<PAGE>
As filed with the Securities and Exchange Commission on April 1, 1999
Registration No. 33-_________
=====================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
MOORE MEDICAL CORP.
(Exact name of registrant as specified in its charter)
Delaware 22-1897821
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
MOORE MEDICAL CORP.
P.O. Box 1500
389 John Downey Drive
New Britain, CT 06050-1500
(Address of Principal Executive Officers)
Moore Medical Corp. Incentive Stock Option Plan
Moore Medical Corp. Non-Qualified Stock Option Plan
(Full title of the plans)
David V. Harper
Executive Vice President - Finance
Moore Medical Corp.
389 John Downey Drive
New Britain, CT 06050-1500
(Name and address of agent for service)
860-826-3600
(Telephone number, including area code, of agent for service)
Copy to:
Joseph Greenberger, Esq.
1370 Avenue of the Americas, Suite 2701
New York, New York 10019-4602
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title of Amount to be Proposed maximum Proposed maximum Amount of
securities to be registered offering price per aggregate offering registration
registered (1) share (2) price (2) fee
- ---------------- ------------ ----------------- ------------------ --------------
<S> <C> <C> <C> <C>
Common 150,000 (3) $10.875 $1,631,250 $453.49
Stock, $.01 200,000 (4) $10.875 $2,175,000 $327.34 (5)
par value
------------ ----------------- ------------------ --------------
Total 350,000 $3,806,250 $786.83
</TABLE>
____________
(1) Pursuant to Rule 416(c) under the Securities Act of 1933, as amended, this
Registration Statement also covers an indeterminate amount of securities to
be offered or sold as result of any adjustments made in connection with
stock splits, stock dividends or similar events.
(2) Estimated solely for the purposes of calculating the registration fee.
Pursuant to Rule 457(c) and Rule 457(h) under the Securities Act, the
proposed maximum offering price per share and the proposed maximum aggregate
offering price have been determined on the basis of the closing price of the
Common Stock on March 23, 1999, of $10.875, as reported on The American
Stock Exchange.
(3) Registers 150,000 shares of Common Stock issuable under options heretofore
or hereafter granted under the Registrant's Non-Qualified Stock Option Plan
(the "NQO Plan"); also registers reoffers and resales, pursuant to the
"reoffer prospectus" included herein, of such securities by persons who may
be affiliates (as defined under Rule 405 of the Securities Act) of the
Company.
(4) Registers 200,000 shares of Common Stock issuable on exercises of options
heretofore or hereafter granted under the Registrant's Incentive Stock
Option Plan (the "ISO Plan"), inclusive of the 100,000 shares of Common
Stock previously registered in its registration statement on Form S-8
(registration no. 33-68128), filed August 27, 1993; also registers reoffers
and resales of 13,425 restricted shares of Common Stock acquired pursuant to
options heretofore granted and exercised under the ISO Plan by persons who
are not affiliates (as defined under Rule 405 of the Securities Act) of the
Company, and 186,575 shares of Common Stock which may be acquired by
affiliates of the Company upon the exercises of options granted or that may
be granted under the ISO Plan.
(5) Pursuant to Rule 429 under the Securities Act, the "reoffer prospectus"
included herein is, a "combined prospectus" which relates both to the
Registration Statement filed herewith and the Registrant's registration
statement of Form S-8 (registration no. 33-68128), filed August 27, 1993.
The number of securities being carried forward is 86,575 shares of Common
Stock, the amount of filing fee associated with the securities being carried
forward is $277.31, and the amount of filing fee associated with such
securities that was previously paid was $277.31.
<PAGE>
EXPLANATORY NOTE
This Registration Statement registers:
(a) The offer and sale by the Moore Medical Corp. (the "Company"), of 200,000
shares of Common Stock issuable on exercises of options heretofore or hereafter
granted under its Incentive Stock Option Plan (the "ISO Plan"), inclusive of the
100,000 shares of Common Stock registered in its registration statement on Form
S-8 (registration no. 33-68128), filed August 27, 1993 (the "Prior Registration
Statement");
(b) The reoffer and resale, pursuant to the "reoffer prospectus" included
herein, of 13,425 restricted shares of Common Stock acquired pursuant to options
heretofore granted and exercised under the ISO Plan by persons who are not
affiliates (as defined under Rule 405 of the Securities Act of 1933, as amended
(the "Securities Act")) of the Company;
(c) The reoffer and resale, pursuant to the "reoffer prospectus" included
herein, of the balance of 186,575 shares of the Company's Common Stock which may
be acquired by affiliates of the Company upon the exercises by such affiliates
of options granted or that may be granted under the ISO Plan;
(d) The offer and sale by the Company of 150,000 shares of its Common Stock
under options heretofore or hereafter granted under its Non-Qualified Stock
Option Plan (the "NQO Plan"); and
(e) The reoffer and resale, pursuant to the "reoffer prospectus" included
herein, of 150,000 shares of Common Stock which may be acquired on exercises of
options heretofore or hereafter granted under the NQO Plan by persons who may be
affiliates (as defined under Rule 405 of the Securities Act) of of the Company.
SECTION 10(a) PROSPECTUS;
REOFFER PROSPECTUS;
Section 10(a) Prospectus. The documents containing the information specified in
- -------------------------
Part I of this Registration Statement on Form S-8 will be sent or given to
participants in the Plans as specified by Rule 428(b)(i) under the Securities
Act. Such documents are not required to be, and are not being, filed by the
Company with the Securities and Exchange Commission, (the "Commission"), either
as part of this Registration Statement or as prospectuses or prospectus
supplements pursuant to Rule 424 under the Securities Act. Such documents,
together with the documents incorporated by reference herein pursuant to Item 3
of Part II of this Registration Statement on Form S-8 under the Securities Act,
constitute a prospectus that meets the requirements of Section 10(a) of the
Securities Act.
Reoffer Prospectus. The material which follows, up to but not including the
- -------------------
page beginning Part II of the Registration Statement of which this Prospectus is
a part, constitutes a "reoffer prospectus," prepared in accordance with the
requirements of Part I of Form S-3 under the Securities Act, in accordance with
General Instruction C of Form S-8 under the Securities Act.
1
<PAGE>
REOFFER PROSPECTUS
MOORE MEDICAL CORP.
250,000 SHARES
OF
COMMON STOCK
This Reoffer Prospectus (the "Prospectus") relates to the reoffer and resale of
an aggregate of (a) 150,000 shares (the "Shares") of the Common Stock, par value
$.01 per share (the "Common Stock"), of Moore Medical Corp. (the "Company" or
the "Registrant") issuable under options which have been granted or which may be
granted under its Non-Qualified Stock Option Plan (the "NQO Plan") to officers
and directors of the Company who may be deemed to be affiliates (as such term is
defined in Rule 405 under the Securities Act of 1933, as amended (the
"Securities Act")) of the Company, as identified herein under "Selling
Stockholders, (b) 186,575 shares (also "Shares") of Common Stock issuable under
options which have been granted or may be granted under its Incentive Stock
Option Plan (the "ISO Plan") to employees (also "Selling Stockholders") of the
Company, some or all of whom may be affiliates of the Company, and (c) 13,425
shares (also "Shares") which have been issued as restricted securities to
persons (also "Selling Stockholders") who are not affiliates of the Company on
exercises of options previously granted under the ISO Plan. The Company may from
time to time supplement and/or amend this Prospectus to cover additional shares
of Common Stock that underlie options granted pursuant to the Plans to
affiliates of the Company.
The Selling Stockholders may, from time to time, offer all or part of the Shares
on The American Stock Exchange, upon which shares of the Company's Common Stock
are now tradable, or such other national securities exchanges or on Nasdaq or
another interdealer quotation system upon which the Common Stock may be tradable
at the time of any such sales, at fixed prices that may be changed, at market
prices at the time of sale, at prices related to market prices or at negotiated
prices, or by a combination of these methods. The Selling Stockholders will pay
the brokerage commissions charged to sellers in connection with any sales of
Shares hereunder. The Selling Stockholders may also effect these transactions by
selling the Shares to or through broker-dealers, who may receive compensation in
the form of discounts or commissions from a Selling Stockholder, or from the
purchasers of the Common Stock for whom the broker-dealers may act as agent or
to whom they may sell as principal, or from both. The Company will pay all
expenses in connection with the preparation and reproduction of the Registration
Statement of which this Prospectus is a part, which current expenses are
estimated, in the aggregate, to be approximately $10,000. The Company will not
receive any part of the proceeds of any sales by Selling Stockholders of Shares.
However, the Company has received or will receive the exercise price paid or
payable by Selling Stockholders upon the exercise of options granted or which
may be granted under the Plans. In lieu of being sold pursuant to this
Prospectus, any of the Shares which are eligible for sale pursuant to Rule 144
under the Securities Act ("Rule 144") may be sold by Selling Stockholders under
Rule 144. See "Plan of Distribution."
The Company's Common Stock trades on The American Stock Exchange under the
ticker symbol "MMD". On March 23, 1999, the closing price of the Common Stock
as reported on The American Stock Exchange was $10.875 per share.
2
<PAGE>
See "RISK FACTORS" beginning on page 7 for a discussion of certain factors that
should be considered in connection with an investment in the Common Stock
offered hereby.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OF ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
No broker, dealer, salesman or any other person has been authorized to give any
information or to make any representations, other than as contained herein, in
connection with the offer made in this Prospectus, and any information or
representations not contained herein must not be relied upon as having been
authorized by the Company or the Selling Stockholders. This Prospectus does not
constitute an offer to sell or a solicitation of an offer to buy any security
other than the Common Stock offered by this Prospectus, nor does it constitute
an offer to sell or a solicitation of an offer to buy any shares of Common Stock
offered hereby to any person in any jurisdiction where it is unlawful to make
such an offer or solicitation to such person. Neither the delivery of this
Prospectus nor any sale hereunder shall under any circumstances create any
implication that information contained herein is correct as of any time
subsequent to the date hereof.
The date of this Prospectus is April 1, 1999.
3
<PAGE>
TABLE OF CONTENTS
AVAILABLE INFORMATION.................................................. 5
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE........................ 5
PROSPECTUS SUMMARY..................................................... 6
RISK FACTORS........................................................... 7
BUSINESS............................................................... 9
CERTAIN FACTORS AFFECTING FORWARD LOOKING STATEMENTS...................13
USE OF PROCEEDS........................................................14
SELLING STOCKHOLDERS...................................................14
PLAN OF DISTRIBUTION...................................................16
DESCRIPTION OF CAPITOL STOCK...........................................17
LEGAL MATTERS..........................................................18
DISCLOSURE OF COMMISSION POSITION ON
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES.......................18
4
<PAGE>
AVAILABLE INFORMATION
The Company has filed a Registration Statement on Form S-8 (the "Registration
Statement") under the Securities Act with the Commission with respect to the
shares of Common Stock of the Company offered hereby. As permitted by the rules
and regulations of the Commission, this Prospectus omits certain information
contained in the Registration Statement and the exhibits and schedules thereto.
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the U.S.
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by the Company with the Commission can be
inspected and copied at the Public Reference Room maintained by the Commission
at 450 Fifth Street, N.W., Room 1024, Washington, D.C., 20549, and at the
regional offices of the Commission at 7 World Trade Center, 13th Floor, New
York, New York, 10048 and Northwestern Atrium Center, 500 West Madison Street,
Room 1400, Chicago, Illinois 60661-2511. Copies of such material can be
obtained from the Public Reference Room of the Commission at 450 Fifth Street,
N.W., Washington, D.C., at prescribed rates. Information regarding the
operation of the Public Reference Room may be obtained by calling the Commission
at 1-800-SEC-0330. The Commission maintains a World Wide Web site that contains
reports, proxy and information statements and other information regarding
registrants that file electronically with the Commission. The address of that
site is http://www.sec.gov. The Company's Common Stock is traded on The American
Stock Exchange under the ticker symbol "MMD." Reports, proxy statements and
other information may also be inspected at The American Stock Exchange, 86
Trinity Place, New York, New York 10006-1881.
Statements contained in this Prospectus as to the contents of any document
referred to are not necessarily complete, and in each instance reference is made
to the copy of such document filed as an Exhibit to the Registration Statement
or otherwise filed with the Commission, each such statement is qualified in all
respects by such reference, and each such document shall be deemed to be
incorporated by reference into this Prospectus.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company's Annual Report on Form 10-K for its fiscal year ended January 2,
1999, including all amendments filed for the purpose of completing or updating
such report, which has been heretofore filed by the Company with the Commission
pursuant to the Exchange Act is hereby incorporated by reference and made a part
hereof:
All other documents filed by the Company with the Commission pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of
the Registration Statement and prior to the filing of a post-effective amendment
to this Registration Statement which indicates that all securities offered have
been sold or which de-registers all securities then remaining unsold, shall be
deemed to be incorporated by reference in this Registration Statement and to be
a part hereof from the date of filing of such documents (such documents, and the
documents enumerated above, being hereinafter referred to collectively as the
"Incorporated Documents").
Any statement contained in an Incorporated Document shall be deemed to be
modified or superseded
5
<PAGE>
for purposes of this Registration Statement to the extent that a statement
contained in any other subsequently filed Incorporated Document modifies or
supersedes such statement. Any such statements so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a
part of the Registration Statement.
The Company undertakes to provide without charge to each person (including any
beneficial owner) to whom a copy of this Prospectus is delivered, upon oral or
written request of such person, a copy of any and all of the information that
has been or may be incorporated by reference in this Prospectus, other than
exhibits to such documents. Requests for such copies should be directed to the
attention of David V. Harper, Executive Vice President - Finance, Moore Medical
Corp., 389 John Downey Drive, New Britain, CT 06050-1500, 860-826-3600.
PROSPECTUS SUMMARY
Common Stock being Offered..The Prospectus relates to an offering
by the Selling Stockholders of up to 250,000 shares
of Common Stock which may be acquired or have been
acquired by such Selling Stockholders upon the
exercise of options issued as of the date of this
Prospectus or thereafter under a Plan.
Common Stock Outstanding
after the Offering .........As of March 23, 1999 the Company had
(exclusive of 306,854 treasury shares) 2,939,221
shares of Common Stock outstanding. As of the date
of the Prospectus, options for an aggregate of
48,400 shares of the Company's Common Stock are
outstanding under its ISO Plan, and options for an
aggregate of 130,800 shares of its Common Stock are
outstanding under its NQO Plan. Assuming that all of
the options held by Selling Stockholders as of the
date of this Prospectus are exercised and no other
shares of Common Stock are issued following the date
of this Prospectus, the Company would have 3,118,821
shares of Common Stock outstanding.
Use of Proceeds.............The Company will not receive any proceeds from the
sale of the Shares offered by the Selling
Stockholders. However, the Company has
received or will receive the exercise price paid or
payable by Selling Stockholders upon the exercise of
options issued under a Plan. If all of the options
held by the Selling Stockholders as of the date of
this Prospectus are exercised, the Company will
receive aggregate estimated proceeds in connection
with the
6
<PAGE>
payment of the exercise prices of such options
(excluding any amounts received in respect thereof
by the Company in connection with the exercise of
options prior to the date of this Prospectus) of
approximately $2,100,000. The Company anticipates
using any proceeds received, and has used any such
proceeds previously received, upon the exercise of
the options for general corporate purposes,
including working capital. See "Use of Proceeds."
AMEX
Market Symbol...............MMD
Risk Factors................See "Risk Factors" and "Certain
Factors Affecting Forward Looking Statements" for
discussions of certain risk factors that should be
considered by prospective investors in connection
with an investment in the Shares offered hereby.
RISK FACTORS
An investment in the Shares offered by this Prospectus involves a degree of
risk. In addition to the other information contained or incorporated by
reference in this Prospectus, the following factors should be considered
carefully in evaluating an investment in the Shares offered hereby.
Governmental and Private Healthcare Funding.
Most of the Company's customers are healthcare practitioners. The healthcare
they provide is, to a significant extent, funded by federal, state and local
government agencies, including Medicare and Medicaid, and by HMO, managed care
and other cost containment programs. Although the Company is not directly
affected by these agencies or programs, they indirectly affect the Company by
limiting funding of healthcare. Proposed legislation and trends in HMO and
managed care may adversely affect the Company by further limiting healthcare
funding.
Distributor and Healthcare Provider Consolidations.
There have been consolidations among the Company's competing distributors,
affording them economies in purchasing inventory for resale, and among its
healthcare practitioners customers, affording them with greater power to bargain
for lower prices. These trends affect the Company's margins.
Competition.
The healthcare supplies distribution industry is highly competitive. Current
and potential competitors of the Company include regional and national full-
line, full-service healthcare supply and product distributors, independent
specialty distributors, mail order distributors that distribute
7
<PAGE>
medical products and supplies on a regional or national basis, and certain
manufacturers that own distributors or that sell their products both to
distributors and directly to users, including clinics, physicians offices and
other categories of the Company's customers. Some of these competitors have
greater financial, technical, marketing and managerial resources than the
Company.
Government Contract Price Adjustments.
The Company decided in 1997 to exit various U.S. government supply contracts.
It calculated certain price adjustments under the contracts for sales in 1991
through 1996, voluntarily disclosed these adjustments to the lead U.S.
government agency, and, based thereon, established a reserve. Because that
governmental agency has not completed its own analysis and responded to the
Company's submission, the final amount of the price adjustments, which may be
more or less than the reserve, has not been determined.
Government Regulation.
The Company's healthcare supplies distribution business is required to register
for permits and licenses with, and comply with certain strict operating and
security standards of, the U. S. Drug Enforcement Administration, U.S. Food and
Drug Administration and other federal, state and local agencies. Although the
Company believes that it is in substantial compliance with the applicable
regulations, failure to comply could adversely affect the Company's operations.
Shared Chief Executive Office Functions.
Since January 1, 1999, Richard A. Bucchi, the Company's Executive Vice President
- - Sales and Marketing, David V. Harper, its Executive Vice President - Finance,
and Kenneth S. Kollmeyer, its Executive Vice President - Operations, have
jointly discharged the chief executive officer functions of the Company as the
members of its then newly established Office of the President and co-chief
executive officers. Although the Company believes the shared management
structure is functioning satisfactorily, there can be no guarantee it will
continue to do so.
Dependence on Key Employees.
The Company is dependent on the retention of its senior management. It has no
employment agreement with, or key man insurance on, any of its employees. The
loss of the services of senior management personnel could have a material
adverse effect on the Company.
Year 2000 Issues.
Year 2000 issues arise from the fact that many computer programs and some
hardware use two digits rather than four to define the applicable year. This
could result in a system's failure or in miscalculations causing disruptions of
operations, including an inability to process transactions, fulfill orders, send
invoices or engage in other normal business activities. During 1998, as a part
of a modernization program to upgrade data processing, integrate systems and
enhance internal
8
<PAGE>
reporting, the Company purchased, and is presently implementing, an integrated
enterprise system which has been represented to the Company by the vendor as
Year 2000 compliant. The Company is assessing the Year 2000 compliance of its
internal non-information software and technology embedded in such systems as its
security, telecommunications and building systems. It would be adversely
affected by Year 2000 issues if the new enterprise system's software or such
software or technology proves not to be fully Year 2000 compliant, or if the
Company's suppliers, customers, service practitioners or others do not address
Year 2000 issues successfully and in a timely manner.
Reliance on Service Providers.
The Company's operations are dependent on such services as deliveries from its
suppliers by truckers, deliveries to its customers by UPS and other common
carriers, and services relied on from other service providers, such as catalogue
printers. Service disruptions, such as may be caused by labor strikes at such
service providers or other causes of delays or failures, could have adverse
effects on the Company's operations.
Charter, By-Law and Anti-Takeover Provisions.
The Company's corporate charter, by-laws and Rights Plan, as well as certain
provisions of Delaware General Corporation Law, contain provisions which may
deter, discourage or make more difficult a change in control of the Company,
even if such a change in control would be in the interest of some of the
Company's stockholders or if such change in control would provide such
stockholders with a substantial premium for their shares over then current
market prices. For example, the Company's charter authorizes its Board of
Directors to issue one or more classes of preferred stock, having such
designations, rights and preferences as they determine, and such issuances may,
among other things, have an adverse effect on the rights of holders of common
stock. The Company's by-laws provide that a shareholder may nominate persons
for election as directors only in compliance with specified notice provisions.
In addition, under the Company's Stockholder Rights Plan, in general, if a
person or group acquires more than 15% of its outstanding shares of common
stock, all other shareholders of the Company would have the right to purchase
securities from the Company at a discount to their fair market value, thus
causing substantial dilution to the holdings of the acquiring person or group.
The Rights Plan may inhibit a change in control and can adversely affect the
stockholders' ability to realize a premium over the then current market price
for the common stock.
BUSINESS
Moore Medical Corp. is a national marketer and distributor of healthcare
products to approximately 96,000 healthcare practitioner customers in non-
hospital settings. Primary customer groups are physicians, emergency medical
services, medical departments at industrial sites, podiatrists, and
university/school health services. It markets approximately 8,500
medical/surgical and pharmaceutical supply products (SKUs) through direct mail,
telesales, and a small field sales force. Most customer orders are processed by
call center representatives. Most customers use the products in their healthcare
practices, rather than buying for resale. The Company fulfills orders from its
regional distribution centers in Connecticut, Florida, Illinois and California
and ships orders nationwide by common carriers. More than 90% of its customers
receive orders within two business
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<PAGE>
days. The Company is in its fifty-third year of operation, and it has served
healthcare practitioner customers for over 25 years. In 1997, the Company
decided to exit from its wholesale drug distribution business in order to
concentrate on its more profitable healthcare practitioner distribution
business, and the description of its operations in this report focuses on the
healthcare practitioner business.
Recent Developments.
During 1998, the Company:
. received substantially all its revenues from healthcare practitioners,
. successfully concluded its withdrawal from the wholesale drug
distribution business, a lower margin operation which had been
responsible for approximately 60% of its sales in 1997,
. increased its gross profit margin rate to over 31% from 13.5% in
the prior year,
. realigned its senior-most executive management by establishing an
office of the president which placed all chief executive officer
responsibilities directly with its chief finance, marketing and
operations officers, effective January 1, 1999,
. completed staff changes to serve healthcare practitioners in non-
hospital settings rather than, as in earlier years, have most of
its staff in the wholesale business, and
. expanded its electronic commerce (e-commerce) presence through on-line
marketing and sale of the full line of its products
(www.mooremedical.com).
Distribution of Healthcare Products.
Most product manufacturers will not sell directly to healthcare practitioners in
non-hospital settings the small quantities of products they regularly purchase.
Moreover, most healthcare practitioners prefer the administrative efficiencies
of purchasing their supplies from one or a few sources rather than from hundreds
of manufacturers. Healthcare product distributors, by selling a very wide range
of products purchased from many manufacturers, economically move products from
the manufacturers' large, but separately narrow, product inventories to the
smaller volume, but much more varied, product selections required by healthcare
practitioners. Customers find it efficient and convenient to rely on the
availability from distributors of thousands of different products, manufactured
by hundreds of manufacturers, offered at competitive prices, with prompt
delivery and a variety of other services.
The overall market for healthcare products at non-hospital sites has been
growing, largely because of:
. an aging population,
10
<PAGE>
. increases in the amount and variety of products available for
diagnosis and treatments, as a result of medical advances, and
. an increase in healthcare at more economical sites than hospitals,
as a result of cost containment pressures.
Governmental programs such as Medicare and Medicaid, and HMO's, managed care and
other insurance programs limit funding for healthcare products. This has
contributed to consolidations of:
. physician customers, as sole practitioners form groups and as practice
organizations, (PPO's) form to provide business management for large
numbers of physicians,
. other customer groups, notably emergency medical services and
podiatrists,
. distributors of healthcare products into larger organizations serving
broader geographic areas, and
. manufacturers of healthcare products.
In addition, customers expect better prices and services. Services expectations
include a broad selection of products, speed of delivery, reliability of supply,
ease of ordering, and more extensive information on product specifications,
product use and pricing, and on government regulations.
Products.
The Company distributes approximately 8,500 healthcare product stock keeping
units (SKUs) consisting of medical/surgical supplies and pharmaceuticals. Its
broad and diversified selection of medical/surgical supplies includes gauze and
wound dressings, examination room supplies, diagnostic tests and equipment,
personal protection products, surgical instruments, emergency response supplies,
continuing care products and infection control supplies. Although most of its
products are consumables and disposables, the Company also sells small-dollar
medical/surgical equipment. It is one of the few distributors of
medical/surgical products to non-hospital healthcare practitioners that also
offers pharmaceuticals. Pharmaceutical products include unit-dose medications,
vaccines, injectables and ointments. The Company purchases all its products,
primarily direct from manufacturers, and does not manufacture any product.
The Company exited the wholesale drug distribution business, in which it sold
primarily pharmaceuticals, during the fourth quarter of 1997. Most of the
Company's medical/surgical supply sales are to healthcare practitioner end-
users, while, before withdrawing from its wholesale drug distribution business,
most of its pharmaceutical sales were to pharmacies for resale. The following
table shows the sales and the percentages of total sales for the past three
years of pharmaceuticals and medical/surgical supplies:
11
<PAGE>
Dollars in thousands 1998 1997 1996
- -------------------- ---- ---- ----
Medical/surgical supplies $90,635 $ 91,030 $ 78,731
75.0% 31.5% 27.5%
Pharmaceuticals $30,211 $197,483 $207,618
25.0% 68.5% 72.5%
Customers.
The Company's approximately 96,000 healthcare practitioner customers typically
use its products in non-hospital settings. Its most significant customer
groups, which account for approximately 85% of its sales, are physicians,
emergency medical services, medical departments at industrial sites, podiatrists
and university/school health services. Most of the customers use the products
in their healthcare practice, as opposed to buying the products for resale.
Marketing and Distribution.
The Company markets nationally to existing and prospective customers through
direct mail, outbound telesales calls, and a small number of national account
field sales representatives. The Company considers direct marketing to be one
of its core strengths.
Catalogs and other product literature are designed by the Company's in-house
advertising department with different products featured for targeted customer
groups. Mailings are regularly made to current customers based on buying
patterns and to prospective customers based on mailing lists. The Company
provides for electronic ordering by customers through both a CD-ROM catalog and
an Internet presence (www.mooremedical.com).
Many customers order through one of the Company's toll free telephone numbers in
response to direct mail catalogs or other advertising literature. Their orders
are processed by representatives in the Company's inbound call center. Call
center representatives are trained on product features, to respond to customer
inquiries and on the Company's computerized order entry procedures. In
addition, the Company has a staff of outbound telesales representatives who
specialize in one or more customer groups. They are trained on selling
techniques to effectively promote sales and establish new customers. An
advanced phone system supports each call center and telesales representative,
and each is equipped with a computer terminal for access to customer and product
information and the order entry processing system. A small number of field
sales representatives build relationships and negotiate sales terms with the
Company's larger customers in the industrial market.
The Company fulfills orders from its regional distribution centers in
Connecticut, Florida, Illinois and California. Customer orders are directed by
its computer systems from the call center and telesales to the distribution
center closest to the customer. There, orders are picked, packed and shipped to
customers by common carriers. The Company utilizes United Parcel Services (UPS)
for the shipment of most of its customers' orders and, accordingly, is dependent
on UPS for efficient
12
<PAGE>
delivery services. More than 90% of customers receive orders within two
business days. The Company considers distribution reliability to be a core
strength.
The Company's marketing, sales, distribution and purchasing processes are
information intensive, making its computer systems essential to efficient
operations.
Suppliers.
The Company distributes the products of approximately 550 manufacturers of
medical/surgical supplies and pharmaceuticals. It purchases most products
directly from manufacturers, but also purchases some products from other
distributors. In 1998, the largest suppliers of the products which it sold in
its healthcare practitioner business were Graham-Field Health Products, Inc.,
Johnson & Johnson Healthcare Systems, Inc., Laerdal Medical Corp., Microflex
Medical Corp., Ortho Diagnostic Systems, Inc., SmithKline Beecham
Pharmaceuticals, and Tillotson Healthcare Corporation. Management believes the
Company is a significant customer of a small portion of its vendors. It has
several competing sources for many medical/surgical supplies and
pharmaceuticals. Sales of products from its largest supplier in 1998 accounted
for less than 5% of total sales. The Company does not have any significant
long-term purchase commitments with its suppliers, nor does it have any
exclusive rights for a territorial area.
Competition.
Competitors consist of large national distributors, regional distributors and
local distributors. Some use primarily direct marketing methods, like the
Company, and others make sales and deliveries to their customers with a
dedicated sales force and fleet of delivery vehicles. According to a 1996 market
research report by a national brokerage firm, five national distributors larger
than the Company account for approximately 40% of the sales volume of healthcare
supplies to the physician market. These national distributors have been growing
in recent years through both internal growth and through acquisitions of
regional and local distributors. The remaining distributors to this market are
believed to be smaller than the Company and consist primarily of regional and
local distributors. In each of the Company's other markets, the competition is
more fragmented and the Company believes it is one of the top five leading
distributors. The strongest competitors in each market area generally compete
with the Company in only one or a few of its market areas.
Generally, the Company competes with other distributors on breadth of product
line, delivery speed, price, order completion rates, and other value-added
customer service factors. Customers place high value on reliability, ease of
doing business and speed. As more healthcare practices consolidate into larger,
more geographically spread organizations, the Company expects that there will be
a growing number of large customers that will require their distributor of
choice to be able to reliably service many locations in numerous states and/or
regions of the country.
Regulation.
The manufacturing, marketing, labeling, packaging and distribution of
medical/surgical products and pharmaceuticals are subject to regulation by
federal, state and local governmental authorities. The Company is licensed to
distribute pharmaceutical products, including certain controlled substances.
13
<PAGE>
Its operating and security practices must comply with statutes and regulations
of the U.S. Food and Drug Administration, the Federal Drug Enforcement Agency
and state boards of pharmacy and health. The Company believes that it is in
material compliance with the applicable statutes and regulations. The Company
is indirectly affected by Medicare, Medicaid and other governmental regulations
to which many of its customers are subject and by managed care plans in which
many participate. Such programs' payment and reimbursement policies encourage
customers to economize in purchasing healthcare products.
Employees.
As of January 3, 1999, the Company had 323 full-time employees and 24 part-time
employees. Of the full-time employees, 168 worked in its marketing and sales
operations. All the Company's operations are non-union.
CERTAIN FACTORS AFFECTING FORWARD LOOKING STATEMENTS
This Prospectus herein may contain certain forward looking statements. In
addition, from time to time, the Company or its representatives may have made or
may make forward-looking statements, orally or in writing. Such forward-looking
statements may be included in, but, not limited to, press releases, oral
statements made by or with the approval of an authorized executive officer, or
in this report or other filings made by the Company with the Securities and
Exchange Commission. The words or phrases "trend," "expect," "grow," "will,"
"could," "likely result," "planned," "continued," "anticipated," "estimated,"
"projected," "scheduled," "could have," "intended," or similar expressions are
intended to identify "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. The Company wishes to ensure
that such statements are accompanied by meaningful cautionary statements, so as
to maximize to the fullest extent possible the protections of the safe harbor
established in the said Act. Accordingly, such statements are qualified in
their entirety by reference to and are accompanied by the discussion of certain
important factors set forth in this Prospectus under the caption "Risk Factors"
that could cause actual results to differ materially from such forward-looking
statements. The risks identified therein are not all inclusive. Reference is
also made to the reports and other filings made by the Company with the
Securities and Exchange Commission, including Incorporated Documents, for
additional information concerning factors that could adversely impact the
Company's business, financial position or performance. The risk factors could
cause actual results or outcomes to differ materially from those expressed in
any forward-looking statements of the Company or made by or on behalf of the
Company, and investors, therefore, should not place undue reliance on any such
forward-looking statements. Any forward-looking statement speaks only as of the
date on which such statement is made, and the Company undertakes no obligation
to update any forward-looking statement or statements to reflect events or
circumstances after the date on which such statement is made or to reflect the
occurrence of unanticipated events. Moreover, the Company operates in a
changing and very competitive business environment. New risks may emerge from
time to time, and it is not possible for management to predict all risk factors,
nor can it necessarily identify or assess the impact of all such factors on the
Company or the extent to which any factor or combination of factors may cause
actual results to differ materially from those contained in any forward-looking
14
<PAGE>
statements. Further, management cannot necessarily assess the impact of each
such factor on the Company's business or the extent to which any factor, or
combination of factors, may cause actual results to differ materially from those
contained in any forward-looking statements. Accordingly, forward-looking
statements should not be relied upon as a prediction of actual results.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the Shares offered
herein by the Selling Stockholders, however, the Company will receive the
exercise price for options upon the prior or future exercise by such Selling
Stockholders of such options. If all of the options held by Selling
Stockholders as of the date of this Prospectus and covered by this Prospectus
are exercised, the Company will receive aggregate estimated proceeds of
approximately $2,100,000. The Company anticipates utilizing any such proceeds
received, and has utilized any such proceeds previously received, upon the
exercise of such options and for general corporate purposes, including working
capital. There can be no assurance that any of the options will be exercised.
SELLING STOCKHOLDERS
This Prospectus covers possible sales by the Selling Stockholders who are
officers or directors of the Company of Shares that such Selling Stockholders
have acquired and/or may acquire through the exercise of options granted in the
Plans; such officers and directors may be affiliates (as such term is defined in
Rule 405 under the Securities Act) of the Company. The names of such officers
and of a director who, as of the date of this Prospectus, may be Selling
Stockholders from time to time are listed below, along with (i) the number of
shares of Common Stock currently owned by each such person, (ii) the number of
Shares offered by each such person for sale hereby and (iii) the number of
shares of Common Stock to be owned by each such Selling Stockholder following
the completion of the offering contemplated hereby and the percentage that such
shares will bear to the number of outstanding shares of Common Stock at such
time. This Prospectus also cover the possible sales by Selling Stockholders who
are not affiliates of the Company and to whom the Company has issued restricted
shares of Common Stock on the exercise of options granted under its ISO Plan.
None of such non-affiliate Selling Stockholders as of the date of this
Prospectus, holds such restricted securities in an amount in excess of 1,000
Shares. Each of such non-affiliates may use this Prospectus for reoffer and
resale of up to 1,000 Shares. The number of Shares offered for sale by each
Selling Stockholders may be updated in, and additional individuals who may be
affiliates of the Company may be added as Selling Stockholders hereunder by,
supplements and/or amendments to this Prospectus, which will be filed with the
Commission in accordance with Rule 424(b) under the Securities Act.
15
<PAGE>
<TABLE>
<CAPTION>
Number of Number of Shares
Number of Shares Subject Beneficially Percentage of Shares
Selling Shares to Options and Owned After Beneficially Owned
Stockholder Beneficially Offered Completion of After Completion of
(1) Owned Hereby (2) Offering (3) Offering (3)
- ----------- ------------ -------------- ---------------- --------------------
<S> <C> <C> <C> <C>
Richard A.
Bucchi 6,750(4) 19,000 2,000 *
David V.
Harper 1,000 16,000 1,000 *
Kenneth
Kollmeyer 15,500(5) 24,000 6,000 *
Robert H.
Steele 11,400 (6) 40,000 6,400 *
</TABLE>
______________
* Less than 1%.
(1) In reliance upon Item 2(b) of General Instruction C to Form S-8 under the
Securities Act, the officers and director of the Company listed above as
Selling Stockholders have been listed herein whether or not such persons have
a present intent to reoffer or resell any or all of the Shares listed as owned
by them and being offered hereby.
(2) Assumes all options held by the Selling Stockholders are exercisable
within 60 days of the date of the completion of the offering. All options
were granted under the NQO Plan, other than an option for 3,000 Shares granted
to Mr. Bucchi in 1996 and options for 4,000 Shares granted to Mr. Kollmeyer in
each of 1993 and 1996 under the ISO Plan.
(3) Assumes the sale of all Shares offered by all Selling Stockholders under
this Prospectus, and that all options to acquire Common Stock held by such
Selling Stockholders are exercisable within 60 days of the date of the
completion of the offering. As the Company is unable, as of the date of this
Prospectus, to determine the date of the completion of the offering hereunder,
the number of shares and percentages shown hereunder are computed with
reference to the aggregate number of shares of Common Stock of the Company
outstanding as of March 23, 1999 and giving effect to the exercise of the
options.
(4) Includes 4,750 Shares issuable under an option exercisable within 60 days.
(5) Includes 9,500 Shares issuable under options exercisable within 60 days.
(6) Includes 5,000 Shares issuable under an option exercisable within 60 days.
16
<PAGE>
PLAN OF DISTRIBUTION
The Shares, which are issuable upon the exercise of the options may be sold
pursuant to this Prospectus by the Selling Stockholders. These sales may occur
in privately negotiated transactions or through brokers and dealers, as agents,
or to brokers and dealers, as principals who may receive compensation in the
form of discounts, concessions or commissions from the Selling Stockholders or
from the purchasers of the Common Stock for whom the broker-dealers may act as
agent or to whom they may sell as principal, or both. After the passage of the
requisite period of time, the Selling Stockholders may also sell the Shares
pursuant to Rule 144. The Company has been advised by the Selling Stockholders
that they have not made any arrangements relating to the distribution of the
Shares. In effecting sales, broker-dealers engaged by the Selling Stockholder
may arrange for other broker-dealers to participate. Broker-dealers will
receive commissions or discounts from the Selling Stockholder in amounts to be
negotiated prior to the sale.
Upon being notified by a Selling Stockholder that any material arrangement
(other than a customary brokerage account agreement) has been entered into with
a broker or dealer for the sale of Shares pursuant to this Prospectus through a
block trade, purchase by a broker or dealer, or similar transaction, the Company
will file a supplemented Prospectus pursuant to Rule 424(c) under the Securities
Act disclosing (a) the name of each such broker-dealer, (b) the number of Shares
involved, (c) the price at which such Shares were sold, (d) the commissions paid
or discounts or concessions allowed to such broker-dealer(s), (e) if applicable,
that such broker-dealer(s) did not conduct any investigation to verify the
information set out or incorporated by reference in the Prospectus, as
supplemented, and (f) any other facts material to the transaction.
The Selling Stockholders and any broker-dealers who execute sales for the
Selling Stockholders may be deemed to be "underwriters" within the meaning of
the Securities Act by virtue of the number of shares of Common Stock to be sold
or resold by such persons or entities or the manner of sale thereof, or both.
If the Selling Stockholders or any broker-dealer or other holders were
determined to be underwriters, any discounts, concessions or commissions
received by them or by brokers or dealers acting on their behalf and any profits
received by them on the resale of their shares of Common Stock might be deemed
underwriting discounts and commissions under the Securities Act.
The Selling Stockholders have represented to the Company that any purchase or
sale of the Common Stock by them will be in compliance with Regulation M
("Regulation M") promulgated under the Exchange Act. In general, Rule 102 under
Regulation M prohibits any person connected with a distribution of the Company's
Common Stock (the "Distribution") from directly or indirectly bidding for, or
purchasing for any account in which he has a beneficial interest, any Common
Stock or any right to purchase Common Stock, for a period of one business day
prior to and subsequent to completion of his participation in the Distribution
(the "Distribution Period").
During the Distribution Period, Rule 104 ("Rule 104") under Regulation M
prohibits the Selling Stockholders and any other persons engaged in the
Distribution from engaging in any stabilizing bid or purchasing the Common Stock
except for the purpose of preventing or retarding a decline in the open market
price of the Common Stock. No such person may effect any stabilizing
transaction to facilitate any offering at the market. Inasmuch as any Selling
Stockholder will be reoffering and
17
<PAGE>
reselling the Common Stock at the market, Rule 104 prohibits him or her from
effecting any stabilizing transaction in contravention of Rule 104 with respect
to the Common Stock.
DESCRIPTION OF CAPITAL STOCK
The authorized capital stock of the Company consists of (a) 1,270,002 shares of
Preferred Stock, of three classes, none of which is outstanding, and (b)
5,000,000 shares of Common Stock, par value $.01. As of March 23, 1999,
2,939,221 shares of Common Stock were issued and outstanding, and 306,854
additional shares of Common Stock were issued and held by the Company as
treasury shares. A summary of the rights, preferences and privileges of the
Company's authorized capital stock follows:
Common Stock.
Subject to the rights of holders of any Preferred Stock issued in the future,
the holders of Common Stock are entitled to one vote per share in all matters to
be voted on by stockholders and are entitled to share pro rata in any dividends
which may be declared from time to time by the Board of Directors out of the
funds available thereof and in any distribution on liquidation. The holders of
Common Stock have no pre-emptive rights or cumulative voting rights. The
Company is a party to loan agreements which, among other things, preclude the
payment of dividends on Common Stock and limits the Company's ability to
repurchase stock.
Preferred Stock.
There are no shares of Preferred Stock of any class outstanding and the Company
has no present plans to issue any such shares. Three classes of Preferred Stock
are authorized: 200,000 shares of Class A Cumulative Convertible Preferred,
$5.00 par value ("Class A"); 70,002 shares of Class B Cumulative Convertible
Preferred, $10.00 par value ("Class B"); and 1,000,000 shares of Class C
Preferred, $1.00 par value ("Class C") of which 70,000 shares have been
designated as a Series I Junior Participating Preferred Stock. Shares of Class
A and Class B (no of which is outstanding) have cumulative dividends, no general
voting rights and redemption at a price equal to par plus accrued and unpaid
dividends and, upon liquidation, the holders are entitled to receive the par
value plus accrued dividends before any distribution may be made to the holders
of Common Stock. Each share of Class A and Class B is convertible into one
share of Common Stock. The Board of Directors may, from time to time, and
subject to certain limitation, establish, designate and issue shares of Class C
stock in one or more series and fix the number of shares and the relative
rights, preferences, conversion rights, voting rights, terms of redemption and
liquidation preferences of such stock. The issuance of such stock with voting
or other rights could result in a class of securities outstanding with certain
preferences over the Common Stock with respect to dividends and in liquidation,
and could result in the dilution of the voting rights and equity interest of the
holders of Common Stock. The issuance of additional Common Stock, pursuant to
conversion rights, may also result in similar dilution.
In 1998, the Company adopted a Shareholder Rights Plan and declared a dividend
distribution of one Preferred Stock Purchase Right (the "Rights") for each
outstanding share of Common Stock. The Rights will become exercisable, with
certain exceptions, only if a party or group acquires 15%
18
<PAGE>
or more of the Company's Common Stock or announces an offer to acquire 15% or
more. When exercisable, with some exceptions, each Right will entitle its
holder (other than the party or group acquiring 15% or more or offering to
acquire 15% or more of the Common Stock) to buy one one-hundredth of a share of
a Series I Junior Participating Preferred Stock at a purchase price of $70.00.
Upon the occurrence of certain events, Rightsholders (other than such party or
group) will be entitled to purchase either preferred stock of the Company or
shares of the acquiring company at half of their market value. The Company will
generally be entitled to redeem the Rights at $.01 per Right at any time prior
to the earlier of the expiration of the Rights in March, 2009 or ten days
following the acquisition of or offer of 15% of the Company's Common Stock.
LEGAL MATTERS
Certain legal matters in connection with the sale and validity of the Shares
will be passed upon for the Joseph Greenberger, Esq., 1370 Avenue of the
Americas, Suite 2701, New York, New York 10019-4602.
DISCLOSURE OF COMMISSION POSITION
ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
The Company's Certificate of Incorporation and By-laws provide for
indemnification of officers and directors in instances, among others, in which
they acted in good faith and in a manner they reasonably believed to be in, or
not opposed to, the best interests of the Company and in which, with respect to
criminal proceedings, they had no reasonable cause to believe their conduct was
unlawful, and to the full extent authorized by the Delaware General Corporation
Law.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
Company pursuant to the foregoing provisions, or otherwise, the Company has been
advised that in the opinion of the Commission such indemnification is against
public policy as expressed in the Securities Act and is, therefore,
unenforceable.
19
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The Company's Annual Report on Form 10-K for its fiscal year ended January 2,
1999, including all amendments filed for the purpose of completing or updating
such report, which has been heretofore filed by the Company with the Commission
pursuant to the Securities Exchange Act of 1934, as amended, is hereby
incorporated by reference and made a part hereof:
All other documents filed by the Company with the Commission pursuant to
Sections 13, 14 and 15 of the Exchange Act subsequent to the date of this
Registration Statement and prior to the filing of a post-effective amendment to
this Registration Statement which indicates that all securities offered have
been sold or which de-registers all securities then remaining unsold shall be
deemed to be incorporated by reference in this Registration Statement and to be
a part hereof from the date of filing of such documents (such documents, and the
document referred to above, being hereinafter referred to collectively as the
"Incorporated Documents").
Any statement contained in an Incorporated Document shall be deemed to be
modified or superseded for purposes of this Registration Statement to the extent
that a statement contained therein or in any other subsequently filed
Incorporated Document modifies or supersedes such statement. Any such statements
so modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Registration Statement.
Item 4. Description of Securities.
The authorized capital stock of the Company consists of (a) 1,270,002 shares
of Preferred Stock, of three classes, none of which is outstanding, and (b)
5,000,000 shares of Common Stock, par value $.01. As of March 23, 1999,
2,939,221 shares of Common Stock were issued and outstanding, and 306,854
additional shares of Common Stock were issued and held by the Company as
treasury shares. A summary of the rights, preferences and privileges of the
Company's authorized capital stock follows:
Common Stock.
Subject to the rights of holders of any Preferred Stock issued in the future,
the holders of Common Stock are entitled to one vote per share in all matters to
be voted on by stockholders and are entitled to share pro rata in any dividends
which may be declared from time to time by the Board of Directors out of the
funds available thereof and in any distribution on liquidation. The holders of
Common Stock have no pre-emptive rights or cumulative voting rights. The
Company is a party to loan agreements which, among other things, preclude the
payment of dividends on Common Stock and limits the Company's ability to
repurchase stock.
Preferred Stock.
There are no shares of Preferred Stock of any class outstanding. Three
classes of Preferred Stock
II-1
<PAGE>
are authorized: 200,000 shares of Class A Cumulative Convertible Preferred,
$5.00 par value ("Class A"); 70,002 shares of Class B Cumulative Convertible
Preferred, $10.00 par value ("Class B"); and 1,000,000 shares of Class C
Preferred, $1.00 par value ("Class C") of which 70,000 shares have been
designated as a Series I Junior Participating Preferred Stock. Shares of Class
A and Class B (none of which is outstanding) have cumulative dividends, no
general voting rights and redemption at a price equal to par plus accrued and
unpaid dividends and, upon liquidation, the holders are entitled to receive the
par value plus accrued dividends before any distribution may be made to the
holders of Common Stock. Each share of Class A and Class B is convertible into
one share of Common Stock. The Board of Directors may, from time to time, and
subject to certain limitation, establish, designate and issue shares of Class C
stock in one or more series and fix the number of shares and the relative
rights, preferences, conversion rights, voting rights, terms of redemption and
liquidation preferences of such stock. The issuance of such stock with voting
or other rights could result in a class of securities outstanding with certain
preferences over the Common Stock with respect to dividends and in liquidation,
and could result in the dilution of the voting rights and equity interest of the
holders of Common Stock. The issuance of additional Common Stock, pursuant to
conversion rights, may also result in similar dilution.
In 1998, the Company adopted a Shareholder Rights Plan and declared a dividend
distribution of one Preferred Stock Purchase Right (the "Rights") for each
outstanding share of Common Stock. The Rights will become exercisable, with
certain exceptions, only if a party or group acquires 15% or more of the
Company's Common Stock or announces an offer to acquire 15% or more. When
exercisable, with some exceptions, each Right will entitle its holder (other
than the party or group acquiring 15% or more or offering to acquire 15% or more
of the Common Stock) to buy one one-hundredth of a share of a Series I Junior
Participating Preferred Stock at a purchase price of $70.00. Upon the
occurrence of certain events, Rightsholders (other than such party or group)
will be entitled to purchase either preferred stock of the Company or shares of
the acquiring company at half of their market value. The Company will generally
be entitled to redeem the Rights at $.01 per Right at any time prior to the
earlier of the expiration of the Rights in March, 2009 or ten days following the
acquisition of or offer of 15% of the Company's Common Stock.
Item 5. Interest of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
Section 145(a) of the General Corporation Law of Delaware (the "DGCL")
empowers a corporation to indemnify any person who was or is party, or is
threatened to be made party, to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the corporation) by reason of the
fact that he is or was a director, employee or agent of the corporation or was
serving at the request of the corporation as a director, officer, employee or
agent of another corporation or enterprise, against expenses (including
attorney's fees), judgements, fines and amounts paid in settlement actually and
reasonably incurred by him in connection with such action, suit or proceeding if
he acted in good faith and in a manner he reasonably believed to be in, or not
opposed to, the best interests of the corporation, and, with respect to any
criminal action or proceeding, had no cause to believe his conduct was unlawful.
II-2
<PAGE>
Subsection 145 (b) of the DGCL empowers a corporation to indemnify any person
who was or is a party, or is threatened to be made party, to any threatened,
pending or completed action or suit by or in the right of the corporation to
procure a judgement in its favor by reason of the fact that such person acted in
any of the capacities set forth above, against expenses actually and reasonably
incurred by him in connection with the defense or settlement of such action or
suit if he acted under similar standards, except that no indemnification may be
made in respect to any claim, issue or matter as to which such person shall have
been adjudged to be liable to the corporation unless and only to the extent that
the Court of Chancery or the court in which such an action or suit was brought
shall determine that despite the adjudication of liability such person is fairly
and reasonably entitled to indemnity for such expenses which the court shall
deem proper.
Section 145 further provides that to the extent a director or officer of a
corporation has been successful in the defense of any action, suit or proceeding
referred to in subsections (a) and (b) or in the defense of any claim, issue or
matter therein, he shall be indemnified against expenses (including attorneys'
fees) actually and reasonably incurred by him in connection therewith, and that
indemnification provided for by Section 145 shall not be deemed exclusive of any
other rights to which the indemnified party may be entitled. It empowers the
corporation to purchase and maintain insurance on behalf of a director or
officer of the corporation against any liability asserted against him or
incurred by him in any such capacity or arising out of his status as such
whether or not the corporation would have the power to indemnify him against
such liabilities under Section 145.
Article Ninth of the Company's Certificate of Incorporation reads as follows:
NINTH: The Corporation shall, to the fullest extent permitted by
Section 145 of the General Corporation Law of Delaware, as the same may
be amended and supplemented, indemnify any and all persons whom it shall
have the power to indemnify under said section from and against any and
all of the expenses, liabilities or other matters referred to in or
covered by said section, and the indemnification provided for herein
shall not be deemed exclusive of any other rights to which those
indemnified may be entitled under any Bylaw, agreement, vote of
stockholders or disinterested directors or otherwise, both as to action
in his official capacity and as to action in another capacity while
holding such office, and shall continue as to a person who has ceased to
be a director, officer or agent and shall inure to the benefit of the
heirs, executors and administrators of such a person.
Item 7. Exemption From Registration Claim.
Registrant claims an exemption pursuant to Section 4(2) under the Securities Act
of 1933, as amended, with respect to the issuance of an aggregate of 13,425 of
its Common Stock as restricted securities to certain Selling Stockholders on the
exercise of options granted under its ISO Plan, as securities acquired with no
distributive intent, for investment, and for each optionholder's own account.
II-3
<PAGE>
Item 8. Exhibits.
Exhibit No. Description
- ----------- -----------
5.1 Opinion of Joseph Greenberger with respect to the legality of the
securities being registered. (Filed herewith.)
23.1 Consent of PricewaterhouseCoopers LLP. (Filed herewith.)
23.2 Consent of Joseph Greenberger. (Included in Exhibit 5.)
24 Power of Attorney. (Included on signature pages to this
Registration Statement.)
99.1 Incentive Stock Option Plan, as amended. (Filed herewith.)
99.2 Non-Qualified Stock Option Plan, as amended. (Filed herewith.)
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New Britain, State of Connecticut, on the 30th day of
March 1999.
MOORE MEDICAL CORP.
<TABLE>
<CAPTION>
<S> <C>
BY: /s/ David V. Harper BY: /s/ David V. Harper
------------------------------------------------- -------------------------------------------------
David V. Harper, Member, Office of the President David V. Harper, Executive Vice
(Chief Executive Office), Executive Vice President - President - Finance and Chief Financial
Finance and Chief Financial Officer Officer
March 30, 1999 March 30, 1999
BY: /s/ Richard A. Bucchi BY: /s/ Susan G. D'Amato
------------------------------------------------- -------------------------------------------------
Richard A. Bucchi, Member, Office of the President Susan G. D'Amato, Controller and
(Chief Executive Office), Executive Vice President - Chief Accounting Officer
Marketing and Sales March 30, 1999
March 30, 1999
BY: /s/ Kenneth S. Kollmeyer
-------------------------------------------------
Kenneth S. Kollmeyer, Member, Office of the President
(Chief Executive Office), Executive Vice President -
Operations
March 30, 1999
</TABLE>
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities and
on the dates indicated. Each person whose individual signature appears below
hereby authorizes Robert H. Steele and David V. Harper, or either of them, to
execute in the name and on behalf of each such person and to file any amendment
to this Registration Statement, and appoints Robert H. Steele and David V.
Harper, or either of them, as attorney-in-fact to sign on his behalf
individually and in each capacity stated below, and to file any amendments to
this Registration Statement, including any and all post-effective amendments.
/s/ Robert H. Steele /s/ Peter C. Sutro
- ---------------------------- -------------------------------
Robert H. Steele, Director Peter C. Sutro, Director
March 30, 1999 March 30, 1999
/s/ Steven Kotler /s/ Wilmer J. Thomas, Jr.
- ---------------------------- -------------------------------
Steven Kotler, Director Wilmer J. Thomas, Jr., Director
March 30, 1999 March 30, 1999
/s/ Dan K. Wassong
- ----------------------------
Dan K. Wassong, Director
March 30, 1999
II-5
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
5.1 Opinion of Joseph Greenberger with respect to the
legality of the securities being registered. (Filed
herewith.)
23.1 Consent of PricewaterhouseCoopers LLP. (Filed
herewith.)
23.2 Consent of Joseph Greenberger. (Included in Exhibit 5.)
24 Power of Attorney. (Included on signature pages to this
Registration Statement.)
99.1 Incentive Stock Option Plan, as amended. (Filed
herewith.)
99.2 Non-Qualified Stock Option Plan, as amended.
(Filed herewith.)
<PAGE>
EXHIBIT 5.1
Joseph Greenberger
LAW OFFICE
1370 AVENUE OF THE AMERICAS, SUITE 2701
NEW YORK, NEW YORK 10019-4602
212.757.4001
FAX 212.757.4053
March 30, 1999
Moore Medical Corp.
389 John Downey Drive
New Britain, CT 06050-1500
Ladies and Gentlemen:
I have acted as counsel to Moore Medical Corp., a Delaware corporation (the
"Company"), in connection with the Company's registration statement on Form S-8
(the "Registration Statement") to be filed pursuant to the Securities Act of
1933, as amended. The Registration Statement relates to an aggregate of 350,000
shares of the Company's Common Stock, par value $.01 per share (the "Common
Stock"), which have been issued or may be issued upon the exercise of stock
options granted or which may be granted pursuant to the Moore Medical Corp.
Incentive Stock Option Plan and Non-Qualified Stock Option Plan (the "Option
Plans").
In that connection, I have reviewed the Company's certificate of
incorporation, as amended, its by-laws, resolutions adopted by its Board of
Directors and its stockholders, the Registration Statement, the Option Plans,
and such other documents and proceedings as we have deemed appropriate.
On the basis of such review, and having regard to legal considerations that I
deem relevant, I am of the opinion that the shares of Common Stock to be offered
pursuant to the Registration Statement have been duly authorized and, when
issued in accordance with the terms set forth in the Option Plans, will be
validly issued, fully paid and nonassessable.
Our opinion set forth above is based as to matters of law solely on applicable
provisions of the General Corporation Law of the State of Delaware, and I
express no opinion as to any other laws, statutes, ordinances, rules or
regulations.
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. In giving this opinion, I do not thereby admit that I am
within the category of persons whose consent is required under Section 7 of the
Securities Act of 1933, as amended or the rules and regulations of the
Securities and Exchange Commission.
Very truly yours,
Joseph Greenberger
<PAGE>
EXHIBIT 23.1
PricewaterhouseCoopers
- --------------------------------------------------------------------------------
PricewaterhouseCoopers LLP
One Financial Plaza
Hartford CT 06103
Telephone (860) 240 2000
March 30, 1999
The Board of Directors
Moore Medical Corp.:
We consent to the use of our report incorporated herein by reference.
PricewaterhouseCoopers LLP
Hartford, Connecticut
March 30, 1999
<PAGE>
EXHIBIT 99.1
INCENTIVE STOCK OPTION PLAN OF MOORE MEDICAL CORP.
1. Purpose. The purpose of this Incentive Stock Option Plan (hereinafter
called "the Plan") is to promote the interests of Moore Medical Corp.
(hereinafter called "the Company"), by affording an incentive to certain
officers and key employees to remain in the employ of the Company to use their
best efforts in its behalf, and further to aid the Company in attracting,
maintaining, and developing capable personnel of a caliber required to ensure
the Company's continued success, by means of an offer to such persons of an
opportunity to acquire or increase their proprietary interest in the Company
through the granting of options to purchase the Company's stock pursuant to the
terms of the Plan.
2. Shares Subject to Plan.
(a) The shares to be delivered upon exercise of options granted under the
Plan (hereinafter called "Options" or "Option") shall be made available, at the
discretion of the Board of Directors, from the authorized and unissued shares of
the Company's $.01 par value Common Stock, or from the shares acquired by the
Company, including shares purchased in the open market.
(b) Subject to adjustments made pursuant to the provisions of Section 11
hereof, the aggregate number of shares which may be issued upon exercise of all
Options shall not exceed 200,000 shares of the Common Stock of the Company.
(c) In the event that any Option shall expire or terminate for any reason
whatsoever without having been exercised in full, the unpurchased shares covered
thereby shall (unless the Plan shall have been terminated) be added to the
shares otherwise available for Options which may be granted in accordance with
the terms of the Plan or shall be available for any lawful corporate purpose.
(d) More than one Option may be granted to any employee pursuant to the
Plan. The aggregate fair market value of the stock (determined as of the time
the Option is granted) for which Options are exercisable for the first time
under the Plan by any employee during any calendar year shall not exceed the
aggregate dollar limitation of Section 422 (d) of the Internal Revenue Code of
1986, as amended ("the Code")($100,000 as of the date of the Plan).
3. Option Agreements. Each Option shall be evidenced by an option
agreement, which shall be signed by an officer of the Company and by the
employee and which shall contain such provisions as may be approved by the
Committee (defined in Section 4). The terms of the option agreement shall be in
accordance with the Plan, but may include additional provisions and
restrictions, provided that the same are not inconsistent with the terms and
provisions of the Plan. Neither anything contained in the Plan nor in any
resolution adopted or to be adopted by the Board of Directors or the
shareholders of the Company nor any action taken by the Committee shall
constitute the granting of any Option. The granting of any Option shall take
place only when a written option agreement shall have been duly executed and
delivered by or on behalf of the Company and the employee to whom such Option
shall be granted. No Option shall be granted after ten (10) years from the date
(March 4, 1993) the Plan was adopted by the Company's Board of Directors.
<PAGE>
4. Administration. A Stock Option Committee of the Board of Directors
(hereinafter called "the Committee"), which shall consist solely of
"disinterested persons" (which term shall have the same meaning as used in SEC
Rule 16b-3(c)(2)(i)), shall administer the Plan, which Committee shall consist
of not less than two nor more than five members of the board, to serve at the
pleasure of the board. A majority of the Committee shall constitute a quorum,
and acts of a majority of the disinterested members present at any meeting at
which a quorum is present, or acts approved in writing by a majority of the
disinterested members of the Committee, shall be deemed the acts of the
Committee. The Committee may select one of its members as its chairman. The
Committee may appoint a secretary who need not be a member of the Committee and
who shall maintain a record of its actions, decisions and proceedings. If the
Committee appoints no secretary, the secretary of the Company shall serve as
secretary of the Committee. The Committee shall have full power and authority
to construe, interpret, and administer the Plan and may from time to time adopt
such rules and regulations for carrying out the Plan as it may deem proper and
in the best interest of the Company. Subject to the terms, provisions, and
conditions of the Plan, the Committee in the light and on the consideration of
recommendations of the Company's directors, president and other officers, if the
Committee shall deem the same appropriate, shall (i) select the key employees to
whom Options shall be granted, (ii) determine the number of shares subject to
each Option, (iii) determine the time or times when Options will be granted,
(iv) determine the price of the shares subject to each Option, (v) determine the
time when each Option may be exercised, (vi) fix such other provision of the
option agreement as the Committee may deem necessary or desirable consistent
with the terms of the Plan, and (vii) determine all other questions relating to
the administration of the Plan. The interpretation of any provisions of the
Plan by the Committee shall be final, conclusive, and binding upon all persons,
and the Board of Directors shall place into effect the determinations of the
Committee.
5. Eligibility. Key employees of the Company and any of its subsidiaries,
including officers and directors who are salaried employees, shall be eligible
to receive Options; provided, however, that no person shall be eligible to
receive Options who immediately after such Option is granted hereunder owns
(within the meaning of Section 422(b)(6) of the Code) capital stock possessing
more than 10% of the fair market value of the stock (determined at the time of
the grant). The fact that an employee has been granted an Option shall not in
any way effect or qualify the right of the employer to continue or terminate his
or her employment at any time. Nothing contained in the Plan shall be construed
to limit the right of the Company to grant options otherwise than under the Plan
for any proper and lawful corporate purpose, including but not limited to
options granted to key employees.
6. Option Price. Except as provided in Section 5 hereof relating to an
employee who owns capital stock possessing more than 10% of the total combined
voting power of all classes of stock, the price at which shares of stock may be
purchased under an Option shall be determined by the Committee but shall not be
less than 100% of the fair market value (within the meaning of Section 422(c)(7)
of the Code) of such shares on the date that the Option is granted, such fair
market value to be determined by, and in accordance with procedures to be
established by the Committee. The option price will be subject to adjustments
in accordance with the provisions of Section 11 hereof.
7. Exercise of Options. Subject to the provisions of the Plan with
respect to termination of employment under Section 9 hereof, the period during
which each Option may be exercised shall be fixed by the Committee at the time
such Option is granted, but such period shall expire not later than ten years
from the date the Option is granted. Subject to the terms and conditions of the
option
<PAGE>
agreement, an Option may be exercised, at any time or from time to time, as to
any part of or all of the shares which shall be covered thereby; provided,
however, that an Option may not be exercised as to less than 100 shares at any
one time (except as to the remaining shares then purchasable under the Option,
if less than 100 shares). No shares shall be delivered pursuant to any exercise
of an Option until the requirements of such laws and regulations as may be
deemed by the Committee to be applicable to them are satisfied and until payment
in full in cash of the option price for them is received by the Company. No
employee to whom an Option shall have been granted or the legal representative,
legatee, or distributee of such an employee, shall be deemed to be a holder of
any shares subject to any Option unless and until the certificate or
certificates for them have been issued. Except as provided in Section 9 and 10
hereof, at all times during the period beginning on the date of the granting of
the Option and ending on the date of the exercise of the Option, the individual
must have been an employee of the Company or any of its subsidiaries or a
corporation or a parent or subsidiary of such corporation issuing or assuming a
stock option in a transaction to which Section 424(a) of the Code applies.
8. Transferability of Options. An Option granted under the Plan may not
be transferred except by will or the laws of descent and distribution, and,
during the lifetime of the employee to whom granted, may be exercised only by
such employee.
9. Termination of Employment. In the event that the employment of an
employee to whom an Option shall have been granted shall be terminated for any
reason other than death, such Option may be exercised at any time prior to the
expiration date of the Option or within three (3) months after the date of such
termination (twelve (12) months in the case of an employee who is disabled
within the meaning of Section 22(e)(3) of the Code), whichever is earlier, but
only to the extent such employee had the right to exercise such Option at the
date of such termination; provided, however, that, if the employment is
terminated as a result of deliberate, willful or gross misconduct as determined
by the Board of Directors or the Committee, all rights under the Option shall
terminate and expire upon such termination.
10. Death of Employee. If an employee to whom an Option shall have been
granted shall die while he or she is employed by the Company or any of its
subsidiaries or within three (3) months after the termination of his or her
employment, such Option may be exercised (to the extent that the employee shall
have been entitled to do so at the date of his or her death) by the person or
persons to which such deceased employee's rights passed by will or by the laws
of descent and distribution at any time prior to the expiration date of the
Option of within one (1) year after the date of the appointment of a person
representative for such deceased employee's estate, whichever is earlier.
11. Adjustments Upon Changes in Capitalization. In the event of a capital
adjustment resulting from a stock dividend, stock split, reorganization, merger,
consolidation, or a combination or exchange of shares, the number of shares of
stock subject to the Plan and the number of shares under Option shall be
adjusted consistent with such capital adjustment. The price of any share under
Option shall be adjusted consistent with such capital adjustment. The price of
any share under Option shall adjusted so that there will be no change in the
aggregate purchase price payable upon exercise of any such Option. The granting
of an Option pursuant to the Plan shall not affect in any way the right or power
of the Company to make adjustments, reorganizations, reclassifications, or
changes of its capital or business structure or to merge, consolidate,
dissolve, liquidate, or sell or transfer all or any part of its business or
assets.
<PAGE>
12. Termination and Amendment of Plan. The Plan may at any time or from
time to time be terminated, modified, or amended by the shareholders of the
Company, by the affirmative vote of a majority of the common shares, voting at a
meeting at which a quorum is present. The Board of Directors may at any time and
from time to time modify or amend the Plan in such respects as it shall deem
advisable in order that the Options shall be "Incentive Stock Options" as
defined in Section 422 of the Code or to conform to any change in the law, or in
any other respect which shall not change (a) the maximum number of shares for
which Options may be granted under the Plan; or (b) the minimum purchase price
for the shares subject to Options, except as provided in Section 11; or (c) the
periods during which Options may be granted or exercised; or (d) the provisions
relating to the determination of employees to whom Options shall be granted; or
(e) the provisions relating to the annual dollar limitation upon Options granted
to any employee; or (f) the provisions relating to the transferability of the
Options; or (g) the provisions relating to the employment status of an employee
to whom as Option shall not have been granted. The termination or any
modification or amendment of the Plan shall not, without the consent of an
employee, affect such employee's rights under an Option therefore granted to
such employee.
13. Effective Date, Term and Approval. The Plan was adopted by the Board
of Directors on March 4, 1993 and approved by the shareholders on May 20, 1993.
The Plan shall take effect on May 20, 1993. The Plan will terminate on the close
of business on March 23, 2002, and no Options may be granted under the Plan
after that date. Any Options granted pursuant to the Plan are subject to all
laws, approvals, requirements and regulations of any governmental authority
which may be applicable thereto and notwithstanding any provisions of the Plan
or option agreement, the holder of an Option shall not be entitled to exercise
his Option nor shall the Company be obligated to issue any shares to the holder
if such exercise or issuance shall constitute a violation by the holder or the
Company of any provisions of any such approval, requirement, law or regulation.
<PAGE>
EXHIBIT 99.2
MOORE MEDICAL CORP. NON-QUALIFIED STOCK OPTION PLAN, AS AMENDED
1. Purpose. The purpose of this Non-Qualified Stock Option Plan (the
--------
"Plan") is to provide a continuing incentive to selected directors, officers,
and key employees of Moore Medical Corp., a Delaware corporation (the
"Company"), by the grant of non-qualified, non-incentive stock options
("options") under the Plan. Options granted under the Plan are not intended to
be eligible for the tax consequences provided for in Sections 421 through 424 of
the Internal Revenue Code of 1986, as amended ("the Code").
2. Shares Covered by Plan. The number of shares which may be issued
----------------------
pursuant to options granted under the Plan shall not exceed 150,000 shares of
the Company's common stock, par value $.01 ("Common Stock"). If any option
granted under the Plan shall terminate, expire or be canceled, for any reason
whatsoever, without having been exercised in full, the shares not purchased
under such option shall be available again for the purposes of the Plan. The
maximum number of shares in respect to which options may be granted under the
Plan to any particular director, officer, or employee participating in the Plan
shall be 20,000 per calendar year.
3. Administration. The Plan shall be administered by a committee of
--------------
directors of the Company (the "Committee") to be appointed from time to time by
the Company's Board of Directors and to consist of not less than the minimum
number of persons from time to time required by Rule 16(b)-3 promulgated by the
Securities Exchange Act of 1934, or any successor rule or regulation thereto as
in effect from time to time ("Rule 16(b)-3") and Section 162(m) of the Internal
Revenue Code of 1986, as amended, or any successor statue, rule or regulation
("Code"), each of whom, to the extant necessary to comply with Rule 16(b)-3 and
Section 162(m) of the Code only, is intended to be a "disinterested person"
within the meaning of Rule 16(b)-3 and an "outside director" within the meaning
of Section 162(m) of the Code; provided that, the mere fact that a Committee
--------
member shall fail to qualify under either or both of these requirements shall
not invalidate any award made or action taken by the Committee which award or
action would otherwise be validly made under this Plan. Any determination in
writing signed by all the members of the Committee shall be fully effective as
if made by a majority vote at a meeting. The Committee may hold meetings
telephonically. The Committee may appoint a Secretary, who shall keep minutes
of its meetings, and the Committee may make such rules and regulations for the
conduct of its business and for the carrying out of the Plan as it shall deem
appropriate. In addition to the express powers and authorizations conferred
upon the Committee by the Plan, the Committee shall have the authority to (i)
interpret and administer the Plan and any instrument or agreement relating to or
option made under the Plan and (ii) correct any defects, supply any omission and
reconcile any inconsistency in the Plan. The interpretations and constructions
by the Committee of any provisions of the Plan or of any option granted
thereunder, and such determinations of the Committee as it shall deem
appropriate for the administration of the Plan and of options granted
thereunder, shall be final, binding and conclusive on all persons having any
interest thereunder.
4. Eligibility. Options may be granted under the Plan to directors,
-----------
officers, and key employees of the Company, selected by the Committee or the
Board of Directors.
<PAGE>
5. Granting of Options. The Committee and Board of Directors shall each be
-------------------
authorized to select the directors, officers, and key employees eligible to
receive options under the Plan, and to grant options to such directors,
officers, and key employees providing for the number of shares to be included
under each option, the installments (if any) in which it may be exercised, the
date upon which each option expires, and the other terms and conditions of each
option, all subject to and within the limitations of the Plan. Notwithstanding
that an option provides that it may be exercised in installments, it may, if so
authorized by the Committee or Board also provide that it becomes fully
exercisable earlier ( subject to the provision of Sections 8(a)(ix) and 8(a)(x)
of this Plan), in the event of and on a Change of Control and Position
(hereinafter defined).
6. Option Period. The date of grant of an option shall be the date on
--------------
which Committee or Board shall award the option. The Committee or the Board of
Directors may make options exercisable for up to five years from the date of
grant.
7. Option Price. The price to be paid for shares on exercise of each option
------------
shall be fixed by the Committee or the Board of Directors upon the date of
grant. The price shall not be less than 100% of the fair market value of the
Common Stock on the date of the grant.
8. Terms and Conditions of Options.
-------------------------------
(a) Each option shall be deemed to include the following terms and
conditions:
(i) The holder of an option may exercise his or her option by
delivering to the Company written notice of the number of shares with respect to
which option rights are to be exercised together with full payment of the
purchase price of the such shares. In addition, the holder of an option will be
required to pay all withholding taxes when due by reason of said exercise. In
either case (at the election of the holder of the option) payment may be made
either (x) in cash, (y) in Common Stock, or (z) by a combination of cash and
Common Stock. If payment, in whole or part, is made in Common Stock, it shall be
valued by the Committee at its fair market value on the close of business on the
date prior to the date of payment. Common Stock used for payment must have been
held by the optionee for at least six months. Upon receipt by the Chief
Financial Officer of the Company of payment in full, the option holder shall be
deemed the holder of record of the Common Stock issuable upon such exercise,
notwithstanding that certificates representing such Common Stock shall not then
be actually delivered to the option holder.
(ii) No option and no right under any such option may be assigned,
alienated, pledged, attached, sold or otherwise transferred or encumbered by the
optionee other than by will or the laws of descent and distribution, and it may
be exercised during his or her lifetime only by the optionee.
(iii) If the holder of an option dies during the period of his or her
employment by the Company, the number of shares for which the option was
exercisable as of the date of death may be exercised by the option holder's
personal representative, or transferee entitled to acquire the right to exercise
the option by will or pursuant to the laws of descent and distribution, until
the earlier of the date upon which his or her option expires or ninety days
following the date of death.
(iv) If the employment of the option holder is terminated by the option
holder by reason of his or her permanent disability, or terminated by the
Company for any reason (except to
<PAGE>
the extent the option provides otherwise with respect to termination for cause),
the number of shares for which the option was exercisable as of the date of
termination may be exercised by the option holder until the earlier of the date
upon which his or her option expires or ninety days following the date of such
termination.
(v) If the option holder terminates his or her employment with the
Company for any reason other than permanent disability, the number of shares for
which the option was exercisable as of the date of termination may be exercised
by the option holder until the earlier of the date upon which his or her option
expires or ten days following the date of such termination.
(vi) No fractional shares shall be issued upon the exercise of an
option. With respect to any fraction of a share otherwise issuable upon any
exercise hereof, the Company shall pay to the option holder an amount in cash
equal to the fair value of such fraction.
(vii) The option holder shall not, by virtue thereof, be entitled to any
rights of a shareholder in the Company, either at law or equity, and the rights
of the option holder are limited to those provided by this Plan and (to the
extant consistent therewith) those expressed in the option.
(viii) If the term of the option holder as a director of the Company
terminates for any reason other than his death, the number of shares for which
the option was exercisable as of the date of termination may be exercised by the
option holder until the earlier of the date upon which his option expires or 10
days (90 days in the event of death) following the date of such termination.
(ix) Notwithstanding anything to the contrary contained in an option
granted under the Plan, it shall not become exercisable to the extent that, and
so long as, an exercise (when aggregated with all other option exercises by an
option holder subject to the Section 162(m) provisions hereinafter referred to)
thereof would, pursuant to Section 162(m) of the Code, limit the amount
deductible by the Company as compensation for federal income tax purposes.
(x) Notwithstanding anything to the contrary in an option granted
under the Plan, it shall not become exercisable to the extent that, and so long
as, an exercise (when aggregated with any other payment which would be subject
to the "parachute payment" provisions hereinafter referred to) would cause a
"parachute payment" under Section 280G of the Code.
(xi) The Company may require an option holder, and the option holder's
legal representative, heir, legatee, or distributee, as a condition of any
exercise of the option, to give written assurance satisfactory to the Company
that the shares are being acquired for investment only, with no view to the
distribution, and that any subsequent resale thereof will be made pursuant to an
effective and current registration statement under the Securities Act of 1933,
or pursuant to an exemption from registration under said Act, and all
certificates representing the shares subject to options shall bear the following
legend:
The shares represented by this certificate have not been registered
under the Securities Act of 1933. Said shares have been acquired
for investment, and may not be sold, transferred or assigned except
pursuant to an effective registration statement for said shares
under said Act or an opinion of the Company's counsel that such
registration is not required under said Act.
<PAGE>
(b) Each option may be made subject to such other terms and conditions
consistent with the Plan as the Committee or Board of Directors may approve and
provide for.
(c) A "Change of Control and Position" shall be deemed to have occurred
if a "change of control" described in (i) occurs on or before December 31, 1999
and a "change in position" described in (ii) or (iii) occurs within twelve
months after the "change of control."
(i) a "change of control" is:
(aa) either (x) any merger or consolidation of the Company
into or with another corporation (other than a subsidiary of the Company), or
(y) the acquisition by another person or entity of beneficial ownership (as
defined in Rule 13d-3 under the Securities Exchange Act of 1934) of more than
50% of the common stock of the Company, unless, immediately after such merger,
consolidation or acquisition, the holders of common stock of the Company
immediately prior to such merger, consolidation or acquisition own more than 50%
of the voting capital stock of such other corporation or the voting equity
interests of such person or entity; or
(bb) any sale by the Company of substantially all of the assets
and business of the Company for cash, stock, or any combination thereof, unless,
immediately after such sale, the holders of common stock of the Company
immediately prior to such sale own 50% or more of the voting capital stock of
the acquiring corporation or, if the acquiring person or entity is not a
corporation, more than 50% of the voting equity interests of such acquiring
person or entity; or
(cc) either (x) the election or removal of a majority of the
directors of the Company as a result of a solicitation subject to Rule 14a-11
(or successor Rule) under the Securities Exchange Act of 1934 relating to the
election or removal of directors, or (y) the election of directors constituting
a majority of the directors of the Company by other than the action of directors
a majority of whom consist of Continuing Directors; for purposes hereof, a
"Continuing Director" means a director (aa) for whose election the Company
solicited proxies pursuant to a proxy statement under Regulation 14A of said
Act, or (bb) who was elected by action of the directors a majority of whom were
elected as described in clause (aa) hereof, or (cc) who was elected by action of
directors a majority of whom were elected as described in clause (aa) and/or
clause (bb) hereof.
(ii) A "change of position" with respect to an option granted to an
employee of the Company is the termination of the original option holder's
employment by the Company (other than by reason of death, disability or a
material breach of his or her duties to the Company) or a substantial change in
his or her duties. Such an option holder will be considered to have had a
substantial change in his or her duties only if:
(aa) (x)the position level of the participant is lowered, or
(y) the duties of the participant (if he or she held a corporate Vice
President - position level immediately prior to the change of control) are
changed to (aa) primarily consist of new duties not based upon his or her
training or experience, or (bb) include substantial duties performed immediately
prior to the change of control by employees of the Company previously
subordinate to the participant, or (z) the principle location of employment by
the Company of the participant is changed to a location more than 75 miles from
his or her residence (for purposes hereof, such residence is to be the
participant's
<PAGE>
residence when the intent of any party to cause a "change of control" becomes
actually known to the participant or is first publicly disclosed); and
(bb) within 90 days after the occurrence of any of the events
referred to in clause (x), (y), or (z) of Section 8(c)(ii)(aa) hereof, he or she
terminates his or her employment by the Company.
(iii) A "change of position" with respect to an option granted to a non-
employee director of the Company is the original option holder's ceasing to be a
director of the Company by reason of a (aa) transaction described in clause (aa)
or (bb) of Section 8(c)(i) hereof, if he or she is not, or in connection
therewith does not become, a director or officer of the other corporation,
another person, or acquiring person or entity referred to in said clauses (aa)
or (bb), or (bb) a solicitation subject to Rule 14a-11 (or successor Rule) under
the Securities Exchange Act of 1934 relating to the election or removal of the
directors of the Company.
9. Amendments to and Termination of Plan. The Board of Directors of the
-------------------------------------
Company may from time to time make such amendments to the Plan as it may deem
proper and in the best interests of the Company, provided that no amendment
--------
shall be made which would impair, without the consent of the optionee, any
option theretofore granted under the Plan or deprive any optionee of any shares
of stock of the Company which he may have acquired through or as a result of an
option under the Plan. The Plan may be terminated at any time by the Company's
Board of Directors, except with respect to options then outstanding under the
Plan.
10. Adjustments. In the event that the Committee or the Board of Directors
------------
determines that any dividend or other distribution (whether in the form of cash,
shares, other securities, or other property), recapitalization, stock split,
reverse stock split, reorganization, merger, consolidation, split-up, spin-off,
combination, repurchase, or exchange of shares or other securities of the
Company, issuance of warrants or other rights to purchase shares or other
similar corporate transaction or event affects the shares such that an
adjustment is determined by the Committee or the Board of Directors to be
appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan, then the
Committee or the Board of Directors shall, in such manner as it may deem
equitable, adjust any or all of the following (i) the number and type of shares
(or other securities or property) with respect to which options may be granted,
(ii) the number and type of shares (or other securities or property) subject to
outstanding options and (iii) the grant or exercise price with respect to any
option or, if deemed appropriate, make provision for a cash payment to the
holder of an outstanding option in full satisfaction of the Company's
obligations to the holder thereunder.
11. General Provisions.
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(a) Options May Be Granted Separately or Together. Options may, in the
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discretion of the Committee or the Board of Directors, be granted either alone
or in addition to, in tandem with, or in substitution for any other option
granted under the Plan or award granted under any other plan of the Company or
any affiliate of the Company.
(b) No limit on Other Compensation Arrangements. Nothing contained in the
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Plan shall prevent the Company or its affiliates from adopting or continuing in
effect other compensation arrangements, and such arrangements may be either
generally applicable or applicable only in specific cases.
<PAGE>
(c) No Right to Continued Employment or Tenure as Director. The grant of
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an option shall not be construed as giving a participant in the Plan the right
to be retained in the employ of the Company or any of its affiliates or, if a
director of the Company or any of its affiliates, to continue as a director.
Further, the Company or its affiliates may at any time dismiss a participant in
the Plan from employment, free from any liability or any claim under the Plan,
unless otherwise expressly provided in the Plan or in any award evidencing an
option.
(d) Governing Law. The validity, construction, and effect of the Plan and
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any rule and regulations relating to the Plan shall be determined in accordance
with the laws of the State of Delaware.
(e) No Trust or Fund Created. Neither the Plan nor any option shall
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create or be construed to create a trust or separate fund of any kind or a
fiduciary relationship between the Company or any of its affiliates and a
participant in the Plan or any other person. To the extant that any person
acquires a right to receive payments from the Company or any of its affiliates
pursuant to an option, such right shall be no greater than the right of any
unsecured general creditor of the Company or its affiliates.
12. Effective Date and Term of Plan.
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(a) The Plan was adopted and became effective on February 17,
1998, the date on which it was approved by the Board of Directors of the
Company.
(b) Unless sooner terminated, this Plan shall terminate on
February 16, 2008 and no options shall thereafter be made under the Plan.
