UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
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 section 240.14a-11(c) or
section 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):
/X/ No Fee required
<PAGE>
[LOGO]
MOORE PRODUCTS CO.
Sumneytown Pike
Spring House, Pennsylvania 19477
-------------------------------
NOTICE OF 1997 ANNUAL MEETING
OF SHAREHOLDERS
TO BE HELD ON MAY 1, 1997
-------------------------------
To Our Shareholders:
The Annual Meeting of Shareholders of Moore Products Co. (the
"Company") will be held on Thursday, May 1, 1997, 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 the 1997 Non-Employee
Directors' Equity Incentive Plan;
3. To consider and vote upon a proposal to approve amendment of the Company's
1994 Incentive Stock Option and Non-qualified Stock Option Plan; and
4. To transact such other business as may properly come before the meeting,
or any adjournments thereof.
The close of business on March 13, 1997, 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 27, 1997
<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 1, 1997 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,
1997.
Voting Securities
As of the record date, March 13, 1997, the Company had outstanding
2,585,972 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 Proposal 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 13, 1997, (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.
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<TABLE>
<CAPTION>
Name of Beneficial Class of Amount and Nature of Percent
Owner of Group (1) Voting Shares Beneficial Ownership (2) of Class
- ------------------ ------------- ------------------------ --------
<S> <C> <C> <C>
Mellon Bank Corporation Common 636,156 (3)(4) 24.0
Preferred 172,890 (4) 98.3
Moore Products Co. Pension Plan Common 500,000 (5) 19.3
Frances O. Moore Common 326,854 (3)(6) 12.3
Preferred 172,890 (6) 98.3
Peter Cundill & Associates Common 196,425 (7) 7.6
Dimensional Fund Advisors Inc. Common 119,400 (8) 4.6
Franklin Resources, Inc. Common 134,700 (9) 5.2
Wachovia Corporation Common 135,665 (10) 5.3
Robert B. Adams, Director Common 4,033 *
Edward J. Curry, Director, Common 7,692 (11)(12) *
Executive Vice President and
Chief Operating Officer
F. Lawton Hindle, Director Common 2,520 (11) *
Edward T. Hurd, Director Common -- --
James O. Moore, Director Common 352,133 (3)(11)(14) 13.6
Preferred 1,020 *
Thomas C. Moore, Director Common 345,492 (3)(13) 13.4
Preferred 1,020 *
William B. Moore, Director Common 365,293 (3)(11)(15) 14.1
President and Chief Preferred 1,020 *
Executive Officer
Raymond M. Reed, Director Common -- --
Ralph H. Owens, Director Common 4,331 *
Edwin G. Rorke, Director Common 6,022 *
Edward M. Coll, Vice President - Common 5,105 (11) *
General Manager, Systems Division
James McDonald, Vice President, Common 4,721 (11) *
Sales
3
<PAGE>
All directors and executive Common 975,859 (3)(16) 37.3
officers as a group Preferred 3,060 1.7
(13 in number)
- ----------
*Less than 1%
</TABLE>
(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 Peter Cundill & Associates
(Bermuda), Ltd. is 15 Alton Hill, Southampton, SN 01, Bermuda. The
address of Dimensional Fund Advisors Inc. is 1299 Ocean Avenue, 11th
Floor, Santa Monica, California 90401. The address of Franklin
Resources, Inc. is 777 Mariners Island Blvd., P.O. Box 7777, San
Mateo, CA 94403-7777. The address of Wachovia Corporation is 301 North
Main Street, Winston-Salem, NC 27150-3099.
(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, 1996 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.; but does not include any of
the common shares referred to in 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 Bank
Corporation, 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 M. Moran, Personnel Manager, 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.
4
<PAGE>
(7) 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, 1996: (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.
(8) According to their Schedule 13G, Dimensional Fund Advisors Inc.
("Dimensional"), a registered investment advisor, is deemed to have
beneficial ownership of such shares as of December 31, 1996, all of
which shares are held in portfolios of DFA Investment Dimensions Group
Inc., a registered open-end investment company, or in series of the
DFA Investment Trust Company, a Delaware business trust, or the DFA
Group Trust and DFA Participation Group Trust, investment vehicles for
qualified employee benefit plans, all of which Dimensional Fund
Advisors Inc. serves as investment manager. Dimensional disclaims
beneficial ownership of all such shares.
(9) According to their Schedule 13G, as of December 31, 1996, such shares
are owned by investment funds or other managed accounts as to which
Franklin Advisory Services, Inc., an investment advisor and subsidiary
of Franklin Resources Inc. ("FRI"), has sole voting and dispository
power. FRI's principal shareholders are Charles B. Johnson and Rupert
H. Johnson, Jr.
(10) According to their Schedule 13G, shares are held as of December 31,
1996 by Wachovia Corporation.
(11) Includes, with respect to the particular named individual, shares
issuable under currently exercisable stock options granted to him as
follows: E. J. Curry - 6,600 common shares; F. L. Hindle - 2,520
common shares; J. O. Moore - 1,800 common shares; W. B. Moore -
7,500 common shares; E. M. Coll - 4,280 common shares; J. McDonald -
4,500 common shares.
(12) Does not include the 500,000 common shares held by the Company's
Pension Plan (see footnote (5) above).
(13) 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
2,294 common shares held by him as custodian for his minor
grandchildren.
(14) 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.
(15) 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.
5
<PAGE>
(16) Includes 31,080 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.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors, executive officers and persons who own more than ten
percent of a registered class of the Company's equity securities, to file with
the Securities and Exchange Commission (the "SEC") initial reports of ownership
and reports of changes in ownership of common stock and other equity securities
of the Company. Officers, directors and greater than ten-percent beneficial
owners are required by SEC regulations to furnish the Company with copies of all
Section 16(a) reports they file.
Based solely upon review of the copies of such reports furnished to the
Company and/or written representations, the Company believes that, except as
further described below, there was compliance for the fiscal year ended December
31, 1996 with all Section 16(a) filing requirements applicable to the Company's
officers, directors and greater than ten-percent beneficial owners. Raymond M.
Reed, a director of the Company, filed an initial report of ownership in 1996
which was due in a prior year. Such report reflected no ownership of Company
securities.
6
<PAGE>
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 1997 Annual Meeting, the shareholders will elect three
directors for a term expiring in 2001. The following have been nominated by the
Board of Directors to serve as directors until the 2001 Annual Meeting of
shareholders, or until a successor is elected and has duly qualified.
Robert B. Adams Edward T. Hurd Edwin G. Rorke
The above nominees currently are serving as directors of the Company and
were elected by the Company's shareholders, except for Mr. Hurd who was elected
by the Board in June 1996. 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.
The following table sets forth as of March 13, 1997, 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>
Robert B. Adams * 66 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
Edward T. Hurd * 58 1996 1997
Chairman of the Board of the Company
since August 1996, and independent consultant
to the Company since April 1996; formerly
Executive Vice President of Honeywell, Inc. and
President of Industrial Control, a division of
Honeywell, Inc.; Director, Total Control Products Inc.
(a provider of control products for the industrial
automation market); Director, Iconics, Inc.
(a manufacturer of industrial automation software)
7
<PAGE>
Edwin G. Rorke * 74 1968 1997
Chairman Emeritus; formerly
Chairman of the Board of the
Company; Retired in 1988 as Chief
Executive Officer of the Company
F. Lawton Hindle 65 1995 1998
Retired in 1995 as President of
Moore Products Co. (Canada), Inc.
(a wholly-owned subsidiary of
the Company)
Thomas C. Moore 64 1969 1998
Retired in 1994 as Regional
Manager of the Company
Edward J. Curry * 50 1986 1999
Executive Vice President and Chief
Operating Officer of the Company
Raymond M. Reed 61 1991 1999
President, R. Reed & Associates, Inc.
(a management consulting firm) and
R. Reed Business Systems Consulting, Inc.
(a systems implementation support firm);
independent consultant to the Company since
1984
James O. Moore * 56 1978 2000
Director of Corporate
Technology of the Company
William B. Moore * 54 1978 2000
President and Chief Executive
Officer of the Company
Ralph H. Owens 80 1974 2000
Retired in 1986 as Senior
Vice President of the Company
</TABLE>
* 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.
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<PAGE>
Information Concerning Meetings and Certain Committees
Six meetings of the Board of Directors were held in 1996. 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, the members of which are presently Robert B. Adams,
Edward J. Curry, and Edwin G. Rorke, held four meetings in 1996. 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 is appointed each year to study and make
recommendations to the Board regarding compensation of officers. That committee
held four meetings in 1996. The members of the committee are (and during all of
1996 were) Robert B. Adams, Thomas C. Moore, and Ralph H. Owens.
Compensation Committee Interlocks and Insider Participation
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 (increased to $1,000 effective February 4, 1997) plus travel expenses for
each Board and Committee meeting they attend on separate days. It is also
anticipated that current non-employee Directors will each receive annual stock
option grants under the proposed 1997 Non-Employee Directors Equity Incentive
Plan, subject to shareholder approval at the May 1, 1997 Annual Meeting (see
Proposal 2 herein).
On occasion, directors are compensated on a per diem basis for specific
consulting services and related business expenses. Consulting fees during 1996
of $15,038 were paid to Raymond M. Reed or his affiliated consulting firm and
$61,500 was paid to Edward T. Hurd.
In addition to cash compensation, Messrs. Reed and Hurd in 1996 were
granted stock options in their capacity as consultants to the Company, subject
to approval by shareholders of amendments to the 1994 Incentive Stock Option
Plan (see Proposal 3 herein ) at the May 1, 1997 Annual Meeting. Mr. Reed was
granted stock options to purchase 10,000 shares of common stock at $18.50 per
share. The right to exercise such options vests in 2,000 share increments,
following such shareholder approval and achievement of certain consolidated
operating goals by the Company. Mr. Hurd was granted stock options to purchase
50,000 shares of common stock at $18.00 to $18.50 per share. The right to
exercise such options vests
9
<PAGE>
as to 20,000 shares immediately following such shareholder approval, and the
remainder vests in increments of 7,500 shares upon achievement of certain
consolidated operating goals by the Company.
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
$5,000 under this agreement during 1996.
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 $20,000 under this
agreement during 1996 and future compensation to be paid under this agreement is
not expected to exceed $10,000 over the remaining term.
2. APPROVAL OF THE 1997 NON-EMPLOYEE DIRECTORS'
EQUITY INCENTIVE PLAN
At the Meeting the shareholders will be asked to approve the Company's
Non-Employee Directors' Equity Incentive Plan (the "Outside Directors' Plan").
The Outside Directors' Plan was adopted by the Company's Board of Directors in
February 1997, subject to the approval of the shareholders of the Company.
The purpose of the Outside Directors' Plan is to enable the Company,
through the grant of stock options to non-employee ("outside") directors of the
Company, to attract and retain highly-qualified outside directors and, by
providing them with such a stock based incentive, to motivate them to promote
the best interests of the Company and its shareholders. For the purposes of the
Plan, outside directors are directors who, at the time of granting of options
under the Plan, are not and for the prior twelve months have not been employees
of the Company or any of its subsidiaries.
The following is a summary of the principal features of the Outside
Directors' Plan. This summary, however, does not purport to be a complete
description of all the provisions of the 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 Outside Directors' Plan is to be administered by the Board of
Directors and authorizes up to an aggregate of 50,000 shares of the Company's
common stock ("Shares") for the granting of nonqualified stock options to
outside directors. Generally, Shares subject to options that 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.
The Outside Directors' Plan provides for the automatic granting to each
outside director, shortly following each of the Company's Annual Meetings of
Shareholders during the term of the Plan, of an option for 1,000 Shares, with an
exercise price equal
10
<PAGE>
to 100% of the fair market value of a Share at the date of grant. Each 1,000
Share option will become exercisable six months after date of grant and will
expire ten years after date of grant, subject to earlier exercise and
termination in certain circumstances. If an outside director ceases to be an
outside director for any reason, his outstanding options will remain exercisable
(to the extent they were exercisable at the time of his ceasing to be an outside
director) for various specified periods of time up to a maximum of nine months.
The number of Shares authorized for issuance under the Outside
Directors' Plan, the number of Shares with respect to which options
automatically will be granted, and the number of Shares issuable under (and the
exercise price of) outstanding options are 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 transactions, the Board of Directors, in its
discretion, may terminate the outstanding options, in which case the options to
be so terminated immediately will vest and become exercisable for a specified
period prior to the date of such termination.
The Board of Directors, at any time, may suspend or discontinue the
Plan and, subject to certain limitations, may amend the Plan and any outstanding
options in any respect (including, without limitation, to increase the number of
Shares authorized for issuance under the Plan and to extend for the duration of
the Plan) without shareholder approval, unless such shareholder approval is
required by applicable law, rule or regulation. The Plan will become effective
upon its approval by the Company's shareholders and will expire on December 31,
2004, unless terminated earlier by the Board of Directors.
No options have yet been granted under the Outside Directors' Plan.
Assuming the Plan is approved by the shareholders at the 1997 Annual Meeting and
the Board of Directors' nominees for election as directors are elected, on the
third business day following the Meeting, options for an aggregate of 7,000
Shares, or 1,000 Shares each, automatically will be granted to the Company's
seven non-employee directors (Messrs. Adams, Hurd, Rorke, Hindle, T.C. Moore,
Reed and Owens). The other directors (Messrs. Curry, J.O. Moore and W.B. Moore)
are employees of the Company and, as such, are currently ineligible to receive
options under the Outside Directors' Plan. Following subsequent Annual Meetings
during the term of the Plan, the number of automatic 1,000 share Option grants
under the Plan will depend upon the number of non-employee directors who are
elected at such Meetings or whose terms as directors are continuing. The
exercise price of the 1997 options and of future option grants under the Plan
will be equal to 100% of the fair market value of the Shares on the date of
grant. On March 13, 1997, the closing price of a Share on the Nasdaq Stock
Market was $23.
Messrs. Hurd and Reed (who are outside directors of the Company), in
their capacities as consultants to the Company, were granted options to purchase
50,000 and 10,000 Shares, respectively, under the Company's 1994 Incentive Stock
Option and Non-Qualified Stock Option Plan (the "1994 Plan"). These options are
contingent upon shareholder approval of the amendment of the 1994 Plan
permitting options under the 1994 Plan to be granted to consultants (see
Proposal 3 herein). Assuming the
11
<PAGE>
amendment of the 1994 Plan is approved by the shareholders, additional options
could be granted to Messrs. Hurd and Reed or to other directors or other persons
who might become consultants to the Company, but the Compensation Committee
currently has no plans to grant any further options under the 1994 Plan to
Messrs. Hurd or Reed or to any other outside directors or other persons who
might become consultants. (See Item 1. "Election of Directors -- Compensation of
Directors" above for further information concerning options granted and
compensation paid and to be paid to non-employee directors of the Company.)
Certain Federal Income Tax Consequences
The Company has been advised that, under present federal tax laws and
regulations as in effect on February 28, 1997, the Federal income tax
consequences to the Company and the outside directors receiving stock options
pursuant to the Outside Directors' 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 of an Option, no income will be realized 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 or exercise exceeds the
exercise price will be taxed as ordinary income to the optionee, and the Company
will be entitled to a corresponding deduction. 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.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF SUCH PLAN.
3. AMENDMENT OF 1994 INCENTIVE STOCK OPTION AND
NON-QUALIFIED STOCK OPTION PLAN
At the Meeting, the shareholders further will be asked to approve
amendment of 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 and approved by the shareholders of the Company at
the Annual Meeting 1994. In 1996, the 1994 Plan was amended to increase the
number of Shares authorized for issuance under the Plan. Subsequently, the Board
of Directors further amended the 1994 Plan, subject to shareholder approval, to
make non-employee consultants under contract with the Company eligible to
receive options under the Plan. The Board also amended the Plan in certain other
relatively minor respects for which shareholder approval is not required and is
not being sought.
The Board of Directors believes that the proposed change to include
consultants as eligible to participate is necessary in order for the 1994 Plan
to continue to fulfill its
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<PAGE>
purpose of assisting the Company in attracting and retaining key individuals
with special skills, talents and experience and to motivate them, through stock
ownership in the Company, to promote the best interests of the Company and its
shareholders.
The following is a summary of the principal features of the 1994 Plan
as it would apply to consultants. 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 Code) ("ISOs") and non-qualified stock
options for up to an aggregate of 750,000 Shares. 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.
The 1994 Plan is administered by the Compensation Committee of the
Board (the "Committee") which is given broad discretion under the Plan. The
Plan, as amended, authorizes the Committee to grant ISOs and non-qualified stock
options to officers (including officers who also are directors) and other key
employees, and to grant non-qualified stock options to consultants (including
consultants who also are directors), of the Company and its subsidiaries. Prior
to the amendment of the Plan for which shareholder approval is being sought,
non-employee consultants were not eligible to receive options under the Plan.
There currently are two consultants (who are also directors of the Company),
five officers and approximately 153 others eligible for participation in the
Plan as amended, although these numbers are 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 Shares on the date of grant of
the option. 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.
ISO's and, unless otherwise permitted by the committee, non-qualified stock
options are not transferable by optionees other than by will or pursuant to the
laws of descent and distribution.
If an optionee's consultancy 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
such consultancy (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 consultancy, and in the case of
termination of consultancy due to death, not earlier than one year after the
date of death. Further, such accelerated option termination date may not be
later than three years after the date of death. Special rules apply with respect
to an optionee who dies after termination of consultancy 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, as well as the exercise price of outstanding
options, is subject
13
<PAGE>
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.
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 under the Plan prior to such termination may be exercised after
termination in accordance with their terms.
Options for 50,000 Shares and 10,000 Shares, respectively, have been
granted under the 1994 Plan to Messrs. Hurd and Reed, respectively, subject to
shareholder approval of amendment of the Plan. (See "Compensation of Directors"
and Proposal 2 herein for further information concerning the compensation and
options of said individuals and for the closing price of a Share on a recent
date.) The Committee has no current plans to issue any further options under the
1994 Plan to consultants.
Certain Federal Income Tax Consequences
The Federal income tax consequences to the Company and to consultants
receiving stock options pursuant to the 1994 Plan are substantially the same as
those set forth with respect to the Outside Directors' Plan (see Proposal 2
herein).
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF 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.
14
<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 plan, 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. No such bonuses have been paid to
any officers or employees since 1993.
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.
The Committee periodically reviews overall compensation policy and
design with the intention of considering changes dictated by industry trends and
Company performance, and the Committee currently is in the process of such a
review which may result in changes in the Company's compensation policies. In
the most recent three years, executive compensation has been influenced by
competitive economic conditions in the Company's industry and corresponding
impact on the operating results of the Company. Modest pay increases in the
period 1994 through 1996 were granted to maintain competitive salary structures.
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 1996 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, 1997
15
<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 $100,000 for 1996.
Annual Compensation Long-Term Compensation
------------------- -----------------------------
Shares
Underlying All Other
Name and Salary Bonus Options Compensation
Principal Position Year ($) ($) (#) ($)
- --------------------------------------------------------------------------------
William B. Moore 1996 166,000 0 3,000 5,851
President and 1995 166,000 0 0 5,851
Chief Executive 1994 163,231 0 10,000 3,069
Officer
Edward J. Curry 1996 157,000 0 3,000 5,320
Executive Vice 1995 147,385 0 11,000 5,152
President and 1994 139,577 0 7,000 2,634
Chief Operating
Officer
James McDonald 1996 111,885 0 2,000 4,496
Vice President, 1995 101,231 0 8,000 4,597
Sales 1994 96,962 0 4,500 2,913
Edward M. Coll 1996 109,808 0 2,000 4,423
Vice President- 1995 94,515 0 7,800 1,890
General Manager, 1994 88,294 0 4,200 314
Systems Division
Amounts disclosed as "all other compensation" represent Company matching
contributions under a 401(k) retirement savings plan, 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 (up to
a 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 has a defined benefit pension plan which 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, multiplied by
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 1996 base salaries and credited years of service for
the executive officers listed above were as follows: W. B. Moore - $166,000 with
29 years; E. J. Curry - $157,000 with 17 years; J. McDonald - $115,000 with 25
years; and E. M. Coll - $115,000 with 25 years.
16
<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 includes a $150,000 annual compensation limit.
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
225,000 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 1996, and unexercised stock options held by
them at the end of 1996:
<TABLE>
<CAPTION>
Option Grants in 1996
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 ($/Sh) Date 5% ($) 10% ($)
---- ----------- ---- ------ ---- ------ -------
<S> <C> <C> <C> <C> <C> <C>
William B. Moore 3,000 (1) 2.15% 19.525 5/1/01 9,386 27,184
Edward J. Curry 3,000 (2) 2.15% 17.75 5/1/06 33,488 84,866
James McDonald 2,000 (2) 1.43% 17.75 5/1/06 22,325 56,577
Edward M. Coll 2,000 (2) 1.43% 17.75 5/1/06 22,325 56,577
</TABLE>
(1) The exercise price of these options was 110% of the fair market value on
the date of grant, and they become exercisable in four equal installments
commencing on date of grant, subject to possible acceleration in certain
circumstances.
(2) The exercise price of these options was 100% of the fair market value on
the date of grant, and they become exercisable in five equal installments
commencing on date of grant, subject to possible acceleration in certain
circumstances.
17
<PAGE>
Aggregate Option Exercises in 1996 and Year-End Option Values
<TABLE>
<CAPTION>
Number of Shares Value of Unexercisable
Shares Value Underlying Unexercised In-the-Money Options at
Acquired on Realized Options at FY-End (#) FY-End ($)
Name Exercise (#) ($) Exercisable/Unexercisable Exercisable/Unexercisable (1)
---- ------------ --- ------------------------- -----------------------------
<S> <C> <C> <C> <C>
William B. Moore None N/A 5,000 / 8,000 5,250 / 5,250
Edward J. Curry None N/A 5,000 / 16,000 11,825 / 30,800
James McDonald None N/A 3,400 / 11,100 8,075 / 21,737
Edward M. Coll None N/A 3,240 / 10,760 7,685 / 20,965
</TABLE>
(1) Market value of underlying securities at year-end, minus the exercise price
of "in-the-money" options.
Shareholder Return Performance Graph
The following graph compares for the years 1992 through 1996 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 154
publically traded companies as classified by Dow Jones & Company, Inc. into an
industry group identified as "Industrial Technology."
[GRAPHIC OMITTED]
The printed document contains a line graph depicting the following plot
points:
1991 1992 1993 1994 1995 1996
---- ---- ---- ---- ---- ----
Moore Products Co. 95 74.04 66.1 65.04 76.23 76.77
Industry Index 95 102.93 112.44 124.09 174.45 172.95
NASDAQ 95 100.98 121.13 127.17 164.96 204.98
The above graph assumes that the value of the investment was $100 on
December 31, 1991, and that all dividends were reinvested.
18
<PAGE>
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 1996. Auditors to
serve in 1997 will be appointed in May, 1997 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
specific 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
1998 Annual Meeting must delivery such proposal (which must comply with the
requirements of Rule 14a-8 under the Securities Exchange Act of 1934) to the
attention of the Corporate Secretary, at the address of the Company set forth
below, not later than December 8, 1997.
Annual Report
The Annual Report to shareholders containing audited results for the year 1996
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 1996, 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 27, 1997
19
<PAGE>
MOORE PRODUCTS CO.
Annual Meeting of Shareholders May 1, 1997
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 13, 1997, at the
Annual Meeting of Shareholders to be held on May 1, 1997, 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.
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.)
Robert B. Adams Edward T. Hurd Edwin G. Rorke
2. Approval of the 1997 Non-Employee Director Equity Incentive Plan
For Against Abstain
/ / / / / /
3. Amendment of the 1994 Incentive Stock Option and Non-Qualified Stock Option
Plan
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:____________________________________,1997
_________________________________________
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.
<PAGE>
