<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
MOORE-HANDLEY, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
MOORE-HANDLEY, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
APRIL 24, 1997
The Annual Meeting of the shareholders of Moore-Handley, Inc. (the
"Corporation") will be held at the office of The Corporation Trust Company,
Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801, on
Thursday, April 24, 1997, at 10:00 A.M., for the following purposes:
(1) To elect directors for the ensuing year;
(2) To approve an increase in shares of Common Stock authorized for
issuance under the Corporation's 1991 Incentive Compensation Plan; and
(3) To transact such other business as may properly come before the
meeting.
Only shareholders of record at the close of business on March 7, 1997 will
be entitled to vote at the meeting. A list of shareholders eligible to vote at
the meeting will be available for inspection at the meeting and during business
hours at the Corporation's offices at the address set forth below and at the
office of The Corporation Trust Company at the address set forth above from
April 14, 1997 to the date of the meeting.
Whether you expect to attend the Annual Meeting or not, your proxy vote is
important. To assure your representation at the meeting, please sign and date
the enclosed proxy card and return it without delay in the enclosed envelope,
which requires no additional postage if mailed in the United States.
By Order of the Board of Directors
L. Ward Edwards
Vice President -- Finance,
Treasurer and Secretary
P. O. Box 2607
Birmingham, Alabama 35202
March 28, 1997
IT IS IMPORTANT THAT THE ENCLOSED PROXY CARD BE COMPLETED AND RETURNED PROMPTLY
<PAGE> 3
MOORE-HANDLEY, INC.
PROXY STATEMENT
MARCH 28, 1997
This Statement is furnished in connection with the solicitation of proxies
by the Board of Directors of Moore-Handley, Inc. (the "Corporation") for use at
the Annual Meeting of its shareholders to be held on April 24, 1997.
Shares cannot be voted at the meeting unless the owner thereof is present
in person or by proxy. Any person giving a proxy may revoke it by written notice
to the Corporation at any time prior to its exercise. In addition, although mere
attendance at the meeting will not revoke the proxy, a person present at the
meeting may withdraw his proxy and vote in person. All properly executed and
unrevoked proxies in the accompanying form which are received in time for the
meeting will be voted at the meeting or any adjournment thereof in accordance
with any specification thereon, or if no specification is made, will be voted
FOR the election of the five persons nominated for election as directors and FOR
the proposal to increase the number of shares of Common Stock authorized for
issuance under the Corporation's 1991 Incentive Compensation Plan.
The Annual Report of the Corporation (which does not form part of the proxy
solicitation material), including the financial statements of the Corporation
for the fiscal year 1996, is enclosed herewith.
The mailing address of the principal executive offices of the Corporation
is P. O. Box 2607, Birmingham, Alabama 35202. This Statement and the
accompanying form of proxy are being mailed to the shareholders of the
Corporation on March 28, 1997.
VOTING SECURITIES
The Corporation has only one class of voting securities, its Common Stock.
On March 10, 1997, 2,154,543 shares of Common Stock were outstanding. As to each
matter presented to the shareholders' meeting, each shareholder of record at the
close of business on March 10, 1997 will be entitled to one vote for each share
of Common Stock owned on that date.
ELECTION OF DIRECTORS
The affirmative vote of a plurality of the votes cast is required to elect
the directors. Abstentions from voting on these proposals (including broker
non-votes) will have no effect on the outcome of the vote. Unless otherwise
directed, the persons named in the accompanying form of proxy intend to vote at
the Annual Meeting for the election of the nominees named in the following table
as directors of the Corporation to serve until the next Annual Meeting and until
their successors are duly elected and have qualified. If any nominee is unable
to be a candidate when the election takes place, the shares represented by valid
proxies will be voted in favor of the remaining nominees and for such person, if
any, as shall be designated by the present Board of Directors to replace such
nominee. The Board of Directors does not presently anticipate that any nominee
will be unable to be a candidate for election.
Each of the nominees was elected to his present term of office at the last
annual meeting of shareholders.
The following information with respect to the principal occupation or
employment, other affiliations and business experience of each nominee during
the last five years has been furnished to the Corporation by such nominee.
Except as indicated, each of the nominees has had the same principal occupation
for the last five years.
<PAGE> 4
INFORMATION REGARDING NOMINEES FOR ELECTION AS DIRECTOR
The Corporation's current Board of Directors consists of the five directors
listed below, each of whom will stand for election at the annual meeting.
William Riley -- Chairman and Director of the Corporation since 1981; Age
65.
Pierce E. Marks, Jr. -- President, Chief Executive Officer from 1981 to
June, 1995; Vice Chairman since June, 1995 and Director of the Corporation since
1981; Age 68.
L. Ward Edwards -- Vice President -- Finance, Treasurer, Secretary and
Director of the Corporation since 1981; Age 60.
Michael B. Stubbs -- Private investor; Director, Lyon, Stubbs & Tompkins,
Inc., New York, New York (investment advisors) from 1984 to August, 1996 and
President from 1984 to June, 1992; Secretary/Treasurer and Director, S&P
Cellular Holdings, Inc. (cellular communications) from 1989 to November, 1995
and Chairman from 1991 to November, 1995; Secretary/Treasurer and Director,
Petroleum Communications (cellular communications) from 1990 to November, 1995
and Chairman from 1991 to November, 1995, Director of the Corporation since
1981; Age 48.
Ronald J. Juvonen -- General Partner, Downtown Associates, New York, New
York (investment partnership). Director of the Corporation since 1989; Age 56.
INFORMATION REGARDING THE BOARD OF DIRECTORS
COMMITTEES OF THE BOARD
The Board of Directors of the Corporation has Executive and Audit
Committees, but does not presently have nominating and compensation committees.
Executive Committee. Members: Messrs. Riley and Marks. The Executive
Committee may, between meetings of the Board of Directors, exercise all of the
authority of the Board in the management of the business and affairs of the
Corporation, except with respect to certain significant corporate matters
reserved to the Board by Delaware law, such as amendments to the Certificate of
Incorporation or By-Laws of the Corporation and the appointment and removal of
officers.
Audit Committee. Members: Messrs. Stubbs and Juvonen. The Audit
Committee's functions include recommending to the Board of Directors the
selection of the Corporation's independent auditors and reviewing with such
auditors the plan and results of their audit.
ATTENDANCE AT BOARD AND COMMITTEE MEETINGS
During the 1996 fiscal year the Board of Directors held two meetings, the
Executive Committee met formally once and informally numerous times, and the
Audit Committee met once. During such fiscal year each director attended all of
the meetings of the Board, and each director who was a member of the Executive
Committee or Audit Committee attended all of the meetings of such Committee.
COMPENSATION OF DIRECTORS
No director received compensation for his services as director or member of
the Executive or Audit Committees, except for the annual grant to non-employee
directors of Special Options to purchase 2,000 shares of the Corporation's
Common Stock granted to each of Messrs. Stubbs and Juvonen. Each such Special
Option is granted at an exercise price equal to the market value of the Common
Stock on the date of the grant and becomes exercisable six months after the date
of grant. The term of such Option is ten years, subject to termination on the
third anniversary of the date the holder ceases to be a director of the
Corporation.
2
<PAGE> 5
EXECUTIVE COMPENSATION AND OTHER INFORMATION
REPORT OF THE EXECUTIVE AND AUDIT COMMITTEE ON EXECUTIVE COMPENSATION
This report by the members of the Executive and Audit Committees of the
Board of Directors of the Corporation describes the policies guiding the
compensation paid to the Corporation's Chief Executive Officer and other
executive officers for 1996.
Messrs. Riley and Marks, who comprise the Executive Committee of the Board
of Directors, determine the compensation payable to executives other than
themselves. Messrs. Stubbs and Juvonen, independent directors who comprise the
Audit Committee, determine the compensation payable to Messrs. Riley and Marks.
EXECUTIVE COMPENSATION POLICIES
The Corporation's compensation policies for its executive officers
incorporate both fixed base salaries and variable, at-risk compensation
opportunities in total compensation packages intended to take into consideration
individual and overall corporate performance and to achieve the following
specific goals:
- ensure that the Corporation can attract and retain highly competent
individuals whose performance is essential to the future growth and success
of the Corporation; and
- ensure that executive compensation reflects corporate performance by
tying a significant portion of total compensation to the achievement of
specified corporate performance objectives.
FIXED COMPENSATION
Base salary is the fixed component of each executive officer's total
compensation package.
VARIABLE COMPENSATION
The variable component of each executive officer's total compensation
package is comprised of an annual and a long-term part:
- the opportunity to receive a cash payment under the Corporation's
Return-On-Investment Bonus Program (the "Bonus Program"), based on the
Corporation's actual performance in a given year against certain
established objectives; and
- the opportunity to benefit from the appreciation in value of the
Corporation's common stock through stock options, granted under the
Corporation's 1991 Incentive Compensation Plan (the "1991 Plan").
Through the Bonus Program, executive officers, excluding Messrs. Riley and
Marks, are eligible to participate in an annual bonus pool which consists of 20%
of the amount, if any, by which the Corporation's net income exceeds 8% of the
Corporation's net assets for such year. Messrs. Riley and Marks participate in a
separate pool which consists of 10% of the amount, if any, by which net income
exceeds 10% of net assets for such year. Other awards are determined by the
Executive Committee, after consultation with key managers. In 1996, the
threshold amount was not achieved; therefore, no cash bonuses were paid.
The purpose of the 1991 Plan is to assist in attracting and retaining
skilled management personnel and strengthening the mutuality of interests
between them and the Corporation's shareholders. Under the 1991 Plan, executive
officers are eligible to receive grants of stock options, stock appreciation
rights, restricted stock and deferred stock. The 1991 Plan is administered by a
Committee consisting of Messrs. Riley and Marks (the "Committee") who are not
eligible to receive discretionary grants or awards under the Plan. The Committee
has the authority to select employees to receive grants and awards thereunder
and determine the number of shares subject to such grants and awards and the
exercise price, restrictions, exercisability, transfer, vesting and other terms
and conditions thereof. It is the Corporation's policy to award option grants of
significant amounts when deemed appropriate.
3
<PAGE> 6
APPLICATION OF PHILOSOPHY
Messrs. Riley and Marks are substantial shareholders of the Corporation and
as such have an economic incentive to increase the value of the Corporation. In
each of their cases, the Audit Committee has kept their base salaries at levels
which are low compared to competitive practices. The Audit Committee believes
each of them has a substantial economic incentive to enhance the value of the
Corporation's stock and therefore need not be paid salary on a competitive
basis. As a part of their compensation, however, Messrs. Riley and Marks did
receive a special one-time automatic grant on April 12, 1991, of non-qualified
Special Options with an exercise price that was approximately 143% of the fair
market value of the stock on the date of the grants. Each such option will
become exercisable, if at all, at the first to occur of (i) the end of the first
fiscal year during the term of the option in which the Corporation's earnings
per share are at least $.85, or (ii) nine years and nine months after the date
of grant, if the option holder is still an employee of the Corporation, or (iii)
the date of retirement of the option holder from employment by the Corporation,
if he is then 70 or older. These options have a ten-year term but will terminate
on the date the option holder ceases to be an employee or director of the
Corporation, if they have not become exercisable as of such date, or on the
third anniversary of such date if they are exercisable on such date.
In keeping with the rationale that a key employee's compensation should be
significantly dependent on the performance of the Corporation, the base salaries
for Mr. White is also low compared to competitive practice. He received a
substantial grant of stock options in 1995 under the 1991 Plan with an exercise
price equal to the fair market value of the stock on the date of grant and which
becomes exercisable in annual installments over six years. Mr. White is eligible
to participate in the Bonus Program in 1997.
William Riley
Pierce E. Marks, Jr.
Michael B. Stubbs
Ronald J. Juvonen
L. Ward Edwards
4
<PAGE> 7
The following graph compares Moore-Handley's total stockholder return over
the last five fiscal years with the cumulative total return (assuming
reinvestment of dividends) of all U.S. companies traded on NASDAQ and of all
NASDAQ companies in the same U.S. Department of Commerce Standard Industrial
Classification (wholesale trade -- durable goods) as the Corporation.
<TABLE>
<CAPTION>
Wholesale Trade -
Measurement Period Moore-Handley, Durable Goods
(Fiscal Year Covered) Inc. NASDAQ Index Index
<S> <C> <C> <C>
1991 100.0 100.0 100.0
1992 102.5 116.4 101.7
1993 90.0 133.6 132.3
1994 95.0 130.6 114.4
1995 78.8 184.7 134.1
1996 65.0 227.2 137.5
</TABLE>
EXECUTIVE COMPENSATION
The following table sets forth all compensation for services in all
capacities to the Corporation and its subsidiary during the years 1994 - 1996 of
the Chief Executive Officer and each other executive officer of the Corporation
whose cash compensation exceeded $100,000.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
ANNUAL AWARDS
COMPENSATION ----------------------
------------ SECURITIES UNDERLYING
SALARY OPTIONS
YEAR ($) (#)
---- ------------ ----------------------
<S> <C> <C> <C>
Emery H. White........................................ 1996 $180,000
President and C.E.O................................. 1995 $ 80,682 100,000
William Riley......................................... 1996 $150,000
Chairman 1995 $150,000
1994 $150,000
Pierce E. Marks, Jr................................... 1996 $150,000
Vice Chairman 1995 $150,000
1994 $150,000
</TABLE>
5
<PAGE> 8
The following table sets forth information as to options outstanding as of
December 31, 1996 held by each of the executive officers named in the Summary
Compensation Table. No options were granted or exercised during 1996.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF
UNDERLYING UNEXERCISED UNEXERCISED IN-THE-MONEY
OPTIONS AT FY-END(#) OPTIONS AT FY-END ($)
NAME EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- ---- ------------------------- -------------------------
<S> <C> <C>
Pierce E. Marks, Jr............................... None/50,000(1) --/--
William Riley..................................... None/50,000(1) --/--
Emery H. White.................................... 18,181/81,819(2) --/--
</TABLE>
- ---------------
(1) Not exercisable until annual earnings per share of Common Stock reach $.85,
except that option becomes exercisable on January 12, 2001 or upon earlier
retirement at age 70 or over, until expiration of options on April 12, 2001.
(2) Exercisable in six annual installments commencing on June 5, 1996.
Pension Plan. The Moore-Handley, Inc. Salaried Pension Plan (the "Pension
Plan") is a defined benefit plan covering all salaried employees compensated on
a commission basis. Normal retirement benefits are based on an employee's final
average earnings and years of service and are payable to participants commencing
at age 65. Final average earnings are based on total salary and bonus but
exclude any income realized from stock options. Benefits are not reduced for
Social Security or other offset amounts.
The following table shows the combined estimated annual retirement benefits
payable to employees under the Pension Plan and the Corporation's prior Plan who
retire at age 65 at the stated levels of Final Average Earnings and years of
service at retirement.
<TABLE>
<CAPTION>
ANNUAL NORMAL RETIREMENT BENEFIT
FOR SPECIFIED YEARS OF SERVICE
----------------------------------------
10 20 30 40
FINAL AVERAGE EARNINGS YEARS YEARS YEARS YEARS
- ---------------------- ------- ------- ------- -------
<S> <C> <C> <C> <C>
$ 50,000............................................ $ 4,883 $ 9,765 $14,647 $19,530
75,000............................................ 8,008 16,015 24,023 32,030
100,000............................................ 11,133 22,260 33,398 44,520
125,000............................................ 14,258 28,515 42,773 57,030
150,000............................................ 17,383 34,765 52,148 69,530
175,000............................................ 20,508 41,015 61,523 82,030
200,000............................................ 23,633 47,265 70,898 94,530
</TABLE>
As of December 31, 1996 Messrs. Riley and Marks had 36 and 25 years of
service respectively, under the Pension Plan.
CERTAIN TRANSACTIONS
The cost of leasing office space, and related overhead costs, in Atlanta
and New York City used by Messrs. Marks and Riley, who spend a substantial
majority of their time serving as executive officers and directors of the
Corporation are shared by the Corporation and two unrelated manufacturing
companies. In 1996 these unrelated manufacturing companies paid an aggregate of
$120,000 to the Corporation, representing 25% of the cost to the Corporation of
maintaining such offices. Messrs. Riley and Marks are substantial stockholders
and directors of such unrelated companies, and Mr. Stubbs is a substantial
stockholder and director of one of such companies, but none of Messrs. Riley,
Marks or Stubbs participates in the day-to-day management thereof.
6
<PAGE> 9
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. Riley and Marks, who comprise the Executive Committee, and Messrs.
Stubbs and Juvonen, who comprise the Audit Committee, were involved in the
determination of compensation for executive officers of the Corporation for the
past fiscal year.
Messrs. Riley and Marks, executive officers of the Corporation, determined
the compensation payable to executive officers other than themselves and did not
participate in any discussion regarding their own compensation. Messrs. Stubbs
and Juvonen, outside directors of the Corporation, determined the compensation
payable to Messrs. Riley and Marks.
PROPOSAL TO APPROVE INCREASE IN SHARES
AUTHORIZED FOR ISSUANCE UNDER THE 1991
INCENTIVE COMPENSATION PLAN
On April 12, 1991, the Board of Directors adopted the Moore-Handley, Inc.
1991 Incentive Compensation Plan (the "Incentive Plan") to assist in attracting
and retaining skilled management personnel and strengthening the mutuality of
interests between them and the Corporation's shareholders. On January 22, 1997,
the Board of Directors approved an amendment (the "Proposed Amendment") to the
Incentive Plan increasing the maximum number of shares of the Corporation's
common stock ("Stock") that may be issued under the Incentive Plan from 350,000
to 460,000. The principal features of the Incentive Plan are summarized below.
The Incentive Plan provides for the grant by a Committee of disinterested
directors (the "Committee") of stock options, stock appreciation rights,
restricted stock grants and deferred stock grants to officers and other key
executive and management employees of the Corporation and its subsidiaries, and
also provides for the automatic grant of stock options ("Special Options") to
non-employee directors of the Corporation ("Independent Directors") and certain
designated officer-directors of the Corporation ("Officer-Directors"). The key
management employees eligible to receive grants and awards under the Incentive
Plan (other than Special Options) are selected by the Committee.
The maximum number of shares of Stock that may be issued under the
Incentive Plan is currently 350,000 and is proposed to be increased to 460,000,
which may be either authorized and unissued shares or shares repurchased and
held in the treasury. In case of a stock split, stock dividend,
recapitalization, merger, consolidation or similar change affecting the Stock,
appropriate adjustments will be made in the number of shares issuable under the
Incentive Plan and subject to outstanding grants and awards and in the exercise
price of outstanding options. If shares subject to an option are not issued
before the expiration or termination of such option or if shares subject to
restricted or deferred stock award are forfeited, those shares would become
available for inclusion in future grants or awards. Prior to the grant of
100,000 options to officers and employees described below under "Option Grants"
and approval of the Proposed Amendment, 1,000 shares remained authorized and
available for issuance under the Incentive Plan. After giving effect to the
Proposed Amendment and the grants to officers and employees, 11,000 shares would
remain authorized and available for issuance under the Incentive Plan.
The Committee is composed of two or more directors of the Corporation who
are not eligible to receive grants or awards under the Incentive Plan (other
than automatic grants of Special Options). The Committee will have the authority
to administer the Incentive Plan (except with respect to Special Options).
Pursuant to that authority, the Committee may establish rules and regulations
for the operation of the Incentive Plan, select employees to receive grants and
awards thereunder (other than Special Options) and determine the number of
shares subject to such grants and awards and the exercise price, restrictions on
exercisability, transfer and vesting and other terms and conditions thereof. The
Committee may grant options under the Incentive Plan in exchange for outstanding
options (other than Special Options) or awards, including options that are more
favorable to the employee, and the shares covered by the option surrender in
exchange will be come available for future grants or awards under the Incentive
Plan.
7
<PAGE> 10
GRANTS AND AWARDS (OTHER THAN SPECIAL OPTIONS)
Stock Options. The Committee may grant eligible employees non-qualified
options and options qualifying as incentive stock options under the Internal
Revenue Code of 1986, as amended (the "Code"). The option price of an incentive
stock option must be not less than the fair market value of the Stock on the
date of grant. The option price for a non-qualified stock option must be not
less than 50% of the fair market value of the Stock on the date of grant. To
exercise an option, an employee must pay the option price in cash, or if
permitted by the Committee by delivering a note or shares of Stock already owned
by the employee, including the shares of restricted or deferred stock awards,
that have a fair market value equal to the option price. The Incentive Plan
would authorize the Committee to permit "pyramiding", which involves the
exercise price of an option in successive stages using as the payment at each
stage shares which have been acquired under the option in preceding stages.
The term of each option will be fixed by the Committee and may not exceed
10 years from the date of grant. The Committee will determine the time or times
at which each option granted to an employee may be exercised. Such options may
be made exercisable in installments, and the exercisability of options may be
accelerated by the Committee.
Stock Appreciation Rights. The Committee may grant an employee a stock
appreciation right (a "SAR") in conjunction with an option granted under the
Incentive Plan. If a grantee exercises a SAR, the grantee will receive an amount
in cash equal to the excess of the fair market value of the Stock at the time of
exercise over the exercise price of the option. If a SAR is exercised, the
corresponding option terminates, and if a stock option is exercised, any
corresponding SAR terminates.
Restricted Stock Grants. The Committee may also issue or transfer shares
of Stock to an employee under a restricted stock grant. The grant would set
forth a restriction period (including a period related to the attainment of
performance goals) during which the shares of restricted stock could not be sold
or otherwise transferred and would remain subject to forfeiture. During this
period, the employee would generally have all the rights of a stockholder,
including the right to vote the shares and receive dividends.
Deferred Stock Grants. The Committee may also make deferred stock awards
to employees under the Incentive Plan. These are non-transferrable awards
entitling the employee to receive shares of Stock without any payment in one or
more installments at a future date or dates, as determined by the Committee.
Receipt of deferred stock may be conditioned on such matters as the Committee
shall determine, including continued employment or attainment of performance
goals. Any deferral restrictions under a deferred stock award may be accelerated
or waived by The Committee at any time prior to termination of employment.
Amounts equal to cash dividends on the deferred stock may be paid to the
employee or deem reinvested in additional shares of deferred stock.
Termination of Employment. Unless otherwise determined by the Committee,
in the event of termination of employment by reason of retirement, disability or
death, any option or SAR held by the employee may thereafter be exercised to the
extent it was exercisable at the time of termination (or on such accelerated
basis as the Committee may determine) for a period 3 years (or such shorter
period as the Committee shall determine at grant), subject in each case to the
stated term of the option. Shares of restricted stock subject to restriction or
deferred stock will vest or be forfeited under comparable rules. In the event of
termination of employment for any reason other than retirement, disability or
death, unless otherwise determined by the Committee, any options and SARs held
by the employee will be canceled and any shares of restricted or deferred stock
then outstanding as to which the period of restriction has not lapsed will be
forfeited.
Change in Control Provisions. The Incentive Plan provides that, except as
provided below, in the event of a "change in control" (as defined in the
Incentive Plan), (i) all outstanding stock options (other than Special Options)
and all SARs outstanding at least six months will become immediately
exercisable: (ii) the restrictions and deferral limitations applicable to
outstanding restricted stock and deferred stock will lapse and such stock will
fully vest: and (iii) all SARs will be settled in cash in an amount equal to the
excess of the highest price paid (or offered) for the Stock in the Change of
Control transaction during the preceding 60-day period over the exercise price
of such SARs.
8
<PAGE> 11
Option Grants. The following outlines the options that have been granted
under the Plan. All such options have an exercise price equal to the market
value of the Stock on the date of grant and have a term of 10 years.
<TABLE>
<CAPTION>
DATE OF NO. OF OPTION
GRANT SHARES PRICE EXERCISABLE
------- ------- ------ -----------
<S> <C> <C> <C>
April 12, 1991......................... 80,000(a) $3.75 Four equal installments commencing on
the first anniversary of the grant.
June 5, 1995........................... 100,000 5.50 Six equal installments commencing on
the first anniversary of the grant.
August 12, 1996........................ 25,000 3.50 Five equal installments commencing on
the first anniversary of the grant.
September 16, 1996..................... 50,000 3.625 Five equal installments commencing on
the first anniversary of the grant.
November 1, 1996....................... 75,000(b) 3.375 Five equal installments commencing on
the first anniversary of the grant.
January 1, 1997........................ 25,000(b) 3.267 Five equal installments commencing on
the first anniversary of the grant.
</TABLE>
- ---------------
(a) Of the 80,000 shares granted on this date, 40,000 have been forfeited and
30,000 have been exercised.
(b) These options were granted subject to the approval of the Proposed Amendment
to the Incentive Plan that increases the number of shares authorized for
issuance under the Incentive Plan at the 1997 Annual Meeting.
SPECIAL OPTIONS
Independent Director Options. The Incentive Plan provides for the
automatic grant to each non-employee director of the Corporation on the day
following each Annual Meeting of Stockholders during the term of the Incentive
Plan, commencing with the 1991 Annual Meeting, of a non-qualified Special
Options to purchase 2,000 shares of the Corporation's Common Stock, at an
exercise price equal to the fair market value of such stock on the date of
grant. Each such option shall become exercisable six months after the date of
grant and shall have a term of 10 years from the date of grant, subject to
termination on the third anniversary of the date the option holder ceases to be
a director of the Corporation. A total of 24,000 Special Options have been
granted to date.
Officer-Director Options. The Incentive Plan also provides for the
automatic grant as of the date of adoption of the Incentive Plan (April 12,
1991), of non-qualified Special Options to the three officer-directors of the
Corporation covering the following number of shares: William Riley,
Chairman -- 50,000 shares; Pierce E. Marks, Jr. then President and Chief
Executive Officer -- 50,000 shares; and L. Ward Edwards, Vice President --
Finance, Treasurer and Secretary -- 10,000 shares. Such Special Options have an
exercise price of $5.36 per share, which was the average cost to the Company of
shares repurchased and held in treasury as of the date of grant and was
approximately 143% of the market value of the Corporation's Common Stock on the
date of grant. These Special Options will become exercisable, if at all, at the
first to occur of (i) the date the Corporation's independent auditors certify,
if ever, that the Corporation's annual consolidated earnings per share of Stock
for any fiscal year during the term of the Special Options equal or exceed $.85
per share, or (ii) three months before the tenth anniversary of the date of
grant if the option holder is still an employee of the Corporation or any
subsidiary, or (iii) the date of retirement of the option holder from employment
by the Corporation and its subsidiaries, if he is then age 70 or older. These
Special Options have a term of ten years, but will terminate on the date the
holder ceases to be an employee of the Corporation or a subsidiary or a director
of the Corporation if they have not become exercisable on such date, or on the
third anniversary of such date if they are exercisable on such date. The
Corporation's annual consolidated earnings per share of Stock have not equaled
or exceeded $.85 per share during any fiscal year since the date of issuance of
such Special Options and, accordingly, they are not yet exercisable.
FEDERAL INCOME TAX CONSEQUENCES
Stock Options. The grant of an incentive stock option or a non-qualified
stock option would not result in income for the grantee or in a deduction for
the Corporation.
9
<PAGE> 12
The exercise of a non-qualified stock option generally would result in
ordinary income for the grantee and a deduction for the Corporation measured by
the difference between the fair market value at the time of exercise of the
shares acquired (or the date on which any substantial risk of forfeiture lapses)
and the option price. The same tax treatment should apply even if the grantee is
an officer or director subject to the short swing trading provisions of Section
16(b) of the Securities Exchange Act of 1934 (a"16(b) Person"), so long as the
shares acquired pursuant to the exercise of the option are not disposed of
within six months of the date the option was granted. Income tax withholding
would be required at the time income is recognized.
The exercise of an incentive stock option would not result in ordinary
income for an employee if the employee (i) does not dispose of the shares within
two years after the date of grant of the option or one year after the exercise,
and (ii) is an employee of the Corporation or a subsidiary from the date of
grant until at least three months before the exercise date. If these
requirements are met, the employee's basis in the shares upon later disposition
would be the option price, and any gain realized upon disposition of such shares
would be taxed to the employee as long-term capital gain, and the Corporation
would not be entitled to any deduction. The excess of the market value of the
shares on the exercise date over the option price is considered as income for
purposes of the alternative minimum tax; therefore, a grantee is potentially
subject to the minimum tax on such excess.
If the employee disposes of the shares acquired under an incentive stock
option prior to the expiration of either of the holding periods described above,
the employee would recognize ordinary income, in the year of disposition and the
Corporation would be entitled to a deduction, equal to the excess of the fair
market value of the shares on the exercise date or the amount realized on
disposition, whichever is the lesser, over the option price. If the amount
realized on disposition exceeds the fair market value at the date of exercise,
such excess would be treated as long-term or short-term capital gain, depending
on whether the shares are held for the requisite holding period.
SARs and Deferred Stock Awards. The grant of a SAR or deferred stock award
would not result in taxable income for the grantee or in a deduction for the
Corporation. Upon the exercise of a SAR or the receipt of shares under a
deferred stock award, the grantee would recognize ordinary income and the
Corporation would be entitled to a deduction measured by the cash or the fair
market value of the shares received. Income tax withholding would be required at
the time income is recognized.
Restricted Stock Grant. The grant of restricted stock will not result in
taxable income for the grantee or in a deduction for the Corporation, unless the
grantee timely elects to have income recognized (at the fair market value of the
restricted stock) at the time of the grant. Absent such election, dividends paid
while the stock remains subject to such restrictions would be taxable to the
recipient and deductible by the Corporation as compensation. At the time the
restrictions lapse, the grantee would recognize ordinary income, and the
Corporation would be entitled to a deduction, equal to the fair market value of
the shares at the time of lapse. Income tax withholding would be required.
The forgoing is a summary of the principal federal income tax consequences
of transactions under the Incentive Plan. It does not describe all federal tax
consequences under the Incentive Plan, nor does it describe state or local tax
consequences.
OTHER INFORMATION
The Board of Directors may amend or terminate the Incentive Plan at any
time, but no such termination shall affect any stock options, SARs, restricted
stock awards or deferred stock awards then outstanding under the Incentive Plan,
and, without approval of the Corporation's stockholders, no such amendment may
increase the number of shares of Stock issuable under the Incentive Plan;
decrease the exercise price under any option to less than 50 percent of the fair
market value of the Stock on the date of grant: materially change the class of
employees eligible to participate in the Incentive Plan; extend the maximum
option period beyond 10 years; or
10
<PAGE> 13
alter the provisions of the Incentive Plan relating to Special Options. Unless
terminated by action of the Board, the Incentive Plan will continue for a
ten-year term expiring April 12, 2001.
The following table provides information with respect to all stock options
granted under the Incentive Plan since its adoption on April 12, 1991 and
outstanding as of March 31, 1996 held by (i) each officer named in the Summary
Compensation Table above:; (ii) all executive officers of the Corporation as a
group; (iii) all directors of the Corporation who are not officers; and (iv) all
employees, including current officers who are not executive officers, as a
group. All such options have a term of ten years. No option granted under the
Incentive Plan have be exercised and no stock appreciation rights, restricted
stock awards or deferred stock awards have been granted.
<TABLE>
<CAPTION>
EXERCISE
NUMBER OF PRICE
NAME OF INDIVIDUAL TYPE OF OPTION SHARES PER SHARE
------------------ -------------- --------- ------------
<S> <C> <C> <C>
Emery H. White........................................ Non-Qualified(1) 100,000 $ 5.50
William Riley......................................... Special(2) 50,000 $ 5.36
Pierce E. Marks, Jr................................... Special(2) 50,000 $ 5.36
All eight executive officers as a group............... Various(3) 335,000 $3.267-$5.50
All directors who are not officers.................... Special(4) 24,000 $ 3.50-$5.00
All employees as a group.............................. Various(5) 395,000 $3.267-$5.50
</TABLE>
- ---------------
(1) Becomes exercisable in six annual installments from June 5, 1996 to June 5,
2002.
(2) Not exercisable until annual earnings per share of Stock reach $.85, except
that option becomes exercisable on January 12, 2001 or upon earlier
retirement at age 70 or over until expiration of option on April 12, 2001.
(3) In addition to those granted to the officers listed individually, this
includes a 10,000 share Special Option of the type noted in item (2) above;
a 10,000 share Non-Qualified Option at an exercise price of $3.75 that is
now exercisable; a 25,000 share Incentive Option at an exercise price of
$3.50 which becomes exercisable in five equal, annual installments beginning
on August 12, 1997; a 50,000 share Incentive Option at an exercise price of
$3.625 which becomes exercisable in five equal, annual installments
beginning on September 16, 1997; a 15,000 share Incentive Option at an
exercise price of $3.375 which becomes exercisable in five equal, annual
installments beginning on November 1, 1997; and a 25,000 share Incentive
Option at an exercise price of $3.267 which becomes exercisable in five
equal, annual installments beginning on January 13, 1998.
(4) On the day following the 1991 Annual Meeting and each Annual Meeting
thereafter each non-officer director was automatically granted a Special
Options for 2,000 shares at market value on that day, which becomes
exercisable six months after grant.
(5) In addition to those granted to officers 60,000 shares in Incentive Options
where granted to employees with an exercise price of $3.375 which become
exercisable in five equal, annual installments beginning on November 1,
1997.
STOCKHOLDER APPROVAL
The affirmative vote of the holders of a majority of shares of the Stock
present in person or represented by proxy and entitled to vote at the 1997
Annual Meeting is required for approval of the Proposed Amendment. Broker
non-votes will have no effect on the outcome of this proposal. Unless so
approved, the non-qualified stock options previously granted will terminate, and
no further options or awards will be granted or made under the Incentive Plan
(including Special Options to Independent Directors) beyond those for which
shares of Stock remain available for issuance under the Incentive Plan.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDER VOTE "FOR"
APPROVAL OF THE PROPOSED AMENDMENT TO THE INCENTIVE PLAN.
11
<PAGE> 14
SECURITY OWNERSHIP BY MANAGEMENT
The following table gives information concerning the beneficial ownership
of the Corporation's Common Stock on March 3, 1997 by (i) each nominee for
election as a director, (ii) each of the executive officers named in the Summary
Compensation Table, and (iii) all directors and executive officers of the
Corporation as a group.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
BENEFICIAL OWNERSHIP(1)
------------------------
SHARES PERCENT
BENEFICIALLY OF
BENEFICIAL OWNERS OWNED CLASS
- ----------------- ------------ --------
<S> <C> <C>
William Riley(2)............................................ 376,458 17.5%
Pierce E. Marks, Jr.(2)(3).................................. 302,458 14.0%
Michael B. Stubbs(4)(6)..................................... 225,915 10.5%
Ronald J. Juvonen(5)(6)..................................... 138,500 6.4%
L. Ward Edwards(2).......................................... 58,522 2.7%
Emery H. White(7)........................................... 23,181 1.1%
All directors and executive officers as a group (10
persons)(8)............................................... 1,142,034 53.7%
</TABLE>
- ---------------
(1) The information as to beneficial ownership is based on statements furnished
to the Corporation by the beneficial owners. Except as indicated in the
footnotes which follow, such owners have sole voting power and sole
investment power with respect to all shares listed above and all such shares
are owned directly (i.e., not by virtue of an option or other right to
acquire).
(2) Does not include shares covered by Special Options granted under Incentive
Plan which are not presently exercisable -- see "Executive Compensation and
Other Information". The address of Messrs. Riley, Marks and Edwards is
Moore-Handley, Inc. P. O. Box 2607, Birmingham, Alabama 35202.
(3) Does not include 54,000 shares owned by Mr. Marks' children, as to which Mr.
Marks disclaims beneficial ownership.
(4) Includes an aggregate of 73,500 shares held of record by two trusts
established for Mr. Stubbs' children; Mr. Stubbs, who is a co-trustee of
such trusts, disclaims beneficial ownership of such shares. Mr. Stubbs'
address is Lyon, Stubbs & Tompkins, Inc., 345 Park Avenue, New York, New
York 10154.
(5) Includes 121,000 shares owned by a limited partnership of which Mr. Juvonen
is a general partner with shared voting and investment power. Mr. Juvonen
disclaims beneficial ownership of the proportion of shares owned by the
limited partnership in which he has no economic interest. Mr. Juvonen's
address is Downtown Associates, 920 East Baltimore Pike, Kennett Square,
Pennsylvania 19348.
(6) Includes 12,000 shares covered by presently exercisable Special Options
granted under Incentive Plan -- see "Information Regarding the Board of
Directors".
(7) Includes 18,181 shares covered by presently exercisable Incentive Stock
Options granted under Incentive Plan.
(8) Includes 45,181 shares covered by non-qualified stock options granted under
Incentive Plan which are presently exercisable or which become exercisable
within 60 days and 24,000 shares covered by Special Options which are
presently exercisable.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Emery H. White, President and Chief Executive Officer, failed to file a
Form 3 showing no stock ownership at the time he became an executive officer of
the Company and a Form 4 or Form 5 showing the purchase of 5,000 shares of the
Company's Common Stock on May 28, 1996. A Form 5 will be filed in March, 1997.
12
<PAGE> 15
SECURITY OWNERSHIP BY CERTAIN BENEFICIAL OWNERS
Set forth below is certain information concerning those persons who, to the
Corporation's knowledge, are beneficial owners of more than 5% of the Common
Stock.
<TABLE>
<CAPTION>
SHARES OF PERCENT
NAME AND ADDRESS COMMON STOCK OF CLASS
---------------- ------------ --------
<S> <C> <C>
Gilder, Gagnon & Co. ....................................... 413,615 18.7%
1775 Broadway
New York, NY 10111
</TABLE>
Based on a Schedule 13G dated March 14, 1996 filed with the SEC by Gilder,
Gagnon & Co. ("Gilder"), a broker/dealer registered under section 15 of the
Securities Exchange Act of 1934, as amended, in which Gilder reported that
413,615 shares of Common Stock were held in the accounts of customers, partners
or families of partners as of December 31, 1995. Gilder reported that one or
more of its partners or employees may have sole dispositive power with respect
to 138,875 of such shares, although Gilder disclaimed beneficial ownership of
any such shares.
INDEPENDENT AUDITORS
Ernst & Young LLP, which served as the Corporation's independent auditors
in 1996 has been designated by the Board of Directors as the Corporation's
independent auditors for 1997. No representative of that firm will be present at
the Annual Meeting. Accordingly, no representative of that firm will have an
opportunity to make a statement or will be available to respond to questions.
SHAREHOLDER PROPOSALS
It is anticipated that the 1998 Annual Meeting of Shareholders will be held
on April 23, 1998. In accordance with regulations issued by the Securities and
Exchange Commission, shareholder proposals intended for presentation at that
meeting must be received by the Secretary of the Corporation no later than
December 24, 1997 if such proposals are to be considered for inclusion in the
Corporation's Proxy Statement.
OTHER MATTERS
Management knows of no matters that are to be presented for action at the
meeting, other that those set forth above. If any other matters properly come
before the meeting, the persons named in the enclosed form of proxy will vote
the shares represented by proxies in accordance with their best judgment on such
matters.
Proxies will be solicited by mail and may also be solicited in person or by
telephone by some regular employees of the Corporation. All expenses in
connection with the preparation of proxy materials and the solicitation of
proxies will be borne by the Corporation.
By Order of the Board of Directors
L. Ward Edwards,
Vice President -- Finance,
Treasurer and Secretary
P. O. Box 2607
Birmingham, Alabama 35202
March 28, 1997
13
<PAGE> 16
APPENDIX
PROXY MOORE-HANDLEY, INC.
ANNUAL MEETING OF SHAREHOLDERS, APRIL 24, 1997
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF MOORE-HANDLEY, INC.
The undersigned hereby appoints WILLIAM RILEY, PIERCE E. MARKS, JR. and L.
WARD EDWARDS, and each of them, the proxies of the undersigned with power of
substitution to each, to vote all shares of Common Stock of the Corporation that
the undersigned is entitled to vote at the Annual Meeting of Shareholders of the
Corporation to be held at the office of The Corporation Trust Company,
Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801 on
April 24, 1997 at 10:00 A.M. and any adjournment thereof, on all matters coming
before said meeting.
Election of Directors, Nominees: William Riley, Pierce E. Marks, Jr., L. Ward
Edwards, Michael B. Stubbs and Ronald J. Juvonen
1. ELECTION OF DIRECTORS: FOR [ ] WITHHELD [ ]
FOR, except vote withheld from the following nominee(s):
-----------------------------------------------------------------------------
2. Increase in shares authorized for issuance under the Corporation's 1991
Incentive Compensation Plan:
FOR [ ] WITHHELD [ ] ABSTAIN [ ]
3. In their discretion, the proxies are authorized to vote upon such other
matters as may properly come before the meeting.
This Proxy when properly executed will be voted in the manner directed herein
by the undersigned shareholder. If no contrary instructions are indicated, this
Proxy will be voted FOR the election of the Nominees as Directors and FOR the
increase in shares authorized under the Corporation's 1991 Incentive
Compensation Plan.
PLEASE MARK, SIGN AND DATE THIS PROXY ON THE REVERSE SIDE AND RETURN IT
PROMPTLY IN THE ENCLOSED ENVELOPE.
PLEASE MARK, SIGN AND DATE THIS PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED
ENVELOPE.
Please sign name(s) exactly as
printed hereon. Joint owners
should each sign. When signing
as attorney, executor,
administrator, trustee or
guardian, give full title as
such. If a Corporation, sign
in full corporate name by
President or other authorized
officer. If a partnership,
sign in partnership name by
authorized person.
Date:
------------------------
------------------------------
Signature
------------------------------
Signature
