<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14 (a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other
than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement / / Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6 (e) (2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11 (c) or sec.240.14a-12
MOORE PRODUCTS CO.
-------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
-------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing Fee (Check the appropriate box):
/ / $125 per Exchange Act Rules 0-11 (c) (1) (ii),
or 14a-6 (i) (1), or 14a-6 (i) (2)
or Item 22(a) (2) of Schedule 14A
/ / $500 per each party to the controversy
pursuant to Exchange Act Rule 14a-6 (i) (3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i) (4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
<PAGE>
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/X/ Fee paid previously with preliminary material.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 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.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
[GRAPHIC OMITTED]
MOORE PRODUCTS CO.
Sumneytown Pike
Spring House, Pennsylvania 19477
-------------------
NOTICE OF 1996 ANNUAL MEETING
OF SHAREHOLDERS
TO BE HELD ON MAY 2, 1996
-------------------
To the Shareholders:
The Annual Meeting of Shareholders of Moore Products Co. (the "Company")
will be held on Thursday, May 2, 1996, at 11:00 A.M. local time at the office of
the Company, Spring House, Pennsylvania, for the following purposes:
1. To elect three directors of the Company for a term of four years;
2. To consider and vote upon a proposal to approve an amendment to the
Company's Articles of Incorporation increasing the number of
authorized shares of common stock from 3,750,000 to 7,500,000 shares;
3. To consider and vote upon a proposal to approve an amendment to the
Company's 1994 Incentive Stock Option and Non-qualified Stock Option
Plan to increase the number of shares available for issuance under the
plan from 300,000 to 750,000; and
4. To transact such other business as may properly come before the
meeting, or any adjournments thereof.
The close of business on March 14, 1996, has been fixed by the Board of
Directors as the record date for the determination of shareholders entitled to
notice of, and to vote at, this meeting or any adjournments thereof.
Whether or not you expect to be present in person at the meeting, you are
requested to execute promptly the enclosed proxy and return it in the envelope
provided, which requires no further postage if mailed in the United States.
By Order of the Board of Directors
Robert E. Wisniewski
Secretary and Treasurer
March 28, 1996
<PAGE>
Moore Products Co.
Sumneytown Pike
Spring House, PA 19477
PROXY STATEMENT
Proxies in the form enclosed are solicited by the Board of Directors of
Moore Products Co. ("the Company") for use at the Annual Meeting ("the Meeting")
of the Shareholders of the Company to be held May 2, 1996, and any adjournments
thereof.
Execution of the enclosed proxy will not in any way affect a shareholder's
right to attend the meeting and vote in person; and shareholders giving proxies
may revoke them at any time before they are exercised by a written revocation or
duly executed proxy bearing a later date filed with the Secretary of the
Company.
The solicitation of the proxies being on behalf of the Board of Directors,
all expenses in connection therewith will be paid by the Company. No
solicitation is intended to be made by any manner other than the sending of this
Proxy Statement through the mail which is expected to occur on or about April 1,
1996.
Voting Securities
As of the record date, March 14, 1996, the Company had outstanding
2,583,892 shares of common stock, par value $1.00, each share entitled to one
vote, and 175,950 shares of convertible preferred stock, par value $1.00, each
share entitled to five votes. The preferred stock is convertible at any time, at
the option of the holder, into common stock at the rate of one share of common
stock for each 2-1/2 shares of preferred stock. The common and preferred shares
are collectively referred to herein as the "voting shares." In the election of
directors, assuming a quorum is present, the nominees receiving the highest
number of votes cast at the Meeting (with the common stock and preferred stock
voting as a single class) will be elected. The affirmative vote of a majority of
the votes cast at the Meeting is required for the approval of Proposals 2 and 3,
assuming a quorum is present. Abstentions, or the withholding of, or specific
direction not to cast any vote on a specific matter, such as broker non-votes,
will not constitute the casting of a vote on such matter.
Beneficial Ownership of Principal Shareholders and Management
The following table sets forth, as of March 14, 1996, (except where
otherwise indicated) certain information concerning the beneficial ownership of
the Company's outstanding voting shares by (i) each person who is known by the
Company to be the beneficial owner of more than 5% of either class of such
voting shares, (ii) each director and nominee for director of the Company; (iii)
each executive officer of the Company named in the Summary Compensation Table
appearing later in this Proxy Statement, and (iv) all directors and executive
officers of the Company as a group. Such information is based upon information
supplied by such persons.
5
<PAGE>
<TABLE>
<CAPTION>
Name of Beneficial Class of Amount and Nature of Percent
Owner or Group (1) Voting Shares Beneficial Ownership (2) of Class
- ------------------ ------------- ------------------------ --------
<S> <C> <C> <C>
Mellon Bank Corporation Common 1,136,156 (3) (4) 42.8
Preferred 172,890 (4) 98.3
Moore Products Co. Pension Plan Common 500,000 (5) 19.4
Frances O. Moore Common 326,854 (3) (6) 12.3
Preferred 172,890 (6) 98.3
Thomas C. Moore, Director Common 345,592 (3) (7) 14.4
Preferred 1,020 *
James O. Moore, Director Common 351,533 (3) (8) (9) 13.6
Preferred 1,020 *
William B. Moore, Director, Common 362,793 (3) (9) (10) 14.0
President and Chief Preferred 1,020 *
Executive Officer
Edwin G. Rorke, Director Common 6,022 *
Edward J. Curry, Director, Common 4,092 (9) (11) *
Executive Vice President and
Chief Operating Officer
Robert B. Adams, Director Common 4,033 *
F. Lawton Hindle, Director Common 1,680 (9) *
Ralph H. Owens, Director Common 4,331 *
Raymond M. Reed, Director Common --- ---
James McDonald, Vice President, Common 2,221 (9) *
Sales
Quest Advisory Corp. Common 163,100 (12) 6.3
Peter Cundill & Associates Common 196,425 (13) 7.6
(Bermuda), Ltd.
All directors and executive Common 958,177 (3) (14) 37.1
officers as a group Preferred 3,060 1.7
(11 in number)
</TABLE>
- -----------------------
* Less than 1%
6
<PAGE>
(1) The address of Mellon Bank Corporation is One Mellon Bank Center,
Pittsburgh, PA 15258. The address of the Moore Products Co. Pension Plan is
c/o Benefits Committee, Moore Products Co., Sumneytown Pike, Spring House,
PA 19477. The addresses of F. O. Moore, T. C. Moore, J. O. Moore and W. B.
Moore are c/o Moore Products Co., Sumneytown Pike, Spring House, PA 19477.
The address of Quest Advisory Corp. is 1414 Avenue of the Americas, New
York, NY 10019. The address of Peter Cundill & Associates (Bermuda), Ltd.
is 15 Alton Hill, Southampton SN 01, Bermuda.
(2) Except as otherwise indicated, the beneficial ownership reflected in this
Proxy Statement is based upon sole voting and dispositive power (other than
in the case of co-trustees, where such powers are shared).
(3) Includes shares issuable upon the assumed conversion of the preferred
shares beneficially owned by such person or entity.
(4) Represents shares held as of December 31, 1995 by Mellon Bank Corporation
and its affiliates ("Mellon") in various fiduciary capacities according to
the Schedule 13G filed by it with the Securities and Exchange Commission.
Includes: an aggregate of 257,698 common shares, and all of the indicated
preferred shares, held as co-trustee (with Frances O. Moore) of the Trust
under the Will of the late Coleman B. Moore; and an aggregate of 300,000
common shares held as co-trustee (with T. C. Moore, J. O. Moore, and W. B.
Moore) of two trusts established by Coleman B. Moore; and an aggregate of
500,000 common shares held by the Company's Pension Plan of which Mellon is
the Trustee (see footnote (5) below).
(5) Under the terms of the Company's Pension Plan and Trust, the Company's
Benefits Committee has the power and duty to direct Mellon, as Trustee, as
to the voting, holding and sale of the Company common shares held in the
Plan; however, by law Mellon, as Trustee, may have certain duties as to the
management and voting of such common shares. The current members of the
Company's Benefits Committee are E. J. Curry, Executive Vice President and
Chief Operating Officer of the Company; R. E. Wisniewski, Secretary and
Treasurer of the Company; and J. F. Douglass, Director of Personnel and
Facilities of the Company, all of whom disclaim beneficial ownership of the
common shares held by the Plan. The decisions of the Benefits Committee
with respect to the voting, holding and sale of such common shares are
required to be made by a majority of the members of the Benefits Committee.
(6) Includes the common and preferred shares held by her as co-trustee of the
Trust under the Will of Coleman B. Moore referred to in footnote (4) above.
(7) Includes: 10,000 common shares held by him as trustee for his children;
300,000 common shares held by him as co-trustee of the two trusts referred
to in footnote (4) above; 13,000 common shares held by him as co-trustee of
a trust established by Frances O. Moore; and 1,344 common shares held by
him as custodian for his minor grandchildren.
(8) Includes: 300,000 common shares held by him as co-trustee of the two trusts
referred to in footnote (4) above; and 13,000 common shares held by him as
co-trustee of a trust established by Frances O. Moore.
7
<PAGE>
(9) Includes, with respect to the particular named individual, shares issuable
under currently exercisable stock options granted to him as follows: J. O.
Moore, 1,200 common shares; W. B. Moore, 5,000 common shares; E. J. Curry,
3,000 common shares; F. L. Hindle, 1,680 common shares; and J. McDonald,
2,000 common shares.
(10) Includes: 300,000 common shares held by him as co-trustee of the two trusts
referred to in footnote (4) above; 13,000 common shares held by him as
co-trustee of a trust established by Frances O. Moore; and an aggregate of
7,350 common shares owned directly by his minor children.
(11) Does not include the 500,000 common shares held by the Company's Pension
Plan (see footnote (5) above).
(12) Shares held as of December 31, 1995 by Quest Advisory Corp. which is
controlled by Charles M. Royce according to their joint Schedule 13G.
(13) According to a joint Schedule 13D filed by Peter Cundill & Associates
(Bermuda) Ltd. ("PCB"), Peter Cundill Holdings (Bermuda) Ltd. ("Holdings")
and F. Peter Cundill ("Cundill"), includes as of December 31, 1995 (i)
152,200 common shares owned by Cundill Value Fund, as to which PCB has sole
voting and dispositive power, and (ii) 44,225 common shares owned by
investment advisory clients as to 22,875 of which common shares PCB shares
voting and dispositive power; and as to 21,350 of which common shares PCB
shares dispositive power only. PCB could be deemed to be controlled by
Holdings, which, in turn, could be deemed to be controlled by Cundill.
(14) Includes 14,760 common shares issuable under currently exercisable stock
options, and the 500,000 common shares held by the Company's Pension Plan
(see footnote (5) above).
Thomas C. Moore, James O. Moore and William B. Moore are brothers and the sons
of the late Coleman B. Moore, founder of the Company.
1. ELECTION OF DIRECTORS
The By-Laws of the Company provide for a Board of Directors not less than
five nor more than eleven in number, to be divided into four classes of
directors. At the 1996 Annual Meeting, the shareholders will elect three
directors for a term expiring in 2000. The following have been nominated by the
Board of Directors to serve as directors until the 2000 Annual Meeting of
shareholders, and until a successor is elected and has duly qualified.
James O. Moore William B. Moore Ralph H. Owens
The above nominees are present directors of the Company. It is intended
that the proxies will be voted for the nominees or for substituted nominees, in
case any nominee becomes unavailable, which is not contemplated. However,
proxies will not be voted for the election of more than three directors.
8
<PAGE>
The following table sets forth as of March 14, 1996, certain information
with respect to the nominees for election as a director, and each director whose
term of office will continue after the Annual Meeting.
<TABLE>
<CAPTION>
Present
Director Term
Name and Occupation (1) Age Since Expires
- ----------------------- --- --------- -------
<S> <C> <C> <C>
James O. Moore * 55 1978 1996
General Manager, Measurement
& Control Division beginning
in 1995; formerly, Manager of
Research and Electronic
Instrument Development
of the Company
William B. Moore * 53 1978 1996
President and Chief Executive
Officer of the Company
Ralph H. Owens 79 1974 1996
Retired in 1986 as Senior
Vice President of the Company
Robert B. Adams * 65 1986 1997
President, CEO & Director, EST Group, Inc.
(a manufacturer of industrial dampers, pressure
plugging and testing equipment) since 1994;
President, Product Development Services Co.
(a management and engineering consulting firm)
since 1993; Retired in 1993 as Vice President,
Engineering and Secretary of the Company
Edwin G. Rorke * 73 1968 1997
Chairman of the Board
of the Company; Retired
in 1988 as Chief Executive
Officer of the Company
F. Lawton Hindle 64 1995 1998
Retired in 1995 as President of
Moore Products Co. (Canada), Inc.
(a wholly-owned subsidiary
of the Company)
Thomas C. Moore 63 1969 1998
Retired in 1994 as Regional
Manager of the Company
Edward J. Curry * 49 1986 1999
Executive Vice President and Chief
Operating Officer of the Company
Raymond M. Reed 60 1991 1999
President, R. Reed & Associates, Inc.
(a management consulting firm); and
R. Reed Business Systems Consulting, Inc.
(a systems implementation support firm)
</TABLE>
9
<PAGE>
* member of the Executive Committee
(1) Unless otherwise indicated, the named individuals have held the specified
positions (other than directorships), or other positions with the indicated
entities, for at least five years. In September 1995 Edward J. Curry,
Executive Vice President was appointed the additional title of Chief
Operating Officer.
Information Concerning Meetings and Certain Committees
Five meetings of the Board of Directors were held in 1995. No director
attended fewer than 75% of the total meetings of the Board and of any Board
Committees on which he served.
The Company has Audit and Compensation Committees, but does not have a
Nominating Committee.
The Audit Committee, members of which are presently Robert B. Adams, Edward
J. Curry, and Edwin G. Rorke, held four meetings in 1995. The Audit Committee
recommends the engagement of independent accountants, reviews the scope of the
audit, reviews the financial statements and performance of the independent
accountants, considers comments made by the independent accountants with respect
to the Company's system of internal accounting controls, reviews controls with
the Company's financial and accounting staff and reviews nonaudit services
provided by the Company's independent accountants.
A Compensation Committee customarily is appointed each year to study and
make recommendations to the Board regarding compensation of officers. That
committee held two meetings in 1995. The members of the committee are (and
during all of 1995 were) Robert B. Adams, Thomas C. Moore, and Ralph H. Owens.
Messrs. Owens and Adams formerly were officers and Thomas C. Moore formerly was
a Regional Manager of the Company.
Compensation of Directors
Directors, other than those currently employed by the Company, are paid
$400 plus travel expenses for each Board and Committee meeting they attend. On
occasion, directors are compensated on a per diem basis for specific consulting
services, and during 1995, consulting fees, totalling $4,900 were paid to
Raymond M. Reed or his affiliated consulting firm.
At his retirement in 1993, Robert B. Adams (former Vice President,
Engineering, Secretary and a member of the Board of Directors) entered into a
consulting and non-compete agreement with the Company for a three-year period
ending March 31, 1996. Mr. Adams or his affiliated consulting firm was paid
$25,000 under this agreement during 1995, and future compensation to be paid
under this agreement is not expected to exceed $5,000 over the remaining term.
10
<PAGE>
At his retirement in 1995, F. Lawton Hindle, (former officer of the
Company's Canadian subsidiary and a member of the Board of Directors) entered
into a consulting and non-compete agreement with the Company for a three-year
period ending December 31, 1997. Mr. Hindle was paid $43,900 under this
agreement during 1995 and future compensation to be paid under this agreement is
not expected to exceed $30,000 over the remaining term.
2. AMENDMENT OF ARTICLES OF INCORPORATION
On March 11, 1996, the Company's Board of Directors unanimously adopted,
subject to shareholder approval, an amendment to Article Fifth of the Company's
Articles of Incorporation, increasing the total number of authorized common
shares of the Company from 3,750,000 shares to 7,500,000 shares. The
shareholders will be asked to approve this amendment at the Meeting.
As of March 14, 1996, of the 3,750,000 common shares currently authorized,
2,583,092 shares were outstanding and only 1,166,908 shares were available for
issuance by the Company. Of this latter number, 749,200 shares were reserved for
issuance under options outstanding or authorized under the Company's 1994
Incentive Stock Option and Non-qualified Stock Option Plan (assuming the
amendment of such Plan as set forth in Proposal 3 below is approved) and an
additional 70,380 shares were reserved for potential conversion of the Company's
175,950 outstanding shares of preferred stock. The Board of Directors believes
that the additional 3,750,000 common shares proposed to be authorized by the
amendment of the Articles of Incorporation will provide flexibility for steps
the Company might wish to take in the future relating to possible employee stock
benefit plans, financings, acquisitions, stock splits and other appropriate
corporate transactions. If the issuance of common shares is deemed advisable in
connection with such matters, the existence of authority sought by this Proposal
2 to issue the additional common shares may avoid the necessity for, and the
expense and delay of, a special shareholders' meeting to increase the Company's
authorized common shares.
Although the Board of Directors is not proposing the authorization of the
additional common shares as an "anti-takeover" device, it is possible that such
additional shares could be used to discourage or impede a tender offer or other
attempt to gain control of the Company. Further, the Company's 149,050 shares of
presently authorized but unissued preferred stock may be issued in one or more
series and with such designations, preferences and relative rights, including
voting and conversion rights, as the Board of Directors may fix by resolution.
In the event of a threatened takeover of the Company, it could be possible for
the Board to authorize the issuance of one or more additional series of such
preferred shares, either alone or in conjunction with issuances of the
additional 3,750,000 common shares proposed to be authorized, which could make
it difficult for such takeover to succeed. Since holders of common shares are
not entitled to preemptive rights, issuances by the Company of additional
preferred shares or additional common shares, other than to existing
shareholders, could have the effect of reducing the voting power of, and would
dilute the percentage ownership in the Company of, existing shareholders.
11
<PAGE>
If the 3,750,000 additional common shares are authorized, no further action
or authorization by the Company's shareholders will be necessary prior to the
issuance of such common shares, except as might be required for a particular
transaction by applicable law or by agreements with or policies of the NASDAQ
National Market and any other stock exchanges on which the Company's securities
then may be listed. The Board of Directors has no present specific plans with
respect to the issuance of any of the additional common shares proposed to be
authorized.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THIS AMENDMENT TO
THE ARTICLES OF INCORPORATION.
3. AMENDMENT OF 1994 INCENTIVE STOCK OPTION AND NON-QUALIFIED STOCK OPTION
PLAN
At the Meeting, the shareholders also will be asked to approve an amendment
to the Company's 1994 Incentive Stock Option and Non-qualified Stock Option Plan
(the "1994 Plan"). The 1994 Plan was originally adopted by the Company's Board
of Directors in February, 1994, and approved by the shareholders of the Company
at the Annual Meeting in May, 1994. On March 11, 1996, the Board of Directors
unanimously amended the 1994 Plan, subject to shareholder approval, so as to
increase the number of common shares ("Shares") authorized for issuance under
the Plan from 300,000 to 750,000 Shares.
The Board of Directors believes that the proposed increase in the number of
Shares authorized for issuance under the 1994 Plan is necessary in order for the
1994 Plan to continue to fulfill its purpose of assisting the Company in
attracting and retaining officers and other key employees and to motivate them,
through stock ownership in the Company, to promote the best interests of the
Company and its shareholders.
As of March 14, 1996, of the 300,000 Shares originally authorized for
issuance under the 1994 Plan, 266,900 Shares, net of forfeitures, had been
granted under the Plan, leaving only 33,100 Shares available for the grant of
future options.
The following is a summary of the principal features of the 1994 Plan. This
summary, however, does not purport to be a complete description of all the
provisions of the 1994 Plan. Any shareholder who wishes to obtain a copy of the
actual plan document may do so by written request to the Corporate Secretary at
the Company's offices in Spring House, Pennsylvania.
The 1994 Plan authorizes the granting of incentive stock options (within
the meaning of Section 422 of the Internal Revenue Code) ("ISOs") and
non-qualified stock options. Shares subject to options granted under the Plan
which remain unexercised upon expiration or earlier termination of such options
will once again become available for the granting of options under the Plan.
Authorized but unissued shares or treasury shares may be issued under the Plan.
12
<PAGE>
The 1994 Plan is administered by the Compensation Committee of the Board
(the "Committee") which is given broad discretion under the Plan. Except as
otherwise may be permitted by applicable rules and regulations of the Securities
and Exchange Commission, none of the members of the Committee is eligible to
participate in the Plan. The Plan authorizes the Committee to grant ISOs and
non-qualified stock options to officers (including officers who also are
directors) and other key employees of the Company and its subsidiaries. There
currently are four officers and approximately 130 other employees eligible for
participation in the Plan, although this number is subject to increase or
decrease in the future.
The exercise price of options granted under the Plan must be at least equal
to the fair market value of the Company's common stock on the date of grant of
the option. With respect to ISOs granted to any one optionee during any calendar
year, the aggregate market value on the date of grant of the underlying Shares
which first become exercisable during any calendar year (under the 1994 Plan or
any other plan of the Company or related corporations) may not exceed $100,000.
Options under the Plan may not extend for more than ten years and become
exercisable in such installments as the Committee may specify, but not earlier
than six months from the date of grant, except in limited circumstances. ISOs
granted to certain large shareholders must have an exercise price not less than
110% of fair market value and cannot extend for more than five years from the
date of grant. Under certain circumstances, the 1994 Plan permits the exercise
price of options to be satisfied by the optionee by having the Company withhold
Shares issuable pursuant to the options or by delivery to the Company of other
previously acquired Shares. The Plan similarly permits the withholding of Shares
issuable upon exercise of non-qualified options to satisfy withholding taxes.
Options under the 1994 Plan are not transferable by optionees other than by will
or pursuant to the laws of descent and distribution.
If an optionee's employment with the Company is terminated for any reason,
his or her option will remain exercisable, to the extent of the number of Shares
with respect to which it was exercisable at the time of termination of
employment (or to any greater extent permitted by the Committee), until the
expiration date of such option or until such earlier accelerated termination
date as the Committee, in its discretion, may determine. However, subject to
certain exceptions, such accelerated option termination date may not be earlier
than the date of the optionee's termination of employment, and in the case of
termination of employment due to death, not earlier than one year after the date
of death. Further, subject to certain exceptions, such accelerated option
termination date may not be later than: (i) three years after the date of death;
and (ii) in the case of ISOs, one year after termination of employment as a
result of disability and three months after termination of employment for any
reason other than death or disability. Special rules apply with respect to an
optionee who dies after termination of employment but while his or her option
remains in effect.
The number of Shares authorized for issuance under the 1994 Plan and
issuable under outstanding options is subject to adjustment in the event of a
stock split, stock dividend or similar change in the capitalization of the
Company. The Plan further provides that, in the event of a merger, consolidation
or other specified corporate transaction, options shall be assumed by the
surviving or successor corporation, if any. However, the Plan also authorizes
the Committee, in its discretion, to terminate all or a portion of the
outstanding options in the event of such a corporate transaction and further
authorizes the Committee, in its discretion, to accelerate the exercise date of
all or a portion of any options to be so terminated. The Committee also has the
authority under the Plan to accelerate the exercise date of options if it
determines that a change of control of the Company has occurred or is likely to
occur.
13
<PAGE>
Subject to certain limitations, the Board of Directors may discontinue or
amend the Plan as it deems necessary, but no discontinuance or amendment may
adversely affect the rights of an optionee with respect to an outstanding option
without his or her consent. However, subject to certain exceptions, shareholder
approval generally will be required for any amendment which would materially (i)
increase the benefits accruing to executive officers or directors under the
Plan; (ii) increase the number of Shares which may be issued under the Plan;
(iii) modify the requirements as to eligibility to participate in the Plan; or
(iv) extend the duration of the Plan. Unless earlier terminated by the Board of
Directors, the Plan will automatically terminate in February, 2004, although
options granted prior to such termination may be exercised after termination in
accordance with their terms.
As of March 11, 1996, the Committee had made no determination to grant
specific options with respect to the additional 450,000 additional Shares for
which shareholder approval is being sought. Of the 266,100 Shares which were
subject to outstanding options under the 1994 Plan as of March 14, 1996, the
current executive officers of the Company had been granted options with respect
to a total of 50,500 Shares, including options for 10,000 Shares, 18,000 Shares
and 12,500 Shares, respectively, to William B. Moore, President and Chief
Executive Officer, Edward J. Curry, Executive Vice President, and James
McDonald, Vice President, Sales (who were the Company's three most highly
compensated executive officers with respect to fiscal 1995). Other officers and
employees of the Company have been granted options with respect to all of the
remaining 215,600 Shares. (See also "Additional Information - Option Grants"
below). On March 11, 1996, the closing price of a Share on the NASDAQ National
Market was $18.50.
Certain Federal Income Tax Consequences
The Company has been advised that, under present federal tax laws and
regulations, as in effect on February 29, 1996, the Federal income tax
consequences to the Company and to the employees receiving stock options
pursuant to the 1994 Plan are as described below. The following discussion is
only a brief summary of such tax consequences, is not intended to be all
inclusive or to constitute tax advice, and, among other things, does not cover
possible state, local or foreign tax consequences.
Upon the grant or exercise of an ISO, no income will be recognized by the
optionee for federal income tax purposes (although, upon exercise, the excess of
the fair market value of the Shares over the exercise price will generally be
included in the optionee's alternative minimum taxable income), and the Company
will not be entitled to any deduction. If the Shares received on the exercise of
an ISO are not disposed of within one year following the date of the exercise of
the option by the optionee, or within two years following the date of the grant
of the option, any gain realized by the optionee upon the disposition of such
Shares will be taxed as long-term capital gain.
14
<PAGE>
In such event, no deduction will be allowed to the Company. If the Shares
are disposed of within the aforesaid one-year or two-year periods, the excess of
the fair market value of the Shares on the date of exercise or, if less, the
amount realized on disposition of such Shares, over the exercise price of such
Shares generally will be taxable as ordinary income to the optionee at the time
of disposition, and the Company will be entitled to a corresponding deduction at
such time, subject to the extent applicable, to limitations on deductibility
imposed by Internal Revenue code Section 162(m) discussed below. Any gain or
loss recognized on such a disposition of the Shares in excess of the amount
treated as ordinary income will be characterized as capital gain or loss if the
Shares have been held as capital assets.
Upon the grant of a non-qualified stock option, no income will be
recognized by the optionee for federal income tax purposes. Upon the exercise of
such an option, the amount by which the fair market value of the Shares at the
time of exercise exceeds the exercise price will be taxed as ordinary income to
the optionee, and the Company will be entitled to a corresponding deduction,
subject to possible limitations imposed by Internal Revenue code Section 162(m)
discussed below. Upon an optionee's sale of such Shares, any difference between
the sale price and the fair market value of such Shares on the date of exercise
will be treated as capital gain or loss if the Shares have been held as capital
assets.
Section 162(m) of the Internal Revenue Code of 1986, as amended, disallows
tax deductions to public companies for compensation in excess of $1 million paid
or accrued in taxable years beginning after January 1, 1994 to certain executive
officers (generally consisting of the chief executive officer and the four other
highest paid executive officers), unless such compensation is of a type that
qualifies for exemption from that limitation. One such exemption is for
performance based compensation, which can include compensation under a stock
option plan, provided that certain requirements, including administration of the
plan by "outside directors" and shareholder approval of the plan are met. The
Board of Directors may try to comply with such requirements with respect to the
1994 Plan to the extent reasonably practicable if and when it appears likely
that the $1 million compensation level will be reached, but there can be no
assurance that the 1994 Plan will so comply.
Different rules for measuring ordinary income may apply if the optionee is
subject to Section 16 of the Securities Exchange Act of 1934.
Various additional tax consequences may apply to the granting, acceleration
and exercise of options and to be disposition of Shares acquired thereunder, but
such consequences are beyond the scope of this summary.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THIS
AMENDMENT TO THE 1994 PLAN.
4. OTHER MATTERS
The Board of Directors does not know at present of any matters to be
presented at the Meeting other than those mentioned in the Notice of Meeting and
customary procedural matters. However, if other matters should properly come
before the Meeting, the proxies solicited hereby will be voted on such matters
in accordance with the judgment of the persons voting such proxies, to the
extent permitted by applicable rules of the Securities and Exchange Commission.
15
<PAGE>
ADDITIONAL INFORMATION
Report of the Compensation Committee
Executive compensation at the Company is comprised primarily of base
salary, split-dollar life insurance, a pension benefit plan, and, beginning in
1994, a 401(k) Employee Retirement Savings Plan with corporate matching
contributions and a Stock Option Plan. In addition, from time to time, executive
officers and all employees have received annual bonuses determined at the
discretion of the Board of Directors based upon the profitability of the Company
at an equal rate as a percentage of base pay. No such bonuses were paid to any
officers or employees in 1993, 1994, or 1995.
The Company's executive compensation program, including that for its Chief
Executive Officer, is guided by principles designed to align compensation with
overall business strategy, the current and long-term initiatives of management,
overall corporate performance and Company values. It is also compared against
statistical studies of comparable positions and responsibilities in similar
organizations to test the competitiveness of the overall executive compensation
program.
In the most recent three years, executive compensation has been influenced
by a continuing economic slowdown in the Company's industry and corresponding
impact on the operating results of the Company. Modest or no pay increases in
1995 and 1994 were granted to maintain competitive salary structures, following
almost three years of no increases to the base pay of executive officers.
Aside from base pay, which is commensurate with responsibility, there are
presently no distinctive features to the compensation program for the Chief
Executive Officer or individual executive officers. Prior to 1994, the Company
had no stock option or long-term compensation arrangements for its executive
officers. In 1994 the Board of Directors and shareholders adopted a stock option
plan, for the benefit of all key employees, including executive officers.
Options granted in 1995 were based upon individual influence, initiative and
managerial ability in initiating changes that are intended to yield long-term
profitability and enhance shareholder value. No particular weight was ascribed
by the Committee to any one or more of these factors. Furthermore, the Committee
did not rely on any particular hurdles, benchmarks or other objective criteria
in awarding these options.
Compensation Committee:
Thomas C. Moore
Ralph H. Owens
Robert B. Adams
March 22, 1996
16
<PAGE>
Summary Compensation Table
The following table sets forth certain information concerning the
compensation paid or accrued to or for (i) the Company's Chief Executive Officer
and (ii) the only other executive officers whose total annual salary and bonus
exceeded $100,000 for 1995.
<TABLE>
<CAPTION>
Securities
Underlying All Other
Name and Salary Bonus Options Compensation
Principal Position Year ($) ($) (#) ($)
- ------------------ ---- --- --- --- ---
<S> <C> <C> <C> <C> <C>
William B.Moore, 1995 166,000 0 0 5,851
President and 1994 163,231 0 10,000 3,069
Chief Executive 1993 158,000 0 0 2,494
Officer
Edward J. Curry, 1995 147,385 0 11,000 5,152
Executive Vice 1994 139,577 0 7,000 2,634
President and 1993 135,000 0 0 2,142
Chief Operating
Officer
James McDonald 1995 101,231 0 8,000 4,597
Vice President, 1994 96,962 0 4,500 2,913
Sales 1993 95,000 0 0 2,572
</TABLE>
Amounts disclosed as "all other compensation" represent Company matching
contributions under a 401(k) retirement savings plan established in 1994, and
annual premiums paid under an officer split-dollar insurance program that
provides supplemental life insurance coverage for each executive officer equal
to annual base salary (maximum of $100,000) to retirement and $100,000 after
retirement. A portion of the premiums paid by the Company for an executive
officer's split-dollar policy will be repaid to the Company out of the death
benefit under such policy.
Pension Plan
The Company's defined benefit pension plan covers all employees over age 21
with one year of service. A plan member's annual pension is 1.5% of the average
of his highest five consecutive years' base salary times the number of years of
credited service at date of retirement. The base salary or wages paid by the
Company to plan participants is the only compensation covered by the plan. The
1995 base salaries and credited years of service for the executive officers
listed above were as follows: W. B. Moore, $166,000 with 28 years; E. J. Curry,
$157,000 with 16 years; and J. McDonald, $106,000 with 24 years.
17
<PAGE>
The following table illustrates the estimated straight-life annual
retirement benefits payable at normal retirement age under the plan. The
benefits listed are not subject to any deduction for Social Security benefits or
other offset amounts. Benefits are subject to limitations imposed by the
Internal Revenue Code, which beginning in 1994 includes a $150,000 annual
compensation limit.
Credited Years of Service
Remuneration 10 years 20 years 30 years 40 years
- ------------- --------- -------- -------- --------
$100,000 $15,000 $30,000 $45,000 $60,000
125,000 18,750 37,500 56,250 75,000
150,000 22,500 45,000 67,500 90,000
175,000 22,500 45,000 67,500 90,000
200,000 22,500 45,000 67,500 90,000
Stock Option Grants, Exercises and Holdings
The following tables set forth certain information concerning options to
purchase common stock granted to and exercised by the individuals named in the
Summary Compensation Table during 1995 and unexercised stock options held by
them at the end of 1995:
<TABLE>
<CAPTION>
Option Grants in 1995
Individual Grants
------------------------------------------------------------------------
% of Total Potential Realizable
Number of Options Value at Assumed
Shares Granted to Exercise Annual Rate of Stock
Underlying Employees or Base Price Appreciation For
Options in Fiscal Price Expiration Option Term
Name Granted (#) Year ($/Sh) (1) Date (1) 5% ($) 10% ($)
---- ------------ ---- ---------- -------- ------ -------
<S> <C> <C> <C> <C> <C> <C>
Edward J. Curry 1,000 9.5% 14.75 2/6/05 9,276 23,508
10,000 16.50 8/1/05 103,768 262,967
James McDonald 1,000 7.8% 14.75 2/6/05 9,276 23,508
8,000 16.50 8/1/05 83,014 210,373
</TABLE>
(1) The exercise price of these options was 100% of the market price on the
date of grant, and they become exercisable in five equal installments
commencing on date of grant.
18
<PAGE>
Aggregate Option Exercises in 1995 and Year-End Option Values
<TABLE>
<CAPTION>
Number of Shares Value of Unexercised
Shares Value Underlying Unexercised In-the-money Options at
Acquired on Realized Options at FY-End (#) FY-End ($)
Name Exercise (#) ($) Exercisable/Unexercisable Exercisable/Unexercisable (1)
---- ------------ --- ------------------------- -----------------------------
<S> <C> <C> <C> <C>
William B. Moore None N/A 2,500/10,000 $1,375/4,125
Edward J. Curry None N/A 1,400/16,600 $2,975/28,775
James McDonald None N/A 800/11,700 $1,913/20,400
</TABLE>
(1) Market value of underlying securities at exercise date or year-end, as the
case may be, minus the exercise or base price of "in-the-money" options.
Shareholder Return Performance Graph
The following graph compares for the years 1991 through 1995 the yearly
change in the cumulative total shareholder return on the Company's common stock
with the cumulative total returns, as calculated by Media General Financial
Services, for the NASDAQ Market Value Index and an index comprised of 131
publically traded companies as classified by Dow Jones & Company, Inc. into an
industry group identified as "Industrial Technology".
FIVE YEAR CUMULATIVE TOTAL RETURN
1990 1991 1992 1993 1994 1995
MOORE PRODUCTS CO. 100 118.44 87.7 77.98 76.73 89.93
INDUSTRY INDEX 100 155.04 160.9 176.01 192.93 280.99
NASDAQ 100 128.38 129.64 155.5 163.26 211.77
19
<PAGE>
Certain Relationships and Related Transactions
As previously announced, in late December 1995, the Company's Pension Plan
purchased 500,000 unregistered common shares from the Company for an aggregate
of $8 million which was determined to be the fair market value of such shares by
an independent appraiser retained by Mellon Bank, N.A., the Trustee of the
Pension Plan. In connection with this purchase, the Company has granted to the
Pension Plan certain rights to request the Company to register such shares with
the Securities and Exchange Commission for public sale by the Pension Plan. See
"Beneficial Ownership of Principal Shareholders and Management" earlier in this
Proxy Statement.
INDEPENDENT PUBLIC ACCOUNTANTS
Ernst & Young LLP served as the Company's independent public accountants to
audit the accounts of the Company and its subsidiaries for 1995. Auditors to
serve in 1996 will be appointed in May, 1996 in accordance with the Company's
standard practice. Ernst & Young LLP has served as the Company's auditors since
1968. Representatives of Ernst & Young LLP will not be present at the Annual
Meeting.
SUBMISSION OF SHAREHOLDER PROPOSALS
Under Securities and Exchange Commission rules, shareholders meeting
specified eligibility requirements are entitled to have certain types of
proposals included in the Company's Proxy Statement. Any such shareholder
desiring to have a proposal included in the Company's Proxy Statement for its
1997 Annual Meeting must deliver such proposal (which must comply with the
requirements of Rule 14a-8 under the Securities Exchange Act of 1934) to the
attention the Corporate Secretary, at the address of the Company set forth
below, not later than December 9, 1996.
Annual Report
The Annual Report to shareholders containing audited results for the year
1995 accompanies this Proxy Statement but is not to be regarded as proxy
solicitation material.
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR 1995, AS
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, WILL BE FURNISHED TO ANY
SHAREHOLDER WITHOUT CHARGE UPON WRITTEN REQUEST TO THE ATTENTION OF THE
CORPORATE TREASURER, MOORE PRODUCTS CO., SPRING HOUSE, PENNSYLVANIA 19477.
ROBERT E. WISNIEWSKI
Secretary & Treasurer
March 28, 1996
20
<PAGE>
MOORE PRODUCTS CO.
Annual Meeting of Shareholders May 2, 1996
This Proxy Solicited on Behalf of the Board of Directors
The undersigned hereby appoint(s) EDWARD J. CURRY and ROBERT E.
WISNIEWSKI or either of them, with full power of substitution, proxies to vote,
as designated on the reverse side, all of the voting shares of capital stock of
MOORE PRODUCTS CO. held of record by the undersigned on March 14, 1996, at the
Annual Meeting of Shareholders to be held on May 2, 1996, and at any
adjournments thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED. IF NO CONTRARY DIRECTION IS MADE, THIS PROXY
WILL BE VOTED FOR PROPOSALS 1, 2 AND 3 ON THE REVERSE SIDE AND IN ACCORDANCE
WITH THE PROXIES' BEST JUDGEMENT UPON OTHER MATTERS PROPERLY COMING BEFORE THE
MEETING AND ANY ADJOURNMENTS THEREOF.
(Continued on reverse side)
<PAGE>
MOORE PRODUCTS CO.
YOUR VOTE IS IMPORTANT TO US. PLEASE COMPLETE, DATE AND SIGN THE ABOVE
PROXY CARD AND RETURN IT PROMPTLY IN THE ACCOMPANYING ENVELOPE.
IF YOUR STOCK CERTIFICATE IS LOST, STOLEN OR DESTROYED, OR IF YOU CHANGE YOUR
ADDRESS, PLEASE CONTACT OUR STOCK TRANSFER AGENT, CHEMICAL MELLON SHAREHOLDER
SERVICES, AT 1-800-526-0801.
<PAGE>
1. Election of Directors
To vote FOR To Withhold
the nominees Authority to vote
listed below for the nominees
check this box check this box
(except as marked to the
contrary below)
/ / / /
(To withhold authority to vote for any individual nominee,
strike a line through the nominee's name listed below.)
William B. Moore James O. Moore Ralph H. Owens
2. Amendment to the Articles of Incorporation increasing authorized common
stock to 7,500,000
For Against Abstain
/ / / / / /
3. Amendment to the 1994 Incentive Stock Option and Non-Qualified Stock
Option Plan increasing number of shares available for issuance to 750,000
For Against Abstain
/ / / / / /
4. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
DATED:
---------------------------------------, 1996
---------------------------------------------
Signature
---------------------------------------------
Signature if held jointly
Please sign exactly as name appears hereon.
When shares are held by joint tenants, both
should sign. When signing as attorney, or as
executor, administrator, trustee, or guardian,
please give full title as such. If a
corporation, please sign in full corporate
name by President or other authorized
officer. If a partnership, please sign in
partnership name by authorized person.
PLEASE PROMPTLY MARK, SIGN, DATE AND RETURN THE PROXY CARD(S) USING THE ENCLOSED
ENVELOPE.
