<PAGE> 1
================================================================================
SCHEDULE 14A
(RULE 14a)
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>
[ ] 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 sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
METATEC CORPORATION
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
(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
[Metatec Logo]
METATEC CORPORATION
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 23, 1998
To the Shareholders of
METATEC CORPORATION:
Notice is hereby given that the Annual Meeting of Shareholders of Metatec
Corporation (the "Company") will be held at the Company's principal executive
offices located at 7001 Metatec Boulevard, Dublin, Ohio 43017, on Thursday,
April 23, 1998, at 1:00 p.m., local time, for the following purposes:
1. To elect three Class II directors; and
2. To transact such other business as may properly come before the
meeting or any adjournment thereof.
The close of business on February 23, 1998, has been fixed as the record
date for the determination of shareholders entitled to notice of and to vote at
the meeting and any adjournment thereof.
In order that your shares may be represented at this meeting and to assure
a quorum, please sign and return the enclosed proxy promptly. A return addressed
envelope, which requires no postage, is enclosed. In the event you are able to
attend and wish to vote in person, at your request we will cancel your proxy.
By Order of the Board of Directors
Julia A. Pollner
Secretary
Dated: March 20, 1998
<PAGE> 3
METATEC CORPORATION
PROXY STATEMENT
GENERAL
This Proxy Statement is being furnished to the holders of common shares,
$.10 par value, of Metatec Corporation, a Florida corporation (the "Company"),
in connection with the solicitation of proxies by the Board of Directors of the
Company to be used at the Company's Annual Meeting of Shareholders to be held at
the Company's principal executive offices located at 7001 Metatec Boulevard,
Dublin, Ohio 43017, on Thursday, April 23, 1998, at 1:00 p.m., local time, for
the purposes set forth on the accompanying Notice of Annual Meeting. The
approximate date on which this Proxy Statement and the form of proxy will be
first sent to shareholders is March 20, 1998.
All shares represented by properly executed proxies will be voted at the
Annual Meeting in accordance with the choices indicated on the proxy. If no
choices are indicated, the shares will be voted in favor of the proposals set
forth in the Notice of Annual Meeting as more fully described in this Proxy
Statement. Any proxy may be revoked at any time prior to its exercise by
delivery to the Company of a subsequently dated proxy or by giving notice of
revocation to the Company in writing or in open meeting. A shareholder's
presence at the Annual Meeting does not by itself revoke the proxy.
The close of business on February 23, 1998, has been fixed as the record
date for the determination of shareholders entitled to notice of and to vote at
the Annual Meeting and any adjournment thereof. On the record date, there were
6,033,224 of the Company's common shares outstanding and entitled to vote. Each
common share is entitled to one vote.
ELECTION OF DIRECTORS
The number of directors currently is fixed at nine. The Board of Directors
is divided into three classes, Class I, Class II, and Class III, with three
directors in each class. The directors in each class are elected to three-year
terms. The terms of office of one class of directors expire each year at the
annual meeting of shareholders and at such time as their successors are duly
elected and qualified. The term of office of the Class II directors expires
concurrently with the holding of the Annual Meeting, and the three incumbent
directors in such Class have been nominated for re-election. There is no
cumulative voting in the election of directors, and those nominees receiving the
highest number of votes will be elected. Abstentions and broker non-votes will
not be counted in determining the votes cast in the elections of director and
will not have a positive or negative effect on the election.
At the Annual Meeting, common shares represented by proxies, unless
otherwise specified, will be voted to elect the nominees named below as Class II
directors for a three-year term expiring in 2001. In the event that any nominee
named below as a Class II director is unable to serve (which is not
anticipated), the persons named in the proxy may vote for another nominee of
their choice.
-1-
<PAGE> 4
CLASS II DIRECTORS
(NOMINEES FOR ELECTION)
<TABLE>
<CAPTION>
COMMON SHARES
NAME OF BENEFICIALLY
NOMINEE/DIRECTOR A DIRECTOR OF OWNED AS OF
AND POSITION(S) PRINCIPAL OCCUPATION(S) DURING THE PAST THE COMPANY FEBRUARY 23, % OF
WITH COMPANY AGE FIVE YEARS SINCE 1998(1) CLASS
---------------- --- --------------------------------------- ------------- ------------- -----
<S> <C> <C> <C> <C> <C>
Jerry D. Miller, 62 President of D&D Properties, Inc. and 1976 70,700 1.2%
Director President of MGB, Inc., two companies
engaged in the real estate business
since May 1992; President and Treasurer
of the Company from the Company's
incorporation in 1976 to May 1993, and
Chairman of the Board from June 1978 to
August 1989.
Gregory T. Tillar, 45 President of the Company since February 1995 57,786 *
President, Chief Operating 1995, and Chief Operating Officer of
Officer and Director the Company since April 1993; Held
various sales management positions with
the Company from May 1990 to April
1993.
James V. Pickett, 56 Vice Chairman of Banc One Capital 1995 100,723(2) 1.7%
Director Corp., a subsidiary of Banc One Holding
Corporation, since February 1993;
President of Pickett Realty Advisors,
Inc., an asset management firm for
hotel owners, since December 1991;
President of a group of affiliated
companies and partnerships,
collectively known as The Pickett
Companies, involved in the management
and ownership of real estate, since
1965. Mr. Pickett is also a Director of
Wendys International, Inc. and
Karrington Health, Inc.
</TABLE>
Set forth below is information relating to directors whose terms will
continue after the Annual Meeting:
-2-
<PAGE> 5
CLASS III DIRECTORS(3)
(TERMS EXPIRING IN 1999)
<TABLE>
<CAPTION>
COMMON SHARES
NAME OF BENEFICIALLY
DIRECTOR A DIRECTOR OF OWNED AS OF
AND POSITION(S) PRINCIPAL OCCUPATION(S) DURING THE PAST THE COMPANY FEBRUARY 23, % OF
WITH COMPANY AGE FIVE YEARS SINCE 1998(1) CLASS
--------------- --- --------------------------------------- ------------- ------------- -----
<S> <C> <C> <C> <C> <C>
A. Grant Bowen, 67 Financial Consultant since March 1986. 1991 32,373 *
Director Mr Bowen is a director of W. W.
Williams Co. and State Savings Bank.
Jeffrey M. Wilkins, 53 Chairman of the Board and Chief 1989 420,578(4) 7.0%
Chairman of the Board, Executive Officer of the Company since
Chief Executive Officer 1989, and President and Chief Executive
and Director Officer of the Company's subsidiary,
Metatec/Discovery Systems, Inc., since
December 1988. Mr. Wilkins is also a
Director of CheckFree Corporation and
Holophane Corporation.
</TABLE>
CLASS I DIRECTORS(5)
(TERMS EXPIRING IN 2000)
<TABLE>
<CAPTION>
COMMON SHARES
NAME OF BENEFICIALLY
DIRECTOR A DIRECTOR OF OWNED AS OF
AND POSITION(S) PRINCIPAL OCCUPATION(S) DURING THE PAST THE COMPANY FEBRUARY 23, % OF
WITH COMPANY AGE FIVE YEARS SINCE 1998(1) CLASS
--------------- --- --------------------------------------- ------------- ------------- -----
<S> <C> <C> <C> <C> <C>
Joseph F. Keeler, Jr. 57 Chairman, Chief Executive Officer and 1997 65,334(6) 1.1%
Director President of The Fishel Company, a
national underground utility
contractor, since 1978. Mr. Keeler has
been with The Fishel Company since
1967. Mr. Keeler is also a Director of
Airnet Systems, Inc.
Peter J. Kight, 41 Chairman, Chief Executive Officer and 1994 50,834 *
Director President of Checkfree Corporation, a
company that provides a nationwide
electronic bill paying system, since
January 1981.
</TABLE>
- ---------------
*Less than 1%.
(1) Except as otherwise indicated in the notes to this table, the persons named
in the table and their spouses have sole voting and investment power with
respect to all common shares owned by them. For each of the directors, this
table includes the following number of common shares which may be acquired
upon the exercise of options which are currently exercisable or exercisable
within 60 days of February 23, 1998: Mr. Bowen--18,790 common shares; Mr.
Kight--17,500 common shares; Mr. Miller--17,500 common shares; Mr.
Pickett--12,500 common shares; Mr. Tillar--47,500 common shares; and Mr.
Wilkins--6,250 common shares.
-3-
<PAGE> 6
(2) Includes 24,000 common shares owned by a corporation controlled by Mr.
Pickett.
(3) There is currently one vacancy in this class of directors.
(4) Includes 40,000 common shares owned by a family trust created by Mr.
Wilkins. Mr. Wilkins does not have any voting or dispositive power with
respect to the common shares owned by such trust. Also includes 100 common
shares owned by a trust which is for the benefit of one of Mr. Wilkins'
children. Mr. Wilkins is the trustee of such trust.
(5) E. David Crockett, currently a Class I director, has tendered his
resignation as a director effective as of the date of the Annual Meeting.
Accordingly, no biographical, share ownership, or other information
regarding Mr. Crockett has been included in this Proxy Statement.
(6) Includes 48,334 common shares owned by a family limited partnership, of
which Mr. Keeler is a partner.
In addition to the common shares beneficially owned by Messrs. Wilkins and
Tillar, as set forth above, Christopher L. Winslow and Alexander P. Deak, the
other named executive officers in the Summary Compensation Table set forth
below, beneficially owned 21,988 and 23,364 common shares, respectively, as of
February 23, 1998, which in each case constituted less than one percent of the
outstanding common shares of the Company as of such date. Mr. Winslow and his
spouse have sole voting and investment power with respect to all common shares
owned by them. Mr. Deak has sole voting and investment power with respect to all
common shares owned by him. The number of common shares beneficially owned by
Messrs. Winslow and Deak include 15,000 and 13,750 common shares, respectively,
which may be acquired upon the exercise of options which are currently
exercisable or exercisable within 60 days of February 23, 1998. As of February
23, 1998, the number of common shares owned by all directors and executive
officers of the Company as a group (ten persons) was 962,430 (15.5%). The
foregoing amount includes 157,540 common shares which may be acquired upon the
exercise of options which are currently exercisable or exercisable within 60
days of February 23, 1998.
BOARD OF DIRECTORS COMMITTEES AND MEETINGS
The Board of Directors has established an Executive Committee, a
Compensation Committee, and a Finance and Audit Committee. The Board of
Directors has no standing nominating committee or committee performing similar
functions.
The members of the Executive Committee are Jeffrey M. Wilkins, Gregory T.
Tillar, and James V. Pickett. The Executive Committee, which may exercise all of
the authority of the Board of Directors between its meetings, took action one
time by written consent during 1997. The members of the Compensation Committee
are Jerry D. Miller and James V. Pickett. The Compensation Committee, which is
responsible for administering the Company's two stock option plans and which may
exercise the authority of the Board of Directors with respect to the
compensation of employees of the Company, held five meetings during 1997. The
members of the Audit and Finance Committee are A. Grant Bowen, Peter J. Kight,
and Jerry D. Miller. The Audit and Finance Committee, which is responsible for
the appointment of the independent auditors, the annual audit of the Company's
accounts by the independent auditors, and all related matters, along with other
activities undertaken by such committee, held two meetings during 1997.
The Board of Directors held six meetings and took action three times by
written consent during 1997. Each director attended at least 75% of the meetings
held by the Board of Directors and the committees on which he served during
1997.
-4-
<PAGE> 7
COMPENSATION OF DIRECTORS
Employee directors receive no additional compensation for service on the
Board of Directors or its committees. Directors of the Company who are not also
employees of the Company receive a fee of $1,250 per board meeting attended in
person, $500 per board meeting attended through telephonic communication and a
quarterly retainer of $1,250. In addition, directors of the Company who are not
officers or employees of the Company do not receive any additional compensation
for committee meetings attended, unless the committee meets on a date different
from a board meeting, in which case they receive $500 per committee meeting
attended. In 1998, the Company implemented a directors' deferred compensation
plan pursuant to which directors may defer all or a portion of their director
fees. In addition, directors of the Company who are not officers or employees of
the Company or any of its subsidiaries receive stock options pursuant to the
Company's 1992 Directors' Stock Option Plan. Under this plan, immediately
following each annual meeting of shareholders of the Company, each eligible
director is automatically granted an option to purchase 2,500 common shares.
These options are fully vested at the time of grant and must be exercised within
five years of the grant date. In addition, each new director is automatically
granted an option, on a one-time basis, to purchase 10,000 common shares. These
one-time options have five-year terms and vest in equal annual installments over
a four-year period. All options are granted at an exercise price which is equal
to the fair market value of the common shares on the last trading day prior to
the annual meeting relating to the date of grant.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and 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. Officers, directors, and
greater than 10% shareholders are required by the Securities and Exchange
Commission's regulations to furnish the Company with copies of all Section 16(a)
forms they file. Based solely on a review of the copies of such forms furnished
to the Company, the Company believes that during 1997 all Section 16(a) filing
requirements applicable to its officers and directors were complied with by such
persons.
-5-
<PAGE> 8
PRINCIPAL HOLDERS OF VOTING SECURITIES
The following table sets forth certain information with respect to the only
persons known by the Company to be the beneficial owners of 5% or more of the
Company's common shares:
<TABLE>
<CAPTION>
AMOUNT AND NATURE PERCENT
NAME AND ADDRESS OF OF BENEFICIAL OF
BENEFICIAL OWNER OWNERSHIP(1) OWNERSHIP
------------------- ----------------- ---------
<S> <C> <C>
Jeffrey M. Wilkins 420,578(2) 7.0%
7001 Metatec Boulevard
Dublin, Ohio 43017
Wellington Management Company, LLP 698,000 11.3%
75 State Street
Boston, Massachusetts 02109
Dimensional Fund Advisors, Inc. 493,400 8.0%
1299 Ocean Avenue 11th Floor
Santa Monica, California 90401
</TABLE>
- ---------------
(1) Beneficial ownership as of December 31, 1997, except in the case of Mr.
Wilkins, which is as of February 23, 1998.
(2) Includes the following: (i) 6,250 common shares which may be acquired upon
the exercise of options which are currently exercisable or exercisable
within 60 days of February 23, 1998; (ii) 40,000 common shares owned by a
family trust created by Mr. Wilkins. Mr. Wilkins does not have any voting or
dispositive power with respect to the common shares owned by such trust; and
(iii) 100 common shares owned by a trust which is for the benefit of one of
Mr. Wilkins' children. Mr. Wilkins is the trustee of such trust.
-6-
<PAGE> 9
EXECUTIVE COMPENSATION
Set forth below is summary information regarding the annual and long-term
compensation of the Company's chief executive officer and its only other
executive officers whose annual compensation exceeded $100,000 during 1997:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
ANNUAL COMPENSATION ------------------ ALL
NAME AND -------------------- SHARES UNDERLYING OTHER
PRINCIPAL POSITION YEAR SALARY BONUS(1) OPTIONS GRANTED(2) COMPENSATION(3)
------------------ ---- ------ -------- ------------------ ---------------
<S> <C> <C> <C> <C> <C>
Jeffrey M. Wilkins............ 1997 $250,000 $ 52,896 200,000 $3,858
Chairman of the Board and 1996 $250,000 $178,885 $7,963
Chief Executive Officer 1995 $250,000 $225,544 25,000(4) $2,149
Gregory T. Tillar............. 1997 $175,000 $ 70,697 50,000 $3,773
President and 1996 $175,000 $ 51,750 $4,472
Chief Operating Officer 1995 $158,692 $105,165 50,000(4) $2,044
Christopher L. Winslow........ 1997 $100,000 $ 31,456 27,500 $2,850
Vice President, 1996 $ 94,231 $ 38,850 $3,934
Manufacturing Services 1995 $ 84,000 $ 34,276 32,500(4) $1,168
Alexander P. Deak............. 1997 $ 94,962 $ 19,795 35,000 $2,223
Vice President and 1996 $ 87,500 $ 9,850 $3,518
Chief Information Officer 1995 $ 72,500 $ 23,731 13,500(4) $ 962
</TABLE>
- ---------------
(1) Bonuses, other than for Mr. Wilkins which are paid pursuant to his
employment agreement with the Company, were earned pursuant to an Incentive
Compensation Plan for certain key executives of the Company selected by the
chief executive officer. Pursuant to this plan, an individual target
incentive amount for each executive and a target amount for the Company's
pre-tax income was established. Each participating executive was paid a
bonus in an amount ranging from 40% to 140% of his target incentive amount
based on his percentage of the target pre-tax income actually achieved by
the Company.
(2) This column sets forth the number of common shares subject to options
granted during the indicated year pursuant to the Company's employee stock
option plan.
(3) Represents amounts contributed by the Company as matching contributions to
its 401(K) retirement plan and excess group term life insurance.
(4) These options, originally granted in the year indicated, were replaced in
1997 with an equal number of new options issued as a result of such person's
participation in the Company's 1997 stock option exchange program. See
"Ten-Year Option Repricings" and "Compensation Committee Report on Executive
Compensation -- 1997 Stock Option Exchange Program."
-7-
<PAGE> 10
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth all grants of stock options to the executive
officers named in the Summary Compensation Table during 1997:
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL
------------------------------------------------- REALIZABLE VALUE
% OF AT ASSUMED ANNUAL
NUMBER TOTAL RATES OF STOCK
OF SHARES OPTIONS EXERCISE PRICE APPRECIATION
UNDERLYING GRANTED TO PRICE FOR OPTION TERM(3)
OPTIONS EMPLOYEES IN PER EXPIRATION ---------------------
NAME GRANTED(1) FISCAL YEAR SHARE(2) DATE 5% 10%
---- ---------- ------------ -------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Jeffrey M. Wilkins............. 200,000 25.5% $6.00 7/16/07 $754,674 $1,912,491
25,000(4) 3.2% $4.38 2/17/07 $ 68,864 $ 174,515
Gregory T. Tillar.............. 50,000 6.4% $6.00 7/16/07 $188,668 $ 478,123
70,000(4) 8.9% $4.38 2/17/07 $192,819 $ 488,641
Christopher L. Winslow......... 27,500 3.5% $6.00 7/16/07 $103,768 $ 262,968
40,000(4) 5.1% $4.38 2/17/07 $110,182 $ 279,224
Alexander P. Deak.............. 35,000 4.5% $6.00 7/16/07 $132,068 $ 334,686
27,000(4) 3.4% $4.38 2/17/07 $ 74,373 $ 188,476
</TABLE>
- ---------------
(1) Except as otherwise indicated in the notes to this table, all of the options
were granted under the Company's 1990 Stock Option Plan and are subject to a
one-year vesting schedule.
(2) The per share exercise price is equal to the fair market value of the
Company's common shares on the date of grant.
(3) The dollar amounts under the 5% and 10% columns in the table are the result
of calculations required by the rules of the Securities and Exchange
Commission. Although permitted by these rules, the Company did not use an
alternate formula for a grant date valuation because the Company is not
aware of a formula which would determine with reasonable accuracy a present
value based on future unknown factors.
(4) Represents new options issued as a result of such person's election to
exchange an equal number of options in connection with the Company's 1997
stock option exchange program. See "Ten-Year Option Repricings" and
"Compensation Committee Report on Executive Compensation -- 1997 Stock
Option Exchange Program."
-8-
<PAGE> 11
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND YEAR END OPTION VALUES
The following table sets forth stock option exercises during 1997 by the
executive officers named in the Summary Compensation Table and the value of
in-the-money stock options held by those individuals as of December 31, 1997:
<TABLE>
<CAPTION>
NUMBER OF SHARES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS
12/31/97 AT 12/31/97(2)
SHARES ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE (#) REALIZED(1) UNEXERCISABLE UNEXERCISABLE
---- --------------- ----------- ---------------- --------------
<S> <C> <C> <C> <C>
Jeffrey M. Wilkins.......... -0- -0- -0-/225,000 $ -0-/$9,250
Gregory T. Tillar........... -0- -0- 30,000/120,000 $ 65,000/$25,000
Christopher L. Winslow...... -0- -0- 5,000/67,500 $ 6,250/$14,800
Alexander P. Deak........... -0- -0- 7,000/62,000 $ 21,500/$9,990
</TABLE>
- ---------------
(1) Aggregate market value of the common shares covered by the option less the
aggregate price paid by the executive officer.
(2) The value of in-the-money options was determined by subtracting the exercise
price from the closing price of the Company's common shares as of December
31, 1997.
TEN-YEAR OPTION REPRICINGS
The following table sets forth information concerning the executive
officers of the Company who participated in a stock option exchange program
approved by the Company's Compensation Committee on February 17, 1997. Under
this stock option exchange program, employees holding options previously granted
under the Company's 1990 Stock Option Plan with above-market exercise prices
were given the opportunity to exchange those options for new options with an
exercise price equal to the fair market value of the Company's common shares on
the exchange program's approval date. For additional information about the
exchange
-9-
<PAGE> 12
program, see "Compensation Committee Report on Executive Compensation -- 1997
Stock Option Exchange Program."
<TABLE>
<CAPTION>
LENGTH OF
NUMBER OF ORIGINAL
SECURITIES MARKET PRICE EXERCISE OPTION TERM
UNDERLYING OF STOCK AT PRICE AT REMAINING AT
OPTIONS TIME OF TIME OF NEW DATE OF
REPRICED OR REPRICING OR REPRICING OR EXERCISE REPRICING OR
NAME AND POSITION DATE AMENDED AMENDMENT AMENDMENT PRICE(1) AMENDMENT
----------------- ------- ----------- ------------ ------------ -------- ------------
<S> <C> <C> <C> <C> <C> <C>
Jeffrey M. Wilkins................ 2/17/97 25,000 $4.38 $ 9.75 $4.38 105 months
Chairman of the Board
and Chief Executive Officer
Gregory T. Tillar................. 2/17/97 20,000 $4.38 $11.50 $4.38 86 months
President and 2/17/97 50,000 $4.38 $ 9.75 $4.38 105 months
Chief Operating Officer
Christopher L. Winslow............ 2/17/97 7,500 $4.38 $11.50 $4.38 86 months
Vice President, 2/17/97 7,500 $4.38 $ 9.37 $4.38 95 months
Manufacturing Services 2/17/97 25,000 $4.38 $ 9.75 $4.38 105 months
Alexander P. Deak................. 2/17/97 7,500 $4.38 $11.50 $4.38 86 months
Vice President and 2/17/97 5,500 $4.38 $ 9.37 $4.38 95 months
Chief Information Officer 2/17/97 8,000 $4.38 $ 9.75 $4.38 105 months
2/17/97 6,000 $4.38 $ 9.63 $4.38 110 months
Julia A. Pollner.................. 2/17/97 5,000 $4.38 $ 6.00 $4.38 72 months
Vice President, Finance, 2/17/97 3,750 $4.38 $11.50 $4.38 86 months
Treasurer, and Secretary 2/17/97 5,000 $4.38 $ 9.75 $4.38 105 months
2/17/97 1,250 $4.38 $ 9.63 $4.38 110 months
</TABLE>
- ---------------
(1) The new options are subject to a four-year vesting schedule providing for an
equal number of options to become exercisable each year.
EMPLOYMENT AGREEMENT WITH MR. WILKINS
The Company and Mr. Wilkins are parties to an Amended and Restated
Employment Agreement (the "Employment Agreement") pursuant to which Mr. Wilkins
is serving as Chairman of the Board and Chief Executive Officer of the Company.
The Employment Agreement continues until terminated by the parties. The
Employment Agreement may be terminated by the Company for "Cause" (defined as
dishonesty constituting a felony) or because of Mr. Wilkins' "Long-Term
Disability," by Mr. Wilkins for "Good Reason" (defined as any material reduction
in authority, title, or responsibility, any reduction in compensation or
benefits or any assignment of additional duties), or by either party upon at
least one year's notice. Under the Employment Agreement, Mr. Wilkins is entitled
to an annual base salary of $250,000, fringe benefits to be determined by the
Board of Directors of the type which are typically provided to chief executive
officers of similarly situated companies, and an annual bonus equal to five
percent of the net pre-tax profit of the Company (calculated without
consideration of any such bonuses paid or payable to Mr. Wilkins). Upon
termination of the Employment Agreement, unless the termination is by the
Company for Cause or unless the termination is a voluntary termination by Mr.
Wilkins without Good Reason, Mr. Wilkins is entitled to receive a single payment
equal to his full annual salary in effect at the time, he is entitled to
continue receiving the annual bonuses for the three fiscal
-10-
<PAGE> 13
years of the Company ending after the date of termination, and the Company is to
continue providing group life and group health insurance coverage for a one-year
period after the date of termination.
The Company has the option to purchase all of Mr. Wilkins' common shares at
fair market value upon Mr. Wilkins' death or Long-Term Disability or upon his
voluntary termination other than Good Reason or upon the Company's termination
for Cause. For a period of three years after termination of his employment, Mr.
Wilkins is prohibited from competing against the Company unless he is terminated
by the Company without Cause or he voluntarily resigns for Good Reason.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Company's Compensation Committee are Jerry D. Miller and
James V. Pickett. Until May 1993, prior to his appointment to the Compensation
Committee, Mr. Miller served as President of the Company. There are no
interlocking relationships between any executive officers of the Company and any
entity whose directors or executive officers serve on the Company's board or
Compensation Committee.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors regularly reviews
executive compensation policies and levels and evaluates the performance of
management in the context of the Company's performance. The Compensation
Committee is composed entirely of independent outside directors.
The Committee believes that compensation must be designed to attract,
retain, reward, and motivate highly qualified individuals to manage the Company
to meet corporate growth and earnings objectives and maximize shareholder value.
BASE SALARY. The major component of compensation for executive officers of
the Company is their annual base salaries. With respect to executive officers,
other than the chief executive officer, the Committee reviews the recommendation
of the chief executive officer with respect to the annual base salary to be paid
to each such officer and then makes a subjective determination based upon
various factors, including the position held by such executive officer, his or
her accomplishments during the year, level of responsibility and experience, and
the relationship of such salary to the salaries of other managers and associates
of the Company, in establishing the amount of such salary. The annual base
salary of Mr. Wilkins, chairman and chief executive officer, which is paid
pursuant to his employment agreement, was $250,000 for 1997. The Board of
Directors has the authority to increase Mr. Wilkins' annual base salary. The
Committee believes that Mr. Wilkins' base salary is currently adequate and has
not recommended to the Board of Directors an increase in his base salary for
1998.
ANNUAL INCENTIVE. The Compensation Committee also believes it is desirable
to provide employees with incentive compensation based on the Company's actual
performance during a fiscal year. Under his employment agreement, Mr. Wilkins
receives, in addition to his base salary, an annual bonus equal to five percent
of the net pre-tax profit of the Company (calculated without consideration of
any such bonuses paid or payable to Mr. Wilkins). In addition, during 1997 the
Company had an Incentive Compensation Plan for certain key employees of the
Company selected by the chief executive officer of the Company. At the beginning
of 1997, the chief executive officer established an individual target incentive
amount for the selected employee and a target amount for the Company's pre-tax
income. Each selected employee received a bonus in an amount ranging from 40% to
140% of this target incentive amount based on the percentage of the pre-tax
income actually earned by the Company. All bonuses under the Incentive
Compensation Plan required approval by the Compensation Committee. For 1998, the
Company is implementing a new incentive compensation plan for all employees
(other than Mr. Wilkins). Under this plan, employees will share, based upon
their duties and level of responsibility, in a
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<PAGE> 14
predetermined portion of the Company's pre-tax income based upon the Company's
actual performance in comparison to its targeted pre-tax income.
LONG-TERM STOCK INCENTIVES. In addition to the Incentive Compensation Plan,
the Company has established the 1990 Stock Option Plan which is designed to
align a portion of the executive and key associates compensation package with
the long-term interests of shareholders. The 1990 Stock Option Plan has been
approved by the Company's shareholders. All options are granted by the
Compensation Committee, whose members are not eligible to participate in such
Plan. The Company's associates are granted options in amounts subjectively
determined by the Compensation Committee to be appropriate given the relative
positions and responsibilities of such persons.
1997 STOCK OPTION EXCHANGE PROGRAM. In February 1997, the Compensation
Committee reviewed certain options previously granted to employees of the
Company and the market price of the Company's common shares during the past
year. The Compensation Committee recognized that options issued by the Company
are utilized as compensation and to provide incentives to improve Company
performance and thereby positively influence the market price for the Company's
common shares for the benefit of all shareholders. The Compensation Committee
determined that the market price had declined despite significant efforts of the
Company's employees, that certain options previously granted under the Company's
1990 Stock Option Plan were at exercise prices in excess of the current market
prices of the Company's common shares, and that these outstanding stock options,
if left in place, would not achieve the underlying objectives.
Accordingly, on February 17, 1997, the Compensation Committee approved a
stock option exchange program for employees holding options previously granted
under the Company's 1990 Stock Option Plan. Under this exchange program,
employees were given the opportunity to exchange their options with above-market
exercise prices for new options with an exercise price equal to the fair market
value of the Company's common shares on the exchange program's approval date
(which was $4.38). However, all new options would be subject to a four-year
vesting schedule in which an equal number of options would become exercisable
each year. The stock option exchange was contingent upon the grantee of the new
option terminating, effective as of the grant date, existing options for the
same number of common shares.
Jerry D. Miller, Chairman
James V. Pickett
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<PAGE> 15
PERFORMANCE GRAPH
The following graph provides a comparison of the five-year cumulative total
return (assuming reinvestment of dividends) from the Company, the NASDAQ
Computer and Data Processing Services Index, and the NASDAQ Stock Market
Index--United States:
<TABLE>
<CAPTION>
NASDAQ NASDAQ
Measurement Period METATEC COMPUTER STOCK
(Fiscal Year Covered) CORPORATION & DP MRKT - US
<S> <C> <C> <C>
12/92 100 100 100
12/93 264 106 115
12/94 175 129 112
12/95 200 248 159
12/96 123 242 195
12/97 86 297 240
</TABLE>
The foregoing graph and above amounts assume $100 invested on December 31,
1992, in the Company's common shares or applicable stock index, including
reinvestment of dividends with the year ending December 31. The foregoing graph
is not, nor is it intended to be, indicative of future performance of the
Company's common shares.
INDEPENDENT PUBLIC ACCOUNTANTS
Deloitte & Touche LLP has been selected by the Board of Directors as the
independent public accountants for the Company for its fiscal year ending
December 31, 1998.
It is expected that a representative of Deloitte & Touche LLP will be
present at the Annual Meeting and will be given an opportunity to make a
statement if desired and to respond to appropriate questions.
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<PAGE> 16
SHAREHOLDER PROPOSALS
Proposals of shareholders intended to be presented at the 1999 annual
meeting of shareholders must be received by the Company for inclusion in the
proxy statement and form of proxy on or prior to 120 days in advance of the
first anniversary of the date of this Proxy Statement.
OTHER MATTERS
Management does not know of any other matters which may come before the
Annual Meeting. However, if any other matters properly come before the Annual
Meeting, it is the intention of the persons named in the accompanying form of
proxy to vote the proxy in accordance with their judgment on such matters.
The Company will bear the cost of solicitation of proxies. In addition to
the use of the mails, proxies may be solicited by officers, directors, and
regular employees, personally or by telephone or telegraph, and the Company will
reimburse banks, brokers, and nominees for their out-of-pocket expenses incurred
in sending proxy materials to the beneficial owners of shares held by them. If
there are follow-up requests for proxies, the Company may employ other persons
for such purpose.
JULIA A. POLLNER
Secretary
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<PAGE> 17
REVOCABLE PROXY
METATEC CORPORATION
[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE
ANNUAL MEETING OF SHAREHOLDERS
APRIL 23, 1998
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Jeffrey M. Wilkins and Julia A. Pollner,
and each of them, with full power of substitution, proxies to vote and act with
respect to all Common Shares, $0.10 par value (the "Shares"), of Metatec
Corporation, a Florida corporation (the "Company"), which the undersigned is
entitled to vote at the Annual Meeting of Shareholders to be held on Thursday,
April 23, 1988, at the Company's principal executive offices located at 7001
Metatec Boulevard, Dublin, Ohio 43017, at 1:00 p.m., local time, and at any and
all adjournments thereof, with all the powers the undersigned would possess if
present in person, on the following proposals and any other matters that may
properly come before the Annual Meeting.
1. THE ELECTION AS CLASS II With- For All
DIRECTORS OF ALL NOMINEES For hold Except
LISTED (except as marked to the [ ] [ ] [ ]
contrary below):
JERRY D. MILLER, GREGORY T. TILLAR AND JAMES V. PICKETT
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, MARK
"FOR ALL EXCEPT" AND WRITE THAT NOMINEE'S NAME IN THE SPACE PROVIDED BELOW.
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2. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
MATTERS AS MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF.
The Shares represented by this Proxy will be voted upon the proposals
listed above in accordance with the instructions given by the undersigned, but
if no instructions are given, this Proxy will be voted to elect all directors as
set forth in item 1 above, and in the discretion of the proxies, on any other
matter which properly comes before the Annual Meeting.
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Please be sure to sign and date Date
this Proxy in the box below.
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- --------Shareholder sign above-------------Co-holder (if any) sign above--------
DETACH ABOVE CARD, SIGN, DATE AND MAIL IN POSTAGE PAID ENVELOPE PROVIDED.
METATEC CORPORATION
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PLEASE ACT PROMPTLY
SIGN, DATE & MAIL YOUR PROXY CARD TODAY
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