<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------------------
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement pursuant to Section 14(a) of
The Securities Exchange Act of 1934 (Amendment No. __)
[X] Filed by the Registrant
[ ] Filed by a party other than the Registrant
Check the appropriate box:
[ ] Preliminary proxy statement
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
PAUL MUELLER COMPANY
- ------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
Donald E. Golik, Senior Vice President and CFO
- ------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (check the appropriate box):
[ ] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(j)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(j)(4)
and 0-11.
(1) Title of each class of securities to which transaction applies: ____
____________________________________________________________________
(2) Aggregate number of securities to which transactions applies: ______
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11: <F1> ___________________________
(4) Proposed maximum aggregate value of transaction: ___________________
- -----------
[FN]
<F1> Set forth the amount on which the filing fee is calculated and
state how it was determined.
</FN>
<PAGE> 2
[ ] 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 registra-
tion statement number, or the form or schedule and the date of its
filing.
(1) Amount previously paid: ________________________________________
(2) Form, schedule or registration statement number: _______________
(3) Filing party: __________________________________________________
(4) Date filed: ____________________________________________________
<PAGE> 3
MUELLER (Registered)
PAUL MUELLER COMPANY
P.O. BOX 828 / SPRINGFIELD, MISSOURI, U.S.A. 65801
- -----------------------------------------------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
(MAY 4, 1998)
- -----------------------------------------------------------------------
Notice is hereby given that the annual meeting of shareholders of Paul
Mueller Company, a Missouri corporation, will be held at the offices of
the Company, 1600 West Phelps Street, Springfield, Missouri 65802, on
Monday, May 4, 1998, commencing at 10:00 a.m. on that day, and there-
after as it may from time to time be adjourned, to consider and act upon
the following:
1. To elect one (1) Class I director for a term of three (3) years
expiring at the annual meeting to be held in 2001 and until his
respective successor is duly elected and qualified.
2. To transact such other business as may properly come before the
meeting or any adjournment or adjournments thereof.
The Board of Directors of the Company has fixed the close of business on
March 13, 1998, as the record date for the determination of shareholders
entitled to notice of and to vote at the annual meeting or any adjourn-
ment or adjournments thereof.
Shareholders who are unable to attend the meeting but who wish their
shares to be voted may vote by proxy. A form of proxy, which has been
prepared by the Board of Directors of the Company, and a return envelope
are enclosed. Since it is important that your shares be represented at
the meeting, you are requested to sign, date and return the proxy in the
enclosed envelope. Your proxy may be revoked at any time before it is
exercised and will not be used if you attend the meeting and vote in
person.
By order of the Board of Directors.
DONALD E. GOLIK
Secretary
Springfield, Missouri
March 27, 1998
<PAGE> 4
MUELLER (Registered)
PAUL MUELLER COMPANY
-------------------
PROXY STATEMENT
-------------------
GENERAL INFORMATION
SOLICITATION AND REVOCABILITY OF PROXIES. The enclosed proxy is being
solicited on behalf of the Board of Directors of Paul Mueller Company
(the Company) for use at the annual meeting of the shareholders to be
held on May 4, 1998, and at any adjournment or adjournments thereof.
Any proxy given does not affect the right to vote in person at the
meeting and may be revoked at any time before it is exercised by noti-
fying Donald E. Golik, Secretary, by mail, telegram, facsimile or
appearing at the meeting in person and requesting a ballot. This Proxy
Statement and the proxy were first mailed to shareholders on or about
March 27, 1998.
EXPENSE OF SOLICITATION. All expenses of solicitation will be borne by
the Company. In addition to solicitations by mail, regular employees
and directors of the Company may solicit proxies in person or by tele-
phone. The Company does not expect to pay any compensation for the
solicitation of proxies. The Company will reimburse banks, brokers and
other custodians, nominees or fiduciaries for reasonable expenses in-
curred in forwarding proxy material to beneficial owners.
VOTING OF PROXIES. Shares represented by a proxy given pursuant to this
solicitation will be voted at the meeting in favor of the election, as
director of the Company, of the nominee hereinafter named, unless
directed to the contrary by the proxy; provided, however, that if any
other candidate for director is proposed at the annual meeting by per-
sons other than the Board of Directors, the shares represented by the
proxy may be voted cumulatively for fewer than all of the nominees. If
the nominee should unexpectedly become unavailable for election for any
reason, the shares represented by the proxy will be voted for such sub-
stituted nominee as the Board of Directors may name. The nominee here-
inafter named has indicated his willingness to serve if elected, and it
is not anticipated that he will become unavailable for election.
The proxy confers discretionary authority, with respect to the voting of
the shares represented thereby, on any other business that may properly
come before the meeting. The Board of Directors is not aware that any
such other business, other than as set forth in this Proxy Statement, is
to be presented for action at the meeting and does not itself intend to
present any such other business; however, if any such other business
does come before the meeting, shares represented by proxies given pur-
suant to this solicitation will be voted as directed by the Board of
Directors.
1
<PAGE> 5
PERSONS ENTITLED TO VOTE. Only holders of Common Stock of the Company
of record as of the close of business on March 13, 1998, are entitled to
vote at the meeting. At the close of business on that date, 1,168,021
shares of Common Stock were outstanding. Holders of Common Stock are
entitled to one (1) vote per share standing in their names on the record
date. In the election of directors, each shareholder will have cumula-
tive voting rights, which means he will have the right to cast as many
votes as equals the number of shares owned by him multiplied by the
number of directors to be elected, and this total number of votes may be
divided among one (1) or more candidates for the office of director in
such manner as the shareholder may elect, if present to vote in person,
or as the proxyholders elect, if voting by proxy. In the event the
votes for certain director nominees are withheld, those votes will be
distributed among the remaining director nominees. Withholding author-
ity to vote for all director nominees has the effect of abstaining from
voting for any director nominees. Shares cannot be voted at the meeting
unless the owner is present in person or represented by proxy. The
directors shall be elected by an affirmative vote of the plurality of
shares that are entitled to vote on the election of directors and that
are represented at the meeting by shareholders who are present in person
or represented by a proxy, assuming a quorum is present.
In determining the number of shares that have been affirmatively voted
for a particular matter, shares not represented at the meeting, shares
represented by shareholders that abstain from voting on a matter, and
shares held by brokers or other nominees for which no voting instruc-
tions on the matter being voted upon have been given by the beneficial
owner and the nominee does not have discretionary authority to vote
(although the beneficial owner has given voting instructions on other
matters) are not considered to be votes affirmatively cast. Any of the
foregoing is equivalent to a vote against the proposal other than the
election of directors and will have no effect on the election of direc-
tors. Abstentions will have the effect of a vote against any of the
proposals to which the abstention applies.
When a broker or other nominee holding shares for a customer votes on
one proposal but does not vote on another proposal because the broker or
nominee does not have discretionary voting power with respect to such
proposal and has not received instructions from the beneficial owner, it
is referred to as a "broker nonvote." Properly executed proxies marked
"abstain" or proxies required to be treated as "broker nonvotes" will be
treated as present for purposes of determining whether there is a quorum
at the meeting.
2
<PAGE> 6
PRINCIPAL SHAREHOLDERS. As of the close of business on February 27,
1998, the principal beneficial owners of the Company's Common Stock were
as follows:
<TABLE>
<CAPTION>
Shares Percent
Beneficially of
Name and Address Owned<F1> Class
------------------------------ ------------ -----
<S> <C> <C>
Paul Mueller 106,557<F2> 9.1%
1600 West Phelps Street
Springfield, Missouri 65802
Moore Sons Investments, L.P. 58,879<F3><F4> 5.0%
1020 West 58th Street
Kansas City, Missouri 64113
Royce & Associates, Inc.
and Charles M. Royce 132,650<F5> 11.4%
1414 Avenue of the Americas
New York, New York 10019
Dimensional Fund Advisors Inc. 71,200<F6><F7> 6.1%
1299 Ocean Avenue
Santa Monica, California 90401
<FN>
<F1> Unless otherwise noted, each shareholder has sole voting power
and investment power over the number of shares set forth beside
his name.
<F2> The 106,557 shares include 20,420 shares owned solely by Mrs.
Paul Mueller and 15,000 shares owned by the Mueller Family
Foundation, and Paul Mueller disclaims any beneficial ownership
in those shares.
<F3> In his capacity as a general partner of Moore Sons Investments,
L.P., David L. Moore may be deemed to be beneficial owner of
58,879 shares of Common Stock owned by said limited partner-
ship. In his capacity as general partner of Moore Sons Invest-
ments, L.P., David L. Moore may be deemed to have shared power
to vote or direct the vote of 58,879 shares of Common Stock and
may be deemed to have shared power to dispose or direct the
disposition of 58,879 shares of Common Stock owned by said
limited partnership. David L. Moore disclaims beneficial
ownership of all such shares owned by said limited partnership.
As husband of Mary Kathleen Moore, David L. Moore may be deemed
to be beneficial owner of an additional 11,224 shares of Common
Stock, which are owned by Mary Kathleen Moore. David L. Moore
disclaims beneficial ownership of all such shares exclusively
owned by Mary Kathleen Moore.
<F4> In her capacity as a general partner of Moore Sons Investments,
L.P., Mary Kathleen Moore may be deemed to have shared power to
vote or direct the vote of 58,879 shares of Common Stock and
may be deemed to have the shared power to dispose or direct the
disposition of 58,879 shares of Common Stock owned by said
limited partnership. Mary Kathleen Moore disclaims beneficial
ownership of all such shares owned by said limited partnership.
Mary Kathleen Moore is the direct owner of 11,224 shares of
stock over which she has sole voting and dispositive power.
<F5> Royce & Associates, Inc., formerly Quest Advisory Corp.,
(Royce) is the direct owner of 132,650 shares of the Company's
Common Stock as of December 31, 1997 (the most recent date for
which information is available). Charles M. Royce may be deemed
to be a controlling person of Royce, and as such may be deemed to
beneficially own the shares of the Company owned by Royce. Mr.
Royce does not own any shares outside of Royce and disclaims
beneficial ownership of the shares owned by Royce.
<F6> Dimensional Fund Advisors Inc. (Dimensional), a registered
investment advisor, is deemed to have beneficial ownership of
71,200 shares of the Company's Common Stock as of December 31,
1997 (the most recent date for which information is available),
all of which shares are held in portfolios of DFA Investment
Dimensions Group Inc. (a registered open-end investment com-
pany), or in The DFA Investment Trust Company (a Delaware
business trust), or in DFA Group Trust and DFA Participating
Group Trust (investment vehicles for qualified employee benefit
plans), all for which Dimensional serves as investment manager.
Dimensional disclaims beneficial ownership of all such shares.
<F7> The 71,200 shares include 38,000 shares with respect to which
Dimensional has sole voting power and 71,200 shares with re-
spect to which Dimensional has sole dispositive power. Persons
who are officers of Dimensional also serve as officers of DFA
Investment Dimensions Group Inc. (the Fund) and The DFA Invest-
ment Trust Company (the Trust), each an open-end management
investment company registered under the Investment Company Act
of 1940. In their capacities as officers of the Fund and the
Trust, these persons vote 26,700 additional shares which are
owned by the Fund and 6,100 shares which are owned by the Trust
(both included in the 71,200 shares above).
</FN>
</TABLE>
All of the information set forth in the above table and footnotes is
based solely on information furnished by the persons listed in the
table. The Company does not know of any other person (as that term is
defined by the Securities and Exchange Commission) who owns of record or
beneficially more than five percent (5%) of the Company's outstanding
shares.
SHAREHOLDER PROPOSALS. Shareholder proposals to be considered for
inclusion in the Proxy Statement and considered at the 1999 annual
shareholders' meeting must be received by the Company no later than
November 27, 1998. Any such proposals should be directed to the
Secretary of the Company at 1600 West Phelps Street, P.O. Box 828,
Springfield, Missouri 65802.
3
<PAGE> 7
DIRECTORS AND
RELATED INFORMATION
DIRECTORS. The Board of Directors consists of seven (7) members,
divided into three (3) classes, of whom approximately one-third (1/3)
are elected each year at the annual meeting of shareholders to serve for
a term of three (3) years and until their successors are duly elected
and qualified.
The following schedule sets forth the name of the one (1) person who has
been nominated by the Board of Directors for election as director of the
Company, the names of the remaining six (6) directors whose terms expire
in subsequent years, and certain related information:
<TABLE>
<CAPTION>
Shares of
Common Stock
of the Company
Beneficially
Owned on
Feb. 27, 1998<F1>
---------------
Name and Occupation First Number Percent
Present Position During Past Became a of of
with Company Age Five Years Director Shares Class
- ---------------------- --- ----------------------- -------- ------ -----
<F2>
NOMINEE FOR CLASS I DIRECTOR - TERM EXPIRING IN 2001
- ------------------------------
<S> <C> <C> <C> <C> <C>
Donald E. Golik 54 Position with Company 1982 609 -
Sr. Vice President and
Chief Financial Offi-
cer, Secretary and
Director
<CAPTION>
CONTINUING CLASS II DIRECTORS - TERM EXPIRING IN 1999
- -----------------------------
<S> <C> <C> <C> <C> <C>
William B. Johnson 65 International Business 1993 150 -
Director Consultant
Previous positions held:
President and Executive
Vice President - Hussmann-
Frio Lux, a division of
Hussmann Corporation
(manufacturing, importing
and distribution of com-
mercial refrigeration
products for Chili, Peru
and Bolivia)
William R. Patterson<F3> 56 Executive Vice President - 1997 - -
Director Premium Standard Farms,
Inc.
Previous positions held:
Business Consultant;
Partner - Arthur Andersen,
LLP, in the Commercial
Audit Division
Charles M. Ruprecht<F4> 79 Business Consultant 1979 4,400 -
Director
<CAPTION>
CONTINUING CLASS III DIRECTORS - TERM EXPIRING IN 2000
- ------------------------------
<S> <C> <C> <C> <C> <C>
Daniel C. Manna<F4> 51 Position with Company 1977 30,698 3%
President and Director
David T. Moore 26 Vice President - Product 1997 3,431<F5> -
Director Development - Corporate
Document Systems, LLC
Previous positions held:
Director of Technical
Services - Access Cor-
poration, a computer
software company;
Research Fellow - Kansas
State University - Depart-
ment of Physics; Techni-
cian - Access Corporation;
Student - Middlebury
College
Paul Mueller<F4> 82 Position with Company 1946 106,557<F6> 9%
Chairman of the
Board and Director
<S> <C> <C>
All officers and directors as a group (7 persons). 145,845 12%
4
<PAGE> 8
<FN>
<F1> Unless otherwise noted, the nominee and each director has sole voting
power and investment power over the number of shares set forth be-
side his name.
<F2> The percentage is less than one percent (1%), except as otherwise
indicated.
<F3> Elected to the Board at the July 29, 1997, meeting of the Board of
Directors to fill the vacancy created by the January 1997 resigna-
tion of Wayne Wells.
<F4> Member of Executive Committee.
<F5> Does not include 58,879 shares owned by Moore Sons Investments,
L.P., of which David T. Moore owns a 49.5% limited partnership
interest.
<F6> The 106,557 shares include 20,420 shares owned solely by Mrs. Paul
Mueller and 15,000 shares owned by the Mueller Family Foundation,
and Paul Mueller disclaims any beneficial ownership in those
shares.
</FN>
</TABLE>
The Board of Directors of the Company does not have a permanent nomi-
nating committee.
The Board of Directors of the Company held four (4) meetings during the
year ended December 31, 1997. No director, serving for the full year of
1997, attended less than seventy-five percent (75%) of the meetings of
the Board of Directors and Committee(s) on which he served.
The Company pays each director who is not an employee of the Company an
annual fee of $6,000, plus a fee of $1,000 for each regular or special
meeting of the Board, $500 for each Board committee meeting attended,
and $1,000 per day for special assignments.
The Company has a Compensation and Benefits Committee, and the members
were William B. Johnson - Chairman, Robert A. Becker and Charles M.
Ruprecht. The Committee met once in 1997. The function of the Com-
mittee is to develop, review and make recommendations to the Board of
Directors as to the compensation policies for officers of the Company
and to administer salary and incentive plans for officers.
Mr. Patterson was acting Chief Financial Officer in a consulting ar-
rangement with Premium Standard Farms, Inc., during the time it filed a
bankruptcy petition under Chapter 11 of the Bankruptcy Code in July 1996
and emerged from bankruptcy in September 1996.
Mr. Patterson is a director of American Italian Pasta Company.
There is one vacancy on the Board of Directors, as Mr. Becker will not
stand for re-election at the May 4, 1998, annual meeting of share-
holders.
Mr. Moore is the grandson of Paul Mueller.
EXECUTIVE COMPENSATION. The following table summarizes for the last
three (3) years the compensation of the Chief Executive Officer and the
other most highly compensated executive officer of the Company whose
total annual salary and bonus exceeded $100,000:
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Annual Compensation All Other
Name and --------------------- Compen-
Principal Position Year Salary Bonus<F1> sation<F2>
- -------------------- ---- -------- -------- --------
<S> <C> <C> <C> <C>
Daniel C. Manna 1997 $220,000 $ - $ 2,375
President and CEO 1996 203,300 52,000 4,500
1995 195,000 20,000 2,300
Donald E. Golik 1997 $158,700 $ - $ 2,375
Sr. Vice President 1996 152,800 35,000 4,500
and CFO 1995 148,500 14,300 2,300
<FN>
<F1> Bonus amounts were earned and accrued during each year indicated.
<F2> Company contributions paid or accrued during each year under the
Profit Sharing and Retirement Savings Plan [401(k) Plan].
</FN>
</TABLE>
5
<PAGE> 9
PENSION PLAN TABLE
Officers and directors who are employees of the Company participate in
the Paul Mueller Company Noncontract Employees Retirement Plan (Plan).
The Plan is a defined benefit plan and the compensation covered by the
Plan includes only base salary, and effective January 1, 1997, compensa-
tion covered by the Plan is limited to $160,000 annually by the Internal
Revenue Code. Daniel C. Manna and Donald E. Golik are also covered
under the Paul Mueller Company Supplemental Executive Retirement Plan
(Supplemental Plan) effective January 1, 1996, which provides for an
additional retirement benefit based on the provisions of the Plan for
compensation in excess of the Internal Revenue Code limitation of
$160,000.
The combined annual retirement benefit under the Plan and Supplemental
Plan are not subject to deductions for social security benefits or other
offset amounts. The maximum number of years of credited service is
thirty-five (35) years. The retirement benefit is based on the years of
credited service and the final average monthly compensation based on the
sixty (60) consecutive months of highest compensation during the most
recent one-hundred twenty (120) complete months of compensation. The
monthly benefit is calculated as follows: [$5.85 + (0.015 x final
average monthly compensation over $650)] x years of credited service.
The following table presents the combined annual retirement benefit due
under the Plans at age sixty-five (65) based on various amounts of final
average annual compensation and years of service:
<TABLE>
<CAPTION>
Final Years of Service
Avg. Annual ----------------------------------------------------
Compensation 15 20 25 30 35
---------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$140,000 $ 30,800 $ 41,100 $ 51,300 $ 61,600 $ 71,900
160,000 35,300 47,100 58,800 70,600 82,400
180,000 39,800 53,100 66,300 79,600 92,900
200,000 44,300 59,100 73,800 88,600 103,400
220,000 48,800 65,100 81,300 97,600 113,900
240,000 53,300 71,100 88,800 106,600 124,400
</TABLE>
The following table indicates, for the current executive officers named
in the Summary Compensation Table, the compensation for 1997 covered by
the Plans and the years of credited service:
<TABLE>
<CAPTION>
Compensation Years of
Covered Credited
Name by Plans Service
--------------- -------- --------
<S> <C> <C>
Daniel C. Manna $220,000 21
Donald E. Golik 150,000 18
</TABLE>
REPORT OF THE COMPENSATION AND BENEFITS COMMITTEE. The Compensation and
Benefits Committee (Committee) is charged with the responsibility of
developing, reviewing and recommending to the Board of Directors of the
Company policies relating to compensation and remuneration of executive
officers, with a view to ensuring that such policies are fair and
equitable in view of market conditions and that they contribute to the
success of the Company. The Committee also is charged with the respon-
sibility of administering the salary plan for executive officers and the
Executive Short-Term Incentive Plan. The Committee is composed entirely
of nonemployee directors of the Board. Given the Company's current
level of executive compensation, the Committee has not yet adopted a
policy with respect to Section 162(m) of the Internal Revenue Code
pertaining to the deduction of compensation in excess of $1,000,000.
6
<PAGE> 10
The Committee believes that executive compensation should be aligned
with Company financial performance. With this in mind, the Committee
has established a program to (1) attract and retain key executives
critical to the long-term success of the Company, (2) reward executives
for enhanced shareholder value, and (3) support a performance oriented
environment that rewards performance consistent with Company financial
goals.
The total compensation program for executive officers consists of a base
salary, an annual bonus under the Executive Short-Term Incentive Plan
and contributions paid or accrued under the Profit Sharing and Retire-
ment Savings Plan [401(k) Plan].
Salary ranges for executive officer positions, including the Chief
Executive Officer (CEO), are established periodically based on compe-
titive salary data developed by an independent outside compensation
consultant. The Committee establishes the CEO's salary by considering
salaries of CEO's of comparably sized capital-goods manufacturing com-
panies. The Committee believes the CEO's compensation, and that of all
executive officers, should be heavily influenced by the Company's per-
formance. Therefore, the Executive Short-Term Incentive Plan provides
the opportunity for a cash bonus, which is a percentage of base salary
and is based on (a) profitability of the Company and (b) an individual's
level of performance. The Committee establishes a target level of pro-
fitability at the beginning of each year against which actual profita-
bility will be measured. Additionally, the Committee may consider other
factors in arriving at the determination of corporate performance for
incentive calculation purposes. Such other factors may include market
conditions; extraordinary adjustments due to taxation, nonoperating
income, collective bargaining issues, or Acts of God; and other achieve-
ments which position the Company for future growth or enhance the market
value of the corporation. Under the Plan, profitability must reach at
least 70% of the annual target, and the maximum bonus payable is 55% of
the base salary.
The CEO is responsible for assessing the performance and level of con-
tribution toward corporate goals made by each member of his executive
staff. The CEO's evaluation and recommendations are submitted to the
Committee for their review and final determination of the level of
individual performance for bonus calculation purposes.
The Company also has a 401(k) Plan in which executive officers and sub-
stantially all other employees are eligible to participate. The Plan
provides for a match of each employee's contributions up to a specified
limit. The Plan also provides a profit sharing feature whereby an
additional match is made by the Company if the Company's net income
reaches predetermined levels established annually by the Board of
Directors.
The main factors upon which the Committee evaluates the CEO's perfor-
mance are (1) the Company's actual profitability for the year and (2)
those activities undertaken by the CEO which will position the Company
for future growth and enhance the market value of the Company. Signi-
ficant items considered are additions to and expansion of the product
lines, effective control and reduction of inventory levels, progress
in margin improvement, and the implementation of systems and procedures
to improve efficiency, enhance the Company's competitiveness, and posi-
tion the Company for long-term growth. Based on the Company's profita-
bility performance for 1997, the CEO was not awarded a bonus for 1997.
COMPENSATION AND BENEFITS COMMITTEE:
William B. Johnson, Chairman
Robert A. Becker, Member
Charles M. Ruprecht, Member
7
<PAGE> 11
COMPANY PERFORMANCE. The following graph shows a five (5) year compari-
son of the cumulative total returns for the Company, the S&P 500 Index,
and the Media General Financial Services, Inc. - Metals Fabrication
Index (MG-Metals Fabrication Index).
<TABLE>
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
<CAPTION>
MG-Metals
Paul Mueller Fabrication
Company S&P 500 Index
------------ ------- -----------
<S> <C> <C> <C>
1992 100 100 100
1993 103 110 136
1994 98 112 122
1995 114 153 141
1996 133 189 187
1997 147 252 253
<FN>
NOTE: <F1> Assumes $100 invested on December 31,
1992, in each of Paul Mueller Company
Common Stock, the S&P 500 Index, and
the Media General Financial Services,
Inc. - Metals Fabrication Index.
<F2> Total return includes reinvestment of
dividends.
</FN>
</TABLE>
INDEPENDENT PUBLIC ACCOUNTANTS. The Company's Board of Directors
annually selects the Company's independent auditing firm. Arthur
Andersen LLP has been the Company's independent auditing firm since
1969. It is not expected that Arthur Andersen LLP will have a repre-
sentative present at the May 4, 1998, meeting of shareholders.
The Company has an Audit Committee, and the members are Charles M.
Ruprecht - Chairman, William B. Johnson, and David T. Moore. The Audit
Committee met once in 1997. The functions of the Audit Committee are to
nominate the independent auditors of the Company for appointment by the
Board of Directors, arrange for and review the results of the Company's
annual audit, ratify annual audit fees, and provide for independent
review of the adequacy of the Company's system of internal controls.
DONALD E. GOLIK
Secretary
Springfield, Missouri
8
<PAGE> 12
PROXY MUELLER (Registered)
PAUL MUELLER COMPANY
THIS PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS, MAY 4, 1998
The undersigned hereby constitutes and appoints Donald E. Golik and
Ronald W. Gielow, and each of them, as proxies, with full power of sub-
stitution, to vote all of the shares of the Common Stock which the un-
dersigned is entitled to vote at the annual meeting of the shareholders
of the Company to be held at the offices of the Company, 1600 West
Phelps Street, Springfield, Missouri, on Monday, May 4, 1998, commencing
at 10:00 a.m. on that day, and at any adjournment or adjournments there-
of, as fully and with the same effect as the undersigned might or could
do if personally present, with respect to the following:
(1) The election of one (1) Class I director for a term of three (3)
years expiring at the annual meeting to be held in 2001: Donald E.
Golik.
[ ] FOR the nominee listed.
[ ] WITHHOLD AUTHORITY to vote for the nominee listed.
(2) To transact such other business as may properly come before the
meeting or any adjournment or adjournments thereof.
(continued, and to be signed, on the other side)
<PAGE> 13
(Proxy - continued from other side)
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR THE NOMINEE IN PROPOSAL (1).
Either of said proxies present and acting at said meeting or any ad-
journment or adjournments thereof shall have and may exercise all of
the powers of all of said proxies. The undersigned hereby ratifies and
confirms all that said proxies, or either of them or their substitute or
substitutes, may lawfully do or cause to be done by virtue hereof, and
acknowledges receipt of the notice of said meeting and the Proxy State-
ment accompanying it.
Date _________________________, 1998
____________________________________
____________________________________
Please insert date of signing. Sign
exactly as name appears at left.
Where stock is issued in two or more
names, all should sign. If signing
as attorney, administrator, execu-
tor, trustee or guardian, give full
title as such.
