<SUBMISSION>
<ACCESSION-NUMBER>0000950137-02-002583
<TYPE>PRE 14A
<PUBLIC-DOCUMENT-COUNT>3
<PERIOD>20020614
<FILING-DATE>20020430
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>METALCLAD CORP
<CIK>0000013547
<ASSIGNED-SIC>1700
<IRS-NUMBER>952368719
<STATE-OF-INCORPORATION>DE
<FISCAL-YEAR-END>1231
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>PRE 14A
<ACT>34
<FILE-NUMBER>000-02000
<FILM-NUMBER>02628080
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>800 NICOLLET MALL
<STREET2>SUITE 2690
<CITY>MINNEAPOLIS
<STATE>MN
<ZIP>55402
<PHONE>612 333-0614
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>800 NICOLLET MALL
<STREET2>SUITE 2690
<CITY>MINNEAPOLIS
<STATE>MN
<ZIP>55402
</MAIL-ADDRESS>
<FORMER-COMPANY>
<FORMER-CONFORMED-NAME>PHOENIX GEMS INC
<DATE-CHANGED>19730617
</FORMER-COMPANY>
<FORMER-COMPANY>
<FORMER-CONFORMED-NAME>BOWER INDUSTRIES INC
<DATE-CHANGED>19870618
</FORMER-COMPANY>
</FILER>
<DOCUMENT>
<TYPE>PRE 14A
<SEQUENCE>1
<FILENAME>c69240ppre14a.htm
<DESCRIPTION>PRELIMINARY NOTICE AND PROXY
<TEXT>
<HTML>
<HEAD>
<TITLE>Preliminary Notice and Proxy</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<!-- TOC -->
<A name="toc"><DIV align="CENTER"><U><B>TABLE OF CONTENTS</B></U></DIV></A>

<P><CENTER>
<TABLE border="0" width="90%" cellpadding="0" cellspacing="0">
<TR>
	<TD width="3%"></TD>
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	<TD width="76%"></TD>
</TR>
<TR><TD colspan="9"><A HREF="#000">VOTING INFORMATION</A></TD></TR>
<TR><TD colspan="9"><A HREF="#001">Proposal &#151; No.&nbsp;1
ELECTION OF DIRECTORS</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#002">General</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#003">Information Concerning Nominees</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#004">Information Concerning Directors Not Standing for Re-election</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#005">Meetings of Board of Directors</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#006">Committees of Board of Directors</A></TD></TR>
<TR><TD></TD><TD></TD><TD colspan="7"><A HREF="#007">Audit Committee.</A></TD></TR>
<TR><TD></TD><TD></TD><TD colspan="7"><A HREF="#008">Compensation Committee.</A></TD></TR>
<TR><TD></TD><TD></TD><TD colspan="7"><A HREF="#009">Nominating Committee.</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#010">Director Compensation</A></TD></TR>
<TR><TD colspan="9"><A HREF="#011">Proposal &#151; No.&nbsp;2
INCREASE OF SHARES UNDER STOCK OPTION PLAN</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#012">Proposal</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#013">Reason for Proposal.</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#014">Summary Plan Description</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#015">Federal Income Tax Consequences</A></TD></TR>
<TR><TD colspan="9"><A HREF="#016">Proposal &#151; No.&nbsp;3
CHANGE STATE OF INCORPORATION TO MINNESOTA</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#017">Proposal</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#018">Reasons for Two Thirds Vote Requirement</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#019">Reasons for the Reincorporation</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#020">Principal Features and Mechanics of the Reincorporation</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#021">Comparison of Shareholders&#146; Rights</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#022">Tax Consequences of the Reincorporation</A></TD></TR>
<TR><TD colspan="9"><A HREF="#023">Proposal &#151; No.&nbsp;4
AMEND ARTICLES OF INCORPORATION</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#024">Contingent Nature of Proposal</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#025">Proposal</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#026">Specific Language of Amendment</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#027">Purpose and Effect of the Amendments</A></TD></TR>
<TR><TD colspan="9"><A HREF="#028">EXECUTIVE COMPENSATION</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#029">Information Concerning Non-Director Executive Officers</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#030">Summary Compensation Table</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#031">Option Grants in Last Fiscal Year</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#032">Aggregated Option Exercises and Year End Option Values</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#033">Compensation Committee Report</A></TD></TR>
<TR><TD colspan="9"><A HREF="#034">CERTAIN TRANSACTIONS</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#035">Transactions with Executive Officers</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#036">Change in Control</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#037">Vesting of Directors&#146; Options</A></TD></TR>
<TR><TD colspan="9"><A HREF="#038">STOCK PERFORMANCE GRAPH</A></TD></TR>
<TR><TD colspan="9"><A HREF="#039">COMMON STOCK OWNERSHIP</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#040">Share Ownership of Management</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#041">Share Ownership of Certain Beneficial Owners</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#042">Reporting Under Section&nbsp;16(a) of the Securities Exchange Act of 1934</A></TD></TR>
<TR><TD colspan="9"><A HREF="#043">AUDIT COMMITTEE REPORT</A></TD></TR>
<TR><TD colspan="9"><A HREF="#044">INDEPENDENT AUDITORS</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#045">Auditors</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#046">Audit Fees</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#047">All Other Fees</A></TD></TR>
<TR><TD colspan="9"><A HREF="#048">SHAREHOLDER PROPOSALS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#049">Exhibit&nbsp;A</A></TD></TR>
<TR><TD colspan="9"><A HREF="#050">Exhibit&nbsp;B</A></TD></TR>
<TR><TD colspan="9"><A HREF="#051">Exhibit&nbsp;C</A></TD></TR>
<TR><TD colspan="9"><A HREF="#052">Exhibit&nbsp;D</A></TD></TR>
</TABLE>
</CENTER>
<!-- /TOC -->
<P align="center"><FONT size="2"><B>SCHEDULE 14A<BR>
</B>


<P align="center"><B>Proxy Statement Pursuant to Section 14(a) of the Securities<BR>
Exchange Act of 1934 (Amendment No.&nbsp;&nbsp;)</B></FONT>

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
        <TD width="3%"></TD>
        <TD width="97%"></TD>
</TR>
<TR valign="top">
        <TD>&nbsp;</TD>
        <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Filed by the
registrant &nbsp;&nbsp;<FONT face="wingdings">&#120;</font></FONT></TD>
</TR>
</TABLE>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
        <TD width="3%"></TD>
        <TD width="97%"></TD>
</TR>
<TR valign="top">
        <TD>&nbsp;</TD>
        <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Filed
by a party other than the registrant &nbsp;&nbsp;<img src="c69240ppi5-110.gif"></FONT></TD>
</TR>
<TR>
        <TD>&nbsp;</TD>
</TR>
<TR valign="top">
        <TD>&nbsp;</TD>
        <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Check the appropriate box:</FONT></TD>
</TR>
</TABLE>
<p>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
        <TD width="3%"></TD>
        <TD width="97%"></TD>
</TR>
<TR valign="top">
        <TD>&nbsp;</TD>

<TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="wingdings">&#120;</font>&nbsp;&nbsp; Preliminary proxy statement</FONT></TD>
</TR>
</TABLE>
<p>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
        <TD width="3%"></TD>
        <TD width="97%"></TD>
</TR>
<TR valign="top">
        <TD>&nbsp;</TD>

<TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<img src="c69240ppi5-110.gif">&nbsp;&nbsp;
Confidential, for use of the Commission only (as permitted by Rule&nbsp;14a-6(e)(2).</FONT></TD>
</TR>
</TABLE>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
        <TD width="3%"></TD>
        <TD width="97%"></TD>
</TR>
<TR valign="top">
        <TD>&nbsp;</TD>

<TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<img src="c69240ppi5-110.gif">&nbsp;&nbsp; Definitive proxy statement.</FONT></TD>
</TR>
<TR>
        <TD>&nbsp;</TD>
</TR>
<TR valign="top">
        <TD>&nbsp;</TD>
        <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<img src="c69240ppi5-110.gif">&nbsp;&nbsp; Definitive additional materials.</FONT></TD>
</TR>
<TR>
        <TD>&nbsp;</TD>
</TR>
<TR valign="top">
        <TD>&nbsp;</TD>

<TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<img src="c69240ppi5-110.gif">&nbsp;&nbsp;
Soliciting material pursuant to &#167;240.14a-12.</FONT></TD>
</TR>
</TABLE>


<P align="center">
<HR size="1">
<DIV align="center"><FONT size="2">Metalclad Corporation<BR>(Name of Registrant as Specified in Its Charter)</FONT></DIV>

<p>
<HR size="1">
<P align="center"><FONT size="2">(Name of Person(s) Filing Proxy Statement if Other Than the Registrant)

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Payment of filing fee (check the appropriate box):</FONT>

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
        <TD width="3%"></TD>
        <TD width="97%"></TD>
</TR>
<TR valign="top">
        <TD>&nbsp;</TD>

<TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="wingdings">&#120;</font>&nbsp;&nbsp; No fee required.</FONT></TD>
</TR>
</TABLE>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
        <TD width="3%"></TD>
        <TD width="97%"></TD>
</TR>
<TR valign="top">
        <TD>&nbsp;</TD>
        <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<img src="c69240ppi5-110.gif">&nbsp;&nbsp; Fee computed on table below per Exchange Act Rules&nbsp;14a-6(i)(1) and
0-11.</FONT></TD>
</TR>
</TABLE>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
        <TD width="3%"></TD>
        <TD width="97%"></TD>
</TR>
<TR valign="top">
        <TD>&nbsp;</TD>
        <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;Title of each class of securities to which transaction applies:</FONT></TD>
</TR>
</TABLE>
<HR size="1">

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
        <TD width="3%"></TD>
        <TD width="97%"></TD>
</TR>
<TR valign="top">
        <TD>&nbsp;</TD>
        <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;Aggregate number of securities to which transaction applies:</FONT></TD>
</TR>
</TABLE>
<HR size="1">

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
        <TD width="3%"></TD>
        <TD width="97%"></TD>
</TR>
<TR valign="top">
        <TD>&nbsp;</TD>
        <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)&nbsp;Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule&nbsp;0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):</FONT></TD>
</TR>
</TABLE>
<HR size="1">

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
        <TD width="3%"></TD>
        <TD width="97%"></TD>
</TR>
<TR valign="top">
        <TD>&nbsp;</TD>
        <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)&nbsp;Proposed maximum aggregate value of transaction:</FONT></TD>
</TR>
</TABLE>
<HR size="1">

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
        <TD width="3%"></TD>
        <TD width="97%"></TD>
</TR>
<TR valign="top">
        <TD>&nbsp;</TD>
        <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5)&nbsp;Total fee paid:</FONT></TD>
</TR>
</TABLE>
<HR size="1">

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
        <TD width="3%"></TD>
        <TD width="97%"></TD>
</TR>
<TR valign="top">
        <TD>&nbsp;</TD>
        <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<img src="c69240ppi5-110.gif">&nbsp;&nbsp; Fee paid previously with preliminary materials.</FONT></TD>
</TR>
</TABLE>
<HR size="1">

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
        <TD width="3%"></TD>
        <TD width="97%"></TD>
</TR>
<TR valign="top">
        <TD>&nbsp;</TD>
        <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<img src="c69240ppi5-110.gif">&nbsp;&nbsp; Check box if any part of the fee is offset as provided by Exchange Act
Rule&nbsp;0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.</FONT></TD>
</TR>
</TABLE>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
        <TD width="3%"></TD>
        <TD width="97%"></TD>
</TR>
<TR valign="top">
        <TD>&nbsp;</TD>
        <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;Amount Previously Paid:</FONT></TD>
</TR>
</TABLE>
<HR size="1">


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
        <TD width="3%"></TD>
        <TD width="97%"></TD>
</TR>
<TR valign="top">
        <TD>&nbsp;</TD>
        <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;Form, Schedule or Registration Statement No.:</FONT></TD>
</TR>
</TABLE>
<HR size="1">

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
        <TD width="3%"></TD>
        <TD width="97%"></TD>
</TR>
<TR valign="top">
        <TD>&nbsp;</TD>
        <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)&nbsp;Filing Party:</FONT></TD>
</TR>
</TABLE>
<HR size="1">

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
        <TD width="3%"></TD>
        <TD width="97%"></TD>
</TR>
<TR valign="top">
        <TD>&nbsp;</TD>
        <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)&nbsp;Date Filed:</FONT></TD>
</TR>
</TABLE>
<HR size="1">


<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<P align="center"><FONT size="2"><B>METALCLAD CORPORATION</B><BR>
800 Nicollet Mall, Suite&nbsp;2690<BR>
Minneapolis, Minnesota 55402<BR>
&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;
</FONT>
<P align="center"><FONT size="2">NOTICE OF ANNUAL MEETING OF SHAREHOLDERS<BR>
to be held on<BR>
June&nbsp;14, 2002<BR>
&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notice is hereby furnished to the shareholders of Metalclad Corporation (a
Delaware corporation) of record as of the close of business on April&nbsp;26, 2002,
of the Annual Meeting of shareholders thereof, to be held at 10:00&nbsp;a.m. on June
14, 2002, at the Hyatt Regency Hotel, 1300 Nicollet Mall, Minneapolis,
Minnesota, for the following purposes:
</FONT>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
        <TD width="2%"></TD>
        <TD width="98%"></TD>
</TR>
<TR valign="top">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;&nbsp;&nbsp;&nbsp;To elect the members of the Board of Directors of Metalclad
Corporation;</FONT></TD>
</TR>

<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;&nbsp;&nbsp;&nbsp;To vote on a proposal to increase the number of shares of
Metalclad Corporation&#146;s common stock available under its 2000 Omnibus
Stock Option and Incentive Plan from 1,000,000 to 2,000,000;</FONT></TD>
</TR>

<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;&nbsp;&nbsp;&nbsp;To vote on a proposal to change the state of incorporation of
Metalclad Corporation from Delaware to Minnesota, which will involve the
merger of Metalclad Corporation into a wholly owned subsidiary organized
under the laws of the state of Minnesota named Entrx Corporation;</FONT></TD>
</TR>

<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.&nbsp;&nbsp;&nbsp;&nbsp;If proposal number 3 (reincorporation by merger into a Minnesota
corporation) does not receive an affirmative vote of holders of at least
two-thirds of the outstanding common stock of Metalclad Corporation,
excluding those owned by Wayne W. Mills, the President of Metalclad
Corporation, then to vote on a proposal to amend Metalclad Corporation&#146;s
Certificate of Incorporation to change its name to Entrx Corporation, and
to increase its authorized preferred stock from 1,500,000 to 5,000,000
shares; and</FONT></TD>
</TR>

<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.&nbsp;&nbsp;&nbsp;&nbsp;To transact such other business as may properly come before the
meeting, or any adjournment thereof.</FONT></TD>
</TR>

</TABLE>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Only shareholders of record as of the close of business on April&nbsp;26, 2002,
or their legal representatives, are entitled to notice and to vote at the
Annual Meeting or any adjournment thereof. Each shareholder is entitled to one
vote per share on all matters to be voted on at the Annual Meeting.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A Proxy, Proxy Statement and the 2001 Annual Report on Form&nbsp;10K are
enclosed herewith. You are requested to complete and sign the Proxy, which is
being solicited by the Board of Directors and management of Metalclad
Corporation, and to return it in the envelope provided.
</FONT>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
        <TD width="50%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="50%"><FONT size="2">By Order of the Board of Directors</FONT></TD>
</TR>
</TABLE>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
        <TD width="50%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="50%"><FONT size="2"><I>Chairman of the Board</I></FONT></TD>
</TR>
</TABLE>
<P><FONT size="2">May &#95;&#95;, 2002
</FONT>
<P align="center"><FONT size="2">&nbsp;</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<!-- TOC -->
<!-- /TOC -->




<P align="center"><FONT size="2"><B>TABLE OF CONTENTS</B>
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
        <TD width="5%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="85%">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD colspan="4"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Voting Information</FONT></DIV></TD>
</TR>

<TR valign="bottom">
        <TD colspan="4"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><br>&nbsp;</FONT></DIV></TD>
</TR>

<TR valign="bottom">
        <TD colspan="4"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Proposal No.&nbsp;1 &#151; Election of Directors</FONT></DIV></TD>
</TR>

<TR valign="bottom">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">General</FONT></DIV></TD>
</TR>

<TR valign="bottom">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Information Concerning Nominees</FONT></DIV></TD>
</TR>

<TR valign="bottom">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Information Concerning Directors Not Standing for Re-election</FONT></DIV></TD>
</TR>

<TR valign="bottom">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Meetings of Board of Directors</FONT></DIV></TD>
</TR>

<TR valign="bottom">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Committees of Board of Directors</FONT></DIV></TD>
</TR>

<TR valign="bottom">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Audit Committee</FONT></DIV></TD>
</TR>

<TR valign="bottom">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Compensation Committee</FONT></DIV></TD>
</TR>

<TR valign="bottom">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Nominating Committee</FONT></DIV></TD>
</TR>

<TR valign="bottom">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Director Compensation</FONT></DIV></TD>
</TR>

<TR valign="bottom">
        <TD colspan="4"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><br>&nbsp;</FONT></DIV></TD>
</TR>

<TR valign="bottom">
        <TD colspan="4"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Proposal No.&nbsp;2 &#151; Increase of Shares under Stock Option Plan</FONT></DIV></TD>
</TR>

<TR valign="bottom">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Proposal</FONT></DIV></TD>
</TR>

<TR valign="bottom">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Reason for Proposal</FONT></DIV></TD>
</TR>

<TR valign="bottom">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Summary Plan Description</FONT></DIV></TD>
</TR>

<TR valign="bottom">
           <TD><FONT size="2">&nbsp;</FONT></TD>
     <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Federal Income Tax Consequences</FONT></DIV></TD>
</TR>

<TR valign="bottom">
        <TD colspan="4"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><br>&nbsp;</FONT></DIV></TD>
</TR>

<TR valign="bottom">
        <TD colspan="4"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Proposal No.&nbsp;3 &#151; Change State of Incorporation to Minnesota</FONT></DIV></TD>
</TR>

<TR valign="bottom">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Proposal</FONT></DIV></TD>
</TR>

<TR valign="bottom">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Reason for Two Thirds Vote Requirement</FONT></DIV></TD>
</TR>

<TR valign="bottom">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Reasons for the Reincorporation</FONT></DIV></TD>
</TR>

<TR valign="bottom">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Principal Features and Mechanics of the Reincorporation</FONT></DIV></TD>
</TR>

<TR valign="bottom">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Comparison of Shareholders&#146; Rights</FONT></DIV></TD>
</TR>

<TR valign="bottom">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Tax Consequences of Reincorporation</FONT></DIV></TD>
</TR>

<TR valign="bottom">
        <TD colspan="4"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><br>&nbsp;</FONT></DIV></TD>
</TR>

<TR valign="bottom">
        <TD colspan="4"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Proposal No.&nbsp;4 &#151; Amend Articles of Incorporation</FONT></DIV></TD>
</TR>

<TR valign="bottom">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Contingent Nature of Proposal</FONT></DIV></TD>
</TR>

<TR valign="bottom">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Proposal</FONT></DIV></TD>
</TR>

<TR valign="bottom">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Specific Language of Amendment</FONT></DIV></TD>
</TR>

<TR valign="bottom">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Purpose and Effect of the Amendments</FONT></DIV></TD>
</TR>

<TR valign="bottom">
        <TD colspan="4"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><br>&nbsp;</FONT></DIV></TD>
</TR>

<TR valign="bottom">
        <TD colspan="4"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Executive Compensation</FONT></DIV></TD>
</TR>

<TR valign="bottom">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Information Concerning Non-Director Executive Officers</FONT></DIV></TD>
</TR>

<TR valign="bottom">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Summary Compensation Table</FONT></DIV></TD>
</TR>

<TR valign="bottom">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Option Grants in Last Fiscal Year</FONT></DIV></TD>
</TR>

<TR valign="bottom">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Aggregated Option Exercises and Year End Option Values</FONT></DIV></TD>
</TR>

<TR valign="bottom">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Compensation Committee Report</FONT></DIV></TD>
</TR>
</TABLE>
</CENTER>
<P align="center"><FONT size="2">&nbsp;</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
        <TD width="5%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="85%">&nbsp;</TD>
</TR>

<TR valign="bottom">
        <TD colspan="4"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Certain Transactions</FONT></DIV></TD>
</TR>

<TR valign="bottom">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Transactions with Executive Officers</FONT></DIV></TD>
</TR>

<TR valign="bottom">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Change in Control</FONT></DIV></TD>
</TR>

<TR valign="bottom">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Vesting of Directors&#146; Options</FONT></DIV></TD>
</TR>

<TR valign="bottom">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Loan to Affiliate of Wayne Mills</FONT></DIV></TD>
</TR>

<TR valign="bottom">
        <TD colspan="4"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><br>&nbsp;</FONT></DIV></TD>
</TR>

<TR valign="bottom">
        <TD colspan="4"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Stock Performance Graph</FONT></DIV></TD>
</TR>

<TR valign="bottom">
        <TD colspan="4"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><br>&nbsp;</FONT></DIV></TD>
</TR>

<TR valign="bottom">
        <TD colspan="4"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Common Stock Ownership</FONT></DIV></TD>
</TR>

<TR valign="bottom">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Share Ownership of Management</FONT></DIV></TD>
</TR>

<TR valign="bottom">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Share Ownership of Certain Beneficial Owners</FONT></DIV></TD>
</TR>

<TR valign="bottom">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Reporting Under Section&nbsp;16(a) of the Securities Exchange Act of 1934</FONT></DIV></TD>
</TR>

<TR valign="bottom">
        <TD colspan="4"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><br>&nbsp;</FONT></DIV></TD>
</TR>

<TR valign="bottom">
        <TD colspan="4"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Audit Committee Report</FONT></DIV></TD>
</TR>

<TR valign="bottom">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Auditors</FONT></DIV></TD>
</TR>

<TR valign="bottom">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Audit Fees</FONT></DIV></TD>
</TR>

<TR valign="bottom">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">All Other Fees</FONT></DIV></TD>
</TR>

<TR valign="bottom">
        <TD colspan="4"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><br>&nbsp;</FONT></DIV></TD>
</TR>

<TR valign="bottom">
        <TD colspan="4"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Independent Auditors</FONT></DIV></TD>
</TR>

<TR valign="bottom">
        <TD colspan="4"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><br>&nbsp;</FONT></DIV></TD>
</TR>

<TR valign="bottom">
        <TD colspan="4"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Shareholder Proposals</FONT></DIV></TD>
</TR>

<TR valign="bottom">
        <TD colspan="4"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><br>&nbsp;</FONT></DIV></TD>
</TR>

<TR valign="bottom">
        <TD colspan="4"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Exhibit&nbsp;A</FONT></DIV></TD>
</TR>

<TR valign="bottom">
        <TD colspan="4"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><br>&nbsp;</FONT></DIV></TD>
</TR>

<TR valign="bottom">
        <TD colspan="4"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Exhibit&nbsp;B</FONT></DIV></TD>
</TR>

<TR valign="bottom">
        <TD colspan="4"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><br>&nbsp;</FONT></DIV></TD>
</TR>

<TR valign="bottom">
        <TD colspan="4"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Exhibit&nbsp;C</FONT></DIV></TD>
</TR>
</TABLE>
</CENTER>
<P align="center"><FONT size="2">&nbsp;</FONT>
<!-- PAGEBREAK -->
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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<P align="center"><FONT size="2"><B>METALCLAD CORPORATION</B><BR>
800 Nicollet Mall, Suite&nbsp;2690<BR>
Minneapolis, Minnesota 55402
</FONT>
<P align="center"><FONT size="2"><B>PROXY STATEMENT<BR>
2002 ANNUAL MEETING OF SHAREHOLDERS</B>
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Proxy Statement is furnished to the shareholders of Metalclad
Corporation (hereinafter referred to as &#147;Metalclad&#148;), in connection with the
solicitation by the Board of Directors of Metalclad of proxies to be voted at
the annual meeting of Metalclad shareholders (the &#147;Meeting&#148;), to be held at
10:00&nbsp;a.m. on June&nbsp;14, 2002 at the Hyatt Regency Hotel, 1300 Nicollet Mall,
Minneapolis, Minnesota. This Proxy Statement and the accompanying Proxy were
first mailed on approximately May &#95;&#95;, 2002 to the shareholders of record of
Metalclad as of the close of business on April&nbsp;26, 2002.
</FONT>
<!-- link1 "VOTING INFORMATION" -->
<DIV align="left"><A name="a000"></A></DIV>
<P align="center"><FONT size="2"><B>VOTING INFORMATION</B>
</FONT>

<P><FONT size="2"><B><I>Who is entitled to vote?</I></B>
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The holders of common stock of Metalclad who are shareholders of record on
April&nbsp;26, 2002, may vote at the Meeting. As of April&nbsp;26, 2002, there were
7,674,015 shares of Metalclad&#146;s common stock outstanding.
</FONT>
<P><FONT size="2"><B><I>What are you voting on?</I></B>
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At the Meeting, the following matters will be voted on:
</FONT>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="93%"><FONT size="2">The election of five members of the Board of Directors of
Metalclad.</FONT></TD>
</TR>
<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="93%"><FONT size="2">An increase in the number of shares of common stock available
in Metalclad&#146;s 2000 Stock Option Plan from 1,000,000 shares to
2,000,000 shares.</FONT></TD>
</TR>
<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="93%"><FONT size="2">A change in Metalclad&#146;s state of incorporation from Delaware
to Minnesota, which includes among other things a change in the name
of Metalclad to Entrx Corporation.</FONT></TD>
</TR>
<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="93%"><FONT size="2">If the shareholders fail to approve the change in Metalclad&#146;s
state of incorporation, amendments to the Certificate of
Incorporation of Metalclad to change its name to &#147;Entrx
Corporation,&#148; and in general to increase the number of authorized
shares of preferred stock from 1,500,000 to 5,000,000.</FONT></TD>
</TR>
<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="93%"><FONT size="2">Other matters incident to the conduct of the Meeting.</FONT></TD>
</TR>
</TABLE>
<P align="center"><FONT size="2">- 1 -</FONT>
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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>




<P><FONT size="2"><B><I>How does the Board recommend you vote on the proposals?</I></B>
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board recommends you vote your shares <B>FOR </B>the election of each of
Metalclad&#146;s nominees for director, <B>FOR </B>an increase in the number of shares
available for purchase under Metalclad&#146;s 2000 Omnibus Stock Option and
Incentive Plan, <B>FOR </B>changing the state of incorporation from Delaware to
Minnesota, and <B>FOR </B>the proposed amendments to Metalclad&#146;s Articles of
Incorporation. An abstention from voting on any proposal, except for the
election of directors, is the same as a vote against the proposal.
</FONT>
<P><FONT size="2"><B><I>Who will be soliciting your vote?</I></B>
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board of Directors is soliciting your vote by mail through this Proxy
Statement. However, your vote may also be solicited in person or by telephone
by directors, officers or employees of Metalclad. In addition, Metalclad has
engaged &#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;to solicit your vote by telephone at a cost of
$&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;, plus $&#95;&#95;&#95;&#95;&#95;&#95;for each of the shareholders contacted.
Brokers/dealers, nominees, fiduciaries and other custodians will be requested
to forward soliciting materials to beneficial owners of the Company&#146;s common
stock, and will be reimbursed for their expenses in connection with that
activity. The cost of all of this solicitation, is being paid for by
Metalclad.
</FONT>
<P><FONT size="2"><B><I>How can you vote?</I></B>
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If you hold your shares as a shareholder of record, you can vote in person
at the Meeting or you can vote by mail. You are a &#147;shareholder of record&#148; if
you hold your shares directly in your own name. If you hold your shares
indirectly in the name of a bank, broker or other nominee, you are a &#147;street
name shareholder.&#148; If you are a street name shareholder, you will receive
instructions from your bank, broker or other nominee describing how to vote
your shares.
</FONT>
<P><FONT size="2"><B><I>How do you vote by Mail?</I></B>
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;You can vote by mail by following the instructions on the accompanying
proxy card, signing the card, and mailing it to the address noted on the card
or by using the accompanying envelope provided for that purpose. The proxies
named on the proxy card will vote your shares in accordance with your
instructions. If you sign and submit your proxy card without giving
instructions, the proxies named on the proxy card will vote your shares as
recommended by the Board of Directors.
</FONT>
<P><FONT size="2"><B><I>How can you revoke your proxy card?</I></B>
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If you are a shareholder of record, you can revoke your proxy card by:
</FONT>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="93%"><FONT size="2">Submitting a new proxy card;</FONT></TD>
</TR>
<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="93%"><FONT size="2">Giving written notice before the meeting to
Metalclad&#146;s Secretary stating that you are revoking your proxy
card; or</FONT></TD>
</TR>
<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="93%"><FONT size="2">Attending the Meeting and voting your shares in
person.</FONT></TD>
</TR>
</TABLE>
<P align="center"><FONT size="2">- 2 -</FONT>
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<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Merely attending the meeting without voting will not revoke your proxy.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If you are a street name shareholder, you may revoke your proxy only as
instructed by the bank, broker or other nominee holding your shares.
</FONT>
<P><FONT size="2"><B><I>How do you sign the proxy card?</I></B>
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Sign your name exactly as it appears on the proxy card. If you are
signing in a representative capacity (for example, as a guardian, trustee,
executor, administrator, attorney or the officer or agent of a company),
include your name and title or capacity. If the shares are held in custody
(for example, under the Uniform Transfer to Minors Act), the custodian should
sign, not the minor or other beneficiary. If the shares are held in joint
ownership, both owners must sign.
</FONT>
<P><FONT size="2"><B><I>What does it mean if you receive more than one proxy or voting instruction
card?</I></B>
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;It means your shares are registered differently or are in more than one
account. Please provide voting instructions for all proxy and voting
instruction cards you receive to ensure all your shares are voted.
</FONT>
<P><FONT size="2"><B><I>What constitutes a quorum?</I></B>
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A quorum of shareholders is necessary to hold a valid meeting of
shareholders. A majority of the outstanding shares, present in person or
represented by proxy, constitutes a quorum for the Meeting. Abstentions and
broker non-votes (as described below) are counted as present for establishing a
quorum.
</FONT>
<P><FONT size="2"><B><I>How can you cast your vote for directors?</I></B>
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;You may cast your vote for any nominee as a member of the Board of
Directors two ways. You may cast one vote for each share you own for each
nominee, or you may cumulate your votes. In order to cumulate your votes, you
would multiply the number of directors to be elected (five in this case) by the
number of shares you own. This is the total (or cumulative) number of votes
you can exercise. You may then cast this cumulative number of votes for one
nominee, or distribute those votes among two or more nominees in any proportion
you desire. In an uncontested election there is normally no need to cumulate
votes.
</FONT>
<P><FONT size="2"><B><I>How many votes are needed for approval of each proposal?</I></B>
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Persons nominated to be a member of the Board of Directors are elected by
a plurality. That is, since there are five directorships established by the
Board of Directors, those five nominees who receive the greatest number of
votes will be elected as members of the Board of Directors, regardless of
whether they receive the affirmative vote of the shareholders owning a majority
of the shares of common stock present in person or by proxy. In an uncontested
election, the plurality requirement is not a factor.
</FONT>
<P align="center"><FONT size="2">- 3 -</FONT>
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The increase of the number of shares of Metalclad&#146;s common stock available
for issuance under the 2000 Omnibus Stock Option and Incentive Plan requires
the affirmative vote of Metalclad&#146;s shareholders owning a majority of the
shares present at the Meeting. This includes shareholders present in person
and shareholders who have submitted proxy cards.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The change in Metalclad&#146;s state of incorporation requires the affirmative
vote of Metalclad&#146;s shareholders owning two-thirds of outstanding shares of
common stock, exclusive of those held by Metalclad&#146;s president, Wayne W.
Mills.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The amendments to Metalclad&#146;s Articles of Incorporation require the
affirmative vote of Metalclad&#146;s shareholders owning a majority of the
outstanding shares of common stock.
</FONT>
<P><FONT size="2"><B><I>What is a broker non-vote?</I></B>
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A broker non-vote occurs when a broker submits a proxy card that does not
indicate a vote for some of the proposals because the broker did not receive
instructions from the beneficial owner on how to vote on those proposals and
does not have discretionary authority to vote in the absence of instructions.
</FONT>
<P><FONT size="2"><B><I>How can you attend the Meeting?</I></B>
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If you are a shareholder of record on April&nbsp;26, 2002, you can attend the
meeting by presenting acceptable identification at the Meeting. If you are a
street name shareholder you may attend the meeting by presenting acceptable
identification along with evidence of your beneficial ownership of Metalclad
common stock.
</FONT>
<!-- link1 "Proposal &#151; No.&nbsp;1
ELECTION OF DIRECTORS" -->
<DIV align="left"><A name="a001"></A></DIV>
<P align="center"><FONT size="2"><B>Proposal No.&nbsp;1<BR>
ELECTION OF DIRECTORS</B>
</FONT>

<!-- link2 "General" -->
<DIV align="left"><A name="a002"></A></DIV>
<P align="left"><FONT size="2"><B>General</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Five persons, four of whom are currently members of Metalclad&#146;s Board of
Directors, are being nominated for election at the Meeting. Unless otherwise
directed, it is the intention of those appointees named in the accompanying
Proxy to vote for the election of Kenneth W. Brimmer, Joseph M. Caldwell, Gary
W. Copperud, Wayne W. Mills and Joseph M. Senser, as the members of Metalclad&#146;s
Board of Directors. Each nominee is being nominated for a term of
approximately one year, until the next annual meeting of Metalclad&#146;s
shareholders. Messrs.&nbsp;Brimmer, Copperud, Mills and Senser were appointed as
members of Metalclad&#146;s Board of Directors on February&nbsp;13, 2002, to fill
vacancies then existing on the Board of Directors. Mr.&nbsp;Caldwell has not
previously served as a member of the Board of Directors. J. Thomas Talbot,
Raymond J. Pacini and Daniel D. Lane, who are currently members of the Board of
Directors, are not standing for reelection.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>MANAGEMENT RECOMMENDS A VOTE IN FAVOR OF EACH OF THE PROPOSED NOMINEES
LISTED BELOW, AND THE PROXIES WILL BE VOTED IN FAVOR OF SUCH PROPOSED NOMINEES
OR AS OTHERWISE DIRECTED.</B>
</FONT>
<P align="center"><FONT size="2">- 4 -</FONT>
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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<!-- link2 "Information Concerning Nominees" -->
<DIV align="left"><A name="a003"></A></DIV>
<P align="left"><FONT size="2"><B>Information Concerning Nominees</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The name, initial year of service as a director, age and respective
position of each nominee as a director of Metalclad as of the date of this
Proxy Statement, are as follows:
</FONT>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="85%">
<TR valign="bottom">
        <TD width="6%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="28%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="48%">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center"><FONT size="1"><B>Name</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>Director Since</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>Age</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center"><FONT size="1"><B>Position</B></FONT></TD>
</TR>
<TR valign="bottom">
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center"><HR size="1" noshade></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD colspan="3"><HR size="1" noshade></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD colspan="3"><HR size="1" noshade></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
Kenneth W. Brimmer(1)(2)
</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="top"><FONT size="2">2002
</FONT></TD>
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="top"><FONT size="2">46
</FONT></TD>
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">Chairman of the Board and Director</FONT></TD>
</TR>

<TR valign="bottom">
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
Wayne W. Mills
</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="top"><FONT size="2">2002
</FONT></TD>
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="top"><FONT size="2">47
</FONT></TD>
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">President, Chief Executive Officer and a Director</FONT></TD>
</TR>

<TR valign="bottom">
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
Gary W. Copperud(1)(2)
</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="top"><FONT size="2">2002
</FONT></TD>
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="top"><FONT size="2">44
</FONT></TD>
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">Director</FONT></TD>
</TR>

<TR valign="bottom">
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
Joseph M. Senser(1)(2)
</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="top"><FONT size="2">2002
</FONT></TD>
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="top"><FONT size="2">45
</FONT></TD>
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">Director</FONT></TD>
</TR>

<TR valign="bottom">
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
Joseph M. Caldwell
</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="top"><FONT size="2">N/A
</FONT></TD>
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="top"><FONT size="2">34
</FONT></TD>
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">Nominee As Director</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;&nbsp;&nbsp;&nbsp;Member of the Compensation Committee since February&nbsp;13, 2002.<BR>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;&nbsp;&nbsp;&nbsp;Member of the Nominating Committee since February&nbsp;13, 2002.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The business experience, principal occupations and directorships in
publicly-held companies for the persons nominated to be directors of Metalclad
are set forth below.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Kenneth W. Brimmer was the chief executive officer and chief financial
officer of Active IQ Technologies, Inc., from March, 2000 until
December, 2001, and continues to act as its chairman of the board of
directors.
Active IQ Technologies, Inc., which is headquartered in Minnetonka, Minnesota,
is engaged in providing accounting and financial management software and
services, as well as other software and e-business solutions, to small and
medium sized companies, and is listed on the NASDAQ System under the symbol
AIQT. Until April, 2000, Mr.&nbsp;Brimmer was an executive officer of Rainforest
Cafe, Inc., which had offices in Hopkins, Minnesota, serving as its treasurer
from 1995, and its president from April, 1997. Rainforest Cafe, Inc. was the
owner and operator of the &#147;Rainforest Cafe&#148; restaurants located throughout the
United States and in several foreign countries. From 1990 until 1997, Mr.
Brimmer was also engaged in an executive position with Grand Casino, Inc., in
Minneapolis, Minnesota, which primarily owned or managed gaming casinos in
Minnesota, Mississippi and Louisiana. Mr.&nbsp;Brimmer is a certified public
accountant. Mr. Brimmer currently serves on the board of directors of
Rainforest Cafe, Inc., a wholly-owned subsidiary of Landry's
Restaurants, Inc., New Horizons Kid Quest, Inc., Hypertension
Diagnostics, Inc. and Sterion Incorporated. Mr. Brimmer is currently
the chairman of the board of directors of both Sterion Incorporated
and Hypertension Diagnostics, Inc.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Wayne W. Mills has been the president and chief executive officer of
Metalclad since February&nbsp;13, 2002. Mr.&nbsp;Mills is the owner and manager of Blake
Capital Partners, LLC, which he formed in September, 1999, primarily to provide
consulting services in the areas of capital formation, and mergers and
acquisitions. From May, 1991 until September, 1999, Mr.&nbsp;Mills was a registered
representative with RJ Steichen &#038; Co., a broker/dealer in Minneapolis,
Minnesota.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Joseph M. Senser is the owner of Joe Senser&#146;s Sports Grill, Inc. which
owns and operates three restaurants in the Minneapolis, Minnesota metropolitan
area. Mr.&nbsp;Senser opened his first restaurant in 1987. From 1995 until August,
2000, Mr.&nbsp;Senser also acted as director of community relations for Grand Casino
Mille Lacs and Grand Casino Hinckley, which are native American owned and
operated gaming casinos in north-central Minnesota.
</FONT>
<P align="center"><FONT size="2">- 5 -</FONT>
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<P><FONT size="2">&nbsp;&nbsp;Since August, 2000, Mr.&nbsp;Senser has acted as a manager of two related non-profit organizations; the
Milton Hershey School and the Hershey Trust. The Milton Hershey School, with funding
from the Hershey Trust, provides K through 12 education and living facilities,
in Hershey, Pennsylvania, for financially disadvantaged children.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gary W. Copperud has been the president and general manager of CMM
Properties, LLC, in Fort Collins, Colorado, since 1983. CMM Properties, LLC is
primarily engaged in making investments in real estate and equity securities,
and the management of those investments.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Joseph M. Caldwell has been Chief Executive Officer and a member of the
board of directors of Marix Technologies, Inc. since May, 2000. Marix is a
privately held company based in Minneapolis, Minnesota that develops and
markets software designs to facilitate and control offsite access to software
applications and access to information. From March, 1995 to May, 2000, Mr.
Caldwell was the chief executive officer of US Internet Corporation, a
Minneapolis-based privately held Internet service provider, with service in
over 1,300 cities nationwide and over 110 cities internationally. In June,
1998, he co-founded Net Lifestyles, Inc., and has served as Co-Chairman from
June, 1998 to the present. Net Lifestyles is a privately held direct sales
company marketing websites, e-commerce solutions, and Internet access to
individuals and small businesses.
</FONT>
<!-- link2 "Information Concerning Directors Not Standing for Re-election" -->
<DIV align="left"><A name="a004"></A></DIV>
<P align="left"><FONT size="2"><B>Information Concerning Directors Not Standing for Re-election</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;J. Thomas Talbot, is the owner of The Talbot Company, an investment and
asset management company and has been the chief executive officer of HAL, Inc.,
the parent company of Hawaiian Airlines. He currently serves on the boards of
directors of The Hallwood Group, Inc., Fidelity National Financial, Inc.,
California Costal Communities, Inc., Competisys LLC and The Pacific Club. Mr.
Talbot has been a director and served on the Audit Committee of Metalclad since
March, 1999, and served on the Compensation Committee from March, 1999 until
February, 2002.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Raymond J. Pacini, is the president, chief executive officer, and a
director of California Coastal Communities, Inc. (formerly Koll Real Estate
Group, Inc.), where he has been since 1990. Prior to 1998, he was the
executive vice president and chief financial officer of Koll Real Estate Group,
Inc. Mr.&nbsp;Pacini has been a director and served on the Audit Committee of
Metalclad since March, 1999, and served on the Compensation Committee from
March, 1999 until February, 2002.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Daniel D. Lane, has been the chief executive officer and principal owner
of Lane/Kuhn Pacific, Inc. since 1983. Lane/Kuhn Pacific, Inc., with offices
in Newport Beach, California, is involved in the construction of condominiums
and single family homes, and the development of master-planned communities.
Mr.&nbsp;Lane has been in the development of single family home projects since 1960.
Mr.&nbsp;Lane has been a director and served on the Audit Committee of Metalclad
since October, 2001.
</FONT>
<P align="center"><FONT size="2">- 6 -</FONT>
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<!-- link2 "Meetings of Board of Directors" -->
<DIV align="left"><A name="a005"></A></DIV>
<P align="left"><FONT size="2"><B>Meetings of Board of Directors</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During the year ended December&nbsp;31, 2001 the Board of Directors held five
meetings, and acted by unanimous written consent on three occasions. Each
member of the Board of Directors was present for more than 75% of the meetings. None of the current
nominees proposed for election to the Board of Directors served as a director
in the year ended December&nbsp;31, 2001.
</FONT>
<!-- link2 "Committees of Board of Directors" -->
<DIV align="left"><A name="a006"></A></DIV>
<P align="left"><FONT size="2"><B>Committees of Board of Directors</B>
</FONT>

<!-- link3 "Audit Committee." -->
<DIV align="left"><A name="a007"></A></DIV>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Audit Committee.</I></B> The Audit Committee has the
responsibility of (i)&nbsp;reviewing audited annual financial statements, and reports and financial
statements submitted to any governmental body or disclosed to the public; (ii)
consulting with Metalclad&#146;s independent auditors on various audit and financial
personnel issues, including questions of independence, disagreement between the
auditors and Metalclad&#146;s financial personnel, review of internal financial
controls: (iii)&nbsp;recommend to the Board of Directors the engagement of
independent accountants to audit the financial statements of Metalclad, and
review the performance of such accountants; (iv)&nbsp;review and consider the
appropriateness of accounting principals or practices applied to Metalclad&#146;s
financial statements; and (v)&nbsp;review Metalclad&#146;s financial personnel and
organization. The Audit Committee held two meetings during the year ended
December&nbsp;31, 2001.
</FONT>
<!-- link3 "Compensation Committee." -->
<DIV align="left"><A name="a008"></A></DIV>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Compensation Committee.</I></B> The Compensation Committee, which consists solely
of non-employee directors, has the obligation to adopt policies applicable to
the establishment and the compensation of Metalclad&#146;s executive officers, and
has authority to consider and recommend to the Board of Directors the salaries,
bonuses, share options, and other forms of compensation of those executive
officers. The Compensation Committee held two meetings during the year ended
December&nbsp;31, 2001.
</FONT>
<!-- link3 "Nominating Committee." -->
<DIV align="left"><A name="a009"></A></DIV>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Nominating Committee.</I></B> Metalclad&#146;s Nominating Committee was established by
the Board of Directors in February, 2002. The Nominating Committee has the
authority to consider the qualifications of and recommend each candidate and
incumbent for election as a director of Metalclad and to nominate candidates to
fill Board of Directors vacancies. In the future, the Nominating Committee
will consider shareholder nominations of candidates for election as directors
of Metalclad upon receipt of a written request provided to Metalclad&#146;s
Nominating Committee no later than December&nbsp;31 of the calendar year preceding
the next annual meeting of shareholders together with the written consent of
such person to serve as a director.
</FONT>
<!-- link2 "Director Compensation" -->
<DIV align="left"><A name="a010"></A></DIV>
<P align="left"><FONT size="2"><B>Director Compensation</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;J. Thomas Talbot, Raymond J. Pacini and Daniel D. Lane as non-employee
members of the Board of Directors during 2001 and through the date of the
Meeting, are each entitled to receive $2,500 per calendar quarter, $1,000 for
attendance at each Board of Directors meeting and $500 for attendance at each
meeting of a Committee of the Board of Directors. For 2001, Messrs.&nbsp;Talbot,
Pacini and Lane received $14,000, $14,000 and $5,000, respectively, as members
of the Board of Directors. In 2001 Metalclad granted stock options to purchase
25,000 shares of Metalclad&#146;s Common Stock to each of J. Thomas
</FONT>
<P align="center"><FONT size="2">- 7 -</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>


<P><FONT size="2">Talbot, Raymond J. Pacini and Daniel D. Lane. In addition, options to purchase 20,000 shares
of Metalclad common stock were granted to Messrs.&nbsp;Talbot and Pacini in June,
2001, as members of the compensation committee of the Board of Directors under
the terms of Metalclad&#146;s 2000 Omnibus Stock Option and Incentive Plan. Options
for 45,000 shares were similarly granted to Bruce Haglund who was a member of
the Board of Directors and compensation committee through February&nbsp;13, 2002.
The options discussed in this paragraph are exercisable at $2.00 per share, are fully vested and expire
in 2011. (See &#147;CERTAIN TRANSACTIONS &#151; Vesting of Directors Options&#148;)
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gary W. Copperud, Kenneth W. Brimmer and Joseph M. Senser, who were
elected as members of the Board of Directors on February&nbsp;13, 2002, were each
granted options to purchase 50,000 shares of Metalclad&#146;s Common Stock at a
price of $2.50 per share on March&nbsp;4, 2002; 16,700 shares of which are
immediately exercisable, an additional 16,700 shares of which will be
exercisable after March&nbsp;4, 2003, and all shares which will be exercisable after
March&nbsp;4, 2004. These options will vest only while each optionee remains as a
member of the Board of Directors, and expire on March&nbsp;5, 2009. In addition,
the Board of Directors established a plan whereby each member of Metalclad&#146;s
Board of Directors would receive a stock option for 10,000 shares of
Metalclad&#146;s common stock in January of each year, at the then fair market value
of the shares. The options granted to Messrs.&nbsp;Copperud, Brimmer and Senser
will only be effective if Proposal No.&nbsp;2 below, increasing the number of shares
available for option grants under Metalclad&#146;s 2000 Omnibus Stock Option and
Incentive Plan, is adopted by the shareholders. There is no current plan to
pay any cash compensation to the members of the Board of Directors elected at
the Meeting.
</FONT>
<!-- link1 "Proposal &#151; No.&nbsp;2
INCREASE OF SHARES UNDER STOCK OPTION PLAN" -->
<DIV align="left"><A name="a011"></A></DIV>
<P align="center"><FONT size="2"><B>Proposal No.&nbsp;2<BR>
INCREASE OF SHARES UNDER STOCK OPTION PLAN</B>
</FONT>

<!-- link2 "Proposal" -->
<DIV align="left"><A name="a012"></A></DIV>
<P align="left"><FONT size="2"><B>Proposal</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board of Directors has proposed to amend Article&nbsp;VI of Metalclad&#146;s
2000 Omnibus Stock Option and Incentive Plan (the &#147;Plan&#148;) to change the number
of shares of common stock authorized for issuance under the Plan from 1,000,000
to 2,000,000 shares of common stock. The proposed amendment to the second
sentence of Article&nbsp;VI of Metalclad&#146;s Plan reads as follows:
</FONT>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
        <TD width="2%"></TD>
        <TD width="98%"></TD>
</TR>
<TR valign="top">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&#147;The aggregate number of shares which may be issued as Awards or
upon the exercise of Award under the Plan shall not exceed
2,000,000 Shares.&#148;</FONT></TD>
</TR>

</TABLE>
<!-- link2 "Reason for Proposal." -->
<DIV align="left"><A name="a013"></A></DIV>
<P align="left"><FONT size="2"><B>Reason for Proposal.</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of the date of this Proxy Statement, there were outstanding options
granted under the Plan to purchase an aggregate of 990,000 of Metalclad&#146;s
shares of common stock. These options have been granted under the Plan to the
executive officers, employees and directors of Metalclad and certain of its
subsidiaries. Metalclad&#146;s management believes that granting options for the
purchase of common stock of Metalclad will assist it in attracting and
retaining persons of desired ability as key employees and directors of
Metalclad and its subsidiaries, and to motivate such persons to exert their
best efforts on behalf of Metalclad and its subsidiaries. Adoption of the
proposed amendment to the Plan would authorize a
</FONT>
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<P><FONT size="2">sufficient number of shares of Metalclad&#146;s common stock for options to be granted to such individuals in the
future.
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, the
Board of Directors of Metalclad granted seven year options for 50,000
shares each to Kenneth Brimmer, Gary Copperud and Joseph Senser, at
$2.50 per share, one-third of which will vest immediately, and the
remainder which will vest over two years. The Board of Directors also
granted options to Wayne Mills and Brian Niebur for 150,000 and
50,000 shares, respectively, at $2.50 per share, vesting ratably over
three years. Mr. Mills&#146; option is for five years, and Mr. Niebur&#146;s
option is for seven years. These options are subject to the approval
by Metalclad&#146;s shareholders of the proposed increase in shares
available for options under the Plan.
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>MANAGEMENT RECOMMENDS ADOPTION OF THE PROPOSED AMENDMENT TO THE PLAN, AND
THE PROXIES WILL BE VOTED IN FAVOR OF SUCH PROPOSAL OR AS OTHERWISE DIRECTED.</B>
</FONT>
<!-- link2 "Summary Plan Description" -->
<DIV align="left"><A name="a014"></A></DIV>
<P align="left"><FONT size="2"><B>Summary Plan Description</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board of Directors of Metalclad adopted the Plan in September of 2000
for key employees and directors of Metalclad and its subsidiaries, a group
currently consisting of approximately 10 persons. The Plan was approved by the
shareholders of Metalclad in November of 2000. The Plan allows for the
granting of Awards involving Metalclad&#146;s common stock in the form of options to
purchase stock, stock appreciation rights, stock payments and other similar
rights. Options may be granted under the Plan as either incentive stock options
that qualify for favorable tax treatment upon exercise afforded by Section&nbsp;422
of the Internal Revenue Code of 1986, as amended, or non-statutory options that
do not qualify for such favorable tax treatment. The Plan may be administered
by the Board of Directors or by a committee comprised of two or more members of
the Board of Directors. The Plan is currently administered by the Board of
Directors. The term &#147;Committee&#148; when used in this discussion of the Plan
means the Board of Directors where, as is currently the case, no committee has
been established.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Awards may be granted under the Plan under such terms and granted under
the Plan conditions as the Committee may determine from time to time, provided
that options must be exercised within a period of not more than ten years after
the date the option is granted (except that options granted to an owner of 10%
or more of Metalclad&#146;s outstanding shares of common stock must be exercised
within five years from the date the option is granted). Options will generally
be granted after recommendation by management. In general, Metalclad will not
receive any cash or other consideration for the granting or extension of
options, but options are generally issued in recognition of services rendered
or to be rendered to Metalclad or its subsidiaries.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;An optionee granted an incentive stock option or stock appreciation right
must remain an employee of Metalclad or its subsidiary in order to retain any
incentive stock option rights not exercisable. If the optionee&#146;s employment is
terminated (other than by disability or discharge for cause) such optionee or
his estate, in the case of death, may, within three months of such termination,
or if an optionee&#146;s employment is terminated due to disability, such optionee
may, within 12&nbsp;months of such termination, exercise any unexercised portion of
his or her option to the extent exercisable at the time of termination. If an
optionee is discharged for cause, his or her option terminates as of the date
of discharge.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The exercise price of the shares of common stock covered by any incentive
stock option granted under the Plan cannot be less than the fair market value
of the shares on the date the option is granted, as determined by the
Committee, except that in the case of owners of 10% or more of Metalclad&#146;s
outstanding shares of common stock, the exercise price may not be less than
110% of the fair market value of the shares on the date the option is granted.
The exercise price of the shares of common stock covered by a non-statutory
stock option
</FONT>
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<P><FONT size="2">granted under the Plan cannot be less than 85% of the fair market
value of the shares on the date the option is granted, as determined by the
Committee. Options may be exercised through the payment of cash, or with
Metalclad&#146;s consent, by the transfer of Metalclad&#146;s shares of common stock
already owned by the optionee, at the fair market value on the date of
exercise, or any combination of cash and shares of common stock. Except for
non-statutory options, the aggregate fair market value of shares of common
stock with respect to which an incentive stock option is exercisable
for the first time during any calendar year by any one person may not
exceed $100,000. Options need not be exercised in the order granted.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under the Plan, each member of the Board of Directors who is a member of
the Compensation Committee on June 1 of each year, during the term of the Plan,
is entitled to a &#147;formula award&#148; in the form of a non-statutory stock option
for 20,000 shares of common stock at the fair market value as of that date.
These options vest ratably over a three year period. The term of the options
is at the discretion of the Board of Directors, within their limits described
above. All formula award options vest upon a change of control of Metalclad.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock appreciation rights are rights, granted to an employee under the
Plan, to receive cash or Metalclad common stock based upon and equal to the
market price increase of Metalclad&#146;s common stock over a fixed period. No
stock appreciation right has been granted under the Plan.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock purchase agreements are rights granted to an employee to purchase
Metalclad&#146;s common stock at a discount of not more than 75% of the fair market
value of Metalclad&#146;s common stock, executable within 60&nbsp;days of the date the
right was granted. No rights under a stock purchase agreement have been
granted.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board of Directors may at any time suspend or terminate the Plan or
modify the Plan to make certain administrative changes, such as changes imposed
by changing tax laws. The Board of Directors may not materially (i)&nbsp;increase
the benefits accruing to participants under the Plan, (ii)&nbsp;increase the maximum
number of shares of common stock as to which options may be granted under the
Plan, or (iii)&nbsp;modify the requirements as to eligibility for participation in
the Plan without further approval by the shareholders of Metalclad.
</FONT>
<!-- link2 "Federal Income Tax Consequences" -->
<DIV align="left"><A name="a015"></A></DIV>
<P align="left"><FONT size="2"><B>Federal Income Tax Consequences</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following is a general summary of Metalclad&#146;s understanding of the
federal income tax consequences of Awards granted under the Plan.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A person receiving an option under the Plan (an &#147;Optionee&#148;) will not
realize taxable compensation income upon the grant of an incentive stock
option. In addition, assuming certain holding period requirements are met, an
optionee will not realize regular taxable income upon the exercise of an
incentive stock option if the option is exercised while the optionee is an
employee of Metalclad or any of its subsidiaries or within three months after
terminating employment (or within one year after terminating employment by
reason of permanent and total disability). The amount by which the fair market
value of the shares of common stock exceeds the exercise price of the options
at the time of exercise is an item
</FONT>
<P align="center"><FONT size="2">- 10 -</FONT>
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<P><FONT size="2">of tax preference for purposes of the alternative minimum tax, which, for some optionees, could trigger liability for
the alternative minimum tax. To qualify for favorable tax treatment, shares of
common stock acquired upon exercise of any incentive stock option must be held
for at least two years from the date of grant of the option and one year from
the date of exercise. Gain upon the sale of shares of common stock acquired
pursuant to exercise of an incentive stock option, but not meeting the holding
period requirements described above (referred to hereafter as a &#147;disqualifying
disposition&#148;), will be taxed at ordinary income rates up to
the amount of gain which was deferred upon exercise of the incentive stock
option. Gain in excess of such amount will qualify as long-term capital gain.
Exercise of an incentive stock option does not entitle Metalclad to an income
tax deduction. However, any ordinary compensation income which an optionee
realizes when shares of common stock are sold in a disqualifying disposition
will result in Metalclad being allowed a corresponding income tax deduction at
that time.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;An optionee will not realize taxable compensation income upon the grant of
a non-statutory stock option. In general, an optionee who exercises a
non-statutory stock option will realize taxable compensation income at that
time equal to the difference between the fair market value of the shares of
common stock on the date of exercise and the exercise price of the option. Any
ordinary compensation income realized by an optionee upon exercise of a
non-statutory stock option will result in Metalclad being allowed a
corresponding income tax deduction at that time. When an optionee disposes of
shares of common stock acquired by the exercise of a non-statutory stock
option, any amount realized which is in excess of the fair market value of the
shares of common stock on the date of exercise will be treated as short-term or
long-term capital gain, depending on the holding period of such shares.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;An employee will recognize ordinary compensation income for tax purposes
when the employee receives cash or stock as a result of a stock appreciation
right. An employee will recognize ordinary compensation income upon the
receipt of a right under a stock purchase agreement to the extent that the
purchase price is less than 85% of the fair market value of Metalclad&#146;s common
stock on the date the right is granted; otherwise the right is treated
substantially the same as a non-statutory stock option. Whenever the employee
recognizes ordinary compensation income, Metalclad will be allowed a
corresponding income tax deduction of the same amount.
</FONT>
<!-- link1 "Proposal &#151; No.&nbsp;3
CHANGE STATE OF INCORPORATION TO MINNESOTA" -->
<DIV align="left"><A name="a016"></A></DIV>
<P align="center"><FONT size="2"><B>Proposal No.&nbsp;3<BR>
CHANGE STATE OF INCORPORATION TO MINNESOTA</B>
</FONT>

<!-- link2 "Proposal" -->
<DIV align="left"><A name="a017"></A></DIV>
<P align="left"><FONT size="2"><B>Proposal</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board of Directors has proposed, subject to the approval of the
shareholders and subject to the right of the Board of Directors to determine
not to proceed in certain circumstances, that Metalclad change its state of
incorporation from the state of Delaware to the state of Minnesota (the
&#147;Reincorporation&#148;) pursuant to the Agreement and Plan of Merger and
Reincorporation (the &#147;Merger Agreement&#148;) between Metalclad and Entrx
Corporation, a Minnesota corporation (&#147;Entrx&#148;). Approval of the
Reincorporation will require the affirmative vote of shareholders owning
two-thirds of the total shares outstanding excluding the shares beneficially
owned by Wayne W. Mills, Metalclad&#146;s President, and his
</FONT>
<P align="center"><FONT size="2">- 11 -</FONT>
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<P><FONT size="2">spouse, or approximately 3,969,344 shares. The following discussion summarizes certain
aspects of the Reincorporation and the Merger Agreement. This summary is not
intended to be complete and is subject to, and qualified in its entirety by
reference to the &#147;COMPARISON OF MINNESOTA AND DELAWARE CORPORATE LAW&#148; attached
as Exhibit&nbsp;A, the Merger Agreement, a copy of which is attached as Exhibit&nbsp;B,
the Articles of Incorporation of Entrx (the &#147;Entrx Articles&#148;), a copy of which
is attached as Exhibit&nbsp;C, and the Bylaws of Entrx (the &#147;Entrx Bylaws&#148;), a copy
of which is attached as Exhibit&nbsp;D.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Copies of the current Certificate of Incorporation and the Bylaws of
Metalclad (the &#147;Metalclad Certificate&#148; and the &#147;Metalclad Bylaws,&#148;
respectively) will be sent to shareholders, without charge, upon oral or
written request made in accordance with the instructions at the end of this
proxy statement.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>MANAGEMENT RECOMMENDS A VOTE IN FAVOR OF THE PROPOSED REINCORPORATION, AND
THE PROXIES WILL BE VOTED IN FAVOR OF SUCH REINCORPORATION OR AS OTHERWISE
DIRECTED.</B>
</FONT>
<!-- link2 "Reasons for Two Thirds Vote Requirement" -->
<DIV align="left"><A name="a018"></A></DIV>
<P align="left"><FONT size="2"><B>Reasons for Two Thirds Vote Requirement</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Wayne W. Mills, Metalclad&#146;s President and a member of the Board of
Directors began acquiring Metalclad common stock in the open market as an
investment in November, 2000. By August&nbsp;31, 2001, Mr.&nbsp;Mills acquired 15% of
Metalclad&#146;s outstanding common stock. Under certain provisions of the Delaware
Corporation Law (the &#147;Delaware Law&#148;), if a shareholder acquires 15% of the
outstanding common stock of a corporation incorporated under the Delaware Law
without prior approval of the Board of Directors of that corporation, Metalclad
is precluded from entering into certain transactions without the affirmative
vote of holders of at least two-thirds of the shares of Metalclad&#146;s outstanding
common stock, excluding the shares owned by the 15% or greater shareholder.
The restriction includes any merger or consolidation of Metalclad and certain
of its subsidiaries with any other corporation which might be considered as
caused by Mr.&nbsp;Mills under the statute, and the receipt by Mr.&nbsp;Mills of any
loan, advance, guarantee, pledge or other financial benefit. Since the term
&#147;caused by&#148; in Section&nbsp;203 is not clear, and it could be interpreted to mean
that any transaction is &#147;caused by&#148; Mr.&nbsp;Mills, so long as he is the President
and a director of Metalclad, the only method of ensuring that the prohibition
is not applicable to Metalclad and Mr.&nbsp;Mills is to obtain a two-thirds vote of
Metalclad&#146;s common stock. (See &#147;CERTAIN TRANSACTIONS &#151; Change in Control and
Loan to Affiliate of Wayne Mills&#148;)
</FONT>
<!-- link2 "Reasons for the Reincorporation" -->
<DIV align="left"><A name="a019"></A></DIV>
<P align="left"><FONT size="2"><B>Reasons for the Reincorporation</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The management of Metalclad believes that it is in the best interests of
the shareholders of Metalclad to reincorporate under the Minnesota Business
Corporate Act (the &#147;Minnesota Act&#148;) because Metalclad now has its principal
offices in Minnesota, the management of Metalclad is more familiar with the
laws of Minnesota, incorporation in Minnesota will result in a significant
saving to Metalclad, and the provisions of Section&nbsp;203 of the Delaware Law will
no longer be applicable.
</FONT>
<P align="center"><FONT size="2">- 12 -</FONT>
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<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A large number of corporations seek to incorporate in Delaware because it
is generally believed that the Delaware courts have developed considerable
expertise in dealing with corporate issues, and that a substantial body of case
law construing the Delaware General Corporation Law and establishing public
policy has developed, making the application of those laws more predictable.
While the perception is widely recognized, the Board of Directors does not
believe that it presents a compelling argument to stay incorporated in
Delaware. In addition, it is often perceived that Delaware Law is more
favorable to management than the laws in many other states, including
Minnesota.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The statutes governing corporations of many other states have been updated
or revised, including the Minnesota Act, which was totally revised effective in
1984. The Minnesota Act allows for significant flexibility in the conduct of
affairs of a corporation, and in many instances is substantially similar in
that respect to the Delaware Law. Because of these similarities, and the
recognized experience of the Delaware courts and the breadth of Delaware case
law, the courts of other states, including Minnesota, often look to Delaware
case law when an issue is not fully developed in that state, making
incorporation in Delaware less advantageous.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;By reincorporating in Minnesota, the Board of Directors believes Metalclad
will effect a significant savings. The state of Delaware derives a significant
amount of its revenues by charging each corporation incorporated in that state
a substantial franchise tax based upon the corporation&#146;s capitalization. For
2000 and 2001, Metalclad paid $29,600 and $41,400, respectively, to the state
of Delaware. Minnesota has no such franchise fee. Delaware Law requires that
Metalclad maintain an agent for service of process in Delaware. Since
Metalclad&#146;s offices are now in Minnesota, there would be no requirement to
maintain an agent in Delaware. The management of Metalclad has engaged legal
counsel convenient to its new corporate offices. Because of the familiarity of
management and Metalclad&#146;s legal counsel with the laws of Minnesota, the Board
of Directors believes that Minnesota is a better forum for its incorporation
and eliminates a requirement to engage Delaware legal counsel in complicated
issues of Delaware law.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The management of Metalclad is developing a strategy to change the focus
of, and diversify, Metalclad&#146;s business in an attempt to improve shareholder
value. In attempting to implant this strategy, transactions may be proposed
which could be thwarted by the existence of Article&nbsp;203 of the Delaware Law.
Reorganization under the Minnesota Act would eliminate this possibility.
Reorganization in Minnesota will not have any affect on the applicability of
Section&nbsp;203 of the Delaware Law on the transactions described under &#147;CERTAIN
TRANSACTIONS &#151; Loan to Affiliate of Wayne Mills.&#148;
</FONT>
<!-- link2 "Principal Features and Mechanics of the Reincorporation" -->
<DIV align="left"><A name="a020"></A></DIV>
<P align="left"><FONT size="2"><B>Principal Features and Mechanics of the Reincorporation</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The proposal will be effected by the merger (the &#147;Merger&#148;) of Metalclad
into Entrx, which is incorporated under Minnesota Law as a wholly-owned
subsidiary of Metalclad for purposes of the Merger. Entrx will be the
surviving corporation in the Merger and will continue under the name &#147;Entrx
Corporation.&#148; Metalclad, as a corporate entity, will cease to exist as a
result of the Merger.
</FONT>
<P align="center"><FONT size="2">- 13 -</FONT>
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<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Merger will not become effective until the Reincorporation is approved
by the Shareholders, and an appropriate certificate of merger is filed with the
Secretary of State of the state of Delaware and articles of merger are filed
with the Secretary of State of the state of Minnesota. At the effective time
of the Merger (the &#147;Effective Time&#148;), Metalclad will be governed by the Entrx
Articles, the Entrx Bylaws and the Minnesota Act.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At the Effective Time, each outstanding share of Metalclad common stock,
par value $.10 per share, of Metalclad will be converted into one share of
common stock, $0.01 par value per share, of Entrx. At the Effective Time, the
existing Shareholders of Metalclad will automatically become Shareholders of
Entrx, and Entrx will continue to operate the business of Metalclad under the
name &#147;Entrx Corporation.&#148; Metalclad stock certificates will be deemed to
represent the same number of Entrx shares of common stock as were represented
by such Metalclad stock certificates prior to the Reincorporation.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;After the Merger is consummated, American Stock Transfer and Trust
Company, 59 Maiden Lane, New York, NY 10038, will act as exchange agent to
effect the exchange of Metalclad common stock certificates for Entrx common
stock certificates. After the Effective Time, Entrx will mail to all
Shareholders a Letter of Transmittal with respect to the exchange of shares.
Upon surrender of all the certificates of Metalclad stock registered in the
name of a holder of such certificates (or an indemnity satisfactory to Entrx
that such certificates are lost, stolen or destroyed), together with a properly
completed letter of transmittal, Entrx will mail to such holder a certificate
or certificates representing shares of common stock of Entrx. <B>DO NOT SEND IN
YOUR CERTIFICATES UNTIL AFTER YOU RECEIVE TRANSMITTAL DOCUMENTS. </B>Until such
exchange is completed, previously outstanding Metalclad stock will constitute
&#147;good delivery&#148; in connection with sales or transfers through a broker, or
otherwise, of shares of Entrx,
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Reincorporation will not result in any change to the daily business
operations of Metalclad or the present location of the principal executive
offices of Metalclad in Minneapolis, Minnesota. The consolidated financial
condition and results of operations of Entrx immediately after the consummation
of the Reincorporation will be substantially identical to that of Metalclad
immediately prior to the consummation of the Reincorporation.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, at the Effective Time, the Board of Directors of Entrx will
consist of those persons immediately prior to the Merger who are directors of
Metalclad (all of whom are nominees for reelection at the Meeting), and the
individuals serving as executive officers of Metalclad immediately prior to the
Merger will serve as executive officers of Entrx immediately following the
Merger.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the Merger Agreement, each option or right to purchase a share
of Metalclad common stock outstanding prior to Effective Time will become an
option or right to purchase a share of Entrx common stock upon the same terms
and conditions as existed immediately prior to the Effective Time of the
Merger.
</FONT>
<!-- link2 "Comparison of Shareholders&#146; Rights" -->
<DIV align="left"><A name="a021"></A></DIV>
<P align="left"><FONT size="2"><B>Comparison of Shareholders&#146; Rights</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The rights of Metalclad&#146;s shareholders are currently governed by the
Delaware Law, and Metalclad&#146;s Certificate and Bylaws. Upon completion of the
Reincorporation, the old
</FONT>
<P align="center"><FONT size="2">- 14 -</FONT>
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<P><FONT size="2">Metalclad shareholders will become Entrx shareholders
and will be governed by the Minnesota Act, and the Entrx Articles and Entrx
Bylaws. Some of the material differences between Minnesota Act and Delaware
Law, and the rights of a Metalclad shareholder under the Metalclad Certificate
and Metalclad Bylaws, as compared to the rights of an Entrx shareholder under
the Entrx Articles and Entrx Bylaws. are summarized in the &#147;COMPARISON OF
MINNESOTA AND DELAWARE CORPORATE LAW&#148; attached as Exhibit&nbsp;A. This discussion is not intended to be a complete
statement of the differences affecting the rights of Shareholders and is
qualified in its entirety by reference to the corporate documents of each
corporation.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A vote in favor of the proposed Reincorporation will also constitute
approval of the Entrx Articles and Bylaws. In addition, a vote in favor of the
proposed Reincorporation will constitute approval of the assumption by Entrx of
the Metalclad benefit plans, including the 2000 Omnibus Stock Option and
Incentive Plan, and the contractual obligations of Metalclad, and the
substitution of shares of Entrx common stock for shares of Metalclad common
stock, as the security to be received upon exercise of options granted in the
future under the existing 2000 Omnibus Stock Option and Incentive Plan.
</FONT>
<!-- link2 "Tax Consequences of the Reincorporation" -->
<DIV align="left"><A name="a022"></A></DIV>
<P align="left"><FONT size="2"><B>Tax Consequences of the Reincorporation</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Reincorporation is intended to be tax-free under the Internal Revenue
Code of 1986, as amended. Accordingly, it is anticipated that no gain or loss
will be recognized by the Metalclad shareholders for federal income tax
purposes as a result of the consummation of the Reincorporation. Each such
shareholder will have a tax basis in the shares of capital stock of Entrx equal
to the tax basis of the shares of capital stock as a capital asset, and each
shareholder&#146;s holding period for the shares of capital stock of Entrx will
include the holding period of the shares of capital stock deemed exchanged
therefor. No gain or loss will be recognized for federal income tax purposes
by Entrx, and Entrx will succeed, without adjustment to the tax attributes of
Metalclad. Metalclad has not obtained a ruling from the Internal Revenue
Service or an opinion of legal or tax counsel with respect to the consequences
of the Reincorporation.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The foregoing is only a summary of anticipated federal income tax
consequences. SHAREHOLDERS SHOULD CONSULT THEIR OWN TAX ADVISERS REGARDING THE
SPECIFIC TAX CONSEQUENCES TO THEM OF THE MERGER, INCLUDING THE APPLICABILITY OF
THE LAWS OF ANY STATE OR OTHER JURISDICTION.
</FONT>
<!-- link1 "Proposal &#151; No.&nbsp;4
AMEND ARTICLES OF INCORPORATION" -->
<DIV align="left"><A name="a023"></A></DIV>
<P align="center"><FONT size="2"><B>Proposal No.&nbsp;4<BR>
AMEND ARTICLES OF INCORPORATION</B>
</FONT>

<!-- link2 "Contingent Nature of Proposal" -->
<DIV align="left"><A name="a024"></A></DIV>
<P align="left"><FONT size="2"><B>Contingent Nature of Proposal</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If the Metalclad shareholders fail to approve Proposal No.&nbsp;3, relating to
reincorporating Metalclad as a Minnesota corporation, by the requisite vote of
two-thirds of the outstanding shares, exclusive of those held by Wayne W.
Mills, Proposal 3 will be deemed not to have passed and Proposal No.&nbsp;4, to
amend Metalclad&#146;s Certificate of Incorporation, will be presented to the
shareholders for approval at the Meeting. If Proposal No.&nbsp;3 is passed by the
requisite vote, Proposal No.&nbsp;4 will not be voted upon.
</FONT>
<P align="center"><FONT size="2">- 15 -</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<!-- link2 "Proposal" -->
<DIV align="left"><A name="a025"></A></DIV>
<P align="left"><FONT size="2"><B>Proposal</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board of Directors is proposing that the Certificate of Incorporation
of Metalclad be amended to change the name of Metalclad to Entrx Corporation,
and to increase the authorized capital stock of Metalclad from 81,500,000 shares, consisting of
80,000,000 shares of common stock having a par value of $0.10 per share, and
1,500,000 shares of preferred stock having a par value of $10.00, to 85,000,000
shares, consisting of 80,000,000 shares of common stock having a par value of
$0.10 per share, and 5,000,000 shares of preferred stock having a par value of
$1.00 per share.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>MANAGEMENT RECOMMENDS A VOTE IN FAVOR OF THE PROPOSED AMENDMENTS TO
METALCLAD&#146;S CERTIFICATE OF INCORPORATION, AND THE PROXIES WILL BE VOTED IN
FAVOR OF SUCH AMENDMENTS OR AS OTHERWISE DIRECTED.</B>
</FONT>
<!-- link2 "Specific Language of Amendment" -->
<DIV align="left"><A name="a026"></A></DIV>
<P align="left"><FONT size="2"><B>Specific Language of Amendment</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If approved by the Shareholders, the existing &#147;FIRST&#148; and &#147;FOURTH&#148;
Sections of Metalclad&#146;s Certificate of Incorporation as they now read, would be
amended in their entirety to read as follows:
</FONT>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
        <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="1%" align="left" nowrap><FONT size="2">&#147;FIRST:</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="93%"><FONT size="2">The name of the Corporation (hereinafter called the
&#147;Corporation&#148;) is Entrx Corporation.&#148;</FONT></TD>
</TR>
<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
        <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="1%" align="left" nowrap><FONT size="2">&#147;FOURTH:</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="93%"><FONT size="2"></FONT></TD>
</TR>
</TABLE>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
        <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="1%" align="left" nowrap><FONT size="2">4.1</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="93%"><FONT size="2">The total number of shares of stock which
the Corporation shall have authority to issue is
85,000,000, of which 80,000,000 shares shall be Common
Stock having a par value of $0.10 per share, and
5,000,000 shares shall be Preferred Stock having a par
value of $1.00 per share.</FONT></TD>
</TR>
<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
        <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="1%" align="left" nowrap><FONT size="2">4.2</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="93%"><FONT size="2">Each share of issued and outstanding
Common Stock shall have one vote, and shall be entitled
to dividends thereon as and if declared by the Board of
Directors.</FONT></TD>
</TR>
<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
        <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="1%" align="left" nowrap><FONT size="2">4.3</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="93%"><FONT size="2">Preferred Stock may be issued in one or
more series as determined by the Board of Directors,
and, to the extent not prohibited by law, the Board of
Directors may by resolution or resolutions, in respect
of the Preferred Stock or any series thereof, designate
each such series, and designate the powers,
preferences, qualifications, limitations and
restrictions of the Preferred Stock and each such
designated series.</FONT></TD>
</TR>
</TABLE>
<P align="center"><FONT size="2">- 16 -</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>




<!-- link2 "Purpose and Effect of the Amendments" -->
<DIV align="left"><A name="a027"></A></DIV>
<P align="left"><FONT size="2"><B>Purpose and Effect of the Amendments</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The proposed change of Metalclad&#146;s name from Metalclad Corporation to
Entrx Corporation is intended to reflect current management&#146;s plan to change
the focus of and diversify Metalclad&#146;s business. Metalclad&#146;s subsidiary,
Metalclad Insulation Corporation, will continue to use the name in connection
with its insulation and asbestos abatement contracting business.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The small increase in Metalclad&#146;s authorized shares from 81,500,000 to
85,000,000 shares, including primarily the increase in the number of preferred
shares from 1,500,000 to 5,000,000 shares, is being proposed to allow the Board
of Directors to use Metalclad&#146;s preferred stock to effect future financing and
strategic transactions in connection with Metalclad&#146;s plan to change the focus
of and diversify Metalclad&#146;s business. There are currently 7,674,015 shares of
Metalclad&#146;s common stock, and no shares of preferred stock, outstanding.
Metalclad does not currently have any specific plan to issue new shares of
common or preferred stock. Since the Board of Directors can issue shares of
authorized capital stock without shareholders approval, the increase in capital
stock will allow the Board of Directors to dilute the voting interests of
current shareholders to a greater degree.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The amendment to the FOURTH Section of the Certificate of Incorporation
involves the substitution of the language proposed above for the existing
language of the FOURTH Section. Existing provisions of that Section go into
significant detail in describing the powers, rights and preferences which may
be established for preferred shares; however, both the existing FOURTH Section
and the proposed amended FOURTH Section leave it up to the Board of Directors
to determine those powers, rights and preferences.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board of Directors will continue to have great flexibility in
establishing the terms of preferred stock in order to obtain future financing,
or to structure acquisitions and allow strategic transactions. The proposed
increase in the number of authorized preferred shares of capital stock, and the
flexibility in structuring the terms and conditions of preferred stock may be
viewed as giving the Board of Directors the ability to make a takeover attempt
more difficult, such as using the shares in a counter offer for the shares of a
bidder and issuing preferred shares to persons friendly to management with
superior voting rights to those held by common stock holders.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The use of the increased preferred stock as an anti-takeover device is not
a consideration in management&#146;s recommendation to approve the amendment to
Metalclad&#146;s Certificate of Incorporation, and no such use is currently
contemplated.
</FONT>
<!-- link1 "EXECUTIVE COMPENSATION" -->
<DIV align="left"><A name="a028"></A></DIV>
<P align="center"><FONT size="2"><B>EXECUTIVE COMPENSATION</B>
</FONT>

<!-- link2 "Information Concerning Non-Director Executive Officers" -->
<DIV align="left"><A name="a029"></A></DIV>
<P align="left"><FONT size="2"><B>Information Concerning Non-Director Executive Officers</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The names, ages, positions and business experience of Metalclad&#146;s
non-director executive officers, as of the date of this Proxy Statement, are as
follows:
</FONT>
<P align="center"><FONT size="2">- 17 -</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="65%">
<TR valign="bottom">
        <TD width="23%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="64%">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD nowrap align="center"><FONT size="1"><B>Name</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>Age</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center"><FONT size="1"><B>Position</B></FONT></TD>
</TR>
<TR valign="bottom">
        <TD nowrap align="center"><HR size="1" noshade></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD colspan="3"><HR size="1" noshade></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
        <TD valign="top"><FONT size="2">Brian D. Niebur</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="top"><FONT size="2">
39
</FONT></TD>
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">Treasurer and Chief Financial Officer</FONT></TD>
</TR>

<TR valign="bottom">
        <TD valign="top"><FONT size="2">Robert D. Rizzo</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="top"><FONT size="2">
56
</FONT></TD>
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">President of Metalclad Insulation Corporation</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Brian D. Niebur has been employed part time by Metalclad as its Treasurer
and Chief Financial Officer since February&nbsp;13, 2002. Mr.&nbsp;Niebur is a certified
public accountant, and since July, 2000, has acted as a vice president and
controller for Wyncrest Capital, Inc. in Minneapolis, Minnesota, a privately
held venture capital firm. Mr.&nbsp;Niebur&#146;s primary duties for Wyncrest Capital,
Inc. are to act as chief financial officer for Marix Technologies, Inc., a
development stage software company in which Wyncrest Capital, Inc. has made an
equity investment. From August, 1997 until July, 2000, Mr.&nbsp;Niebur was the
controller for Vital Images, Inc., a developer and marketer of medical
visualization and analysis software, in Plymouth, Minnesota. Mr.&nbsp;Niebur was
the vice president and controller of IVI Publishing, Inc. in Eden Prairie,
Minnesota, from September, 1993 until August, 1997. IVI Publishing, Inc. was
an electronic publisher of health and medical information.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Robert D. Rizzo has been the President and Chief Executive Officer, an
employee, and a member of the Board of Directors of Metalclad Insulation
Corporation, a wholly owned subsidiary of Metalclad, since November, 1999.
Prior to November, 1999, Mr.&nbsp;Rizzo was a project manager at PDG Environmental,
Inc., in Pittsburg, Pennsylvania, since November, 1997. PDG Environmental,
Inc. is engaged in asbestos abatement. From 1995 until November 1997, Mr.
Rizzo was a general manager with Smith Technology, Inc., an
architectural and engineering firm specializing in
hazardous waste abatement in Newport Beach, California.
</FONT>
<!-- link2 "Summary Compensation Table" -->
<DIV align="left"><A name="a030"></A></DIV>
<P align="left"><FONT size="2"><B>Summary Compensation Table</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth certain compensation information for: (1)
each person who served as the Chief Executive Officer of Metalclad at any time
during the year ended December&nbsp;31, 2001, regardless of compensation level, and
each of the other executive officers, other than the Chief Executive Officer,
serving as executive officers at December&nbsp;31, 2001. The foregoing persons are
collectively referred to in this Proxy Statement as the &#147;Named Executive
Officers.&#148; Compensation information is shown for fiscal years 1999, 2000 and
2001.
</FONT>
<P align="center"><FONT size="2">- 18 -</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="95%">
<TR valign="bottom">
        <TD width="3%">&nbsp;</TD>
        <TD width="28%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="2%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="4%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="4%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="4%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="4%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="4%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="4%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="7"><FONT size="1"><B>Long Term Compensation</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD colspan="7"><HR size="1" noshade></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="11"><FONT size="1"><B>Annual Compensation</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="7"><FONT size="1"><B>Awards</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD colspan="11"><HR size="1" noshade></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD colspan="7"><HR size="1" noshade></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>Restricted</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>Securities</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>Other Annual</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>Stock</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>Underlying</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>All Other</B></FONT></TD>
</TR>
<TR valign="bottom">
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>Salary</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>Bonus</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>Compensation</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>Awards</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>Options/SARs</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>Compensation</B></FONT></TD>
</TR>
<TR valign="bottom">
        <TD nowrap align="center" colspan="2"><FONT size="1"><B>Name/Principal Position</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>Year</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>($)</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>($)</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>($)</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>($)</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>(#)</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>($)</B></FONT></TD>
</TR>
<TR valign="bottom">
        <TD colspan="2"><HR size="1" noshade></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD colspan="3"><HR size="1" noshade></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD colspan="3"><HR size="1" noshade></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD colspan="3"><HR size="1" noshade></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD colspan="3"><HR size="1" noshade></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD colspan="3"><HR size="1" noshade></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD colspan="3"><HR size="1" noshade></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Grant S. Kessler (1)</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">President and Chief</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">2001</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">250,000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">480,000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">25,920</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">200,000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Executive Officer</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">2000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">250,000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">50,000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">25,920</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">250,000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">1999</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">250,000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">50,000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">25,920</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">170,000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Anthony C. Dabbene (1)</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Treasurer and Chief</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">2001</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">180,000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">360,000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">6,000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">150,000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Financial Officer</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">2000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">180,000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">36,000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">6,000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">200,000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">1999</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">180,000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">36,000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">6,000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">100,000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Robert D. Rizzo (2)</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">President of Metalclad</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">2001</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">130,000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">40,000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Insulation Corporation</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">2000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">120,024</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">24,000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">19,106</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">10,000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">1999</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">14,375</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">&#151;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P>
<HR size="1" width="18%" align="left" noshade>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
      <TD width="1%" align="left" nowrap><FONT size="2">(1)</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2">Terminated employment on February&nbsp;13, 2002.</FONT></TD>
</TR>
<TR valign="top">
      <TD width="1%" align="left" nowrap><FONT size="2">(2)</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2">Commenced employment in November, 1999.</FONT></TD>
</TR>
</TABLE>
<!-- link2 "Option Grants in Last Fiscal Year" -->
<DIV align="left"><A name="a031"></A></DIV>
<P align="left"><FONT size="2"><B>Option Grants in Last Fiscal Year</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table provides certain information regarding options to
purchase shares of Metalclad&#146;s Common Stock granted to the Named Executive
Officers during the year ended December&nbsp;31, 2001.
</FONT>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="75%">
<TR valign="bottom">
        <TD width="32%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="4%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="2%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="2%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="6%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="4%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="4%">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD nowrap align="center" colspan="15"><FONT size="1"><B>Individual Grants</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
        <TD colspan="15"><HR size="1" noshade></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="7"><FONT size="1"><B>Potential Realizable</B></FONT></TD>
</TR>
<TR valign="bottom">
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>Number of</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="7"><FONT size="1"><B>Value of Assumed</B></FONT></TD>
</TR>
<TR valign="bottom">
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>Securities</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>Percentage of Total</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="7"><FONT size="1"><B>Annual Rates of Stock</B></FONT></TD>
</TR>
<TR valign="bottom">
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>Underlying</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>Options/SARs</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="7"><FONT size="1"><B>Price Appreciation</B></FONT></TD>
</TR>
<TR valign="bottom">
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>Options/SARs</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>Granted to</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="7"><FONT size="1"><B>for Option Term</B></FONT></TD>
</TR>
<TR valign="bottom">
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>Granted</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>Employees in Fiscal</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>Exercise or Base</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center"><FONT size="1"><B>Expiration</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD colspan="7"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
        <TD nowrap align="center"><FONT size="1"><B>Name</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>(#)</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>Year 2001</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>Price ($/Share)</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center"><FONT size="1"><B>Date</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>5% ($)</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>10% ($)</B></FONT></TD>
</TR>
<TR valign="bottom">
        <TD nowrap align="center"><HR size="1" noshade></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD colspan="3"><HR size="1" noshade></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD colspan="3"><HR size="1" noshade></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD colspan="3"><HR size="1" noshade></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center"><HR size="1" noshade></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD colspan="3"><HR size="1" noshade></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
        <TD valign="top"><FONT size="2">Grant S. Kessler</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="top"><FONT size="2">
200,000
</FONT></TD>
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="top"><FONT size="2">55.6%
</FONT></TD>
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="top"><FONT size="2">2.00
</FONT></TD>
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">6/1/11
</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="top"><FONT size="2">251,156
</FONT></TD>
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="top"><FONT size="2">637,500</FONT></TD>
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
        <TD valign="top"><FONT size="2">Anthony C. Dabbene</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="top"><FONT size="2">
150,000
</FONT></TD>
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="top"><FONT size="2">41.7%
</FONT></TD>
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="top"><FONT size="2">2.00
</FONT></TD>
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">6/1/11
</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="top"><FONT size="2">188,669
</FONT></TD>
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="top"><FONT size="2">478,125</FONT></TD>
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="center"><FONT size="2">- 19 -</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<!-- link2 "Aggregated Option Exercises and Year End Option Values" -->
<DIV align="left"><A name="a032"></A></DIV>
<P align="left"><FONT size="2"><B>Aggregated Option Exercises and Year End Option Values</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table provides certain information regarding the exercise of
stock options to purchase shares of Metalclad&#146;s Common Stock during the year
ended December&nbsp;31, 2001, by the Named Executive Officers, and the fiscal
year-end value of stock options held by such officers.
</FONT>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="65%">
<TR valign="bottom">
        <TD width="30%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="4%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="8%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="9%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="4%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="4%">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="7"><FONT size="1"><B>Number of Securities</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="7"><FONT size="1"><B>Underlying Unexercised</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="7"><FONT size="1"><B>Value of Unexercised</B></FONT></TD>
</TR>
<TR valign="bottom">
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center"><FONT size="1"><B>Shares</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="7"><FONT size="1"><B>Options/SARs at</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="7"><FONT size="1"><B>In-the-Money Options/SARs</B></FONT></TD>
</TR>
<TR valign="bottom">
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center"><FONT size="1"><B>Acquired on</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="7"><FONT size="1"><B>Fiscal Year End (#)</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="7"><FONT size="1"><B>at Fiscal Year End ($)</B></FONT></TD>
</TR>
<TR valign="bottom">
        <TD nowrap align="center"><FONT size="1"><B>Name</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center"><FONT size="1"><B>Exercise (#)</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="7"><FONT size="1"><B>Exercisable/Unexercisable)</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="7"><FONT size="1"><B>(Exercisable/Unexercisable) (1)</B></FONT></TD>
</TR>
<TR valign="bottom">
        <TD nowrap align="center"><HR size="1" noshade></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center"><HR size="1" noshade></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD colspan="7"><HR size="1" noshade></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD colspan="7"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
        <TD valign="top" nowrap><FONT size="2">Grant S. Kessler</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
None
</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="top"><FONT size="2">253,333
</FONT></TD>
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="top" nowrap><FONT size="2">366,667(2)
</FONT></TD>
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="top"><FONT size="2">0
</FONT></TD>
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="top"><FONT size="2">12,000</FONT></TD>
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
        <TD valign="top" nowrap><FONT size="2">Anthony C. Dabbene</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
None
</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="top"><FONT size="2">166,667
</FONT></TD>
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="top"><FONT size="2">283,333(2)
</FONT></TD>
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="top"><FONT size="2">0
</FONT></TD>
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="top"><FONT size="2">8,000</FONT></TD>
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
        <TD valign="top"><FONT size="2">Robert D. Rizzo</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
None
</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="top"><FONT size="2">3,334
</FONT></TD>
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="top"><FONT size="2">6,666
</FONT>&nbsp;&nbsp;&nbsp;</TD>
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="top"><FONT size="2">0
</FONT></TD>
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right" valign="top"><FONT size="2">0</FONT></TD>
        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
        <TD width="1%" align="left" nowrap><FONT size="2">(1)</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2">Based on a fiscal year end of December&nbsp;31, 2001 and a closing Common
Stock trade price of $2.06 per share on December&nbsp;31, 2001. The value of
in-the-money options is calculated as the difference between the fair
market value of the Common Stock underlying the options at fiscal year end
and the exercise price of the options. Exercisable options refer to those
options that are exercisable as of December&nbsp;31, 2001, while unexercisable
options refer to those options that become exercisable at various times
thereafter.</FONT></TD>
</TR>
<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
        <TD width="1%" align="left" nowrap><FONT size="2">(2)</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2">Upon the termination of employment on February&nbsp;13, 2002, all 620,000
shares under option granted to Mr.&nbsp;Kesler vested, with an in-the-money
value on that date of $140,000, and all 450,000 shares under options
granted to Mr.&nbsp;Dabbene vested, with an in-the-money value on that date of
$105,000. The in-the-money values are based upon a closing trade price of
$2.70 on February&nbsp;13, 2002.</FONT></TD>
</TR>
</TABLE>
<!-- link2 "Compensation Committee Report" -->
<DIV align="left"><A name="a033"></A></DIV>
<P align="left"><FONT size="2"><B>Compensation Committee Report</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As the Compensation Committee of Metalclad Corporation (the &#147;Company&#148;), it
is our duty to review and recommend the compensation levels for members of
Metalclad&#146;s management, evaluate the performance of management and the
administration of Metalclad&#146;s various incentive plans.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The policies and underlying philosophy governing Metalclad&#146;s compensation
program are to maintain a comprehensive program that is competitive in the
marketplace, provide opportunities integrating salary and stock rights to
compensate short and long term performance of management, recognize and reward
individual accomplishments and allow Metalclad to retain seasoned executives
who are essential to Metalclad&#146;s success.
</FONT>
<P align="center"><FONT size="2">- 20 -</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In determining management&#146;s compensation, this Committee evaluates the
compensation paid to management based on their performance, their experience,
and the stage of development of Metalclad. The Committee also takes into
account such relevant external factors as general economic conditions, stock
price performance, and stock market prices generally.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Management compensation is composed of salary, bonuses, and options to
purchase shares of Common Stock at the fair market value on the date of grant.
The Company entered into employment agreements with Messrs.&nbsp;Kesler and Dabbene
in January, 1998, which established base salaries and minimum bonus amounts.
In January, 2002, these contracts were amended and restated to reflect changes
in the compensation of both officers and to clarify the intent of the parties
in the contract language. Additionally, Mr.&nbsp;Kesler&#146;s contract was amended to
incorporate forgiveness of his debt to Metalclad over the three year term of
the amended contract, as long as he remained employed by Metalclad.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The base salaries for executive officers are determined by evaluating the
responsibilities of the positions held, the individual experience, the
competitive marketplace, the individual&#146;s performance of responsibilities and
the individual&#146;s overall contribution to Metalclad. On January&nbsp;1, 2002 both
Mr.&nbsp;Kesler and Mr.&nbsp;Dabbene received salary increases. Prior to these
increases, Mr.&nbsp;Kesler&#146;s last salary increase had been in 1997 and Mr.&nbsp;Dabbene&#146;s
last salary increase had also been in 1997. The number of options granted is
scaled to the salary of each individual officer.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Committee considers and recommends stock option grants under
Metalclad&#146;s stock option plans for key employees and others who make
substantial contributions to the long-term financial success of Metalclad. The
Company and the Committee believe that stock options provide strong incentive
to increase the value of stockholders&#146; interests. Stock options grants are
believed by the Committee to help focus management on the long-term success of
Metalclad. The amount of any stock option grant is based primarily on an
individual&#146;s responsibilities and position with Metalclad. Individual awards
of options are effected by the Committee&#146;s subjective evaluation of factors it
deems appropriate such as the assumption of responsibilities, competitive
factors and achievements. During 2001 options were granted to Messrs.&nbsp;Kesler
and Dabbene for the purchase of 200,000 and 150,000 shares, respectively, at an
exercise price of $2.00 per share.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Significant to the Committee&#146;s recommendations concerning executive
compensation and option grants are significant events which have occurred over
time as well as objectives set for the coming year. With regard to the year
ended December&nbsp;31, 2001, Metalclad (a)&nbsp;increased revenues and profits in its
insulation business; (b)&nbsp;obtained settlement of the NAFTA claim in amount of
$16&nbsp;million and (c)&nbsp;obtained the additional capital necessary to support
Metalclad&#146;s operations until receipt of the NAFTA settlement monies.
Additionally, Metalclad was able to realize the full settlement value, with
minimal cost and tax impacts.
</FONT>
<P align="center"><FONT size="2">- 21 -</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The executive officers devoted substantial time and effort in achieving
the aforementioned objectives while at the same time devoting significant time
to the daily affairs of Metalclad. Based on the performance of management in
achieving these objectives in 2001 and the financial condition of Metalclad,
Messrs.&nbsp;Kesler and Dabbene were granted stock options as described above and
awarded a special bonus related to the NAFTA settlement in the amount of
$440,000 for Mr.&nbsp;Kesler and $360,000 for Mr.&nbsp;Dabbene. Additionally, Mr.&nbsp;Kesler
was awarded an incentive bonus of $40,000. Mr.&nbsp;Dabbene did not receive any
incentive bonus.
</FONT>

<TABLE cellspacing="0" border="0" cellpadding="0" width="40%" align="right">
<TR valign="bottom">
        <TD width="100%">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD valign="top"><FONT size="2">Compensation Committee</FONT></TD>
</TR>
<TR><TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom">
        <TD valign="top"><FONT size="2">/s/ J. Thomas Talbot<BR>
</FONT><HR size="1" noshade width="60%" align="left"><FONT size="2">
J. Thomas Talbot, Chairman</FONT></TD>
</TR>
<TR><TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom">
        <TD valign="top"><FONT size="2">/s/ Raymond J. Pacini<BR>
</FONT><HR size="1" noshade width="60%" align="left"><FONT size="2">
Raymond J. Pacini, Member</FONT></TD>
</TR>
</TABLE>
<br clear="all">

<!-- link1 "CERTAIN TRANSACTIONS" -->
<DIV align="left"><A name="a034"></A></DIV>
<P align="center"><FONT size="2"><B>CERTAIN TRANSACTIONS</B>
</FONT>

<!-- link2 "Transactions with Executive Officers" -->
<DIV align="left"><A name="a035"></A></DIV>
<P align="left"><FONT size="2"><B>Transactions with Executive Officers</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Effective January&nbsp;1, 2002, Metalclad entered into Amended and Restated
Employment Agreements (the &#147;Amended Agreements&#148;) between the then President of
Metalclad, Grant S. Kesler, and the then Treasurer and Chief Executive Officer
of Metalclad, Anthony C. Dabbene. The Amended Agreements increased the
salaries of Messrs.&nbsp;Kesler and Dabbene from $250,000 and $180,000, to $300,000
and $216,000, respectively, changed the definition of a change in control of
Metalclad to include a change in the composition of the Board of Directors, and
provided for an increase in the amount of severance payments and benefits which
would be payable to each in the event they resigned after a change of control.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As a result of the resignations of Messrs.&nbsp;Kesler and Dabbene, as set
forth under &#147;Change in Control&#148; below, and in lieu of compensation which would
otherwise be due under change of control provisions contained in their Amended
Agreements, Metalclad issued Mr.&nbsp;Kesler 140,000 shares of Metalclad&#146;s common
stock, forgave a loan due from Mr.&nbsp;Kesler in the amount of $543,000 in exchange
for future consulting services and paid Mr.&nbsp;Kesler $832,000 in cash, and issued
Mr.&nbsp;Dabbene 86,000 shares of Metalclad&#146;s common stock and paid Mr.&nbsp;Dabbene
$637,000 in cash. In addition, all outstanding unvested stock options held by
Messrs.&nbsp;Kesler and Dabbene were immediately vested and became exercisable.
Messrs.&nbsp;Kesler and Dabbene have each agreed to act as a consultant to Metalclad
under two-year and three-month consulting agreements, respectively. In
addition to the payment discussed above, Mr.&nbsp;Dabbene&#146;s compensation for
consulting was $5,000 per month. A portion of the cash payments due to Mr.
Kesler and Mr.&nbsp;Dabbene ($482,000 and
</FONT>
<P align="center"><FONT size="2">- 22 -</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>


<P><FONT size="2">$425,000, respectively) was deposited by
Metalclad as income and payroll tax withholding on the total compensation paid
to each of them.
</FONT>
<!-- link2 "Change in Control" -->
<DIV align="left"><A name="a036"></A></DIV>
<P align="left"><FONT size="2"><B>Change in Control</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Wayne Mills commenced an acquisition of Metalclad shares in November 2000
for investment purposes, with the then understanding and encouragement of
Metalclad&#146;s management. In January 2001, Mr.&nbsp;Mills filed with Metalclad and
the Securities and Exchange Commission a report on form Schedule&nbsp;13D reporting
the acquisition of more than ten percent of the outstanding shares of the
corporation by Mr.&nbsp;Mills, his wife and a company (Blake Capital Partners, LLC)
controlled by Mr.&nbsp;Mills. Mr.&nbsp;Mills stated the shares were acquired for
investment purposes and not with an intent to obtain control of Metalclad.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In December 2001, Mr.&nbsp;Mills amended his Schedule&nbsp;13D to report a
determination by Mr.&nbsp;Mills to undertake efforts to change the management of
Metalclad. Mr.&nbsp;Mills indicated he would seek the cooperation of the then
current members of Metalclad&#146;s management and, if those efforts were not
successful, would solicit the shareholders of Metalclad to elect replacement
members to the Metalclad Board of Directors.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In February 2002, as a result of negotiations among Mr.&nbsp;Mills and members
of the Metalclad management, and in order to avoid the cost and disruption to
Metalclad&#146;s business that would likely result from shareholder solicitations,
(i)&nbsp;Grant Kesler, Anthony Dabbene and Bruce Haglund resigned as members of the
corporation&#146;s Board of Directors; (ii)&nbsp;Mr.&nbsp;Mills, Gary Copperud, Kenneth
Brimmer and Joseph Senser were elected to the corporation&#146;s Board of Directors;
and (iii)&nbsp;Mr.&nbsp;Mills and Brian Niebur were, respectively, appointed as
Metalclad&#146;s Chief Executive Officer and Chief Financial Officer.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Mr.&nbsp;Mills reported that he, his spouse, and Blake Capital Partners, LLC
used personal funds to acquire their Metalclad shares. He further reported the
purchases were made as open market acquisitions.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In connection with the change in management of Metalclad, employment
agreements with Mr.&nbsp;Kesler and Mr.&nbsp;Dabbene were amended, consulting agreements
were made with them and a debt owed to Metalclad by Mr.&nbsp;Kesler was forgiven.
The terms of such amendments, consulting agreements and debt forgiveness are
described under &#147;Transactions with Executive Officers&#148; above.
</FONT>
<!-- link2 "Vesting of Directors&#146; Options" -->
<DIV align="left"><A name="a037"></A></DIV>
<P align="left"><FONT size="2"><B>Vesting of Directors&#146; Options</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As a result of the change in control discussed above, options granted to
four non-executive officers of Metalclad who served as members of the Board of
Directors became fully vested in February, 2002. The following table
illustrates the shares that would have been vested as of June 14,
2002, without the change in
control, and the total shares that vested as a result of the change in control:
</FONT>
<P align="center"><FONT size="2">- 23 -</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="55%">
<TR valign="bottom">
        <TD width="54%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="8%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="9%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="8%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="9%">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="7"><FONT size="1"><B>Vested Shares</B></FONT></TD>
</TR>
<TR valign="bottom">
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD colspan="7"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>Without Change</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>After Change</B></FONT></TD>
</TR>
<TR valign="bottom">
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>in Control</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>in Control</B></FONT></TD>
</TR>
<TR valign="bottom">
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD colspan="3"><HR size="1" noshade></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">J. Thomas Talbot</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">51,668</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">95,000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Raymond Pacini</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">51,668</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">95,000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Daniel Lane</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">0</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">25,000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Bruce Haglund</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">51,668</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">95,000</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="left"><FONT size="2"><B>Loan to Affiliate of Wayne Mills</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On December&nbsp;10, 2001, Metalclad loaned Blake Capital Partners, LLC (&#147;Blake
Capital&#148;) a Minnesota limited liability company, $1,250,000 under a
non-recourse secured note (the &#147;Note&#148;) which Blake Capital used to acquire an
equity interest in an entity unrelated to Metalclad. Blake Capital is wholly
owned by Wayne W. Mills who later became a director and the President
of Metalclad on February&nbsp;13, 2002. The Note with interest at the rate of
6% per annum, is due June&nbsp;10, 2002. Blake Capital can extend the note to for
up to 90&nbsp;days beyond June&nbsp;10, 2002, in which case the rate of interest
increases to 12% per annum during that 90&nbsp;day period.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As security for the loan, Wayne Mills pledged 500,000 shares of
Metalclad&#146;s common stock, under the terms of a pledge agreement (the &#147;Pledge
Agreement&#148;) dated as of December&nbsp;10, 2001. The Pledge Agreement provides that
Mr.&nbsp;Mills will retain voting power over the 500,000 shares until such shares
are either cancelled or sold to satisfy the loan under the terms of the Note
and Pledge Agreement. To satisfy its obligations under the Note, all or a
portion of the 500,000 shares can be sold at the direction of Blake Capital, in
which case the proceeds of such sale will be applied against the principal and
interest due under the Note, or Blake Capital can request that they be
cancelled, in which case they will carry a value of $2.50 per share which may
be applied against the amount due under the Note. If the Note is in default,
Metalclad can cancel the shares at a value of $2.50 per share, and apply the
amount cancelled against the principal and interest due under the Note.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Since the Note is non-recourse to Blake Capital, neither Blake Capital nor
Mr.&nbsp;Mills has any personal liability under the Note, and Metalclad&#146;s only
recourse for repayment of the Note is the 500,000 shares of Metalclad common
stock pledged as security.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The loan was made to Mr.&nbsp;Mills when he owned more than 15% of the
outstanding common stock of Metalclad. As a result, the loan was likely in
violation of Section&nbsp;203 of the Delaware Corporation Law. Neither Mr.&nbsp;Mills
nor the management of Metalclad was aware of the provisions of said Section&nbsp;203
at the time the loan was made (see &#147;Proposal No.&nbsp;3 &#151; CHANGE OF INCORPORATION TO
MINNESOTA &#151; Reason for Two Thirds Vote Requirement.&#148;)
</FONT>
<P align="center"><FONT size="2">- 24 -</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<!-- link1 "STOCK PERFORMANCE GRAPH" -->
<DIV align="left"><A name="a038"></A></DIV>
<P align="center"><FONT size="2"><B>STOCK PERFORMANCE GRAPH</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The graph below provides an indication of the cumulative return on
Metalclad&#146;s common stock as compared to the NASDAQ stock index and to eight
specialty trade contractors (including Metalclad) whose common stock is traded
in the NASDAQ market for the period January&nbsp;1, 1997 through December&nbsp;31, 2001.
The graph is presented on the assumption that $100 was invested at the close of
the market on December&nbsp;31, 1996, in shares of Metalclad common stock, in the
NASDAQ stock market index, and in the eight specialty trade contractors,
weighted on the basis of the closing market price as of December&nbsp;31, 1996, with
all dividends reinvested.
</FONT>
<P align="center"><FONT size="2"><img src=c69240pc6924001.gif>
</FONT>
<!-- link1 "COMMON STOCK OWNERSHIP" -->
<DIV align="left"><A name="a039"></A></DIV>
<P align="center"><FONT size="2"><B>COMMON STOCK OWNERSHIP</B>
</FONT>

<!-- link2 "Share Ownership of Management" -->
<DIV align="left"><A name="a040"></A></DIV>
<P align="left"><FONT size="2"><B>Share Ownership of Management</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth certain information as of the record date
with respect to the shares of Common Stock beneficially owned by: (i)&nbsp;each
director; (ii)&nbsp;each executive officer; and (iii)&nbsp;all current executive officers
(regardless of salary and bonus level) and directors as a group. Unless
otherwise indicated, the shareholders listed in the table below have sole
voting and investment powers with respect to the shares indicated:
</FONT>
<P align="center"><FONT size="2">- 25 -</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="75%">
<TR valign="bottom">
        <TD width="62%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="11%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="12%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="2%">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>Number of</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>Common Shares</B></FONT></TD>
        <TD nowrap align="center" colspan="7"><FONT size="1"><B>Percentage of</B></FONT></TD>
</TR>
<TR valign="bottom">
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>Beneficially</B></FONT></TD>
        <TD nowrap align="center" colspan="7"><FONT size="1"><B>Outstanding</B></FONT></TD>
</TR>
<TR valign="bottom">
        <TD nowrap align="center"><FONT size="1"><B>Name of Beneficial Owner</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>Owned</B></FONT></TD>
        <TD nowrap align="center" colspan="7"><FONT size="1"><B>Shares (7)</B></FONT></TD>
</TR>
<TR valign="bottom">
        <TD nowrap align="center"><HR size="1" noshade></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD colspan="3"><HR size="1" noshade></TD>
        <TD colspan="7"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Wayne W. Mills</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">1,720,000</FONT></TD>
        <TD nowrap><FONT size="2">(1)</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">22.4</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Kenneth W. Brimmer</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">116,700</FONT></TD>
        <TD nowrap><FONT size="2">(2)(3)</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">1.5</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Gary W. Copperud</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">123,430</FONT></TD>
        <TD nowrap><FONT size="2">(3)</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">1.6</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Joe M. Senser</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">16,700</FONT></TD>
        <TD nowrap><FONT size="2">(3)</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">*</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">J. Thomas Talbot</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">115,000</FONT></TD>
        <TD nowrap><FONT size="2">(4)</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">1.5</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Raymond Pacini</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">95,400</FONT></TD>
        <TD nowrap><FONT size="2">(4)</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">1.2</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Daniel D. Lane</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">40,000</FONT></TD>
        <TD nowrap><FONT size="2">(5)</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">*</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Brian D. Niebur</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">0</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">N/A</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Robert D. Rizzo</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">3,334</FONT></TD>
        <TD nowrap><FONT size="2">(6)</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">*</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">All executive officers and
directors as a group (9 persons)</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">2,230,564</FONT></TD>
        <TD nowrap><FONT size="2">(7)</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">28.1</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
      <TD width="1%" align="left" nowrap><FONT size="2">*</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2">Less than 1%</FONT></TD>
</TR>
<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
      <TD width="1%" align="left" nowrap><FONT size="2">(1)</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2">Includes 400,000 shares which are owned by Blake Capital Partners, LLC
which is wholly owned by Mr.&nbsp;Mills, 400,000 shares which are owned by Mr.
Mill&#146;s Individual Retirement Account, and 275,000 shares which are owned
by Mr.&nbsp;Mills&#146; spouse and to which Mr.&nbsp;Mills disclaims beneficial
ownership.</FONT></TD>
</TR>
<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
      <TD width="1%" align="left" nowrap><FONT size="2">(2)</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2">Includes 15,000 shares which are owned by Mr.&nbsp;Brimmer&#146;s Individual
Retirement Account, and 5,000 shares which are owned by the Individual
Retirement Account of Mr.&nbsp;Brimmer&#146;s spouse, and to which he disclaims any
beneficial interest.</FONT></TD>
</TR>
<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
      <TD width="1%" align="left" nowrap><FONT size="2">(3)</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2">Includes 16,700 shares that each of Messrs.&nbsp;Brimmer, Copperud and Senser
have the right to acquire as of June&nbsp;25, 2002 upon exercise of outstanding
stock options.</FONT></TD>
</TR>
<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
      <TD width="1%" align="left" nowrap><FONT size="2">(4)</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2">Includes 95,000 shares that each of Messrs.&nbsp;Talbot and Pacini have the
right to acquire as of June&nbsp;25, 2002 upon exercise of outstanding stock
options at prices ranging from $2.00 to $3.00 per share.</FONT></TD>
</TR>
<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
      <TD width="1%" align="left" nowrap><FONT size="2">(5)</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2">Includes 25,000 shares that Mr.&nbsp;Lane has the right to acquire as of June
25, 2002 upon exercise of outstanding stock options at $2.00 per share.</FONT></TD>
</TR>
<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
      <TD width="1%" align="left" nowrap><FONT size="2">(6)</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2">The 3,334 shares may be acquired by Mr.&nbsp;Rizzo as of June&nbsp;25, 2002 at
$3.00 per share.</FONT></TD>
</TR>
</TABLE>

<P align="center"><FONT size="2">- 26 -</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>




<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
      <TD width="1%" align="left" nowrap><FONT size="2">(7)</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2">The percentage of outstanding shares of common stock as shown in the
table above is calculated on 7,674,015 shares outstanding, as of April&nbsp;26,
2002, plus it assumes in each case that the shareholder exercised all
options available to that person which would vest as of June&nbsp;25, 2002.</FONT></TD>
</TR>
</TABLE>
<!-- link2 "Share Ownership of Certain Beneficial Owners" -->
<DIV align="left"><A name="a041"></A></DIV>
<P align="left"><FONT size="2"><B>Share Ownership of Certain Beneficial Owners</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth the name, address, number of shares of
Metalclad&#146;s common stock beneficially owned, and the percentage of the
outstanding shares of common stock such shares represent, at each person or
group of persons, known by Metalclad to beneficially own more than 5% of
Metalclad&#146;s outstanding common stock:
</FONT>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="55%">
<TR valign="bottom">
        <TD width="5%">&nbsp;</TD>
        <TD width="54%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="12%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="13%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="2%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="2%">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>Number of</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>Common Shares</B></FONT></TD>
        <TD nowrap align="center" colspan="7"><FONT size="1"><B>Percentage of</B></FONT></TD>
</TR>
<TR valign="bottom">
        <TD nowrap align="center" colspan="2"><FONT size="1"><B>Name and Address</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>Beneficially</B></FONT></TD>
        <TD nowrap align="center" colspan="7"><FONT size="1"><B>Outstanding</B></FONT></TD>
</TR>
<TR valign="bottom">
        <TD nowrap align="center" colspan="2"><FONT size="1"><B>of Beneficial Owner</B></FONT></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD nowrap align="center" colspan="3"><FONT size="1"><B>Owned</B></FONT></TD>
        <TD nowrap align="center" colspan="7"><FONT size="1"><B>Shares (4)</B></FONT></TD>
</TR>
<TR valign="bottom">
        <TD colspan="2"><HR size="1" noshade></TD>
        <TD><FONT size="1">&nbsp;</FONT></TD>
        <TD colspan="3"><HR size="1" noshade></TD>
        <TD colspan="7"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Wayne W. Mills</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">1,720,000</FONT></TD>
        <TD nowrap><FONT size="2">(1)</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">22.4</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">5020 Blake Road</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Edina, MN 55436</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Grant S. Kesler</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">793,000</FONT></TD>
        <TD nowrap><FONT size="2">(2)</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">9.6</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">3739 Brighton Point Drive</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Salt Lake City, UT 84121</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
        <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Anthony C. Dabbene</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">548,600</FONT></TD>
        <TD nowrap><FONT size="2">(3)</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="right"><FONT size="2">6.8</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">26921 Magnolia Court</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Laguna Hills, CA 92653</FONT></DIV></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
        <TD width="1%" align="left" nowrap><FONT size="2">(1)</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2">Includes 400,000 shares which are owned by Blake Capital Partners, LLC,
which is owned by Mr.&nbsp;Mills, 400,000 shares which are owned by Mr.&nbsp;Mills
Individual Retirement Account and 275,000 shares which are owned by Mr.
Mills&#146; spouse and to which Mr.&nbsp;Mills disclaims beneficial ownership. Mr.
Mills has pledged 500,000 shares to secure a loan from Metalclad. (See
&#147;CERTAIN TRANSACTIONS&#148; &#151; Loan to Affiliate of Wayne Mills&#148;)</FONT></TD>
</TR>
<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
        <TD width="1%" align="left" nowrap><FONT size="2">(2)</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2">Includes 620,000 shares which Mr.&nbsp;Kesler may purchase under currently
exercisable options for Metalclad&#146;s common stock at prices ranging from
$2.00 to $3.00 per share.</FONT></TD>
</TR>
<TR>
        <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
        <TD width="1%" align="left" nowrap><FONT size="2">(3)</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2">Includes 450,000 shares which Mr.&nbsp;Dabbene may purchase under currently
exercisable options for Metalclad&#146;s common stock at prices ranging from
$2.00 to $3.00 per share.</FONT></TD>
</TR>
</TABLE>
<P align="center"><FONT size="2">- 27 -</FONT>
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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>




<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
        <TD width="1%" align="left" nowrap><FONT size="2">(4)</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2">The percentage of outstanding shares of common stock shown in the table
above is calculated based upon 7,674,015 shares outstanding as of the
close of business on April&nbsp;26, 2002, plus it assumes in each case that the
shareholder exercised all options available to that person which would
vest on or before June&nbsp;25, 2002.</FONT></TD>
</TR>
</TABLE>
<!-- link2 "Reporting Under Section&nbsp;16(a) of the Securities Exchange Act of 1934" -->
<DIV align="left"><A name="a042"></A></DIV>
<P align="left"><FONT size="2"><B>Reporting Under Section&nbsp;16(a) of the Securities Exchange Act of 1934</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;16(a) of the Securities Exchange Act of 1934 requires executive
officers and directors of Metalclad, and persons who beneficially own more than
10&nbsp;percent of Metalclad&#146;s outstanding shares of Common Stock, to file initial
reports of ownership and reports of changes in ownership of securities of
Metalclad with the Securities and Exchange Commission (&#147;SEC&#148;) and the NASDAQ
Stock Market. Officers, directors and persons owning more than 10&nbsp;percent of
Metalclad&#146;s outstanding Common Stock are required by SEC regulation to furnish
Metalclad with copies of all Section&nbsp;16(a) forms filed. Based solely on a
review of the copies of such reports and amendments thereto furnished to or
obtained by Metalclad or written representations that no other reports were
required, Metalclad believes that during the year ended December&nbsp;31, 2001, all
filing requirements applicable to its directors, officers or beneficial owners
of more than 10&nbsp;percent of Metalclad&#146;s outstanding shares of Common Stock were
complied with.
</FONT>
<!-- link1 "AUDIT COMMITTEE REPORT" -->
<DIV align="left"><A name="a043"></A></DIV>
<P align="center"><FONT size="2"><B>AUDIT COMMITTEE REPORT</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following Audit Committee report shall not be deemed to be soliciting
material or to be filed with the Securities and Exchange Commission under the
Securities Act of 1933 or the Securities Exchange Act of 1934 nor incorporated
by reference into any document so filed.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The purpose of the Audit Committee is to assist the Board in its oversight
of management&#146;s conduct of the Company&#146;s financial reporting process. The
Audit Committee reviewed and discussed with management of the Company and Moss
Adams LLP the audited financial statements of the Company contained in the
Company&#146;s Annual Report on Form&nbsp;10-K for the fiscal year ended December&nbsp;31,
2001. Management is responsible for the Company&#146;s internal controls and the
financial reporting process. Moss Adams LLP is responsible for performing an
independent audit of the Company&#146;s financial statements in accordance with
generally accepted auditing standards and issuing a report thereon. The Audit
Committee&#146;s responsibility is to monitor and oversee these processes.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Audit Committee discussed with Moss Adams LLP the matters required by
Codification of Statements on Auditing Standards No.&nbsp;61. The Audit Committee
also received and reviewed the written disclosures and the letter from Moss
Adams LLP required by the Independence Standards Board Standard No.&nbsp;1, and
discussed with that firm its independence from the Company. The Audit
Committee discussed with management of the Company and Moss Adams LLP such
other matters and received such assurances as the Audit Committee deemed
appropriate.
</FONT>
<P align="center"><FONT size="2">- 28 -</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Audit Committee considered the effect that provision of all other
non-audit related fees may have on the independence of Moss Adams LLP. The
Audit Committee has determined that provision of those services is compatible
with maintaining the independence of Moss Adams LLP as the Company&#146;s principal
accountants.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Based on the foregoing review and discussions and a review of the report
of Moss Adams LLP , and relying thereon, the Audit Committee recommended the
inclusion of the audited financial statements in the Company&#146;s Annual Report on
Form&nbsp;10-K for the year ended December&nbsp;31, 2001.
</FONT>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
        <TD width="60%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="40%"><FONT size="2">The Audit Committee<BR>
Of the Board of Directors</FONT></TD>
</TR>
</TABLE>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
        <TD width="60%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="40%"><FONT size="2">/s/ Raymond J. Pacini<BR>
Raymond J. Pacini, Chairman<BR>
J. Thomas Talbot<BR>
Daniel D. Lane</FONT></TD>
</TR>
</TABLE>
<!-- link1 "INDEPENDENT AUDITORS" -->
<DIV align="left"><A name="a044"></A></DIV>
<P align="center"><FONT size="2"><B>INDEPENDENT AUDITORS</B>
</FONT>

<!-- link2 "Auditors" -->
<DIV align="left"><A name="a045"></A></DIV>
<P align="left"><FONT size="2"><B>Auditors</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board of Directors of Metalclad selected Moss Adams, LLP, certified
public accountants, to audit the accounts of Metalclad for the year ended
December&nbsp;31, 2001, and to perform other appropriate accounting services for
Metalclad as needed. No representative of such accounting firm will be present
at the Annual Meeting of Shareholders to be held on June&nbsp;14, 2002. Moss Adams,
LLP has audited the accounts of Metalclad since 1998.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On April&nbsp;4, 2002, Moss Adams, LLP, resigned as Metalclad&#146;s auditors. The
report of Moss Adams, LLP on the financial statements of Metalclad for the
years 2000 and 2001 did not contain an adverse opinion or a disclaimer of
opinion, and was not qualified or modified as to uncertainty, audit scope or
accounting principles. The resignation of Moss Adams, LLP was not sought,
recommended or approved by the Audit Committee or Board of Directors of
Metalclad. There were no disagreements between the management of Metalclad and
Moss Adams, LLP, with respect to the financial statements of Metalclad
Corporation for the years 2000 and 2001, or any interim period, or any matter
of accounting principles or practices, financial statement disclosure or
auditing scope or procedure, which were not resolved to the satisfaction of
Moss Adams, LLP or which would have caused Moss Adams, LLP to make reference to
the subject matter or any such disagreement in connection with rendering its
report on those financial statements.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On April&nbsp;16, 2002, upon the recommendation of the Audit Committee,
Metalclad engaged Virchow Krause &#038; Company, LLP, certified public accountants
with offices in Minneapolis, Minnesota, to audit Metalclad&#146;s financial
statements for 2002. Metalclad has not previously engaged Virchow Krause &#038;
Company, LLP on any matter.
</FONT>
<P align="center"><FONT size="2">- 29 -</FONT>
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<!-- link2 "Audit Fees" -->
<DIV align="left"><A name="a046"></A></DIV>
<P align="left"><FONT size="2"><B>Audit Fees</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Moss Adams, LLP billed Metalclad $52,270 for the audit of Metalclad&#146;s
financial statements for the year ended December&nbsp;31, 2001, and the review of
Metalclad&#146;s financial statements, including those included in Metalclad&#146;s Forms
10-Q filed with the Securities and Exchange Commission.
</FONT>
<!-- link2 "All Other Fees" -->
<DIV align="left"><A name="a047"></A></DIV>
<P align="left"><FONT size="2"><B>All Other Fees</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Moss Adams, LLP billed Metalclad $27,510 for services rendered in 2001,
other than those disclosed under &#147;Audit Fees&#148; above, including $14,350 for tax
related matters. The Audit Committee reviewed these other fees, and found them
compatible with Moss Adams, LLP&#146;s independence.
</FONT>
<!-- link1 "SHAREHOLDER PROPOSALS" -->
<DIV align="left"><A name="a048"></A></DIV>
<P align="center"><FONT size="2"><B>SHAREHOLDER PROPOSALS</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proposals that shareholders may wish to present at the annual meeting of
Metalclad&#146;s shareholders in 2003 must be received by Metalclad in writing at
800 Nicollet Mall, Suite&nbsp;2690, Minneapolis, Minnesota, 55402, prior to
January&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2003 (120&nbsp;days or more before the date of this Proxy Statement),
in order to be included in the proxy statement and form of proxy relating to
that meeting.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Metalclad&#146;s Annual Report on Form&nbsp;10-K filed with the Securities and
Exchange Commission, without the exhibits listed in the Form&nbsp;10-K, has been
furnished to each shareholder of record as of April&nbsp;26, 2002, and has been
furnished to nominees of street-name shareholders in sufficient quantities to be provided to all benefitted
shareholders on April&nbsp;26, 2002. If, however, you as a record or beneficial
shareholder on the record date did not receive a copy of the Annual Report on
Form&nbsp;10-K, you may request in writing that a copy be mailed to you, making a
representation (in the case of a street name shareholder) that you were a
beneficial owner of Metalclad&#146;s shares on the record date. Upon such request,
the Form&nbsp;10-K Annual Report will be mailed to you without charge. If you would
like a copy of any of the exhibits listed in the Form&nbsp;10-K Annual Report, we
will send mail you a copy upon request and upon the payment of $5.00 per
document, and $0.25 per page. All requests should be made in writing and
addressed to Brian Niebur, Chief Financial Officer, Metalclad Corporation, 800
Nicollet Mall, Suite&nbsp;2600, Minneapolis, Minnesota 55402.</I>
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>A form of Proxy is enclosed for your use. Please date, sign and return
the Proxy at your earliest convenience. Prompt return of your Proxy will be
appreciated.</B>
</FONT>

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<A HREF="#a000">Exhibit&nbsp;A</A>
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<P align="center"><FONT size="2"><B>COMPARISON OF MINNESOTA AND DELAWARE CORPORATE LAW</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The rights and preferences of the holders of Metalclad&#146;s capital stock are
presently governed by the Delaware General Corporation Law (the &#147;Delaware
Law&#148;). Upon the Reincorporation, these rights and preferences will be governed
by the Minnesota Business Corporation Act (the &#147;Minnesota Act&#148;). Although the
Minnesota Act and Delaware Law currently in effect are similar in many
respects, certain differences will affect the rights of Metalclad shareholders
if the Merger is consummated. The following discussion summarizes certain
differences and is qualified in its entirety by reference to the full text of
the Minnesota Act and the Delaware Law.
</FONT>
<P><FONT size="2"><B><u>Anti-Takeover Legislation</u>. </B>Both the Minnesota Act and the Delaware Law contain
provisions intended to protect shareholders from individuals or companies
attempting a takeover of a corporation in certain circumstances. The Articles
of Incorporation of Entrx (the &#147;Entrx Articles&#148;) and Certificate of
Incorporation of Metalclad (the &#147;Metalclad Certificate&#148;) do not contain any
anti-takeover provisions. The anti-takeover provisions of the Minnesota Act and
Delaware Law differ in a number of respects, and it is not practical to
summarize all such differences here. However, the following is a summary of
certain significant differences.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Business Combinations. </I></B>Both the Minnesota Act and Delaware Law have
different business combination statutes that are intended primarily to deter
highly leveraged takeover bidders who propose to use the target&#146;s assets as
collateral for the offeror&#146;s debt financing and to liquidate the target, in
whole or in part, to satisfy financing obligations. Both the Minnesota Act and
the Delaware Law permit a corporation to &#147;opt out&#148; of the business combination
statute by electing to do so in its articles or certificate of incorporation or
bylaws. The Entrx Articles &#147;opt out&#148; of the business combination provisions,
but the Metalclad Certificate does not. Under Section&nbsp;203 of the Delaware Law,
a shareholder who has acquired 15% or more of the outstanding voting stock of a
corporation without prior approval of the Board of Directors, is precluded from
engaging in certain transactions for three years after acquiring the 15%
interest. The transactions precluded include a merger, transfer of assets to
the 15% shareholder, increases in the 15% shareholder&#146;s proportionate share of
the corporation&#146;s voting stock, and loans, advances, guarantees and pledges
made for the 15% shareholder&#146;s benefit.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Control Share Acquisition. </I></B>The Entrx Articles opt out of the Minnesota
Act&#146;s control share acquisition statute that establishes various disclosure and
shareholder approval requirements to be met by individuals or companies attempting a takeover.
Except as discussed above, Delaware Law has no comparable provision.
</FONT>
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<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Other Anti-Takeover Provisions. </I></B>The Minnesota Act includes three other
provisions relating to takeovers that are not included in the Delaware Law.
These provisions address a corporation&#146;s use of the golden parachutes,
greenmail and the standard of conduct of the Board of Directors in connection
with the consideration of takeover proposals. The Minnesota Act contains a
provision which prohibits a publicly-held corporation from entering into or
amending agreements (commonly referred to as golden parachutes) that increase
current or future compensation of any officer or director during any tender
offer or request or invitation for tenders. The Minnesota Act also contains a
provision which limits the ability of a corporation to pay greenmail. The
statute provides that a publicly-held corporation is prohibited from purchasing
or agreeing to purchase any shares from a person who beneficially owns more
than 5% of the voting power of Metalclad if the shares have been beneficially
owned by that person for less than two years, and if the purchase price would
exceed the market value of those shares. However, such a purchase will not
violate the statute if the purchase is approved at a meeting of the
shareholders by a majority of the voting power of all shares entitled to vote
or if Metalclad&#146;s offer is of at least equal value per share and to all holders
of shares of the class or series and to all holders of any class or series into
which the securities may be converted. The Minnesota Act authorizes the board
of directors, in considering the best interests of Metalclad with respect to a
proposed acquisition of an interest in Metalclad, to consider the interest of
Metalclad&#146;s employees, customers, suppliers and creditors, the economy of the
state and nation, community and social considerations and the long-term as well
as short-term interests of Metalclad and its shareholders, including the
possibility that these interests may be best served by the continued
independence of Metalclad.
</FONT>
<P><FONT size="2"><B><u>Directors&#146; Standard of Care and Personal Liability</u>. </B>The Minnesota Act provides
that a director shall discharge the director&#146;s duties in good faith, in a
manner the director reasonably believes to be in the best interests of
Metalclad, and with the care an ordinary prudent person in a like position
would exercise under similar circumstances. A director who so performs those
duties may not be held liable by reason of being or having been a director of
Metalclad. The Delaware Law provides that the board of directors has the
ultimate responsibility for managing the business affairs of a Delaware
corporation. In discharging this function, the Delaware Law holds directors to
fiduciary duties of care and loyalty to Metalclad and its shareholders. The
Delaware courts have held that the duty of care requires the exercise of an
informed business judgment. An informed business judgment means that the
directors have informed themselves of all material information reasonably
available to them. Having become so informed, they then must act with
requisite care in the discharge of their duties. Liabilities of directors of a
Delaware corporation to Metalclad or its shareholders for breach of the duty of
care requires a finding by the court that the directors were grossly negligent
in their decision-making process. The duty of loyalty requires that, in making a business decision,
directors act in good faith and with the honest belief that the action taken is
in the best interests of Metalclad.
</FONT>
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<P><FONT size="2"><B><u>Limitation or Elimination of Director&#146;s Personal Liability</u>. </B>The Minnesota Act
provides that if the articles of incorporation so provide, the personal
liability of a director for breach of fiduciary duty as a director may be
eliminated or limited, but that the articles may not limit or eliminate such
liability for: (a)&nbsp;any breach of the directors&#146; duty of loyalty to Metalclad or
its shareholders, (b)&nbsp;acts or omissions not in good faith or that involve
intentional misconduct or a knowing violation of law, (c)&nbsp;the payment of
unlawful dividends, stock repurchases or redemptions, (d)&nbsp;any transaction in
which the director received an improper personal benefit, (e)&nbsp;certain
violations of the Minnesota securities laws, and (f)&nbsp;any act or omission
occurring prior to the date when the provision in the articles eliminating or
limiting liability became effective. The Entrx Articles contain a provision
eliminating the personal liability of its directors for breach of fiduciary
duty as a director, subject to the foregoing limitations.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Delaware Law provides that if the certificate of incorporation so
provides, the personal liability of a director for breach of fiduciary duty as
a director may be eliminated or limited, but that the liability of a director
is not limited or eliminated for: (a)&nbsp;any breach of the director&#146;s duty of
loyalty to Metalclad or its shareholders, (b)&nbsp;acts or omissions not in good
faith or involving intentional misconduct or a knowing violation of law, (c)
the payment of unlawful dividends, stock repurchases or redemptions, or (d)&nbsp;any
transaction in which the director received an improper personal benefit. The
Metalclad Certificate contains a provision eliminating the personal liability
of its directors for breach of fiduciary duty as a director, subject to the
foregoing limitations. In addition, the Metalclad Certificate, unlike the
Entrx Articles, provides that to the extent the Delaware Law is subsequently
amended to authorize further limitations of the liability of a director, then
the liability of the directors of Metalclad shall be eliminated to the fullest
extent authorized under such subsequent amendment. Metalclad is not aware of
any pending or threatened litigation to which the limitation of directors&#146;
liability would apply.
</FONT>
<P><FONT size="2"><B><u>Indemnification</u>. </B>The Minnesota Act generally provides for mandatory
indemnification of persons acting in an official capacity on behalf of
Metalclad if such person acted in good faith, received no improper personal
benefit, acted in a manner the person reasonably believed to be in, or not
opposed to, the best interests of Metalclad and, in the case of a criminal
proceeding, had no reasonable cause to believe that the conduct was unlawful.
The Delaware Law permits a corporation to indemnify officers, directors,
employees, or agents and expressly provides that such indemnification shall not
be deemed exclusive of any indemnification right provided under any bylaw, vote
of shareholders or disinterested directors or otherwise. The Delaware Law
permits indemnification against expenses and certain other liabilities arising
out of legal actions brought or threatened against parties entitled to indemnity for their
conduct on behalf of Metalclad, provided that each such person acted in good
faith and in a manner such person reasonably believed was in or not opposed to
the best interests of Metalclad. Indemnification is available in a criminal
action only if the person seeking indemnity had no reasonable cause to believe
that the person&#146;s conduct was unlawful. The Delaware Law does not allow
indemnification for directors in the case of an action by or in the right of
Metalclad (including shareholder derivative suits) as to which
</FONT>
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<P><FONT size="2">such director shall have been adjudged to be liable to Metalclad unless indemnification
(limited to expenses) is ordered by a court. The Entrx Bylaws generally
provide for indemnification to the fullest extent permitted by the Minnesota
Act. The Metalclad Bylaws provide for indemnification to the fullest extent
permitted by the Delaware Law.
</FONT>
<P><FONT size="2"><B><u>Shareholder Voting</u>. </B>Under both the Minnesota Act and Delaware Law, action on
certain matters, including the sale, lease or exchange of all or substantially
all of Metalclad&#146;s property or assets, mergers, and consolidations and
voluntary dissolution, must be approved by the holders of a majority of the
outstanding shares. In addition, both states&#146; laws provide that the articles
or certificate of incorporation may provide for a supermajority of the voting
power of the outstanding shares to approve such extraordinary corporate
transactions. Neither the Entrx Articles nor Metalclad Certificate contains
such a provision.
</FONT>
<P><FONT size="2"><B><u>Appraisal Rights in Connection with Corporate Reorganizations and Other
Actions</u>. </B>Under the Minnesota Act and Delaware Law, shareholders have the
right, in some circumstances, to dissent from certain corporate transactions by
demanding payment in cash for their shares equal to the fair value of the
shares as determined by agreement with Metalclad or by a court in an action
timely brought by the dissenters. The Minnesota Act, in general, affords
dissenters&#146; rights upon certain amendments to the articles of incorporation
that materially and adversely affect the rights or preferences of the shares of
the dissenting shareholder, upon the sale of substantially all corporate assets
and upon merger or exchange by a corporation, including a merger such as that
proposed in the Proxy Statement which primarily effects a change in the state
of incorporation, and regardless of whether the shares of Metalclad are listed
on a national securities exchange or widely held. The Delaware Law allows for
dissenters&#146; rights only in connection with certain mergers or consolidations,
and such rights exist for corporations whose shares are listed on a national
securities exchange or held of record by more than 2,000 shareholders unless
the certificate of incorporation provides otherwise (the Metalclad Certificate
does not provide otherwise), or the shareholders are to receive in the merger
or consolidation anything other than: (a)&nbsp;shares of stock of Metalclad
surviving or resulting from such merger or consolidation, (b)&nbsp;shares of stock
of any other corporation which at the effective date of the merger or
consolidation will be either listed on a national securities exchange or held of record by more than 2,0000 shareholders, (c)
cash in lieu of fractional shares of Metalclad describe in the foregoing
clauses (a)&nbsp;and (b), or (d)&nbsp;any combination of (a), (b), or (c). The
procedures for asserting dissenters&#146; rights under Delaware Law impose most of
the initial costs of such assertion on the dissenting shareholder, whereas the
Minnesota procedures pose little financial risk to the dissenting shareholder
in demanding payment in excess of the amount Metalclad determined to be the
fair value of its shares.
</FONT>
<P><FONT size="2"><B><u>Action by Directors Without a Meeting</u>. </B>The Minnesota Act and Delaware Law each
permit directors to take unanimous written action without a meeting in an
action otherwise required or permitted to be taken at a board meeting.
Minnesota Law further provides that a corporation&#146;s articles of incorporation
may provide that such written action, other than an
</FONT>
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<P><FONT size="2">action requiring shareholder approval, may be taken by the number of directors that would be
required to take the same action at a meeting of the board at which all
directors were present. The Entrx Articles do not contain such a provision.
The Delaware Law requires that written actions by the board of directors must
be unanimous. The Minnesota Act also provides that if the articles of
incorporation or bylaws so provide, a director may give advance written consent
or opposition to a proposal to be acted on at a board meeting; however, such
consent or opposition of a director not present at a meeting does not
constitute presence for determining the existence of a quorum. Neither the
Entrx Articles nor the Entrx Bylaws contain such a provision. The Delaware Law
contains no similar advance written consent or opposition provision.
</FONT>
<P><FONT size="2"><B><u>Conflicts of Interest</u>. </B>Under both the Minnesota Act and Delaware Law, a
contract or transaction between a corporation and one or more of its directors,
or an entity in or of which one or more of Metalclad&#146;s directors are directors,
officers, or legal representatives or have a material financial interest, is
not void or voidable solely by reason of the same, provided that the contract
or transaction is fair and reasonable at the time it is authorized and is
ratified by Metalclad&#146;s shareholders after disclosure of the relationship or
interest, or is authorized and is ratified by Metalclad&#146;s shareholders after
disclosure of the relationship or interest, or it is authorized in good faith
by a majority of the disinterested members of the board of directors after
disclosure of the relationship or interest. However, if the contract or
transaction is authorized by the board, under the Minnesota Act the interested
director may not be counted in determining the presence of a quorum and may not
vote on such contract or transaction. The Delaware Law permits the interested
director to be counted in determining whether a quorum of the directors is
present at the meeting approving the contract or transaction, and further
provides that the contract or transaction shall not be void or voidable solely
because the interested director&#146;s vote is counted at the meeting which
authorizes the contract or transaction.
</FONT>
<P><FONT size="2"><B><u>Treasury Shares under Delaware Law</u>. </B>The Minnesota Act does not allow treasury
shares. Under the Delaware Law, a corporation may hold treasury shares and
such shares may be held, sold, lent, pledged or exchanged by Metalclad. Such
treasury shares, however, are not outstanding shares and therefore do not
receive any dividends and do not have voting rights.
</FONT>
<P><FONT size="2"><B><u>Classified Board of Directors</u>. </B>Both the Minnesota Act and Delaware Law permit
a corporation&#146;s bylaws to provide for a classified board of directors. The
Delaware Law permits a corporation&#146;s certificate of incorporation or bylaws to
provide for a maximum of three classes. The Minnesota Act does not limit the
number of classes. Neither the Entrx Bylaws nor the Metalclad Bylaws provide
for a classified board of directors.
</FONT>
<P><FONT size="2"><B><u>Removal of Director</u>. </B>Under the Minnesota Act, unless a corporation&#146;s articles
of incorporation or bylaws provide otherwise, and under Delaware Law a director
may be removed with or without cause by the affirmative vote of shareholders
owning a majority of the outstanding shares. Under the Minnesota Act, where
there is cumulative voting, a
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<P><FONT size="2">director may not be removed if there are cast against such removal the votes of a proportion of the voting power sufficient
to elect the director at an election of the entire board. Under the Delaware
Act, where there is cumulative voting, a director may not be removed without
cause if the votes cast against such director&#146;s removal would be sufficient to
elect such director at an election of the entire board. Under the Minnesota
Act, a director named by the board to fill a vacancy in the board of directors
may be removed by the affirmative vote of a majority of the other directors. A
director of a Delaware corporation that has a classified board may be removed
only for cause, unless the certificate of incorporation provides otherwise.
Neither the Entrx Articles or Bylaws, nor the Metalclad Bylaws, provide for any
contrary treatment.
</FONT>
<P><FONT size="2"><B><u>Vacancies on Board of Directors</u>. </B>Under Minnesota Act, unless the articles of
incorporation or bylaws provide otherwise: (a)&nbsp;a vacancy on a corporation&#146;s
board of directors may be filled by the vote of a majority of directors then in
office, although less than a quorum, (b)&nbsp;a newly created directorship resulting
from an increase in the number of directors may be filled by the board, and (c)
any director so elected shall hold office only until a qualified successor is
elected at the next regular or special meeting of shareholders. Under the
Delaware Law, unless the bylaws provide otherwise, a vacancy on a corporation&#146;s
board of directors may be filled by the board of directors or other governing
body.
</FONT>
<P><FONT size="2"><B><u>Annual Meeting of Shareholders</u>. </B>The Minnesota Act provides that if a regular
meeting if shareholders has not been held during the immediately preceding 15
months, a shareholder or shareholders holding 3% or more of the voting power of
all shares entitled to vote may demand a regular meeting of shareholders. The
Delaware Law provides that if no date has been set for an annual meeting of shareholders over a period of 13&nbsp;months after the last
annual meeting, the Delaware court may order a meeting to be held upon the
application of any shareholder or director.
</FONT>
<P><FONT size="2"><B><u>Special Meetings of Shareholders</u>. </B>The Minnesota Act provides that the chief
executive officer, the chief financial officer, two or more directors, a person
authorized in the articles or bylaws to call a special meeting, or a
shareholder holding 10% or more of the voting power of all shares entitled to
vote, may generally call a special meeting of the shareholders. Under the
Delaware Law, only the board of directors or those persons authorized by
Metalclad&#146;s certificate of incorporation or bylaws may call a special meeting
of Metalclad&#146;s shareholders. The Metalclad bylaws provide that a special
meeting may be called only by the board of directors or a committee of the
board of directors.
</FONT>
<P><FONT size="2"><B><u>Voluntary Dissolution</u>. </B>The Minnesota Act provides that a corporation may be
dissolved by the voluntary action of holders of a majority of a corporation&#146;s
shares entitled to vote at a meeting called for the purpose of considering such
dissolution. The Delaware Law provides that voluntary dissolution of a
corporation first must be deemed advisable by a majority of the board of
directors and then approved by a majority of the outstanding stock entitled to
vote. The Delaware Law further provides for voluntary dissolution of a
</FONT>
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<P><FONT size="2">corporation without action of the directors if all of the shareholders entitled
to vote on such dissolution shall have consented to the dissolution in writing.
</FONT>
<P><FONT size="2"><B><u>Involuntary Dissolution</u>. </B>The Minnesota Act provides that a court may dissolve
a corporation in an action by a shareholder where: (a)&nbsp;the situation involves a
deadlock in the management of corporate affairs and the shareholders cannot
break the deadlock; (b)&nbsp;the directors have acted fraudulently, illegally, or in
a manner unfairly prejudicial to Metalclad; (c)&nbsp;the shareholders are divided in
voting power for two consecutive regular meetings to the point where successor
directors are not elected; (d)&nbsp;there is a case of misapplication or waste of
corporate assets; or (e)&nbsp;the duration of Metalclad has expired. The Delaware
Law provides that courts may revoke or forfeit the charter of any corporation
for misuse of its corporate powers, privileges or franchises.
</FONT>
<P><FONT size="2"><B><u>Inspection of Shareholder Lists</u>. </B>Under the Minnesota Act, any shareholder has
an absolute right, upon written demand, to examine and copy, in person or by a
legal representative, at any reasonable time, Metalclad&#146;s share register.
Under the Delaware Law, any shareholder, upon written demand under oath stating
the purpose thereof, has the right during the usual hours for business to
inspect for any proper purpose a list of Metalclad&#146;s shareholders and its other
books and records, and to make copies or extracts therefrom.
</FONT>
<P><FONT size="2"><B><u>Amendment of the Charter</u>. </B>Under the Minnesota Act, before the shareholders may
vote on an amendment to the articles of incorporation, either a resolution to
amend the articles must have been approved by the affirmative vote of the
majority of the directors present at the meeting where such resolution was
considered, or the amendment must have been proposed by shareholders holding 3%
or more of the voting power of the shares entitled to vote. Amending the
articles of incorporation requires the affirmative vote of the holders of the
majority of the voting power present and entitled to vote at the meeting (and
of each class, if entitled to vote as a class), unless the articles of
incorporation require a larger proportion. The Minnesota Act provides that a
proposed amendment may be voted upon by the holders of a class or series even
if the articles of incorporation would deny that right, if among other things,
the proposed amendment would increase or decrease the aggregate number of
authorized shares of the class or series, change the rights or preferences of
the class or series, create a new class or series of shares having rights and
preferences prior and superior to the shares of that class or series or limit
or deny any existing preemptive right of the shares of the class or series.
Under the Delaware Law, the board of directors must adopt a resolution setting
forth an amendment to the certificate of incorporation before the shareholders
may vote on such amendment. Unless the certificate of incorporation provides
otherwise, amendments to the certificate of incorporation generally require the
approval of the holders of a majority of the outstanding stock entitled to vote
thereon, and if the amendment would increase or decrease the number of
authorized shares of any class or series or the par value of such shares, or
would adversely affect the rights, powers or preferences of such class or
series, a majority of the outstanding stock of such class or series also must
approve the amendment.
</FONT>
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<P><FONT size="2"><B><u>Amendment of the Bylaws</u>. </B>The Minnesota Act provides that unless reserved by
the articles of incorporation to the shareholders, the power to adopt, amend,
or repeal a corporation&#146;s bylaws is vested in the board of directors, subject
to the power of the shareholders to adopt, repeal, or amend the bylaws. After
adoption of initial bylaws, the board of directors of a Minnesota corporation
cannot adopt, amend or repeal a bylaw fixing a quorum for meetings of
shareholders, prescribing procedures for removing directors or filling
vacancies in the board, or fixing the number of directors or their
classifications, qualifications, or terms of office, but may adopt or amend a
bylaw to increase the number of directors. The Entrx Articles do not reserve
the power to amend the Entrx Bylaws to the shareholders. The Delaware Law
provides that the power to adopt, amend, or repeal bylaws remains with
Metalclad&#146;s shareholders, but permits Metalclad, in its certificate of
incorporation, to place such power in the board of directors. The Metalclad
Certificate allows the board of directors to adopt, amend, or repeal the bylaws
from time to time. Under both the Minnesota Act and Delaware Law, the fact
that the power to adopt, amend, or repeal has been placed in the board of directors
neither divests nor limits the shareholders&#146; power to adopt, amend or repeal
bylaws.
</FONT>
<P><FONT size="2"><B><u>Proxies</u>. </B>Both the Minnesota Act and Delaware Law permit proxies of definite
duration. In the event the proxy is indefinite as to its duration, under the
Minnesota Act it is valid for 11&nbsp;months, under the Delaware Law, for three
years.
</FONT>
<P><FONT size="2"><B><u>Preemptive Rights</u>. </B>Under the Minnesota Act, shareholders have preemptive
rights to acquire a certain fraction of the unissued securities or rights to
purchase securities of a corporation before Metalclad may offer them to other
persons, unless Metalclad&#146;s articles of incorporation otherwise provide. The
Entrx Articles eliminate all such preemptive rights. Under the Delaware Law,
no such preemptive right will exist, unless Metalclad&#146;s certificate of
incorporation specifies otherwise. Metalclad&#146;s Certificate does not provide
for any such preemptive rights.
</FONT>
<P><FONT size="2"><B><u>Dividends</u>. </B>Generally, a corporation organized under the Minnesota Act may pay
a dividend if its board of directors determines that Metalclad will be able to
pay its debts in the ordinary course of business after paying the dividend and
if, among other things, the dividend payment does not reduce the remaining net
assets of Metalclad below the aggregate preferential amount payable im the
event of liquidation to the holders of the shares having preferential rights,
unless the payment is made to those shareholders in the order and to the extent
of their respective priorities. Under the Delaware Law, a corporation may pay
dividends out of surplus or, if there is no surplus, out of net profits for the
fiscal year in which the dividend is declared and/or for the preceding fiscal
year, except that dividends may not be paid out of net profits if, after the
payment of the dividend, capital is less than the capital represented by the
outstanding stock of all classes having a preference upon the distribution of
assets.
</FONT>
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<P><FONT size="2"><B><u>Shareholders&#146; Action Without a Meeting</u>.</B> Under the Minnesota Act, any action
required or permitted to be taken at a shareholders&#146; meeting may be taken
without a meeting by written consent signed by all of the shareholders entitled
to vote on such action. This power cannot be restricted by a Minnesota
corporation&#146;s articles of incorporation. The Delaware Law permits such an
action to be taken if the written consent is signed by the holders of shares
that would have been required to effect the action at an actual meeting of the
shareholders. Generally, holders of a majority of outstanding shares could
effect such an action. However, the Delaware Law also provides that a
corporation&#146;s certificate of incorporation may restrict or prohibit
shareholders&#146; action without a meeting. Metalclad&#146;s Certificate does not
contain any such restriction.
</FONT>
<P><FONT size="2"><B><u>Stock Repurchases</u>. </B>Under the Minnesota Act, a corporation may acquire its own
shares if, after the acquisition, it is able to pay its debts as they become
due in the ordinary course of business and if enough value remains in Metalclad
to satisfy all preferences of senior securities. Under the Delaware Law, a
corporation may purchase or redeem shares of any class except when its capital
is impaired or such purchase would cause impairment of capital, except that a
corporation may purchase or redeem out of capital any of its preferred shares
if such shares will be retired upon the acquisition and the capital of
Metalclad will be thereby reduced.
</FONT>

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<A HREF="#a000">Exhibit&nbsp;B</A>
<!-- link1 "Exhibit&nbsp;B" -->

<P align="center"><FONT size="2"><B>AGREEMENT AND PLAN OF MERGER</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Agreement and Plan of Merger (the &#147;Agreement&#148;) is entered into this
&#95;&#95;&#95;&#95;&#95;&#95;day of &#95;&#95;&#95;&#95;&#95;&#95;, 2002, among Metalclad Corporation, a Delaware
corporation (&#147;Metalclad&#148;), and Entrx Corporation, a Minnesota corporation (&#147;Entrx&#148;).
</FONT>
<P align="center"><FONT size="2"><B><u>Recital</u></B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Metalclad and Entrx wish to enter into an agreement whereby Metalclad will merge
into Entrx (the &#147;Merger&#148;), a wholly owned subsidiary of Metalclad, and Entrx will
become the surviving corporation.
</FONT>
<P align="center"><FONT size="2"><B><u>Agreement</u></B>
</FONT>

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
        <TD width="1%" align="left" nowrap><FONT size="2"><B>1.</B></FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2"><B><U>Terms of Merger</U>.</B></FONT></TD>
</TR>
</TABLE>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><u>Merger</u>. </B>&nbsp;&nbsp;&nbsp;Subject to the terms and conditions of this Agreement, at the
Effective Time (as hereinafter defined), Metalclad shall be merged into and with Entrx.
At the Effective Time, the separate existence of Metalclad shall cease, and Entrx shall
continue as the surviving corporation (the &#147;Surviving Corporation&#148;) under the Minnesota
Business Corporation Act.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.2 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><u>Effective Time of Merger</u>. </B>&nbsp;&nbsp;&nbsp;As soon as practicable, but not less than three
business days after the conditions set forth in Section&nbsp;4, have been satisfied or waived
(i)&nbsp;Entrx will file, or cause to be filed, with the Minnesota Secretary of State, Articles of
Merger which contains a copy of this Agreement, along with a statement that this
Agreement has been approved by Metalclad and Entrx, all of which shall be in the form
required by and executed in accordance with the Minnesota Business Corporation Act (the
&#147;Minn Law&#148;) and (ii)&nbsp;Metalclad shall file or cause to be filed with the Delaware Secretary
of State, this Agreement or a Certificate of Merger, and an agreement of Entrx that it may
be served with process in the state of Delaware in any proceeding for the enforcement of
any obligation of Metalclad, all of which shall be in the form required by and executed in
accordance with the Delaware General Corporation Law (the &#147;Del Law&#148;). The merger
transaction provided for in this Agreement (the &#147;Merger&#148;) will be effective at the time (the
&#147;Effective Time&#148;) that all of the foregoing filings with the Minnesota and Delaware
Secretaries of State are effected.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.3 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><u>Conversion of Common Shares</u>. </B>&nbsp;&nbsp;&nbsp;Except as otherwise provided herein, each
share of the $0.10 par value common stock of Metalclad (the &#147;Metalclad Shares&#148;), shall
automatically, without submission of certificates in exchange therefore, become one share
of the $0.01 per share par value common stock of Entrx (the &#147;Entrx Shares&#148;).
</FONT>
<P align="center"><FONT size="2">&#150; 1 &#150;</FONT>
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<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.4 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>Fractional Shares</U>. </B>&nbsp;&nbsp;&nbsp;No fractional Entrx Shares will result from the one for
one exchange, and thereafter, no fractional Entrx Shares shall be issued.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.5 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>Dissenters Rights</U>. </B>&nbsp;&nbsp;&nbsp;No Metalclad shareholders shall have any dissenters
rights, and Metalclad will not exercise its dissenters rights.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.6 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>Options and Option Plan</U>. </B>&nbsp;&nbsp;&nbsp;The 2000 Omnibus Stock Option and Incentive
Plan of Metalclad (the &#147;Plan&#148;) shall become the Plan of Entrx. An outstanding option or
warrant to acquire one Metalclad Share will be converted into an option to acquire one
Entrx Share. All options for Metalclad Shares converted into options for Entrx Shares
shall be issued under terms, including vesting rights, substantially identical to the options
for Metalclad Shares.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.7 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>Confirmatory Instruments</U>. </B>&nbsp;&nbsp;&nbsp;If at any time after the Effective Time Entrx
shall consider or be advised that any instruments of further assurance are desirable in order
to evidence the vesting in it of the title to any of the property rights of Metalclad, the
appropriate officers or directors of Entrx are hereby authorized to execute, acknowledge
and deliver all such instruments of further assurance and to do all other acts, in the name
of Metalclad, as may be requisite or desirable to carry out the provisions of this Plan.
</FONT>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
        <TD width="1%" align="left" nowrap><FONT size="2"><b>2.</b></FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2"><b><u>Articles of Incorporation and By-Laws</u>.</b></FONT></TD>
</TR>
</TABLE>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><u>Articles of Incorporation &#151; Amendment</u>. </B>&nbsp;&nbsp;&nbsp;The Articles of Incorporation of
Entrx shall continue in full force and effect following the Merger, without modification or
amendment.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><u>By-Laws</u>. </B>&nbsp;&nbsp;&nbsp;The By-Laws of Entrx shall continue in full force and effect
following the Merger, without modification or amendment.
</FONT>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
        <TD width="1%" align="left" nowrap><FONT size="2"><B>3.</B></FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2"><b><u>Covenants of Metalclad and Entrx</u>.</b></FONT></TD>
</TR>
</TABLE>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><u>Director and Shareholder Approval</u>. </B>&nbsp;&nbsp;&nbsp;Each of Metalclad and Entrx shall,
as promptly as practicable, call a meeting of their respective Boards of Directors and
shareholders, for the purpose of voting upon approval of this Agreement.
</FONT>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
        <TD width="1%" align="left" nowrap><FONT size="2"><B>4.</B></FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2"><B><u>Conditions to the Merger</u>.</B></FONT></TD>
</TR>
</TABLE>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><u>Conditions to the Obligations of Each Party</u>. </B>&nbsp;&nbsp;&nbsp;The obligations of Metalclad
or Entrx to consummate the Merger, which may be waived by both parties, are subject to
the following:
</FONT>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
        <TD width="3%"></TD>
        <TD width="97%"></TD>
</TR>
<TR valign="top">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1.1 &nbsp;&nbsp;&nbsp;No provisions of any applicable law or regulation, and no judgment,
injunction, order or decree of any court, arbitrator or government agency shall
exist,</FONT></TD>
</TR>

</TABLE>
<P align="center"><FONT size="2">&#150; 2 &#150;</FONT>
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<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
        <TD width="3%"></TD>
        <TD width="97%"></TD>
</TR>
<TR valign="top">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">and no proceeding shall have been instituted by any person before any court,
arbitrator or government agency, to restrict, delay or prevent this Merger.</FONT></TD>
</TR>

</TABLE>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
        <TD width="3%"></TD>
        <TD width="97%"></TD>
</TR>
<TR valign="top">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1.2 &nbsp;&nbsp;&nbsp;This Agreement shall have been approved and adopted by the
affirmative vote of the holders of at least two-thirds of the issued and outstanding
shares of Metalclad, excluding those shares held beneficially by Wayne W. Mills,
as of the record date of such meeting of the Metalclad shareholders.</FONT></TD>
</TR>

</TABLE>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><u>Conditions to the Obligations of Metalclad</u>. </B>&nbsp;&nbsp;&nbsp;The obligation of Metalclad
to consummate the Merger, which may be waived by Metalclad, is subject to the
following:
</FONT>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
        <TD width="3%"></TD>
        <TD width="97%"></TD>
</TR>
<TR valign="top">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2.1 &nbsp;&nbsp;&nbsp;There shall not be any event, occurrence or development or a state of
circumstances or fact after the date of this Agreement, which alone, or together
with any other circumstance or fact, would or could reasonably be expected to
result in a material adverse change in the financial condition or results of
operations, business or business prospects, or assets of Entrx</FONT></TD>
</TR>

</TABLE>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.3 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><u>Conditions to the Obligations of Entrx</u>. </B>&nbsp;&nbsp;&nbsp;The obligation of Entrx to
consummate the Merger, which may be waived by Entrx, is subject to the following:
</FONT>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
        <TD width="3%"></TD>
        <TD width="97%"></TD>
</TR>
<TR valign="top">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.3.1 &nbsp;&nbsp;&nbsp;There shall not be any event, occurrence or development or a state of
circumstances or fact after the date of this Agreement, which alone, or together
with any other circumstance or fact, would or could reasonably be expected to
result in a material adverse change in the financial condition or results of
operations, business or business prospects, or assets of Metalclad.</FONT></TD>
</TR>

</TABLE>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
        <TD width="1%" align="left" nowrap><FONT size="2"><b>5.</b></FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2"><b><u>Miscellaneous</u></b></FONT></TD>
</TR>
</TABLE>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><u>Termination</u>. </B>&nbsp;&nbsp;&nbsp;This Agreement may be terminated and the Merger
abandoned at any time prior to the Effective Time, even if approved by the shareholders
of Metalclad by resolution of the Board of Directors of Metalclad.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><u>Amendment</u>. </B>&nbsp;&nbsp;&nbsp;This Agreement may be amended at any time prior to the
Effective Time with the mutual consent of the Board of Directors of Metalclad and Entrx;
provided, however, that after it has been adopted by the shareholders of Metalclad , this
Agreement may not be amended in any manner not permitted under applicable laws.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.3 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><u>Expenses</u>. </B>&nbsp;&nbsp;&nbsp;Metalclad will bear and pay the fees or expenses incurred by it
and Entrx in connection with the proposed Merger transaction.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.4 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><u>Successors or Assigns</u>. </B>&nbsp;&nbsp;&nbsp;The provisions of this Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective successors and
assigns, provided that no party may assign, delegate or otherwise transfer any of its rights
or obligations under this Agreement without the consent of the other party.
</FONT>
<P align="center"><FONT size="2">&#150; 3 &#150;</FONT>
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<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.5 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><u>Governing Law</u>. </B>&nbsp;&nbsp;&nbsp;Except to the extent that the laws of the state of Delaware
are mandatorily applicable to the Merger, this Agreement shall be construed in accordance
with and governed by the laws of the state of Minnesota.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>IN WITNESS WHEREOF, </B>the parties hereto have executed this Agreement as of
the date first written above.
</FONT>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
        <TD width="45%">&nbsp;</TD>
        <TD width="10%">&nbsp;</TD>
        <TD width="45%">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD valign="top"><FONT size="2"><B>METALCLAD CORPORATION</B></FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
<B>ENTRX CORPORATION</B></FONT></TD>
</TR>

<TR valign="bottom">
        <TD valign="top"><FONT size="2">By: ________________________</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
By: ________________________</FONT></TD>
</TR>

<TR valign="bottom">
        <TD valign="top"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Wayne W. Mills, President</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Wayne W. Mills, President</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The undersigned President of Metalclad Corporation, the undersigned President of
Entrx Corporation, hereby acknowledge, under penalties of perjury, that the foregoing
Agreement of Merger is the free act and deed of Metalclad Corporation and Entrx
Corporation, respectively, and that the facts stated therein are true.
</FONT>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
        <TD width="45%">&nbsp;</TD>
        <TD width="10%">&nbsp;</TD>
        <TD width="45%">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD valign="top"><FONT size="2"><B>METALCLAD CORPORATION</B></FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
<B>ENTRX CORPORATION</B></FONT></TD>
</TR>

<TR valign="bottom">
        <TD valign="top"><FONT size="2">By: ________________________</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
By: ________________________</FONT></TD>
</TR>

<TR valign="bottom">
        <TD valign="top"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Wayne W. Mills, President</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Wayne W. Mills, President</FONT></TD>
</TR>
</TABLE>
</CENTER>

<P align="center"><FONT size="2">&#150; 4 &#150;</FONT>




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<P align="right">
<A HREF="#a000">Exhibit&nbsp;C</A>
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<P align="center"><FONT size="2"><B>ARTICLES OF INCORPORATION<BR>
OF<BR>
ENTRX CORPORATION</B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The undersigned, being of full age, for the purpose of organizing a
corporation under Minnesota Statutes, Chapter&nbsp;302A, and acts amendatory
thereto, does hereby adopt, sign and acknowledge the following Articles of
Incorporation.
</FONT>
<P align="center"><FONT size="2"><B>ARTICLE I<BR>
<u>Name</u></B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The name of the corporation is &#147;Entrx Corporation.&#148;
</FONT>
<P align="center"><FONT size="2"><B>ARTICLE II<BR>
<u>Registered Office</u></B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The address of the corporation&#146;s registered office in the State of
Minnesota is 800 Nicollet Mall, Suite&nbsp;2690, Minneapolis, Minnesota 55420.
</FONT>
<P align="center"><FONT size="2"><B>ARTICLE III<BR>
<u>Authorized Shares</u></B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The corporation shall have the authority to issue an aggregate of
80,000,000 shares, all of which shall be common voting shares having a par
value of $0.01 per share unless otherwise designated by resolution of the Board
of Directors of the corporation prior to the issuance thereof. The Board of
Directors of the corporation may, from time to time, establish and designate by
resolution different classes of shares, and different series of shares within
each class, out of the authorized shares, and may fix the par value, rights and
preferences of said established and designated shares of any class or series.
</FONT>
<P align="center"><FONT size="2"><B>ARTICLE IV<BR>
<u>Incorporator</u></B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The name and address of the sole incorporator of the corporation is Roger
H. Frommelt, Felhaber, Larson, Fenlon &#038; Vogt, P.A., 225 South Sixth Street,
Minneapolis, Minnesota 55402
</FONT>
<P align="center"><FONT size="2">&#150; 1 &#150;</FONT>
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<P align="center"><FONT size="2"><B>ARTICLE V<BR>
<u>Preemptive Rights</u></B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No shareholder of the corporation, solely by reason of such status as a
shareholder shall have any right to acquire any portion of the unissued shares
or other securities of the corporation, or to acquire any rights to purchase
such shares or other securities, which the corporation may from time to time
offer or sell to any person.
</FONT>
<P align="center"><FONT size="2"><B>ARTICLE VI<BR>
<u>Director Liability</u></B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No member of the Board of Directors of the corporation shall have personal
liability to the corporation or its shareholders for monetary damages for any
breach of fiduciary duty, except for the following:
</FONT>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
        <TD width="3%"></TD>
        <TD width="97%"></TD>
</TR>
<TR valign="top">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;Any breach of a director&#146;s duty of loyalty to the corporation or
its shareholders;</FONT></TD>
</TR>

</TABLE>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
        <TD width="3%"></TD>
        <TD width="97%"></TD>
</TR>
<TR valign="top">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;Any act or omission not in good faith, or that involves
intentional misconduct or a knowing violation of law;</FONT></TD>
</TR>

</TABLE>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
        <TD width="3%"></TD>
        <TD width="97%"></TD>
</TR>
<TR valign="top">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;Any act prohibited under or regulated by Minnesota Statutes,
Section&nbsp;302A.559 concerning illegal distributions, or by Minnesota
Statutes, Section&nbsp;80A.23 concerning civil liabilities for securities
violations; or</FONT></TD>
</TR>

</TABLE>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
        <TD width="3%"></TD>
        <TD width="97%"></TD>
</TR>
<TR valign="top">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;Any transaction from which the director derives an improper
personal benefit.</FONT></TD>
</TR>

</TABLE>
<P align="center"><FONT size="2"><B>ARTICLE VII<BR>
<u>Control Share Acquisitions/Business Combinations</u></B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The corporation shall not be subject to either Section&nbsp;302A.671 or Section
302A.673 of the Minnesota Business Corporation Act, relating to control share
acquisitions and business combinations, respectively.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>IN WITNESS WHEREOF, </B>I have hereunto set my hand this
day of April, 2002.
</FONT>

<P align="center">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR><TD width="50%">&nbsp;</TD><TD width="50%">&nbsp;</TD></TR>
<TR><TD>&nbsp;</TD><TD><hr size="1" noshade>
<FONT size="2">Roger H. Frommelt
</FONT></TD></TR></TABLE>


<P align="center"><FONT size="2">&#150; 2 &#150;</FONT>




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<P align="right">
<A HREF="#a000">Exhibit&nbsp;D</A>
<!-- link1 "Exhibit&nbsp;D" -->

<P align="center"><FONT size="2"><B>BY-LAWS<BR>
OF<BR>
ENTRX CORPORATION<BR>
(a Minnesota corporation)</B>
</FONT>

<P align="center"><FONT size="2"><B>ARTICLE I<BR>
<u>DEFINITIONS</u></B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>1.01. </B>The following words or phrases when used in these By-Laws, whether
or not initially capitalized, shall have the meanings set forth below:
</FONT>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
        <TD width="3%"></TD>
        <TD width="97%"></TD>
</TR>
<TR valign="top">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Articles of Incorporation&#148; shall mean the Articles of
Incorporation of the Corporation.</FONT></TD>
</TR>

</TABLE>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
        <TD width="3%"></TD>
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        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Board of Directors&#148; shall mean the Board of Directors of the
Corporation.</FONT></TD>
</TR>

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        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Corporation&#148; shall mean Entrx Corporation</FONT></TD>
</TR>

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        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Director&#148; shall mean a member of the Board of Directors.</FONT></TD>
</TR>

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        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Notice&#148; is given to a Shareholder or Director when mailed to
such person at the address designated by the person or at the last known
address of the person, or when communicated to the person orally, or when
handed to the person, or when left at the office of the person with a
clerk or other person in charge of the office, or if there is no one in
charge, when left in a conspicuous place in the office, or if the office
is closed or the person to be notified has no office, when left at the
dwelling, house or usual place of abode of the person with some other
person of suitable age and discretion residing therein.</FONT></TD>
</TR>

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        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Shares&#148; shall mean the authorized shares of the Corporation as
identified in the Corporation&#146;s Articles of Incorporation.</FONT></TD>
</TR>

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        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;g. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Shareholder&#148; or &#147;Shareholders&#148; shall mean a Shareholder or the
Shareholders of record of the Corporation.</FONT></TD>
</TR>

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        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;h. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Statute&#148; shall mean the applicable statute or statutes of the
Minnesota Business Corporation Act, being Chapter&nbsp;270 of the 1981 Laws of
Minnesota.</FONT></TD>
</TR>

</TABLE>
<P align="center"><FONT size="2">&#150; 1 &#150;</FONT>
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        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Voting Shares&#148; shall mean the shares which entitle the record
owner to vote on matters relating to the affairs of the Corporation under
the Articles of Incorporation or by Statute.</FONT></TD>
</TR>

</TABLE>
<P align="center"><FONT size="2"><B>ARTICLE II<BR>
<u>OFFICES, BOOKS AND RECORDS</u></B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>2.01 <u>Registered and Other offices.</u> </B>The registered office of the
Corporation in Minnesota shall be that most recently adopted either in the
Articles of Incorporation or any amendment thereto, or by the Board of
Directors in a statement filed with the Secretary of State of Minnesota
establishing the registered office in the manner prescribed by law. The
Corporation may have such other offices, within or without the State of
Minnesota, as the Board of Directors shall, from time to time, determine.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>2.02 <u>Maintenance of Records.</u> </B>The original books and records of the
Corporation, or copies thereof, shall be maintained at the principal executive
office of the Corporation. Certain records, statements and agreements, or
copies thereof, shall be available for examination by the Shareholders on such
terms and conditions as the Board of Directors may from time to time impose,
consistent with Statute.
</FONT>
<P align="center"><FONT size="2"><B>ARTICLE III<BR>
<u>SHAREHOLDERS&#146; MEETING</u></B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>3.01
<u>Place</u>.</B> Meetings of the Shareholders shall be held in the county
where the principal executive office of the Corporation is located; provided
that any meeting not called by or at the demand of a Shareholder or
Shareholders pursuant to Statute, may be held at such other place as the chief
executive officer or the Board of Directors may designate.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>3.02 <u>Regular Meeting</u>. </B>A regular meeting of the Shareholders shall be
held within the five calendar months following the end of the Corporation&#146;s
fiscal year for federal income tax purposes, on such date, and at such time and
place, as may be specified by the chief executive officer, unless some other
date, time or place is specified by the Board of Directors.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>3.03 <u>Special Meeting</u>. </B>A special meeting of the Shareholders may be
called for any purpose by or upon the order of the chief executive officer, or
two or more Directors. A special meeting of the Shareholders shall be called by the Chief Executive Officer
or the Board of Directors on the demand, pursuant to Statute, of Shareholders
holding at least ten percent of the outstanding Voting Shares of the
Corporation. Business transacted at any special meeting of the Shareholders
shall be confined to the purposes stated in the Notice of such meeting.
</FONT>
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<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>3.04 <u>Notice</u>. </B>Notice of the place, date and time of any meeting of the
Shareholders shall be given to each Shareholder entitled to vote thereat.
Except where a specific minimum notice period has been fixed by law, Notice of
any meeting of the shareholders shall be given at least ten days before the
meeting. No Notice of any meeting of the Shareholders may be given more than
sixty days before such meeting. The Notice of any special meeting shall set
forth the purposes of the meeting and, in a general nature, the business to be
transacted. In determining the number of days of Notice required under this
By-Law, the date upon which any such Notice is given shall be included as one
day and the date of the meeting which is the subject of the Notice shall not be
included.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>3.05 <u>Waiver of Notice; Consent Meetings</u>. </B>Notice of the time, place and
purpose of any meeting of the Shareholders may be waived by any Shareholder
before, at, or after any such meeting. Any action which may be taken at a
meeting of the Shareholders may be taken without a meeting if authorized by a
writing signed by all Shareholders who would be entitled to a Notice of such
meeting for such purpose. Attendance at a meeting of the Shareholders is a
waiver of the Notice of that meeting, unless at the beginning of that meeting a
Shareholder objects that the meeting is not lawfully called or convened, or
unless prior to the vote on any item of business, a Shareholder objects that
the item may not be lawfully considered at that meeting and such Shareholder
does not participate in the consideration of that item at that meeting.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>3.06 <u>Quorum; Adjournment</u>. </B>The presence at any meeting, in person or by
proxy, of the Shareholders owning at least one third of the outstanding Voting
Shares shall constitute a quorum for the transaction of business. Once a
quorum is established at any meeting of the Shareholders, the voluntary
withdrawal of any Shareholder from the meeting shall not affect the authority
of the remaining Shareholders to conduct any business which properly comes
before the meeting. In the absence of a quorum, those present may adjourn the
meeting from day to day or time to time without further notice other than
announcement at such meeting of such date, time and place of the adjourned
meeting. At an adjourned meeting of the Shareholders at which a quorum is
present, any business may be transacted which might have been transacted at the
meeting as originally noticed.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>3.07 <u>Voting; Record Date</u>. </B>At each meeting of the Shareholders, each
Shareholder entitled to vote thereat may vote in person or by proxy duly
appointed by an instrument in writing subscribed by such Shareholder. At a
meeting of the Shareholders, each Shareholder shall have one vote for each voting share standing in such Shareholder&#146;s
name on the books of the Corporation, or on the books of any transfer agent
appointed by the Corporation, on the record date established by the Board of
Directors, which date may not be more than sixty days from the date of any such
meeting. If no record date has been established, the record date shall be as
of the close of business on the date immediately preceding the date such notice
is first given to any Shareholder. Upon the demand of any Shareholder at the
meeting, the vote for Directors, or the vote upon any question before the
meeting, shall be by written ballot. All elections shall be effected, and all
questions shall be decided, by Shareholders
</FONT>
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<P><FONT size="2">owning a majority of the shares present in person and by proxy, except as otherwise specifically provided for
by Statute or by the Articles of Incorporation.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>3.08 <u>Presiding Officer</u>. </B>The chief executive officer of the Corporation
or any person so designated by the chief executive officer shall preside as
chairman over each meeting of the Shareholders, unless another person is
designated by the Board of Directors to preside at such meeting or meetings.
In the absence of the chief executive officer or his designee, or another
person designated by the Board of Directors to preside at any meeting of the
Shareholders, the Shareholders at the meeting may elect any person present to
act as the presiding officer of the meeting.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>3.09 <u>Conduct of Meetings of Shareholders</u>. </B>Subject to the following,
meetings of Shareholders generally shall follow accepted rules of parliamentary
procedure:
</FONT>
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        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The chairman of the meeting shall have absolute authority over
matters of procedure and there shall be no appeal from the ruling of the
chairman. If the chairman, in his absolute discretion, deems it
advisable to dispense with the rules of parliamentary procedure as to any
one meeting of Shareholders or part thereof, the chairman shall so state
and shall clearly state the rules under which the meeting or appropriate
part thereof shall be conducted.</FONT></TD>
</TR>

</TABLE>
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        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If disorder should arise which prevents continuation of the
legitimate business of the meeting, the chairman may (i)&nbsp;quit the chair
and announce the adjournment of the meeting, and upon his so doing, the
meeting is immediately adjourned, or (ii)&nbsp;cause the person or persons
causing such disorder to be forcibly removed if that person does not
leave the meeting voluntarily.</FONT></TD>
</TR>

</TABLE>
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        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The chairman may ask or require that anyone leave the meeting who
is not a bona fide Shareholder of record entitled to Notice of the
meeting, or a duly appointed proxy thereof, and cause the person to be forcibly removed if that
person does not leave the meeting voluntarily.</FONT></TD>
</TR>

</TABLE>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>3.10 <u>Inspectors of Election</u>. </B>The Board of Directors in advance of any
meeting of Shareholders may appoint one or more inspectors to act at such
meeting or adjournment thereof. If inspectors of election are not so
appointed, the person acting as chairman of any such meeting may, and on the
request of any Shareholder or his or her proxy shall, make such appointment.
In case any person appointed as inspector shall fail to appear to act, the
vacancy may be filled by appointment made by the Board of Directors in advance
of the meeting, or at the meeting by the officer or person acting as chairman.
The inspectors of election shall determine the number of shares outstanding,
the voting power of each, the shares represented at the meeting, the existence
of a quorum, the authenticity, validity and effect of proxies, and shall
receive votes, ballots, assents or consents, hear and determine all challenges
and questions in any way arising and announce the result, and do such acts as
may
</FONT>
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<P><FONT size="2">be proper to conduct the election or vote with fairness to all
Shareholders. No inspector whether appointed by the Board of Directors or by
the officer or person acting as chairman need be a Shareholder.
</FONT>
<P align="center"><FONT size="2"><B>ARTICLE IV<BR>
<u>BOARD OF DIRECTORS</u></B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>4.01 <u>Number, Election and Term</u>. </B>The Board of Directors shall consist of
one or more members. The number of the members of the Board of Directors to be
elected at any meeting of the Shareholders shall be determined from time to
time by the Board of Directors and, if the Board of Directors does not
expressly fix the number of Directors to be so elected, then the number of
Directors shall be the number of Directors elected at the preceding regular
meeting of Shareholders. The number of Directors may be increased at any
subsequent special meeting of Shareholders called for the election of
additional Directors, by the number so elected. A Director need not be a
Shareholder. Directors shall be elected at each regular meeting of the
Shareholders. Each Director shall be elected to serve for an indefinite term,
terminating at the next regular meeting of the Shareholders and the election of
a qualified successor by the Shareholders, or the earlier death, resignation,
removal or disqualification of such Director.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>4.02 <u>Regular Meetings</u>. </B>Unless otherwise specified by the Board of
Directors, the regular meeting of the Board of Directors shall be held at the
place of, and immediately following the adjournment of, the regular meeting of
the Shareholders. At such meeting of the Board of Directors, the Board of
Directors shall elect such officers as are deemed necessary for the operation
and management of the Corporation, and transact such other business as may
properly come before it.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>4.03 <u>Special Meetings</u>. </B>Special meetings of the Board of Directors may be
called by the chief executive officer or any Director at any time, to be held
at the principal executive office of the Corporation, or at some other location
which is either within 50 miles of the principal executive offices of the
Corporation, determined at any prior meeting of the Board of Directors, or
agreed to by a majority of the members of the Board of Directors.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>4.04 <u>Notice</u>. </B>Notice of the date, time and place of meetings of the Board
of Directors shall be given to each Director at least two days prior to the
meeting; provided that if the Notice is given by mail, it shall be deposited in
the U.S. mail and posted at least four days prior to the meeting. In
determining the number of days of Notice required under this By-Law, the date
upon which any such Notice is given shall be included as one day, and the date
of the meeting which is the subject of the Notice shall not be included. In
the case of meetings held by voice communication as provided in By-Law 4.05
below, such Notice shall set forth the specific manner in which the meeting is
to be held. Any Director may, before, at, or after a meeting of the Board of
Directors, waive Notice thereof. Any Director who attends a meeting shall be
deemed to have waived Notice of the meeting, unless such
</FONT>
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<P><FONT size="2">Director objects at
the beginning of the meeting to the transaction of business because the meeting
is not lawfully called and does not participate in the meeting.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>4.05 <u>Telephone and Consent Meetings</u>. </B>Participation in any meeting of the
Board of Directors by conference telephone or other similar means of
communication, whereby all persons participating in the meeting can
simultaneously and continuously hear each other, shall constitute presence in
person at that meeting. Any action which might be taken at a meeting of the
Board of Directors may be taken without a meeting if done in writing, signed by
all members of the Board of Directors.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>4.06 <u>Quorum/Voting</u>. </B>At all meetings of the Board of Directors, a
majority of the members must be present to constitute a quorum for the
transaction of business. Each member shall have one vote. Voting by proxy, or
the establishment of a quorum by proxy, is prohibited. The act of the majority
of the Directors present at any meeting at which there is a quorum shall be the
act of the Board of Directors. In the absence of a quorum, a majority of those
present may adjourn the meeting from day to day or time to time without Notice
other than announcement at such meeting of the date, time and place of the
adjourned meeting.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>4.07 <u>Order of Business/Record</u>. </B>The Board of Directors may, from time to
time, determine the order of the business at any meeting thereof. If a
Secretary of the Corporation has been elected by the Board of Directors, such
Secretary shall keep a record of all proceedings at a meeting of the Board of Directors; otherwise, a Secretary Pro Tem, chosen
by the person presiding over the meeting as chairman, shall so act.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>4.08 <u>Vacancy</u>. </B>A vacancy in membership of the Board of Directors shall be
filled by the affirmative vote of the remaining members of the Board of
Directors, though less than a quorum, and a member so elected shall serve until
his successor is elected by the Shareholders at their next regular meeting, or
at a special meeting duly called for that purpose.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>4.09 <u>Committees</u>. </B>The Board of Directors may, by resolution adopted by a
majority of the members of the Board of Directors, designate one or more
persons to constitute a committee which, to the extent provided in such
resolution, shall have and exercise the authority of the Board of Directors in
the management of the business of the Corporation. The authority of any such
committee, and any member thereof, may be terminated or removed at any time at
the discretion of the Board of Directors. Unless otherwise provided by the
Board of Directors, a meeting of a committee of the Board of Directors may be
called by any member of the committee, otherwise the calling of any meeting of
a committee, and the conduct of any such meeting, including the voting of
committee members thereof, shall be governed by By-Laws 4.03, 4.04, 4.05, 4.06
and 4.07, as if the word &#147;committee&#148; is substituted for the words &#147;Board of
Directors,&#148; and the words &#147;committee member&#148; are substituted for the word
&#147;Director.&#148;
</FONT>
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<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>4.10 <u>Other Powers</u>. </B>In addition to the powers and authorities conferred
upon them by By-Laws, the Board of Directors shall have the power to do all
acts necessary and expedient to the conduct of the business of the Corporation
which are not conferred upon the Shareholders by Statute, these By-Laws, or the
Articles of Incorporation.
</FONT>
<P align="center"><FONT size="2"><B>ARTICLE V<BR>
<u>SHARES</u></B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>5.01 <u>Issuance of Securities</u>. </B>The Board of Directors is authorized to
issue securities of the Corporation, and rights thereto, to the full extent
authorized by the Articles of Incorporation, in such amounts, at such times and
to such persons as may be determined by the Board of Directors and permitted by
law, subject to any limitations specified in these By-Laws.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>5.02 <u>Certificates for Shares</u>. </B>Every Shareholder shall be entitled to a
certificate, to be in such form as prescribed by law and adopted by the Board
of Directors, evidencing the number of shares of the Corporation owned by such
Shareholder. The certificates shall be signed by the chief executive officer;
provided that if a transfer agent has been appointed for the Corporation&#146;s
shares, such signature may be a facsimile.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>5.03 <u>Transfer of Shares</u>. </B>Subject to any applicable or reasonable
restrictions which may be imposed by the Board of Directors, shares of the
Corporation shall be transferred upon written demand of the Shareholder named
in the certificate, or the Shareholder&#146;s legal or the Shareholder&#146;s duly authorized attorney-in-fact, accompanied by a
tender of the certificates to be transferred properly endorsed, and payment of
all transfer taxes due thereon, if any. The Corporation may treat, as the
absolute owner of shares of the Corporation, the person or persons in whose
name or names the shares are registered on the books of the Corporation.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>5.04 <u>Lost Certificate</u>. </B>Any Shareholder claiming a certificate evidencing
ownership of shares to be lost, stolen or destroyed shall make an affidavit or
affirmation of that fact in such form as the Board of Directors may require,
and shall, if the Board of Directors so require, give the Corporation (and its
transfer agent, if a transfer agent be appointed) a bond of indemnity in such
form with one or more sureties satisfactory to the Board of Directors, in such
amount as the Board of Directors may require, whereupon a new certificate may
be issued of the same tenor and for the same number of shares as the one
alleged to have been lost, stolen or destroyed.
</FONT>
<P align="center"><FONT size="2">&#150; 7 &#150;</FONT>
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<P align="center"><FONT size="2"><B>ARTICLE VI<BR>
<u>OFFICERS</u></B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>6.01 <u>Election of Officers</u>. </B>The Board of Directors, at its regular
meeting held after each regular meeting of Shareholders shall, and at any
special meeting may, elect a Chief Executive Officer and a Chief Financial
Officer. Except as may otherwise be determined from time to time by the Board
of Directors, such officers shall exercise such powers and perform such duties
as are prescribed by these By-Laws. The Board of Directors may elect such
other officers and agents as it shall deem necessary from time to time,
including Vice Presidents and a Chairman of the Board who shall exercise such
powers and perform such duties, not in conflict with the duties of officers
designated in these By-Laws, as shall be determined from time to time by the
Board of Directors.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>6.02 <u>Terms of Office</u>. </B>The officers of the Corporation shall hold office
until their successors are elected and qualified, notwithstanding an earlier
termination of their office as Directors. Any officer elected by the Board of
Directors may be removed with or without cause by the affirmative vote of a
majority of the Board of Directors present at a meeting.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>6.03 <u>Salaries</u>. </B>The salaries of all officers of the Corporation shall be
determined by the Board of Directors.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>6.04 <u>Chief Executive Officer</u>. </B>The President shall be the chief executive
officer of the Corporation, unless the Board of Directors shall designate
another person as the chief executive officer. The chief executive officer
shall:
</FONT>
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        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;have general active management of the business of the
Corporation;</FONT></TD>
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        <TD width="97%"></TD>
</TR>
<TR valign="top">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;when present, and except where the Board of Directors elects a
chairman of the board, other than the chief executive officer, preside at
all meetings of the Board of Directors and of the Shareholders;</FONT></TD>
</TR>

</TABLE>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
        <TD width="3%"></TD>
        <TD width="97%"></TD>
</TR>
<TR valign="top">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;see that all orders and resolutions of the Board of Directors are
carried into effect;</FONT></TD>
</TR>

</TABLE>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
        <TD width="3%"></TD>
        <TD width="97%"></TD>
</TR>
<TR valign="top">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;sign and deliver in the name of the Corporation any deeds,
mortgages, bonds, contracts or other instruments pertaining to the
business of the Corporation, except in cases in which the authority to
sign and deliver is required by law to be exercised by another person or
is expressly delegated by the Articles of Incorporation or these By-Laws
or by the Board of Directors to some other officer or agent of the
Corporation;</FONT></TD>
</TR>

</TABLE>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
        <TD width="3%"></TD>
        <TD width="97%"></TD>
</TR>
<TR valign="top">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;maintain records of and, whenever necessary, certify all
proceedings of the Board of Directors and the Shareholders; and</FONT></TD>
</TR>

</TABLE>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
        <TD width="3%"></TD>
        <TD width="97%"></TD>
</TR>
<TR valign="top">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;perform other duties prescribed by the Board of Directors.</FONT></TD>
</TR>

</TABLE>
<P align="center"><FONT size="2">&#150; 8 &#150;</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>





<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>6.05 <u>Chief Financial Officer</u>. </B>The Treasurer shall be the chief financial
officer of the Corporation, and as such shall:
</FONT>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
        <TD width="3%"></TD>
        <TD width="97%"></TD>
</TR>
<TR valign="top">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;keep accurate financial records for the Corporation;</FONT></TD>
</TR>

</TABLE>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
        <TD width="3%"></TD>
        <TD width="97%"></TD>
</TR>
<TR valign="top">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;deposit all money, drafts, and checks in the name of and to the
credit of the Corporation in the banks and depositories designated by the
Board of Directors;</FONT></TD>
</TR>

</TABLE>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
        <TD width="3%"></TD>
        <TD width="97%"></TD>
</TR>
<TR valign="top">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;endorse for deposit all notes, checks, and drafts received by the
Corporation as ordered by the Board of Directors, making proper vouchers
therefor;</FONT></TD>
</TR>

</TABLE>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
        <TD width="3%"></TD>
        <TD width="97%"></TD>
</TR>
<TR valign="top">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;disburse funds of the Corporation, and issue checks and drafts in
the name of the Corporation, as ordered by the Board of Directors;</FONT></TD>
</TR>

</TABLE>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
        <TD width="3%"></TD>
        <TD width="97%"></TD>
</TR>
<TR valign="top">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;render to the chief executive officer and the Board of Directors,
whenever requested, an account of all transactions by the Treasurer and
of the financial condition of the Corporation; and</FONT></TD>
</TR>

</TABLE>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
        <TD width="3%"></TD>
        <TD width="97%"></TD>
</TR>
<TR valign="top">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;perform other duties prescribed by the Board of Directors or by
the chief executive officer, under whose supervision the Treasurer shall
be.</FONT></TD>
</TR>

</TABLE>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>6.06 <u>Secretary</u>. </B>The Secretary, if elected, shall:
</FONT>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
        <TD width="3%"></TD>
        <TD width="97%"></TD>
</TR>
<TR valign="top">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;attend all meetings of the Board of Directors at the request of
the chief executive officer or the Board of Directors, and shall attend
all meetings of the Shareholders and record all votes and the minutes of
all proceedings in a book kept for that purpose; and shall perform like
duties for a committee when required by the chief executive officer; and</FONT></TD>
</TR>

</TABLE>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
        <TD width="3%"></TD>
        <TD width="97%"></TD>
</TR>
<TR valign="top">
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;perform other duties prescribed by the Board of Directors or by
the chief executive officer, under whose supervision the secretary shall
be.</FONT></TD>
</TR>

</TABLE>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>6.07 <u>Delegation of Authority</u>. </B>Except where prohibited or limited by the
Board of Directors, an officer elected by the Board of Directors may delegate
some or all of the duties or powers of his or her office to another person,
provided that such delegation is in writing, and a copy of such written
delegation, identifying the person to whom those duties or powers are
delegated, and specifying the nature, extent and any limitations of the duties
or powers delegated, is delivered in the same manner as provided for Notices of
meetings of the Board of Directors to all members of the Board of Directors
prior to such delegation becoming effective.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>6.08 <u>Succession</u>. </B>Unless otherwise provided for by the Board of
Directors, in the event of the death, incapacity, resignation or removal of the
chief executive officer, the
</FONT>
<P align="center"><FONT size="2">&#150; 9 &#150;</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<P><FONT size="2">Chairman of the Board, if elected, and if no
Chairman of the Board is elected, the chief financial officer, shall accede to
the office and have the authority to exercise the duties and powers, of the
chief executive officer.
</FONT>
<P align="center"><FONT size="2"><B>ARTICLE VII<BR>
<u>MISCELLANEOUS</u></B>
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>7.01 <u>Corporate Seal</u>. </B>If so directed by the Board of Directors, the
Corporation may adopt and use a corporate seal. The failure to use such seal,
however, shall not affect the validity of any documents executed on behalf of
the Corporation. The seal need only include the word &#147;seal,&#148; but it may also
include, at the discretion of the Board of Directors, such additional wording
as permitted by Statute.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>7.02 <u>Reimbursement by Directors and Officers</u>. </B>Any payments made to any
officer or Director of this Corporation, such as salary, commission, bonus,
interest, or rent, or entertainment expenses incurred by him, which shall be
disallowed in whole or in part as a deductible expense by the Internal Revenue
Service, shall be reimbursed by such officer or Director to the Corporation to
the full extent of such disallowance. It shall be the duty of the Board of
Directors to enforce payment of each said amount disallowed. In lieu of
payment by the officer or Director, subject to the determination of the Board
of Directors, proportionate amounts may be withheld from his future
compensation payments until the amount owed to the Corporation has been
recovered.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>7.03 <u>Amendments to By-Laws</u>. </B>These By-Laws may be amended or altered by
the vote of a majority of all of the members of the Board of Directors at any
meeting. Such authority of the Board of Directors is subject to the power of
the Shareholders to adopt, amend or repeal By-Laws adopted, amended or repealed
by the Board of Directors, pursuant to Statute at any regular or special
meeting called for that purpose.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The foregoing By-Laws of this Corporation were adopted by the Board of
Directors on the &#95;&#95;&#95;&#95;&#95;&#95;day of &#95;&#95;&#95;&#95;&#95;&#95;, 2002.
</FONT>
<P align="right"><FONT size="2"><B>__________________________________</B>
</FONT>


<P align="center"><FONT size="2">10</FONT>




<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<P align="center"><FONT size="2"><B>PROXY<BR>
METALCLAD CORPORATION<BR>
This Proxy is solicited on Behalf of the Board of Directors and<BR>
Management of Metalclad Corporation</B>
</FONT>

<P><FONT size="2">The undersigned, revoking all prior proxies, hereby appoints Wayne W. Mills and
Kenneth W. Brimmer, and each or either of them, as proxies, with full power of
substitution, to vote all shares of common stock of Metalclad Corporation (the
&#147;Company&#148;) which the undersigned is entitled to vote at the Annual Meeting of
Shareholders of Metalclad Corporation, to be held at the Hyatt Regency Hotel,
1300 Nicollet Mall, Minneapolis, Minnesota on June&nbsp;14, 2002, at 10:00&nbsp;a.m. or
at any adjournment thereof, and hereby instructs said proxies to vote said
shares as specified below:
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
        <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
<TD width="4%">&nbsp;</TD>
        <TD width="2%">&nbsp;</TD>
        <TD width="32%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="4%">&nbsp;</TD>
        <TD width="2%">&nbsp;</TD>
        <TD width="42%">&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD width="4%"><FONT size="2">1.</FONT></TD>

        <TD colspan="7"><FONT size="2">Election of Directors</FONT></TD>
</TR>
<TR valign="top">
<TD width="4%">&nbsp;</TD>
        <TD valign="top"><FONT size="2"><font face="wingdings">&#111;</font></FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
FOR all nominees listed below<BR>
(except as marked to the contrary below)
</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2"><font face="wingdings">&#111;</font>
</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">WITHHOLD AUTHORITY<BR>
to vote for all nominees listed below</FONT></TD>
</TR>
<TR valign="bottom">
        <TD width="4%">&nbsp;</TD>
<TD colspan="7"><FONT size="2"><B>(INSTRUCTIONS: To withhold authority to vote for any individual nominee, strike a line through the nominee&#146;s name in the list below.)</B>
</FONT></TD>
</TR>
</TABLE>
</CENTER>

<P align="center"><FONT size="2">Wayne W. Mills, Kenneth W. Brimmer, Joseph M. Caldwell,<BR>
Gary W. Copperud and Joseph M. Senser
</FONT>

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
        <TD width="1%" align="left" nowrap><FONT size="2">2.</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2">Approval of an amendment to the Company&#146;s 2000 Incentive Stock Option
Plan (the &#147;Plan&#148;) to increase the number of shares of common stock
reserved for issuance under the Plan from 1,000,000 shares to 2,000,000
shares.</FONT></TD>
</TR>
<TR><TD colspan="8" align="center">
<FONT size="2">
<font face="wingdings">&#111;</font>&nbsp;FOR
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<font face="wingdings">&#111;</font>&nbsp;AGAINST
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<font face="wingdings">&#111;</font>&nbsp;ABSTAIN
</FONT>
</TD></TR>
</TABLE>




<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
        <TD width="1%" align="left" nowrap><FONT size="2">3.</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2">Approval of the merger of the Company into a wholly owned subsidiary
called Entrx Corporation, a Minnesota corporation, to effect a change in
the state of the Company&#146;s incorporation from Delaware to Minnesota.</FONT></TD>
</TR>
<TR><TD colspan="8" align="center">
<FONT size="2">
<font face="wingdings">&#111;</font>&nbsp;FOR
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<font face="wingdings">&#111;</font>&nbsp;AGAINST
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<font face="wingdings">&#111;</font>&nbsp;ABSTAIN
</FONT>
</TD></TR>
</TABLE>

<P align="center"><FONT size="2">(Continued, and to be signed, on reverse side)
</FONT>

<P align="center"><FONT size="2">&nbsp;</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>



<P align="center"><FONT size="2">(continued from other side)
</FONT>

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
        <TD width="1%" align="left" nowrap><FONT size="2">4.</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2">If proposed number 3 above (reincorporation by merger into a Minnesota
corporation) does not pass with the requisite number of votes, approval of
amendments to the Company&#146;s Certificate of Incorporation to change the
name of Metalclad Corporation to Entrx Corporation, and to increase the
Company&#146;s authorized preferred stock from 1,500,000 to 5,000,000 shares.</FONT></TD>
</TR>
<TR><TD colspan="8" align="center">
<FONT size="2">
<font face="wingdings">&#111;</font>&nbsp;FOR
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<font face="wingdings">&#111;</font>&nbsp;AGAINST
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<font face="wingdings">&#111;</font>&nbsp;ABSTAIN
</FONT>
</TD></TR>
</TABLE>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
        <TD width="1%" align="left" nowrap><FONT size="2">5.</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2">In their discretion, the proxies are authorized to vote upon matters
which are incidental to the conduct of the Annual Meeting, and upon other
business of which the Board of Directors is presently unaware and which
may properly come before the meeting, and for the election of any person
as a member of the Board of Directors if a nominee named in the
accompanying Proxy Statement is unable to serve or for good cause will not
serve.</FONT></TD>
</TR>
<TR><TD colspan="8" align="center">
<FONT size="2">
<font face="wingdings">&#111;</font>&nbsp;FOR
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<font face="wingdings">&#111;</font>&nbsp;AGAINST
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<font face="wingdings">&#111;</font>&nbsp;ABSTAIN
</FONT>
</TD></TR>
</TABLE>

<P><FONT size="2">THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS AND MANAGEMENT OF METALCLAD
CORPORATION AND WILL BE VOTED IN FAVOR OF THE ELECTION OF THE FIVE NOMINEES AND
FOR PROPOSALS , 3, 4 AND 5 UNLESS OTHER INSTRUCTIONS ARE GIVEN.
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
        <TD width="55%">&nbsp;</TD>
        <TD width="45%">&nbsp;</TD>
</TR>
<TR valign="bottom">    <TD width="55%">&nbsp;</TD>
        <TD valign="top" nowrap><FONT size="2">Dated: &#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;&#95;, 2002</FONT><br>&nbsp;</TD>
</TR>

<TR valign="bottom">    <TD width="55%">&nbsp;</TD>
        <TD valign="top" align="center"><hr noshade size="1"><FONT size="2">Signature</FONT><br>&nbsp;</TD>
</TR>

<TR valign="bottom">    <TD width="55%">&nbsp;</TD>
        <TD valign="top" align="center"><hr noshade size="1"><FONT size="2">Signature</FONT><br>&nbsp;</TD>
</TR>
<TR>    <TD width="55%">&nbsp;</TD>
<TD><FONT size="2">Please sign exactly as your name
appears hereon; if stock is held
jointly, each owner must sign.
When signing as executor, trustee,
guardian, attorney, agent or proxy,
please indicate title.<BR>
<B>Please sign, date and return this Proxy promptly.</B>
</FONT></TD></TR></TABLE></CENTER>


<P align="center"><FONT size="2">&nbsp;</FONT>




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