<PAGE> 1
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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 [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C> <C>
[ ] 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.
</TABLE>
MPW INDUSTRIAL SERVICES GROUP, INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
XXXXXXXXXXXXXXXX
(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: .......
(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): ............
(4) Proposed maximum aggregate value of transaction: ......................
(5) Total fee paid: .......................................................
[ ] Fee paid previously with preliminary materials.
[ ] 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: ...............................................
(2) Form, Schedule or Registration Statement No.: .........................
(3) Filing Party: .........................................................
(4) Date Filed: ...........................................................
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<PAGE> 2
[MPW LOGO]
9711 Lancaster Road, S.E.
Hebron, Ohio 43025
------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD DECEMBER 13, 2000
------------------
To the Shareholders of
MPW Industrial Services Group, Inc.:
The Annual Meeting of Shareholders of MPW Industrial Services Group, Inc.
(the "Company") will be held at the Company's principal executive offices
located at 9711 Lancaster Road, S.E., Hebron, Ohio 43025 on Wednesday, December
13, 2000, at 10:00 a.m. local time for the following purposes:
1. To elect six Directors to serve for the ensuing year; and
2. To transact such other business as may properly come before the meeting
or any adjournment thereof.
Only shareholders of record at the close of business on November 10, 2000,
will be entitled to vote at the meeting and any adjournment thereof. A list of
such shareholders will be available at the time and place of the meeting and,
during the ten days prior to the meeting, at the Company's principal office.
By Order of the Board of Directors
/s/ IRA O. KANE
IRA O. KANE
President, Chief Operating Officer and
Secretary
Hebron, Ohio
October 27, 2000
YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING. IF YOU DO NOT EXPECT TO
ATTEND, PLEASE FILL IN, DATE, SIGN AND RETURN THE ENCLOSED FORM OF PROXY IN THE
ENCLOSED PREPAID ENVELOPE AS PROMPTLY AS POSSIBLE.
<PAGE> 3
MPW INDUSTRIAL SERVICES GROUP, INC.
9711 LANCASTER ROAD, S.E.
HEBRON, OHIO 43025
------------------
PROXY STATEMENT FOR THE 2000 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD DECEMBER 13, 2000
------------------
MPW Industrial Services Group, Inc. (the "Company") is mailing this Proxy
Statement to the shareholders of the Company in connection with the solicitation
of proxies by the Company's Board of Directors. These proxies will be used at
the Annual Meeting of Shareholders to be held at 10:00 a.m. on Wednesday,
December 13, 2000, at the Company's principal executive offices located at 9711
Lancaster Road, S.E., Hebron, Ohio 43025 and at any adjournment thereof (the
"Annual Meeting").
If a shareholder properly executes and returns the enclosed form of proxy,
it will be voted according to his or her instructions. If no instructions are
given, it will be voted (i) for the election as Directors of the six nominees
named below, and (ii) in the discretion of the proxies with respect to any other
matter that may come before the meeting. Any shareholder may revoke a previously
granted proxy by giving notice of revocation to the Company in writing or in
open meeting before the proxy is exercised. Attendance at the Annual Meeting
will not, in itself, constitute revocation of a previously granted proxy.
The Company will pay the expenses of soliciting proxies, including the
charges and expenses of brokers, nominees, fiduciaries and custodians incurred
in sending proxy materials to principals and obtaining their instructions. In
addition to the use of the mail, proxies may be solicited in person or by
telephone or telegraph. Directors, officers and regular employees of the Company
may solicit proxies without additional compensation.
This Proxy Statement, Notice of Annual Meeting of Shareholders and the
accompanying form of proxy are first being mailed to shareholders on or about
November 15, 2000.
VOTING
The Board of Directors has fixed the close of business on November 10,
2000, as the record date (the "Record Date") for determining shareholders
entitled to notice of and to vote at the Annual Meeting. On October 27, 2000,
there were outstanding 10,939,957 shares of the Company's Common Stock, without
par value ("Common Stock"), all of one class and all of which are entitled to be
voted at the Annual Meeting. Holders of issued and outstanding shares of Common
Stock are entitled to one vote for each share held by them.
At the Annual Meeting, the results of shareholder voting will be tabulated
by the inspector of elections appointed for the Annual Meeting. Under Ohio law
and the Company's Code of Regulations, properly executed proxies either marked
"abstain" or held in "street name" by brokers that are not voted on one or more
particular proposals (if otherwise voted on at least one proposal) will be
counted for purposes of determining whether a quorum has been achieved at the
Annual Meeting but will not be treated as either a vote for or a vote against
any of the proposals to which such abstention or broker non-vote applies.
<PAGE> 4
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The Company's Common Stock is the only outstanding class of voting
securities. The following table sets forth information regarding the beneficial
ownership of the Company's Common Stock as of October 27, 2000 by (a) each
person who owns beneficially more than 5% of Common Stock of the Company to the
extent known to management, (b) each director, nominee and named executive
officer of the Company, and (c) all directors and executive officers, as a
group. Unless otherwise indicated, the named persons exercise sole voting and
investment power over the shares that are shown as beneficially owned by them.
<TABLE>
<CAPTION>
AMOUNT
AND NATURE
OF BENEFICIAL PERCENT
BENEFICIAL OWNER OWNERSHIP OF CLASS
---------------- ------------- --------
<S> <C> <C>
Monte R. Black (1).......................................... 6,217,500 56.8%
Goldman Sachs Asset Management (2).......................... 1,098,033 10.0%
T. Rowe Price Associates, Inc. (3).......................... 738,400 6.7%
Susan K. Black.............................................. 620,000 5.7%
T. Rowe Price Small-Cap Stock Fund, Inc. (4)................ 575,000 5.3%
Monte R. Black and Susan K. Black 1994 Irrevocable Trust.... 547,840 5.0%
Ira O. Kane (5)............................................. 533,000 4.9%
Richard R. Kahle............................................ 0 *
C. Douglas Rockwell (6)..................................... 8,750 *
Alfred Friedman (7)......................................... 3,000 *
Pete A. Klisares (8)........................................ 4,000 *
Gerald Nilsson-Weiskott (9)................................. 8,000 *
Timothy A. Walsh (8)........................................ 4,500 *
J. Craig Wright (10)........................................ 13,500 *
All directors and executive officers as a group (9 persons)
(11)...................................................... 6,792,250 62.1%
</TABLE>
---------------
* less than 1%
(1) Includes (i) 620,000 shares of Common Stock held by Mr. Black's wife, Susan
K. Black, and (ii) an aggregate of 547,840 shares of Common Stock held in
trust for Mr. Black's children. Mr. Black disclaims beneficial ownership of
the foregoing shares. Also includes 17,500 shares of Common Stock subject
to options to purchase, which are currently exercisable within 60 days.
(2) Based on information contained in a Schedule 13G filed on February 10, 2000
and a Schedule 13G/A filed on March 10, 2000. The address for Goldman Sachs
Asset Management is 1 New York Plaza, New York, New York 10004.
(3) Based on information contained in a Schedule 13G filed on February 7, 2000.
The address for T. Rowe Price Associates, Inc. is 100 E. Pratt Street,
Baltimore, Maryland 21202.
(4) Based on information contained in a Schedule 13G filed on February 7, 2000.
The address for T. Rowe Price Small-Cap Stock Fund, Inc. is 100 E. Pratt
Street, Baltimore, Maryland 21202.
(5) Includes 533,000 shares of Common Stock subject to options to purchase,
which are currently exercisable or exercisable within 60 days.
(6) Includes 8,750 shares of Common Stock subject to options to purchase, which
are currently exercisable or exercisable within 60 days.
(7) Includes 2,000 shares of Common Stock subject to options to purchase, which
are currently exercisable or exercisable within 60 days.
(8) Includes 3,000 shares of Common Stock subject to options to purchase, which
are currently exercisable or exercisable within 60 days.
-2-
<PAGE> 5
(9) Includes (i) 1,750 shares of Common Stock held by Mr. Nilsson-Weiskott's
wife for which Mr. Nilsson-Weiskott disclaims beneficial ownership and (ii)
3,000 shares of Common Stock subject to options to purchase, which are
currently exercisable or exercisable within 60 days.
(10) Includes (i) 4,000 shares of Common Stock held in trust for Mr. Wright's
child, (ii) 1,000 shares of Common Stock held by Mr. Wright's wife and
(iii) 500 shares of Common Stock held by Alexi, Inc., a corporation in
which Mr. Wright holds a controlling interest. Mr. Wright disclaims
beneficial ownership of the foregoing shares. Also includes 2,000 shares of
Common Stock subject to options to purchase, which are currently
exercisable or exercisable within 60 days.
(11) Includes (i) 620,000 shares of Common Stock held by Mr. Black's wife, Susan
K. black, (ii) an aggregate of 547,840 shares of Common Stock held in trust
for Mr. Black's children, (iii) 4,000 shares of Common Stock held in trust
for Mr. Wright's child, (iv) 1,000 shares of Common Stock held by Mr.
Wright's wife, (v) 500 shares of Common Stock held by Alexi, Inc., a
corporation in which Mr. Wright holds a controlling interest and (vi) 1,750
shares of Common Stock held by Mr. Nilsson-Weiskott's wife. Mr. Black, Mr.
Wright and Mr. Nilsson-Weiskott disclaim beneficial ownership of the
following shares. Includes 721,250 shares of Common Stock subject to
options to purchase, which are currently exercisable or exercisable within
60 days.
-3-
<PAGE> 6
PROPOSAL: ELECTION OF DIRECTORS
INFORMATION CONCERNING THE NOMINEES
Six Directors will be elected at the Annual Meeting. Each Director elected
at the Annual Meeting will hold office until the next annual meeting of
shareholders and until his successor is duly elected and qualified, or until his
earlier death, resignation or removal from office. The Company's management
intends that the shares represented by the enclosed proxy will be voted, unless
the shareholder executing the proxy otherwise instructs, for the election to the
Board of Directors of each of the six nominees named below.
The Company has no reason to believe that any of such nominees will be
unable, if elected, to serve as a Director. However, if such an event should
occur, the Company's management intends that the shares represented by the
enclosed proxy will be voted for the remainder of the nominees, and for such
substitute nominee or nominees as may be selected by the Company's current Board
of Directors.
All of the nominees for Director named below are currently serving as
Directors of the Company for terms expiring at the Annual Meeting. Mr. Klisares
became a Director of the Company in February 1998, Mr. Friedman became a
Director in November 1998 and Messrs. Walsh and Wright became Directors in
September 1994 and May 1999, respectively. Mr. Kane took his position as a
Director of the Company in March 1994 and Mr. Black has served as the Chairman
of the Board of Directors since founding the Company in 1972. Dr.
Nilsson-Weiskott, a current Director of the Company, has declined to stand for
re-election.
The following table sets forth information regarding each of the persons
nominated for election to the Board of Directors. Certain biographical
information regarding each of the persons nominated for election to the Board of
Directors is described below the table.
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Monte R. Black 50 Chairman of the Board of Directors and Chief Executive
Officer
Ira O. Kane 53 President, Chief operating Officer and Secretary; Director
Pete A. Klisares 64 Director
Alfred Friedman 59 Director
Timothy A. Walsh 39 Director
J. Craig Wright 71 Director
</TABLE>
Monte R. Black originally founded the Company in 1972 and has served as
Chief Executive Officer and Chairman of the Board of Directors since that time.
Ira O. Kane has served as President, Chief Operating Officer and Director
of the Company since February 1994. Prior to joining the Company, Mr. Kane
served as chairman of the board of directors, senior executive vice president
and director of NSC Corporation, an asbestos abatement company, and president
and chief operating officer of NSC Industrial Services Corp., an industrial
services company, from June 1993 until February 1994. Prior to joining NSC
Corporation, Mr. Kane served as director and executive vice president of OHM
Corporation, an environmental services company, from January 1984 until June
1993. Prior to joining OHM Corporation, Mr. Kane was a partner with Crabbe,
Brown, Jones, Potts & Schmidt, a law firm.
Pete A. Klisares has served as a Director of the Company since February
1998. Mr. Klisares is the principal of MIGG Capital, an Ohio-based venture
capital company. Mr. Klisares previously served as president, chief operating
officer and a director of Karrington Health, Inc., a provider of assisted living
facilities, from August 1997 to June 1999. Prior to this time, Mr. Klisares
served in the following capacities with Worthington Industries, Inc., a
manufacturer of processed steel and custom cast products: (i) executive vice
president from August 1993 to July 1997, and (ii) assistant to the chairman of
the board of directors from December 1991 to July 1993. Before joining
Worthington Industries, Inc., Mr. Klisares served as executive director of JMAC,
Inc. an investment vehicle, from May 1991 to December 1991 and as Manufacturing
Vice President and General Manager of AT&T, a telecommunications firm, for more
than five years prior to May 1991. Mr. Klisares also
-4-
<PAGE> 7
serves as a director of Dominion Homes, Inc., a residential construction firm,
and Huntington National Bank, N.A., a national banking association.
Timothy A. Walsh has served as a Director of the Company since September
1994. Mr. Walsh has served as executive vice president, chief financial officer
and treasurer of Farm Family Holdings, Inc., a property and casualty company,
since February 2000 and as executive vice president, finance and treasurer for
Farm Family Holdings, Inc. since December 1996. Prior to this time, Mr. Walsh
served in the following capacities with Farm Family Insurance Company, a
subsidiary of Farm Family Holdings, Inc.: (i) senior vice president, finance
from March 1996 to November 1996; and (ii) director of corporate development
from August 1995 to March 1996. Prior to this time, Mr. Walsh served as Vice
President, Finance, Chief Financial Officer and Secretary of MPW Industrial
Services, Inc. from April 1994 until August 1995 and as corporate controller for
NSC Corporation, an asbestos abatement company, from June 1992 until April 1994.
Before joining NSC Corporation, Mr. Walsh was employed by KPMG Peat Marwick, a
public accounting firm.
Alfred Friedman has served as a Director of the Company since November
1998. Mr. Friedman has been an independent financial consultant since 1998 and
prior thereto was a partner at PricewaterhouseCoopers, LLC, an accounting firm,
or its predecessor firms since 1974.
J. Craig R. Wright has served as a Director of the Company since May 1999.
Mr. Wright is of counsel with Chester, Wilcox and Saxbe, a law firm, and prior
thereto, Mr. Wright was an Associate Justice of the Ohio Supreme Court from
January 1985 to March 1996.
EXECUTIVE OFFICERS AND NON-CONTINUING DIRECTOR
In addition to Messrs. Black and Kane, information with respect to whom is
set forth above, the executive officers and non-continuing Director of the
Company include the following:
C. Douglas Rockwell (age 48). Mr. Rockwell joined the Company in March 1999
and was appointed Vice President, New Business Strategies in July 1999. Prior to
joining the Company, Mr. Rockwell served as Manager, Global Service Business
Development from 1996 until 1999 and Manager, LMS-Leasing from 1994 to 1996 for
GE Transportation Systems, a subsidiary of General Electric Corporation, a
diversified industrial corporation, and before 1994 served in various capacities
for Southern Pacific Lines, a railway company.
Richard R. Kahle (age 36). Mr. Kahle joined the Company in September 2000
and was appointed Vice President, Chief Financial Officer and Treasurer. Prior
to joining the Company, Mr. Kahle served in the following capacities for Bank
One Corporation, a bank holding company, from January 1997 until September 2000:
(i) senior vice president -- finance, consumer lending division; (ii) manager of
financial planning and analysis -- consumer lending division; (iii) national
accounting director; (iv) director of financial reporting; and (v) corporate
accounting manager. Before joining Bank One Corporation, from December 1994
until December 1996, Mr. Kahle was the manager of financial accounting for
Clopay Corporation, a manufacturer, and from August 1990 until December 1994,
Mr. Kahle was the supervisor of financial reporting for Borden, Incorporated, a
manufacturer of chemicals, packaged foods, housewares and consumer adhesives.
Prior to joining Borden, Incorporated Mr. Kahle was employed by Deloitte &
Touche, a public accounting firm.
Gerald Nilsson-Weiskott (age 51). Dr. Nilsson-Weiskott served as a Director
of the Company from February 1998 until October 2000. Dr. Nilsson-Weiskott
founded and has served as senior partner of Organizational Horizons
Incorporated, a comprehensive human resource consulting firm, since 1983. Dr.
Nilsson-Weiskott also served as director of marketing and development of Healthy
Lifestyle Consultants, a behavioral health company, from 1979 until March 1997.
Prior to this time, Dr. Nilsson-Weiskott served as the director of training of
The Ohio State University Consultation and Counseling Services.
COMMITTEES OF THE BOARD OF DIRECTORS AND MEETINGS HELD
During the Company's fiscal year ended June 30, 2000 ("fiscal 2000"), the
Board of Directors of the Company held a total of five meetings.
-5-
<PAGE> 8
The Company has an Executive Committee that is empowered to exercise the
power and authority of the Board of Directors between meetings of the Board of
Directors. Messrs. Black, Kane, Klisares and Walsh are presently the members of
the Executive Committee, which did not meet during fiscal 2000.
The Compensation and Stock Option Committee (the "Compensation Committee")
of the Board of Directors met once during fiscal 2000. Messrs. Klisares,
Nilsson-Weiskott and Walsh are presently members of the Compensation Committee,
the primary function of which is to review and approve salaries and other
benefits for executive officers of the Company, to make recommendations to the
Board of Directors with respect to the adoption of employee benefit programs and
to administer the Company's stock option plans and approve awards of stock
options made under the Company's 1997 Stock Option Plan.
The Company has an Audit Committee, the primary function of which is to
oversee the accounting and auditing affairs of the Company. Messrs. Friedman,
Walsh and Wright presently serve as members of the Audit Committee, which met
twice during fiscal 2000.
The Company has no standing nominating committee or committee performing
similar functions.
-6-
<PAGE> 9
EXECUTIVE COMPENSATION AND OTHER INFORMATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The compensation discussion that follows has been prepared based on the
actual plan and non-plan compensation awarded to, earned by or paid to the
Company's named executive officers during the periods presented. The Company's
compensation arrangements with its directors and certain arrangements with its
named executive officers are described below.
CASH COMPENSATION TABLE
The following table sets forth the compensation paid or payable by the
Company during the fiscal years ended June 30, 2000, 1999 and 1998, to those
individuals serving as the registrant's chief executive officer at any time
during fiscal 2000 and certain other executive officers of the Company.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION AWARDS
------------------- ---------------------
SALARY BONUS SECURITIES UNDERLYING
NAME AND PRINCIPAL POSITION YEAR ($) ($) OPTIONS (#)
--------------------------- ---- -------- -------- ---------------------
<S> <C> <C> <C> <C>
Monte R. Black 2000 458,800 -- --
Chairman of the Board of Directors and Chief 1999 453,200 294,580 35,000
Executive Officer 1998 453,097 226,600 --
Ira O. Kane 2000 337,700 -- --
President and Chief Operating Officer 1999 300,000 222,750 30,000
1998 279,167 181,000 --
Daniel P. Buettin(1) 2000 189,300 -- --
Vice President, Chief Financial Officer, and 1999 168,800 109,284 25,000
Assistant Secretary 1998 150,083 84,000 --
C. Douglas Rockwell(2) 2000 163,700 23,000 --
Vice President, Business Development 1999 44,400 -- 35,000
Robert J. Gilker(3) 2000 169,400 -- --
Vice President, Law and Administration and 1999 168,800 42,000 100,000
Secretary --
</TABLE>
---------------
(1) Subsequent to the end of the 2000 fiscal year, Mr. Buettin resigned as an
officer of the Company.
(2) Mr. Rockwell joined the Company in March 1999.
(3) Mr. Gilker joined the Company in July 1998 and, subsequent to the end of the
2000 fiscal year, resigned as an officer of the Company.
-7-
<PAGE> 10
FISCAL 2000 AGGREGATED OPTION EXERCISES FY-END OPTION VALUES
The following table sets forth information concerning the exercise of stock
options by each of the Company's named executive officers during fiscal 2000 and
fiscal year end value of unexercised options.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS AT FISCAL YEAR- OPTIONS AT FISCAL YEAR-
SHARES VALUE END(#) END($)(1)
ACQUIRED ON REALIZED --------------------------- ---------------------------
NAME EXERCISE(#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Monte R. Black........... -- -- 8,750 26,250 -- --
Ira O. Kane.............. -- -- 525,500 22,500 2,904,426 --
Daniel P. Buettin........ 49,923 402,499 135,750 37,250 663,947 89,488
C. Douglas Rockwell...... -- -- 8,750 26,250 -- --
Robert J. Gilker......... -- -- 50,000 50,000 -- --
</TABLE>
---------------
(1) Value is based on the June 30, 2000 closing price of $7.75 per share of the
Company's common stock on the NASDAQ National Market.
DIRECTORS' COMPENSATION
Directors who are employees of the Company do not receive compensation for
serving as Directors. Non-employee Directors are paid a quarterly fee of $1,500
as well as additional fees of $1,000 for each meeting of the Board of Directors
or of a committee of the Board of Directors attended by such Director. In
addition, under the Company's 1997 Stock Option Plan each non-employee Director
of the Company who is in office on the business day following the date of the
first annual meeting of shareholders of the Company following the date at which
he or she is elected a Director receives an option to purchase 2,000 shares of
Common Stock and each non-employee Director of the Company in office on the
business day following the date of each subsequent annual meeting of
shareholders receives an option to purchase 1,000 shares of Common Stock. All
Directors of the Company also are reimbursed for reasonable travel expenses to
and from meetings of the Board of Directors and committees.
SEVERANCE AGREEMENTS WITH CERTAIN EXECUTIVES
The Company entered into separate severance agreements (the "Severance
Agreements"), which are designed to ensure the continuity of management in the
event of a change in control, with Mr. Black, Mr. Kane, Mr. Rockwell, Mr.
Buettin and Mr. Gilker. The Severance Agreements provide that following a change
in control such executives will be entitled to severance compensation upon
termination of employment during the period commencing with the occurrence of
the change in control and continuing until the earliest of (i) the third
anniversary of the occurrence of the change in control, (ii) death or (iii)
attainment of age 65 and the occurrence of one or more certain additional
events.
Under the Severance Agreements, severance compensation will be a lump sum
payment in an amount equal to three times the sum of (i) base pay at the highest
rate in effect for the three calendar years immediately preceding the year in
which the change in control occurs, plus (ii) incentive pay in an amount equal
to not less than the highest aggregate annual bonus, incentive or other payments
of cash compensation made or to be made in regard to services rendered in any
fiscal year during the three fiscal years immediately preceding the year in
which the change in control occurs, less the sum of (iii) any and all payments
received from the Company, a successor or their affiliates following a change in
control, plus (iv) any future payments to be made in accordance with any
employment agreements or other contracts between the Company and such other
entities. For three years following termination, the Company will arrange to
provide the executives with welfare benefits substantially similar to those they
were receiving or were entitled to receive immediately prior to the termination
date, with such three-year period qualifying as service with the Company for the
purpose of determining service credits and benefits under the Company's various
retirement benefit plans.
The Company has agreed to pay any and all legal fees incurred by these
executives in connection with the interpretation, enforcement or defense of
their rights under the Severance Agreements. The terms of the
-8-
<PAGE> 11
Severance Agreements run until the later of (i) the close of business on June
30, 2002 or (ii) the expiration of the three-year period of severance benefit
coverage. Beginning in fiscal 2003, the Severance Agreements will automatically
be renewed for successive one year terms unless the Company or the executive
gives notice of intent to terminate before such renewal.
Subsequent to the end of fiscal 2000, Mr. Buettin and Mr. Gilker resigned
as executive officers of the Company in connection with the proposed
privatization of the Company. Mr. Buettin and Mr. Gilker each entered into a
Severance and Release Agreement with the Company, providing for certain payments
and benefits. Pursuant to their Severance and Release Agreements, Mr. Buettin
and Mr. Gilker received payments of $228,500 and $185,500, respectively, and
will receive additional payments of $450,000 and $300,000, respectively, if,
within three years of August 1, 2000 (i) the Company consummates a going-private
transaction, (ii) a majority of the Company's voting Common Stock is held by any
person or group other than Monte R. Black and his affiliates or (iii) the
Company sells more than 52% of its assets as they appear on its September 30,
2000 balance sheet.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee consists of Messrs. Klisares, Nilsson-Weiskott
and Walsh. Prior to November, 1997, the Company never had a Compensation
Committee or other committee of the Board of Directors performing similar
functions and decisions concerning compensation of executive officers of the
Company were made by the Company's Chief Executive Officer. Mr. Walsh served as
Vice President, Finance, Chief Financial Officer and Secretary of MPW Industrial
Services, Inc., a subsidiary of the Company, from April 1994 until August 1995.
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION*
The Compensation Committee of the Board (the "Compensation Committee") is
comprised of three outside directors, none of whom is or was formerly an officer
of the Company, although Mr. Walsh served as Vice President, Finance, Chief
Financial Officer and Secretary of MPW Industrial Services, Inc., a subsidiary
of the Company from April 1994 until August 1995. During fiscal 2000, none of
the Company's executive officers served on the board of any entity of which a
Compensation Committee member was an executive officer or on the compensation
committee of any entity of which any director of the company was an executive
officer.
Role of Compensation Committee
Prior to November 1997, the Company had no Compensation Committee, and
decisions concerning compensation of executive officers of the Company were made
by the Company's Chief Executive Officer. Following the Company's initial public
offering (the "Offering"), the Compensation Committee undertook the oversight
responsibility for the Company's executive compensation program.
In general, the Company's compensation program for executive officers
consists of three primary elements: a base salary, a discretionary bonus and
periodic grants of stock options. The Compensation Committee believes that it is
important to pay competitive salaries but also to make a high proportion of the
executive officers' total compensation at risk in order to cause the executive
officers to focus on both the short-term and the long-term interests of the
Company's shareholders. Therefore, the bonus (which permits individual
performance to be recognized on an annual basis, and which is based, in part, on
an evaluation of the contribution made by the executive officer to the Company's
performance and other individual and organizational goals) and stock option
grants (which directly tie the executive officer's long-term remuneration to
stock price appreciation realized by the Company's shareholders) are important
components of the overall compensation package.
---------------
* Notwithstanding anything to the contrary set forth in the Company's previous
filings under the Securities Act of 1933 or the Securities Exchange Act of
1934 that might incorporate future filings, including this proxy statement, in
whole or in part, the information set forth under "--Board Compensation
Committee Report on Executive Compensation" and "--Performance Graph" shall
not be incorporated by reference into any such filings.
-9-
<PAGE> 12
Base Salary
Base salary is reviewed annually. In evaluating the base salary component
of compensation for the Company's executive officers the Compensation Committee
considers individual performance and industry analysis and comparisons.
For fiscal 2000, only one of the Company's executive officers received an
increase in base salary; all other base salaries for the Company's executive
officers remained unchanged.
Bonus Plan
Bonuses are awarded at the discretion of the Compensation Committee and are
targeted at a percentage of the annual base salary of each executive officer.
The targeted bonus is the bonus the Company expects to award, based on the
Company's and individual's achievement of certain performance objectives. The
granted bonus may be more or less than the targeted percentage, based on the
subjective determination by the Compensation Committee of the executive's
performance and the Company's performance in relation to the stated goals. For
fiscal 2000, only one of the Company's executive officers received a bonus.
Stock Options
The purpose of the Company's 1997 Stock Option Plan is to attract and
retain key personnel and directors of the Company and to enhance their interest
in the Company's continued success. The maximum number of the Company's Common
Shares with respect to which awards may be granted under the 1997 Stock Option
Plan is 1,200,000. During fiscal 2000, the Company did not grant stock options
to any of its executive officers.
Chief Executive Officer Compensation
Mr. Black, the Company's Chief Executive Officer, was paid an annual salary
of $458,800 for the fiscal year ended June 30, 2000. For fiscal 2000, Mr. Black
did not receive a bonus and was not granted any stock options. The Compensation
Committee believes that tying the remuneration of Mr. Black to the performance
of the Common Stock will enhance the long-term performance and stability of the
Company.
Section 162(m) Compliance
Section 162(m) of the Code places certain restrictions on the amount of
compensation in excess of $1,000,000 which may be deducted for each executive
officer. The Company intends to satisfy the requirements of Section 162(m)
should the need arise.
Submitted by the Compensation
Committee of the Company
TIMOTHY A. WALSH, Chairman
PETE A. KLISARES
GERALD NILSSON-WEISKOTT
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<PAGE> 13
PERFORMANCE GRAPH*
Set forth below is a line graph comparing the yearly percentage change in
the cumulative total shareholder return on the Common Stock against the
cumulative total return of the S&P Composite-500 Stock Index, (i) a peer group
of companies selected by the Company consisting of companies engaged in whole or
in part in the industrial cleaning and maintenance industry (the "Industrial
Cleaning Peer Group") and (ii) a peer group selected by the Company to include
companies that provide a broader range of services to industry and composed of
the companies that make up the Facilities Services Group as defined by analysts
from Deutsche Bank Alex. Brows (the "Facilities Services Peer Group"). These
companies are similar to the Company in that they provide various services to
industry on an outsourcing basis, though not necessarily the same types of
services as the Company. The companies that make up the Industrial Cleaning Peer
Group are: ABM Industries, Inc., Harsco Corporation, Philip Services Corp., The
Servicemaster Company and Valley Systems, Inc. The companies that make up the
Facilities Services Peer Group are: ABM Industries, Inc., Arguss Communications,
Inc., Comfort Systems USA, Inc., Dycom Industries, Inc., Emcor Group, Inc.,
Encompass Services Corp., Firstservice Corporation, Integrated Electrical
Services, Inc., Mastec Inc., Mobile Mini, Inc., Quanta Services, Inc., The
Servicemaster Company, United Rentals, Inc. and Viad Corp.
COMPARISON OF CUMULATIVE TOTAL RETURN*
AMONG MPW INDUSTRIAL SERVICES GROUP, INC., THE S & P 500 INDEX,
THE INDUSTRIAL CLEANING PEER GROUP AND THE FACILITIES SERVICES PEER GROUP
[INSERT COMPARISON GRAFT]
<TABLE>
<S> <C> <C>
MPW INDUSTRIAL SERVICES GROUP, INC. FACILITIES SERVICES PEER GROUP
12/2/97 100 100
12/97 100 112
1/98 92 113
2/98 108 118
3/98 121 124
4/98 133 126
5/98 153 134
6/98 150 148
7/98 125 135
8/98 101 114
9/98 106 123
10/98 111 129
11/98 133 129
12/98 125 143
1/99 136 139
2/99 128 129
3/99 92 133
4/99 101 138
5/99 114 133
6/99 111 143
7/99 118 139
8/99 101 120
9/99 79 121
10/99 89 102
11/99 103 105
12/99 88 107
1/00 89 112
2/00 88 111
3/00 61 124
4/00 81 133
5/00 76 128
6/00 86 124
<S> <C> <C>
S&P 500 INDUSTRIAL CLEANING PEER GROUP
12/2/97 100 100
12/97 100 111
1/98 101 97
2/98 108 100
3/98 114 106
4/98 115 101
5/98 113 104
6/98 118 116
7/98 116 104
8/98 99 93
9/98 106 89
10/98 114 91
11/98 121 94
12/98 128 94
1/99 134 83
2/99 130 82
3/99 135 86
4/99 140 86
5/99 137 81
6/99 144 84
7/99 140 80
8/99 139 73
9/99 135 73
10/99 144 63
11/99 147 62
12/99 155 61
1/00 148 66
2/00 145 55
3/00 159 57
4/00 154 66
5/00 151 62
6/00 155 56
</TABLE>
* $100 INVESTED ON 12/2/97 IN STOCK OR INDEX-
INCLUDING REINVESTMENT OF DIVIDENDS.
FISCAL YEAR ENDED JUNE 30.
---------------
* Notwithstanding anything to the contrary set forth in the Company's previous
filings under the Securities Act of 1933 or the Securities Exchange Act of
1934 that might incorporate future filings, including this proxy statement, in
whole or in part, the information set forth under "-- Board Compensation
Committee Report on Executive Compensation" and "-- Performance Graph" shall
not be incorporated by reference into any such filings.
-11-
<PAGE> 14
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On August 9, 1996, the Company sold certain real estate and a commercial
building located in Chesterfield, Michigan, which currently serves as one of the
Company's industrial container cleaning facilities, to the Black Family Limited
Partnership, an Ohio limited partnership in which Monte R. Black serves as the
sole general partner, for an aggregate consideration of $2.2 million. As part of
the same transaction, the partnership and the Company entered into a long-term
lease arrangement with respect to the facility for a term of ten years at an
annual payment amount of approximately $421,000, payable monthly. In connection
with the Offering, the Company entered into an amended lease agreement through
June 30, 2004, which provides for an annual rental of $288,000, payable monthly,
which the Company believes is no less favorable than it would obtain in a third
party arm's-length transaction.
As part of an industrial revenue bond financing in 1986, Monte R. and Susan
K. Black constructed an approximately 67,000 square foot building in Hebron,
Ohio, which the Company leased for a ten-year term. Annual rent payments on the
building and equipment during this ten-year term were $726,000, payable monthly.
In connection with the Offering, the Company entered into an amended lease
agreement through June 30, 2004, which provides for an annual rental of
$600,000, payable monthly, which the Company believes is no less favorable than
it would obtain in a third party arm's-length transaction.
In 1989 the Company entered into a five-year agreement to rent certain real
estate and a commercial building located in Newark, Ohio from Monte R. and Susan
K. Black as the principal offices of the Company's industrial water subsidiary.
In 1993 the Company extended the lease for an additional five-year term. Annual
lease payments were $46,920, payable monthly. Effective July 1, 1997, the
Company entered into a lease agreement through June 30, 2004, which provides for
an annual rental of $66,000, payable monthly, which the Company believes is no
less favorable than it would obtain in a third party arm's-length transaction.
In 1999, the Company entered into a seventy-five month agreement to rent
certain real estate and a commercial building located in Newark, Ohio from
Miramonte Properties, LLC, a limited liability company controlled by Monte R.
Black, as additional operating space for the Company's industrial water
subsidiary. The lease provides for annual rental of $54,000 payable monthly,
which the Company believes is no less favorable than it would obtain in a third
party arm's-length transaction.
The Company provides from time to time certain operational, administrative
and financial services to Pro-Kleen Industrial Services, Inc., a portable
sanitation services company wholly-owned by Monte R. Black. During fiscal 2000,
such services totaled $61,000.
In February 1998, the Company sold its corporate aircraft at a fair market
value of $3.6 million to an entity controlled by Monte R. Black. The purchase
price was paid by redeeming a portion of the indebtedness created by the
termination prior to the Offering, of the S Corporation status of MPW Industrial
Services, Inc. ("Industrial") and distribution of accumulated undistributed
earnings to the former shareholders of Industrial. At the same time, the Company
entered into a five-year agreement to rent the aircraft from such entity for an
annual lease payment of $360,000, payable monthly, plus applicable state and
local sales taxes. This lease terminates on January 31, 2003 unless extended by
the parties or unless terminated earlier by either party on no less than 120
days' prior written notice.
C. Douglas Rockwell, who joined the Company in March 1999 and became an
executive officer in July 1999, received a loan from the Company in the
principal amount of $130,000 to facilitate relocation. The loan matures on May
12, 2001 bears interest at the lowest per annum rate necessary to avoid
imputation of interest under Internal Revenue Service regulations and is secured
by a second mortgage on Mr. Rockwell's residence.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's Directors and Executive Officers to file reports of ownership and
changes of ownership with the Securities and Exchange Commission. The Company
assists its Directors and Executive Officers in completing and filing those
reports. The Company believes that during the last completed fiscal year all
filing requirements applicable to its Directors
-12-
<PAGE> 15
and Executive Officers were complied with, except that Daniel P. Buettin, who
resigned as Vice President, Chief Financial Officer and Assistant Secretary
subsequent to the end of the fiscal year, filed a late report with respect to
one sale of Common Stock.
SHAREHOLDER PROPOSALS FOR THE 2001 ANNUAL MEETING
Shareholder proposals for the 2001 annual meeting of shareholders (the
"2001 Annual Meeting") must be received by the Secretary of the Company by June
4, 2001, to be included in the Company's proxy statement, notice of annual
meeting and proxy related to the 2001 Annual Meeting.
OTHER MATTERS
Ernst & Young LLP served as the Company's independent auditors for the
fiscal year ended June 30, 2000. REPRESENTATIVES OF ERNST & YOUNG LLP ARE
EXPECTED TO APPEAR AT THE ANNUAL MEETING TO MAKE A STATEMENT, IF THEY WISH TO DO
SO, AND TO BE AVAILABLE TO ANSWER APPROPRIATE QUESTIONS FROM SHAREHOLDERS AT
THAT TIME. THE BOARD OF DIRECTORS EXPECTS TO REAPPOINT ERNST & YOUNG LLP AS ITS
INDEPENDENT AUDITORS FOR THE FISCAL YEAR ENDING JUNE 30, 2001.
The Board of Directors knows of no other matters to be presented for action
at the forthcoming Annual Meeting. However, the proxy confers upon the persons
named therein discretionary authority to act upon any other matter that may
properly come before the meeting.
THE COMPANY WILL FURNISH A COPY OF ITS ANNUAL REPORT ON FORM 10-K FOR THE
YEAR ENDED JUNE 30, 2000, INCLUDING FINANCIAL STATEMENTS AND SCHEDULES THERETO,
BUT EXCLUDING OTHER EXHIBITS, WITHOUT CHARGE, TO ANY PERSON UPON WRITTEN REQUEST
ADDRESSED TO IRA O. KANE, PRESIDENT, CHIEF OPERATING OFFICER AND SECRETARY, MPW
INDUSTRIAL SERVICES GROUP, INC., 9711 LANCASTER ROAD, S.E., HEBRON, OHIO 43025.
/s/ IRA O. KANE
IRA O. KANE
President, Chief Operating Officer and
Secretary
October 27, 2000
Hebron, Ohio
-13-
<PAGE> 16
MPW INDUSTRIAL SERVICES GROUP, INC.
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS, DECEMBER 13, 2000
The undersigned hereby appoints each of Monte R. Black, Ira O. Kane
and Richard R. Kahle as proxies with full power of substitution, and
hereby authorizes each of them to present and vote, as designated on
the reverse side of this card, all the shares of Common Stock, without
par value, held of record on November 10, 2000 by the undersigned in
MPW INDUSTRIAL SERVICES GROUP, INC., at the Annual Meeting of
Shareholders to be held on December 13, 2000 and at any adjournments
thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. When
properly executed, it will be voted in the manner directed on the
reverse side of this card by the undersigned shareholder, if no
direction is made, this proxy will be voted for Proposal #1.
PLEASE MARK, SIGN, DATE AND MAIL THIS PROXY CARD PROMPTLY, USING THE
ENCLOSED PREPAID ENVELOPE.
Date: , 2000
------------------------------
------------------------------
Shareholder Signature
PLEASE SIGN YOUR NAME EXACTLY
AS IT APPEARS AT LEFT. IN
SIGNING AS ATTORNEY, EXECUTOR,
TRUSTEE OR GUARDIAN, PLEASE
GIVE YOUR FULL TITLE AS SUCH,
AND IF SIGNING FOR A
CORPORATION, PLEASE GIVE YOUR
TITLE. WHEN SHARES ARE IN THE
NAME OF MORE THAN ONE PERSON,
EACH SHOULD SIGN.
MPW INDUSTRIAL SERVICES GROUP, INC.
PROXY
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL #1.
1. Election of Directors:
<TABLE>
<S> <C>
[ ]FOR all of the nominees, except vote withheld from those whose names are entered on the line below:
NOMINEES: Monte R. Black, Alfred Friedman, Ira O. Kane, Pete A. Kilsares, Timothy A. Walsh and J.
Craig R. Wright
-------------------------------------------------------------------------------------------------------
[ ]WITHHOLD authority to vote for all of the above nominees
</TABLE>
2. In their discretion, the proxies are authorized to vote upon such
other business as may properly come before the meeting or any
adjournment thereof.
BE SURE TO DATE AND SIGN THE REVERSE SIDE OF THIS CARD
P
R
O
X
Y
Proxy Card
