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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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SCHEDULE 14D-9
SOLICITATION/RECOMMENDATION STATEMENT PURSUANT TO
SECTION 14(d)(4) OF THE SECURITIES EXCHANGE ACT OF 1934
MOORE PRODUCTS CO.
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(Name of Subject Company)
MOORE PRODUCTS CO.
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(Name of Person Filing Statement)
Shares of Common Stock, par value $1.00 per share
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(Title of Class of Securities)
615836103
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(CUSIP Number of Class of Securities)
Robert E. Wisniewski
Secretary and Treasurer
Moore Products Co.
1201 Sumneytown Pike
Spring House, Pennsylvania 19477-0900
(215) 646-7400
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(Name, Address and Telephone Number of Person Authorized to Receive
Notice and Communications on Behalf of the Person Filing Statement)
Copy To:
John C. Bennett, Jr.
Drinker Biddle & Reath LLP
One Logan Square
18th and Cherry Streets
Philadelphia, Pennsylvania 19103-6996
(215) 988-2700
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Item 1. Security and Subject Company.
The name of the subject company is Moore Products Co., a Pennsylvania
corporation (the "Company"), and the address of the principal executive
offices of the Company is 1201 Sumneytown Pike, Spring House, Pennsylvania
19477-0900.
The title of the class of equity securities to which this statement relates
is the Company's shares of common stock, par value $1.00 per share (the
"Common Shares"). The Company's shares of Series A preferred stock, par value
$1.00 per share (the "Preferred Shares" and, with the Common Shares,
collectively the "Shares") are also subject to the Offer (as that term is
defined in Item 2 hereof). The Common Shares are registered under Section
12(g) of the Securities Exchange Act of 1934, as amended (the "Act"); the
Preferred Shares are not registered under Section 12 of the Act and are not
publicly held or traded.
Item 2. Tender Offer of the Bidder.
This Schedule relates to the Company's recommendation in connection with the
tender offer by Malibu Acquisition Corp., a Pennsylvania corporation
("Purchaser") and wholly-owned, direct subsidiary of Siemens Energy &
Automation, Inc, a Delaware corporation ("Parent"), to purchase, upon the
terms and subject to the conditions set forth in the Offer to Purchase, dated
January 21, 2000 (the "Offer to Purchase"), and the related Letter of
Transmittal (which together constitute the "Offer"), all issued and
outstanding (i) Common Shares at a price of $54.71 per Common Share (the
"Common Share Price"), net to the tendering shareholder, in cash, and (ii)
Preferred Shares at a price of $21.88 per Preferred Share (the "Preferred
Share Price"), net to the tendering shareholder, in cash. The Offer is
disclosed in the Tender Offer Statement on Schedule 14D-1 (the "Schedule 14D-
1") filed by Purchaser, Parent and Siemens Aktiengesellschaft ("Siemens") with
the Securities and Exchange Commission (the "Commission") on January 21, 2000.
The principal executive offices of Purchaser and Parent are located at 3333
Old Milton Parkway, Alpharetta, Georgia 30005. Purchaser and Parent are
indirect subsidiaries of Siemens, whose principal executive offices are
located at Wittelsbacherplatz 2, D-80333 Munich, Federal Republic of Germany.
The Offer is being made pursuant to the terms of an Agreement and Plan of
Merger, dated January 16, 2000 (the "Merger Agreement"), by and among the
Company, Purchaser and Parent. The Merger Agreement provides, among other
things, that upon the terms and subject to the conditions contained therein,
and in accordance with the Pennsylvania Business Corporation Law (the "PBCL"),
as promptly as practicable after the purchase of Shares pursuant to the Offer
and the satisfaction or waiver of the conditions contained therein, Purchaser
will be merged with and into the Company (the "Merger"), with the Company
continuing as the surviving corporation in the Merger as a wholly-owned
subsidiary of Parent. At the effective time of the Merger (the "Effective
Time"), each issued and outstanding Share not tendered in the Offer (other
than Shares held by the Company, Parent or any subsidiary of Company or
Parent, and Shares held by shareholders who properly exercise their
dissenters' rights under the PBCL), will be converted into the right to
receive the Common Share Price or the Preferred Share Price, as applicable
(the "Merger Consideration"), without interest thereon. The Merger Agreement
further provides that immediately prior to the Effective Time, all then
outstanding stock options granted under the Company's 1994 Stock Option Plan
and 1997 Non-Employee Directors' Equity Incentive Plan (the "Options") (a)
will become fully vested, (b) the holders of such Options will become entitled
to receive a payment in cash from the Company equal to the product of (i) the
number of Common Shares subject to their Options and (ii) the excess, if any,
of the Common Share Price over the exercise price of such Options, and (c)
such Options will be cancelled.
Certain shareholders of the Company (including members of the Moore family
and all of the Company's Directors), who are the beneficial owners of
approximately 55% of the total voting power of the Company, have entered into
a Tender and Option Agreement (the "Tender Agreement") with the Company,
Parent and Purchaser pursuant to which such shareholders have agreed, among
other things, to grant Purchaser and Parent an option to purchase their Shares
upon the occurrence of certain events and to tender in the Offer, and not
withdrawn, the Shares currently owned by such shareholders, as well as any
other Shares subsequently acquired by such shareholder prior to the expiration
of the Offer, including pursuant to the exercise of Options.
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Copies of the Merger Agreement and the Tender Agreement are filed as
Exhibits to the Schedule 14D-1, a copy of which is enclosed with this Schedule
14D-9, and are incorporated herein by this reference in their entirety.
Item 3. Identity and Background.
(a) Identity.
The name and business address of the Company, which is the person filing
this statement, are set forth in Item 1 above.
(b) Contracts.
Except as otherwise described in this Schedule 14D-9 or in the exhibits or
schedules hereto, to the knowledge of the Company, as of the date hereof,
there are no material contracts, agreements, arrangements or understandings,
or any actual or potential conflicts of interest, between the Company or its
affiliates and (i) the Company or its executive officers, directors or
affiliates or (ii) Purchaser, Parent or their respective executive officers,
directors or affiliates.
The Merger Agreement.
The summary of the Merger Agreement contained in Section 12 "Purpose of the
Offer; the Merger Agreement and Certain Other Agreements--The Merger
Agreement" of the Offer to Purchase is incorporated herein by reference. Such
summary should be read in its entirety for a more complete description of the
terms and provisions of the Merger Agreement. A copy of the Merger Agreement
has been filed as Exhibit (c)(1) to the Schedule 14D-1 and is incorporated
herein by this reference.
The Tender Agreement.
The summary of the Tender Agreement contained in Section 12 "Purpose of the
Offer; the Merger Agreement and Certain Other Agreements--The Tender and
Option Agreement" of the Offer to Purchase is incorporated herein by
reference. Such summary should be read in its entirety for a more complete
description of the terms and provisions of the Tender Agreement. A copy of the
Tender Agreement has been filed as Exhibit (c)(3) to the Schedule 14D-1 and is
incorporated herein by this reference.
Confidentiality Agreement.
Pursuant to the terms of the Confidentiality Agreement effective as of
November 15, 1999, between Parent and the Company, the Company and Parent
agreed to provide, among other things, for the confidential treatment of their
discussions regarding the Offer and the Merger and the exchange of certain
confidential information concerning the Company. A copy of the Confidentiality
Agreement has been filed as Exhibit (c)(2) to the Schedule 14D-1 and is
incorporated herein by this reference.
Interests of Certain Persons.
Certain members of the Company's management may be deemed to have interests
in the transactions contemplated by the Merger Agreement that are in addition
to their interests as shareholders of the Company generally. These interests
arise in connection with the Board's adoption, coincident with its approval of
the Merger Agreement, of principles to memorialize certain determinations made
by the Board to provide for equitable treatment of the Company's employees
from and after the Effective Time and to retain the services of certain
officers in connection with the transaction (the "Principles"). The summary of
the Principles contained in Section 12 "Purpose of the Offer; the Merger
Agreement and Certain Other Agreements--Employee Benefits and Severance
Principles of the Company's Board of Directors" of the Offer to Purchase is
incorporated herein by reference. A copy of the Principles is filed as Exhibit
(c)(4) to this Schedule 14D-9. In addition to the foregoing, the Board,
coincident with its approval of the Merger Agreement, granted Robert E.
Wisniewski, Treasurer and Secretary of the Company, a $100,000 bonus in
recognition of the extraordinary administrative and related services required
of him in connection with the sale of the Company. Reference is hereby made to
Annex B hereto for a description of additional executive employment and
benefit arrangements. Reference is made to the accelerated vesting of options
described in Item 1, above.
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The provisions of the Merger Agreement relating to the election and
designation of directors to the Company's Board of Directors are subject to
Section 14(f) of the Act, which requires the Company to mail to its
shareholders an information statement (the "Information Statement") containing
the information required by Section 14(f) of the Act and Rule 14f-1
promulgated thereunder. A copy of the Information Statement is attached as
Annex B hereto and is incorporated herein by this reference.
Donald Bogle Employment Contract.
Donald E. Bogle and the Company are parties to an Employment Agreement,
dated as of October 31, 1997 (the "Employment Agreement"). The basic terms of
the Employment Agreement are as follows: (i) the term of the agreement is for
three years, extending in most circumstances automatically for additional one
year terms, (ii) the base salary payable to Mr. Bogle is at least $250,000,
which base salary may be increased (but not decreased) by the Company's
Compensation Committee (the base salary is currently set at $270,000 per
year), (iii) Mr. Bogle is entitled to an incentive bonus ranging from 25% to
50% of base salary if certain business plan objectives are achieved, and (iv)
in the event of Mr. Bogle's termination in certain circumstances (including
termination as a result of a merger or acquisition), Mr. Bogle is entitled to
one year's salary plus bonus to the extent earned, continuation of various
insurance benefits, and immediate vesting of granted options. As contemplated
by the Employment Agreement and in accordance with the Company's 1994 Stock
Option Plan, Mr. Bogle was also granted non-qualified stock options to
purchase 100,000 shares of common stock, which options were scheduled to vest
at the rate of 50,000 shares on January 1, 1999 and 25,000 shares each on
January 1, 2000 and 2001. In addition to the above and pursuant to the
Employment Agreement, the Company also provides Mr. Bogle with employee
benefits, use of an automobile, and premiums on an executive life insurance
policy.
Indemnification of Directors and Officers.
The Company's Bylaws, as amended on January 14, 2000, require the Company to
indemnify, to the fullest extent permitted by the PBCL, any person who was or
is a party or is threatened to be made a party to any threatened, pending or
completed action or proceeding, including actions by or in the right of the
Company, whether civil, criminal, administrative or investigative, by reason
of the fact that such person is or was a director or officer of the Company,
or is or was serving while a director or officer of the Company at the request
of the Company as a director, officer or fiduciary of another corporation for
profit or not-for-profit, partnership, joint venture, trust, employee benefit
plan or other enterprise, against expenses (including attorneys' fees),
judgments, fines, excise taxes and amounts paid in settlement actually and
reasonably incurred by such person in connection with such action or
proceeding unless a judgment or other adjudication establishes that his or her
acts or omissions were: (a) committed in bad faith or were the result of
active and deliberate dishonesty and were material to the cause of action so
deliberated or (b) arising out, based upon or attributable to the gaining in
fact of any financial profit or any other advantage to which he or she is not
legally entitled. Expenses (including attorneys' fees) incurred by an officer
or director of the Company in defending any such action or proceeding shall be
paid by the Company in advance of the final disposition of such action or
proceeding upon receipt of an undertaking by or on behalf of such person to
repay such amount if it shall ultimately be determined that the person is not
entitled to be indemnified by the Company. The determination of whether an
individual meets the applicable standard of conduct may be made by a quorum of
disinterested directors or by independent legal counsel if such quorum of
directors so directs or is not obtainable. Such indemnification and
advancement of expenses shall not be deemed exclusive of any other rights to
which those seeking indemnification or advancement of expenses may be entitled
under the Company's Articles of Incorporation, any insurance or other
agreement, vote of shareholders or directors or otherwise, both as to actions
in their official capacity and as to actions in another capacity while holding
an office, and shall continue as to a person who has ceased to be a director
or officer and shall inure to the benefit of the heirs, executors and
administrators of such person.
The Company currently maintains insurance for its directors and officers.
Insofar as indemnification for liabilities arising under the Securities Act of
1933, as amended (the "Securities Act"), may be permitted to directors,
officers, or persons controlling the Company pursuant to the foregoing
provisions, the Company has
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been informed that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is therefore
unenforceable. See Section 12 "Purpose of the Offer; the Merger Agreement and
Certain Other Agreements--The Merger Agreement--Indemnification" in the Offer
to Purchase for a description of Parent's and Purchaser's obligations to
continue this indemnification.
Item 4. The Solicitation or Recommendation.
Recommendation by the Board of Directors.
The Board of Directors (the "Board") of the Company has unanimously approved
the Offer and the Merger and (a) determined that the Merger Agreement and the
transactions contemplated thereby, including each of the Offer and the Merger
(the "Transactions"), are fair to, and in the best interests of, the Company
and the holders of each class of Shares (i.e. Common Shares and Preferred
Shares), including those shareholders not affiliated with Parent or Purchaser
(the "Public Shareholders"), (b) approved the Merger Agreement and the Merger
and (c) resolved to recommend that the Company's shareholders accept the Offer
and tender their Shares pursuant to the Offer and subsequently approve the
Merger Agreement, if such approval is required by law.
In making the recommendation and approving the Merger Agreement and the
Transactions, the Board considered a number of factors, including, but not
limited to, the following:
(a) the financial and other terms and conditions of the Merger Agreement,
including the proposed structure of the Offer and the Merger involving a
cash tender offer of $54.71 per Common Share and $21.88 per Preferred Share
for all outstanding Shares to be followed by a merger for the same
consideration, which Offer will give the Company's shareholders the
opportunity to receive the Merger Consideration for their Shares earlier
than would be the case under many other structures;
(b) various risks and uncertainties associated with the Company's
remaining a small independent company and with any expansion of the
Company's business to meet the needs of its customers and to compete with
its increasingly larger competitors, both domestically and internationally;
(c) the historical market prices of the Common Shares, including the fact
that the Offer price and the Merger price of $54.71 per Common Share
represented premiums of approximately 39.4%, 30.3% and 27.6% over the
closing prices per Common Share on the NASDAQ Stock Market on January 12,
13 and 14, 2000, respectively, the last three full trading days prior to
the January 17, 2000 announcement of the Transactions, and represented a
premium of approximately 98.9% over the closing price for the Common Shares
on the NASDAQ Stock Market on November 22, 1999, the day before the Company
issued a press release announcing that it had engaged a financial advisory
firm to help evaluate potential strategic alternatives;
(d) the $54.71 per Common Share to be paid in the Offer and the Merger
exceeded the highest price at which the Common Shares have traded on the
NASDAQ Stock Market for at least the past ten (10) years;
(e) neither the Offer nor the Merger is subject to any financing
condition, and Parent has represented that it has available to it from or
through Siemens or its affiliates, sufficient funds to consummate the
Offer, the Merger and the transactions contemplated thereby;
(f) the opinion, dated January 14, 2000, to the Board of Houlihan Lokey
Howard & Zukin Financial Advisors, Inc. ("Houlihan Lokey"), to the effect
that, as of the date of such opinion and based upon and subject to certain
matters stated therein, each of the Common Share Price and the Preferred
Share Price to be received, as the case may be, in the Offer and the Merger
by the holders of Shares (other than Parent and its affiliates) was fair,
from a financial point of view, to each class of such holders. The opinion
of January 14, 2000 was reconfirmed in a written opinion dated January 16,
2000, which was essentially identical to the January 14, 2000 opinion. The
full text of the written opinion of Houlihan Lokey dated January 16, 2000
(the analysis and conclusion of which were concurred with and adopted by
the Board), which sets forth the assumptions made, matters considered and
limitations on the review undertaken, is attached as Annex A to this
Schedule 14D-9 and is incorporated herein by this reference. The opinion of
Houlihan Lokey is directed to the Board, addresses only the fairness of
each of the Common Share Price and the Preferred Share Price to be
received, as the case may be, in the Offer and the Merger by the holders of
Shares (other than Parent and its affiliates) from a financial point of
view, and does not constitute a
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recommendation to any shareholder as to whether or not such shareholder
should tender Shares in the Offer or as to how such shareholder should vote
with respect to the proposed Merger. Holders of Shares are urged to read
such opinion carefully in its entirety;
(g) the fact that, prior to consummation of the Offer, the Board may
cause the Offer to be terminated under the circumstances described in
Section 12 "Purpose of the Offer and the Merger; the Merger Agreement and
Certain Other Agreements--The Merger Agreement--No Solicitation" of the
Offer to Purchase. Under such circumstances, the Company likely would be
required to pay Parent a termination fee of $5.5 million; however, the
Board recognized that (i) certain terms of the Merger Agreement limit the
ability of the Company to consider and act upon competing bids in certain
situations and (ii) the Tender Agreement may have the effect of
discouraging persons from making or consummating competing bids; and
(h) despite the fact that the willingness of the Company to entertain
proposals for a change-in-control transaction was well known within the
business community, and despite numerous contacts by the Company with
potentially interested parties, no firm proposals emerged which the Company
believed to be superior to the terms set forth in the Merger Agreement.
The Board's approval and recommendation was based on the totality of the
information considered by it. The Board did not assign relative weights to the
factors considered by it or determine that any one factor was of primary
importance.
Background.
Following the appointment of Edward T. Hurd as Chairman of the Board of the
Company in the fall of 1996, the Company began re-evaluating the Company's
position and prospects as a small independent company in the rapidly
consolidating process automation industry and considered various possible
strategies for increasing shareholder value. Throughout 1997 and 1998, the
Company considered possible alliances with several strategic partners, only
one of which evolved beyond preliminary discussions and evaluation. The one
potential alliance during this period that advanced beyond preliminary
discussions involved a large foreign competitor of the Company. The Company
and this potential partner held discussions from time to time through the fall
of 1998, and into the early spring of 1999, when discussions were terminated
by mutual agreement.
In the summer of 1999, the Company was approached by a large U.S. based
company that expressed interest in a possible acquisition of the Company. The
two companies entered into a confidentiality agreement, and numerous meetings
occurred between the Company and this party over the next several months. The
Board was routinely updated concerning these discussions through periodic
telephone conferences and regularly scheduled meetings. In early November,
during a telephonic meeting of the Board in which the Board was being updated
on the discussions with this party, the Board directed the Company's
management to contact other potential acquirors to assess their interest in
entering into a business combination with the Company. Following this meeting,
the Company's management made contacts with six potential strategic partners,
including Parent and the foreign competitor with whom the Company had
terminated discussions in the spring of 1999.
On November 11, 1999, in compliance with the Board's directions, Mr. Hurd
contacted Dr. Manfred R. Liska, Vice President of Strategic Planning and
Cooperation of Parent, by telephone. Dr. Liska expressed interest in
evaluating a potential business combination with the Company. On November 16,
1999, Parent and the Company executed a Confidentiality Agreement and the
Company allowed Parent the opportunity to review the Company's business
material and to initiate business discussions. On November 17, 1999, Thomas J
Malott, President and Chief Executive Officer of Parent, Gary K. Gabriel,
Executive Vice President and Chief Financial Officer of Parent, and Dr. Liska
met with Mr. Hurd, Donald E. Bogle, President and Chief Executive Officer of
the Company, Edward J. Curry, Executive Vice President and Chief Operating
Officer of the Company, and
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Robert E. Wisniewski, Secretary and Treasurer of the Company, at the Company's
Spring House, Pennsylvania headquarters. During this meeting, the parties
toured the Company's facilities and discussed various issues related to a
possible business combination, although this meeting did not yield any
specific understanding between the parties. At the conclusion of the meeting,
Parent's representatives indicated that they would be in contact with the
Company in the near future.
On November 19, 1999, members of the Company's management, along with some
of its financial and legal advisors, met with management members of the U.S.
based company that had contacted the Company in the summer of 1999 and
discussed the terms of a possible acquisition of the Company in exchange for
capital stock of such company having a value per common share in the mid-$40s
range, subject to due diligence and other conditions. Following that meeting,
the Company once again contacted Parent and the other potential acquirors who
had expressed interest in acquiring the Company and advised them that if they
had a serious interest in acquiring the Company they should move forward
promptly or risk being too late. Also on this date, the Company formally
retained Conway DelGenio Gries & Co., LLC ("Conway DelGenio") in order to help
the Company evaluate proposals from potential acquirors, and Houlihan Lokey to
render a fairness opinion. On November 23, 1999, in response to market
activity in its stock, the Company issued a press release announcing that it
had engaged an investment banking firm to help it evaluate potential strategic
alternatives. Following this press release, the Company was contacted, through
Conway DelGenio, by a number of additional potential acquirors. Exploratory
discussions commenced with several of these potential acquirors, none of which
progressed beyond the preliminary discussion and preliminary due diligence
stage. During a telephonic meeting of the Board on November 26, 1999 during
which the Board was updated on existing inquiries as well as the initial
discussions with Parent, Houlihan Lokey provided the Board with its
preliminary view as to a valuation and fairness range for the Shares in a
change-of-control transaction.
On November 29, 1999, at the request of the Company, Parent delivered a
preliminary, non-binding letter of interest indicating its interest in
acquiring the Company's capital stock in an estimated price range for the
Common Shares between $48 to $52 per share. On this date and on November 30,
1999, the Board had telephonic meetings during which Parent's November 29,
1999 letter was discussed. Following the November 30, 1999 Board meeting and
over the next several days, Mr. Hurd had several conversations with Mr. Malott
and Dr. Liska regarding Parent's preliminary letter of interest and the
structure and timing of a potential acquisition by Parent of the Company.
During these discussions, Parent indicated that, subject to due diligence and
further review and investigation, it could potentially offer as much as $175
million for the Company. Mr. Malott emphasized that Parent would not proceed
with an acquisition of the Company unless the Moore family and certain other
shareholders agreed to commit their Shares to Parent pursuant to a tender and
option agreement. At the same time these discussions were taking place, Dr.
Liska was in contact with Mr. Bogle to plan Parent's due diligence. On
December 3, 1999, Dr. Liska forwarded a letter to Mr. Bogle relating Parent's
desire to refrain from further negotiations until its due diligence was
completed. Representatives of Parent visited the Company's Spring House,
Pennsylvania facility during the week of December 6 through December 10 and
undertook their due diligence review at an off-site location. No substantive
business discussions were held during this due diligence period.
During the week of December 13, 1999, Parent relayed to the Company a number
of issues uncovered during Parent's due diligence. On December 17, 1999,
Messrs. Malott and Gabriel met via video conference with Messrs. Hurd, Bogle,
Moore, Curry and Wisniewski to discuss, among other thing, these due diligence
issues. At that meeting, Messrs. Malott and Gabriel indicated that the
Company's potential acquisition by Parent was scheduled to be discussed that
week by members of Siemens' Managing Board. On December 22, 1999, Mr. Malott
contacted Mr. Hurd and indicated he was authorized to offer up to an aggregate
of $170 million for the Company, again subject to receipt of a tender and
option agreement from specified shareholders of the Company and satisfactory
completion of due diligence. On that same day, the Board had a telephonic
meeting where this value was discussed, and the Board authorized the Company's
management to commence negotiations to resolve open issues and to reach a
definitive agreement. Beginning on December 22, 1999, members of management of
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both companies, together with their respective legal and financial advisors,
extensively negotiated the terms of the proposed acquisition and the
definitive documentation. The principal issues discussed among the parties
during these negotiations included the nature and extent of the parties'
representations and warranties, the conditions to the Offer, the termination
events under the Merger Agreement and the liability of the parties in such
circumstances, the amount of the termination fee and expense reimbursement due
Parent under the Merger Agreement and the bases upon which they were payable,
and the nature of Parent's commitments with respect to various Company officer
and employee benefit, employment and indemnification matters.
On January 13-14, 2000, the Board met to discuss the terms of Parent's offer
of $170 million (which equates to $54.71 per Common Share, $21.88 per
Preferred Share and the cashing out of all of the Company's outstanding
Options for an amount equal to $54.71 minus the exercise price of such
Options) and drafts of the Merger Agreement and the Tender Agreement. During
these meetings, members of the Company's senior management, together with the
Company's legal and financial advisors, reviewed in detail with the Board,
among other things, the background of the proposed transaction, the potential
benefits and risks of and the strategic and financial rationale of the
transactions, and the proposed terms of each of the Merger Agreement and the
Tender Agreement. The Board also discussed and approved the Principles, and
further discussed other provisions of the Merger Agreement relating to pension
plan and other employee benefits to be provided following the Merger. On
January 14, 2000, Houlihan Lokey provided a detailed financial presentation
and delivered its oral opinion (to be confirmed in writing upon finalization
of the terms of each of the Merger Agreement and the Tender Agreement) that
the consideration to be received by holders of each of the Common Shares and
the Preferred Shares pursuant to the Merger Agreement was fair, from a
financial point of view, to such holders. Late that day, after extensive
discussion and further negotiation with Parent over certain terms, the Board
unanimously approved each of the Merger Agreement, the Tender Agreement and
the transactions contemplated thereby, subject to certain changes discussed at
the meeting. The Board further authorized the officers to complete the
negotiations and, subject to receipt of the final written fairness opinion
from Houlihan Lokey, to enter into and perform each of the Merger Agreement
and the Tender Agreement.
On January 16, 2000, the representatives of both Parent and the Company
concluded negotiations of mutually acceptable definitive documentation. On
that date, Parent, Purchaser and the Company executed the Merger Agreement and
Parent, Purchaser, the Company and the other parties thereto executed the
Tender Agreement, and the transaction was announced prior to the opening of
business on January 17, 2000 by the issuance of a joint press release.
Item 5. Persons Retained, Employed or to be Compensated.
The Company has retained Houlihan Lokey and Conway DelGenio to act as its
financial advisors in connection with the Offer and the Merger. Pursuant to
the terms of their respective engagements, the Company has agreed to pay
Conway DelGenio and Houlihan Lokey for their services an aggregate financial
advisory fee of $1,565,000; $1,375,000 payable to Conway DelGenio and $150,000
payable to Houlihan Lokey. The Company also agreed to pay Houlihan Lokey a fee
of $40,000 for its opinion addressed to the trustee and the advisory committee
of the Moore Products Co. Pension Plan (the "Pension Plan") in connection with
the Pension Plan's execution of the Tender Agreement. All of Houlihan Lokey's
fees were payable upon delivery of their respective opinions. A portion of
Conway DelGenio's fee was payable upon its engagement by the Company and the
execution of the Merger Agreement, with the balance payable upon the
consummation of the transaction. The Company also has agreed to reimburse
Conway DelGenio & Houlihan Lokey for reasonable out-of-pocket expenses, and to
indemnify Conway DelGenio, Houlihan Lokey and certain of their related parties
against certain liabilities related to or arising out of their respective
engagements.
Item 6. Recent Transactions and Intent With Respect to Securities.
(a) Transactions in Securities. During the past 60 days, no transactions in
Shares have been effected by the Company, or, to the best of the Company's
knowledge, by any of its executive officers, directors, affiliates or
subsidiaries except for (i) the execution and delivery of the Tender
Agreement; and (ii) transfers by directors and executive officers, without
consideration as gifts, to or for the benefit of family members and charities.
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(b) Intent to Tender. To the best of the Company's knowledge, all executive
officers and directors of the Company presently intend to tender, pursuant to
the Offer, all Shares beneficially owned by them, and those executive officers
and directors who are parties to the Tender Agreement have committed to tender
their Shares.
Item 7. Certain Negotiations and Transactions by the Subject Company.
(a) Negotiations. Except as set forth in this Schedule 14D-9 and Section 13
"Plans for the Company; Other Matters--Plans for the Company" of the Offer to
Purchase, no negotiation is being undertaken or is underway by the Company in
response to the Offer that relates to or would result in (i) an extraordinary
transaction, such as a merger or reorganization involving the Company or any
subsidiary thereof; (ii) a purchase, sale or transfer of a material amount of
assets by the Company or any subsidiary thereof; (iii) a tender offer for or
other acquisition of securities by or of the Company; or (iv) any material
change in the present capitalization or dividend policy of the Company.
(b) Transactions and other Matters. Except as set forth in this Schedule
14D-9, there are no transactions, Board resolutions, agreements in principle
or signed contracts in response to the Offer that relate to or would result in
one or more of the events referred to in Item 7(a) above.
Item 8. Additional Information to be Furnished.
The information contained in all of the Exhibits referred to in Item 9 below
is incorporated herein by reference.
Item 9. Material to be Filed as Exhibits.
<TABLE>
<CAPTION>
Exhibit
Number Exhibit
------- -------
<C> <S>
(a)(1) Press Release, dated January 17, 2000, issued by the Company and
Siemens Energy & Automation, Inc. (incorporated herein by reference to
Exhibit (a)(8) to the Tender Offer Statement, dated January 21, 2000,
on Schedule 14D-1 filed by Siemens Energy & Automation, Inc., Malibu
Acquisition Corp. and Siemens Aktiengesellschaft on January 21, 2000
(the "Schedule 14D-1")
(a)(2) Opinion of Houlihan Lokey Howard & Zukin Financial Advisors, Inc.
(included as Annex A to this Schedule 14D-9)*
(a)(3) Form of letter to shareholders of the Company dated January 21, 2000
(included in copies mailed to shareholders of the Company)*
(b) None
(c)(1) Agreement and Plan of Merger, dated January 16, 2000, among Siemens
Energy & Automation, Inc., Malibu Acquisition Corp. and Moore Products
Co. (incorporated herein by reference to Exhibit (c)(1) to the
Schedule 14D-1)
(c)(2) Tender and Option Agreement, dated January 16, 2000 among Siemens
Energy & Automation, Inc., Malibu Acquisition Corp. and Moore Products
Co. and the Shareholders of the Company listed on Schedule A thereto
(incorporated herein by reference to Exhibit (c)(3) to the Schedule
14D-1)
(c)(3) Employment Agreement between Donald E. Bogle and Moore Products Co.
Dated as of October 31, 1997 (incorporated by reference to Exhibit
10.1 of the Company's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1999)
(c)(4) Company Employee Benefit and Severance Principles, adopted by the
Company's Board of Directors at a Special Meeting of such Board on
January 14, 2000.
Annex B Information Statement pursuant to Section 14(f) of the Securities
Exchange Act of 1934, as amended (included as Annex B to this Schedule
14D-9)*
</TABLE>
- --------
* Included in documents mailed to shareholders.
8
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
/s/ Robert E. Wisniewski
By: _________________________________
Robert E. Wisniewski
Secretary and Treasurer
January 21, 2000
9
<PAGE>
Annex B
MOORE PRODUCTS CO.
1201 Sumneytown Pike
Spring House, Pennsylvania 19477
----------------
INFORMATION STATEMENT PURSUANT TO SECTION 14(f)
OF THE SECURITIES EXCHANGE ACT OF 1934
AND RULE 14f-1 THEREUNDER
----------------
GENERAL
This Information Statement is being mailed on or about January 21, 2000, as
part of the Solicitation/Recommendation Statement on Schedule 14D-9 (as
amended from time to time, the "Schedule 14D-9") of Moore Products Co. (the
"Company"). Capitalized terms used herein and not otherwise defined have the
respective meanings set forth in Schedule 14D-9. You are receiving this
Information Statement in connection with the possible election of persons
designated by Siemens Energy & Automation, Inc. (the "Purchaser Designees") to
the Company's Board of Directors (the "Board"). As more fully described below,
the Merger Agreement requires the Company, upon the acceptance for payment of
and payment for any Shares by Purchaser or any of its affiliates pursuant to
the Offer and upon request of Purchaser, to take certain action to cause the
Purchaser Designees to be elected to the Company's Board. The Offer commenced
on January 21, 2000 and is scheduled to expire at 12:00 midnight, New York
City time, on February 17, 2000 unless extended by Purchaser upon the terms
set forth in the Offer to Purchase. The information contained in this
Information Statement concerning Parent and Purchaser has been furnished to
the Company by Parent. The Company assumes no responsibility for the accuracy
or completeness of such information.
This Information Statement is required by Section 14(f) of the Securities
Exchange Act of 1934, as amended (the "Act"), and Rule 14f-1 thereunder. You
are urged to read this Information Statement carefully. You are not, however
required to take any action.
INFORMATION REGARDING THE SHARES
Voting Securities
As of January 16, 2000, Company had outstanding 2,646,985 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.
DESIGNATION OF DIRECTORS BY PURCHASER
The Merger Agreement provides that immediately upon the acceptance for
payment of and payment for any Shares by Purchaser or any of its affiliates
pursuant to the Offer, Purchaser will be entitled to designate such number of
directors, rounded up to the next whole number, on the Board of Directors of
the Company as will give Purchaser, subject to compliance with Section 14(f)
of the Act, representation on the Board of Directors of the Company equal to
the product of (i) the total number of directors on the Board of Directors of
the Company (giving effect to the increase in the size of such Board pursuant
to this paragraph) and (ii) the percentage that the
B-1
<PAGE>
number of votes represented by the Shares beneficially owned by Purchaser and
its affiliates (including Shares so accepted for payment and purchased) bears
to the number of votes represented by the Shares then outstanding. In
furtherance thereof, concurrently with such acceptance for payment and payment
for such Shares the Company will, upon request of Parent and in compliance
with Section 14(f) of the Act and Rule 14f-1 promulgated thereunder, use its
best efforts promptly either to increase the size of its Board of Directors or
to secure the resignations of such number of its incumbent directors, or both,
as is necessary to enable such designees of Parent to be so elected or
appointed to the Company's Board of Directors, and, subject to applicable law,
the Company will take all reasonable actions available to the Company to cause
such designees of Parent to be so elected or appointed. The Merger Agreement
provides that at such time, the Company will, if requested by Parent and
subject to applicable law, also take all reasonable action necessary to cause
persons designated by Parent to constitute at least the same percentage
(rounded up to the next whole number) as is on the Company's Board of
Directors of (i) each committee of the Company's Board of Directors, (ii) each
board of directors (or similar body) of each subsidiary of the Company and
(iii) each committee (or similar body) of each such board. From and after the
time, if any, that Purchaser Designees constitute a majority of the Company's
Board of Directors and prior to the Effective Time, any amendment of the
Merger Agreement materially adverse to the holders of the Shares or any
termination of the Merger Agreement by the Company may be effected only by the
action of a majority of the directors of the Company who were directors on the
date of the Merger Agreement and who are not officers or affiliates of the
Company (it being understood that for purposes of this sentence, a director of
the Company will not be deemed an affiliate of the Company solely as a result
of his status as a director of the Company), Parent or any of their respective
subsidiaries, which action will be deemed to constitute the action of any
committee specifically designated by the Board of Directors of the Company to
approve the actions contemplated thereby and the full Board of Directors of
the Company; provided, that, if there shall be no such directors, such actions
may be effected by majority vote of the entire Board of Directors of the
Company.
It is expected that the Purchaser Designees will assume office promptly
following the purchase by Purchaser of any Shares pursuant to the terms of the
Offer, which purchase cannot be earlier than February 17, 2000, and that, upon
assuming office, the Purchaser Designees together with the continuing
directors of the Company will thereafter constitute the entire Board.
As of the date of this Information Statement, Purchaser has not determined
who will be the Purchaser Designees. However, the Purchaser Designees will be
selected from among the persons listed in Schedule I attached hereto. Schedule
I also includes certain information with respect to each of the Purchaser
Designees.
B-2
<PAGE>
CURRENT DIRECTORS OF THE COMPANY
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. The following table sets forth as of January 20, 2000, certain
information with respect to each current director.
<TABLE>
<CAPTION>
Present
Director Term
Name and Occupation (1) Age Since Expires
- ----------------------- --- -------- -------
<S> <C> <C> <C>
Edward J. Curry*......................................... 53 1986 2003
Executive Vice President and Chief Operating Officer of
the Company
Raymond M. Reed.......................................... 64 1991 2003
Managing Director, Cotelligent/Reed (a technology
solutions company); independent consultant to the
Company since 1984
James O. Moore**......................................... 59 1978 2000
Director of Corporate Technology of the Company
William B. Moore* **..................................... 57 1978 2000
Vice Chairman of the Board and Chief Technology Officer
of the Company
Ralph H. Owens........................................... 83 1974 2000
Retired in 1986 as Senior Vice President of the Company
Robert B. Adams.......................................... 69 1986 2001
Director, EST Group, Inc. (a manufacturer of 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*.......................................... 61 1996 2001
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 unit of
Honeywell, Inc.; Director, Iconics, Inc. (a
manufacturer of industrial automation software)
Edwin G. Rorke........................................... 77 1968 2001
Chairman Emeritus; formerly Chairman of the Board of the
Company; Retired in 1988 as Chief Executive Officer of
the Company
Donald E. Bogle*......................................... 54 1997 2002
President and Chief Executive Officer of the Company
since October 1997; from October 1996 through September
1997 he was President of Home and Building Control, a
unit of Honeywell, Inc. (a provider of home and
building, and industrial control products); from 1992
to October 1996 various executive and management
capacities with Home and Building Control; and
Industrial Automation and Control, units of Honeywell,
Inc.
F. Lawton Hindle......................................... 68 1995 2002
Retired in 1995 as President of Moore Products Co.
(Canada), Inc.
(a wholly-owned subsidiary of the Company)
</TABLE>
B-3
<PAGE>
<TABLE>
<S> <C> <C> <C>
Thomas C. Moore**................................................ 67 1969 2002
Retired in 1992 as Regional Manager of the Company
</TABLE>
- --------
* member of the Executive Committee
** 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) 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.
EXECUTIVE OFFICERS OF THE COMPANY
The names, ages, principal occupations and positions for the past five years
of each Executive Officer of the Company who is not also a Director of the
Company are as follows:
<TABLE>
<CAPTION>
Name, Age and Position Business Experience During Past Five Years
- ---------------------- --------------------------------------------------------------
<S> <C>
Edward M. Coll, 50...... Mr. Coll was elected Vice President, International Sales and
Vice President, Operations, in April 1998. Since 1993, he has also held
International Sales Positions as Vice President, International Sales, Vice
and Operations President, Sales and Marketing, Vice President and General
Manager of the Systems Division, General Manager of the
Systems Division and National Sales Manager.
Richard D. Dunbar, 41... Mr. Dunbar was elected Vice President, Marketing, in June
Vice President, 1998. From January 1997 until joining Moore, he served as
Marketing President and Chief Operating Officer of Prospera Inc. From
July 1996 to January 1997, he served as Vice President, Sales
and Marketing, of Prospera, Inc. From 1994 to July 1996, he
served as Branch General Manager of Honeywell Inc., Home and
Building Control and from April 1994 to August 1994, he served
as Director of New Technology Marketing for Honeywell's
Industrial Automation & Control division.
Robert D. Greenlaw, 42.. Mr. Greenlaw was elected Vice President, North American Sales,
Vice President, in August 1998. From July 1997 to this appointment, he served
North American as Vice president, Customer Services. Since 1993, he has also
Sales held positions as Director General Manager, and General Sales
Manager of Moore Measurement Systems.
James McDonald, 50...... Mr. McDonald was elected Vice President, Strategic Accounts,
Vice President, in July 1998. Since 1992 he has also held Positions as Vice
Strategic Accounts President, North American Sales, and Vice President, Sales.
Peter F. Schiano, 37 ... Mr. Schiano was elected Vice President, Systems R&D in May
Vice President, 1999. From November 1997 to this appointment, he served as
Systems R&D Director of Manufacturing. Prior to this appointment, he held
positions as Operations Director of Measurement & Controls
Division and Manager, Electronic Instrument Development.
Robert E. Wisniewski, Mr. Wisniewski was elected Secretary and Treasurer in May
46....... Secretary and 1993. Prior to this appointment, he had held the positions of
Treasurer Director of Finance and Controller.
</TABLE>
B-4
<PAGE>
BENEFICIAL OWNERSHIP OF PRINCIPAL SECURITY HOLDERS AND MANAGEMENT
The following table sets forth, as of January 14, 2000 (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.
<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 621,845(3)(4) 22.8
Preferred 172,890(4) 98.3
Moore Products Co. Pension Common 19.0
Plan......................... 500,000(5)
Frances O. Moore.............. Common 321,854(3)(6) 12.0
Preferred 172,890(6) 98.3
Dimensional Fund Advisors Common 6.8
Inc.......................... 187,400(7)
Robert B. Adams .............. Common 7,313(8)(14) *
Director
Donald E. Bogle............... Common 80,000(8) *
Director, President and
Chief Executive Officer
Edward J. Curry............... Common 59,492(8)(9) *
Director, Executive Vice
President and
Chief Operating Officer
F. Lawton Hindle.............. Common 6,360(8) *
Director
Edward T. Hurd................ Common 38,000(8) *
Director, Chairman of the
Board
James O. Moore................ Common 344,653(3)(8)(10) 12.6
Director Preferred 1,020 *
Thomas C. Moore............... Common 338,826(3)(8)(10) 12.5
Director Preferred 1,020 *
William B. Moore.............. Common 352,961(3)(8)(12) 12.9
Director, Vice Chairman of Preferred 1,020 *
the Board and
Chief Technology Officer
Raymond M. Reed............... Common 9,000(8) *
Director
Ralph H. Owens................ Common 7,331(8) *
Director
Edwin G. Rorke................ Common 9,022(8) *
Director
Edward M. Coll................ Common 11,505(8) *
Vice President, International
Sales
</TABLE>
B-5
<PAGE>
<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>
Robert D. Greenlaw.............
Vice President, North American
Sales Common 8,409(8) *
All directors and executive
officers as a group Common 665,428(3)(13) 22.6
(17 in number)................ Preferred 3,060 1.7
</TABLE>
- -------
* Less than 1%
(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 Dimensional Fund Advisors Inc. is 1299
Ocean Avenue, 11th Floor, Santa Monica, CA 90401.
(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, 1998, 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 252,698 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: D. E. Bogle, E. J. Curry, R. E. Wisniewski and Edward J. McGarvey,
each of which 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) According to its Schedule 13G, Dimensional Fund Advisors Inc.
("Dimensional"), a registered investment advisor, furnishes investment
advice to four registered investment companies and serves as an
investment manager to certain other investment vehicles. All of the
indicated common shares are owned by such investment companies and
vehicles, and Dimensional has voting and investment power with respect to
such shares. Dimensional disclaims beneficial ownership of all such
shares.
(8) Includes, with respect to the particular named individual, common shares
issuable under stock options granted to him which are exercisable
currently or within 60 days as follows: R. B. Adams--3,000; D. E. Bogle--
75,000; E. M. Coll--10,680; E. J. Curry--58,400; F. L. Hindle--6,360; E.
T. Hurd--38,000; R. Greenlaw--8,400; J. O. Moore--1,500; T. C. Moore--
3,000; W. B. Moore--3,250; R. H. Owens--3,000; R. M. Reed--9,000; E. G.
Rorke--3,000. Does not include options which accelerate in accordance
with the provisions of the Merger Agreement.
(9) Does not include the 500,000 common shares held by the Company's Pension
Plan (see footnote (5) above).
(10) Includes: 300,000 common shares held by him as co-trustee of the two
trusts referred to in footnote (4) above; and 4,333 common shares held by
him as trustee of a trust established by Frances O. Moore.
(11) Includes: 10,000 common shares held by him as joint trustee for his
children; 300,000 common shares held by him as co-trustee of the two
trusts referred to in footnote (4) above; 4,334 common shares held by
B-6
<PAGE>
him as trustee of a trust established by Frances O. Moore; and 4,125
common shares held by him as custodian for his minor grandchildren and
great grandchild.
(12) Includes: 300,000 common shares held by him as co-trustee of the two
trusts referred to in footnote (4) above; 4,333 common shares held by him
as trustee of a trust established by Frances O. Moore; and an aggregate
of 3,500 common shares owned directly by his minor child.
(13) Includes 225,590 common shares issuable under stock options which are
exercisable currently or within 60 days, and the 500,000 common shares
held by the Company's Pension Plan (see footnote (5) above). Does not
include options which accelerate in accordance with the provisions of the
Merger Agreement.
(14) Includes 4,313 common shares held by him as trustee of two trusts.
MEETINGS OF THE BOARD OF DIRECTORS AND ATTENDANCE
During 1999, the Board of Directors held four formal meetings and informally
conferred on a number of other occasions. Each director attended at least 75
percent of the formal meetings, as well as the meetings of the Committees of
which he was a member.
DIRECTORS' COMPENSATION AND CONSULTING ARRANGEMENTS
Directors, other than those currently employed by the Company, are paid
$1,000 per day plus travel expenses for each Board and Committee meeting they
attend on separate days. Current non-employee directors each receive 1,000
stock options granted annually under the 1997 Non-Employee Directors Equity
Incentive Plan. These options are granted at fair market value, become
exercisable six months after the date of grant and expire ten years after the
date of grant, subject to earlier exercise and termination in certain
circumstances. During 1999, the non-employee directors (Messrs. Reed, Owens,
Adams, Hurd, Rorke, Hindle, and T. C. Moore) each were granted 1,000 options
exercisable at $23.75 per share under this Plan.
On occasion, directors are compensated on a per diem basis for specific
consulting services and related business expenses. During 1999, pursuant to
separate agreements entered into in June 1996, consulting fees of $10,494 were
paid to Raymond M. Reed or his affiliated consulting firm, and consulting fees
of $134,500 plus per diem living expenses and reimbursed business expenses of
$26,641 were paid to Edward T. Hurd.
COMMITTEES OF THE BOARD OF DIRECTORS
The Company has Audit and Compensation Committees, but does not have a
Nominating Committee.
The members of the Audit Committee are: Robert B. Adams, Edward J. Curry,
Raymond M. Reed, and Edwin G. Rorke. The Audit Committee met four times in
1999.
The primary functions of the Audit Committee are to: recommend the
engagement of independent auditors and review the scope of audit activities
and results thereof; review the format and content of financial statements to
be included in the annual report to shareholders; review the adequacy of
internal accounting and financial controls with financial management and
independent auditors; and review any recommendations of the independent
auditors and management responses.
The members of the Compensation Committee are: Robert B. Adams, Thomas C.
Moore, Ralph H. Owens, and Raymond M. Reed. The Compensation Committee met
four times in 1999.
The primary functions of the Compensation Committee are to: review and
establish compensation programs for attracting, retaining and promoting
executive officers, and for developing future senior management; appraise the
performance and approve compensation levels of the Chief Executive Officer and
other executive officers; review and approve payments under incentive
compensation plans for executive officers; administer stock option or other
stock-based compensation plans of the Company; and review and approve
employment, severance and compensation agreements with individual executive
officers.
B-7
<PAGE>
REPORT OF THE COMPENSATION COMMITTEE
Report of the Compensation Committee
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. The program is
also compared against statistical studies of comparable positions and
responsibilities in similar organizations to test the competitiveness of total
executive compensation.
Executive compensation at the Company is comprised primarily of base salary,
a performance-related variable incentive bonus, split-dollar life insurance, a
pension plan, a 401(k) employee retirement savings plan with corporate
matching contributions and a stock option plan.
The Committee periodically reviews overall executive compensation policy and
design with the intention of considering changes dictated by industry trends
and Company performance. In 1999, base compensation was determined by an
assessment of each executive's performance, current salary in relation to the
salary range designated for the job, experience, and potential for
advancement. The Committee considered aspects of performance as measured in
financial terms, but also evaluated the success of the management team in
areas of performance that cannot be measured by purely qualitative tools,
including development and execution of strategic plans, development of
management and employees, and the exercise of leadership. All of these factors
were collectively taken into account by the Committee in determining the
proper levels of base compensation and annual increases.
In 1999 executive officers, other than the Chief Executive Officer, were
eligible for incentive compensation targeted at 15 to 25% of salary based on
meeting overall corporate operating profit goals, individual performance and
on the extent to which the business plans for their areas of responsibility
were met or exceeded.
The Company's stock option plan is intended to motivate and reward employees
for establishing and executing long-term business objectives that are linked
to shareholder value. Options granted are determined 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 does not rely on any particular hurdles,
benchmarks or other objective criteria in awarding these options. Grants in
1999 were limited to special strategic initiatives and competitive situations
where the Company was attempting to attract and retain executive officers and
senior managers with talent and experience in key positions that were
determined to be vital to the growth of its business.
Following his appointment in October 1997 as President and Chief Executive
Officer, Mr. Bogle identified and launched several strategic initiatives
designed to improve long-term operating performance of the Company. Mr.
Bogle's current salary was established based upon evaluation of the criteria
noted above, and consideration of his experience and relevant market surveys.
Mr. Bogle is also eligible to receive incentive pay ranging from 25% to 50% of
his base salary, based upon achievement of certain financial operating
performance goals by the Company. No incentive compensation was earned by him
in 1999. Options granted at the time of his employment are intended to
encourage long-term success for the Company that contributes to shareholder
value.
It is the Committee's policy to establish and maintain compensation programs
for executive officers, which operate in the best interests of the Company and
its shareholders in achieving the Company's long-term business objectives.
Compensation Committee:
Robert B. Adams
Thomas C. Moore
Ralph H. Owens
Raymond M. Reed
January 2000
B-8
<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 four most highly compensated other executive officers
whose total annual salary and bonus exceeded $100,000 for 1999 (collectively,
the "Named Officers").
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation
--------------------- ------------
Shares
Underlying All Other
Name and Salary Bonus Options Compensation
Principal Position Year ($) ($) (1) (#) ($) (2)
- ------------------ ---- ---------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Donald E. Bogle.......... 1999 270,000 0 0 9,954
President and Chief
Executive Officer 1998 253,077 0 0 85,376(3)
1997 39,423 10,000 100,000 0
Edward J. Curry.......... 1999 204,231 0 20,000 6,176
Executive Vice President 1998 200,000 0 0 5,951
and
Chief Operating Officer 1997 162,231 32,446 22,000 5,424
William B. Moore......... 1999 175,000 0 0 5,994
Vice Chairman of the 1998 175,000 0 0 5,994
Board and
Chief Technology Officer 1997 171,885 25,783 2,000 5,800
Edward M. Coll........... 1999 133,269 0 0 4,517
Vice President,
International Sales 1998 130,000 0 0 4,503
1997 122,731 12,273 2,000 4,408
Robert D. Greenlaw....... 1999 138,807 0 0 4,499
Vice President, North
American Sales 1998 120,000 0 0 4,315
1997 103,846 18,692 8,000 2,077
</TABLE>
- --------
(1) No action has yet been taken with respect to any bonuses for 1999.
(2) Except for Mr. Bogle, 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 up to a maximum of $100,000 until retirement and
$100,000 after retirement. A portion of the premiums paid by the Company
for an executive officer's split-dollar policy will be repaid to the
Company out of the death benefit under such policy.
(3) Represents reimbursable moving expenses.
B-9
<PAGE>
OPTION GRANTS DURING 1999
The following tables set forth information concerning options to purchase
common stock granted to the individuals named in the Summary Compensation
Table during 1999. All options were granted under the 1994 Non-Qualified Stock
Option Plan.
<TABLE>
<CAPTION>
% of Total Potential Realizable
Number of Options Value at Assumed
Shares Granted to Exercise Annual Rate of Stock
Underlying Employees or Base Price Appreciation For
Options in Fiscal Price Expiration Option Term
Name Granted (#) Year ($/Sh) Date 5% ($) 10% ($)
- ---- ---------- ---------- -------- ---------- ----------- --------------
<S> <C> <C> <C> <C> <C> <C>
Edward J. Curry ........ 20,000(1) 24.68 21.563 1/27/2009 271,217 687,317
</TABLE>
- --------
(1) The exercise price of these options was 100% of the fair market value on
the date of grant. Options become exercisable based upon completion of
certain strategic goals in 1999.
AGGREGATE OPTION EXERCISES IN 1999 AND 1999
YEAR-END OPTION VALUES
The following table sets forth information concerning options to purchase
common stock of the Company exercised by the individuals named in the Summary
Compensation Table during 1999, and unexercised stock options held by them at
the end of 1999. All options were granted under the 1994 Incentive Stock
Option and Non-qualified Stock Option Plan. Such options are granted at fair
market value, generally become exercisable at 20% per year and expire ten
years after the date of grant, subject to earlier exercise and termination in
certain circumstances. Under the terms of the Merger Agreement, all
unexercisable options will be cancelled in exchange for a cash payments equal
to the difference between (A) Common Share Price to be paid in the Offer and
the Merger, and (B) the exercise price of the option.
<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>
Donald E. Bogle......... None N/A 50,000/100,000 575,000/575,000
William B. Moore........ 7,000 32,725 3,250/1,750 63,907/32,633
Edward J. Curry......... None N/A 28,400/34,600 554,900/594,215
Edward M. Coll.......... None N/A 12,440/3,560 296,225/78,645
Robert D. Greenlaw...... None N/A 8,400/9,600 170,213/150,225
</TABLE>
- --------
(1) Market value of underlying securities at year-end, minus the exercise
price of "in-the-money" options.
B-10
<PAGE>
PENSION ARRANGEMENTS
The Company has a defined benefit pension plan which covers all employees
over age 21 with one year of service. In addition, effective December 1, 1999,
the Compensation Committee of the Board of Directors approved adoption of a
Supplemental Executive Retirement Plan intended to provide pension benefits to
certain named officers (Messrs. Bogle, Curry and Moore) that would otherwise
be limited by the Internal Revenue Code. Annual pension is determined as 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 1999 covered compensation and credited
years of service for the Named Officers were as follows: D. E. Bogle--$270,000
with 2 years; W. B. Moore--$175,000 with 32 years; E. J. Curry--$210,000 with
20 years; E. M. Coll--$135,000 with 28 years; and R. Greenlawn--$147,000 with
18 years.
The following table illustrates the estimated straight-life annual
retirement benefits payable at normal retirement age under the plan, after
giving effect to the Supplemental Executive Retirement Plan referred to above.
The benefits listed are not subject to any deduction for Social Security
benefits or other offset amounts.
<TABLE>
<CAPTION>
Years of Service
-----------------------------------
Remuneration 10 Years 20 Years 30 Years 40 Years
- ------------ -------- -------- -------- --------
<S> <C> <C> <C> <C>
$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.................................... 26,250 52,500 78,750 105,000
200,000.................................... 30,000 60,000 90,000 120,000
225,000.................................... 33,750 67,500 101,250 135,000
250,000.................................... 37,500 75,000 112,500 150,000
275,000.................................... 41,250 82,500 123,750 165,000
300,000.................................... 45,000 90,000 135,000 180,000
</TABLE>
B-11
<PAGE>
EMPLOYMENT AGREEMENTS
Donald E. Bogle is a party to an Employment Agreement, dated as of October
31, 1997 (the "Employment Agreement") with the Company. The basic terms of the
Employment Agreement are as follows: (i) the term of the agreement is for
three (3) years, extending in most circumstances automatically for additional
one (1) year terms, (ii) the base salary payable to Mr. Bogle is at least
$250,000, which base salary may be increased (but not decreased) by the
Company's Compensation Committee (the base salary is currently set at $270,000
per year), (iii) Mr. Bogle is entitled to an incentive bonus ranging from 25%
to 50% of base salary if certain business plan objectives are achieved, and
(iv) in the event of Mr. Bogle's termination in certain circumstances
(including termination as a result of a merger or acquisition), Mr. Bogle is
entitled to one year's salary plus bonus to the extent earned, continuation of
various insurance benefits, and immediate vesting of granted options to be
exercised within one year such termination. As contemplated by the Employment
Agreement and in accordance with the Company's 1994 Incentive Stock Option and
Non-Qualified Stock Option Plan, Mr. Bogle was also granted non-qualified
stock options to purchase 100,000 shares of common stock, which options were
scheduled to vest at the rate of 50,000 shares on January 1, 1999 and 25,000
shares each on January 1, 2000 and 2001. In addition to the above and pursuant
to the Employment Agreement, the Company also provides Mr. Bogle with employee
benefits, use of an automobile, and premiums on an executive life insurance
policy.
SHAREHOLDER RETURN PERFORMANCE GRAPH
The following graph compares for the years 1995 through 1999 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 150 publicly traded companies as classified by Dow Jones & Company, Inc.
into an industry group identified as "Industrial Technology."
[FIVE YEAR CUMULATIVE TOTAL RETURN GRAPH]
---------------------- FISCAL YEAR ENDING -----------------------
COMPANY/
INDEX/
MARKET 12/30/1994 12/29/1995 12/31/1996 12/31/1997 12/31/1998 12/31/1999
Moore Products
Co 100.00 117.21 118.03 242.62 162.51 267.07
Industry Index 100.00 156.99 161.03 180.58 161.61 290.17
NASDAQ Market
Index 100.00 129.71 161.18 197.16 278.08 490.46
The above graph assumes that the value of the investment was $100 on
December 31, 1994, and that all dividends were reinvested.
B-12
<PAGE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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 there was
timely compliance for the fiscal year ended December 31, 1999, with all
Section 16(a) filing requirements applicable to the Company's officers,
directors and greater than ten percent beneficial owners.
B-13
<PAGE>
SCHEDULE I
As of the date of this Information Statement, the Purchaser has not
determined who will be the Purchaser Designees. However, such Purchaser
Designees will be selected from the following list of directors and executive
officers of Parent or its affiliates promptly upon the purchase by the
Purchaser of any Shares pursuant to the Offer. The information contained
herein concerning Parent and its directors and executive officers and those of
its affiliates has been furnished by Parent and the Purchaser. Any other officer
of Siemens AG, Parent or Purchaser listed in Schedule I to the Offer to Purchase
dated January 21, 2000, filed as an exhibit to the Tender Offer Statement on
Schedule 14D-1 of Parent and Purchaser may also be designated by Purchaser as a
Purchaser Designee. The Company assumes no responsibility for the accuracy or
completeness of such information.
The name, present principal occupation or employment and five-year
employment history of each of the persons is set forth below. Except as noted,
none of the persons listed below owns any Shares or has engaged in any
transactions with respect to Shares during the past 60 days. During the last
five years, none of the persons listed below has been convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors) nor was such
person a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction, and as a result of such proceeding was or is subject
to a judgment, decree or final order enjoining future violations of, or
prohibiting activities subject to, federal or state securities laws or finding
any violation of such laws. None of the persons listed below (i) is currently
a director of, or holds any position with, the Company, (ii) has a familial
relationship with any of the directors or executive officers of the Company or
(iii) based on information provided to the Company by Parent (which is to the
best of Parent's knowledge), beneficially owns any securities (or rights to
acquire any securities) of the Company. The Company has been advised by Parent
that, to the best of Parent's knowledge, none of the persons listed below has
been involved in any transaction with the Company or any of its directors,
executive officers or affiliates which is required to be disclosed pursuant to
the rules and regulations of the Commission, except as may be disclosed herein
or in the Schedule 14D-9. All of the individuals listed below are citizens of
the United States of America, unless otherwise noted, and the business address
of each such person, unless otherwise noted, is c/o Siemens Energy &
Automation, Inc., 3333 Old Milton Parkway, Alpharetta, GA 30005-4437.
<TABLE>
<CAPTION>
Present Principal Occupation or Employment; Material Positions
Name and Address Age Held During the Past Five Years
- ---------------- --- --------------------------------------------------------------
<S> <C> <C>
Dr. Klaus Wucherer...... 55 Director. President, Automation & Drives, of Siemens
Gleiwitzer Strasse 555 AG, since September 1998. Former Vice President,
D-90475 Nuremberg Automation Group, of Siemens AG, since 1996. Head of
Federal Republic of various divisions in the Automation Group from 1986
Germany until 1996. Citizen of the Federal Republic of
Germany.
Johannes Feldmayer...... 43 Director. Group Vice President, Automation & Drives,
Gleiwitzer Strasse 555 Siemens AG, since 1999. Former Vice President of
D-90475 Nuremberg Siemens AG. Citizen of the Federal Republic of
Federal Republic of Germany.
Germany
Dr. Udo Wagner.......... 54 Director. Executive Manager of Industrial Projects
Schuhstrasse 60 and Technical Services, Siemens AG. Chief Financial
D-91052 Erlangen Officer Bremer Vulkan from 1996 to 1997. Chief
Federal Republic of Financial Officer of ABB unitl 1996. Citizen of the
Germany Federal Republic of Germany.
Gerhard Schulmeyer...... 61 Director. President and Chief Executive Officer of
1301 Avenue of the Siemens Corporation. Formerly President and Chief
Americas Executive Officer of Siemens Nixdorf
New York, NY 10019 Informationssysteme AG, Munich. Citizen of the
Federal Republic of Germany.
Thomas J Malott......... 62 Director. President and Chief Executive Officer.
Gary K. Gabriel......... 44 Director. Executive Vice President and Chief
Financial Officer since 1998. Former Executive Vice
President and Chief Financial Officer of Siemens
Canada, Ltd.
</TABLE>
I-1
<PAGE>
<TABLE>
<S> <C> <C>
Michael A. 49
Troy....... Vice President Human Resources.
Reinhold 45 Vice President Industrial Solutions and Software
Achatz..... Division since 2000. President of ANS Software
Division of Siemens AG from 1998 to 1999. Software
Developer, Siemens AG until 1998.
Michael S. 56 Secretary since 1998. Associate General Counsel,
Williamson.. Siemens Corporation since 1998. Assistant Secretary
until 1998. Senior Counsel, Siemens Corporation
until 1998.
</TABLE>
I-2
<PAGE>
EXHIBIT (a)(2)
<PAGE>
ANNEX A
[HOULIHAN LOKEY HOWARD & ZUKIN LOGO]
Houlihan Lokey Howard & Zukin
-----------------------------------------
FINANCIAL ADVISORS
January 16, 2000
The Board of Directors
Moore Products Co.
1201 Sumneytown Pike
Spring House, PA 19477
Members of the Board:
We understand that Moore Products Co. ("Moore" or the "Company"), a
Pennsylvania corporation, is contemplating entering into an agreement (the
"Agreement") with Siemens Energy & Automation, Inc. ("Siemens"), a Delaware
Corporation, and Malibu Acquisition Corp. ("Purchaser"), a Pennsylvania
corporation and a wholly-owned subsidiary of Siemens, pursuant to which
Purchaser would merge with and into the Company, with the Company as the
surviving entity (the "Acquisition"). We further understand that, to effectuate
the Acquisition, Purchaser would offer (i) a price equal to $54.71 per share
(the "Common Stock Price") for all 2,646,985 of the Company's common shares
outstanding ("Common Stock") ("Common Stock Purchase") and (ii) a price equal
to $21.88 per share (the "Preferred Stock Price") for all 175,950 outstanding
shares of the Company's convertible preferred stock (the "Preferred Stock")
("Preferred Stock Purchase"). Finally, we understand that, pursuant to the
Acquisition, the Board of Directors of the Company (the "Board") shall take all
necessary actions to provide that all 646,060 of the Company's outstanding
options to purchase Common Stock (the "Options") would be cancelled and each
holder thereof would be entitled to receive for each such Option a payment in
cash (the "Option Payment") equal to the excess, if any, of the Common Stock
Price over the exercise price per share subject to such Option.
The Common Stock Purchase, Preferred Stock Purchase, and Option Payment
collectively are referred to herein as the "Transaction." All capitalized terms
used herein and not defined herein shall have the same meanings herein as
ascribed thereto in the Agreement.
You have requested our opinion (the "Opinion") as to the matters set forth
above. The Opinion does not address Moore's underlying business decision to
effect the acquisition. We have not been requested to, and did not, solicit
third party indications of interest in acquiring all or any part of Moore.
New York
685 Third Avenue, 15th Floor
New York, New York 10017-4024
Tel 917.542.7500 Fax 917.542.0150
Investment advisory services through Houlihan Lokey Howard & Zukin Financial
Advisors.
Los Angeles
Chicago San Francisco
Minneapolis
Washington, D.C.
Dallas Atlanta TorontoSeoul
A-1
<PAGE>
In connection with this Opinion, we have made such reviews, analyses and
inquiries as we have deemed necessary and appropriate under the circumstances.
Among other things, we have:
1. reviewed the Company's annual reports to shareholders and on Form 10-K
for the fiscal years ended 1996, 1997, and 1998, quarterly reports on Form
10-Q for the three quarters ended March 31, 1999, June 30, 1999, and
September 30, 1999, Proxy Statement dated April 30, 1999, and certain other
documents filed with the Securities and Exchange Commission;
2. reviewed historical financial data prepared by the Company's
management with respect to the Company for the years ended December 31,
1996 through 1998;
3. reviewed forecasts and projections prepared by the Company's
management with respect to the Company for the years ended December 31,
2000 through 2002;
4. met with certain members of the senior management of the Company to
discuss the operations, financial condition, future prospects and projected
operations and performance of the Company;
5. visited certain facilities and business offices of the Company;
6. reviewed the Tender and Option Agreement between Moore Products Co.,
Malibu Acquisition Corp., Siemens, and certain stockholders of the Company,
dated January 16, 2000;
7. reviewed the Agreement and Plan of Merger between Moore Products Co.,
Malibu Acquisition Corp., and Siemens, dated January 16, 2000;
8. reviewed the historical market prices and trading volume for the
Company's publicly traded common stock;
9. reviewed certain other publicly available financial data for certain
companies that we deem comparable to the Company, and publicly available
prices and premiums paid in other transactions that we considered similar
to the Transaction; and
10. conducted such other studies, analyses and inquiries as we have
deemed appropriate.
We have relied upon and assumed, without independent verification, that the
financial forecasts and projections provided to us have been reasonably
prepared and reflect the best currently available estimates of the future
financial results and condition of the Company, and that there has been no
material change in the assets, financial condition, business or prospects of
the Company since the date of the most recent financial statements made
available to us.
We have not independently verified the accuracy and completeness of the
information supplied to us with respect to the Company and do not assume any
responsibility with respect to it. We have not made any physical inspection or
independent appraisal of any of the properties or assets of the Company. Our
opinion is necessarily based on business, economic, market and other
conditions as they exist and can be evaluated by us at the date of this
letter, and we have no obligation to update this opinion. Our advisory
services and the opinion expressed herein are for the information and
assistance of the Board of Directors of the Company in connection with its
consideration of the Transaction and do not constitute a recommendation as to
how any common or preferred shareholder of the Company should vote with
respect to such transaction.
Based upon the foregoing, and in reliance thereon, it is our opinion that,
as of the date hereof, the Transaction is fair to each of the Common Stock
shareholders and the Preferred Stock shareholders of Moore from a financial
point of view.
HOULIHAN LOKEY HOWARD & ZUKIN FINANCIAL ADVISORS, INC.
/S/ HOULIHAN LOKEY HOWARD & ZUKIN FINANCIAL ADVISORS, INC.
A-2
<PAGE>
EXHIBIT (a)(3)
<PAGE>
[LETTERHEAD OF MOORE PRODUCTS CO.]
January 21, 2000
Fellow Shareholders:
We are pleased to inform you that Moore Products Co. ("Moore") has entered
into an Agreement and Plan of Merger with Siemens Energy & Automation, Inc.
("SE&A"). SE&A is a U.S. based indirect wholly-owned subsidiary of Siemens
Aktiengesellschaft ("Siemens"), which is based in Munich, Germany. Siemens is a
global leader in electrical engineering and electronics technology. Pursuant to
the Agreement, a wholly-owned subsidiary of SE&A is commencing a tender offer
to purchase all of the outstanding shares of Moore Common Stock for $54.71 per
share in cash and all of the outstanding shares of Moore Preferred Stock for
$21.88 per share in cash. The tender offer is to be followed by a merger in
which holders of shares of Moore Common Stock and Moore Preferred Stock not
tendered pursuant to the tender offer will receive the same cash price paid per
share in the tender offer. As a result of the merger, Moore will become a
wholly-owned subsidiary of SE&A and an indirect wholly-owned subsidiary of
Siemens.
The Directors of Moore have determined that the tender offer and the merger
are fair to and in the best interests of Moore and its common and preferred
shareholders, and recommend that shareholders accept the offer and tender their
shares. All Directors of Moore also have entered into a separate agreement with
SE&A in which they have committed to tender their Moore shares in the tender
offer.
Enclosed are the Offer to Purchase, dated January 21, 2000, Letter of
Transmittal and other related documents. These documents set forth the terms
and conditions of the tender offer. Also enclosed is a copy of Moore's Schedule
14D-9, as filed with the Securities and Exchange Commission. The Schedule 14D-9
describes in more detail the reasons for the Directors' conclusions and
contains other important information relating to the tender offer. We urge you
to consider this information carefully.
The Board of Directors and the management and employees of Moore thank you
for your support.
Sincerely,
/s/ William B. Moore
/s/ Edward T. Hurd
William B. Moore
Edward T. Hurd Vice Chairman
Chairman
<PAGE>
EXHIBIT (c)(4)
<PAGE>
MOORE PRODUCTS CO.
-----------
Employee Benefit and Severance Principles
-----------
January 14, 2000
-----------
Background
- ----------
The Board of Directors of Moore Products Co., a Pennsylvania corporation
("Moore") (together with its foreign subsidiaries, the "Company") has on this
date approved an Agreement and Plan of Merger (the "Merger Agreement") among
Moore, Malibu Acquisition Corp. ("Sub" or "Purchaser") and Siemens Energy &
Automation, Inc. ("Siemens Energy & Automation" or "Parent"), providing, inter
alia, for (i) a tender offer by Sub for all of the issued and outstanding
capital stock of Moore, (ii) the Merger of Sub with and into Moore (the
"Merger") and (iii) the consequent acquisition by Siemens Energy & Automation,
for cash, of all of the issued and outstanding capital stock of Moore. The date
on which the Merger shall become effective is referred to herein as the
"Effective Time."
The Board of Directors of Moore is adopting these Principles to memorialize
certain determinations made by the Board, coincident with its approval of the
Merger Agreement, to provide for equitable treatment of Moore's employees from
and after the Effective Time and to retain the services of certain officers in
connection with the transition. In Section 6.8(j) of the Merger Agreement,
Parent has agreed to implement and carry out these principles with the same
effect as if fully set forth in the Merger Agreement.
1. Past Service Credit. For purposes of meeting any service requirements
for participation, vesting or early retirement under any pension or other
benefit plans sponsored by Purchaser, Parent or the Company in which the
employees of the Company shall be covered after the Effective Time, Purchaser or
Parent shall cause appropriate action to be taken to cause the service of the
Company employees with the Company or any of its subsidiaries that is considered
vesting service under the Company Pension Plan to be recognized as service under
such plans.
2. Maintenance of Aggregate Benefits. At the Effective Time, Purchaser
or Parent shall cause appropriate action to be taken to cause those individuals
who are actively employed by the Company at the Effective Time to be covered by
benefit plans that are comparable in the aggregate to the benefits that those
employees had at the Effective Time, provided, however, nothing in this Section
shall (i) require Purchaser or Parent to provide any equity based plan not
generally made available to employees of Purchaser and Parent, or (ii) prevent
the sponsor of such plans from amending or modifying such plans at any time
after the Effective Time, provided, that such amendments or modifications are
not contrary to the provisions of Section 6.8 of the Merger Agreement.
<PAGE>
3. Pre-existing Condition Limitations. In addition, Purchaser or Parent
shall cause appropriate action to be taken to cause any health plans under which
employees of the Company shall be covered after the Effective Time to waive any
pre-existing condition requirements with respect to the employees of the Company
and their eligible dependents.
4. Special Severance. The Company shall continue the employment of each
of Donald E. Bogle, Edward J. Curry, William B. Moore, and Robert E. Wisniewski
(each, a "Designated Officer") for a period of not less than six (6) months (the
"Initial Period") after the Effective Time at salaries at least equal to those
in effect for each Designated Officer on the date hereof. If during the period
commencing on the first day after the expiration of the Initial Period and
ending on the second anniversary of the Effective Time (the "Protected Period")
the Company or any successor thereto discharges any Designated Officer other
than for Cause (as defined on Exhibit A hereto) or by reason of the Designated
Officer's death, or if the Designated Officer resigns for Good Reason (as
defined on Exhibit A hereto) the Company or any successor thereto shall:
(A) make a lump sum payment to such Designated Officer of an
amount equal to one week's pay for each of the Designated Officer's years
of service, calculated in accordance with paragraph 1 of this Statement of
Principles;
(B) provided that such Designated Officer enters into, and does
not breach in any material respect Parent's customary release and 12 month
non-compete agreement (with respect to the material business or businesses
in which such Designated Officer was engaged at any time during the 24
month period prior to termination), pay such Designated Officer, over the
ensuing 12 months, an amount equal to, and on essentially the same schedule
as, the base salary that would have been paid to such Designated Officer if
he had remained employed for those 12 months at the base salary in effect
on the date of his termination;
(C) continue the medical coverage in effect for such Designated
Officer on the date of his termination for the remainder of the Protected
Period; and
(D) provide such Designated Officer appropriate outplacement
services.
If any payment to be made hereunder, together with the other payments and
benefits that the Designated Officer is entitled to receive from the Company or
any successor thereto would be subject to the excise tax imposed by (S)4999 of
the Internal Revenue Code of 1986 (as amended) (the "Code"), the payments to be
made hereunder shall be reduced, but only to the extent necessary in the
opinion (a copy of which shall be furnished to the Designated Officer) of
Parent's independent auditors so that those payments will be deductible by the
Company or any successor under Code (S)280G and not subject to excise tax under
Code (S)4999. Any such determination with respect to Mr. Bogle shall be made
in accordance with his Employment Agreement described below.
Anything in this Section 4 to the contrary notwithstanding, in the event
that Donald E. Bogle becomes entitled to severance benefits hereunder, he shall
be entitled to the greater of the severance benefits provided herein, or the
severance benefits provided in event of his termination
<PAGE>
of service under the terms of the Employment Agreement dated October 31, 1997
between Mr. Bogle and the Company.
5. Split Dollar Life Insurance. Parent and Purchaser shall, and shall
cause the Company to, honor in accordance with their existing terms the split
dollar life insurance arrangements between the Company and those of its
employees covered by such arrangements on the date hereof, provided that except
as to individuals retired on or before January 14, 2000 or who retire after
January 14, 2000 under circumstances entitling them to an immediate pension
under a pension plan maintained by the Company or any successor, no such
arrangement shall remain in effect following termination of employment.
6. Canadian and United Kingdom Retirement Plans. Purchaser or an
affiliate of Purchaser will become the plan sponsor of the retirement plans
maintained by the Company in Canada and the United Kingdom.
<PAGE>
Exhibit A
As used in Section 3 of these Principles,
(A) The term "Cause" shall mean the (A) a material failure by the
Designated Officer to perform substantially the duties owed to the Company or
any successor thereto, provided that such failure (if curable) is not cured
within 15 days following the Designated Officer's receipt of written notice of
that failure, or (B) conviction of the Designated Officer of a felony, or (C)
conviction of the Designated Officer of a misdemeanor involving moral turpitude.
No act or omission on the part of the Designated Officer shall be considered
"willful" unless it is done or omitted in bad faith or without reasonable belief
that the action or omission was in the best interests of the Company or any
successor thereto.
(B) A resignation shall be for "Good Reason" if
(i) subsequent to the Effective Time and without such Designated
Officer's express written consent, there has been a material
reduction in such Designated Officer's duties and
responsibilities with the Company (or any successor thereto)
from those immediately prior to the Effective Time;
(ii) subsequent to a Effective Time, a reduction by the Company or
any successor thereto in such Designated Officer's base salary
as in effect on the date immediately preceding the Effective
Time; or
(iii) subsequent to the Effective Time and without such Designated
Officer's express written consent, the Company or any successor
thereto shall have required such Designated Officer to be based
anywhere other than within twenty-five (25) miles of his office
location on the date immediately preceding the date of the
Effective Time, except for required travel on the Company's or
any successor's business to an extent substantially consistent
with his business travel obligations prior to the Effective Time
with such reasonable increases, if any, as may be necessitated
by Parent and Purchaser's reasonable business needs in view of
the nature of their international operations.
