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SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [ ]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
MFRI, INC.
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(Name of Registrant as Specified in Its Charter)
MFRI, INC.
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
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[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
(1) Amount previously paid:
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(2) Form, schedule or registration statement no.:
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(3) Filing party:
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(4) Date filed:
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[MFRI LOGO]
June 1, 2001
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
NOTICE IS HEREBY GIVEN that the annual meeting of stockholders of MFRI,
Inc. (the "Company") will be held at The Standard Club, 320 South Plymouth
Court, Chicago, Illinois on Tuesday, June 26, 2001, at 10:00 a.m., Chicago time,
for the following purposes:
1. to elect directors;
2. to vote on the 2001 Independent Directors Stock Option Plan;
3. to vote on the 2001 Stock Option Exchange Plan; and
4. to transact such other business as may properly come before the meeting.
By order of the Board of Directors,
MICHAEL D. BENNETT
Secretary
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PROXY STATEMENT
This proxy statement is furnished in connection with the solicitation of
proxies on behalf of the Board of Directors of the Company for use at the annual
meeting of stockholders to be held on June 26, 2001 and at any adjournment
thereof. This Proxy Statement and the form of proxy are first being mailed on
June 1, 2001 to stockholders of the Company. Only stockholders of record at the
close of business on May 21, 2001 will be entitled to notice of and to vote at
the meeting. The Company had outstanding 4,922,364 shares of common stock as of
the close of business on March 31, 2001. There are no other voting securities.
Each stockholder is entitled to one vote per share for the election of
directors, as well as on all other matters. If the accompanying proxy form is
signed and returned, the shares represented thereby will be voted; such shares
will be voted in accordance with the directions on the proxy form or, in the
absence of direction as to any proposal, they will be voted for such proposal;
and it is intended that they will be voted for the nominees named herein, except
to the extent authority to vote is withheld. The stockholder may revoke the
proxy at any time prior to the voting thereof by giving written notice of such
revocation to the Company, by executing and duly delivering a subsequent proxy
or by attending the meeting and voting in person.
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In case any nominee named herein for election as a director is not
available when the election occurs, proxies in the accompanying form may be
voted for a substitute as well as for the other persons named herein. The
Company expects all nominees to be available and knows of no matters to be
brought before the meeting other than those referred to in the accompanying
notice of annual meeting. If, however, any other matters properly come before
the meeting, it is intended that proxies in the accompanying form will be voted
thereon in accordance with the judgment of the persons voting such proxies.
The presence at the annual meeting, in person or by proxy, of the holders
of a majority of the outstanding shares of common stock of the Company ("Common
Stock") shall constitute a quorum. Abstentions will be treated as shares that
are present and entitled to vote for purposes of determining the presence of a
quorum but as unvoted for purposes of determining the approval of any matter
submitted to the stockholders for a vote. If a broker indicates on the proxy
that it does not have discretionary authority as to certain shares to vote on a
particular matter, those shares will not be considered as present and entitled
to vote with respect to that matter.
A plurality of the votes of the shares present in person or represented by
proxy at the meeting will be required to elect the directors. The favorable vote
of the majority of the outstanding shares of Common Stock represented at the
meeting will be required for approval of the 2001 Independent Directors Stock
Option Plan and the 2001 Stock Option Exchange Plan.
In addition to the use of the mails, proxies may be solicited by directors,
officers, or regular employees of the Company in person, by telegraph, by
telephone or by other means. The cost of the proxy solicitation will be paid by
the Company.
The Company's fiscal year ends January 31. Years described as 2000, 1999,
and 1998 are the fiscal years ended January 31, 2001, 2000 and 1999,
respectively.
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PRINCIPAL STOCKHOLDERS AND SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth as of March 31, 2001, with respect to any
person who is known to the Company to be the beneficial owner of more than 5% of
the outstanding shares of common stock of the Company, the name and address of
such owner, the number of shares of common stock beneficially owned, the nature
of such ownership, and the percentage such ownership is of the outstanding
shares of Common Stock:
NAME AND ADDRESS AMOUNT AND NATURE PERCENT OF
OF BENEFICIAL OWNER OF BENEFICIAL OWNERSHIP OUTSTANDING SHARES
------------------- ----------------------- ------------------
David Unger 609,122(1) 12.4%
7720 Lehigh Avenue
Niles, IL 60714
Henry M. Mautner 491,719(2) 10.0%
7720 Lehigh Avenue
Niles, IL 60714
Heartland Advisors, Inc. 855,700(3) 17.4%
789 North Water Street
Milwaukee, WI 53202
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(1) Includes 36,750 shares that are subject to stock options granted by the
Company that were exercisable on March 31, 2001 or which became exercisable
within 60 days thereafter. Includes 85,417 shares held in joint tenancy with
Reporting Person's spouse, 42,708.5 of which the Reporting Person disclaims
beneficial ownership of. Also includes 12,454 shares owned by the Reporting
Person's spouse all of which the Reporting Person disclaims beneficial
ownership of.
(2) Includes 36,750 shares that are subject to stock options granted by the
Company that were exercisable on March 31, 2001 or which became exercisable
within 60 days thereafter. Includes 47,253 shares held in joint tenancy with
Reporting Persons' spouse, 23,726.5 of which the Reporting Person disclaims
beneficial ownership of.
(3) According to a Schedule 13G dated January 23, 2001, such securities are held
in investment advisory accounts of Heartland Advisors, Inc. As a result,
various persons have the right to receive or the power to direct the receipt
of dividends from, or the proceeds from the sale of, the securities. The
interests of one such account, Heartland Value Fund, a series of Heartland
Group, Inc., a registered investment company, relates to more than 5% of the
class.
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The following table sets forth as of March 31, 2001, certain information
concerning the ownership of securities of the Company of each director, nominee
and executive officer named in the Summary Compensation Table hereof ("Named
Executive Officers") and all directors and executive officers of the Company as
a group:
AMOUNT AND NATURE PERCENT OF
NAME OF BENEFICIAL OWNER OF BENEFICIAL OWNERSHIP OUTSTANDING SHARES
------------------------ ----------------------- ------------------
David Unger............................ 609,122(1) 12.4%
Henry M. Mautner....................... 491,719(2) 10.0%
Gene K. Ogilvie........................ 76,677(3) 1.6%
Fati A. Elgendy........................ 85,733(4) 1.7%
Don Gruenberg.......................... 37,230(5) *
Bradley E. Mautner..................... 170,780(6) 3.5%
Arnold F. Brookstone................... 24,776(7) *
Eugene Miller.......................... 13,250(8) *
Stephen B. Schwartz.................... 18,625(9) *
Dennis Kessler......................... 5,500(10) *
Thomas A. Benson....................... 16,750(11) *
All directors and executive officers as
a group (16 persons)................. 1,678,869 34.1%
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* Less than 1%.
(1) Includes 36,750 shares that are subject to stock options granted by the
Company that were exercisable on March 31, 2001 or which became exercisable
within 60 days thereafter. Includes 85,417 shares held in joint tenancy
with Reporting Person's spouse, 42,708.5 of which the Reporting Person
disclaims beneficial ownership of. Also includes 12,454 shares owned by the
Reporting Person's spouse all of which the Reporting Person disclaims
beneficial ownership of.
(2) Includes 36,750 shares that are subject to stock options granted by the
Company that were exercisable on March 31, 2001 or which became exercisable
within 60 days thereafter. Includes 47,253 shares held in joint tenancy
with Reporting Persons' spouse, 23,726.5 of which the Reporting Person
disclaims beneficial ownership of.
(3) Includes 36,750 shares that are subject to stock options granted by the
Company that were exercisable on March 31, 2001 or which became exercisable
within 60 days thereafter. Includes 500 shares owned by the Reporting
Person's mother over which the Reporting Person has power of attorney, all
of which the Reporting Person disclaims beneficial ownership of. Also
includes 200 shares owned by the Reporting Person's spouse all of which the
Reporting Person disclaims beneficial ownership of.
(4) Includes 55,250 shares that are subject to stock options granted by the
Company that were exercisable on March 31, 2001 or which became exercisable
within 60 days thereafter. Includes 30,483 shares held in joint tenancy
with Reporting Person's spouse, 15,241.5 of which the Reporting Person
disclaims beneficial ownership of.
(5) Includes 17,750 shares that are subject to stock options granted by the
Company that were exercisable on March 31, 2001 or which became exercisable
within 60 days thereafter. Includes 1,000 shares held in joint tenancy with
Reporting Person's spouse, 500 of which the Reporting Person disclaims
beneficial ownership of.
(6) Includes 14,375 shares that are subject to stock options granted by the
Company that were exercisable on March 31, 2001 or which became exercisable
within 60 days thereafter.
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Includes 200 shares held as custodian for the Reporting Person's minor
children, all of which the Reporting Person disclaims beneficial ownership
of.
(7) Includes 9,250 shares that are subject to stock options granted by the
Company that were exercisable on March 31, 2001 or which became exercisable
within 60 days thereafter. Includes 3,000 shares held in a trust of which
the Reporting Person is trustee.
(8) Includes 9,250 shares that are subject to stock options granted by the
Company that were exercisable on March 31, 2001 or which became exercisable
within 60 days thereafter. Includes 4,000 shares held in a trust of which
the Reporting Person is trustee.
(9) Includes 14,250 shares that are subject to stock options granted by the
Company that were exercisable on March 31, 2001 or which became exercisable
within 60 days thereafter. Includes 200 shares held in a trust of which the
Reporting Person is trustee.
(10) Includes 5,500 shares that are subject to stock options granted by the
Company that were exercisable on March 31, 2001 or which became exercisable
within 60 days thereafter.
(11) Includes 16,750 shares that are subject to stock options granted by the
Company that were exercisable on March 31, 2001 or which became exercisable
within 60 days thereafter.
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NOMINEES FOR ELECTION AS DIRECTORS
Ten directors are to be elected at the meeting to hold office until the
annual meeting of stockholders in 2001 and until their respective successors are
elected and qualified. All of the nominees were previously elected directors by
the stockholders.
FIRST BECAME A
DIRECTOR
OF THE
OFFICES AND POSITIONS, IF ANY, COMPANY OR A
NAME HELD WITH THE COMPANY; AGE PREDECESSOR
- ---- ------------------------------ --------------
David Unger Director, Chairman of the Board, President and Chief 1989
Executive Officer of the Company; Age 66
Henry M. Mautner Director and Vice Chairman of the Board of the 1989
Company; Age 74
Gene K. Ogilvie Director and Vice President of the Company; President 1989
and Chief Operating Officer of Midwesco Filter
Resources, Inc.; Age 61
Fati A. Elgendy Director and Vice President of the Company; President 1994
and Chief Operating Officer of Perma-Pipe, Inc.;
Age 52
Bradley E. Mautner Director and Vice President of the Company; Age 45 1995
Don Gruenberg Director and Vice President of the Company; President 1997
and Chief Operating Officer of Thermal Care, Inc.;
Age 58
Arnold F. Brookstone Director of the Company; Age 71 1990
Eugene Miller Director of the Company; Age 75 1990
Stephen B. Schwartz Director of the Company; Age 66 1995
Dennis Kessler Director of the Company; Age 62 1998
David Unger has been employed by the Company and its predecessors in
various executive and administrative capacities since 1958, served as President
of Midwesco, Inc. ("Midwesco") from 1972 through January 1994, and was Vice
President from February 1994 through December 1996. He was also a director of
Midwesco from 1972 through December 1996 and served that company in various
executive and administrative capacities from 1958 until the consummation of the
merger of Midwesco into the Company in December 1996 (the "Merger"). He is a
director and Vice President of the company formed to succeed to the non-Thermal
Care business of Midwesco ("New Midwesco").
Henry M. Mautner has been employed by the Company and its predecessors in
various executive capacities since 1972, served as Chairman of Midwesco from
1972 through December 1996, and served that company in various executive and
administrative capacities from 1949 until the consummation of the Merger. Since
the consummation of the Merger, he has served as the Chairman of New Midwesco.
Mr. Mautner is the father of Bradley E. Mautner.
Gene K. Ogilvie has been employed by the Company and its predecessors in
various executive capacities since 1969. He has been general manager of Midwesco
Filter Resources, Inc. ("Midwesco Filter") (a wholly owned subsidiary of the
Company) or its predecessor since 1980 and President and Chief Operating Officer
of Midwesco Filter since 1989. From 1982 until the consummation of the Merger,
he served as Vice President of Midwesco.
Fati A. Elgendy, who has been associated with the Company and its
predecessors since 1978, was Vice President, Director of Sales of the Perma-Pipe
Division of Midwesco from 1990 to 1991. In 1991, he became Executive Vice
President of the Perma-Pipe Division, a position he continued to hold after the
acquisition by the Company to form Perma-Pipe, Inc. on January 28, 1994. In
March
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1995, Mr. Elgendy became President and Chief Operating Officer of Perma Pipe,
Inc. (a wholly owned subsidiary of the Company).
Bradley E. Mautner has been employed by the Company and its predecessors in
various executive and administrative capacities since 1978, has served as Vice
President of the Company since January 1997 and has been a director of the
Company since 1995. From 1994 to the consummation of the Merger, he served as
President of Midwesco and since December 30, 1996 he has served as President of
New Midwesco. In addition, since February 1996, he served as the Chief Executive
Officer of Midwesco Services, Inc. ("Midwesco Services") which was 50% owned by
New Midwesco until May 19, 2000, at which time it became a wholly owned
subsidiary of New Midwesco. On November 17, 2000, Midwesco Services was merged
into New Midwesco ("Midwesco Services Merger"). From February 1988 to January
1996, he served as the President of Mid Res Inc. (predecessor to Midwesco
Services). Bradley E. Mautner is the son of Henry M. Mautner.
Don Gruenberg has been employed by the Company and its predecessors in
various executive capacities since 1974, with the exception of a period in 1979
- -1980. He has been general manager of Thermal Care, Inc. ("Thermal Care") (a
wholly owned subsidiary of the Company) or its predecessor since 1980, and was
named President and Chief Operating Officer of Thermal Care in 1988. He has been
a Vice President and Director of the Company since January 1997.
Arnold F. Brookstone served as Executive Vice President and Chief Financial
and Planning Officer of Stone Container Corporation (subsequently merged into
Smurfit-Stone Container Corporation) until his retirement on January 31, 1996.
Mr. Brookstone is Chairman of the Board of Trustees of the ABN AMRO family of
mutual and money market funds. He is a director of Donnelly Corporation, a
global manufacturer of automotive parts and electronic products, and also serves
as a director of a number of privately held corporations.
Eugene Miller served as Vice Chairman of the Board of Directors and Chief
Financial Officer of USG Corporation, a building materials holding company, from
March 1987 until his retirement as of May 31, 1991. Mr. Miller is currently
Executive-In-Residence and Adjunct Professor of Florida Atlantic University. Mr.
Miller is a director of IMX Pharmaceuticals, Inc., a marketer of
over-the-counter drug products. He also serves as a director of several
privately held companies.
Stephen B. Schwartz served as a senior vice president of IBM Corporation
from 1990 until his retirement in 1992. From 1957 to 1990, Mr. Schwartz served
in various capacities for IBM Corporation. Mr. Schwartz is currently a director
of Niagara Mohawk Power Company, an electric and gas utility company.
Dennis Kessler has been President of Kessler Management Consulting, LLC
since February 1998. Prior to February 1998, Mr. Kessler was Co-President of
Fel-Pro Incorporated, which manufactured and distributed gaskets, engine parts
and industrial chemicals. Mr. Kessler served in various capacities with Fel-Pro
since 1964. Mr. Kessler is currently a director of Universal Automotive
Industries, Inc., a manufacturer and distributor of brake rotors, drums, disc
brake pads, relined brake shoes, wheel cylinders and brake hoses for the
automotive aftermarket. He also serves as a director of a privately held
company.
BOARD OF DIRECTORS
Directors who are not employees of the Company or a parent or subsidiary of
the Company are compensated by a fee of $2,000 for each day of attendance at
Board meetings, $1,000 for attendance at each Audit Committee meeting and a $200
fixed fee per hour for engagement in any other activity on behalf of the Company
authorized by the Board of Directors and are reimbursed for expenses.
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The Company's 1990 Independent Directors Stock Option Plan, as amended (the
"1990 Directors Plan"), granted automatically to each director who is not an
employee of the Company, any of its subsidiaries, any parent of the Company or
any of such parent's subsidiaries on the date he or she is first elected as a
director of the Company, an option to purchase 10,000 shares of common stock of
the Company and an option to purchase 1,000 shares of common stock is granted
each May 1 thereafter. Authority to grant options under the 1990 Directors Plan
terminated in September, 1999.
The Company has before the Company's stockholders at the Annual Meeting of
Stockholders on June 26, 2001, a proposal to approve a new independent directors
stock option plan and a proposal to approve the exchange of stock options to
purchase the common stock of the Company, including all outstanding stock
options issued to the members of the Board of Directors, with new options.
The Company has entered into indemnification agreements with each person
who is currently a member of the Board of Directors of the Company and expects
to enter into such agreements with persons who may in the future become
directors of the Company. In general, such agreements provide for
indemnification against any and all expenses incurred in connection with, as
well as any and all judgments, fines, and amounts paid in settlement resulting
from, any threatened, pending, or completed action, suit, or proceeding, whether
civil, criminal, administrative, or investigative, by reason of the fact that
such director is or was a director, officer, employee or agent of the Company,
or is or was serving at the request of the Company as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust, or
other enterprise.
The Board of Directors of the Company held four meetings during 2000. The
Board of Directors has a standing Committee of Independent Directors, as well as
standing Compensation and Audit Committees; it does not have a standing
Nominating Committee.
Grants under the Company's 1994 Stock Option Plan are determined by the
Committee of Independent Directors, consisting of Eugene Miller (Chairman),
Arnold F. Brookstone, Stephen B. Schwartz and Dennis Kessler. The Committee of
Independent Directors held four meetings during 2000.
The Compensation Committee, consisting of Stephen B. Schwartz (Chairman),
David Unger, Henry M. Mautner, Arnold F. Brookstone, Eugene Miller, and Dennis
Kessler, reviews the compensation paid to the officers of the Company, reports
to the stockholders with respect to the compensation paid to the officers of the
Company, approves material departures from the Company's past compensation
policies, determines the optionees and grant amounts under the Company's 1993
Stock Option Plan and makes recommendations to the Board with respect to the
Company's compensation policies. The Compensation Committee held one meeting
during 2000.
The Audit Committee consists of Arnold F. Brookstone (Chairman), Eugene
Miller, Stephen B. Schwartz and Dennis Kessler. The Board of Directors has
adopted and approved a charter for the Audit Committee. Under the charter, the
Audit Committee's responsibilities include, among other things:
- Recommending the selection and discharge of the independent auditors for
approval by the Board of Directors and approving the compensation of the
independent auditors;
- Reviewing independence with the independent auditors annually, including
the consideration of other services provided by the independent auditors
or their affiliates, and obtaining on an annual basis written
confirmation of the independence of the independent auditors;
- Considering the results of the review of the interim financial statements
by the independent auditors;
- Reviewing the Company's compliance with applicable accounting and
financial reporting rules;
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- Considering and reviewing with the independent auditors the adequacy of
the Company's internal controls, including computerized information
system controls and security;
- Considering, in consultation with the independent auditors, the audit
scope and plan of the independent auditors;
- Reviewing with management and the independent auditors the results of
annual audits and related matters;
- Reviewing with the independent auditors any impending changes in
accounting and financial reporting rules and the expected impact of such
changes on the Company; and
- Conducting or authorizing investigations into any matters within the
Audit Committee's scope of responsibilities.
A copy of the Audit Committee Charter was included as an appendix to the
Company's Proxy Statement dated June 2, 2000 for the Company's annual meeting of
stockholders held June 27, 2000.
During 2000, the Audit Committee held three meetings. The Board of
Directors has determined that all members of the Audit Committee are
"independent" as that term is defined in the listing standards of The Nasdaq
Stock Market.
REPORT OF AUDIT COMMITTEE
Included in the Company's Annual Report on Form 10-K for the year ended
January 31, 2001 are the consolidated balance sheets of the Company and its
subsidiaries as of January 31, 2001 and 2000, and the related consolidated
statements of earnings, stockholders' equity and cash flows for each of the
three years ended January 31, 2001. These statements (the "Audited Financial
Statements") are the subject of a report by the Company's independent auditors,
Deloitte & Touche LLP.
The Audit Committee reviewed and discussed the Audited Financial Statements
with the Company's management and with the independent auditors prior to
publication and filing. The Audit Committee has discussed with the Independent
Auditors the matters required to be discussed by Statement of Auditing Standards
No. 61. The Audit Committee received from the independent auditors the written
disclosures and letter required by Independence Standards Board Standard No. 1
and has discussed with the independent auditors their independence with respect
to the Company.
Based upon the review and discussions referred to above, the Audit
Committee recommended to the Company's Board of Directors that the Audited
Financial Statements be included in the Company's Annual Report on Form 10-K for
the year ended January 31, 2001 for filing with the Securities and Exchange
Commission.
This Report of the Audit Committee shall not be deemed incorporated by
reference by any general statement incorporating by reference this proxy
statement into any filing under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, except to the extent that the
Company specifically incorporates this information by reference, and shall not
otherwise be deemed filed under any such acts.
Arnold F. Brookstone, Chairman
Eugene Miller
Stephen B. Schwartz
Dennis Kessler
Members of the Audit Committee
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EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth certain information regarding compensation
paid by the Company during each of the Company's last three years ended January
31, 2001 to the Company's Chief Executive Officer and to each of the four other
most highly compensated executive officers who was serving as an executive
officer of the Company at the end of 2000 whose salary and incentive
compensation for 2000 exceeded $100,000.
LONG TERM
COMPENSATION
AWARDS
ANNUAL COMPENSATION ---------------
---------------------------------- SECURITIES
INCENTIVE UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY COMPENSATION OTHER(1) OPTIONS/SARS(#) COMP.(2)
--------------------------- ---- ------ ------------ -------- --------------- ---------
David Unger 2000 $195,000 $ 42,518 $3,256 4,000 $20,000
Chairman and Chief 1999 180,000 88,501 3,200 4,000 20,000
Executive Officer 1998 180,000 27,705 3,200 5,000 20,000
Don Gruenberg 2000 $130,000 $150,344 $2,988 4,000 $15,000
Vice President, 1999 120,000 129,251 3,200 4,000 15,000
President, Thermal Care,
Inc. 1998 120,000 124,277 3,200 5,000 15,000
Fati A. Elgendy 2000 $125,000 $127,896 $4,275 4,000 $15,000
Vice President, 1999 125,000 158,339 3,200 4,000 15,000
President, Perma-Pipe, Inc. 1998 125,000 93,516 3,200 5,000 15,000
Thomas A. Benson 2000 $108,358 $104,803 $3,602 4,000 $10,000
Vice President, 1999 105,482 90,758 3,200 4,000 10,000
Vice President--Sales and 1998 102,835 82,655 3,007 5,000 10,000
Marketing, Thermal Care,
Inc.
Henry M. Mautner 2000 $145,000 $ 42,518 $3,200 4,000 $20,000
Vice Chairman 1999 135,000 88,501 2,400 4,000 20,000
1998 135,000 27,705 2,400 5,000 20,000
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(1) Represents contributions made by the Company to the Named Executive
Officer's account under the 401(k) Plan.
(2) Represents accrual of non-qualified deferred compensation.
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2000 OPTION GRANTS
The following table sets forth certain information regarding option grants
to the Named Executive Officers during 2000.
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF
NUMBER OF PERCENT OF STOCK PRICE
SECURITIES TOTAL APPRECIATION FOR
UNDERLYING OPTIONS OPTION TERM
OPTIONS GRANTED IN EXERCISE EXPIRATION ----------------------
NAME GRANTED FISCAL YEAR PRICE DATE 5% 10%
---- ---------- ----------- -------- ---------- -- ---
David Unger 4,000 3.49% $4.09 4/30/10 $10,289 $26,074
Don Gruenberg 4,000 3.49 4.09 4/30/10 10,289 26,074
Fati A. Elgendy 4,000 3.49 4.09 4/30/10 10,289 26,074
Thomas A. Benson 4,000 3.49 4.09 4/30/10 10,289 26,074
Henry M. Mautner 4,000 3.49 4.09 4/30/10 10,289 26,074
2000 YEAR-END UNEXERCISED STOCK OPTIONS
The following table sets forth information relating to stock options held
by the Named Executive Officers.
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS AT FISCAL YEAR END OPTIONS AT FISCAL YEAR END
--------------------------- ---------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ------------- ----------- -------------
David Unger 31,000 12,000 $ 0 $ 0
Don Gruenberg 12,000 12,000 0 0
Fati A. Elgendy 49,500 12,000 0 0
Thomas A. Benson 11,000 12,000 0 0
Henry M. Mautner 31,000 12,000 0 0
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
David Unger, Chairman of the Board and Chief Executive Officer of the
Company, and Henry M. Mautner, Vice Chairman of the Board of the Company, serve
on the Compensation Committee of the Company's Board of Directors; however, both
Mr. Unger and Mr. Mautner abstain from voting on matters related to their
individual compensation. Prior to the Merger, Messrs. Unger and Mautner also
served on the Board of Directors of Midwesco. Henry M. Mautner is Chairman and
director of New Midwesco. David Unger is Vice President and director of New
Midwesco. Michael D. Bennett, Vice President and Chief Financial Officer of the
Company, is Vice President of New Midwesco. Bradley E. Mautner, Vice President
and director of the Company, is President of New Midwesco. Messrs. Unger,
Bennett and B. Mautner served as directors of Midwesco Services prior to the
Midwesco Services Merger.
The Company provides certain services and facilities to companies primarily
owned by Messrs. Unger and H. Mautner and those companies provide certain
services to the Company at cost pursuant to a Services Agreement. Any material
change to the terms of the Services Agreement must be approved by a majority of
the directors, including a majority of the independent directors. During 2000,
the Company received $269,000 and paid $350,000 under the Services Agreement.
On September 20, 2000, the Company purchased a 8.1 acre parcel of land with
a 131,000 square foot building in Niles, Illinois from Messrs. Unger and H.
Mautner. The building had been previously leased by the Company from Messrs.
Unger and H. Mautner and is used by the Company
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primarily as its headquarters and for its Thermal Care business. The aggregate
purchase price was $4,430,000, which included the assumption of a mortgage note
with a remaining balance of $2,405,000. The property has an appraised value of
$4,600,000. The purchase was approved by the Company's Committee of Independent
Directors. Management of the Company believes that the purchase price was
comparable to what the Company would have been paid in an arm's-length
transaction. The Company paid $359,000 during 2000 to Messrs. Unger and H.
Mautner under the lease agreement in effect prior to the property purchase.
REPORT OF COMPENSATION COMMITTEE OF BOARD OF DIRECTORS ON EXECUTIVE COMPENSATION
The Company considers the following general guidelines in determining the
compensation of its officers and key employees:
- Salary set at levels sufficient to attract and retain employees capable
of contributing materially to the Company's long-term success;
- Annual incentive compensation related to profit in excess of a threshold
amount of the Company or of the Company's subsidiary in which the officer
or key employee is employed;
- Stock options; and
- Non-qualified deferred compensation.
The Company also makes annual contributions to the accounts of eligible
employees in the 401(k) Employee Savings and Protection Plan.
The Company's 1989 Stock Option Plan, 1993 Stock Option Plan ("1993 Plan")
and the 1994 Stock Option Plan ("1994 Plan") (collectively, the "Plans") were
adopted in order to provide officers and other key employees with long-term
incentives in order to create an interest in the Company parallel to that of the
Company's public stockholders. Option exercise prices will be no less than fair
market value of the Common Stock on the date of grant. Under the Plans, options
may be granted to key employees (including officers, whether or not directors)
of the Company, its subsidiaries, Midwesco, and its affiliates. The options
granted under the Plans may be exercised for periods of up to ten years from the
date of grant. Under the 1993 Plan, 100,000 shares of common stock of the
Company are reserved for issuance upon the exercise of options granted
thereunder. Under the 1994 Plan, 250,000 shares of common stock of the Company
are reserved for issuance upon the exercise of options granted thereunder, which
number shall be increased by the number equal to 2% of the aggregate number of
shares of common stock outstanding as of the last day of the most recently ended
fiscal year of the Company. Provided the Company does not issue any additional
shares of its common stock, the maximum number of shares which may be sold to
all optionees pursuant to the 1994 Plan during the term of the 1994 Plan will be
1,081,709. The Committee believes additional incentive compensation should be
made available to officers and other key employees, which will increase the
effectiveness of the Company's executive compensation program.
The Committee believes that the combination of salary, incentive
compensation (which varies directly with the Company's operating profitability),
and stock options (the ultimate value of which is determined by future share
price growth), should constitute an executive compensation program which
encourages enhancement of Company profitability and stockholder value. At a
meeting in April 2001, the Committee reviewed the value of the Plans as an
incentive. The Committee concluded that since all outstanding stock options
granted under the Plans had exercise prices substantially in excess of the then
current market price of the Company's stock, the Plans were not providing the
desired incentive to employees. The Committee has recommended that each optionee
who is an employee and each independent director shall have the right to
surrender all outstanding options under the Plans and the 1990 Directors Plan
held by such optionee in exchange for the right to receive a new option for the
same number of shares on December 31, 2001 (or such later date that is
approximately six months and a day after the cancellation is effective) at the
fair market value
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on the date of the new option grant. The Committee also recommended that any
such cancellation and new grant be subject to stockholder approval. The proposal
to approve the plan to cancel existing stock options and grant new options is
set forth under the caption "The 2001 Stock Option Exchange Plan" herein.
The compensation of David Unger, Chairman of the Board and Chief Executive
Officer of the Company, reflected in the Summary Compensation Table, was based
on his contribution to the Company. Mr. Unger's annual incentive compensation
increased in 1999 and decreased in 2000 as a result of the yearly changes in the
Company's pretax earnings. Although a member of the Compensation Committee, Mr.
Unger abstains from voting on matters related to his individual compensation.
Don Gruenberg, Vice President of the Company and President and Chief
Operating Officer of Thermal Care, Inc., receives annual compensation consisting
of a base salary and incentive compensation. Mr. Gruenberg's incentive
compensation is calculated on a basis similar to that of the Company's other
officers. Mr. Gruenberg's incentive compensation increased significantly in 2000
as a result of the application of the then applicable incentive formulas to the
actual operating results.
Fati A. Elgendy, Vice President of the Company and President of Perma-Pipe,
receives annual compensation consisting of a base salary and incentive
compensation. Mr. Elgendy's incentive compensation is calculated on a basis
similar to that of the Company's other officers. Mr. Elgendy's annual incentive
compensation increased in 1999 and decreased in 2000 as a result of the
application of the then applicable incentive formulas to the actual operating
results.
Thomas A. Benson, Vice President of the Company and Vice President of Sales
and Marketing for Thermal Care, receives annual compensation consisting of a
base salary and incentive compensation. Mr. Benson's incentive compensation is
calculated on a basis similar to that of the Company's other officers. Mr.
Benson's annual incentive compensation increased significantly in 1999 and 2000
as a result of the application of the then applicable incentive formulas to the
actual operating results.
The compensation of Henry M. Mautner, Vice Chairman of the Board of the
Company, reflected in the Summary Compensation Table, was based on his
contribution to the Company. Mr. Mautner's annual incentive compensation
increased in 1999 and decreased in 2000 as a result of the yearly changes in the
Company's pretax earnings. Although a member of the Compensation Committee, Mr.
Mautner abstains from voting on matters related to his individual compensation.
Stephen B. Schwartz, Chairman
Arnold F. Brookstone
Dennis Kessler
Henry M. Mautner
Eugene Miller
David Unger
Members of the Compensation Committee
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STOCK PRICE PERFORMANCE GRAPH
The Stock Price Performance Graph compares the yearly percentage change in
the Company's cumulative total stockholder return on its Common Stock with the
cumulative total returns of the Nasdaq Market Index (the "Nasdaq Index") and the
Russell 2000 Index. The Company has selected the Russell 2000 Index, which is an
index of companies with similar market capitalizations to the Company, as the
most appropriate comparison, because the Company has three distinctly different
businesses and no industry "peer" group is comparable to the Company. The
comparison assumes $100 investments on February 1, 1996 in the Company's common
stock, the Nasdaq Index and the Russell 2000 Index, and further assumes
reinvestment of dividends.
COMPARE 5-YEAR CUMULATIVE TOTAL RETURN
AMONG MFRI, INC.,
NASDAQ MARKET INDEX AND RUSSELL 2000 INDEX
[STOCK PRICE PERFORMANCE GRAPH]
- -----------------------------------------------------------------------------------------------
January 31,
- -----------------------------------------------------------------------------------------------
1996 1997 1998 1999 2000 2001
- -----------------------------------------------------------------------------------------------
MFRI, Inc. $100.00 $128.06 $140.82 $ 93.88 $ 67.35 $ 41.32
- -----------------------------------------------------------------------------------------------
Russell 2000 Index 100.00 118.95 140.42 140.42 163.07 166.82
- -----------------------------------------------------------------------------------------------
Nasdaq Market Index 100.00 131.60 155.01 241.93 361.89 259.11
- -----------------------------------------------------------------------------------------------
ASSUMES $100 INVESTED ON FEBRUARY 1, 1996
ASSUMES DIVIDEND REINVESTED
FISCAL YEAR ENDING JANUARY 31, 2001
APPROVAL OF 2001 INDEPENDENT DIRECTORS STOCK OPTION PLAN
The Board of Directors believes that stock option plans are important in
attracting directors of high caliber and outstanding capabilities. Accordingly,
the Board of Directors on April 18, 2001 adopted a stock option plan designated
as the "2001 Independent Directors Stock Option Plan" (the "2001 Directors
Plan") which is intended to replace the 1990 Directors Plan pursuant to which
authority to grant options terminated in September, 1999. Each director of the
Company who is not an employee of the Company or any subsidiary of the Company
is eligible to participate in the 2001 Directors Plan.
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Options are to be granted under the 2001 Directors Plan as follows: (i) an
option to purchase 10,000 shares upon an eligible director's first election as a
director of the Company; (ii) an option to purchase 1,000 shares of the
Company's common stock will be granted automatically to eligible directors upon
each such date as such eligible director is re-elected as a director of the
Company commencing with the annual meeting for the year 2002; (iii) an option to
purchase 1,000 shares of the Company's common stock will be granted to each
eligible director on December 31, 2001 or such later date new options are
granted under the Stock Option Exchange Plan; and (iv) the Board of Directors
shall have the discretion to make additional option grants to eligible directors
from time to time as the Board of Directors deems necessary or desirable. If the
2001 Stock Option Exchange Plan is approved by the Company's stockholders, then
the new options to be granted to non-employee directors under such plan, if any,
will be granted under the 2001 Directors Plan. Authority to grant such options
expires on March 31, 2011. Options granted under the 2001 Directors Plan are not
intended to be "incentive stock options." The aggregate number of shares which
may be sold pursuant to the 2001 Directors Plan may not exceed 100,000.
Options granted under the 2001 Directors Plan will expire approximately but
not more than ten years from the date of the grant, and the purchase price per
share to be specified in each option will be the fair market value of a share of
the Company's common stock on the date the option is granted. Options granted
under the 2001 Directors Plan are not transferable other than by will or the
laws of descent and distribution. The 2001 Directors Plan permits payment to the
Company upon the exercise of stock options granted under the 2001 Directors Plan
to be made in cash, or in common stock of the Company, or a combination thereof.
Each share of common stock received by the Company in payment of the purchase
price specified in a stock option will be valued at its fair market value on the
date of exercise.
The exercise of options may be subject to such terms and conditions not
inconsistent with the 2001 Directors Plan as the Company may specify in granting
or amending such options or rights and such terms and conditions may differ from
the terms and conditions described herein. Upon the exercise of any option, the
Company may deliver either treasury shares or authorized but previously unissued
shares. If any option, or any portion of any option, under the 2001 Directors
Plan expires or terminates unexercised, becomes unexercisable or is forfeited or
otherwise terminated, surrendered or cancelled as to any shares, such shares
shall thereafter be available for further grants under the 2001 Directors Plan.
Options will accrue in four equal annual cumulative installments, with the
first installment accruing approximately one year after the date of grant. All
installments accrue in the event that an optionee dies or becomes permanently
disabled or there is a change in control of the Company. Options may not be
exercised by an optionee after the date he ceases to be a director of the
Company, except that the optionee has three months from such date for any reason
other than death or permanent disability, or the optionee's estate or the
optionee has one year after death or permanent disability to exercise an option,
but in no event may an option be exercised later than its expiration date.
The Board of Directors may in its discretion prescribe such provisions and
interpretations not inconsistent with the 2001 Directors Plan as it deems
necessary or advisable for carrying out the purposes of the 2001 Directors Plan.
The Board of Directors may amend the 2001 Directors Plan without stockholder
approval, except any amendment that would (i) materially increase the benefits
accruing to participants under the 2001 Directors Plan, (ii) materially increase
the number of shares which may be issued under the 2001 Directors Plan, or (iii)
materially modify the requirements as to eligibility for participation under the
2001 Directors Plan, must be approved by a vote of the stockholders of the
Company.
At any time when an optionee must pay to the Company an amount required to
be withheld under applicable income tax laws in connection with the exercise of
an option, the optionee may satisfy this obligation by electing (the "Election")
to have the Company withhold shares of common
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stock having a value equal to the amount required to be withheld. The value of
the shares to be withheld is based on the fair market value of such shares on
the date that the amount of tax to be withheld is determined ("Tax Date"). Each
Election must be made prior to the Tax Date. The Board of Directors may
disapprove of any Election or may suspend or terminate the right to make
Elections. An Election is irrevocable.
In the event of a stock dividend, stock split, or combination of other
reduction in the number of issued shares of common stock of the Company, under
the 2001 Directors Plan, the Board of Directors must make such adjustments in
the number of unpurchased shares subject to the 2001 Directors Plan, the number
of shares subject to options outstanding in the 2001 Directors Plan and the
exercise price specified in options outstanding under the 2001 Directors Plan as
it determines to be appropriate and equitable. In the event of a merger,
consolidation, reorganization or dissolution of the Company, or the sale or
exchange of substantially all of the Company's assets (i) the rights under
options outstanding under the 2001 Directors Plan will terminate, except to the
extent and subject to such adjustments as may be provided by the Board of
Directors or by the terms of the plan or agreement of merger, consolidation,
reorganization, dissolution or sale or exchange of such assets, and (ii) the
Company must notify the holders of outstanding options of such event at least 30
days prior to the effective date of such event.
Upon the grant of an option under the 2001 Directors Plan, optionee will
not realize taxable income for federal income tax purposes. Upon the exercise of
an option granted under the 2001 Directors Plan, the optionee will realize
compensation taxable as ordinary income in an amount equal to the excess of the
fair market value of the stock acquired, determined at the time of exercise,
over the option price. The Company will be entitled to a federal income tax
deduction to the extent the optionee realizes compensation taxable as ordinary
income for federal income tax purposes.
For financial accounting purposes under generally accepted accounting
principles presently in effect, the grant or exercise of stock options under the
2001 Directors Plan does not result in a charge to the Company's net income.
If the 2001 Directors Plan is not approved by the stockholders, no options
will be granted under the 2001 Directors Plan.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE FOR
APPROVAL OF THE 2001 INDEPENDENT DIRECTORS STOCK OPTION PLAN.
2001 STOCK OPTION EXCHANGE PLAN
The Company's Board of Directors, based upon the recommendation of the
Committee of Independent Directors, has determined that it would be in the best
interests of the Company and its stockholders to implement a plan (the "2001
Stock Option Exchange Plan" or the "Exchange Plan") under which the Company will
grant new stock options in exchange for all outstanding stock options issued to
employees, including officers, and directors, pursuant to the Plans and the 1990
Directors Plan.
Stock options represent an important component of the Company's
compensation program for its employees. Stock options are intended to provide
employees with an incentive to continue in their employment relationship with
MFRI and to align employee financial interests with long-term stockholder value.
However, as a result of the fluctuations in the market price of MFRI's
common stock during recent years, all of the Company's outstanding stock options
have exercise prices substantially in excess of the current market price of the
Company's common stock. Accordingly, these options are no longer effectively
providing the incentive to employees that they were intended to provide.
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The Exchange Plan is intended to realign the exercise price of previously
granted options with the current market price of the Company's common stock and
thereby better enable the Company to motivate and retain its employees and
achieve the Company's business goals.
Although stockholder approval of the Exchange Plan is not required by law
or any regulations applicable to the Company or the terms of the Company's stock
option plans, the Company has determined not to implement the program unless it
is approved by our stockholders.
For any future grant awards, employees will be considered to have their
original grant of options and will not receive larger or smaller grants because
of their participation (or non-participation) in the Exchange Plan.
BACKGROUND
The Company's general policy has been to grant options to employees at the
time of their initial employment and to make annual grants of options to
employees. At the time an option grant is made, the Company specifies the number
of shares of the Company's common stock that can be purchased upon exercise of
the option and the price per share which the employee must pay in order to
exercise the option. Options under the Plans and the 1990 Directors Plan were
granted at not less than fair market value for the number of shares set forth in
the plan.
As of January 31, 2001, options to purchase an aggregate of 798,950 shares
of common stock were eligible for exchange under the Exchange Plan with exercise
prices ranging from $4.09 to $8.10.
DESCRIPTION OF THE EXCHANGE PLAN
Grant of New Options. Under the Exchange Plan, employees of the Company
may elect to exchange some or all of their existing options and to receive a new
option on December 31, 2001 or thereafter on or about the first business day
that is at least six months and one day after the cancellation of the old
options. The exercise price of the new option will be equal to the market price
of common stock as of the grant date of the new option. Participation in the
Exchange Plan is voluntary.
Numbers of Shares to Be Covered by New Options. The Exchange Plan provides
that an employee may elect to exchange his or her existing options on a grant by
grant basis. For example, if an employee had two grants of 1,000 shares each,
such employee could elect to participate in the program with respect to one or
both 1,000 share grants, but could not elect to participate with respect to a
fraction of a grant.
Vesting and Exercisability of New Options. The Exchange Plan provides
generally that all new options that are granted will vest in four equal annual
installments, regardless of the vesting schedule of the options surrendered or
whether such options were currently exercisable prior to their replacement.
Eligibility to Participate in the Exchange Plan. The Exchange Plan is open
to all optionees who are employees, including officers, and directors of the
Company.
Expiration Date of New Options. All new options will have a term of ten
years from the date of grant, subject to earlier termination in the event of
termination of employment.
Implementation of the Exchange Plan. The Exchange Plan was authorized by
the Board of Directors in April, 2001, subject to receipt of stockholder
approval at the annual meeting. On May 25, 2001, eligible employees and
directors were offered the opportunity to participate in the Program, subject to
stockholder approval of the program, pursuant to an Offer to Exchange
distributed to all eligible employees and included as part of a Schedule TO
filed with the Securities and Exchange Commission. Because each optionee's
decision as to whether or not to participate in the Exchange
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Plan is completely at the discretion of the optionee, the Company is not able to
predict how many options any particular person or group will elect to exchange.
If the stockholders approve the Exchange Plan, new options will be issued
in accordance with the program on December 31, 2001 or thereafter on or about
the first business day that is at least six months and one day after the
cancellation of the old options.
Material Federal Income Tax Consequences. The exchange should be treated
as a non-taxable exchange and no tax income should be recognized upon the grant
of a new option.
Information Regarding Eligible Options. The following table provides
certain information relating to options held by directors, officers and
employees which are eligible for inclusion in the Exchange Plan.
NUMBER OF
SECURITIES CURRENT MARKET LENGTH OF ORIGINAL
UNDERLYING PRICE OF CURRENT OPTION TERM
NAME AND POSITION OPTIONS STOCK(1) EXERCISE PRICE(2) REMAINING(3)
- ----------------- ---------- -------------- ----------------- ------------------
David Unger 43,000 $2.50 $4.09 - $8.10 5.6 Years
Chairman and Chief
Executive Officer
Don Gruenberg 24,000 2.50 4.09 - 8.10 7.0
Vice President,
President, Thermal Care, Inc.
Fati A. Elgendy 61,500 2.50 4.09 - 8.10 4.9
Vice President,
President, Perma-Pipe, Inc.
Thomas A. Benson 23,000 2.50 4.09 - 8.10 7.2
Vice President,
Vice President--Sales and
Marketing, Thermal Care, Inc.
Henry M. Mautner 43,000 2.50 4.09 - 8.10 5.6
Vice Chairman
Executive Officers as a Group(4) 386,600 2.50 4.09 - 8.10 5.7
Directors as a Group(5) 46,000 2.50 4.25 - 8.10 5.3
Employee Group(6) 798,950 2.50 4.09 - 8.10 6.0
- ------------
(1) Market price as of March 31, 2001 of stock underlying options. The total
market price as of March 31, 2001 of stock underlying all eligible options
was $1,997,375.
(2) Given as range where applicable.
(3) Average of all applicable option grants.
(4) Includes all executives officers including Named Executive Officers set
forth in the table.
(5) Includes all directors who are not executive officers.
(6) All employees, including all non-executive officers.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF THE PROPOSAL TO
APPROVE THE EXCHANGE PLAN.
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AUDITORS
AUDIT FEES:
The aggregate fees billed by Deloitte & Touche LLP, the member firms of
Deloitte Touche Tohmatsu, and their respective affiliates ("Deloitte") for
professional services rendered for the audit of the Company's annual
consolidated financial statements for the fiscal year ended January 31, 2001,
and for the reviews of the consolidated financial statements included in the
Company's Quarterly Reports on Form 10-Q for that fiscal year were $203,000.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES:
No fees were billed by Deloitte for professional services rendered for
information technology services relating to financial information systems design
and implementation for the fiscal year ended January 31, 2001.
ALL OTHER FEES:
The aggregate fees billed by Deloitte for services rendered to the Company,
other than the services described above, for the fiscal year ended January 31,
2001 were $61,000.
------------------
Representatives of Deloitte are expected to be present at the meeting and
will be available to respond to appropriate questions and may make a statement
if they so desire. The Audit Committee has considered whether the provision of
non-audit services is compatible with maintaining the independence of Deloitte.
STOCKHOLDER PROPOSALS
Any proposal which a stockholder intends to present at the annual meeting
of stockholders in 2002 must be received by the Company by February 1, 2002 in
order to be eligible for inclusion in the proxy statement and proxy form
relating to such meeting. In addition, if any business should properly come
before such annual meeting other than that which is stated in such proxy
statement, then, if the Company does not receive notice of such matter by April
15, 2002, the persons designated in such proxy form will have discretionary
authority to vote or refrain from voting on any such proposal.
INCORPORATION BY REFERENCE
The Company's Audited Financial Statements, Management's Discussion and
Analysis of Financial Condition and Results of Operations, and Quantitative and
Qualitative Disclosures About Market Risk contained in the Company's Annual
Report on Form 10-K for the fiscal year ended January 31, 2001 previously filed
with the Securities and Exchange Commission by the Company (SEC File No.
0-18370) are incorporated by reference in this proxy statement.
IMPORTANT
All stockholders are cordially invited to attend the meeting in person.
If you cannot be present at the meeting, please sign and date the enclosed
Proxy and mail it PROMPTLY in the enclosed self-addressed envelope. No postage
need be affixed if mailed in the United States.
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MFRI, INC.
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. [ ]
FOR WITHHOLD FOR All
All ALL Except
1. ELECTION OF DIRECTORS FOR AGAINST ABSTAIN
Nominees: 01-David Unger, 3. Approval of 2001
02-Henry M. Mautner, 03-Gene K. Ogilvie, Stock Option Exchange
04-Fati A. Elgendy, 05-Bradley E. Mautner, Plan [ ] [ ] [ ]
06-Don Gruenberg, 07-Arnold F. Brookstone,
08-Eugene Miller, 09-Stephen B. Schwartz, [ ] [ ] [ ] 4. In accordance with their discretion upon all
10-Dennis Kessler. other matters that may properly come before
said meeting and any adjournment thereof.
- -----------------------------------------
(INSTRUCTION: TO WITHHOLD AUTHORITY TO THIS PROXY WILL BE VOTED IN ACCORDANCE
VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE WITH SPECIFICATIONS MADE. IF NO CHOICES
THAT NOMINEE'S NAME IN THE SPACE PROVIDED ARE INDICATED, THIS PROXY WILL BE VOTED
ABOVE AND MARK THE OVAL "FOR ALL EXCEPT") FOR EACH OF THE NOMINEES LISTED UNDER
ITEM 1 AND FOR THE PROPOSALS IN ITEMS
2 AND 3.
FOR AGAINST ABSTAIN
2. Approval of 2001 Independent Directors Dated: ,2001
Stock Option Plan [ ] [ ] [ ] --------------------------------
------------------------------------------
Signature
------------------------------------------
Signature
NOTE: PLEASE SIGN EXACTLY AS NAME APPEARS
HEREON. FOR JOINT ACCOUNTS, BOTH OWNERS SHOULD
SIGN. WHEN SIGNING AS EXECUTOR, ADMINISTRATOR,
ATTORNEY, TRUSTEE OR GUARDIAN, ETC., PLEASE
SIGN YOUR FULL TITLE.
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22
PROXY PROXY
MFRI, INC.
FOR SHARES OF COMMON STOCK SOLICITED ON
BEHALF OF THE BOARD OF DIRECTORS FOR THE ANNUAL MEETING
OF STOCKHOLDERS TO BE HELD ON JUNE 26, 2001
The undersigned hereby appoints DAVID UNGER, HENRY M. MAUTNER and MICHAEL
D. BENNETT, and each of them, proxies with power of substitution and revocation,
acting by majority of those present and voting, or if only one is present and
voting then that one, to vote, as designated on the reverse side hereof, all of
the shares of stock of MFRI, INC. which the undersigned is entitled to vote, at
the annual meeting of stockholders to be held at The Standard Club, 320 South
Plymouth Court, Chicago, Illinois on June 26, 2001 at 10:00 a.m. Chicago time,
and at any adjournment thereof, with all the powers the undersigned would
possess if present.
PLEASE VOTE, SIGN AND DATE ON REVERSE SIDE AND RETURN PROMPTLY IN THE
ENCLOSED ENVELOPE. NO POSTAGE NEED BE AFFIXED IF MAILED IN THE UNITED STATES.
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