<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
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 Section 240.14a-11(c) or Section 240.14a-12
</TABLE>
METATEC CORPORATION
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies: .......
(2) Aggregate number of securities to which transaction applies: ..........
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (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 INTERNATIONAL, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 16, 2000
To the Shareholders of
METATEC INTERNATIONAL, INC.:
Notice is hereby given that the Annual Meeting of Shareholders of Metatec
International, Inc., an Ohio corporation (the "Company"), will be held at the
Company's principal executive offices located at 7001 Metatec Boulevard, Dublin,
Ohio 43017, on Tuesday, May 16, 2000, at 1:00 p.m., local time, for the
following purposes:
1. To elect two Class I directors.
2. To transact such other business as may properly come before the
meeting or any adjournment thereof.
The close of business on March 24, 2000, 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. If you are able to attend the
meeting 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 27, 2000
<PAGE> 3
METATEC INTERNATIONAL, INC.
PROXY STATEMENT
GENERAL
This Proxy Statement is being furnished to the holders of common shares,
without par value, of the Company ("Metatec Shares") 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. The Annual Meeting will be held at
the Company's principal executive offices located at 7001 Metatec Boulevard,
Dublin, Ohio 43017, on Tuesday, May 16, 2000, 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 27, 2000.
PROXIES AND VOTING
The close of business on March 24, 2000, 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, 6,080,613
Metatec Shares were outstanding and entitled to vote. Each Metatec Share is
entitled to one vote.
All Metatec 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 on a proxy, the Metatec Shares represented by that
proxy will be voted in favor of the nominees for election as Class I directors.
Any proxy may be revoked at any time prior to its exercise by delivering to the
Company 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 will not by itself revoke the proxy. Abstentions will not be counted in
determining the votes cast for the election of directors and will not have a
positive or negative effect on the outcome of the election. If your Metatec
Shares are held in street name, you will need to instruct your broker regarding
how to vote your Metatec Shares. If you do not provide your broker with voting
instructions regarding the election of directors, your broker will nevertheless
have discretion to vote your Metatec Shares for the election of directors. There
are certain matters, however, over which your broker will not have discretion to
vote your Metatec Shares without your instructions--these situations are
referred to as "broker non-votes." If such a matter comes before the Annual
Meeting (which is not anticipated), your Metatec Shares will not be voted on
that matter. Abstentions, but not broker non-votes, will be considered as
Metatec Shares present and entitled to vote at the Annual Meeting and will be
counted for purposes of determining whether a quorum is present.
Shareholders do not have the right to cumulate their votes in electing
directors, and the nominees who receive the highest number of votes will be
elected.
-1-
<PAGE> 4
ELECTION OF DIRECTORS
The number of directors currently is fixed at six. The Board of Directors
is divided into three classes, Class I, Class II, and Class III, with two
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 I directors expires
concurrently with the holding of the Annual Meeting, and the two incumbent
directors in Class I have been nominated for re-election. If any nominee named
below as a Class I director is unable to serve (which is not anticipated), the
persons named in the proxy may vote for another nominee of their choice.
CLASS I DIRECTORS
(NOMINEES FOR ELECTION)
<TABLE>
<CAPTION>
METATEC SHARES
NAME OF DIRECTOR OF THE COMPANY
DIRECTOR AND OF THE BENEFICIALLY
POSITION WITH PRINCIPAL OCCUPATION(S) DURING THE COMPANY OWNED AS OF PERCENT
THE COMPANY AGE PAST FIVE YEARS SINCE MARCH 9, 2000 OF CLASS
------------- --- ----------------------------------- -------- -------------- --------
<S> <C> <C> <C> <C> <C>
Joseph F. Keeler, Jr., 59 Chairman, Chief Executive Officer 1997 210,034 3.4%
Director and 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, 43 Chairman, Chief Executive Officer 1994 48,834 *
Director and President of Checkfree
Corporation, a company that
provides a nationwide electronic
bill paying system, since January
1981.
</TABLE>
Set forth below is information relating to directors whose terms will
continue after the Annual Meeting.
CLASS II DIRECTORS
(TERMS EXPIRING IN 2001)
<TABLE>
<CAPTION>
METATEC SHARES
NAME OF DIRECTOR OF THE COMPANY
DIRECTOR AND OF THE BENEFICIALLY
POSITION WITH PRINCIPAL OCCUPATION(S) DURING THE COMPANY OWNED AS OF PERCENT
THE COMPANY AGE PAST FIVE YEARS SINCE MARCH 9, 2000 OF CLASS
------------- --- ----------------------------------- -------- -------------- --------
<S> <C> <C> <C> <C> <C>
Jerry D. Miller, 64 President of D&D Properties, Inc. 1976 17,000 *
Director and President of MGB, Inc., two
companies engaged in the real
estate business, since May 1992.
President and Treasurer of the
Company from its incorporation in
1976 until May 1993. Chairman of
the Board of the Company from June
1978 until August 1989.
</TABLE>
-2-
<PAGE> 5
<TABLE>
<CAPTION>
METATEC SHARES
NAME OF DIRECTOR OF THE COMPANY
DIRECTOR AND OF THE BENEFICIALLY
POSITION WITH PRINCIPAL OCCUPATION(S) DURING THE COMPANY OWNED AS OF PERCENT
THE COMPANY AGE PAST FIVE YEARS SINCE MARCH 9, 2000 OF CLASS
------------- --- ----------------------------------- -------- -------------- --------
<S> <C> <C> <C> <C> <C>
James V. Pickett, 58 Principal of Stonehenge Holdings, 1995 152,623 2.5%
Director Inc., a private equity investment
firm, since August 1999. Vice
Chairman of Banc One Capital Corp.,
a subsidiary of Banc One Holding
Corporation, 1993 through July
1999. Principal of Pickett Realty
Advisors, Inc., an asset management
firm for hotel owners, since
December 1991. Mr. Pickett is also
a director of Wendys International,
Inc.
</TABLE>
CLASS III DIRECTORS
(TERMS EXPIRING IN 2002)
<TABLE>
<CAPTION>
METATEC SHARES
NAME OF DIRECTOR OF THE COMPANY
DIRECTOR AND OF THE BENEFICIALLY
POSITION WITH PRINCIPAL OCCUPATION(S) DURING THE COMPANY OWNED AS OF PERCENT
THE COMPANY AGE PAST FIVE YEARS SINCE MARCH 9, 2000 OF CLASS
------------- --- ----------------------------------- -------- -------------- --------
<S> <C> <C> <C> <C> <C>
A. Grant Bowen, 69 Financial consultant since March 1991 55,683 *
Director 1986.
Jeffrey M. Wilkins, 55 Chairman of the Board and Chief 1989 739,078 11.6%
Chairman of the Board, Executive Office of the Company
President, and Chief since 1989, and President since
Executive Office of the July 1998. Mr. Wilkins is also a
Company director of CheckFree Holdings,
Inc.
</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 Metatec Shares owned by them. For each of the directors, this
table includes the following number of Metatec Shares which may be acquired
upon the exercise of options that are currently exercisable or exercisable
within 60 days of March 9, 2000: Mr. Bowen -- 15,000 Metatec Shares; Mr.
Kight -- 15,000 Metatec Shares; Mr. Keeler -- 12,500 Metatec Shares; Mr.
Miller -- 15,000 Metatec Shares; Mr. Pickett -- 25,000 Metatec Shares; and
Mr. Wilkins -- 318,750 Metatec Shares.
(2) Includes 100 Metatec Shares owned by a trust which is for the benefit of one
of Mr. Wilkins' children. Mr. Wilkins is the trustee of such trust. Also
includes 46,000 Metatec Shares owned by a limited partnership, of which Mr.
Wilkins is a general partner.
(3) Includes 48,334 Metatec Shares owned by a family limited partnership, of
which Mr. Keeler is a partner.
(4) Includes 24,000 Metatec Shares owned by a corporation controlled by Mr.
Pickett.
In addition to the Metatec Shares beneficially owned by Mr. Wilkins, as set
forth above, Christopher L. Winslow, Jeffrey F. Tarplin, Christopher T. Haynor,
and Daniel D. Viren, the other named executive officers in the Summary
Compensation Table set forth below, beneficially owned 69,488, -0-, 6,492, and
5,000 Metatec Shares, respectively, as of March 9, 2000, which constituted 1.1%
of the outstanding Metatec Shares as of such date in the case of Mr. Winslow and
constituted less than one percent of the outstanding Metatec Shares as of such
date for Mr. Tarplin, Mr. Haynor, and Mr. Viren. Mr. Winslow and his spouse have
sole voting and investment power with respect to all Metatec Shares owned by
them. Mr. Tarplin, Mr. Haynor, and Mr. Viren have sole voting and investment
power with respect to all Metatec Shares owned by them. The number of Metatec
-3-
<PAGE> 6
Shares beneficially owned by Messrs. Winslow, Tarplin, Haynor and Viren include
62,500, -0-, 3,325, and -0- Metatec Shares, respectively, which may be acquired
upon the exercise of options which are currently exercisable or exercisable
within 60 days of March 9, 2000.
As of March 9, 2000, the number of Metatec Shares owned by all directors
and executive officers of the Company as a group (14 persons) was 1,440,346
(21.6%). The foregoing amount includes 592,075 Metatec Shares which may be
acquired upon the exercise of options which are currently exercisable or
exercisable within 60 days of March 9, 2000.
BOARD OF DIRECTORS COMMITTEES AND MEETINGS
The Board of Directors held four meetings and took action one time by
written consent during 1999. Each director attended at least 75% of the meetings
held by the Board of Directors and the committees on which he served during
1999.
The Board of Directors has established an Executive Committee, a
Compensation Committee, and an Audit Committee. The members of the Executive
Committee are Jeffrey M. Wilkins, Joseph F. Keeler, Jr., and James V. Pickett.
The Executive Committee, which may exercise all of the authority of the Board of
Directors between its meetings, did not meet during 1999. The members of the
Compensation Committee are Joseph F. Keeler, Jr., Jerry D. Miller and James V.
Pickett. The Compensation Committee, which is responsible for administering the
Company's 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
two meetings and took action twice by written consent during 1999. The members
of the Audit Committee are A. Grant Bowen, Peter J. Kight, and Jerry D. Miller.
The Audit Committee, which is responsible for recommending the appointment of
the independent auditors, reviewing with 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 one
meeting during 1999.
The Board of Directors has no standing nominating committee or committee
performing similar functions.
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. The Company has a directors deferred compensation plan pursuant to
which directors may defer all or a portion of their director fees.
Directors of the Company who are not officers or employees of the Company
or any of its subsidiaries currently receive stock options pursuant to the
Company's 1999 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 5,000 Metatec 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 Metatec 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 equal to the
fair market value of the Metatec Shares on the last trading day prior to the
annual meeting relating to the date of grant.
-4-
<PAGE> 7
EXECUTIVE COMPENSATION
Set forth below is summary information regarding the annual and long-term
compensation of the Company's chief executive officer and its four most highly
compensated executive officers, other than the chief executive officer, at the
end of 1999.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
AWARDS
--------------
METATEC SHARES
ANNUAL COMPENSATION OTHER UNDERLYING
NAME AND -------------------------- ANNUAL OPTIONS ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS(1) COMPENSATION(2) GRANTED(3) COMPENSATION(4)
------------------ ---- ------ -------- --------------- -------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Jeffrey M. Wilkins........ 1999 $449,055 $ -- -- 100,000 $8,210
Chairman of the Board 1998 $288,462 $126,940 -- -- $4,814
President, and Chief 1997 $250,000 $ 52,896 -- 200,000 $3,858
Executive Officer
Christopher L. Winslow.... 1999 $145,818 $ 12,762 -- 7,500 $7,645
Executive Vice President 1998 $109,231 $ 78,000 -- -- $3,404
and General Manager of 1997 $100,000 $ 31,456 -- 27,500 $2,850
Media and Logistics
Operations
Jeffrey F. Tarplin (5).... 1999 $ 82,403 $ 24,652 $50,000 40,000 $ --
Vice President and
General Manager,
Internet Products Group
Christopher T. Haynor..... 1999 $ 87,611 $ 3,509 $61,961 7,500 $6,220
Vice President, Sales 1998 $ 66,346 $ 19,501 $86,120 -- $3,583
1997 $ 61,231 $ -- $38,433 -- $1,783
Daniel D. Viren (6)....... 1999 $ 94,567 $ 29,240 $20,000 50,000 $3,055
Senior Vice President
and Chief Financial
Officer
</TABLE>
- ---------------
(1) Mr. Wilkins' bonus was paid pursuant to his employment agreement with the
Company. For 1999 and 1998, bonuses to the other named executive officers
were earned pursuant to the Company's Open Book Management Plan. Under this
plan, executives and employees (called "associates" at the Company) share a
portion of the Company's pre-tax income each year. The amount of pre-tax
income shared by executives and employees depends upon the Company's actual
performance for the year relative to its targeted pre-tax income for that
year. Individual financial awards are based upon the number of points earned
under the plan by the executive or employee during the year. During 1997,
bonuses to the other named executive officers were earned pursuant to an
Incentive Compensation Plan for certain key executives of the Company
selected by the chief executive officer. Pursuant to that 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) Other annual compensation includes a $50,000 and $20,000 signing bonus for
Mr. Tarplin and Mr. Viren, respectively. Amounts listed under other annual
compensation for Mr. Haynor include commissions paid for the years 1997,
1998, and 1999.
(3) This column sets forth the number of Metatec Shares subject to options
granted during the indicated year pursuant to the Company's 1990 Stock
Option Plan.
(4) Represents amounts contributed by the Company as matching contributions to
its 401(K) retirement plan and excess group term life insurance.
-5-
<PAGE> 8
(5) Mr. Tarplin joined the Company in July 1999.
(6) Mr. Viren joined the Company in July 1999.
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth all grants of stock options during 1999 to
the executive officers named in the Summary Compensation Table:
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL
--------------------------------------------------------------- REALIZABLE VALUE
% OF AT ASSUMED ANNUAL
TOTAL RATES OF STOCK
NUMBER OF OPTIONS EXERCISE APPRECIATION FOR
METATEC SHARES GRANTED TO PRICE OPTION TERM(3)
UNDERLYING EMPLOYEES IN PER EXPIRATION ---------------------
NAME AND PRINCIPAL POSITION OPTIONS GRANTED(1) FISCAL YEAR SHARE(2) DATE 5% 10%
- --------------------------- ------------------ ------------ -------------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Jeffrey M. Wilkins....... 100,000 36.4% $6.63 2/17/09 $416,957 $1,056,651
Chairman of the Board
President, and Chief
Executive Officer
Christopher L. Winslow... 7,500 2.7% $3.00 10/22/09 $ 14,150 $ 35,859
Executive Vice President
and General Manager of
Media and Logistics
Operations
Jeffrey F. Tarplin....... 40,000 14.6% $4.19 7/23/09 $105,403 $ 267,111
Vice President and
General Manager,
Internet Products
Group
Christopher T. Haynor
Vice President, Sales... 7,500 2.7% $4.19 7/23/09 $ 19,763 $ 50,083
Daniel D. Viren.......... 50,000 18.2% $4.19 7/23/09 $131,753 $ 333,889
Senior Vice President and
Chief Financial
Officer
</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 or four-year vesting schedule.
(2) The per share exercise price is equal to the fair market value of Metatec
Shares on the date of grant.
(3) The dollar amounts under the 5% and 10% columns 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 that would determine with reasonable accuracy a present
value based on future unknown factors.
-6-
<PAGE> 9
OPTION EXERCISES IN LAST FISCAL YEAR AND YEAR END OPTION VALUES
The following tables sets forth stock option exercises during 1999 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, 1999:
<TABLE>
<CAPTION>
NUMBER OF
METATEC SHARES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
METATEC SHARES 12/31/99 12/31/99
ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE REALIZED(1) UNEXERCISABLE UNEXERCISABLE(2)
---- -------------- ----------- -------------- ----------------
<S> <C> <C> <C> <C>
Jeffrey M. Wilkins...................... 0 0 212,500/112,500 $0/$0
Chairman of the Board President, and
Chief Executive Officer
Christopher L. Winslow.................. 0 0 52,500/27,500 $0/$0
Executive Vice President and General
Manager of Media and Logistics
Operations
Jeffrey F. Tarplin...................... 0 0 0/40,000 $0/$0
Vice President and General Manager,
Internet Products Group
Christopher T. Haynor................... 0 0 3,050/15,550 $0/$0
Vice President, Sales
Daniel D. Viren......................... 0 0 0/50,000 $0/$0
Senior Vice President and Chief
Financial Officer
</TABLE>
- ---------------
(1) Aggregate market value of the Metatec 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 Metatec Shares as of December 31, 1999.
EMPLOYMENT AGREEMENT WITH MR. WILKINS
The Company and Mr. Wilkins are parties to an Amended and Restated
Employment Agreement, as amended (the "Employment Agreement"), pursuant to which
Mr. Wilkins is serving as Chairman of the Board and Chief Executive Office 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." The Employment Agreement may also be terminated 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. Mr.
Wilkins' current annual base salary is $450,000. Mr. Wilkins is also entitled to
receive fringe benefits, as determined by the Board of Directors, of the type
which are typically provided to chief executive officers of similarly situated
companies, and an annual incentive bonus (payable in quarterly installments,
calculated on a cumulative basis) equal to a specified percentage of the net
pre-tax profit of the Company (calculated without consideration of any such
bonuses paid or payable to Mr. Wilkins). Prior to calendar year 1999, Mr.
Wilkins was paid five percent of the net pre-tax profit of the Company. The
Employment
-7-
<PAGE> 10
Agreement was amended in 1999 to decrease the value of this bonus arrangement.
For calendar years 1999, 2000, and 2001, Mr. Wilkins will be entitled to receive
an amount equal to five percent, four percent, and three percent, respectively,
of the net pre-tax profit of the Company for the applicable year, up to a
maximum of $7.5 million of net pre-tax profit, and two and one-half percent of
the net pre-tax profit, if any, in excess of $7.5 million. For calendar year
2002 and thereafter, Mr. Wilkins will be entitled to receive an amount equal to
two and one-half percent of the net pre-tax profit of the Company. 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. Mr. Wilkins is entitled
to continue to receive the incentive bonuses for the three calendar years of the
Company ending after the date of his termination and is also entitled to receive
group life and group health insurance coverage for the one-year period following
the date of his termination.
The Company has the option to purchase all of Mr. Wilkins' Metatec 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 Joseph F. Keeler,
Jr., 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 of Directors or the 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
Compensation Committee believes that the Company's compensation policy must be
designed to attract, retain, reward, and motivate highly qualified individuals
to manage the Company to meet corporate growth and earnings objectives and to
maximize shareholder value. The Company's compensation policy has three primary
components, which are described below.
BASE SALARY. The primary component of executive compensation is an annual
base salary. In establishing the amount of an executive officer's annual base
salary (other than the chief executive officer), the Compensation Committee
reviews a recommendation made by the Company's chief executive officer and
considers other factors as well, including the position held by the executive
officer, his or her accomplishments during the year, his or her level of
responsibility and experience, and the relationship of the executive officer's
salary to the salaries of other managers and associates of the Company. After
considering these factors, the Compensation Committee subjectively determines
the amount of each executive officer's annual base salary.
The annual base salary of Mr. Wilkins, the Company's chairman, president,
and chief executive officer, is paid pursuant to his employment agreement with
the Company. The Board of Directors and its Compensation Committee each has the
authority to increase Mr. Wilkins' annual base salary, and in October 1998, the
Compensation Committee increased Mr. Wilkins' annual base salary from $250,000
to $450,000. The Compensa-
-8-
<PAGE> 11
tion Committee increased Mr. Wilkins' annual base salary for a number of
reasons. During 1998, Mr. Wilkins assumed additional responsibilities as
President of the Company and as a result of the Company's purchase in September
1998 of substantially all of the assets used in the CD-ROM services business of
Imation Corp. That acquisition more than doubled the Company's revenues,
expanded its operations to Europe, expanded its major operating facilities from
one to three, and added approximately 200 new employees. The Compensation
Committee did not take any additional action with respect to Mr. Wilkins' base
salary in 1999.
ANNUAL INCENTIVE. A second component of executive compensation is the
sharing by executives and all employees (called "associates" at the Company) on
an annual basis of a predetermined portion of the Company's pre-tax income under
the Company's Open Book Management Plan. The amount of pre-tax income shared by
executives and associates depends upon the Company's actual performance for the
year relative to its targeted pre-tax income for that year. The Open Book
Management Plan -- which uses a point system to determine individual financial
rewards -- is designed to give associates a stake in the outcome of the
Company's business.
Mr. Wilkins does not participate in the Open Book Management Plan. Instead,
under his employment agreement with the Company, Mr. Wilkins receives an annual
incentive bonus in addition to his base salary. The amount of this annual
incentive bonus (which is payable in quarterly installments, calculated on a
cumulative basis) is equal to a specified percentage of the net pre-tax profit
of the Company (calculated without consideration of any such bonuses paid or
payable to Mr. Wilkins). In late 1998, the Compensation Committee began
reviewing this bonus arrangement and determined that a change in this
arrangement was appropriate. First, the overall size of the Company had
significantly increased due to the acquisition of Imation Corp.'s CD-ROM
services business. Second, the Compensation Committee desired to create an
arrangement which provides more long-term incentives. To that end, the
Compensation Committee determined that a decrease in value to Mr. Wilkins' cash
incentive bonus, coupled with a significant option grant, achieved the
appropriate mix of short- and long-term incentives. Accordingly, in February
1999, the Company and Mr. Wilkins agreed to an amendment to Mr. Wilkins'
employment agreement with respect to his annual incentive bonus. For calendar
years 1999, 2000, and 2001, Mr. Wilkins will be entitled to receive an amount
equal to five percent, four percent, and three percent, respectively, of the net
pre-tax profit of the Company for the applicable year, up to a maximum of $7.5
million of net pre-tax profit, and two and one-half percent of the net pre-tax
profit, if any, in excess of $7.5 million. For calendar year 2002 and
thereafter, Mr. Wilkins will be entitled to receive an amount equal to two and
one-half percent of the net pre-tax profit of the Company.
LONG-TERM STOCK INCENTIVES. Stock options form the third component of
executive compensation. The Company's 1990 Stock Option Plan is designed to
align a portion of the executive and key associates compensation package with
the long-term interests of shareholders. All options are granted by the
Compensation Committee, whose members are not eligible to participate in this
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 the associates.
As discussed above, in February 1999, the Company and Mr. Wilkins agreed to
an amendment to Mr. Wilkins' employment agreement which decreased the value of
his cash incentive bonus. Concurrently with such decrease, and in order to
achieve an appropriate mix of short- and long-term incentives, the Compensation
Committee granted Mr. Wilkins an option to purchase 100,000 Metatec Shares at an
exercise price of $6.63 per share, the fair market value of the Metatec Shares
on the grant date. This option vests in February 2000.
Joseph F. Keeler, Jr.
Jerry D. Miller, Chairman
James V. Pickett
-9-
<PAGE> 12
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 1999 all Section 16(a) filing
requirements applicable to its officers and directors were complied with by such
persons except as follows: Jeffrey M. Wilkins, Chairman of the Board, President,
and Chief Executive Officer of the Company, failed to timely report the
acquisition of 46,000 Metatec Shares by a limited partnership of which he is one
of the general partners. The limited partnership acquired its 46,000 Metatec
Shares in multiple transactions, all of which were more than three years ago and
all of which were at prices exceeding $6.00 per share.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
As discussed above, Mr. Wilkins is entitled to receive an annual incentive
bonus under the Employment Agreement in an amount equal to a specified
percentage of the net pre-tax profits of the Company. See "Employment Agreement
with Mr. Wilkins." This incentive bonus is paid in quarterly installments and is
calculated on a cumulative basis. If Mr. Wilkins receives incentive bonus
installment payments for any or all of the first three calendar quarters in any
calendar year in an aggregate amount which exceeds the annual incentive bonus
payable for that calendar year, then the Company has the right to offset such
excess against the amounts next payable by the Company under the Employment
Agreement until such excess is fully recovered by the Company. If offsets are
insufficient to permit the recovery of such excess, the Company may also require
Mr. Wilkins to repay the unrecovered portion of such excess promptly following
the Company's request. Based upon the Company's financial performance for the
first quarter of 1999, Mr. Wilkins received an incentive bonus installment
payment of $75,000 for that quarter (no other incentive bonus quarterly
installment payments were made in 1999). However, when calculated for the full
year, no incentive bonus was payable to Mr. Wilkins for 1999, and Mr. Wilkins
repaid the $75,000 installment payment in the first quarter of 2000.
-10-
<PAGE> 13
PRINCIPAL HOLDERS OF VOTING SECURITIES
The following table sets forth certain information with respect to the only
persons known by the Company to own beneficially 5% or more of Metatec 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 739,078(2) 11.6%
7001 Metatec Boulevard
Dublin, Ohio 43017
Dimensional Fund Advisors, Inc. 499,100 8.2%
1299 Ocean Avenue
Santa Monica, California 90401
</TABLE>
- ---------------
(1) Beneficial ownership as of December 31, 1999, except in the case of Mr.
Wilkins, which is as of March 9, 2000.
(2) Includes the following: (i) 318,750 Metatec Shares which may be acquired
upon the exercise of options which are currently exercisable or exercisable
within 60 days of March 9, 2000; and (ii) 100 Metatec Shares owned by a
trust which is for the benefit of one of Mr. Wilkins' children. Mr. Wilkins
is the trustee of such trust. Also includes 46,000 Metatec Shares owned by a
limited partnership of which Mr. Wilkins is a general partner.
PERFORMANCE GRAPH
The following graph compares the yearly percentage change in the cumulative
total return (assuming reinvestment of dividends) on Metatec Shares to the
yearly percentage change in the cumulative total return of the NASDAQ Computer
and Data Processing Services Index and the NASDAQ Stock Market Index -- United
States. This comparison is shown for the five previous fiscal years of the
Company. The graph and the amounts in the graph assume that $100 was invested on
December 31, 1994 in Metatec Shares or in the applicable stock index and that
all dividends were reinvested during the applicable fiscal year.
<TABLE>
<CAPTION>
METATEC NASDAQ COMPUTER & NASDAQ STOCK MRKT -
INTERNATIONAL DP US
------------- ----------------- -------------------
<S> <C> <C> <C>
12/94 100 100 100
12/95 114 152 141
12/96 70 188 174
12/97 49 231 213
12/98 78 412 300
12/99 31 871 542
</TABLE>
<TABLE>
<CAPTION>
DEC-94 DEC-95 DEC-96 DEC-97 DEC-98 DEC-99
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Metatec International.................... $100 $114 $ 70 $ 49 $ 78 $ 31
NASDAQ -- Computer & DP.................. $100 $152 $188 $231 $412 $871
NASDAQ Stock Mrkt -- US.................. $100 $141 $174 $213 $300 $542
</TABLE>
The foregoing graph is not -- nor is it intended to be -- any indication of
the future performance of Metatec Shares.
-11-
<PAGE> 14
INDEPENDENT PUBLIC ACCOUNTANTS
Deloitte & Touche LLP has been selected by the Board of Directors to be the
Company's independent public accountants for the fiscal year ending December 31,
2000. A representative of Deloitte & Touche LLP is expected to be present at the
Annual Meeting and to have an opportunity to make a statement if desired and to
respond to appropriate questions.
SHAREHOLDER PROPOSALS
Proposals of shareholders intended to be presented at the 2001 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. If a shareholder intends
to present a proposal at the 2001 annual meeting of shareholders, but does not
seek to include such proposal in the Company's Proxy Statement and form of
proxy, such proposal must be received by the Company on or prior to 45 days in
advance of the first anniversary date of this Proxy Statement or the persons
named in the form of proxy for the 2001 annual meeting will be entitled to use
their discretionary voting authority should such proposal then be raised at such
meeting, without any discussion of the matter in the Company's Proxy Statement
or form of proxy.
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, the persons named in the accompanying form of proxy intend to vote the
proxy in accordance with their judgment on such matters.
The Company will bear the cost of soliciting 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. The Company will reimburse
banks, brokers, and nominees for any out-of-pocket expenses incurred by them in
sending proxy materials to the beneficial owners of Metatec Shares held by any
banks, brokers or nominees. If follow-up requests for proxies are necessary, the
Company may employ other persons to make these requests.
JULIA A. POLLNER
Secretary
-12-
<PAGE> 15
REVOCABLE PROXY
METATEC INTERNATIONAL
[X] PLEASE MARK VOTES AS IN THIS EXAMPLE
ANNUAL MEETING OF SHAREHOLDERS MAY 16, 2000
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints Jeffrey M. Wilkins and Daniel D. Viren, and
each of them, with full power of substitution, proxies to vote and act with
respect to all Common Shares, without par value (the "Shares"), of Metatec
International, Inc., an Ohio corporation (the "Company"), which the undersigned
is entitled to vote at the Annual Meeting of Shareholders to be held on Tuesday,
May 16, 2000, 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. AUTHORITY TO ELECT ALL NOMINEES LISTED FOR WITHHOLD
BELOW AS CLASS I DIRECTORS (except as
marked to the contrary below): [ ] [ ]
Joseph F. Keeler, Jr. Peter J. Kight
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.
2. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED FOR AGAINST ABSTAIN
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.
---------------------------------
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-------|
+ +
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* DETACH ABOVE CARD, SIGN, DATE AND MAIL IN POSTAGE PAID ENVELOPE PROVIDED. *
METATEC INTERNATIONAL
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