Exhibit (10) (af)

 
Description of Met-Pro Corporation FYE 2008 Management Incentive Plan

Background
 

A number of years ago, Met-Pro Corporation (the “Company”) established a
compensation plan (the “Management Incentive Plan” or the “Plan”) which is
presently applicable to the Chief Executive Officer, the Chief Financial
Officer, the Company’s two Executive Vice Presidents, the Assistant to the
President and the various individuals who function as General Managers of the
Company’s business units (herein collectively “business units”). In the fiscal
year ended January 31, 2007, a total of eleven employees participated in the
plan and a total of $233,938 was awarded under the plan.

Description of the Plan

The Management Incentive Plan provides participating individuals with the
opportunity to earn annual incentive awards payable in cash (“awards”) based
upon the performance of the operating segment or business unit managed by an
individual Executive Vice President or General Manager, and for the achievement
of measures relating to the individual’s own performance. In the case of the
Chief Executive Officer (“CEO”), the Chief Financial Officer (“CFO”) and the
Assistant to the President, awards are based upon the performance of the overall
Company, as well as the achievement of measures relating to that individual’s
own performance. The types of measures and relative weight of those measures
used in determining annual incentive awards are tailored to the position and
organizational responsibility.

The amount of the award is based on a percentage of annual base salary. This
percentage reflects the executive’s respective organizational level, position
and responsibility for achievement of the Company’s strategic goals. In the
fiscal year ending January 31, 2008, these percentages are as follows: for the
CEO, 50% of base salary; for the CFO, 40% of base salary; for Executive Vice
Presidents, 35% of base salary; for the Assistant to the President, 25% of base
salary; and for General Managers, 25% of base salary.

Under the terms of the Management Incentive Plan, in order to be eligible for an
award, certain objective threshold results must be met. The fiscal year 2008
Management Incentive Plan requirements are as follows: for the CEO, the CFO and
the Assistant to the President, the achievement of a predetermined threshold
profit before tax (“PBT”) for the Company as a whole; and for Executive Vice
Presidents and General Managers, the achievement of a PBT by the individual’s
respective operating segments or business unit.

The Company’s Compensation and Stock Option Committee (“Committee”) together
with the Company’s other non-management Directors administers the Plan with
respect to the CEO and acts in an advisory capacity to the Board with respect to
the other participants in the Plan. The Committee retains the discretion, for
purposes of determining an officer’s eligibility for a bonus under the
Management Incentive Plan, to make adjustments to take into account
extraordinary or unusual items outside of normal operations, such as capital
asset sales or unusual expenses.

The CEO, together with the CFO, works with the participants in the Management
Incentive Plan to establish thresholds and goals under the Management Incentive
Plan, presents these thresholds and goals to the Committee (typically in
February of each year) as part of the Company’s annual budgeting process,
monitors and reports to the Board and the Committee on a periodic basis
throughout the year as to performance relative to these thresholds and goals,
and presents to the Committee an assessment  after the end of the fiscal year as
to the extent to which the thresholds and goals were met by each of the
participants in the Management Incentive Plan (other than himself).

A “threshold financial multiplier” is used as a computational factor in
determining the actual award amount, the value of which varies depending on the
relative achievement of the threshold financial target.  The specific threshold
financial multiplier assigned, based upon the PBT achieved, is shown in the
 
 
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table below. If the threshold financial target actually achieved at year-end is
less than a certain percentage of the targeted goal (80% for the CEO, CFO and
Assistant to the President; 85% for Executive Vice Presidents; and 90% for
General Managers), no award will be paid, except to the extent of a defined
bonus pool under the Plan from which the Chief Executive Officer has certain
discretionary authority to grant awards.

 
Attainment of Threshold Financial Target
Threshold Financial Multiplier—CEO, CFO,  Assistant to President
Threshold Financial Multiplier— Executive Vice Presidents
Threshold Financial Multiplier—General Managers
 
Less than 80%
0.00%
0.00%
0.00%
 
80%
50.00%
0.00%
0.00%
 
85%
62.50%
50.00%
0.00%
 
90%
75.00%
66.67%
50.00%
 
95%
87.50%
83.34%
75.00%
 
100%
100.00%
100.00%
100.00%
 
105%
110.00%
110.00%
110.00%
 
110%
120.00%
120.00%
120.00%
 
115%
130.00%
130.00%
130.00%
 
120%
140.00%
140.00%
140.00%
 
125%
150.00%
150.00%
150.00%
 
greater than 125%
150.00%
150.00%
150.00%

After achieving the gating percentage of the threshold financial target (80%,
85%, or 90%, as the case may be), the award calculation requires the participant
to meet certain financial and performance goals.  For the CEO, the CFO and the
Assistant to the President, the financial and performance goals consist of PBT
and predetermined personal performance goals.  The weight assigned to PBT and
personal performance goals are 65% and 35%, respectively.  The financial and
performance goals for the Executive Vice President of the Fluid Handling
Technologies segment consist of PBT, net sales, inventory turnover, accounts
receivable days outstanding and predetermined personal performance goals.  The
weight assigned to profit before tax, net sales, inventory turnover, accounts
receivable days outstanding and personal performance goals are 35%, 30%, 10%,
10% and 15%, respectively.  The financial and performance goals for the
Executive Vice President of the Product Recovery/Pollution Control Technologies
segment consisted of PBT, net sales, accounts receivable days outstanding (which
vary with respect to particular business units), inventory turnover percentages
for certain of the business units), and predetermined personal performance
goals.  The weight assigned to profit before tax, net sales, accounts receivable
days outstanding, inventory turnover and personal performance goals are 35%,
30%, 10%, 10% and 15%, respectively.  For the General Managers, the financial
and performance goals consist of a number of possible performance measurements
such as, PBT, net sales, accounts receivable days outstanding, inventory turns
and predetermined personal performance goals.  The weight assigned to these
goals range from 10% to 40% and varies with the individual.  Based upon relative
performance, the weight of each goal would be multiplied by a corresponding
percentage within the range of 0% to 125%.  If less than a particular percentage
of a particular goal is achieved (80%, 85%, or 90%, as the case may be), the
multiplier would be 0%, between the gating percentage and 100% the multiplier
would be between 50% and 100%, between 100% and 125% the multiplier would be
between 100% and 150%, and greater than 125% the multiplier would remain
at 150%.

Additionally, for participants other than the CEO, the CFO and the Assistant to
the President, the Management Incentive Plan provides that the financial and
personal performance goals will be multiplied by a corporate goal percentage,
which is based on the PBT achieved by the Company during its fiscal year.  If
less than a particular percentage of the corporate goal is achieved (80% for
Executive Vice Presidents
 
 
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and General Managers), the multiplier would be 50% and 90%; between the gating
percentage and 100% the multiplier would be between 50% and 100% for Executive
Vice Presidents and between 90% and 100% for General Managers; and greater than
100% the multiplier would remain at 100%.

The total actual award amount cannot exceed 150% of the eligible incentive level
(that is, as previously discussed, for fiscal year 2008, 50% for the CEO; 40%
for the CFO; 35% for Executive Vice Presidents; 25% for the Assistant to the
President; and 25% for the General Managers), meaning that the participant’s
award amount will not be greater than 1.5 times the incentive level times the
base salary.

The award amounts in formulaic terms can be expressed as:

For the CEO, the CFO and the Assistant to the President:
 
  Award amount = (Eligibility and Incentive Level) x (Base Salary) x (Threshold
Financial Multiplier) x
       (Financial and Performance Goals: PBT % + Personal Performance Goals %)

For Executive Vice Presidents:

 
  Award amount = (Eligibility and Incentive Level) x (Base Salary) x (Threshold
Financial Multiplier) x
     (Financial and Performance Goals: PBT % + Net Sales % + Inventory Turnover
% +
         A/R Days Outstanding % + Personal Performance Goals %) x
                (Corporate Goal %)

For General Managers:
      Award amount = (Eligibility and Incentive Level) x (Base Salary) x
(Threshold Financial Multiplier) x
          (Financial and Performance Goals: PBT % + Net Sales % +        
        A/R Days Outstanding % + Inventory Turns %+ Personal Performance Goals
%) x
                 (Corporate Goal %)

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