Edgar Filing: METATEC INTERNATIONAL INC

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

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[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11c or Section 240.14a-12

METATEC INTERNATIONAL, INC.
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(Name of Registrant as Specified In Its Charter)

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(Name of Person(s) Filing Proxy Statement)

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[METATEC INTERNATIONAL LOGO]

METATEC INTERNATIONAL, INC.

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 15, 2003

To the Shareholders of
METATEC INTERNATIONAL, INC.:

Notice is hereby given that the Annual Meeting of Shareholders of Metatec
International, Inc., an Ohio corporation (the "Company"), will be held at the
Company's principal executive offices located at 7001 Metatec Boulevard, Dublin,
Ohio 43017, on Thursday, May 15, 2003, at 1:00 p.m., local time, for the
following purposes:

1. To elect two Class I directors;

2. To consider and vote upon a proposal to amend the Company's Articles of
Incorporation to change the Company's name to Metatec, Inc.; and

3. To transact such other business as may properly come before the meeting
or any adjournment thereof.

The close of business on March 24, 2003, has been fixed as the record date
for the determination of shareholders entitled to notice of and to vote at the
meeting and any adjournment thereof.

In order that your shares may be represented at this meeting and to assure
a quorum, please sign and return the enclosed proxy promptly. A return addressed
envelope, which requires no postage, is enclosed. If you are able to attend the
meeting and wish to vote in person, at your request we will cancel your proxy.

By Order of the Board of Directors

JULIA A. FRATIANNE, Secretary

Dated: April 8, 2003

METATEC INTERNATIONAL, INC.

PROXY STATEMENT

GENERAL

This Proxy Statement is being furnished to the holders of common shares,
without par value, of the Company (the "Shares") in connection with the
solicitation of proxies by the Board of Directors of the Company to be used at
the Company's Annual Meeting of Shareholders. The Annual Meeting will be held at
the Company's principal executive offices located at 7001 Metatec Boulevard,
Dublin, Ohio 43017, on Thursday, May 15, 2003, at 1:00 p.m., local time, for the
purposes set forth on the accompanying Notice of Annual Meeting.

The approximate date on which this Proxy Statement and the form of proxy
will be first sent to shareholders is April 8, 2003.

PROXIES AND VOTING

The close of business on March 24, 2003, has been fixed as the record date
for the determination of shareholders entitled to notice of and to vote at the
Annual Meeting and any adjournment thereof. On the record date, 6,536,113 Shares
were outstanding and entitled to vote. Each Share is entitled to one vote.

Shareholders do not have the right to cumulate their votes in electing
directors, and the nominees who receive the highest number of votes will be
elected. The vote required for approval of the proposal to amend the Company's
Articles of Incorporation to change the Company's name to Metatec, Inc. is the
favorable vote of a majority of the outstanding Shares entitled to vote at the
Annual Meeting.

All Shares represented by properly executed proxies will be voted at the
Annual Meeting in accordance with the choices indicated on the proxy. If no
choices are indicated on a proxy, the Shares represented by that proxy will be
voted in favor of the two nominees described in this Proxy Statement for
election as Class I directors and in favor of the proposal to amend the
Company's Articles of Incorporation to change the Company's name to Metatec,
Inc. Any proxy may be revoked at any time prior to its exercise by delivering to
the Company a subsequently dated proxy or by giving notice of revocation to the
Company in writing or in open meeting. A shareholder's presence at the Annual
Meeting will not by itself revoke the proxy.

Abstentions will be considered as Shares present and entitled to vote at
the Annual Meeting and will be counted for purposes of determining whether a
quorum is present. Abstentions will not be counted in determining the votes cast
for the election of directors and will not have a positive or negative effect on
the outcome of the election. Because the proposal to amend the Company's
Articles of Incorporation to change the Company's name requires the favorable
vote of a majority of the outstanding Shares entitled to vote at the Annual
Meeting, abstentions will have the same effect as a vote against this proposal.

If your Shares are held in street name, you will need to instruct your
broker regarding how to vote your Shares. If you do not provide your broker with
voting instructions regarding the election of directors, your broker will
nevertheless have discretion to vote your Shares for the election of directors.
There are certain matters, however, over which your broker will not have
discretion to vote your Shares without your instructions--these situations are
referred to as "broker non-votes." The proposal to amend the Company's Articles
of Incorporation to change the Company's name falls into this category. If you
do not provide your broker with voting instructions on the proposal, your Shares
will not be voted on this proposal. Because broker non-votes will be considered
as

Shares present and entitled to vote for this proposal, broker non-votes will
have the same effect as votes against this proposal.

PROPOSAL NO. 1--ELECTION OF DIRECTORS

The number of directors currently is fixed at nine. The Board of Directors
is divided into three classes, Class I, Class II, and Class III, with three
directors in each class. The directors in each class are elected to three-year
terms. The terms of office of one class of directors expire each year at the
annual meeting of shareholders and at such time as their successors are duly
elected and qualified. The term of office of the Class I directors expires
concurrently with the holding of the Annual Meeting, and the two incumbent
directors in Class I have been nominated for re-election. There is a vacancy in
each of the Class I and Class III directors.

At the Annual Meeting, it is the intention of the persons named in the
accompanying form of proxy, unless a contrary position is indicated on such
proxy, to vote the proxy for the election of the two nominees named in the
following table as Class I directors, each to hold office until the 2006 annual
meeting of shareholders and until a successor is elected and qualified. In the
event that any nominee named below as a Class I director is unable to serve
(which is not anticipated), the persons named in the proxy may vote for another
nominee of their choice.

The reason for nominating a lesser number of persons to fill the number of
director positions in Class I is that the Company believes it is desirable to
have a vacancy available which could be filled by the Board of Directors without
the time and expense involved in holding a special meeting of shareholders
should a person who could make a valuable contribution as a director of the
Company become available. No decision has been made to fill the vacancy, nor has
any candidate been considered or approved by the Board of Directors.

Proxies cannot be voted at the Annual Meeting for a greater number of
persons than the two nominees named in this Proxy Statement.

CLASS I DIRECTORS
(NOMINEES FOR ELECTION)

NAME OF
NOMINEE/DIRECTOR DIRECTOR OF SHARES BENEFICIALLY
AND POSITION PRINCIPAL OCCUPATION(S) THE COMPANY OWNED AS OF PERCENT OF
WITH THE COMPANY AGE DURING THE PAST FIVE YEARS SINCE MARCH 8, 2003 (1) CLASS
---------------- --- -------------------------- -------------- ------------------- --------------

Joseph F. Keeler, Jr.,
Director................ 62 Chairman of The Fishel 1997 270,034(2) 4.1%
Company, a national
utility contractor serving
the energy and information
industry, since 1978. Mr.
Keeler has been with The
Fishel Company since 1967.
Peter J. Kight,
Director................ 46 Chairman and Chief Exec- 1994 85,334 1.3%
utive Officer of Checkfree
Corporation, a nationwide
electronic bill paying
system provider, since
1981.

Set forth below is information relating to directors whose terms will continue
after the Annual Meeting.

CLASS II DIRECTORS
(TERMS EXPIRING IN 2004)

NAME OF
DIRECTOR DIRECTOR OF SHARES BENEFICIALLY
AND POSITION PRINCIPAL OCCUPATION(S) THE COMPANY OWNED AS OF PERCENT
WITH THE COMPANY AGE DURING THE PAST FIVE YEARS SINCE MARCH 8, 2003 (1) OF CLASS
---------------- --- -------------------------- -------------- ------------------- --------------

Jerry D. Miller,
Director................ 67 President of D&D Proper- 1976 24,500 *
ties, Inc. and President
of MGB, Inc., two
companies engaged in the
real estate business,
since May 1992. President
and Treasurer of the
Company from its in-
corporation in 1976 until
May 1993. Chairman of the
Board of the Company from
June 1978 until August
1989.
James V. Pickett,
Director................ 61 Principal of Stonehenge 1995 150,123(3) 2.3%
Financial Holdings, Inc.,
a private equity
investment firm, since
August 1999. Vice Chairman
of Banc One Capital Corp.,
a subsidiary of Banc One
Holding Corporation, from
1993 through July 1999.
Principal of Pickett
Realty Advisors, Inc., an
asset management firm for
hotel owners, since
December 1991. Mr. Pickett
is also a director of
Wendys International, Inc.

Daniel D. Viren,
Director................ 56 Senior Vice President of 2000 20,000 *
Finance and Chief Finan-
cial Officer of R.G. Barry
Corporation, a man-
ufacturer and marketer of
home comfort footwear,
since June 2000; was also
Senior Vice President of
Administration of R.G.
Barry Corporation from
1992 to July 1998; Senior
Vice President and Chief
Financial Officer of the
Company from July 1998 to
June 2000. Mr. Viren is
also a director of R.G.
Barry Corporation.

CLASS III DIRECTORS
(TERMS EXPIRING IN 2005)

David P. Lauer,
Director................ 60 Retired President and 2001 25,000 *
Chief Operating Officer of
Bank One, NA, Columbus,
Ohio, a national banking
association. He was ap-
pointed to his former
position with Bank One,
Columbus, NA in June 1997,
and retired from that
position in January 2001.
Mr. Lauer was the manag-
ing partner of the Colum-
bus office of Deloitte &
Touche LLP from January
1989 through his retire-
ment in June 1997. Mr.
Lauer is also a director
of Wendy's International,
Inc., Diamond Hill Invest-
ment Group, Inc., Hunt-
ington Preferred Capital
Inc., and AirNet Sytems,
Inc.
Jeffrey M. Wilkins,
Chairman of the Board
of Company............ 58 Chairman of the Board of 1989 742,468 10.8%
the Company. Mr. Wilkins
was the Chief Executive
Office of the Company from
1989 through December
2001, and President from
July 1998 through December
2001. Mr. Wilkins is also
a director of CheckFree
Holdings, Inc.

---------------

* Less than 1%

(1) Except as otherwise indicated in the notes to this table, the persons named
in the table and their spouses (if applicable) have sole voting and
investment power with respect to all Shares owned by them. For each of the
directors, this table includes the following number of Shares which may be
acquired upon the exercise of options that are currently exercisable or
exercisable within 60 days of March 8, 2003: Mr. Kight - 22,500

Shares; Mr. Keeler - 22,500 Shares; Mr. Lauer - 15,000 Shares; Mr. Miller -
22,500 Shares; Mr. Pickett - 22,500 Shares; Mr. Wilkins - 325,000 Shares;
and Mr. Viren - 15,000 Shares.

(2) Includes 48,334 Shares owned by a family limited partnership of which Mr.
Keeler is a partner.

(3) Includes 24,000 Shares owned by a corporation controlled by Mr. Pickett.

Christopher A. Munro, Gary W. Qualmann, and Julia A. Fratianne, the named
executive officers in the Summary Compensation Table set forth below,
beneficially owned 276,000, 100,000, and 60,000 Shares, respectively, as of
March 8, 2003. Each such person and their spouses (if applicable) have sole
voting and investment power with respect to all Shares owned by them. The number
of Shares beneficially owned by Messrs. Munro and Qualmann and Ms. Fratianne
include 225,000, -0-, and 60,000 Shares, respectively, which may be acquired
upon the exercise of options which are currently exercisable or exercisable
within 60 days of March 8, 2003. In addition, 50,000 of Mr. Qualmann's Shares
are subject to risk of forfeiture if his employment is terminated for any reason
prior to February 13, 2004.

As of March 8, 2003, the number of Shares owned by all directors and
executive officers of the Company as a group (13 persons) was 1,788,921 (24.5%).
The foregoing amount includes 760,000 Shares which may be acquired upon the
exercise of options which are currently exercisable or exercisable within 60
days of March 8, 2003, and 50,000 Shares issued to Mr. Qualmann which are
subject to risk of forfeiture.

PROPOSAL NO. 2--AMENDMENT TO THE COMPANY'S
ARTICLES OF INCORPORATION TO CHANGE NAME OF THE COMPANY

The Board of Directors proposes that the shareholders of the Company
approve an amendment to the Company's Articles of Incorporation to change the
Company's name from "Metatec International, Inc." to "Metatec, Inc." The Board
of Directors believes that the use of the term International in the Company's
name is no longer applicable due to the Company's sale of its operations in
Breda, The Netherlands.

The vote required to approve the proposal to amend the Company's Articles
of Incorporation to change the Company's name is a majority of the Shares
outstanding and entitled to vote at the Annual Meeting. THE BOARD OF DIRECTORS
UNANIMOUSLY RECOMMENDS A VOTE "FOR" THIS PROPOSAL.

BOARD OF DIRECTORS COMMITTEES AND MEETINGS

The Board of Directors held five meetings during 2002. Each director
attended at least 75% of the meetings held by the Board of Directors and the
committees on which he served during 2002.

The Board of Directors has established an Executive Committee, a
Compensation Committee, and an Audit Committee. The members of the Executive
Committee are Joseph F. Keeler, Jr., Peter J. Kight, David P. Lauer, and James
V. Pickett. The Executive Committee may exercise all of the authority of the
Board of Directors between its meetings. This committee held five meetings and
took action two times by written consent during 2002. The members of the
Compensation Committee are Joseph F. Keeler, Jr., David P. Lauer, and James V.
Pickett. The Compensation Committee held one meeting and took action two times
by written consent during 2002. The members of the Audit Committee are Joseph F.
Keeler, David P. Lauer, James V. Pickett, and Daniel D. Viren. The Audit
Committee held six meetings during 2002. The responsibilities of the
Compensation Committee are described in "Executive Compensation--Compensation
Committee Report on Executive Compensation," and the responsibilities of the
Audit Committee are described in "Report of Audit Committee," both of which are
included elsewhere in this Proxy Statement.

The Board of Directors currently has no standing nominating committee or
committee performing similar functions.

COMPENSATION OF DIRECTORS

Employee directors receive no additional compensation for service on the
Board of Directors or its committees. Directors of the Company who are not also
employees of the Company receive a fee of $1,500 per board meeting and a
quarterly retainer of $1,500. In addition, directors of the Company who are not
officers or employees of the Company do not receive any additional compensation
for committee meetings attended, with the exception of members of the Audit
Committee. Each member of the Audit Committee receives an annual fee of $2,000
for serving on that committee, and the Chairman of the Audit Committee receives
an annual fee of $4,000 for chairing that committee. The Company has a directors
deferred compensation plan pursuant to which directors may defer all or a
portion of their director fees.

Directors of the Company who are not officers or employees of the Company
or any of its subsidiaries currently receive stock options pursuant to the
Company's 1999 Directors Stock Option Plan. Under this plan, immediately
following each annual meeting of shareholders of the Company, each eligible
director is automatically granted an option to purchase 5,000 Shares. These
options are fully vested at the time of grant and must be exercised within five
years of the grant date. In addition, each new director is automatically granted
an option, on a one-time basis, to purchase 10,000 Shares. These one-time
options have five-year terms and vest in equal annual installments over a
four-year period. All options are granted at an exercise price equal to the fair
market value of the Shares on the last trading day prior to the annual meeting
relating to the date of grant.

EXECUTIVE COMPENSATION

Set forth below is summary information regarding the annual and long-term
compensation of the Company's chief executive officer and its only other
executive officers whose annual compensation exceeded $100,000 during 2002.

SUMMARY COMPENSATION TABLE

LONG-TERM AWARDS
ANNUAL COMPENSATION --------------------------------
RESTRICTED SHARES
NAME AND -------------------- STOCK UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS AWARDS OPTIONS GRANTED (1) COMPENSATION (2)
------------------------------------ ---- -------- --------- ---------- ------------------- ----------------

Christopher A. Munro (3)............ 2002 $300,000 $153,000(4) $ -- 150,000 $25,774
President and Chief 2001 $234,461 $ 60,000 $60,000 100,000 $26,674
Executive Officer

Gary W. Qualmann (3)................ 2002 $205,846 $122,400(4) $39,000 -- $41,323
Chief Financial Officer

Julia A. Fratianne.................. 2002 $124,800 $ 3,000 $ -- -- $ 2,586
Vice President, 2001 $124,800 $ -- $ -- -- $ 4,680
Finance 2000 $114,443 $ 4,254 $ -- 10,000 $ 4,292

---------------

(1) This column sets forth the number of Shares subject to options granted
during the indicated year pursuant to the Company's 1990 Stock Option Plan.

(2) For all named executive officers, the amount in the All Other Compensation
column includes amounts contributed by the Company as matching contributions
to its 401(K) retirement plan. In addition, for

Mr. Munro the amounts in 2002 and 2001 include $20,000 and $20,000,
respectively, paid by the Company as premiums for term life insurance
benefiting Mr. Munro and his family. Finally, for Mr. Qualmann the amount
in 2002 includes $38,000 of consulting fees paid by the Company to Mr.
Qualmann prior to his joining the Company.

(3) Mr. Munro joined the Company as Chief Operating Officer in January 2001, and
was elected President and Chief Executive Officer in November 2001. Mr.
Qualmann joined the Company as Chief Financial Officer in February 2002.

(4) See "Compensation Committee Report on Executive Compensation" for a
discussion of the 2002 bonuses awarded to Messrs. Munro and Qualmann. Ms.
Fratianne's 2002 bonus was a discretionary bonus awarded by the chief
executive officer.

OPTION GRANTS IN LAST FISCAL YEAR

The following table sets forth all grants of stock options during 2002 to
the executive officers named in the Summary Compensation Table:

POTENTIAL
REALIZABLE VALUE
INDIVIDUAL GRANTS AT ASSUMED
---------------------------------------------------------------- ANNUAL
% OF TOTAL RATES OF STOCK
NUMBER OF OPTIONS APPRECIATION FOR
METATEC SHARES GRANTED TO OPTION TERM(3)
NAME AND UNDERLYING EMPLOYEES IN EXERCISE PRICE EXPIRATION ------------------
PRINCIPAL POSITION OPTIONS GRANTED (1) FISCAL YEAR PER SHARE(2) DATE 5% 10%
------------------ ------------------- ------------ -------------- ---------- ------- --------

Christopher A. Munro............. 150,000 100% $0.39 (4) $36,790 $ 93,234
President and Chief Executive
Officer

Gary W. Qualmann................. -- -- -- -- $ 0 $ 0
Chief Financial Officer

Julia A. Fratianne............... -- -- -- -- $ 0 $ 0
Vice President, Finance

---------------

(1) Except as otherwise indicated in the notes to this table, all of the options
were granted under the Company's 1990 Stock Option Plan and are subject to a
vesting schedule.

(2) The per share exercise price is equal to the fair market value of Shares on
the date of grant.

(3) The dollar amounts under the 5% and 10% columns are the result of
calculations required by the rules of the Securities and Exchange
Commission. Although permitted by these rules, the Company did not use an
alternate formula for a grant date valuation because the Company is not
aware of a formula that would determine with reasonable accuracy a present
value based on future unknown factors.

(4) The expiration date for 100,000 of these options is February 13, 2012, and
for the remaining 50,000 of these options is March 1, 2012.

OPTION EXERCISES IN LAST FISCAL YEAR AND YEAR END OPTION VALUES

The following table sets forth stock options exercised during 2002 by the
executive officers named in the Summary Compensation Table and the value of
in-the-money stock options held by those individuals as of December 31, 2002:

NUMBER OF
METATEC SHARES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
METATEC SHARES 12/31/2002 12/31/2002
ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE REALIZED(1) UNEXERCISABLE UNEXERCISABLE(2)
---- -------------- ------------ -------------- -----------------

Christopher A. Munro................. 0 0 50,000/200,000 $0/$0
President and Chief Executive
Officer

Gary W. Qualmann..................... 0 0 0/0 $0/$0
Chief Financial Officer

Julia A. Fratianne................... 0 0 60,000/5,000 $0/$0
Vice President, Finance

---------------

(1) Aggregate market value of the Shares covered by the option less the
aggregate price paid by the executive officer.

(2) The value of in-the-money options was determined by subtracting the exercise
price from the closing price of The Shares as of December 31, 2002.

EMPLOYMENT AGREEMENTS

Christopher A. Munro entered into an employment agreement when he joined
the Company as Chief Operating Officer in January 2001. In November 2001, Mr.
Munro was elected as the President and Chief Executive Officer of the Company.
In March 2002, Mr. Munro's original employment agreement was amended to
recognize his increased responsibilities as President and Chief Executive
Officer. Under his current employment agreement, Mr. Munro received a base
salary of $300,000 in 2002. The Compensation Committee increased his base salary
to $375,000 for 2003. In addition, Mr. Munro is entitled to receive a bonus
ranging up to a maximum of 60% of his base salary based upon the Company's level
of achievement of the performance thresholds specified in his employment
agreement. For 2002, Mr. Munro's bonus was $153,000. Under his employment
agreement, the Company is obligated to make a $20,000 premium payment on Mr.
Munro's behalf on a term life insurance policy benefitting Mr. Munro and his
family. Mr. Munro's employment continues until terminated by either Mr. Munro or
the Company. Mr. Munro may terminate his employment at any time upon notice to
the Company of not less than 60 days prior to the proposed termination date. The
Company may terminate Mr. Munro's employment at any time upon notice to Mr.
Munro. If the Company terminates Mr. Munro's employment without cause, or if Mr.
Munro terminates his employment for "good reason" (as defined in the employment
agreement), then Mr. Munro is entitled to receive severance payments in an
amount equal to his base salary payable over an 18-month period, as well as
health benefits during that same period.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

Persons who served on the Company's Compensation Committee during 2002 were
Joseph F. Keeler, Jr., David P. Lauer, Jerry D. Miller and James V. Pickett. Mr.
Lauer replaced Mr. Miller as a member of the Compensation Committee during 2002.
Until May 1993, prior to his appointment to the Compensation

Committee, Mr. Miller served as President of the Company. There are no
interlocking relationships between any executive officers of the Company and any
entity whose directors or executive officers serve on the Company's Board of
Directors or the Compensation Committee.

COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

The Compensation Committee of the Board of Directors regularly reviews
executive compensation policies and levels and evaluates the performance of
management in the context of the Company's performance. All of the members of
the Compensation Committee are "independent" as defined by the rules of the
Nasdaq Stock Market. The Compensation Committee believes that the Company's
compensation policy must be designed to attract, retain, reward, and motivate
highly qualified individuals to manage the Company to meet corporate growth and
earnings objectives and to maximize shareholder value. The Company's
compensation policy has three primary components, described below, which are
applicable to the Company's executive officers, including its chief executive
officer and chief financial officer.

Base Salary. The primary component of executive compensation is an annual
base salary. In establishing the amount of an executive officer's annual base
salary (other than the chief executive officer), the Compensation Committee
reviews a recommendation made by the Company's chief executive officer and
considers other factors as well, including the position held by the executive
officer, his or her accomplishments during the year, his or her level of
responsibility and experience, and the relationship of the executive officer's
salary to the salaries of other managers and associates of the Company. After
considering these factors, the Compensation Committee subjectively determines
the amount of each executive officer's annual base salary.

The annual base salary of Mr. Munro is paid pursuant to his employment
agreement with the Company. In 2001, Mr. Munro's base salary was $240,000. In
2002, Mr. Munro's base salary was increased to $300,000 in recognition of his
increased responsibilities as President and Chief Executive Officer. For 2003,
the Compensation Committee increased Mr. Munro's base salary to $375,000 in
recognition of his performance in 2002. Mr. Qualmann joined the Company in
February 2002, at a mutually agreed-upon base salary of $240,000. For 2003, the
Compensation Committee increased Mr. Qualmann's salary to $250,000 in
recognition of his performance in 2002.

Incentive Compensation. Under Mr. Munro's employment agreement, he is
entitled to receive an annual bonus ranging up to a maximum of 60% of his annual
base salary based upon the Company's level of achievement of the performance
thresholds specified in his employment agreement. For 2002, the Compensation
Committee determined the performance thresholds achieved by the Company and
awarded Mr. Munro a bonus of $153,000, which was 51% of his annual base salary.
In addition, the Compensation Committee determined, under the performance plan
established for Mr. Qualmann, the performance thresholds achieved by the Company
and awarded Mr. Qualmann a bonus of $122,400, which was 51% of his annual base
salary.

Long-Term Awards. In connection with entering into the amendment to his
employment agreement in March 2002, Mr. Munro was granted options to purchase a
total of 150,000 Shares. In connection with joining the Company in February
2002, Mr. Qualmann received 100,000 Shares pursuant to the terms of a restricted
share agreement, 50,000 of which remain subject to a risk of forfeiture if Mr.
Qualmann's employment is terminated for any reason prior to February 13, 2004.
The Compensation Committee did not grant any options or any other equity awards
to any other executive officer in 2002.

JOSEPH F. KEELER, JR., CHAIRMAN

DAVID P. LAUER
JAMES V. PICKETT
10

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors, and persons who own more than 10% of a registered class
of the Company's equity securities, to file reports of ownership and changes in
ownership with the Securities and Exchange Commission. Officers, directors, and
greater than 10% shareholders are required by the Securities and Exchange
Commission's regulations to furnish the Company with copies of all Section 16(a)
forms they file. Based solely on a review of the copies of such forms furnished
to the Company, the Company believes that during 2002 all Section 16(a) filing
requirements applicable to its officers and directors were complied with by such
persons.

EQUITY COMPENSATION PLAN INFORMATION

NUMBER OF SECURITIES TO NUMBER OF SECURITIES
BE ISSUED UPON WEIGHTED-AVERAGE REMAINING AVAILABLE FOR
EXERCISE EXERCISE PRICE OF FUTURE ISSUANCE UNDER EQUITY
PLAN CATEGORY OF OUTSTANDING OPTIONS OUTSTANDING OPTIONS COMPENSATION PLANS
------------- ----------------------- ------------------- ----------------------------

Equity Compensation
Plans Approved by
Security Holders...... 1,171,750 $3.68 458,800

Equity Compensation
Plans not Approved by
Security Holders...... 0 0 0
--------- ----- -------
Total................... 1,171,750 $3.68 458,800
========= ===== =======

PRINCIPAL HOLDERS OF VOTING SECURITIES

The following table sets forth certain information with respect to the only
persons known by the Company to own beneficially 5% or more of The Shares:

AMOUNT AND NATURE
NAME AND ADDRESS OF BENEFICIAL OWNER OF BENEFICIAL OWNERSHIP (1) PERCENT OF OWNERSHIP
------------------------------------ --------------------------- --------------------

Jeffrey M. Wilkins
7001 Metatec Boulevard
Dublin, Ohio 43017.......................... 742,468(2) 10.2%

Dimensional Fund Advisors, Inc.
1299 Ocean Avenue
Santa Monica, California 90401.............. 486,500 7.4%

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(1) Beneficial ownership as of December 31, 2002, except in the case of Mr.
Wilkins, which is as of March 8, 2003.

(2) Includes 325,000 Shares which may be acquired upon the exercise of options
which are currently exercisable or exercisable within 60 days of March 8,
2003.

PERFORMANCE GRAPH

The following graph compares the yearly percentage change in the cumulative
total return (assuming reinvestment of dividends) on the Shares to the yearly
percentage change in the cumulative total return of the NASDAQ Computer and Data
Processing Services Index and the NASDAQ Stock Market Index - United States.
This comparison is shown for the five previous fiscal years of the Company. The
graph and the amounts in the graph assume that $100 was invested on December 31,
1997, in the Shares or in the applicable stock index and that all dividends were
reinvested during the applicable fiscal year.

Performance Graph

NASDAQ - COMPUTER & NASDAQ STOCK MARKET -
METATEC INTERNATIONAL DATA PROCESSING US
--------------------- ------------------- ---------------------

Dec-97 100 100 100
Dec-98 158 178 141
Dec-99 63 392 261
Dec-00 21 181 157
Dec-01 7 145 125
Dec-02 2 100 86

The foregoing graph is not--nor is it intended to be--any indication of the
future performance of The Shares.

REPORT OF THE AUDIT COMMITTEE

The Audit Committee is responsible to monitor and review the Company's
financial reporting process on behalf of the Board of Directors. Management has
the primary responsibility for the financial statements and the reporting
process, including the systems of internal controls. Management's responsibility
for financial reporting and the report and opinion of Deloitte & Touche LLP are
filed separately in the Company's Annual Report on

Form 10-K for the 2002 fiscal year and should be read in conjunction with this
report and any review of the audited financial statements.

The current members of the Audit Committee are David P. Lauer, its
Chairman, Joseph F. Keeler, Jr., James V. Pickett, and Daniel D. Viren. All of
the members of the Audit Committee are "independent" as defined by the rules of
the Nasdaq Stock Market, with the exception of Mr. Viren, who served as the
Company's Chief Financial Officer from July 1999 to June 2000. The Company's
Audit Committee Charter permits the Board of Directors to appoint one
non-independent director to the Audit Committee under exceptional and limited
circumstances. In appointing Mr. Viren to the Audit Committee, the Board of
Directors considered his extensive experience in dealing with financial
statements and audit matters outside the scope of his employment with the
Company and believed that his membership on the Audit Committee was in the best
interests of the Company and its shareholders. The Committee held six meetings
during the 2002 fiscal year. Each member of the Audit Committee attended at
least 75% of the meetings.

The responsibilities of the Audit Committee are set forth in its charter,
which is reviewed and amended periodically by the Board of Directors. A copy of
the Audit Committee Charter was attached to the Proxy Statement for the 2001
annual meeting of shareholders. In fulfilling its responsibilities, the Audit
Committee reviewed the audited financial statements in the Annual Report on Form
10-K for the 2002 fiscal year with management, including a discussion of the
quality, not just the acceptability, of the accounting principles, the
reasonableness of significant judgments, and the clarity of disclosures in the
financial statements. In addition, the Audit Committee has selected Deloitte &
Touche LLP as the Company's independent auditors for the 2003 fiscal year. Among
other things, the Audit Committee:

- Discussed and considered the independence of Deloitte & Touche LLP,
including reviewing as necessary all relationships and services which
might bear on the objectivity of the auditor;

- Received written affirmation that the auditor is in fact independent;

- Discussed the overall audit process, including receiving and reviewing
the Company's financial statements and related reports; and

- Provided to the independent auditors full access to the Audit Committee
(and the Board of Directors) to report on any and all matters
appropriate.

The Audit Committee also met with selected members of management and the
auditors to review financial statements (including quarterly reports),
discussing such matters as the quality of earnings; estimates, reserves and
accruals; suitability of accounting principles; highly judgmental areas; and
audit adjustments whether or not recorded. In addition, the Audit Committee
considered the quality and adequacy of the Company's internal controls and the
status of pending litigation, taxation matters and other areas of oversight to
the financial reporting and audit process that the committee felt appropriate.

Based upon its work and the information received in the inquiries outlined
above, the Audit Committee is satisfied that its responsibilities for the period
ending December 31, 2002, were met and that the financial reporting and audit
processes of the Company are functioning appropriately. Furthermore, in reliance
on the reviews and discussions referred to above, the Audit Committee
recommended to the Board of Directors that the audited financial statements be
included in the Annual Report on Form 10-K for the 2002 fiscal year for filing
with the Securities and Exchange Commission.

As discussed above, the Audit Committee is responsible to monitor and
review the Company's financial reporting process on behalf of the Board of
Directors. However, it is not the duty or responsibility of the Audit

Committee to conduct auditing or accounting reviews or procedures. Members of
the Audit Committee are not employees of the Company, and some members may not
be accountants or auditors by profession or experts in the fields of accounting
or auditing. Therefore, the Audit Committee has relied, without independent
verification, on management's representation that the financial statements have
been prepared with integrity and objectivity and in conformity with accounting
principles generally accepted in the United States of America and on the
representations of the independent auditors included in their report on the
Company's financial statements. The Audit Committee's review does not provide
its members with an independent basis to determine that management has
maintained appropriate accounting and financial reporting principles or
policies, or appropriate internal controls and procedures designed to assure
compliance with accounting standards and applicable laws and regulations.
Furthermore, the Audit Committee's considerations and discussions with
management and the independent auditors do not assure that the Company's
financial statements are presented in accordance with generally accepted
accounting principles, that the audit of the Company's financial statements has
been carried out in accordance with generally accepted auditing standards, or
that the Company's independent accountants are in fact "independent."

DAVID P. LAUER, Chairman
JOSEPH F. KEELER, JR.
JAMES V. PICKETT
DANIEL D. VIREN

INDEPENDENT PUBLIC ACCOUNTANTS

Deloitte & Touche LLP served as the independent public accountants for the
Company for its fiscal year ended December 31, 2002, and it has been selected by
the Audit Committee to be the Company's independent public accountants for the
fiscal year ending December 31, 2003. A representative of Deloitte & Touche LLP
is expected to be present at the Annual Meeting and to have an opportunity to
make a statement if desired and to respond to appropriate questions.

Aggregate fees billed to the Company for the year ending December 31, 2002,
by Deloitte & Touche LLP, the member firms of Deloitte Touche Tohmatsu, and
their respective affiliates (collectively, "Deloitte") are as follows:

Audit Fees.................................................. $119,850
Financial Information Systems
Design and Implementation Fees.............................. -0-
All Other Fees.............................................. $ 85,756(1)(2)

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(1) Includes fees for tax consulting and other non-audit services.

(2) The Audit Committee has considered whether the provision of these services
is compatible with maintaining the principal accountant's independence.

SHAREHOLDER PROPOSALS

Proposals of shareholders intended to be presented at the 2003 annual
meeting of shareholders must be received by the Company for inclusion in the
proxy statement and form of proxy on or prior to 120 days in advance of the
first anniversary of the date of this Proxy Statement. If a shareholder intends
to present a proposal at the 2003 annual meeting of shareholders, but does not
seek to include such proposal in the Company's proxy

statement and form of proxy, such proposal must be received by the Company on or
prior to 45 days in advance of the first anniversary date of this Proxy
Statement or the persons named in the form of proxy for the 2003 annual meeting
will be entitled to use their discretionary voting authority should such
proposal then be raised at such meeting, without any discussion of the matter in
the Company's proxy statement or form of proxy.

OTHER MATTERS

Management does not know of any other matters which may come before the
Annual Meeting. However, if any other matters properly come before the Annual
Meeting, the persons named in the accompanying form of proxy intend to vote the
proxy in accordance with their judgment on such matters.

The Company will bear the cost of soliciting proxies. In addition to the
use of the mails, proxies may be solicited by officers, directors, and regular
employees, personally or by telephone or telegraph. The Company will reimburse
banks, brokers, and nominees for any out-of-pocket expenses incurred by them in
sending proxy materials to the beneficial owners of The Shares held by any
banks, brokers or nominees. If follow-up requests for proxies are necessary, the
Company may employ other persons to make these requests.

JULIA A. FRATIANNE

Secretary

PROXY

METATEC INTERNATIONAL, INC.

ANNUAL MEETING OF SHAREHOLDERS

MAY 15, 2003

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned hereby appoints Christopher A. Munro and Gary W.
Qualmann, and each of them, with full power of substitution, proxies to vote and
act with respect to all Common Shares, without par value (the "Shares"), of
Metatec International, Inc., an Ohio corporation (the "Company"), which the
undersigned is entitled to vote at the Annual Meeting of Shareholders to be held
on Thursday, May 15, 2003, at the Company's principal executive offices located
at 7001 Metatec Boulevard, Dublin, Ohio, 43017, at 1:00 p.m., local time, and at
any and all adjournments thereof, with all the powers the undersigned would
possess if present in person, on the following proposals and any other matters
that may properly come before the Annual Meeting.

1. WITH [ ] OR WITHOUT [ ] AUTHORITY TO ELECT ALL NOMINEES LISTED
BELOW AS CLASS I DIRECTORS
(EXCEPT AS MARKED TO THE CONTRARY BELOW):

JOSEPH F. KEELER, JR. PETER J. KIGHT

INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
STRIKE A LINE THROUGH HIS NAME.

2. PROPOSAL TO AMEND THE COMPANY'S ARTICLES OF INCORPORATION TO CHANGE THE
COMPANY'S NAME TO METATEC, INC.

FOR [ ] AGAINST [ ] ABSTAIN [ ]

3. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
MATTERS AS MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT
THEREOF.

The Shares represented by this Proxy will be voted upon the proposal listed
above in accordance with the instructions given by the undersigned, but if
no instructions are given, this Proxy will be voted to elect all directors
as set forth in Item 1, above, and in the discretion of the proxies, on any
other matter which properly comes before the Annual Meeting.

ADDITIONAL WORDING ON CARD:

By marking the box to the right and providing my e-mail address below,
I consent to [ ] future access of the annual reports and proxy materials
electronically via the Internet. I understand that the Company may no longer
distribute printed materials to me for any future shareholders meeting until
such consent is revoked. I understand I may revoke my
consent at any time.

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