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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. __________)*
MFRI, INC.
(Name of Issuer)
COMMON STOCK, NO PAR VALUE
(Title of Class of Securities)
552721 11 02
(CUSIP Number)
DAVID UNGER
7720 LEHIGH AVENUE
NILES, ILLINOIS 60714
(847) 966-1000
(Name, Address and Telephone Number
of Person Authorized to Receive
Notices and Communications)
DECEMBER 30, 1996
(Date of Event Which Requires Filing of this Statement)
(continued on following pages)
(Page 1 of 7 pages)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the following
box [ ].
NOTE: Six copies of this statement, including all exhibits, should be
filed with the Commission. See Rule 13d-1(a) for other parties to whom copies
are to be sent.
*The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
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CUSIP No. 552721 11 02 13D Page 2 of 7 pages
1 NAME OF REPORTING PERSONS David Unger
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [x]
(b) [x]
3 SEC USE ONLY
4 SOURCE OF FUNDS* (See Item 3) OO
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
TO ITEMS 2(d) or 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION U.S.
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
7 SOLE VOTING POWER 518,677
8 SHARED VOTING POWER 29,859
9 SOLE DISPOSITIVE POWER 434,063
10 SHARED DISPOSITIVE POWER 114,473
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 548,536
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 11.1%
14 TYPE OF REPORTING PERSON* IN
* SEE INSTRUCTIONS BEFORE FILLING OUT!
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CUSIP No. 552721 11 02 13D Page 3 of 7 pages
INTRODUCTION
This Statement constitutes the initial filing of David Unger (the
"Reporting Person"), Chairman of the Board of MFRI, Inc. (the "Company" or
"MFRI"). On December 30, 1996, pursuant to an Agreement for Merger dated
October 25, 1996 by and between Midwesco, Inc. ("Midwesco") and MFRI, as
amended, Midwesco merged with and into MFRI. Prior to the consummation of
the Merger ("Merger Consideration"), the Reporting Person owned
approximately 23% of the outstanding capital stock of Midwesco. As
consideration for the Merger, MFRI issued an aggregate of 2,124,298 shares
of common stock, par value $.01 per share, of MFRI ("MFRI Common Stock")
to Midwesco's shareholders, 489,927 shares of which were issued to the
Reporting Person or 183.7 shares of MFRI Common Stock for each share of
Midwesco capital stock owned by him immediately prior to the Merger.
ITEM 1. SECURITY AND ISSUER
The class of equity securities to which this Statement relates is
the MFRI Common Stock. The Company's principal executive offices are
located at 7720 Lehigh Avenue, Niles, Illinois 60714.
ITEM 2. IDENTITY AND BACKGROUND
(a) Name: David Unger
(b) and (c) Present Principal Occupation and Business Address:
Chairman of the Board
MFRI, Inc.
7720 Lehigh Avenue
Niles, Illinois 60714
(d) and (e) The Reporting Person has not, during the last five
years, (i) been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors) or (ii) been a party to a civil
proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject to a
judgment, decree or final order enjoining future violations of, or
prohibiting or mandating activities subject to, federal or state
securities laws or finding any violation of such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
As a result of the Reporting Person's ownership of capital stock
of Midwesco, he received 489,927 shares of MFRI Common Stock in the
Merger.
ITEM 4. PURPOSE OF THE TRANSACTION
(a)-(c) and (e)-(j) Other than the Merger, which was consummated
on December 30, 1996, the Reporting Person has no plans or proposals
that would result in any of the consequences listed in
paragraphs (a)-(c) and (e)-(j) of Item 4 of Schedule 13D.
(d) As stated in the definitive proxy statement dated
November 12, 1996 relating to the Special Meeting of stockholders of
MFRI held on December 16, 1996, the Board of Directors of MFRI intends
to elect Bradley E. Mautner as Vice President of MFRI and Don
Gruenberg as Vice President and Director of MFRI.
[continued on following pages]
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CUSIP No. 552721 11 02 13D Page 4 of 7 pages
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
(a), (b) and (c) Set forth in the table below are the number and
percentage of shares of MFRI Common Stock beneficially owned by the
Reporting Person:
Number of Number of Number of
Shares Shares Shares
Beneficially Beneficially Beneficially
Owned with Owned with Owned with
Sole Shared Sole
VOTING POWER VOTING POWER DISPOSITIVE POWER
518,677 (1) 29,859 (2) 434,063 (3)
Number of
Shares Aggregate
Beneficially Number of Percentage
Owned with Shares of Shares
Shared Beneficially Beneficially
DISPOSITIVE POWER OWNED OWNED
114,473 (4) 548,536 (1)(2) 11.1%
__________________
(1) Includes 489,927 shares of MFRI Common Stock acquired in the
Merger. See "Introduction." The Filing person has effected no
other transactions in MFRI Common Stock during the past 60 days.
Also includes 28,750 shares that are subject to stock options
granted by MFRI that were exercisable on December 30, 1996 or
which have or will become exercisable within 60 days thereafter.
(2) Includes 17,000 shares of MFRI Common Stock held in joint tenancy
with the Reporting Person's spouse, 8,500 of which the Reporting
Person disclaims beneficial ownership of. Also includes 12,859
shares owned by the Reporting Person's spouse (all of which were
acquired in the Merger), and all of which the Reporting Person
disclaims beneficial ownership of.
(3) Represents shares identified in Note (1), less shares placed in
escrow pursuant to the Merger Agreement (the "Escrow Shares").
(4) Represents shares identified in Note (2), plus the Escrow Shares.
ITEM 6. CONTRACT, ARRANGEMENTS, UNDERSTANDING OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF ISSUER
Pursuant to the Merger Agreement, the shareholders of Midwesco
placed an aggregate of 300,000 shares of MFRI Common Stock received by
them in the Merger (including 69,188 shares owned by the Reporting
Person) in an escrow account to support Midwesco's indemnification
obligations under the Merger Agreement and up to 66,890 additional
shares (including 15,426 shares owned by the Reporting Person) in a
special escrow related to the litigation liabilities assumed by MFRI.
The Reporting Person retains all voting and divided rights relating to
such shares. Except for the Merger Agreement, and the stock options
granted under MFRI's stock option plans, the Reporting Person is not a
party to any contracts, arrangements or understandings with respect to
any securities of MFRI.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
Exhibit A - Agreement for Merger, dated October 25, 1996, by and
between MFRI, Inc. and Midwesco, Inc. [Incorporated
by reference to Appendix A of the Company's Proxy
Statement dated November 12, 1996 relating to the
Special Meeting of Stockholders held on December 16,
1996 (SEC File No. 1-18370)]
Exhibit B - Agreement and Plan of Merger, as amended, dated
October 25, 1996, by and between MFRI, Inc. and
Midwesco, Inc. [Incorporated by reference to
Exhibit 2.2 of the Current Report on Form 8-K of
MFRI, Inc. dated December 30, 1996 (SEC File
No. 1-18370)]
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CUSIP No. 552721 11 02 13D Page 5 of 7 pages
After reasonable inquiry and to the best of my knowledge and believe,
I certify that the information set forth in this statement is true,
complete and correct.
Dated: January 9, 1997
/S/ DAVID UNGER
DAVID UNGER
