers,
Inc.; Roper Industries, Inc.; Soligen Technologies, Inc.; Spinnaker
Industries; Stake Technologies, Ltd.; Sundstrand Corporation; Taylor
Devices, Inc.; TB Woods Corporation; Thermatrix, Inc.; Trion, Inc.; Tyco
International, Ltd.; 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, 1993 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, 1998 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.
11
2. 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, 1999.
3. 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 judgement in such matters.
STOCKHOLDER PROPOSALS
Stockholder proposals intended to be presented at the Company's 1999
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, 1999, for inclusion in the Company's
proxy statement and form of proxy relating to that meeting.
Gary J. Morgan,
Secretary
Harleysville, Pennsylvania
April 24, 1998
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, 1998, 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
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 Thomas F. Hayes 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 10, 1998 at the Annual Meeting of Stockholders to be held on June 3, 1998
or any adjournment thereof.
(Continued on reverse side)
FOLD AND DETACH HERE
This Proxy when properly executed will be voted in the manner directed here by
the undersigned stockholders. If no direction is made, this Proxy will be voted
FOR Proposals 1 and 2.
Please mark
your votes as /X/
indicated in
this example
1. Election of Directors
Two Directors for a term expiring in 2001:
WILLIAM L. KACIN,
NICHOLAS DeBENEDICTIS
FOR WITHOLD AUTHORITY
One Director for a term expiring in 2000: To Vote For
GARY J. MORGAN
One Director for a term expiring in 1999:
JEFFREY H. NICHOLAS
(To withhold authority to vote for any nominee(s),
write the name(s) of the nominee(s) in the space
that follows)
-------------------------------------------------
-------------------------------------------------
2. Proposal to Ratify the Appointment of Margolis &
Company P.C. as independent auditors.
FOR AGAINST ABSTAIN
3. 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: _______________________________________________, 1998
____________________________________________________________
Signature
____________________________________________________________
Signature if jointly held
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE
FOLD AND DETACH HERE