<PAGE>
[LOGO OMITTED]
160 Cassell Road, Harleysville, Pennsylvania 19438
NOTICE OF ANNUAL MEETING
OF STOCKHOLDERS
To Be Held On June 7, 2000
To the Stockholders of
MET-PRO CORPORATION:
Notice is hereby given that the Annual Meeting of Stockholders of MET-PRO
CORPORATION, a Delaware corporation (the "Company"), will be held at the
DoubleTree Guest Suites, 640 West Germantown Pike (at Hickory Road) in Plymouth
Meeting, Pennsylvania, on June 7, 2000, at the hour of 11:30 a.m. for the
following purposes:
1. To elect two Directors to serve until the 2003 Annual Meeting of
Stockholders and one Director to serve until the 2002 Annual Meeting
of Stockholders.
2. To approve the adoption of the Met-Pro Corporation Year 2000 Employee
Stock Purchase Plan.
3. To ratify the selection of Margolis & Company P.C. as independent
certified public accountants for the Company's fiscal year ending
January 31, 2001.
4. To transact such other business as may properly come before the
meeting.
Only stockholders of record at the close of business on April 13, 2000, the
record date and the time fixed by the Board of Directors, are entitled to notice
of, and to vote at, said meeting.
Gary J. Morgan,
Secretary
Harleysville, Pennsylvania
April 27, 2000
Whether or not you plan to attend the meeting, please sign and date the
enclosed proxy, which is solicited by the Board of Directors of the Company, and
return it to the Company. The proxy may be revoked at any time before it is
voted, and stockholders executing proxies may attend the meeting and vote there
in person, should they so desire.
<PAGE>
MET-PRO CORPORATION
160 Cassell Road, Harleysville, Pennsylvania 19438
PROXY STATEMENT
The Board of Directors of Met-Pro Corporation (the "Company" or "Met-Pro")
presents this proxy statement to all stockholders and solicits their proxies for
the Annual Meeting of Stockholders to be held on June 7, 2000. All proxies duly
executed and received will be voted on all matters presented at the meeting in
accordance with the specifications made in such proxies. In the absence of
specified instructions, proxies so received will be voted for the named nominees
to the Company's Board of Directors and in favor of each of the other proposals
set forth in the Notice of Annual Meeting of Stockholders and described in this
Proxy Statement. Management does not know of any other matters that may be
brought before the meeting nor does it foresee or have reason to believe that
proxyholders will have to vote for a substitute or alternate nominee. In the
event that any other matter should come before the meeting or any nominee is not
available for election, the persons named in the enclosed proxy will have
discretionary authority to vote all proxies not marked to the contrary with
respect to such matters in accordance with their best judgment. The proxy may be
revoked at any time before being voted by written notice to such effect received
by the Company, 160 Cassell Road, Harleysville, Pennsylvania 19438, attention:
President, prior to exercise of the proxy, by delivery of a later proxy or by a
vote cast in person at the meeting. The Company will pay the entire expense of
soliciting these proxies, which solicitation will be by use of the mail.
The total number of shares of Common Stock of the Company outstanding as of
April 13, 2000 was 6,324,005 (excluding treasury shares). The Common Stock is
the only class of securities of the Company entitled to vote, each share being
entitled to one noncumulative vote. Only stockholders of record as of the close
of business on April 13, 2000 will be entitled to vote. All matters to be voted
upon at the Annual Meeting, other than the election of Directors, are determined
by a majority of the votes cast. Directors are elected by a plurality of the
votes cast. Shares represented by proxies that are marked "withhold authority"
with respect to the election of one or more nominees as Directors, by proxies
that are marked "abstain" on other proposals, and by proxies that are marked to
deny discretionary authority on other matters that may be properly brought
before the meeting will be counted as present for quorum purposes but will not
be counted in determining whether a majority vote was obtained in such matters.
In instances where brokers are prohibited from exercising discretionary
authority for beneficial owners who have not returned proxies to the brokers
(so-called "broker non-votes"), those shares will be counted as present for
quorum purposes but will not be included in the vote totals and, therefore, will
have no effect on the vote.
A list of stockholders entitled to vote at the meeting will be available at
the Company's offices, 160 Cassell Road, Harleysville, Pennsylvania 19438, for a
period of ten days prior to the meeting for examination by any stockholder.
These proxy materials were first mailed to stockholders of the Company on
or about April 27, 2000.
1. ELECTION OF DIRECTORS
The Company's Restated Certificate of Incorporation, as amended, provides
for a classified Board of Directors, with the Board divided into three classes
whose terms expire at different times. At the meeting, three Directors, Alan
Lawley, Gary J. Morgan and Michael J. Morris, are to be elected to serve for
terms that expire at the 2003, 2003 and 2002 Annual Meetings, respectively.
Thomas F. Hayes, whose term as a Director will expire at the 2000 Annual
Meeting, is not standing for reelection, having reached the retirement age that
the Board has established for itself. For the time being, this seat on the Board
will remain vacant, although the Board may elect to fill the vacancy at some
point in the future. Information regarding the Board's three nominees is set
forth on page 2. Information regarding the Directors whose terms do not expire
with the 2000 Annual Meeting is also set forth on page 2.
Unless otherwise indicated in valid proxies received pursuant to this
solicitation, such proxies will be voted for the election of the persons listed
below as nominees for the terms set forth below. Management has no reason to
believe that the nominees will not be available or will not serve if elected,
but if any of Messrs. Lawley, Morgan or Morris should become unavailable to
serve as a Director, full discretion is reserved to the persons named as proxies
to vote for such other person as may be nominated.
The following sets forth certain information as to the nominees for
election as Directors and for each other person whose term of office as a
Director will continue after this Annual Meeting of Stockholders, as well as for
Mr. Hayes:
1
<PAGE>
<TABLE>
<CAPTION>
FIRST YEAR
OF SERVICE
AS A
NAME AGE PRINCIPAL OCCUPATION DIRECTOR
<S> <C> <C> <C>
NOMINEES FOR TERM TO EXPIRE IN 2003
Alan Lawley 66 Dr. Lawley is the Grosvenor Professor of Metallurgy in the 1990
Department of Materials Engineering at Drexel University,
Philadelphia, Pennsylvania. He is a member of the National
Academy of Engineering, a Fellow of ASM and APMI
International, a former President of the Metallurgical
Society (1982) and of AIME (1987), and is Editor-in-Chief of
the International Journal of Powder Metallurgy. He is an
expert in physical and mechanical metallurgy, powder
metallurgy, composite materials, and materials engineering
design. He has consulted, lectured and published in these
areas.
Gary J. Morgan 45 Mr. Morgan has been the Vice President-Finance, Secretary, 1998
Treasurer and Chief Financial Officer of the Company since
October 1997. He is a Certified Public Accountant.
Immediately prior to October 1997, Mr. Morgan was the
Corporate Controller of the Company. He has been employed by
the Company since 1980.
NOMINEE FOR TERM TO EXPIRE IN 2002
Michael J. Morris 64 Mr. Morris is the retired Chief Executive Officer and 1999
President of both Transport International Pool (TIP) and GE
Modular Buildings (GEM). Mr. Morris is a member of the Board
of Managers of Beneficial Savings Bank and a Director of
Philadelphia Consolidated Holding Corporation.
The Board of Directors recommends a vote FOR the election of the above nominees as Directors.
DIRECTOR WHOSE TERM EXPIRES IN 2002
Jeffrey H. Nicholas 46 Mr. Nicholas is a partner in the Corporate Department of the 1998
Philadelphia law firm of Fox, Rothschild, O'Brien & Frankel,
LLP. Mr. Nicholas has practiced law since 1981. His practice
areas include securities and corporate finance, general
corporate and commercial law matters. He has served as the
Company's Chief Counsel for four years.
DIRECTORS WHOSE TERMS EXPIRE IN 2001
William L. Kacin 68 Mr. Kacin has been the Chief Executive Officer, President 1993
and a Director of the Company since February 1993 and was
elected Chairman in June 1999. Prior to February 1993, he
was Vice President and General Manager of the Company's
Sethco Division for seventeen years.
Nicholas DeBenedictis 53 Mr. DeBenedictis is Chairman of the Board, Chief Executive 1997
Officer and President of Philadelphia Suburban Corporation
and Chairman of the Board of Philadelphia Suburban Water
Company, positions that he has held for more than five
years. Mr. DeBenedictis is also a Director of Provident
Mutual Life Insurance Company and P.H. Glatfelter Company
as well as a member of the Board of Trustees of Drexel
University.
DIRECTOR WHOSE TERM EXPIRES IN 2000
Thomas F. Hayes 77 Mr. Hayes was President of Philadelphia Gear Corporation, a 1985
privately held corporation, from 1969 to 1984, when he
retired. He is a West Point graduate, and a member of the
Board of Managers of Beneficial Savings Bank, Philadelphia,
Pennsylvania.
</TABLE>
<PAGE>
BOARD AND COMMITTEE PARTICIPATION/COMPENSATION OF DIRECTORS
The Board of Directors of the Company held eight (8) meetings during the
fiscal year ended January 31, 2000, of which two were telephone meetings.
The Audit Committee of the Board (composed of Dr. Lawley, Chairman, Mr.
Hayes and Mr. DeBenedictis, each of whom is "independent" as defined by
applicable provisions of the New York Stock Exchange listing standards) reviews
the activities of the Company's independent auditors (including fees, services
and scope of the audit), reviews the Company's internal audit policies and
procedures and makes recommendations to the Board with respect thereto. The
Audit Committee met twice during fiscal year 2000.
The Compensation and Stock Option Committee of the Board (composed of Mr.
DeBenedictis, Chairman, Dr. Lawley, Mr. Hayes and Mr. Morris) reviews and
recommends to the Board appropriate action with respect to all matters
pertaining to officers' compensation as well as stock option grants for
Directors, officers and other key employees of the Company. See the Committee's
report on pages 6 and 7 of this proxy statement. The Compensation and Stock
Option Committee met four times in fiscal year 2000.
Each Director of the Company attended at least 75% of the meetings held by
the Board of Directors and by the Committees on which he served.
The Company does not have a standing nominating committee charged with the
search for and recommendation to the Board of potential nominees for Board
positions. This function is performed by the Board as a whole. It has been, and
continues to be, the Board's policy to entertain stockholder recommendations for
prospective Board nominees. Any such recommendations may be submitted to the
Board, in writing, addressed to the Chairman.
Prior to November 1, 1999, the Company's compensation package for Directors
during the fiscal year ended January 31, 2000 was a retainer fee of $7,500 per
year, a per meeting fee of $1,250 payable only to non-employee Directors, stock
options, and participation in the Directors' Retirement Plan.
Pursuant to this policy, in April 1999, the Board granted a non-qualified
stock option under the Company's 1997 Stock Option Plan for 10,000 shares to
Messrs. DeBenedictis, Lawley and Nicholas, and a non-qualified stock option
under such plan to Mr. Hayes for 12,500 shares (who agreed in connection with
this to terminate an option for 7,000 shares that had been granted to him in
November 1998), at a price of $10-1/16 per share, the market price of the
Company's stock as quoted on the New York Stock Exchange on the date of grant.
One-third of such options were immediately exercisable, with the other
two-thirds vesting ratably over a two year period, subject to acceleration upon
the cessation of a Director's services to the Company, other than voluntarily or
for cause, or upon a "change in control", which is defined with reference to the
definition used in any Key Employee Severance Agreement from time to time in
effect. All such options are for a term of ten (10) years, subject to earlier
expiration upon certain events as set forth in the 1997 Stock Option Plan,
except that the expiration date upon the Director's cessation of services as a
result of reaching the normal retirement date prescribed by the Company is three
years and three months after such cessation.
Beginning in the third quarter of fiscal year ended January 31, 2000, the
Board undertook a review of, and thereafter revised its policies with respect to
Director compensation. The current policy of the Board is that effective
November 1, 1999, each Director who is not an employee of the Company is
compensated for services as a Director by a retainer of $10,000 per year, paid
quarterly, and a meeting fee of $1,250 for each Board meeting (but no fees for
telephone meetings or for stockholders meetings) and $700 for each Committee
meeting. Also effective as of November 1, 1999, those Directors who are
employees of the Company do not receive any compensation for their services as
Directors. In connection with adopting these policies, the Board effective as of
November 1, 1999 increased the salaries of Messrs. Kacin and Morgan, who are
employee Directors of the Company, by $7,500 per annum, which was the amount of
the annual cash compensation previously received by such persons for regular
service as a Director under the Board's prior policy.
In addition, during the fiscal year ended January 31, 2000, the Board
discontinued the Directors' Retirement Plan (the terms of which are described
below) (hereafter the "Directors' Plan") for the future service of non-vested
Directors and established a policy of an annual grant of an option to purchase
up to 4,000 shares of the Company's Common Stock to non-employee Directors not
participating in the Directors' Plan as to future service under the following
terms that are expected to be on the same basis upon which options are granted
to the Company's officers: a vesting period of two years, with one-third of the
shares covered by the option being immediately exercisable; provided, however,
in the event of a "change of control" (defined in the same manner as in the
Directors' Plan), any unvested portion of the option shall become immediately
exercisable. The term of the option shall be for up to ten (10) years, subject
to earlier termination under various conditions as provided for by the terms of
the Company's 1997 Stock Option Plan. The option shall be granted at current
market price.
3
<PAGE>
In connection with this, on January 11, 2000, the Board granted options on
the foregoing terms to purchase 4,000 shares to Messrs. DeBenedictis, Lawley,
Morris and Nicholas (all of whom were either not vested in the Directors' Plan
or, as in the case of Dr. Lawley, was vested but elected not to participate in
the Directors' Plan as to future service) at the closing price of the Company's
Common Stock as quoted on the New York Stock Exchange on the date of grant, or
$9.875 per share. The Board's expectation is that it will act again as to the
grant of options on similar terms at the Board meeting in February 2001
following the close of the fiscal year ended January 31, 2001, at the same time
that the Board expects to take action with respect to officer compensation.
Under the terms of the Directors' Plan, based upon their years of service
as Directors, Messrs. DeBenedictis and Nicholas had accrued certain future
benefits through December 16, 1999, the date of the termination of continued
benefits under such plan for unvested Directors. The present value of these
benefits, amounting to an aggregate of $3,703 and $1,577, respectively, was paid
to these two Directors in options (the value of which was determined by an
independent compensation consultant) to acquire 925 and 400 shares of Company
Common Stock, respectively, all of which are immediately exercisable and which
are otherwise under the terms provided for options described in the preceding
paragraph, at an exercise price of $9.75 per share, which was the closing price
of the Company's Common Stock as quoted on the New York Stock Exchange on
February 18, 2000.
Of the Company's current Directors, Messrs. Hayes, Kacin and Lawley will
receive benefits in the future under the Directors' Plan as a result of the fact
that each such person was vested as of December 16, 1999, the date of the
Board's action on this plan. The accrual of benefits under the Directors' Plan
for Dr. Lawley will cease as of December 16, 1999, in that Dr. Lawley elected to
receive options as aforementioned for continued Director service in lieu of
participation under the Directors' Plan. The Directors' Plan, which was
established in 1994, provides that Directors who have completed six (6) years of
service will be eligible to receive deferred compensation after they cease to
serve or reach age 70, whichever last occurs. Payment will be made in annual
installments based on $1,000 for each year of service as a Director, up to a
maximum of $10,000, and for a period equal to the length of service, up to a
maximum of 15 installments. Directors who have served as a Chief Executive
Officer for at least six years will be eligible to receive additional annual
deferred compensation at the rate of $1,000 for each year of service as an
officer and/or Director, up to a maximum of $20,000, for a period equal to the
length of such service, up to twenty (20) years. In the event of death before
payments have been completed, the remaining annuity payments will be paid to the
Director's surviving spouse. If there is no surviving spouse, a lump sum payment
will be paid to the Director's estate equal to the total amount payable over ten
(10) years, less the total paid prior to death.
The Directors' Plan further provides that if a Director's services are
terminated at or after a "change in control" of the Company, the Director is
entitled to an immediate lump sum payment of the benefits then applicable to
such Director, and future payments due under the Plan to former Directors shall
be accelerated and shall be immediately due and payable. For purposes of the
Plan, a "change in control" shall be deemed to occur if any person or group of
persons as defined shall become the beneficial owner of 30% or more of the
Company's voting securities, or there shall be a change in the majority
composition of a Company's Board of Directors, or the stockholders of the
Company shall approve a merger or other similar reorganization in which the
persons who were stockholders of the Company prior to such merger do not
immediately thereafter own more than 50% of the voting securities of the
Company.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
Directors and executive officers, and persons who own more than ten percent of a
registered class of the Company's equity securities to file with the Securities
and Exchange Commission initial reports of ownership and reports of changes in
ownership of Common Stock and other equity securities of the Company. Officers,
Directors and greater than ten percent stockholders are required by Securities
and Exchange Commission regulations to furnish the Company with copies of all
Section 16(a) forms that they file.
Based solely upon a review of the copies of the forms furnished to the
Company, or written representations from certain reporting persons that no Forms
5 were required, the Company believes that all filing requirements applicable to
its officers and Directors were complied with during the fiscal year ended
January 31, 2000. During this fiscal year, the Company was advised by Mr.
DeBenedictis of an inadvertent failure to file a Form 4 during the prior fiscal
year with respect to a purchase of Met-Pro Common Stock. Mr. DeBenedictis filed
a Form 5 for this purchase in February 2000.
4
<PAGE>
SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as of January 31, 2000 the number and
percentage of shares held by all persons who, to the knowledge of the Company's
management, are the record and/or beneficial owners of, or who otherwise
exercise voting or dispositive control over, 5% or more of the Company's
outstanding shares of Common Stock. This table also includes security ownership
as of January 31, 2000 by each Director and nominee for Director of the Company,
each executive officer of the Company named in the Summary Compensation Table
and by all Directors, nominees and executive officers as a group. Unless
otherwise stated, the beneficial owners exercise sole voting and/or investment
power over their shares.
<TABLE>
<CAPTION>
Company Common Stock
Right to Acquire
Ownership Under Options Percent
Name of Beneficial Owner Shares Owned Exercisable Within 60 Days of Class (a)
- ------------------------ ------------ -------------------------- ------------
<S> <C> <C> <C>
Dimensional Fund Advisors, Inc. 381,919 (b) - 5.8%
1299 Ocean Avenue
Santa Monica, CA 90401
Met-Pro Corporation 344,129 - 5.2%
Salaried Employee Stock Ownership Trust
Harleysville, PA 19438
William L. Kacin 57,507 (c) 51,875 1.7%
Nicholas DeBenedictis 5,200 5,592 *
Thomas F. Hayes 12,500 4,167 *
Alan Lawley 27,985 10,667 *
Gary J. Morgan 9,959 (d) 13,850 *
Michael J. Morris 4,000 1,333 *
Jeffrey H. Nicholas 6,923 5,067 *
Raymond J. De Hont 1,302 (e) 10,400 *
William G. Hughes 0 1,400 *
William F. Mersch 1,383 (f) 8,900 *
All Directors, nominees and 205,296 (g) 170,501 5.7%
executive officers as a group (17 persons)
</TABLE>
- ----------
(a) Any securities not currently outstanding, but subject to options
exercisable within 60 days of January 31, 2000, are deemed to be
outstanding for the purpose of computing the percentage of outstanding
securities of the class owned by such persons.
(b) Dimensional Fund Advisors Inc. ("Dimensional"), a registered
investment advisor, is deemed to have beneficial ownership of 381,919
shares, as described in a Schedule 13G filed with the Securities and
Exchange Commission on February 11, 2000. These shares are held in
portfolios of DFA Investment Dimensions Group Inc., a registered
open-end investment company, or in series of the DFA Investment Trust
Company, a Delaware business trust, or the DFA Group Trust and DFA
Participation Group Trust, investment vehicles for qualified employee
benefit plans, all of which Dimensional Fund Advisors, Inc. serves as
investment manager. Dimensional disclaims beneficial ownership of all
such shares.
(c) The number of shares held by Mr. Kacin include 22,741 shares of Common
Stock beneficially held through the Met-Pro Corporation Salaried
Employee Stock Ownership Trust and 401(k) Plan.
5
<PAGE>
(d) The number of shares held by Mr. Morgan include 6,657 shares of Common
Stock beneficially held through the Met-Pro Corporation Salaried
Employee Stock Ownership Trust and 401(k) Plan.
(e) The number of shares held by Mr. De Hont include 1,302 shares of
Common Stock beneficially held through the Met-Pro Corporation
Salaried Employee Stock Ownership Trust and 401(k) Plan.
(f) The number of shares held by Mr. Mersch include 1,229 shares of Common
Stock beneficially held through the Met-Pro Corporation Salaried
Employee Stock Ownership Trust and 401(k) Plan.
(g) The number of shares held by all seventeen executive officers and
Directors as a group include 79,914 shares of Common Stock
beneficially held through the Met-Pro Corporation Salaried Employee
Stock Ownership Trust and 401(k) Plan.
(*) Less than one percent of the Company's outstanding shares of Common
Stock.
COMPENSATION AND STOCK OPTION COMMITTEE
REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee is composed only of independent Directors. The
Committee makes recommendations to the Board concerning compensation policies
for the Company's executive officers and Directors. The Committee makes every
effort to ensure that the Company's compensation program is consistent with the
values of Met-Pro Corporation and furthers its business strategy.
The historic practice of the Compensation Committee has been to review
executive pay each year, usually in December, and to make decisions concerning
executive salaries and bonuses that are paid prior to the end of the fiscal
year. This practice was followed during the fiscal year ended January 31, 2000,
with compensation decisions being made in December 1999.
During the fiscal year ended January 31, 2000, the Committee continued the
Company's historic practice of compensating executive officers through two
primary components: base salary and bonus. In addition, during this fiscal year
the Committee made significantly greater use of stock options as a component of
executive compensation. Options awarded by the Committee in December 1999 to
executive officers were at market value on the date of grant, provided for
vesting over two years with acceleration upon a change of control, were for a
ten (10) year life, and were otherwise under the terms of the Company's 1997
Stock Option Plan. Also during this fiscal year the Company instituted a 401(k)
plan in which non-bargaining unit employees and executive officers in the United
States participated and to which the Company made matching contributions.
The salary, bonus, stock option and other components of the Company's
executive compensation awarded during the fiscal year ended January 31, 2000
were together designed to facilitate fulfillment of the following compensation
objectives: (i) aligning the interests of management with those of the Company's
stockholders; (ii) retaining competent management; (iii) relating executive
compensation to the achievement of the Company's goals and financial
performance; and (iv) rewarding management for the attainment of short and long
term accomplishments.
In determining executive compensation during the fiscal year ended January
31, 2000, the Committee relied in part upon a comparative analysis prepared by
an independent compensation consulting firm. The Committee also considered a
number of factors in setting compensation including individual performance and
responsibilities. Compensation for the Company's Vice Presidents managing the
Company's divisions and subsidiaries is intended to reflect, in part, overall
managerial performance that includes consideration of demonstrated management
skills, effectiveness at cost controls, the unit's contribution to the Company's
earnings, asset management, success in new product development and market
exploitation, and other business growth factors.
Compensation increases in December 1999 for Messrs. Kacin and Morgan, the
Company's Chief Executive Officer and Chief Financial Officer, respectively,
took into account a $7,500 per year salary increase each such person received on
November 1, 1999 in connection with the Board's determination to discontinue, as
of that date, payments to employee Directors for service as Board members.
Compensation for Messrs. Kacin and Morgan awarded in the fiscal year ended
January 31, 2000 was intended to reflect, in part, Company-wide financial
results of operations and their perceived skills, as demonstrated in
problem-solving and daily management, as well as in articulating, planning and
implementing the Company's short and long term objectives.
6
<PAGE>
Compensation awarded in this fiscal year ended January 31, 2000 to Mr.
Kacin was based upon the Company's strong operating performance during the
fiscal year, his individual performance in managing the Company's Vice
Presidents and in developing executive skills within the Company, executive
compensation in other comparable companies as evidenced in the independent
consultant's report, and the desire to retain his services. The salary, bonus
and other benefits accorded Mr. Kacin reflect the Committee's view of the
leadership, vision and focus he has provided to Met-Pro Corporation.
In connection with a broad review of the Company's compensation policies
undertaken beginning in the third quarter of this fiscal year, the Committee
determined that the executive compensation meeting to consider bonuses for
performance during the fiscal year ending January 31, 2001 and compensation
increases to take effect beginning February 1, 2001, will follow the completion
of the fiscal year ending January 31, 2001. The Committee recommended this new
time for review in order to more explicitly link compensation to full fiscal
year performance.
In addition to changing the date of future compensation reviews, the
Committee also made numerous executive compensation policy recommendations that
are effective for the fiscal year beginning February 1, 2000. In general, the
changes involve the institution on a Company-wide basis of a management
incentive program that provides a number of objective performance goals. Bonus
compensation is explicitly linked to these performance goals.
Nicholas DeBenedictis (Chairman)
Thomas F. Hayes
Dr. Alan Lawley
Michael J. Morris
December 16, 1999
COMPENSATION AND STOCK OPTION COMMITTEE
INTERLOCKS AND INSIDER PARTICIPATION
Mr. Kacin, the Company's Chairman, Chief Executive Officer and President,
makes general recommendations to and reviews with the Compensation and Stock
Option Committee the compensation of the Company's executive officers, other
than his own. This information is carefully considered by the Committee.
7
<PAGE>
EXECUTIVE COMPENSATION AND OTHER INFORMATION
Summary of Cash and Certain Other Compensation
The following table shows, for the fiscal years ended January 31, 1998,
1999 and 2000, the cash compensation paid by the Company, as well as certain
other compensation paid or accrued for those years, to each of the five most
highly compensated executive officers of the Company where cash compensation
exceeded $100,000 (the "Named Executive Officers") in all capacities in which
they served.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Annual Compensation Long-Term Compensation
---------------------------------- ----------------------
Awards
------
Fiscal All Other
Name and Principal Year Ended Salary Bonus Options Compensation (a)
Position January 31, ($) ($) (#) ($)
- ------------------ ----------- ------ ----- ------- ---------------
<S> <C> <C> <C> <C> <C>
William L. Kacin 2000 $327,813 $80,000 15,000 $6,538
Chairman, Chief 1999 310,000 80,000 0 4,329
Executive Officer 1998 272,500 60,000 0 3,738
& President
William G. Hughes (b) 2000 $144,078 $ 0 4,200 $ 286
Vice President & 1999 50,163 44,878 0 0
General Manager
Flex-Kleen Division
Gary J. Morgan (c) 2000 $138,438 $35,000 5,550 $3,709
Vice President-Finance, 1999 128,750 35,000 13,500 4,329
Secretary/Treasurer & 1998 88,445 15,000 0 2,416
Chief Financial Officer
Raymond J. De Hont 2000 $124,917 $20,000 4,200 $3,061
Vice President & 1999 112,750 16,000 0 3,484
General Manager 1998 101,500 18,000 0 2,791
Fybroc Division &
Dean Pump Division
William F. Mersch 2000 $120,505 $15,000 4,200 $2,823
Vice President & 1999 111,254 11,000 0 3,308
General Manager 1998 101,251 8,000 0 2,552
Stiles-Kem Division
</TABLE>
- ----------
(a) The total amount shown in this column for fiscal years ended January
31, 1998 and 1999 are contributions to the Salaried Employee Stock
Ownership Trust (ESOT) as described on page 11. The amounts for fiscal
year ended January 31, 2000 are employer contributions to the 401(k)
plan as described on page 10. There are no other Long-Term
Compensation Programs other than a Pension Plan and Directors'
Retirement Plan as discussed on page 3, 4 and 11.
(b) Mr. Hughes became an employee and officer of the Company effective as
of October 1, 1998 and the amounts reported for the fiscal year ended
January 31, 1999 represent payments to him by the Company during such
fiscal year.
(c) Mr. Morgan was elected the Company's Vice President-Finance,
Secretary, Treasurer and Chief Financial Officer on October 10, 1997.
8
<PAGE>
Stock Option Plans
The Company's 1992 Stock Option Plan (the "1992 Plan") was adopted by the
Company's Board of Directors on October 10, 1991 and by its stockholders on June
3, 1992. The Company's 1997 Stock Option Plan (the "1997 Plan") was adopted by
the Company's Board of Directors on February 24, 1997 and by its stockholders on
June 4, 1997. The 1992 Plan terminates on October 10, 2001 and the 1997 Plan
terminates on February 24, 2007.
These Plans provide for the grant of options ("Incentive Stock Options"),
which are intended to satisfy the requirements of Section 422 of the Internal
Revenue Code of 1986 (the "Code"), as well as options which are not intended to
satisfy such requirements ("Nonstatutory Stock Options"). The total number of
shares of the Company's Common Stock which may be issued pursuant to the 1992
Plan and the 1997 Plan may not exceed one hundred thousand (100,000) and three
hundred fifty thousand (350,000) shares, respectively, plus an indeterminate
number of additional shares resulting from anti-dilution adjustments.
The following table sets forth stock options granted in the fiscal year
ended January 31, 2000 to each of the Company's executive officers named in the
Summary Compensation Table and stock options granted to all employees as a
group. The table also sets forth the hypothetical gains that would exist for the
options at the end of their ten (10) year terms for the executive officers named
in the Summary Compensation Table and for all employees as a group (assuming
their options had ten year terms) at assumed compound rates of stock
appreciation of 5% and 10%. The actual future value of the options will depend
on the market value of the Company's Common Stock. All options exercise prices
are based on market price on the date of grant.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Potential Realizable Value
Number of Percentage of of Assumed Annual Rates
Securities Total Options of Stock Price Appreciation
Underlying Granted to Exercise for Option Term (a)
Date of Options Employees Price Expiration ---------------------------
Name Grant Granted in Fiscal Year $/Share Date 5% ($) 10% ($)
---- ------- ---------- -------------- -------- ---------- ---------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
William L. Kacin 12/16/99 15,000 30.03% $9.875 12/16/09 $93,155 $236,073
William G. Hughes 12/16/99 4,200 8.41% 9.875 12/16/09 26,083 66,100
Gary J. Morgan 12/16/99 5,550 11.11% 9.875 12/16/09 34,467 87,347
Raymond J. De Hont 12/16/99 4,200 8.41% 9.875 12/16/09 26,083 66,100
William F. Mersch 12/16/99 4,200 8.41% 9.875 12/16/09 26,083 66,100
All Employees as a Group 12/16/99 49,950 100.0% $9.875 12/16/09 $310,203 $786,120 (b)
5% 10%
-- ---
Total potential stock price appreciation from December 16, 1999 to December 16,
2009 for all stockholders at assumed rates of stock appreciation.(c) $39,691,750 $100,586,688
Potential actual realizable value of options granted to all employees, assuming
ten year option terms, as a percentage of total potential stock price
appreciation from December 16, 1999 to December 16, 2009 for all
stockholders at assumed rates of stock price appreciation. .78% .78%
</TABLE>
- ----------
(a) These amounts, based on assumed appreciation rates of 5% and 10% prescribed
by the Securities and Exchange Commission rules, are not intended to
forecast possible future appreciation, if any, of the Company's stock
price.
(b) No gain to the optionees is possible without an increase in stock price,
which will benefit all stockholders.
(c) Based on a price of $9.875 on December 16, 1999, and a total of 6,391,242
shares of Common Stock outstanding.
9
<PAGE>
Option Exercises and Holdings
The following table sets forth the number of shares acquired on exercise of
stock options and the aggregate gains realized on exercise in the fiscal year
ended January 31, 2000 by the Company's executive officers named in the Summary
Compensation Table. The table also sets forth the number of shares covered by
exercisable and unexercisable options held by such executives on January 31,
2000 and aggregate gains that would have been realized had these options been
exercised on January 31, 2000, even though these options were not exercised and
the unexercised options could not have been exercised on January 31, 2000.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUE
<TABLE>
<CAPTION>
Shares Value of Unexercised
Acquired Number of Unexercised In-The-Money
On Value Options at Options at FY-End (b)
Exercise Realized (a) FY-End (#) ($)
-------------------------- --------------------------
Name (#) ($) Exercisable Unexercisable Exercisable Unexercisable
---- -------- ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
William L. Kacin - $ - 51,875 10,000 $107,875 $1,250
William G. Hughes - - 1,400 2,800 175 350
Gary J. Morgan - - 10,850 8,200 231 463
Raymond J. De Hont - - 10,400 2,800 8,455 350
William F. Mersch - - 8,900 2,800 175 350
</TABLE>
- ----------
(a) Market value on the date of exercise of shares covered by options
exercised, less option exercise price.
(b) Market value of shares covered by in-the-money options on January 31, 2000
less option exercise price. Options are in-the-money if the market value of
the shares covered thereby is greater than the option exercise price.
Termination of Employment and Change of Control Arrangements
Mr. Kacin is party to a Key Employee Severance Agreement with the Company
which provides that in the event the Company terminates his employment, other
than for cause, within nine (9) months following a "change of control", or if
Mr. Kacin voluntarily terminates such employment within nine (9) months
subsequent to a "change of control", the Company shall be obligated to pay him a
sum of money equal to two (2) years' base compensation. Payment would be made in
a lump sum upon cessation of employment or, at Mr. Kacin's option, in equal
monthly installments over a two (2) year period. Subsequent to January 31, 2000,
the terms of this agreement were amended to conform the definition of "change of
control" to that provided for by the Directors' Plan. The base annual salary
currently payable to Mr. Kacin is $330,000.
Mr. Morgan is also party to a Key Employee Severance Agreement as amended
on terms that are identical to those to which Mr. Kacin is party, except that
the amount of compensation payable to Mr. Morgan is equal to eighteen (18)
months of base compensation, which for Mr. Morgan is currently $145,000.
The Directors' Plan also provides for the payment of certain benefits in
the event of a "change of control", as discussed under "Board and Committee
Participation/Compensation of Directors" elsewhere herein. In addition, as
disclosed in such section of this Proxy Statement, the Company's stock option
agreements provide for the immediate vesting of all unvested stock options upon
a "change of control".
401(k) Profit Sharing Plan
Effective April 1, 1999, the Company implemented a 401(k) Profit Sharing
Plan (the "401(k) Plan"). All non-bargaining unit employees of the Company in
the United States are eligible to participate in the 401(k) Plan following
completion of one year of service and attaining age 21. Pursuant to this 401(k)
Plan, employees can contribute up to 15% of their compensation to the 401(k)
Plan. The Company will match, in the form of Met-Pro Common Stock, up to 50% of
the employee's contribution up to 4% of compensation. During the fiscal year
ended January 31, 2000, the Company made contributions to the 401(k) Plan in the
amount of $6,538 for William L. Kacin, $286 for William G. Hughes, $3,709 for
Gary J. Morgan, $3,061 for Raymond J. De Hont, $2,823 for William F. Mersch and
$30,499 for all executive officers as a group (12 persons).
10
<PAGE>
Salaried Employee Stock Ownership Plan
Pursuant to the Company's Salaried Employee Stock Ownership Plan (the
"Ownership Plan"), the Company makes discretionary contributions to the
Company's Salaried Employee Stock Ownership Trust (the "Trust") either in cash
or in Company Common Stock. The Trust uses the cash contributions and dividends
received to purchase shares of the Company's Common Stock. All full-time
salaried employees who are at least 21 years of age and who have been employed
by the Company on a full-time basis for at least one year are eligible to
participate in the Ownership Plan. All shares acquired by the Trust are
allocated to the accounts of eligible employees based on their respective
salaries. Employees nearing retirement have discretion to diversify a portion of
their investment. During the Company's three fiscal years ended January 31,
2000, the Company made contributions to the Trust in the aggregate amount of
$8,067 for William L. Kacin, $0 for William G. Hughes, $6,745 for Gary J.
Morgan, $6,275 for Raymond J. De Hont, $5,860 for William F. Mersch and $57,563
for all executive officers as a group (12 persons). On January 31, 2000, the
Ownership Plan held an aggregate of 344,129 shares of the Company's Common
Stock.
Pension Plan
Participants in the Company's pension plan receive retirement income based
on their earnings for the final five years of service, their age at retirement
and their total number of years of service to the Company. The following table
indicates the annual pension on a straight life (no death benefit) basis payable
for various earnings levels upon retirement at age 65, after 15, 20, 25, 30 and
35 years of credited service to the Company:
<TABLE>
<CAPTION>
Years of Service
----------------
Final Five Year Average Earnings(a)(b) 15(c) 20(c) 25(c) 30(c) 35(c)
- -------------------------------------- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
$ 50,000 $ 7,500 $10,000 $12,500 $15,000 $17,500
75,000 11,250 15,000 18,750 22,500 26,250
100,000 15,000 20,000 25,000 30,000 35,000
125,000 18,750 25,000 31,250 37,500 43,750
150,000 22,500 30,000 37,500 45,000 52,500
175,000 24,000(b) 32,000(b) 40,000(b) 48,000(b) 56,000(b)
200,000 24,000(b) 32,000(b) 40,000(b) 48,000(b) 56,000(b)
</TABLE>
(a) Earnings include annual salary and cash bonus awards paid pursuant to the
Company's Executive Incentive Compensation Program.
(b) Internal Revenue Code Section 401(a)(17) limits earnings used to calculate
qualified plan benefits to $160,000 for 1998 and 1999. This limit was used
in the preparation of this table.
(c) As of their employment anniversary dates in 1999, Messrs. Kacin, Hughes,
Morgan, De Hont and Mersch had accrued 24, 1, 19, 4 and 4 years of service,
respectively.
Certain Business Relationships
The Company utilized the services of the law firm of Fox, Rothschild,
O'Brien and Frankel, LLP, during the fiscal year ended January 31, 2000. Jeffrey
H. Nicholas, a Director of the Company, is a partner in that law firm.
11
<PAGE>
PERFORMANCE GRAPH
COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN
Met-Pro Corporation,
AMEX Market Index and Peer Group Index
$400 o Met-Pro Corporation -
- Peer Group
$350 + AMEX Market -
$300
-
$250
$200 o
o- +
$150 + o+ o
o+- +
$100 o+-
$50
---------------------------------------------------------------------------
1995 1996 1997 1998 1999 2000
Met-Pro Corporation 100.00 130.92 182.10 209.66 159.54 144.17
Peer Group Index 100.00 136.13 189.28 261.15 362.84 397.52
AMEX Market Index 100.00 128.18 137.96 157.36 163.03 192.14
(a) The graph above compares the performance of Met-Pro Corporation with that
of the AMEX Market Index and a Peer Group made up of the following
securities: Alanco Technologies; Ampco-Pittsburgh Corporation; ATMI, Inc.;
BHA Group Holdings, Inc.; Crown Andersen, Inc.; Daw Technologies, Inc.;
Display Technologies, Inc.; Donaldson Company, Inc.; Environ Elements
Corporation; Environmental Tectonics; Farr Company; First South Africa
Corporation; Flanders Corporation; Flow International Corporation;
Gorman-Rupp Company; Grayco Inc.; Idex Corporation; Imtec, Inc.; Ionic,
Inc.; Met-Pro Corporation; MFRI, Inc.; Nordson Corporation; Osmonics, Inc.;
Peerless Manufacturing; Pentair, Inc.; Regal-Beloit Corporation; Robbins &
Myers, Inc.; Roper Industries, Inc.; Spinnaker Industries; Stake
Technologies, Ltd.; Taylor Devices, Inc.; TB Woods Corporation; and Tyco
International, Ltd..
(b) The comparison of total return on investment (change in year-end stock
price plus reinvested dividends) for each of the periods assumes that $100
was invested on January 31, 1994 in each of Met-Pro Corporation, the AMEX
Market Index and the Peer Group Index.
(c) The Company was required to develop a "Peer Group Index" for the fiscal
year ended January 31, 2000 and the last five (5) preceding years, based on
selected Standard Industry Codes to replace the AMEX Capital Goods Index
which was discontinued by the American Stock Exchange as of December 31,
1996.
12
<PAGE>
2. APPROVAL OF THE MET-PRO CORPORATION YEAR 2000
EMPLOYEE STOCK PURCHASE PLAN
On April 11, 2000, the Board of Directors adopted the Met-Pro Corporation
Year 2000 Employee Stock Purchase Plan (the "Plan"), which will become effective
upon stockholder approval. The maximum number of shares of the Company's Common
Stock available for purchase by eligible employees in one or more annual
offerings under the Plan is two hundred thousand (200,000), subject to
adjustments for stock splits, stock dividends, and recapitalization.
The following summary of the Plan is qualified by reference to the complete
text of the Plan, which is attached as Exhibit A to this Proxy Statement.
Purpose of the Plan
The purpose of the Plan is to provide all eligible employees of the Company
including certain subsidiaries an opportunity to purchase stock of the Company,
and to foster interest in the Company's success, growth and development.
Description of the Plan
The Plan is intended to be an "employee stock purchase plan" designed to
meet the requirements of Section 423 of the Internal Revenue Code of 1986, as
amended; it is not intended to be qualified under Section 401(a) of the Internal
Revenue Code of 1986, as amended. The Plan is not subject to the provisions of
the Employee Retirement Income Security act of 1974.
Under the Plan, shares will be offered to all employees of the Company and
its designated subsidiaries as the Board of Directors may from time to time
designate. Each eligible employee will be given the opportunity to pay for the
shares by way of lump sum prepayments of not less than $250 or more than $2,500
per month or by payroll deductions in an amount not less than $10 per pay period
for salaried employees or $5 per pay period for hourly employees not to exceed
in either event in any one plan year the lesser of shares having a fair market
value of $25,000 or the employee's base salary for the plan year.
The Company will make a series of annual offerings under the Plan
commencing on or around August 1, 2000. The price to be paid for shares by
eligible employees who elect to participate in an annual offering will be 90% of
the market price of the Common Stock on the twentieth (20th) day of each month
during that annual offering. On each such date, each employee will be deemed to
have purchased as many shares (including any fractional shares) as the amount in
his account is sufficient to pay for at that price. In the event the number of
shares on any such date exceeds the number of shares available for purchase,
each employee will be entitled to purchase a pro rata portion of the available
shares. Shares available in an annual offering may not be purchased more than
twelve (12) months after the effective date of the annual offering and any
amount remaining in an employee's account at the expiration of each annual
offering will be refunded to the employee.
Eligibility
To be eligible to participate in the Plan, an employee must have been
employed by the Company for at least three (3) months. No employee who holds, or
after the purchase of shares under the Plan would hold, 5% or more of the voting
power of the voting shares of the Company is eligible to participate under the
Plan. It is not presently possible to estimate the number of shares included in
each annual offering and the level of participation by all eligible employees.
Use of Funds
As and when payments are made by employees, they will be placed in the
general funds of the Company. Until shares credited to an employee's account are
registered in the name of the employee, the shares will be registered in the
name of the Plan or a nominee account, as determined by the Board of Directors
or a committee thereof.
Market Value
The average of the high and low price of the Company's Common Stock on
April 11, 2000, the date of the adoption of the Plan by the Company's Board of
Directors, as quoted on the New York Stock Exchange, was $9.03.
13
<PAGE>
Federal Income Tax Consequences
Under the provisions of the Internal Revenue Code, no income will be
realized by an employee for Federal income tax purposes upon his election to
participate in the Plan or upon his purchase of shares under the Plan. However,
an employee will recognize taxable income if he disposes of the shares purchased
pursuant to the Plan or if he dies while owning shares so purchased. The tax
consequences to an employee will vary depending on whether the disposition
occurs before or after the expiration of the applicable holding period, which
ends upon the expiration of two years from the date of the annual offering and
one year from the date the shares were purchased by the employee under the Plan.
A disposition of shares prior to the expiration of the holding period
("disqualifying disposition"), will cause the realization of ordinary income by
the employee (included in gross income as compensation) in the year of
disposition equal to the amount by which the fair market value of the shares at
the time the shares were purchased exceeds the purchase price. Upon a
disposition of shares by an employee after the expiration of the applicable
holding period, or upon the death of the employee while holding shares acquired
under the Plan (whether disposition occurs before or after the expiration of the
applicable holding period), the employee will recognize ordinary income
(includable in gross income as compensation) to the extent of the lesser of (a)
the amount by which the fair market value of the shares at the time of
disposition exceeds the purchase price or (b) the amount by which the fair
market value of the shares at the time the shares were purchased exceeds the
purchase price. Provided the shares are capital assets in the hands of the
employee, if the price at which they are sold exceeds their adjusted cost basis,
the excess will be capital gain, and if the price is less than their adjusted
cost basis, the loss will be capital loss. This capital gain or loss will
constitute long-term capital gain or loss if the shares have been held for more
than one year at the time of disposition and short-term capital gain or loss if
they have been held for one year or less at the time of disposition. The basis
of the shares in the employee's hands at the time of a disposition will consist
of the price paid by the employee for the shares, increased by the amount (if
any) included in the employee's gross income as compensation.
Company Deduction
The Company is entitled to a tax deduction only to the extent that the
employee recognizes ordinary income because the employee sells or otherwise
disposes of the shares of Common Stock before the holding period expires.
Registration Statement
If the shareholders approve the Plan, the Company proposes to file a
registration statement with the Securities and Exchange Commission with respect
to the shares of Common Stock to be offered under the Plan. Offerings under the
Plan will be made pursuant to the Registration Statement, as amended, after it
has been declared effective by the Commission. The expenses of the offerings
will be paid by the Company.
The Board of Directors recommends a vote FOR the adoption of the Met-Pro
Corporation Year 2000 Employee Stock Purchase Plan.
3. RATIFICATION OF SELECTION OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Unless instructed to the contrary, the persons named in the enclosed proxy
intend to vote the same in favor of the ratification of the selection of
Margolis & Company P.C. as independent certified public accountants to the
Company to serve until the next Annual Meeting of Stockholders, unless such
engagement shall be earlier terminated. That firm, which has acted as
independent auditors of the Company's accounts since 1971, has reported to the
Company that none of its members has any direct financial interest or material
indirect financial interest in the Company.
A representative of Margolis & Company P.C. is expected to attend the
meeting and have an opportunity to make a statement and/or respond to
appropriate questions from stockholders.
The Board of Directors recommends a vote FOR the ratification of the
selection of Margolis & Company P.C. as independent certified public accountants
for the fiscal year ending January 31, 2001.
14
<PAGE>
4. OTHER BUSINESS
The Board of Directors is not aware of any other matters to come before
this meeting. However, if any other matters properly come before the meeting, it
is the intention of the persons named in the enclosed proxy to vote said proxy
in accordance with their judgement in such matters.
STOCKHOLDER PROPOSALS
Any stockholder wishing to submit a proposal for inclusion in the written
proxy statement for the 2001 Annual Meeting of Stockholders must submit the
proposal to Secretary, Met-Pro Corporation, 160 Cassell Road, P.O. Box 144,
Harleysville, PA 19438 prior to December 28, 2000 in order to be considered for
inclusion in the proxy statement. The submission of such proposals by
stockholders and the consideration of such proposals by the Company for
inclusion in next year's proxy statement and form of proxy are subject to
applicable rules and regulations of the Securities and Exchange Commission.
Stockholders who wish to present Director nominations or any other business
at the 2001 Annual Meeting of Stockholders, which the Company expects to hold on
June 6, 2001, are required by the Company's By-laws to notify the Secretary in
writing, prior to March 8, 2001. The notice from the stockholder must provide
certain information that is described in Section 13 of the Company's By-Laws. A
copy of these By-Law requirements will be provided upon written request to the
Secretary at the address given in the preceding paragraph, and the notice to the
Secretary containing the required information should be sent to this address as
well.
The Company retains discretion to vote proxies it receives with respect to
proposals received after March 8, 2001. The Company retains discretion to vote
proxies it receives with respect to proposals received prior to March 8, 2001
provided (i) the Company includes in its proxy statement advice on the nature of
the proposal and how it intends to exercise its voting discretion, and (ii) the
proponent does not issue his or her own proxy statement.
Gary J. Morgan,
Secretary
Harleysville, Pennsylvania
April 27, 2000
THE COMPANY WILL FURNISH WITHOUT CHARGE TO EACH PERSON WHOSE PROXY IS BEING
SOLICITED, UPON THE WRITTEN REQUEST OF ANY SUCH PERSON, A COPY OF THE COMPANY'S
ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED JANUARY 31, 2000, AS FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION, INCLUDING THE FINANCIAL STATEMENTS
AND SCHEDULES THERETO. REQUESTS FOR COPIES OF SUCH REPORT SHOULD BE DIRECTED TO
GARY J. MORGAN, SECRETARY, MET-PRO CORPORATION, 160 CASSELL ROAD, HARLEYSVILLE,
PENNSYLVANIA 19438.
15
<PAGE>
Exhibit A
MET-PRO CORPORATION
YEAR 2000 EMPLOYEE STOCK PURCHASE PLAN
1. Purpose. The purpose of the Met-Pro Corporation Year 2000 Employee
Stock Purchase Plan ("Plan") is to provide all eligible employees of
Met-Pro Corporation, a Delaware corporation (the "Company") and all
eligible employees of the Company and its Designated Subsidiaries an
opportunity to purchase stock of the Company through offerings
thereof; and to foster interest in the Company's success, growth and
development. It is the intention of the Company that the Plan shall
qualify as an "Employee Stock Purchase Plan" within the meaning of
Section 423 of the Internal Revenue Code of 1986, as amended ("Code").
The provisions of the Plan shall, accordingly, be construed so as to
extend and limit participation in a manner consistent with the
requirements of that Section of the Code.
2. Definitions.
(a) "Account" means the record which shall be maintained by the
Company for each Participant for each Offering and which shall
reflect the method(s) of making payments, the amount of payments
made, the number of shares of Stock purchased, the number of
shares of Stock distributed, the amount of dividends received on
shares of Stock which have not been distributed, and the amount
of dividends distributed.
(b) "Base Salary" means straight time earnings, excluding payments
for overtime, commissions, incentive compensation, bonuses, and
other special payments, except to the extent that the inclusion
of any such item is specifically designated by the Committee.
(c) "Board" means the Board of Directors of the Company.
(d) "Committee" means a committee that may be established under
Paragraph 12 to administer the Plan. If no committee is
established, the term "Committee" shall refer to the Board.
(e) "Designated Subsidiary" means a Subsidiary that has been
designated by the Board from time to time, in its sole
discretion, as eligible to be an Employer in the Plan.
(f) "Employee" means any person, including any officer, who is
employed by an Employer and whose customary employment is more
than twenty (20) hours per week.
(g) "Employer" means, collectively, the Company and its Designated
Subsidiaries.
(h) "Fair Market Value of Stock on the Investment Date" means the
mean between the highest and lowest reported selling prices for
the Stock on the Investment Date, or if sales are not so reported
for the Stock, the mean between the closing bid and asked prices
for the Stock on the Investment Date.
(i) "Investment Date" means the twentieth (20th) day of each calendar
month in each Plan Year in which the organized securities trading
markets in the United States are open for business.
(j) "Offering" means an announcement to Employees pursuant to
Paragraph 4 that Stock may be purchased under the Plan during the
ensuing Plan Year.
(k) "Participant" means an Employee who has agreed to participate in
an Offering and has met the requirements of Paragraphs 3 and 5.
(l) "Plan Year" means the twelve (12) month period commencing on
January 1 and ending on December 31; except that in the first
Plan Year shall commence on or about August 1, 2000 and shall
terminate on December 31, 2000.
(m) "Stock" means, subject to the provisions of Paragraph 15, shares
of the Common Stock, $.10 par value, of the Company.
(n) "Subsidiary" means any corporation, other than the Company, in an
unbroken chain of corporations, beginning with the Company if, at
the time an option is granted under the Plan, each of the
corporations, other than the last corporation in the unbroken
chain, owns stock possessing 50% or more of the total combined
voting power of all classes of stock in one of the other
corporations in such chain.
A-1
<PAGE>
3. Eligibility.
(a) Any Employee who has been employed by an Employer for at least
three (3) full calendar months shall be eligible to participate
in the Plan, but the right to purchase Stock under the Plan shall
commence as of the first day of the calendar month next following
the completion of said three (3) full calendar months of
continuous employment with an Employer.
(b) Any provision of the Plan to the contrary notwithstanding, no
Employee shall have the right to purchase Stock under the Plan:
(i) If, immediately after such right to purchase is granted,
such Employee would own Stock, and/or hold outstanding
options to purchase Stock, possessing 5% or more of the
total combined voting power or value of all classes of
capital stock of the Company or of any subsidiary
corporation of the Company; or
(ii) If such Employee's rights to purchase Stock under all
employer stock purchase plans of the Company and its
Subsidiaries would accrue at a rate which exceeds in any
Plan Year in which such right is outstanding at any time the
lesser of shares of Stock having a fair market value of
$25,000 or such Employee's Base Salary for the Plan Year.
4. Offerings. At least thirty (30) days prior to each Plan Year the
Company may (but shall not be obligated to) announce an Offering to
Employees to purchase Stock under the Plan during the ensuing Plan
Year. The announcement shall specify the maximum number of shares of
Stock that may be purchased in said Offering by all eligible
Employees.
5. Participation.
(a) An Employee who is or will be eligible to participate in the
Offering may do so by one or both of the following methods:
(i) Completing and filing with the Committee a Withholding
Purchase Agreement in which the Employee shall elect to
participate by payroll deduction and shall authorize the
amount (in whole dollars and which shall be not less than
$10 per pay period for salaried employees and $5 per pay
period for hourly employees) which shall be withheld from
the Employee's Base Salary in each pay period throughout the
Plan Year.
(ii) From time to time during the Plan Year (not more frequently
than once a month), file with the Committee a Prepayment
Purchase Agreement in which the Employee shall elect to
participate by lump sum payment and indicate the amount of
the lump sum (which shall not be less than $250 or more than
$2,500) which is being paid by the Employee with the
Prepayment Purchase Agreement.
(b) All payments made by a Participant shall be credited to the
Participant's Account.
(c) A Participant may amend a Withholding Purchase Agreement
previously filed once and not more than once per calendar
quarter, and may discontinue participation in an Offering as
provided in Paragraph 9. Any such amendment shall be implemented
and put into effect by Employer with reasonable promptness.
(d) On a quarterly basis, the Committee shall send to each
Participant a statement of the Participant's Account. The
statement shall reflect all Account balances as of the end of the
calendar quarter and transactions in the Account during the
quarter.
(e) Participation in the Plan shall not be deemed to give rise to any
employment rights, and a Participant's election to participate in
an Offering shall not be deemed to give rise to an employment
contract or any other rights of employment or other rights except
as explicitly set forth in this Plan.
6. Grant of Options. Each Participant in an Offering will be deemed to
have been granted an option to purchase as many shares (including any
fractional shares) of Stock as may have been purchased in the
Participant's Account in the Plan Year pursuant to the provisions of
Paragraph 7.
7. Purchases of Stock.
(a) The option price of Stock purchased by a Participant on an
Investment Date shall be 90% of the Fair Market Value of Stock on
the Investment Date.
A-2
<PAGE>
(b) At the close of business on each Investment Date the uninvested
Participant payment balance of each Participant's Account shall
be determined, the Participant will purchase as many shares
(including any fractional shares) of Stock as possible at the
option price of Stock on said Investment Date, the Participant's
Account shall be charged for the dollar amount of such purchase,
and the Participant's Account shall be credited with the number
of shares of Stock purchased.
(c) Purchases of Stock under the Plan shall continue to be effected
and shall be charged and credited to the Accounts of Participants
throughout the Plan Year until such time as the maximum number of
shares announced as being subject to purchase in the Offering
(unless such number shall have been increased in a subsequent
announcement made during the Plan Year) shall have been purchased
by all Participants. If, on an Investment Date the number of
shares which might otherwise be purchased exceeds the number of
shares remaining for purchase in the Offering, the shares
available for purchase shall be allotted among the Participants
pro rata based on the total number of shares subject to purchase
by all Participants on the Investment Date.
(d) Cash dividends paid on Shares held in a Participant's account
will be credited to such Participant's account and used in
addition to payroll deductions (and cash contributions, if any)
to purchase Shares on the Investment Date. Dividends paid in
Shares or Share splits will be credited to the accounts of
Participants. Dividends paid in property other than cash or
Shares will be distributed to Participants as soon as
practicable.
(e) At the end of a Plan Year or when the maximum number of shares of
Stock included in the Offering have been purchased, any
uninvested Participant payment balance in a Participant's Account
shall be refunded to the Participant. When all shares included in
an Offering have been purchased, all outstanding Withholding
Purchase Agreements and Prepayment Purchase Agreements shall be
cancelled.
8. Restrictions on Transfer of Shares.
(a) All Shares purchased under the Plan will be "Restricted Shares"
for a period of one year from the Investment Date on which they
are purchased ( the "Restricted Period"), unless the Restricted
Period terminates sooner as described below. The Restricted
Shares may not be sold, assigned, transferred, pledged,
hypothecated or otherwise disposed of (except by will or the
applicable laws of descent and distributions) during the
Restricted Period. Upon the issuance of Restricted Shares, either
(i) a share certificate or certificates representing such
Restricted Shares will be registered in the Participant's name,
will bear an appropriate legend referring to the restrictions
applicable thereto, and will be delivered to the Participant, or
(ii) the Company's share transfer agent or other designee will
credit such Restricted Shares to the Participant's Restricted
Shares Account, which shares shall be subject to the restrictions
applicable thereto under the Plan. Any attempt to dispose of any
such Restricted Shares in contravention of such restriction will
be null and void and without effect. When the Restricted Period
terminates, the formerly Restricted Shares will be credited to
the Participant's account under the Plan without restrictions and
will be dealt with in accordance with the Participant's
instructions and the Plan.
(b) Upon the termination of a Participant's employment which either
(i) occurs after the Participant has attained the age of 65 years
or (ii) results from the Participant's death or Disability (as
defined below), or upon the occurrence of a Change in Control (as
defined in Section 8 (d) below), the Restricted Period for all
Restricted Shares purchased under the Plan will terminate. For
this purpose, "Disability" shall mean a Participant's total and
permanent inability to perform his or her duties with the Company
(as defined by the Company immediately prior to the onset of the
Disability) by reason of any medically determinable physical or
mental impairment, as determined by a physician selected by the
Participant and acceptable to the Company.
(c) If the Participant makes a disposition, within the meaning of
Section 424 (c) of the Code and regulations promulgated
thereunder, of any Share or Shares issued to him or her pursuant
to the Participant's exercise of an option, and such disposition
occurs within the two year period commencing on the day after the
Offering Date or within the one year period commencing on the day
after the Investment Date, such Participant must, within ten (10)
days of such disposition, notify the Company and thereafter
immediately deliver to the Company any amount of federal, state
or local income taxes and other amounts which the Company informs
the Participant the Company is required to withhold.
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<PAGE>
(d) For the purposes of this Plan, "Change of Control" shall be
deemed to have occurred if:
(i) Any "person" or "group of persons", which person or group of
persons are not part of present Management and are acting in
concert (as the term "person" is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended
(the "Act")) becomes the "beneficial owner" (as defined in
Rule 13d-3 promulgated under the Act) directly or indirectly
of securities of the Company representing thirty (30%)
percent or more of the combined voting power of the
Company's then outstanding securities; or
(ii) At any time there shall be a change in the composition of
the Company's Board of Directors resulting in a majority of
such Directors as of the date hereof no longer constituting
such a majority; provided, however, that in making any such
determination as to change in composition, there shall be
excluded any change where the new Director was elected by or
upon the recommendation of such present majority; or
(iii) The approval by the stockholders of the Company of a
reorganization, merger or consolidation, in each case, with
respect to which persons who were stockholders of the
Company immediately prior to such reorganization, merger or
consolidation do not, immediately thereafter, own more than
fifty (50%) percent of the combined voting power of the
reorganized, merged or consolidated Company's then
outstanding securities entitled to vote generally in the
election of directors or with respect to a liquidation or
dissolution of the Company or the sale of all or
substantially all of the Company's assets; or
(iv) There shall be a "Change of Control" as such term is defined
by the Company's Directors' Retirement Plan or by any Key
Employee Severance Agreement, as any such plan or agreement
may from time to time be amended.
9. Withdrawal.
(a) A Participant may withdraw all uninvested Participant payment
balances credited to the Participant's Account at any time by
giving written notice to the Committee. All such sums shall be
paid to the Participant with reasonable promptness after receipt
of the notice of withdrawal. A Participant may withdraw all
shares of Stock credited to the Participant's Account at any time
by giving written notice to the Committee. As soon as reasonably
practicable thereafter, the Committee shall cause a certificate
representing said shares to be registered in the name of and
issued to the Participant.
(b) A Participant's withdrawal of shares of Stock and/or of the
unexpended payment balances credited to the Participant's Account
shall constitute the Participant's withdrawal from participation
in the Offering for the Plan Year, but will not have any effect
upon the Participant's eligibility to participate in any
succeeding Offering.
(c) In the event of a Participant's death, retirement or termination
of employment with Employer, no further payments shall be made by
or on behalf of the Participant, no further purchases of Stock
shall be made by or on behalf of the Participant, and the
uninvested Participant payment balance and credited shares of
Stock shall be paid and/or distributed with reasonable promptness
to the Participant or to the Participant's beneficiary.
10. Interest. No interest shall be credited to or paid on a Participant's
Account.
11. Stock.
(a) The shares of Stock to be purchased by Participants under the
Plan may be authorized and unissued shares or shares held in the
treasury (including shares purchased for use and sale in
connection with the Plan) of the Company, as may be determined
from time to time by the Board. The maximum number of shares
which shall be made available for sale under the Plan during all
Offerings shall be two hundred thousand (200,000) shares of
Stock, subject to adjustment upon changes in capitalization of
the Corporation as provided in Paragraph 15.
(b) Until such time as shares of Stock credited to a Participant's
Account are registered in the name of the Participant, the shares
shall be registered in the name of the Plan or in the name of the
Committee or in a nominee account (as determined by the
Committee); and the Committee shall afford the Participant the
opportunity to vote said shares, and shall transmit to the
Participant all mailings made by the Company to its stockholders.
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<PAGE>
12. Administration. The Plan shall be administered by the Board or by a
Committee consisting of not less than two (2) members who shall be
appointed by the Board. Each member of the Committee shall be either a
director, an officer, or an Employee of an Employer. The Committee
shall be vested with authority to engage and appoint agents and to
make, administer, and interpret such rules and regulations as it deems
necessary to administer the Plan; provided, however, that the
Committee shall be subject to the oversight of the Board. Any
determination, decision, or action of the Committee in connection with
the construction, interpretation, administration, or application of
the Plan shall be final, conclusive, and binding upon all Employees
and all Participants and any and all persons claiming under or through
any Employee or Participant. The Board or the Committee may appoint an
outside independent third party to serve as an agent of the Board or
Committee in the administration of the Plan.
13. Designation of Beneficiary. A Participant may file with the Committee
a written designation of a beneficiary who is to receive any Stock and
cash in the Participant's Account in the event of such Participant's
death. Such designation of a beneficiary may be changed by the
Participant at any time upon written notice to the Committee. Upon the
death of a Participant and upon receipt by the Committee of proof of
the Participant's death and of the identity and existence of a
beneficiary validly designated under the Plan, the Company shall
deliver such Stock and cash to such beneficiary. In the absence of a
validly designated beneficiary, the beneficiary shall be deemed to be
the executor or administrator of the estate of the Participant, or if
no such executor or administrator has been appointed (to the knowledge
of the Committee), the Company, in its discretion, may deliver such
Stock and cash to the spouse, if any, or to the children, if any, or
to those persons who would be entitled to inherit from the Participant
in accordance with the Inheritance Laws of the Commonwealth of
Pennsylvania. No beneficiary shall, prior to the death of the
Participant, acquire any interest in the Stock or cash credited to the
Participant's Account.
14. Transferability. No rights with regard to the exercise of an option or
to purchase or receive Stock under the Plan may be assigned,
transferred, pledged, or otherwise disposed of by an Employee or by a
Participant and, except as provided in Paragraph 9, rights granted
under the Plan are exercisable only by a Participant during the
Participant's lifetime.
15. Changes in Capitalization. In the event of any stock dividend,
split-up, or recapitalization, as a result of which shares of any
class shall be issued in respect of the outstanding Stock, or Stock
shall be changed into the same or a different number of the same or
another class or classes, the number of shares of Stock which, at the
time, had not been purchased under the Plan shall be appropriately
adjusted by the Company.
16. Use of Funds. All Participant payments received by the Company under
the Plan may be used by the Company for any corporate purpose and the
Company shall not be obligated to segregate such funds. All funds
received by an Employer, other than the Company, shall be immediately
forwarded by such Employer to the Company.
17. Government Regulations. The Company's obligations to sell and deliver
Stock under the Plan is subject to the approval of any governmental
authority required in connection with and compliance with any law or
regulation applicable to the authorization, issuance or sale of such
Stock.
18. Excused Absences. If a Participant is granted a leave of absence, or
if his absence from service is excused on account of illness,
disability, or entering the armed forces, the Participant may, during
such period of absence, make payments in cash to the Participant's
Account or payments may be suspended, subject to any applicable law or
governmental regulation, for such period of time as the Committee in
its sole discretion shall deem reasonable.
19. Termination or Amendment. The Board reserves the right to abandon,
amend, modify or suspend the Plan at any time without notice and to
revoke or terminate it at any time; provided, however, that no such
amendment, revocation, or termination shall, with respect to payments
theretofore credited to Participants' Accounts, adversely affect any
existing Withholding Purchase Agreement or Prepayment Purchase
Agreement or Offering and provided further that, except as may be
required by law, no such amendment shall change the number of shares
authorized to be offered under the Plan as provided in Paragraph 10
(other than a change merely reflecting a change in capitalization), or
change the price at which the shares will be offered under the Plan to
a price below that specified in Paragraph 7, or change or modify the
eligibility requirements of Employees set forth in Paragraph 3.
20. Effective Date. The Plan shall become effective when it is approved by
the stockholders of the Company, provided that such approval is
obtained within twelve (12) months after April 11, 2000, the date on
which the Plan was adopted by the Board.
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<PAGE>
[GRAPHIC OMITTED]
<PAGE>
================================================================================
Please date, sign and mail your proxy card back as soon as possible
Annual Meeting of Stock holders
MET-PRO CORPORATION
June 7, 2000
================================================================================
Please Detach and Mail in the Envelope Provided
- --------------------------------------------------------------------------------
Please mark ---
your votes as X
indicated in ---
this example.
1. ELECTION OF DIRECTORS.
NOMINEES: Two Directors for a term expiring in 2003
Alan Lawley
Gary J. Morgan
One director for a term expiring in 2002
Michael J. Morris
For the nominees listed above [ ]
Withhold Authority to vote for the nominees listed above [ ]
(To withhold authority to vote for any nominee(s), write
the name(s) of the nominee(s) in the space that follows)
- ---------------------------------------------------------
2. Proposal to approve the adoption of the Met-Pro Year 2000 Employee Stock
Purchase Plan.
for [ ] against [ ] abstain [ ]
3. Proposal to Ratify the appointment of Margolis & Company P.C. as independent
certified public accountants.
for [ ] against [ ] abstain [ ]
4. In their discretion the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
This Proxy when properly executed, will be voted in the manner directed here by
the undersigned stockholder. If no direction is made, this Proxy will be voted
FOR Proposals 1, 2 and 3.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
Signature ___________________________________ Dated: ____________, 2000
Signature if held jointly __________________________________________
Note: Please sign exactly as name appears. When shares are held by joint
tenants, both should sign, When signing as attorney, executor, administrator,
trustee or guardian, pleas give your full title. If a corporation, please sign
in full corporate name by President or other authorized officer. If a
partnership, please sign in partnership name by authorized person.
<PAGE>
PROXY
MET-PRO CORPORATION
160 Cassell Road
Harleysville, Pennsylvania 19438
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints William L. Kacin and Alan Lawley as
Proxies, each with the power to appoint his substitute, and hereby authorizes
them to represent and vote, as designated on the reverse side, all the shares of
Common Stock of Met-Pro Corporation held of record by the undersigned on April
13, 2000 at the Annual Meeting of the Stockholders to be held on June 7, 2000 or
any adjournment thereof.
(Continued on reverse side)
