Edgar Filing: NATCO GROUP INC

NATCO GROUP INC.
2950 N. LOOP WEST, 7TH FLOOR
HOUSTON, TEXAS 77092

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PROXY STATEMENT SUPPLEMENT
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This Proxy Statement Supplement is furnished by the Board of Directors of
NATCO Group Inc. (the "Company" or "NATCO"). It amends and supplements the Proxy
Statement of NATCO dated April 24, 2004, which was first mailed to stockholders
on or about April 29, 2004. Capitalized terms used and not otherwise defined in
this supplement shall have the respective meanings assigned to such terms in the
Proxy Statement.

After the April 24, 2004 Proxy Statement was printed, we became aware of
the following inadvertent errors in the Summary Compensation Table appearing on
page 17 of the Proxy Statement. The revised information is set forth below.

A bonus payment totaling $135,179 made to Patrick M. McCarthy in 2002 was
inadvertently omitted from the Summary Compensation Table. In the column of the
Table captioned "Bonus (1)," the revised amount for Mr. McCarthy for 2002 is
$135,179. The annual salary paid to Robert A. Curcio in 2002 was inadvertently
understated by $2,070 in the Summary Compensation Table. In the column of the
Table captioned "Salary," the revised amount for Mr. Curcio for 2002 is
$199,500. Amounts listed under "Other" for each of Mr. McCarthy, Mr. Smith, Mr.
Curcio and Mr. Michaluk have been omitted since they are below the threshold for
reporting such amounts, and footnote 7 has been revised to reflect this change.

In addition, certain amounts with regard to 401(k) contributions in the
table and in footnotes 3 and 4 reflected the total contribution to the Named
Executive Officer's account by the executive, not the company match, as was
required. This resulted in the overstatement of "All Other Compensation" in 2003
of $6,000 for each of Nathaniel A. Gregory, Mr. McCarthy, C. Frank Smith and Mr.
Curcio. In addition, "All Other Compensation" for Mr. Curcio for 2002 was
previously overstated by $3,000. In the column of the Table captioned "All Other
Compensation", the revised amount for Mr. Gregory for 2003 is $9,806, the
revised amount for Mr. McCarthy for 2003 is $9,161, the revised amount for Mr.
Smith for 2003 is $8,469 and the revised amount for Mr. Curcio for each of 2003
and 2002 is $8,270.

A revised Summary Compensation Table, with footnotes, is set forth below.

ANNUAL COMPENSATION LONG-TERM COMPENSATION AWARDS
------------------- -----------------------------
SECURITIES
NAME AND FISCAL OTHER UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS(1) ($) OPTIONS (#) COMPENSATION
------------------ ------ -------- -------- --------- ----------- ------------

Nathaniel A. Gregory ................... 2003 $426,308 $316,104 $78,798(2) $ -- $ 9,806(3)
Chairman and Chief Executive 2002 400,000 216,523 78,875(2) -- 8,966(4)
Officer 2001 394,231 191,842 71,299(2) 81,750 11,778(5)

Patrick M. McCarthy .................... 2003 293,087 166,133 --(7) -- 9,161(3)
Director and President 2002 275,000 135,179 --(7) -- 10,511(4)
2001 277,177 137,030 --(7) 56,300 9,432(5)

C. Frank Smith ......................... 2003 228,039 107,299 --(7) 10,000 8,469(3)
Executive Vice President 2002 220,000 84,229 --(7) -- 6,207(4)
2001 200,000 83,532 --(7) 48,300 11,220(5)

Robert A. Curcio ....................... 2003 206,790 68,291 --(7) -- 8,270(3)
Senior Vice President-- 2002 199,500 54,875 --(7) -- 8,270(4)
Technology and Product 2001 189,999 56,689 --(7) 28,350 9,243(5)
Development

Peter G. Michaluk (6) .................. 2003 175,109 69,941 --(7) -- 22,681(8)
Senior Vice President--Europe, 2002 156,260 70,655 --(7) -- 17,548(8)
Africa and Middle East 2001 112,239 41,531 --(7) 86,350 10,983(8)

Richard W. FitzGerald .................. 2003 121,154 -- -- 66,667 1,888(3)
Senior Vice President and Chief
Financial Officer (9)

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(1) Bonuses reported and paid in a fiscal year relate to the executive's
performance in the prior fiscal year and, in 2003, also included payment of
previously deferred bonus awards.
(2) Includes costs paid for lodging in Houston and the tax gross-up of related
costs of $50,076 and $28,722 for 2003, respectively, $41,347 and $37,529
for 2002, respectively, and $37,040 and $34,259 for 2001, respectively.
(3) Represents (a) matching contributions made in 2003 under our 401(k) Savings
Plan of $8,000 for Mr. Gregory, $8,000 for Mr. McCarthy, $8,000 for Mr.
Smith, $8,000 for Mr. Curcio and $1,696 for Mr. FitzGerald and (b) life
insurance premiums of $1,806, $1,161, $469, $270 and $192 for Messrs.
Gregory, McCarthy, Smith, Curcio and FitzGerald, respectively.
(4) Represents (a) matching contributions made in 2002 under our 401(k) Savings
Plan of $8,000 for Mr. Gregory, $9,350 for Mr. McCarthy, $5,738 for Mr.
Smith and $8,000 for Mr. Curcio and (b) life insurance premiums of $966,
$1,161, $469 and $270 for Messrs. Gregory, McCarthy, Smith, and Curcio,
respectively.
(5) Represents (a) matching contributions made in 2001 under our 401(k) Savings
Plan of $10,950 for Mr. Gregory, $8,400 for Mr. McCarthy, $10,950 for Mr.
Smith and $9,075 for Mr. Curcio and (b) life insurance premiums of $828,
$1,032, $270 and $168 for Messrs. Gregory, McCarthy, Smith and Curcio,
respectively.
(6) Mr. Michaluk, Senior Vice President-Europe, Africa and Middle East, began
employment with us in March 2001, when the company acquired Axsia Holdings
Limited.
(7) The aggregate amount of perquisites and other personal benefits for the
Named Executive Officer is less than $50,000 or 10% of the annual salary
and bonus of the named executive.
(8) Represents (a) employer contributions to the U.K. Occupational Pension
Scheme on behalf of the employee of $22,681, $17,548 and $10,983, and (b)
amounts related to private health insurance in the U.K. for this employee
of $2,133, $1,853 and $1,334, for the years ended December 31, 2003, 2002
and 2001, respectively.
(9) Mr. FitzGerald, Senior Vice President and Chief Financial Officer, began
employment with the company on May 28, 2003.

In addition, footnote 1 to the table on security ownership of management
and principal stockholders, located on pages 13 and 14 of the Proxy Statement,
inadvertently overstated by 625 shares the number of shares which Mr. McCarthy
had the right to acquire within 60 days. The revised number of shares in the
footnote is 104,817.

The Company's Proxy Statement dated April 24, 2004 is modified in its
entirety by the foregoing.

A NEW PROXY CARD IS INCLUDED WITH THIS SUPPLEMENT. IF YOU HAVE ALREADY
VOTED, AND DO NOT WISH TO CHANGE YOUR VOTE, YOU DO NOT NEED TO SEND A NEW PROXY.
IF YOU WISH TO CHANGE YOUR VOTE, OR HAVE NOT YET VOTED, PLEASE COMPLETE, DATE,
SIGN AND MAIL PROMPTLY THE ENCLOSED PROXY IN THE ENCLOSED POSTPAID ENVELOPE. THE
PROXY IS REVOCABLE AND WILL NOT BE USED IF YOU ARE PRESENT AT THE ANNUAL MEETING
AND PREFER TO VOTE YOUR SHARES IN PERSON.

By Order of the Board of Directors

/s/ Katherine P. Ellis
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Katherine P. Ellis
Senior Vice President, Secretary &
General Counsel

Dated: May 20, 2004