METALCLAD CORPORATION
2 Corporate Plaza, Suite 125
Newport Beach, California 92660
PRELIMINARY
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 14, 2000
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders
(the "Meeting") of METALCLAD CORPORATION, a Delaware corporation (the
"Company"), will be held at the Hyatt Newporter Hotel, Patio Room, 1107
Jamboree Road, Newport Beach, California 92660, on June 14, 2000, at 10:00
A.M. local time, for the following purposes:
1. To elect five members of the Board of Directors to serve until the
next Annual Meeting of Stockholders;
2. To consider and act upon the ratification of the appointment of
Moss Adams LLP as the independent public accountants of the Company for the
year ending December 31, 2000.
3. To transact such other business as may properly come before the
Meeting or any adjournments thereof.
The Board of Directors has fixed the close of business on May 5,
2000 as the record date for the determination of stockholders entitled to
notice of and to vote at the Meeting. Only holders of the Company's Common
Stock at the close of business on the record date are entitled to vote at
the Meeting.
You are cordially invited to attend the Meeting in person.
However, whether you plan to attend or not, we urge you to complete, date,
sign, and return the enclosed proxy promptly in the envelope provided, to
which no postage need be affixed if mailed in the United States, in order
that as many shares as possible may be represented at the Meeting.
BY ORDER OF THE BOARD OF DIRECTORS
/s/Bruce H. Haglund
-------------------
Bruce H. Haglund, Secretary
Newport Beach, California
May 12, 2000
YOUR VOTE IS IMPORTANT.
PLEASE SIGN AND RETURN THE ENCLOSED PROXY CARD
AS PROMPTLY AS POSSIBLE IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
THANK YOU FOR ACTING PROMPTLY.
<PAGE>
METALCLAD CORPORATION
2 Corporate Plaza, Suite 125
Newport Beach, California 92660
PRELIMINARY
PROXY STATEMENT
June 14, 2000
---------------------------------------
SOLICITATION OF PROXY, REVOCABILITY, AND VOTING
General
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of Metalclad Corporation, a Delaware
corporation (the "Company"), to be used at the Annual Meeting of Stockholders
(the "Meeting") of the Company to be held at the Hyatt Newporter Hotel, Patio
Room, 1107 Jamboree Road, Newport Beach, California 92660, on June 14, 2000
at 10:00 A.M. local time, or any adjournment thereof. This Proxy Statement
and accompanying form of proxy are first being mailed to stockholders on or
about the date shown above.
Revocability
Any proxy given pursuant to this solicitation may be revoked by the
person giving it at any time before its exercise by notice in writing to the
Secretary of the Company prior to the Meeting or by attending the Meeting
and voting in person. Unless the proxy is revoked, the shares represented
thereby will be voted as specified at the Meeting or any adjournment
thereof.
Solicitation
This Proxy Statement is being mailed on or about May 12, 2000 in
connection with the solicitation of proxies by the Board of Directors of the
Company. The entire cost of soliciting proxies will be borne by the
Company. Proxies may be solicited by mail or telegraph, or by the
directors, officers or regular employees of the Company in person or by
telephone without additional compensation for such services.
Vote of Proxies
Subject to revocation, all shares represented by duly executed proxies
will be voted for the election of the nominees named above as directors
unless authority to vote for the proposed slate of directors or any
individual director has been withheld. With respect to the proposal to
approve the appointment of Moss Adams, LLP as the Company's independent
accountants, all such shares will be voted for or against, or not voted, as
specified on each proxy. If no choice is indicated, a proxy will be voted
for the proposal to ratify the appointment of the accountants. If no choice
is indicated, a proxy will not be voted on such proposal. If any other
matters are properly presented at the Meeting, the Proxy will be voted in
accordance with the best judgment and in the discretion of the Proxy
Holders.
Voting and Record Date
Only stockholders of record of the Company's $.10 par value common
stock ("Common Stock") at the close of business on May 5, 2000 will be
entitled to notice of and to vote at the Meeting. As of that date, the
total number of shares issued and outstanding of Common Stock was 5,150,498.
In voting on matters other than the election of directors, each share
of Common Stock entitles the holder thereof on the record date to one vote
at the Meeting. The appointment of the accountants will require the
affirmative vote of a majority of the shares present at the Meeting in order
to be valid and binding.
With respect to the election of directors of the Company, the
stockholders have cumulative voting rights, whereby any stockholder may
multiply the number of shares he is entitled to vote by the number of
directors to be elected and allocate his votes among the candidates in any
manner he chooses. The five nominees receiving the highest number of votes
shall be duly elected. There are no conditions precedent to the exercise of
the right to cumulate votes in the election of directors of the Company;
stockholders may exercise such cumulative voting rights, either in person or
by proxy, with or without advance notice to the Company.
QUORUM AND PRINCIPAL SHAREHOLDERS
The presence in person or by proxy of the holders of a majority of the
total outstanding voting shares is necessary to constitute a quorum at the
Meeting. Approval of the proposals to be presented at the Meeting, except
for the election of directors (as discussed above), will require the
affirmative vote of the holders of a majority of the shares present at the
Meeting.
The following table sets forth certain information as of March 15, 2000
relating to the beneficial ownership of the Company's Common Stock by (i)
all persons known by the Company to beneficially own more than 5% of the
outstanding shares of the Company's Common Stock, (ii) each director,
director nominee, and officer of the Company, and (iii) all officers and
directors of the Company as a group.
<PAGE>
<TABLE>
<CAPTION>
Name and Address of Amount and Nature of Percent
Beneficial Owner (1) Beneficial Ownership of Class (2)
- -------------------- -------------------- ------------
<S> <C> <C>
Grant S. Kesler (3) 393,500 7.14%
2 Corporate Plaza, Suite 125
Newport Beach, California 92660
Anthony C. Dabbene (4) 162,600 3.07%
2 Corporate Plaza, Suite 125
Newport Beach, California 92660
Bruce H. Haglund (5) 63,783 1.22%
2 Park Plaza, Suite 450
Irvine, California 92614
J. Thomas Talbot (6) 23,333 *
24 Corporate Plaza
Newport Beach, California 92660
Raymond J. Pacini (7) 23,733 *
6 Executive Circle
Suite 250
Irvine, California 92614
Jan Chr. G. Sundt (8) 1,169,166 18.53%
Luddesdown Court Lodge
Luddesdown, Near Cobham
Kent DA13 OXE
England
Oakes, Fitzwilliams & Co. Limited (9) 868,716 14.43%
7-9 St. James's Place
London SW1A 1EE
England
All Officers and Directors As a Group (5) 666,949 11.57%
- -----------------------------
*Less than one percent.
</TABLE>
(1) Beneficial ownership is determined in accordance with rules of the
Securities and Exchange Commission (the "SEC"). In computing the number of
shares beneficially owned by a person and the percentage ownership of that
person, shares of Common Stock subject to options, warrants or convertible
debt held by that person that are exercisable within 60 days of May 5, 2000
are deemed outstanding. Such shares, however, are not deemed outstanding
for purposes of computing the ownership of any other person. Except as
indicated in the footnotes to this table and pursuant to applicable
community property laws, the stockholder named in the table has sole voting
and investment power with respect to the shares set forth opposite such
stockholders' name.
(2) Based on 5,150,498 shares outstanding as of May 5, 2000.
(3) Includes 359,500 shares issuable upon exercise of stock options
exercisable within 60 days of May 5, 2000.
(4) Includes 150,000 shares issuable upon exercise of stock options
exercisable within 60 days of May 5, 2000.
(5) Includes 63,133 shares issuable upon exercise of stock options
exercisable within 60 days of May 5, 2000.
(6) Includes 23,333 shares issuable upon exercise of stock options
exercisable within 60 days of May 5, 2000.
(7) Includes 23,333 shares issuable upon exercise of stock options
exercisable within 60 days of May 5, 2000.
(8) Includes warrants to purchase 371,954 shares and debt conversion rights
to 788,4809 shares exercisable within 60 days of May 5, 2000
(9) Includes warrants to purchase 868,716 shares exercisable within 60 days
of May 5, 2000.
ELECTION OF DIRECTORS
The Bylaws of the Company provide that the directors or the
stockholders shall determine the number of directors. The directors have
set the number of directors for the ensuing year at nine. Five members of
the Board of Directors are to be elected at the Meeting. Vacancies on the
Board during the year may be filled by the majority vote of the directors in
office at the time of the vacancy without further action by the
stockholders.
The Board of Directors has nominated Anthony C. Dabbene, Grant S.
Kesler, Bruce H. Haglund, J. Thomas Talbot and Raymond J. Pacini for
election as directors for the ensuing year.
It is the intention of the persons named in the enclosed form of proxy
to vote such proxies for the election of the nominees listed herein. The
proposed nominees are willing to serve for the ensuing year, but in the
event any nominee at the time of election is unable to serve or is otherwise
unavailable for election, it is intended that votes will be cast pursuant to
the accompanying proxy for substitute nominees designed by the Board of
Directors.
Cumulative voting applies to the election of directors. The five
nominees receiving the highest number of votes shall be duly elected.
Information about Nominees and Directors
The following sets forth certain information for each person who is a
director or nominated for election to the Board of Directors:
Director
or Officer Current Position
Name Age Since With the Company
- --------------------------------------------------------------------------
Grant S. Kesler 57 1991 President, Chief Executive
Officer, Director
Anthony C. Dabbene 48 1996 Chief Financial Officer,
Director
Bruce H. Haglund Esq. 48 1993 Secretary, Director
J. Thomas Talbot 64 1999 Director
Raymond J. Pacini 44 1999 Director
Grant S. Kesler has served as a Director of the Company since February
1991 and has been Chief Executive Officer since May 1991. From 1982 to May
1991, he was employed by Paradigm Securities, Inc., a company he formed in
1982. In 1975, he was General Counsel to Development Associates, a real
estate development firm. Earlier, he was engaged in the private practice of
law, served as an assistant attorney general for the State of Utah, and
served as an intern to the chief justice of the Utah Supreme Court.
Anthony C. Dabbene has been the Chief Financial Officer for the Company
since January 1996 and a Director since May 1997. Prior to his employment
with the Company, Mr. Dabbene was employed by LG & E Energy Corp. for 10
years, including service as Vice President and Controller to the Energy
Services Group. From 1973 to 1985, he was employed by EBASCO Services
Incorporated, where he was Manager - Finance and Administration for the
Western region from 1981 to 1985.
Bruce H. Haglund has served as Secretary-General Counsel of the Company
since 1983 and served as a Director of the Company from 1983 to July 1991
and again in 1999. Mr. Haglund is a principal in the law firm of Gibson,
Haglund & Paulsen in Orange County, California where he has been engaged in
the private practice of law since 1980. He is also a member of the Boards
of Directors of Aviation Distributors, Inc., HydroMaid International, Inc.,
Renaissance Golf Products, Inc. and VitriSeal, Inc.
J. Thomas Talbot has been a Director since 1999. Mr. Talbot is the
owner of The Talbot Company, an investment and asset management company and
has been the Chief Executive Officer of HAL, Inc., the parent company of
Hawaiian Airlines. He currently serves on the boards of directors of The
Hallwood Group, Inc., Fidelity National Financial, Inc., California Coastal
Communities, Inc., Competisys LLC and The Pacific Club.
Raymond J. Pacini has been a Director since 1999 and is the President,
Chief Executive Officer, and a Director of California Coastal Communities,
Inc. (formerly Koll Real Estate Group, Inc.), where he has been since 1990.
Prior to 1998, he was the Executive Vice President and Chief Financial
Officer of Koll Real Estate Group, Inc.
Committees and Compensation of the Board of Directors
The Board of Directors held 4 meetings during the period January 1,
1999 to December 31, 1999. Each director attended at least 75% of the total
number of Board Meetings held during the year ended December 31, 1999.
Board members who are not employees or consultants to the Company are
presently entitled to receive $1,000 for their attendance at Board meetings
and committee meetings, with a minimum annual fee of $10,000, and members of
the Board of Directors have received non-statutory stock options pursuant to
the Company's Non-Qualified Stock Option Plan, non-statutory stock options
granted other than pursuant to a plan, the Company's 1992 Omnibus Stock
Option and Incentive Plan, and the 1993 Omnibus Stock Option and Incentive
Plan, and the 1997 Omnibus Stock Option and Incentive Plan.
In November 1992, the Board approved the creation of an Executive
Committee authorized to be comprised of up to five members of the Board. The
Executive Committee has all the powers and authority of the Board in the
management of the business and affairs of the Company, including, without
limitation, the power and authority to authorize the issuance of stock,
except with respect to (i) approval of any action which also requires
stockholders' approval or approval of the outstanding shares; (ii) filling
of vacancies on the Board or in any committee; (iii) fixing compensation of
the directors for serving on the Board or on any committee; (iv) amendment
or repeal of Bylaws of the adoption of new Bylaws; (v) amendment or repeal
of any resolution of the Board which by its express terms is not so
amendable or repealable; (vi) declaring distributions to the stockholders of
the Company except at a rate or in a periodic amount or within a price range
determined by the Board; (vii) appointment of members of other committees of
the Board. Messrs. Kesler and Dabbene are members of the Executive
Committee and will continue as members conditioned upon their re-election to
the Board for the ensuing year.
Messrs. Pacini and Talbot are members of the Audit Committee
conditioned upon their re-election to the Board. The duties of the Audit
Committee are to review with the Company's independent auditors the results
of the audit engagement, review the adequacy of the Company's system of
accounting controls, approve the services rendered by the independent
auditors, and examine the range of audit and non-audit fees. The Audit
Committee met twice during the twelve months ended December 31, 1999.
Messrs. Pacini, Talbot and Haglund are members of the Compensation
Committee conditioned upon their re-election to the Board. The duties of
the Compensation Committee are to evaluate and recommend to the Board of
Directors compensation structures for key executive personnel. The
Compensation Committee met once during the year ended December 31, 1999.
<PAGE>
Executive Officers
The following lists the names, ages, and position of the Company's current
executive officers:
Officer Current Position
Name Age Since With the Company
- --------------------------------------------------------------------------
Grant S. Kesler 57 1991 President, Chief Executive
Officer, Director
Anthony C. Dabbene 48 1996 Chief Financial Officer,
Director
Bruce H. Haglund Esq. 48 1993 Secretary, Director
Robert D. Rizzo 54 1999 President, Metalclad
Insulation Corp.
Grant S. Kesler. See "Information about Nominees and Directors."
Anthony C. Dabbene. See "Information about Nominees and Directors."
Bruce H. Haglund. See "Information about Nominees and Directors."
Robert D. Rizzo joined the Company as President of Metalclad Insulation in
November 1999. Prior to joining Metalclad, Mr. Rizzo was project manager
for major projects at PDG Environmental, Inc. He has over 25 years
experience in finance, engineering and construction. Mr. Rizzo has a B.S.
in Civil Engineering and an M.B.A.
Executive Compensation for the Year Ended December 31, 1999
The following table sets forth for the year ended December 31, 1999,
the year ended December 31, 1998, and the year ended December 31, 1997,
information with respect to compensation paid by the Company to the Chief
Executive Officer and each of the other highly compensated executive
officers of the Company.
<PAGE>
Summary Compensation Table
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
------------------------------- ------------------------------ --------
Other Awards
--------------------
Name and Year Salary Bonus Annual Restricted Options/ LTIP All
Principal (1) ($) ($) Compen- Stock SARS Payouts Other
Position sation ($) (#) ($) (1)
- ------------------ ------------------------------- ------------------------------ --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Grant S. Kesler, 1999 250,000 50,000 25,920
C.E.O. 1998 250,000 50,000 --
1997 250,000 50,000 --
Anthony C. Dabbene 1999 180,000 36,000 --
C.F.O. 1998 180,000 36,000 --
1997 160,000 36,000 --
Robert D. Rizzo 1999 14,375(2) -- --
President, M.I.C.
</TABLE>
(1) The remuneration described in the table does not include the cost to the
Company of benefits furnished to the named executive officers, including
premiums for health insurance and other personal benefits provided to such
individual that are extended to all employees of the Company in connection
with their employment.
(2) Mr. Rizzo started with the Company on November 16, 1999. Amount shown
reflects actual 1999 compensation paid based on an annual salary of
$115,000.
Employment Agreements
In January 1998, the Compensation Committee of the Company approved
employment agreements for Messrs. Kesler and Dabbene. The contracts are for
a three-year period, effective January 1, 1998 and call for annual salaries
of $250,000 and $180,000, respectively. The contracts also include minimum
bonus amounts of $50,000 and $36,000, respectively. The contracts are
automatically renewed on January 1 unless terminated by the Company and
contain incentive provisions as determined by the Compensation Committee.
Additionally, the contracts contain a "special bonus" provision tied to the
Company's success in its on-going arbitration with the United Mexican States
under the NAFTA. This provision provides Messrs. Kesler and Dabbene a
special bonus of 2 1/2% and 1%, respectively, of any award of damages to the
Company under this proceeding.
Options Granted in 1999
In March 1999, upon their appointment to the Board of Directors,
Messrs. Haglund, Talbot and Pacini were each granted 10,000 non-statutory
stock options, exercisable at $2.50 per share. The options vest ratably
over a three-year period on the anniversary date of the grant and expire on
March 22, 2009.
In August 1999, the Board of Directors approved the grant of non-qualified
stock options, exercisable at $3.00 per share to the following
officers and directors: Mr. Kesler, 170,000 shares; Mr. Dabbene, 100,000
shares; Mr. Haglund, 20,000 shares; Mr. Pacini, 20,000 shares; and Mr.
Talbot, 20,000 shares. Such options are fully vested and expire August 24,
2009. In February 1999, Messrs. Kesler and Dabbene were also granted common
stock in the amounts of 18,000 and 12,500 shares, respectively. These
shares were issued for services rendered to the Company for which these
individuals had not been otherwise compensated. The price per share at date
of approval was $2.80.
Aggregated Option/SAR Exercises in the year ended December 31, 1999,
and Option Values at December 31, 1999.
The following table sets forth the number of options, both exercisable
and unexercisable, held by each of the named executive officers of the
Company and the value of any in-the-money options at December 31, 1999
(assuming a market value of $5.6875 on December 31, 1999):
Number of Value of
Unexercised in-the-Money
Options at Options at
December 31, December 31,
Shares 1999 1999
Acquired Value ---- ----
on Exercise Realized Exercisable/ Exercisable/
(#) ($) Unexercisable Unexercisable
- --------------------------------------------------------------------------
Grant S. Kesler -0- $-0- 359,500/-0- $456,875/$-0-
Anthony C. Dabbene -0- $-0- 150,000/-0- $268,750/$-0-
Bruce Haglund -0- $-0- 59,800/10,000 $ 53,750/$31,875
Compliance With Section 16 (a) of the Exchange Act
Section 16 (a) of the Securities Exchange Act of 1934 requires the
Company's officers, directors, and persons who own more than 10% of a
registered class of the Company's equity securities to file reports of
ownership and changes in ownership with the Securities and Exchange
Commission (the "SEC"). Officers, directors, and greater than 10% beneficial
owners are required by SEC regulation to furnish the Company with copies of
all Section 16 (a) forms they file. The Company believes that all filing
requirements applicable to its officers, directors, and greater than 10%
beneficial owners were complied with.
<PAGE>
Section 401 (k) Plan
In December 1989, the Company adopted a tax-qualified cash or deferred
profit sharing plan (the "401 (k) Plan") covering all employees who have
completed six months of continuous service prior to a plan entry date.
Pursuant to the 401 (k) Plan, eligible employees may make salary deferral
(before tax) contributions of up to 15% of their total compensation per plan
year up to a specified maximum contribution as determined by the Internal
Revenue Service. The 401 (k) Plan also includes provisions which authorize
the Company to make discretionary contributions. Such contributions, if
made, are allocated among all eligible employees as determined under the 401
(k) Plan. The trustees under the 401 (k) Plan invest the assets of each
participant's account attributable to the Company's contribution in an
equity fund or guaranteed income fund until the participant is fully vested.
The trustees invest the assets at the direction of such participant for the
portion attributable to the participant's contribution and the portion
attributable to the Company's contribution if the participant is fully
vested. No contributions were made to the 401 (k) Plan during the year ended
December 31, 1999.
Certain Relationships and Related Transactions
In October 1994, in consideration of extraordinary contributions to the
Company, including but not limited to the pledge of 755,000 shares of Common
Stock of the Company owned by them to facilitate necessary financing for the
Company, the Board of Directors approved the loan of $740,000 to Mr. Kesler
and Mr. T Daniel Neveau, who was a Director at the time. Such borrowings
were due 30 days after demand and were secured by a pledge of 300,000 shares
of the Company's common stock from each. Interest on such loans was the
prime rate of interest plus 7% per annum. In February 1996, Mr. Kesler and
Mr. Neveau repaid $300,000 of such loan. In March 1996, the notes were
amended to modify the interest rate effective March 1, 1996 to a variable
rate based on the Company's quarterly investment rate. In June 1996, Mr.
Neveau, Chairman of the Board, Senior Vice President, and a Director of the
Company, resigned his positions. As a result, the Company and Mr. Neveau
renegotiated the terms of his employment agreement relative to compensation,
benefits and stock options. Since May 1997, the company has been offsetting
payments due Mr. Neveau against his outstanding loan balance to the Company.
As of December 31, 1999, the Company's remaining receivable from Mr. Kesler
and Mr. Neveau was $569,000. The Board of Directors has extended repayment
of these notes until December 31, 2000.
During the year ended December 31, 1999, the Company incurred legal
fees of $77,000 to the law firm of Gibson, Haglund & Paulsen, of which Bruce
H. Haglund, general counsel, secretary and Director of the Company, is a
principal. The Company intends to continue to utilize the legal services of
Gibson, Haglund & Paulsen for the following year.
<PAGE>
Report of Compensation Committee
April 15, 2000
Board of Directors
Metalclad Corporation
2 Corporate Plaza 125
Newport Beach, California 92660
As the Compensation Committee of Metalclad Corporation (the "Company"),
it is our duty to review and recommend the compensation levels for members
of the Company's management, evaluate the performance of management and the
administration of the Company's various incentive plans.
The policies and underlying philosophy governing the Company's
compensation program are to: maintain a comprehensive program that is
competitive in the marketplace, provide opportunities integrating salary and
stock rights to compensate short and long-term performance of management,
recognize and reward individual accomplishments and allow the Company to
retain seasoned executives who are essential to the Company's success.
In determining management's compensation, this Committee evaluates the
compensation paid to management based on their performance, their
experience, and the stage of development of the Company. The Committee also
takes into account such relevant external factors as general economic
conditions, stock price performance, and stock market prices generally.
Management compensation is composed of salary, bonuses, and options to
purchase shares of Common Stock at the fair market value on the date of
grant. The Company entered into employment agreements with Messrs. Kesler
and Dabbene in January 1998, which established base salaries and minimum
bonus amounts. The number of options granted is scaled to the salary of
each individual officer.
The base salaries for executive officers are determined by evaluating
the responsibilities of the positions held, the individual's experience, the
competitive marketplace, the individual's performance of responsibilities
and the individual's overall contribution to the Company. Mr. Kesler's last
salary increase was in 1997 and Mr. Dabbene's last salary increase was also
in 1997.
The Committee considers and recommends stock option grants under the
Company's stock option plans for key employees and others who make
substantial contributions to the long-term financial success of the Company.
The Company and the Committee believe that stock options provide strong
incentive to increase the value of stockholders' interests. Stock options
grants are believed by the Committee to help focus management on the long-term
success of the Company. The amount of any stock option grant is based
primarily on an individual's responsibilities and position with the Company.
Individual awards of options are affected by the Committee's subjective
evaluation of factors it deems appropriate such as the assumption of
responsibilities, competitive factors and achievements. During 1999,
options were granted to Messrs. Kesler and Dabbene for the purchase of
170,000 shares and 100,000 shares, respectively, at an exercise price of
$3.00 per share.
Significant to the Committee's recommendations concerning executive
compensation and option grants are significant events which have occurred
over time as well as objectives set for the coming year. With regard to the
year ended December 31, 1999, the Company a) increased revenues in its
insulation business; b) sold its Mexico businesses; c) continued pursuit of
the NAFTA claim, including completion of the final hearing; and d) obtained
the additional capital necessary to support the Company's operations.
The executive officers devoted substantial time and effort in achieving
the aforementioned objectives while at the same time devoting significant
time to the daily affairs of the Company. Based on the performance of
management in achieving these objectives in 1999 and the financial condition
of the Company, Messrs. Kesler and Dabbene were granted stock options as
described above and awarded the minimum bonus amounts of $50,000 and
$36,000, respectively, as provided under their respective employment
agreements.
Compensation Committee
/s/J. Thomas Talbot
--------------------------------
J. Thomas Talbot, Chairman
Compensation Committee
/s/Raymond J. Pacini
--------------------------------
Raymond J. Pacini, Member
Compensation Committee
<PAGE>
<TABLE>
<CAPTION>
Comparison of Five-Year Cumulative Total Returns
Performance Report for Metalclad Corporation
Date Company Market Market Peer Peer
Index Index Count Index Count Company Index: CUSIP Ticker Sic Exchange
------------ -------- ------- ------ ------- ----- ----- ------ --- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
12/30/1994 100.000 100.000 4660 100.000 6 59114220 MTLC 1790 NASDAQ
01/31/1995 95.652 100.527 4650 104.163 6 Fiscal Year-end is 12/31/1999
02/28/1995 69.565 105.809 4652 94.257 6 Market Index: Nasdaq Stock Market (US Companies)
03/31/1995 67.391 108.953 4646 95.487 6 Peer Index: NASDAQ Stocks (SIC 1790-1799 US)
04/28/1995 58.696 112.385 4657 92.116 6 Misc. Special Trade Contractors
05/31/1995 65.217 115.289 4655 89.690 6
06/30/1995 71.739 124.622 4672 90.559 6
07/31/1995 100.000 133.774 4691 103.099 6
08/31/1995 110.870 136.490 4714 101.344 6
09/29/1995 119.565 139.634 4710 104.247 5
10/31/1995 91.304 138.829 4748 101.129 5
11/30/1995 132.609 142.086 4780 115.004 5
12/29/1995 139.130 141.335 4820 119.233 5
01/31/1996 173.913 142.042 4810 139.452 6
02/29/1996 193.478 147.457 4840 155.425 6
03/29/1996 163.043 147.952 4879 142.519 6
04/30/1996 123.913 160.210 4924 129.185 5
05/31/1996 110.869 167.557 4981 124.697 5
06/28/1996 106.522 160.004 5035 120.962 5
07/31/1996 93.478 145.764 5067 103.734 5
08/30/1996 113.043 153.954 5091 112.881 5
09/30/1996 80.435 165.725 5097 100.174 5
10/31/1996 63.043 163.882 5139 80.487 5
11/29/1996 53.261 174.044 5181 63.659 5
12/31/1996 63.043 173.898 5177 71.816 5
01/31/1997 65.217 186.240 5162 74.092 5
02/28/1997 45.652 175.937 5171 65.905 5
03/31/1997 43.478 164.466 5170 58.716 5
04/30/1997 35.870 169.591 5155 54.524 5
05/30/1997 41.304 188.793 5148 64.687 5
06/30/1997 53.261 194.600 5132 73.765 5
07/31/1997 45.652 215.102 5127 91.820 6
08/29/1997 50.000 214.784 5116 99.455 6
09/30/1997 47.826 227.516 5106 126.235 6
10/31/1997 45.652 215.662 5115 126.065 6
11/28/1997 41.304 216.799 5131 119.384 6
12/31/1997 38.043 213.068 5082 120.523 6
01/30/1998 54.348 219.812 5053 114.267 6
02/27/1998 60.869 240.480 5032 109.973 6
03/31/1998 38.043 249.367 4994 110.336 6
04/30/1998 34.783 253.569 4973 103.134 6
05/29/1998 34.783 239.480 4966 90.767 7
06/30/1998 35.870 256.207 4944 87.026 7
07/31/1998 44.565 253.220 4921 73.390 7
08/31/1998 30.435 203.026 4883 44.811 7
09/30/1998 33.696 231.195 4822 44.212 7
10/30/1998 23.913 241.359 4738 48.126 7
11/30/1998 13.043 265.895 4703 41.925 7
12/31/1998 14.130 300.440 4653 39.888 7
01/29/1999 11.956 344.027 4602 45.959 7
02/26/1999 9.783 313.222 4574 42.052 7
03/31/1999 7.609 336.872 4518 37.260 7
04/30/1999 10.870 347.549 4497 36.202 7
05/28/1999 8.696 338.151 4487 44.930 7
06/30/1999 6.522 368.620 4469 51.890 7
07/30/1999 8.696 362.005 4464 52.956 5
08/31/1999 9.891 377.257 4452 61.237 6
09/30/1999 13.696 377.473 4424 56.043 6
10/29/1999 16.522 407.442 4423 60.688 6
11/30/1999 23.043 456.758 4417 79.816 6
12/31/1999 19.783 556.913 4405 84.932 6
The index level for all series was set to 100.0 on 12/30/1994.
- -----------------
Prepared by the Center for Research in Security Prices
Produced on 04/26/2000 including data to 12/31/1999
Copyright 2000
</TABLE>
<PAGE>
APPROVAL OF ENGAGEMENT OF AUDITORS
The Board of Directors has selected Moss Adams, LLP as independent
public accountant for the Company for the year ending December 31, 2000,
subject to approval by the stockholders of the Company. Prior to such
engagement, neither the Company nor anyone on the Company's behalf consulted
Moss Adams, LLP regarding either the application of accounting principles to
a specified transaction, either completed or proposed; or the type of audit
opinion that might be rendered on the Company's financial statements; or any
matter that was the subject of a disagreement with Moss Adams, LLP or a
reportable event. To the knowledge of the Company, at no time has Moss
Adams, LLP had any direct or indirect financial interest in or any
connection with the Company other than as independent public accountants.
It is anticipated that a representative of Moss Adams, LLP will be available
at the Meeting to make a statement if so desired and to respond to
appropriate questions.
SUBMISSION OF SHAREHOLDER PROPOSALS
Stockholders are advised that any stockholder proposal intended for
consideration at the 2001 Annual Meeting must be received by the Company on
or before February 1, 2001 to be included in any proxy materials prepared
for the 2001 Annual Meeting of Stockholders. It is recommended that
stockholders submitting proposals direct them to the Secretary of the
Company and utilize certified mail-return receipt requested to insure timely
delivery of the proposal.
MISCELLANEOUS AND OTHER MATTERS
Financial Statements
The Company's financial statements for the year ended December 31,
1999, and the year ended December 31, 1998 appear on the pages following
page 18 of its 1999 Annual Report on Form 10-K which is being mailed to all
stockholders along with this Proxy Statement. Said pages are incorporated
herein by reference.
Matters Not Determined at the Time of the Solicitation
Management knows of no matters to come before the Meeting other than as
specified herein. If any other matter should come before the Meeting, then
the persons named in the enclosed form of proxy will have discretionary
authority to vote all proxies with respect thereto in accordance with their
judgment.
A COPY OF THE COMPANY'S CURRENT ANNUAL REPORT ON FORM 10-K AS FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION, INCLUDING THE FINANCIAL STATEMENTS AND
SCHEDULES THERETO, IS BEING MAILED TO EACH SHAREHOLDER TOGETHER WITH THIS
PROXY STATEMENT. ADDITIONAL COPIES OF THE ANNUAL REPORT MAY BE OBTAINED BY
SHAREHOLDERS WITHOUT CHARGE BY WRITING TO: METALCLAD CORPORATION, 2
CORPORATE PLAZA, SUITE 125, NEWPORT BEACH, CALIFORNIA 92660.
