<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 23, 1998
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 23, 1998, at 10:00 A.M., for the following purposes:
(1) To elect directors for the ensuing year;
(2) To consider and vote upon a proposal to approve the
Moore-Handley, Inc. Employee Stock Purchase Plan, as described in the
accompanying Proxy Statement;
(3) To transact such other business as may properly come before the
meeting.
Only shareholders of record at the close of business on March 6, 1998 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 13, 1998 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 31, 1998
IT IS IMPORTANT THAT THE ENCLOSED PROXY CARD BE
COMPLETED AND RETURNED PROMPTLY
<PAGE> 3
MOORE-HANDLEY, INC.
PROXY STATEMENT
MARCH 31, 1998
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 23, 1998.
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
approval of The Moore-Handley, Inc. Employee Stock Purchase 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 1997, 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 April 3, 1998.
VOTING SECURITIES
The Corporation has only one class of voting securities, its Common Stock.
On March 6, 1998, 1,854,543 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 6, 1998 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, Chief
Executive Officer since April, 1997; Age 66.
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 69.
L. Ward Edwards -- Vice President -- Finance, Treasurer, Secretary and
Director of the Corporation since 1981; Age 61.
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 49.
Ronald J. Juvonen -- General Partner, Downtown Associates, New York, New
York (investment partnership). Director of the Corporation since 1989; Age 57.
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.
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 1997 fiscal year the Board of Directors held five meetings, the
Executive Committee met formally once and informally numerous times, and the
Audit Committee met twice. 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 1997.
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 1997, 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. Gaines is also low compared to competitive practice. He received a
substantial grant of stock options in 1997 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 five years. Mr. Gaines is
eligible to participate in the Bonus Program in 1998.
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 The Nasdaq Stock
Market(SM) and of all The Nasdaq Stock Market(SM) 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, The Nasdaq Stock Durable Goods
(Fiscal Year Covered) Inc. Market Index Index
<S> <C> <C> <C>
1992 100.0 100.0 100.0
1993 87.8 114.8 130.2
1994 92.7 112.2 112.5
1995 76.8 158.7 132.0
1996 63.4 195.2 136.7
1997 53.0 239.5 138.3
</TABLE>
EXECUTIVE COMPENSATION
The following table sets forth all compensation for services in all
capacities to the Corporation and its subsidiary during the years 1995-1997 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>
Michael J. Gaines................................... 1997 $139,000 75,000
President and COO
William Riley....................................... 1997 $150,000
Chairman and C.E.O. 1996 $150,000
1995 $150,000
Pierce E. Marks, Jr................................. 1997 $150,000
Vice Chairman 1996 $150,000
1995 $150,000
</TABLE>
5
<PAGE> 8
The following table sets forth information as to options outstanding as of
December 31, 1997 held by each of the executive officers named in the Summary
Compensation Table. No options were exercised during 1997.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF SECURITIES UNEXERCISED IN-THE-
UNDERLYING UNEXERCISED MONEY
OPTIONS AT FY-END(#) OPTIONS AT FY-END($)
NAME EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- ---- ------------------------- -------------------------
<S> <C> <C>
Pierce E. Marks, Jr................................ None/50,000(1) --/--
William Riley...................................... None/50,000(1) --/--
Michael J. Gaines.................................. 5,000/20,000(2) --/--
Michael J. Gaines.................................. 10,000/50,000(3) --/--
</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 five annual installments commencing on January 13, 1998.
(3) Exercisable in five annual installments commencing on April 2, 1998.
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, 1997 Messrs. Riley, Marks and Gaines had 37, 26 and 1
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 1997 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 THE MOORE-HANDLEY, INC.
EMPLOYEE STOCK PURCHASE PLAN
On March 27, 1998, the Board of Directors adopted The Moore-Handley, Inc.
Employee Stock Purchase Plan (the "Plan") to encourage and facilitate stock
ownership by Employees by providing a continued opportunity to purchase Common
Stock, generally through voluntary after-tax payroll deductions. The portion of
the Plan described under the heading "Qualified Stock Purchases" is intended to
comply with the requirements of Section 423 of the Internal Revenue Code of
1986, as amended (the "Code"). The principal features of the Plan are summarized
below, but reference is made to the copy of the Plan, attached as Exhibit A to
this Proxy Statement, for a complete description of the terms thereof. All
capitalized terms not defined herein shall have the meaning ascribed to them in
the Plan.
Qualified Stock Purchases. Up to a maximum of 300,000 shares of the
Corporation's Common Stock, less the number of shares purchased by Current
Option Holders on or before June 30, 1998 (see "Non-Qualified Stock Purchases"
below) will become available for purchase by eligible Employees through payroll
deduction.
Under the terms of the Plan, each eligible Employee will be granted an
Option, with a term of 27 months, to purchase the number of shares of Common
Stock as determined by the Plan Administrator. There shall be an Individual
Account for each participating Employee to which shall be credited the amount of
any Payroll Contributions and the number of full or fractional shares of Common
Stock that are purchased by such Employee. An Employee may authorize Payroll
Contributions in terms of whole percentages of $25,000 or less per year or
purchase shares of Common Stock with a Fair Market Value of $25,000 or less per
year. The price per share of Common Stock paid by each participating Employee
shall be 85% of the Fair Market Value on the Date of Grant of the Option to
purchase such shares. There are approximately 402 Employees eligible to
participate under the part of the Plan that is intended to be qualified under
Section 423 of the Code.
Any shares of Common Stock subject to an Option which for any reason is
canceled, terminated or otherwise settled without the issuance of any Common
Stock shall again be available for purchase under the Plan.
Deduction Changes and Plan Withdrawals. Subject to Plan maximums and the
submission of proper notice, an Employee may increase or decrease his Payroll
Contributions. Also, an Employee may at any time, cease participation in the
Plan and withdraw all or any portion of the shares of Common Stock and cash, if
any, in his Individual Account. Upon the termination of an Employee's
employment, all shares and any cash held in his Individual Account shall be
distributed to him as soon as practicable thereafter.
Non-Qualified Stock Purchases. The Plan provides that each of the 12
Current Option Holders will have the opportunity to purchase the number of
shares of Common Stock equal to the number of their currently held stock
options. A Current Option Holder may participate by surrendering for
cancellation all stock options currently held. The purchase price for such
shares shall be $2.625 per share and may be paid in cash or with a Promissory
Note. The terms of the Promissory Note provide for the entire principal balance
to become due and payable on the third anniversary of the purchase of shares.
Interest on the Promissory Note will be payable annually at the rate of interest
paid by the Company on its principal revolving line of credit on
7
<PAGE> 10
the date of purchase. The closing of any purchase by the Current Option Holders
must occur on or before June 30, 1998.
In addition to the right of the Current Option Holders to purchase shares
of Common Stock described in the preceding paragraph, the Plan also permits 5%
owners who are not eligible to participate under the part of the Plan that is
intended to qualify under Section 423 of the Code to be granted Nonqualified
Options. These purchases are subject to the same terms and conditions as those
described under "Qualified Stock Purchases" above, except that the exercise
price of the Options shall not be less than 100% of the Fair Market Value on the
Date of Grant. There are 2 Current Option Holders eligible to participate under
the part of the Plan that is not intended to qualify under Section 423 of the
Code.
Other Information. The Board of Directors may at any time amend the Plan
in any respect; provided that shareholder approval shall be required to amend
the number of shares of Common Stock reserved for issuance under the Plan, or a
decrease in the per share price, or alter the requirements for eligibility to
participate in the Plan. The Plan shall terminate at any time at the discretion
of the Board and all shares of Common Stock and cash, if any, in the Individual
Accounts of participating Employees shall be distributed to each Employee. The
closing sale price of the Common Stock as reported on The Nasdaq Stock
Market(SM) on March 25, 1998 was $2.3125.
The following table sets forth the number of Options that could have been
held by the named executives had the plan been in effect at the end of the last
fiscal year.
NEW PLAN BENEFITS
THE MOORE-HANDLEY, INC. EMPLOYEE STOCK PURCHASE PLAN
<TABLE>
<CAPTION>
NAME AND POSITION NUMBER OF OPTIONS(2)(3)
- ----------------- -----------------------
<S> <C>
William Riley(1)............................................ 2,100
Chairman and CEO
Pierce E. Marks, Jr.(1)..................................... 2,100
Vice Chairman
Michael J. Gaines........................................... 1,200
President and COO
Executive Group (6 persons)................................. 10,200
Non Executive Officer Employee Group (4 persons)............ 3,000
</TABLE>
- ---------------
(1) Messrs. Riley and Marks are not permitted to participate under the portion
of the Plan that is intended to satisfy the requirements of Section 423 of
the Code, because they own more than 5% of the Common Stock, therefore
Options that would have been granted to them if the Plan was in place at the
end of the last fiscal year would have been granted at 100% of the Fair
Market Value as of the Date of Grant.
(2) Options that would have been granted to Mr. Gaines, the Executive Group
(other than Messrs. Riley and Marks) and the Non-Executive Officer Employee
Group would have been made under the portion of the Plan that is intended to
qualify under Section 423 of the Code at a price equal to 85% of the Fair
Market Value at the Date of Grant.
(3) The dollar value of the Options that would have been granted if the Plan had
been in place at the end of the last fiscal year is not determinable.
FEDERAL INCOME TAX CONSEQUENCES
Options granted pursuant to Section 423 of the Code
Under present law, Options granted under Section 423 of the Code are
subject to the following federal income tax consequences:
The amounts deducted from the Employee's paycheck will be subject to
applicable withholding and taxed as ordinary income. The Employee will not
be required to report any taxable income or pay any tax
8
<PAGE> 11
at the time an Option is exercised. If the Employee holds any share of
Common Stock transferred to such Employee upon the exercise of an Option
for more than two years after the Date of Grant and for more than one year
after the Date of Exercise, then any gain realized upon the sale or other
disposition of that share will be taxed as long-term capital gain, and any
loss will be a long-term capital loss, except that an amount equal to the
lesser of (a) the excess of the Fair market Value of the shares at the time
the Option was granted over the price at which such Option could have been
exercised at that time if it had then been exercisable and (b) the amount,
if any, by which the Fair Market Value of the share at the time of such
deposition exceeds the price actually paid for the share under the Option,
will be taxed as ordinary income in the taxable year such sale or other
disposition occurs. If the Employee disposes of the share of Common Stock,
such amount of ordinary income realized upon the sale or other disposition
of the share will increase the Employee's tax basis in the share for
determining gain or loss upon such sale or other disposition of the share.
The Company will be entitled to a deduction for tax purposes at the same
time and in the same amount as the Employee is considered to have realized
ordinary income in connection with such a disposition.
If the Employee disposes of any share of Common Stock transferred to
such Employee on the exercise of an Option within two years after the Date
of Grant or within one year from the Date of Exercise, the Employee should
report as ordinary income for the taxable year in which the disposition
occurs the amount by which the Fair Market Value of such share on the Date
of Exercise of such Option exceeded the amount the Employee paid for such
share. Any such ordinary income will increase the Employee's tax basis for
the purpose of determining gain or loss on the sale or exchange of the
share. The Employee will be considered to have disposed of a share of
Common Stock if such Employee sells, exchanges, makes a gift or transfers
(except by pledge, tax free reorganization or by transfer on death) legal
title to the share. Any gain or loss on the sale or exchange for a share
will generally be a short-term gain or loss if the share was held for one
year or less and a long-term capital gain or loss if the share was held
more than a year. The Company will be entitled to a deduction for federal
income tax purposes at the same time and in the same amount as the Employee
is considered to have realized ordinary income in connection with such a
disposition. If the Employee dies holding any share acquired by such
Employee upon the exercise of an Option, an amount equal to the lesser of
(a) the excess of the Fair Market Value of the share at the time the Option
was granted over the price at which such Option could have been exercised
and (b) the amount, if any, by which the Fair Market Value of the share at
the date of death exceeds the price actually paid for the share under the
Option will be included in the Employee's gross income as ordinary income
for the year of such Employee's death. Under these circumstances, the
Company is not allowed an income tax deduction in connection with an
Option.
NONQUALIFIED OPTIONS
There will be no federal income tax consequences to either the Employee or
the Company upon the grant of a Nonqualified Option. Generally, upon the
exercise of a Nonqualified Option the Employee will realize ordinary income in
an amount equal to the excess of the Fair Market Value of the shares of Common
Stock received on the Date of Exercise over the Option price of the shares. The
Company will generally be entitled to a federal income tax deduction in the same
amount.
Any ordinary income realized by an Employee upon exercise of a Nonqualified
Option will increase his or her tax basis in the Common Stock thereby acquired.
Upon the sale of Common Stock acquired by exercise of a Nonqualified Option, an
Employee will realize long term or short term capital gain or loss, depending on
the length of time that the Employee has held the shares of Common Stock. The
holding period for capital gains purposes begins on the Date of Exercise
pursuant to which such shares were acquired.
If the Company delivers cash to buy an Employee's Nonqualified Option, the
Employee will recognize ordinary income in an amount equal to the cash paid. An
amount equal to the ordinary income recognized by the Employee will be
deductible by the Company.
An Employee who surrenders shares of Common Stock in payment of the
exercise price of a Nonqualified Option will not recognize gain or loss on his
or her surrender of such shares. Of the shares
9
<PAGE> 12
received in such an exchange, the number of shares equal to the number of shares
surrendered will have the same tax basis and holding period as the shares
surrendered. The Employee will recognize ordinary income equal to the Fair
Market Value of the balance of the shares received and such shares will then
have a tax basis equal to their Fair Market Value on the Date of Exercise, and
the holding period will begin on the Date of Exercise.
The foregoing summary is general, and is based on current law and
regulations and, accordingly, is subject to change at any time. It does not
apply to all specific transactions which may occur. As to specific transactions,
the Employee should consult his or her own tax advisor. In addition, in some
individual cases, it will be important to consider the state and foreign tax
consequences of participation in the Plan and the effect, if any, of gift,
estate or inheritance taxes.
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 1998
Annual Meeting is required, which approval must be obtained prior to any
purchase of shares or the grant of any Option to purchase shares under the Plan.
Abstentions from voting on this proposal will have the effect of votes against
this proposal. Broker non-votes will have no effect on the outcome of this
proposal.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE "FOR"
APPROVAL OF THE PLAN.
SECURITY OWNERSHIP BY MANAGEMENT
The following table gives information concerning the beneficial ownership
of the Corporation's Common Stock on March 6, 1998 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 20.3%
Pierce E. Marks, Jr.(2)(3).................................. 302,458 16.3%
Michael B. Stubbs(4)(6)..................................... 227,915 11.5%
Ronald J. Juvonen(5)(6)..................................... 140,500 6.8%
L. Ward Edwards(2).......................................... 51,450 2.8%
Michael J. Gaines(7)........................................ 15,000 --
All directors and executive officers as a group (8
persons)(8)............................................... 1,126,781 57.7%
</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 1991 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.
10
<PAGE> 13
(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 14,000 shares covered by presently exercisable Special Options
granted under 1991 Plan -- see "Information Regarding the Board of
Directors".
(7) Includes 15,000 shares covered by presently exercisable Incentive Stock
Options granted under 1991 Plan.
(8) Includes 28,000 shares covered by non-qualified stock options granted under
1991 Plan which are presently exercisable or which become exercisable within
60 days and 28,000 shares covered by Special Options which are presently
exercisable.
INDEPENDENT AUDITORS
Ernst & Young LLP, which served as the Corporation's independent auditors
in 1997 has been designated by the Board of Directors as the Corporation's
independent auditors for 1998. 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 1999 Annual Meeting of Shareholders will be held
on April 22, 1999. 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
November 28, 1998 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 31, 1998
11
<PAGE> 14
EXHIBIT A
THE MOORE-HANDLEY, INC.
EMPLOYEE STOCK PURCHASE PLAN
SECTION 1.
PURPOSE
The purpose of The Moore-Handley, Inc. Employee Stock Purchase Plan (the
"Plan") is to encourage and facilitate stock ownership by Employees by providing
a continued opportunity to purchase Common Stock, generally through voluntary
after-tax payroll deductions. Except as provided for in Section 5 hereof, the
Plan is intended to be a qualified employee stock purchase plan under Section
423 of the Code.
SECTION 2.
DEFINITIONS
2.1. Definitions. Whenever used herein, the following terms shall have the
respective meanings set forth below:
a. "Board" means the Board of Directors of the Company.
b. "Code" means the Internal Revenue Code of 1986, as amended.
c. "Common Stock" means the common stock, par value $.01, of the
Company.
d. "Company" means Moore-Handley, Inc., a Delaware corporation.
e. "Compensation" means base salary, determined without regard to any
salary reduction contributions under a qualified cash or deferred
arrangement or a cafeteria plan, in each case meeting the applicable
requirements of the Code.
f. "Current Option Holder" means Employees and directors of the
Company who own stock options as of the Effective Date and who have elected
to participate in the Plan in accordance with Section 5 hereof.
g. "Custodian" means the bank, trust company or other entity selected
by the Plan Administrator to serve as the custodian under the Plan.
h. "Date of Exercise" means the last trading day of each calendar
month.
i. "Date of Grant" means the date upon which an Option is granted, as
set forth in Section 6.3.
j. "Effective Date" means March 30, 1998. Notwithstanding the
foregoing, no purchase of Common Stock or exercise of Nonqualified Options
shall occur pursuant to Section 5 and no Option shall be exercised pursuant
to Section 6 prior to the date, if any, as of which the Plan is approved by
shareholders.
k. "Employees" means all officers and employees of the Company and of
any Subsidiary whose employees are expressly permitted to participate in
the Plan by the Plan Administrator.
l. "Employer" means the Company and any Subsidiary whose employees are
expressly permitted to participate in the Plan by the Plan Administrator.
m. "Fair Market Value" means, on any date, the closing price of the
last trade of the Common Stock as reported on the National Association of
Securities Dealers Automatic Quotation system (or on such other recognized
quotation system on which the trading price of the Common Stock is quoted
at the relevant time) on such date. In the event that there are no Common
Stock transactions reported on such system on such date, Fair Market Value
shall mean the closing price of the last trade on the immediately preceding
date on which Common Stock transactions were so reported.
A-1
<PAGE> 15
n. "Individual Account" means a separate account maintained by the
Custodian for each Employee participating under Section 6 hereof.
o. "Nonqualified Option" means an option granted under Section 5 to a
participating Employee to purchase shares of Common Stock.
p. "Option" means an option granted under Section 6 to a participating
Employee to purchase shares of Common Stock. To the extent contemplated by
Section 5 the term Option shall include Nonqualified Options.
q. "Option Price" has the meaning set forth in Section 6.7.
r. "Parent" means any corporation, other than the Company, in an
unbroken chain of corporations ending with the Company if, at the time of
the granting of the Option, each of the corporations other than the Company
owns stock possessing 50% or more of the total combined voting power of all
classes of stock in one of the other corporations in the chain.
s. "Payroll Contributions" means an Employee's after-tax contributions
of Compensation by payroll deduction pursuant to Section 6.5.
t. "Plan Administrator" means a committee comprised solely of
directors or solely of officers of the Company selected by the Board.
u. "Plan Year" means for the first Plan Year, the period beginning on
the Effective Date and ending on December 31, 1998 and for each succeeding
Plan Year, a period of twelve months commencing on January 1 and ending on
the next December 31.
v. "Promissory Note" means a full recourse promissory note described
in Section 5 hereof.
w. "Qualified Stock Purchases" means purchases of Common Stock
pursuant to the exercise of Options granted under Section 6, which are
intended to be qualified under Section 423 of the Code.
x. "Subsidiary" means each of the Company's direct or indirect
majority-owned subsidiaries.
y. "Terminating Event" means a participating Employee's termination of
employment for any reason, Unpaid Leave or any other event which causes
such Employee to no longer meet the requirements of Section 4.
z. "Unpaid Leave" means an unpaid leave of absence or any leave of
absence that does not meet the requirements of Treasury Regulation Section
1.421-7(h)(2).
aa. "Withdrawn Shares" means any shares which have been retained in an
Employee's Individual Account for less than six months.
SECTION 3.
ADMINISTRATION
The Plan shall be administered by the Plan Administrator. The Plan
Administrator shall have authority to make rules and regulations for the
administration of the Plan, and its interpretations and decisions with regard
thereto shall be final and conclusive. The Plan Administrator may delegate
responsibility for the day to day operation and administration of the Plan to
any officer or employee or group of officers or employees of the Company or any
of its Subsidiaries.
A-2
<PAGE> 16
SECTION 4.
ELIGIBILITY
4.1. General Rule. Except as otherwise provided herein, all Employees
shall be eligible to participate in the benefits available under Section 6, but
only the Current Option Holders shall be eligible to participate under Section
5.
4.2. Exclusions. Notwithstanding the provisions of Section 4.1, any
Employee (i) whose customary employment is 20 hours or less per week, (ii) who
has been employed for less than 90 days, (iii) who is on an Unpaid Leave, (iv)
who terminates employment or is terminated for any reason, or (v) who, after an
Option is granted, owns stock (as defined by Sections 423(b)(3) and 424(d) of
the Code) possessing five percent or more of the total combined voting power or
value of all classes of stock of the Company or of a Parent or any Subsidiary,
shall not be eligible to participate in Section 6 of the Plan.
SECTION 5.
NONQUALIFIED STOCK PURCHASES AND STOCK OPTIONS
5.1. Nonqualified Stock Purchases. (a) Participation. Each Current Option
Holder shall be entitled to purchase hereunder the number of shares of Common
Stock equal to the number of stock options currently held by such Current Option
Holder. A Current Option Holder may participate under this Section 5 by (i)
completing and forwarding an enrollment form to the Plan Administrator or its
designee, (ii) surrendering, for cancellation, all stock options held by such
Current Option Holder and (iii) satisfying such other conditions as the Plan
Administrator shall establish. The purchase price for such shares shall be
$2.625 per share and may be paid in cash or with a Promissory Note described in
subsection (c) below. The closing of any purchase under this Section 5 shall be
required to occur on or before June 30, 1998. The purchase price set forth
herein is the price paid by the Company in certain recent repurchase
transactions.
(b) Operation of Stock Purchases. The provisions of this Section 5 pertain
to a one-time offer to sell a limited number of securities to a limited group of
officers and directors.
(c) Promissory Note. Each Current Option Holder who elects to purchase
shares with a Promissory Note shall be required to execute a Promissory Note, in
a form acceptable to the Company, which will provide for the entire principal
balance to become due and payable on the third anniversary of the purchase of
shares under this Section 5 (or, if earlier, upon the termination of the Current
Option Holder's employment). Interest on the Promissory Note will accrue at an
annual rate equal to the rate of interest paid by the Company on its principal
revolving line of credit as in effect on the date of such purchase. Interest
will be payable annually on each of the first, second and third anniversaries of
the date of purchase of shares.
(d) Purchase of Shares. As soon as practicable, but not later than five
business days following the full payment of cash or the principal balance and
accrued interest on the Promissory Note, the Custodian shall issue that number
of whole shares of Common Stock purchased.
5.2. Nonqualified Options. Any Employee who does not satisfy the
eligibility requirements set forth in Section 4 hereof, may nonetheless be
granted a Nonqualified Option to purchase Common Stock under the same terms and
conditions as described in Section 6 below, provided that, the exercise price to
be paid by each Employee participating in this Section 5.2 shall be an amount
equal to 100% of the Fair Market Value of a share of Common Stock on the Date of
Grant.
A-3
<PAGE> 17
SECTION 6.
QUALIFIED STOCK PURCHASES
6.1. Stock to Be Issued. Subject to the provisions of Sections 6.8 and
11.3, the number of shares of Common Stock issuable pursuant to Options under
this Section 6 and Section 5.2 of the Plan shall not exceed 300,000 less that
number of shares purchased under Section 5.1 of the Plan on or before June 30,
1998, if any. The shares to be delivered pursuant to Options under the Plan may
consist, in whole or in part, of treasury stock or authorized but unissued
Common Stock, not reserved for any other purpose.
6.2. Shareholder Approval. The Plan will be submitted for the approval of
the Company's shareholders not later than 12 months after the Effective Date. No
Options granted under this Section 6 may be exercised prior to such shareholder
approval. If shareholders do not grant such approval, this Section 6 shall be
rendered void and without effect.
6.3. Grant of Options. Subject to Sections 4 and 6.2, the Company may
offer Options under the Plan to all Employees. Options will be granted on the
Effective Date and may be granted on such other date or dates as shall be
determined by the Plan Administrator. The term of each Option shall end on the
date which is 27 months from the Date of the Grant (or on such earlier date as
shall be determined by the Plan Administrator). The number of whole shares of
Common Stock subject to each Option shall be the lesser of (i) the quotient of
(A) the Payroll Contributions authorized by each participating Employee in
accordance with Section 6.5 for the term of the Option divided by (B) the Option
Price for each share of Common Stock purchased pursuant to such Option,
excluding all fractions, or (ii) such maximum number of shares as may be
established by the Plan Administrator, which may be established as a fixed
number or vary based on a predetermined formula.
6.4. Participation. An Employee who meets the requirements in Section 4
may participate in the Plan under this Section 6 by completing and forwarding an
enrollment form to the Plan Administrator or its designee, and by satisfying
such other conditions as the Plan Administrator shall establish from time to
time. Eligible Employees who elect to participate in the Plan shall authorize a
payroll deduction from the Employee's Compensation to be made as of any future
payroll period. Any election to authorize payroll deductions shall be effective
on such date as the Plan Administrator may determine after the date of the
receipt of the enrollment form by the Plan Administrator or its designee.
6.5. Payroll Contributions. There shall be an Individual Account for each
participating Employee to which shall be credited the amount of any Payroll
Contributions and the number of full or fractional shares of Common Stock that
are purchased by such Employee, pursuant to the terms of the Plan. An Employee
may authorize Payroll Contributions in terms of whole number percentages, of the
Compensation that the Employee receives during each payroll period; provided
that (i) no Employee shall be entitled to make Payroll Contributions for any
Plan Year in excess of $25,000, and (ii) no Employee shall be permitted to
purchase Common Stock pursuant to Options under the Plan or under any other
employee stock purchase plan of the Company or a Parent or any Subsidiary which
is intended to qualify under Section 423 of the Code, at a rate which exceeds
$25,000 in Fair Market Value (determined at the time the Option is granted) for
each calendar year in which such Option granted to such Employee is outstanding
at any time. In the event of a participating Employee's Terminating Event, (i)
no further Payroll Contributions by such Employee shall be permitted and (ii)
his outstanding Options shall terminate. Employees on short-term disability may
make Payroll Contributions.
6.6. Exercise of Options. Each participating Employee automatically and
without any act on his part will be deemed to have exercised his Option on each
Date of Exercise to the extent that the balance then in his Individual Account
is sufficient to purchase at the Option Price whole shares of Common Stock. Any
amount in the participating Employee's Individual Account on a Date of Exercise
not applied to the purchase of Common Stock shall continue to be held in such
account and applied as of the earliest subsequent Date of Exercise at which such
amount can be so applied in accordance with the terms hereof.
6.7. Option Price. Except as provided in Section 5.2, the Option Price per
share of Common Stock (the "Option Price") to be paid by each participating
Employee on each exercise of his Option shall be an amount
A-4
<PAGE> 18
equal to 85% (or such greater percentage as the Board or its designee may
authorize) of the Fair Market Value of a share of Common Stock on the Date of
Grant or, if authorized by the Board at the Date of Grant, the lesser of (i) 85%
(or such greater percentage as the Board or its designee may authorize) of the
Fair Market Value of a share of Common Stock on the Date of Grant or (ii) 85%
(or such greater percentage as the Board or its designee may authorize) of the
Fair Market Value of a share of Common Stock on the Date of Exercise.
6.8. Canceled, Terminated or Forfeited Options. Any shares of Common Stock
subject to an Option which for any reason is canceled, terminated or otherwise
settled without the issuance of any Common Stock shall again be available for
Options under the Plan.
SECTION 7.
DEDUCTION CHANGES AND PLAN WITHDRAWALS
7.1. Deduction Changes. Subject to Section 6.5, a participating Employee
may increase or decrease his Payroll Contributions, as of any time as the Plan
Administrator shall determine, commencing after the receipt of proper notice of
such change by the Plan Administrator or its designee. If an Employee ceases to
make Payroll Contributions at any time prior to a Terminating Event, any cash
balance then held in his Individual Account shall automatically be distributed
to such Employee as soon as practicable after the effective date of such
cessation.
7.2. Withdrawals. An Employee may at any time (subject to such notice
requirements as the Plan Administrator may from time to time prescribe), and for
any reason, cease participation in Section 6 of the Plan and withdraw all or any
portion of the shares of Common Stock and cash, if any, in his Individual
Account pursuant to Section 9. The Employee may thereafter recommence
participation in Section 6 on the date the Plan Administrator shall determine
following completion of re-enrollment pursuant to Section 6.4. Upon an
Employee's Terminating Event, any and all cash held in his Individual Account
shall be distributed to him as soon as practicable thereafter. Without limiting
the generality of the foregoing, upon the termination of an Employee's
employment, all shares and any cash held in his Individual Account shall be
distributed to him as soon as practicable thereafter.
SECTION 8.
ISSUANCE OF CERTIFICATES
While maintained by the Custodian, all shares shall be held in the name of
the Custodian or its nominee, or in street name. The Company shall issue
certificates to an Employee who is to receive a distribution of shares pursuant
to Section 9 as soon as practicable following the event giving rise to such
distribution under such Section 9. Such certificates may be registered only in
the name of the Employee. Notwithstanding the foregoing, the Company shall issue
certificates to an Employee upon such Employee's request to the Plan
Administrator or its designee as soon as practicable following such request.
SECTION 9.
WITHDRAWALS AND DISTRIBUTIONS
All or a portion of the shares of Common Stock allocated to an Employee's
Individual Account may be withdrawn by an Employee at any time. Upon termination
of employment, all amounts and shares of Common Stock held for the benefit of
any Employee shall be distributed to such Employee. Any withdrawal or other
distribution shall be made in the form of cash or stock, as elected by the
Committee. To the extent of a withdrawal or distribution of an Employee's shares
in the form of cash, the Employee shall receive an amount per share equal to the
proceeds received from the sale of such shares net of his allocable share of any
related brokerage fees and other expenses incurred in connection with the sale
of such shares. All fractional shares
A-5
<PAGE> 19
shall be paid in cash at the average sale price of such shares sold on behalf of
Employees on the day of such sales.
SECTION 10.
MISCELLANEOUS PROVISIONS
10.1. Withholding. The Employer or its designee may make such provisions
and take such action as it may deem necessary or appropriate for the withholding
of any taxes which the Employer is required by law or regulation of any
governmental authority, whether Federal, state or local, to withhold in
connection with Payroll Contributions. Each participating Employee, however,
shall be responsible for the payment of all individual tax liabilities relating
to any such amounts.
10.2. Rights Not Transferable. Rights under the Plan are not transferable
by a participating Employee other than by will or the laws of descent and
distribution of the state wherein the Employee is domiciled at the time of his
death, and are exercisable during the Employee's lifetime only by the Employee.
10.3. Adjustments in Capitalization; Mergers. In the event of any stock
dividend or stock split, recapitalization (including, without limitation, the
payment of an extraordinary dividend), merger, consolidation, combination, spin
off, distribution of assets to shareholders (other than ordinary cash
dividends), exchange of shares, or other similar corporate change, (i) shares
credited to each Employee's Individual Account shall be adjusted in the same
manner as all other outstanding shares of Common Stock in connection with such
event, (ii) the Board or a committee thereof shall determine the kind of shares
which may be acquired under the Plan after such event, and (iii) the aggregate
number of shares of Common Stock available under Sections 5.1 or 6.1 or subject
to outstanding Options and the respective exercise prices applicable to
outstanding Options may be appropriately adjusted by the Board or a committee
thereof, in its discretion, and the determination of the Board or a committee
thereof shall be conclusive. Except as otherwise determined by the Board, a
merger or a similar reorganization which the Company does not survive, a
liquidation or distribution of the Company, or a sale of all or substantially
all of the assets of the Company, shall cause the Plan to terminate and all
shares of Common Stock and cash, if any, in the Individual Accounts of
participating Employees shall be distributed to each Employee pursuant to
Section 9 as soon as practicable unless any surviving entity agrees to assume
the obligations hereunder.
10.4. Amendment of the Plan. The Board or its delegate may at any time, or
from time to time, amend the Plan in any respect; provided that shareholder
approval shall be required to amend the Plan to (i) change the number of shares
of Common Stock reserved for issuance under Section 5.1 or Section 6.1 of the
Plan, (ii) decrease the Option Price below a price computed in the manner stated
in Section 5.2 or 6.7, or (iii) alter the requirements for eligibility to
participate in the Plan under Section 6. No amendment, modification, or
termination of the Plan shall in any manner adversely affect the rights of any
Employee under the Plan, without the consent of the Employee. The Plan shall
terminate at any time at the discretion of the Board or its delegate. Upon
termination of the Plan, all shares of Common Stock and cash, if any, in the
Individual Accounts of participating Employees shall be distributed to each
Employee pursuant to Section 9 as soon as practicable.
10.5. Requirements of Law. The Company's obligation to deliver Common
Stock under the Plan shall be subject to all applicable laws, rules and
regulations, and to such approvals by any governmental agencies or national
securities exchanges as may be required.
10.6. Custodial Arrangement. All cash and Common Stock allocated to an
Employee's Individual Account under the Plan shall be held by the Custodian in
its capacity as a custodian for the Employee with respect to such cash and
Common Stock. Nothing contained in the Plan, and no action taken pursuant to the
Plan, shall create or be construed to create a trust of any kind, or a fiduciary
relationship between the Company and its officers or the Board or the Plan
Administrator or the Custodian, on the one hand, and any Employee, the Company
or any other person or entity, on the other hand.
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<PAGE> 20
10.7. No Right to Continuous Employment. The Plan and any right to
purchase Common Stock granted hereunder shall not confer upon any Employee any
right with respect to continuance of employment by the Company or any
Subsidiary, nor shall they restrict or interfere in any way with the right of
the Company or any Subsidiary by which an Employee is employed to terminate his
employment at any time.
10.8. Indemnification. Each person who is or shall have been a member of
the Board or the Plan Administrator shall be indemnified and held harmless by
the Company and each Employer against and from any loss, cost, liability, or
expense that may be imposed upon or reasonably incurred by him in connection
with or resulting from any claim, action, suit, or proceeding to which he may be
made a party or in which he may be involved by reason of any action taken or
failure to act under the Plan (in the absence of bad faith) and against and from
any and all amounts paid by him in settlement thereof, with the Company's
approval, or paid by him in satisfaction of any judgment in any such action,
suit, or proceeding against him, provided he shall give the Company an
opportunity, at its own expense, to handle and defend the same before he
undertakes to handle and defend it on his own behalf. The foregoing right of
indemnification shall not be exclusive and shall be independent of any other
rights of indemnification to which such persons may be entitled under the
Company's Certificate of Incorporation or By-Laws, by contract, as a matter of
law, or otherwise.
10.9. No Limitation on Compensation. Nothing in the Plan shall be
construed to limit the right of the Company to establish other plans.
10.10. No Constraint on Corporate Action. Nothing in this Plan shall be
construed (i) to limit, impair or otherwise affect the Company's right or power
to make adjustments, reclassifications, reorganizations or changes of its
capital or business structure, or to merge or consolidate, or dissolve,
liquidate, sell, or transfer all or any part of its business or assets or (ii)
except as provided in Section 11.4, to limit the right or power of the Company
or any of its subsidiaries or affiliates to take any action which such entity
deems to be necessary or appropriate.
10.11. Governing Law. The Plan shall be construed in accordance with and
governed by the laws of Delaware, without regard to principles of conflict of
laws.
A-7
<PAGE> 21
APPENDIX
PROXY MOORE-HANDLEY, INC.
ANNUAL MEETING OF SHAREHOLDERS, APRIL 23, 1998
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 23, 1998 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:
<TABLE>
<S> <C> <C> <C>
[ ] FOR [ ] WITHHELD
[ ] FOR, except vote withheld from the following
nominee(s):
</TABLE>
- --------------------------------------------------------------------------------
2. Approve the proposed Moore-Handley, Inc. Employee Stock Purchase Plan:
[ ] FOR [ ] WITHHELD [ ] ABSTAIN
PLEASE MARK, SIGN AND DATE THIS PROXY ON THE REVERSE SIDE AND RETURN IT
PROMPTLY IN THE ENCLOSED ENVELOPE.
(Continued and to be dated and signed on reverse side)
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 approval of the Moore-Handley, Inc. Employee Stock Purchase.
PLEASE MARK, SIGN AND DATE THIS PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED
ENVELOPE.
Dated: , 1998
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Signature
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Signature
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.
