SCHEDULE 14A INFORMATION
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14a-6(e)(2))
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[ ] Soliciting Material Pursuant to ss. 240.14a-11(c) or ss. 240.14a-12
Moore Medical Corp.
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(Name of Registrant as Specified In Its Charter)
N/A
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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):
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
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1) Amount Previously Paid:
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4) Date Filed:
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[LOGO of Moore Medical
The Supply Experts]
NOTICE OF 2003 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 22, 2003
Dear Stockholder,
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the
"Meeting") of Moore Medical Corp., a Delaware corporation (the "Company"), will
be held at The Michelangelo Hotel, in the Roman Room, located at 152 West 51st
Street, New York, NY 10019, on Thursday, May 22, 2003 at 11:00 a.m., local time.
At the Meeting we will ask stockholders to consider and act upon the following
matters:
(1) The election of seven directors to serve until the next Annual
Meeting of Stockholders or until their successors have been duly
elected and qualified. The following incumbent directors will be
nominated for re-election:
Linda M. Autore
Christopher W. Brody
Peter A. Derow
Steven Kotler
Robert H. Steele
Wilmer J. Thomas, Jr.
Dan K. Wassong
(2) The transaction of such other business as may properly come
before the Meeting and at any adjournments thereof.
Only stockholders of record of the Company's Common Stock, $0.01 par
value per share, at the close of business on April 10, 2003, which has
been fixed as the record date for the Meeting, will be entitled to
notice of, and to vote at, the Meeting and any adjournments thereof.
It is important that your shares be represented and voted at the meeting. You
may vote your shares by means of a proxy form by signing, dating and mailing the
enclosed proxy card (the "Proxy") in the postage-paid envelope provided or,
electronically via the Internet, or by telephone. Stockholders who attend the
Meeting may vote their shares personally, even though they have mailed in their
Proxies.
Each of these matters is described in more detail in the enclosed Proxy
Statement, which constitutes part of this Notice. Please use this opportunity to
take part in the Company's affairs by voting your shares.
By Order of the Board of Directors,
Linda M. Autore
President and Chief Executive Officer
April 21, 2003
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YOUR VOTE IS IMPORTANT
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[LOGO of Moore Medical
The Supply Experts]
389 John Downey Drive
New Britain, CT 06050
________________________________________________________________________________
PROXY STATEMENT
2003 ANNUAL MEETING OF STOCKHOLDERS
May 22, 2003
________________________________________________________________________________
INFORMATION ABOUT THE MEETING, VOTING AND PROXIES
Date, Time and Place of Meeting
The Board of Directors of Moore Medical Corp., a Delaware corporation ("Moore
Medical" or the "Company") is asking for your proxy to be voted at the Annual
Meeting of Stockholders (the "Meeting") of Moore Medical to be held on Thursday,
May 22, 2003 at 11:00 a.m., local time, and at any adjournment or adjournments
thereof, at The Michelangelo Hotel, in the Roman Room, located at 152 West 51st
Street, New York, NY, for the purposes set forth in the accompanying Notice of
Annual Meeting of Stockholders and in this Proxy Statement. We are mailing this
Proxy Statement and Proxy on or about April 21, 2003 to stockholders of Moore
Medical.
Record Date, Outstanding Shares and Quorum
Only stockholders of record at the close of business on April 10, 2003 (the
"Record Date") will be entitled to notice of, and to vote at, the Meeting and at
any adjournments thereof. On the Record Date, there were 3,189,784 shares of the
Company's common stock, par value $0.01 per share (the "Common Stock"),
outstanding and entitled to vote. There were no other classes of voting
securities of the Company outstanding on such Record Date. The presence at the
meeting, in person or by proxy, of the holders of a majority of the outstanding
shares of Common Stock on the Record Date shall constitute a quorum.
Voting Rights and Voting of Proxies
Each holder of Common Stock is entitled to one vote for each share held on the
Record Date by such holder. Cumulative voting for directors is not permitted. If
a quorum is present, (i) a plurality of the votes cast by the holders of the
Common Stock, in person or by proxy at the Meeting, is required for the election
of directors, and (ii) the approval of holders of a majority of the votes cast,
in person or by proxy at the Meeting, is required (except where Delaware General
Corporation Law prescribes a different percentage) to approve any other matter
duly presented for action at the Meeting.
Under the rules promulgated by the Securities and Exchange Commission (the
"SEC"), boxes and a designated blank space are provided on the Proxy card for
stockholders to mark, if they wish, to withhold authority to vote for one or
more of the nominees for directors. Votes withheld in connection with the
election of one or more of the nominees for director will be excluded from the
1
vote and will have no effect, but will be counted toward the presence of a
quorum for the transaction of business at the Meeting. If no direction is
indicated, the Proxy will be voted for the election of the nominees for
director. The form of Proxy does not provide for abstentions with respect to the
election of directors; however, a stockholder present at the Meeting may abstain
with respect to such election. The treatment of abstentions and broker
"non-votes" with respect to the election of directors is consistent with
applicable Delaware law and the Company's By-Laws. Abstentions and broker
"non-votes" are counted as present and entitled to vote and are, therefore,
included for purposes of determining whether a quorum of shares is present at a
meeting. An abstention from a vote with respect to a proposal (other than for
the election of directors) will have the same practical effect as a vote against
such proposal. However, broker "non-votes" are not deemed to be "votes cast." As
a result, broker "non-votes" are not included in the tabulation of the voting
result on the election of directors or issues requiring approval of a majority
of the votes cast and, therefore, do not have the effect of votes in opposition
in such tabulations and as such will have the practical effect of reducing the
number of affirmative votes required to achieve a majority vote for a matter by
reducing the total number of shares from which a majority is calculated. A
broker "non-vote" occurs when a nominee holding shares for a beneficial owner
does not vote on a particular proposal because the nominee does not have
discretionary voting power with respect to that item and has not received
instructions from the beneficial owner. Under stock exchange rules a broker
nominee who delivers this Proxy Statement to the beneficial owner will be
entitled to vote the shares on the election of directors and the ratification of
the appointment of auditors, even without the beneficial owner's instructions.
A Proxy, in the accompanying form, which is properly executed, duly returned to
the Company and not revoked, will be voted in accordance with the instructions
contained therein. If no specification is indicated on the Proxy, the shares
represented thereby will be voted (i) FOR the election of the seven nominees for
director; and (ii) in accordance with the judgment of the person or persons
voting the Proxies on any other matter that may be properly brought before the
Meeting. To the Company's knowledge, no other matter will be presented at the
meeting.
Solicitation of Proxies
The Proxy included with this Proxy Statement is solicited by the Board of
Directors of Moore Medical for use at the Meeting. You can submit your Proxy by
mailing it in the envelope provided. You may also be able to vote your shares by
telephone or by the Internet, if these options are provided on your proxy.
Instructions for telephone and Internet voting, if applicable, are included with
your Proxy.
Moore Medical will pay all expenses of soliciting proxies to be voted at the
Meeting. After the Proxies are initially distributed, Moore Medical and/or its
agents may also solicit proxies by mail, telephone or in person. We have hired a
proxy solicitation firm, D.F. King & Co., Inc. to assist us in soliciting
proxies. We will pay D.F. King & Co., Inc. a fee of $4,000 plus their expenses.
After the Proxies are initially distributed, we will ask brokers, custodians,
nominees and other record holders to forward copies of the Proxy Statement,
Proxy and other materials to people for whom they hold shares of Common Stock,
and to request that the beneficial holders give them authority to sign the
Proxies. We will reimburse record holders for reasonable expenses they incur in
forwarding proxy materials to beneficial holders.
2
Revocation of Proxies
Execution and delivery of a Proxy will not affect a stockholder's right to
attend the Meeting and vote in person. A stockholder in whose name shares are
registered as of the Record Date and who has given a Proxy may revoke it at any
time before it is voted by executing and delivering a written revocation to the
Secretary of the Company, by execution and delivery of a later dated Proxy or by
attending the Meeting and voting by ballot (which has the effect of revoking the
prior Proxy). Attendance at the Meeting, however, will not in and of itself
revoke a Proxy.
A stockholder who is a beneficial owner but not registered as the record owner
as of the Record Date cannot vote his or her shares except by the stockholder's
broker, bank or nominee in whose name the shares are registered as of the Record
Date executing and delivering a proxy on his or her behalf or the stockholder
attending the Meeting with a proxy or other written authorization to vote from
the registered owner and voting.
3
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS, DIRECTORS,
NOMINEES AND OFFICERS
Certain Beneficial Owners
The Company believes the following, based on filings with the SEC, to be the
only persons who own beneficially five percent or more of its voting securities
outstanding, as of April 2, 2003:
Name and Address of Beneficial Owner Percent of
------------------------------------ Number Common Stock
of Shares Outstanding
--------- -----------
Heartland Advisors, Inc. (1) 449,400 14.1%
789 North Water St., Milwaukee, WI 53202
Vantage Venture Partners, LP / Christopher W. Brody (2) 210,000 6.6%
610 Fifth Avenue, 7th Floor, New York, NY 10020
Dimensional Fund Advisors, Inc. (3) 191,100 6.0%
1299 Ocean Avenue, 11th Floor, Santa Monica, CA 90401
Thomas Charitable Foundation (4) 186,943 5.9%
272 Undermountain Road, Salisbury, CT 06068
(1) We obtained information about the shares owned by Heartland Advisors,
Inc. ("Heartland") from the most recent Schedule 13G filed by Heartland
with the SEC on December 31, 2002. Heartland's 449,400 shares may be
deemed beneficially owned within the meaning of Rule 13d-3 of the
Securities Exchange Act of 1934 (the "Exchange Act") by (1) Heartland
by virtue of its investment discretion and in some cases voting power
over client securities, which may be revoked; and (2) William J.
Nasgovitz, as a result of his position with and stock ownership of
Heartland which could be deemed to confer upon him voting and/or
investment power over the shares Heartland beneficially owns. Of these
449,400 shares, 282,600 shares also may be deemed beneficially owned
within the meaning of Rule 13d-3 of the Exchange Act by Mr. Nasgovitz
as a result of his position as an officer and director of Heartland
Group, Inc. ("Heartland Group") which could be deemed to confer upon
him voting power over the shares Heartland Group beneficially owns.
(2) We obtained information about shares owned by Christopher W. Brody from
the most recent Schedule 13D filed by Mr. Brody with the SEC on August
7, 2000. Mr. Brody's 210,000 shares include 50,000 shares owned by
Vantage Venture Partners, LP, as to which voting and dispositive power
is exercised solely by Mr. Brody in his capacity as Chairman of its
general partner, Vantage Partners, LLC.
(3) We obtained information about the shares owned by Dimensional Fund
Advisors, Inc. ("Dimensional") from the most recent Schedule 13G filed
by Dimensional with the SEC on December 31, 2002. Dimensional, an
investment advisor registered under Section 203 of the Investment
Advisors Act of 1940, furnishes investment advice to four investment
companies registered under the Investment Company Act of 1940, and
serves as investment manager to certain other commingled group trusts
and separate accounts. These investment companies, trusts and accounts
are referred to as the "Funds." In its role as investment advisor or
manager, Dimensional possesses voting and/or investment power over
4
the securities of the Company that are owned by the Funds. All
securities reported are owned by the Funds. Dimensional has disclaimed
beneficial ownership of such securities.
(4) The Thomas Charitable Foundation ("Foundation") is a trust established
pursuant to the laws of Florida. We obtained information about the
shares owned by the Foundation from a Non-Objecting Beneficial Owners
listing as of March 29, 2002. The Foundation's shares are held by the
named trust, of which Wilmer J. Thomas, Jr., a director of the Company,
as a co-trustee has shared voting and shared investment power. He
disclaims a beneficial interest in the securities held by the
Foundation.
5
Ownership of Management
The following table sets forth, as of April 2, 2003, the number of shares of
Moore Medical voting securities owned by all executive officers, directors and
nominees of Moore Medical individually and as a group. The persons named in the
table below have sole voting and investment power with respect to all of the
shares of Moore Medical voting securities owned by them, unless otherwise noted.
Percent
Amount/Nature of of Common
Name of Beneficial Owner Beneficial Ownership Stock (1)
------------------------ -------------------- ---------
Linda M. Autore .......................................... 96,500 (2) 2.9%
President and Chief Executive Officer, Director
Jon Garrity .............................................. 13,800 (3) *
Senior Vice President of Supply Chain and Customer Support
Jerry Flasz .............................................. 10,000 (4) *
Executive Vice President Information Systems and Chief
Information Officer
John M. Zinzarella ....................................... 1,625 (5) *
Vice President of Finance, Treasurer and Chief
Financial Officer
Christopher W. Brody ..................................... 210,000 (6) 6.4%
Director
Peter A. Derow ........................................... 13,000 (7) *
Director
Steven Kotler ............................................ 155,520 (8) 4.7%
Director
Robert H. Steele ......................................... 84,800 (9) 2.6%
Chairman of the Board
Wilmer J. Thomas, Jr ..................................... 186,943 (10) 5.7%
Director
Dan K. Wassong ........................................... 1,000 *
Director
All Current Directors and Executive Officers as a Group
(10 persons) ............................................. 773,188 (11) 23.6%
* Less than 1% of the outstanding shares of Common Stock
(1) Based on 3,276,409 shares which represents issued and outstanding
shares of Common Stock on April 2, 2003 (3,189,784), plus 86,625 shares
of Common Stock that may be acquired by the person or group indicated
pursuant to any options and warrants exercisable within 60 days.
(2) Includes 50,000 shares pledged to the Company to secure a promissory
note payable to the Company and 39,500 shares underlying options
exercisable within 60 days.
6
(3) Includes 12,500 shares underlying options exercisable within 60 days.
(4) Includes 10,000 shares underlying options exercisable within 60 days.
(5) Includes 1,625 shares underlying options exercisable within 60 days.
(6) Includes 50,000 shares held by Vantage Venture Partners, LP of which
Mr. Brody is Chairman of its general partner, Vantage Partners, LLC,
and holds a beneficial interest in Vantage Venture Partners, LLP.
(7) Includes 3,000 shares underlying options exercisable within 60 days.
(8) Excludes 300 shares owned by Mr. Kotler's wife, of which he disclaims
beneficial ownership.
(9) Includes 20,000 shares underlying options exercisable within 60 days.
(10) Consists of shares held by Thomas Charitable Foundation, of which Mr.
Thomas is a Trustee and of which he disclaims beneficial ownership.
(11) Includes 86,625 shares underlying stock options granted to directors
and executive officers that are exercisable within 60 days. Also
includes 186,943 shares held by Thomas Charitable Foundation and 50,000
shares held by Vantage Venture Partners, LP.
7
PROPOSAL NO. 1 - ELECTION OF DIRECTORS
Moore Medical's directors are elected each year at the annual meeting. Seven
nominees for director are proposed to be elected at the Meeting. Each director
will hold office until the election and qualification of his or her successor or
earlier death, removal or resignation. The Board of Directors recommends the
election as directors of these nominees. Should any of the nominees not remain a
candidate for election at the date of the Meeting (which contingency is not now
contemplated or foreseen by the Board of Directors), Proxies solicited there
under will be voted in favor of those nominees who do remain candidates and may
be voted for substitute nominees selected by the Nominating Committee of the
Board of Directors. Assuming a quorum is present, a plurality of the votes of
the shares present, in person or by proxy, at the Meeting is required to elect
each of the nominees as a director in accordance with the Company's By-Laws.
Certain Information Regarding Nominees
The following table gives information as of April 2, 2003 concerning the persons
intended to be nominated on behalf of the Board of Directors for election as
directors. They are now members of the Board of Directors and their current term
of office expires at the election and qualification of their successors at the
Meeting.
Name Age Title
---- --- -----
Linda M. Autore 52 President and Chief Executive Officer,
Director
Christopher W. Brody 58 Director
Peter A. Derow 62 Director
Steven Kotler 56 Director
Robert H. Steele 64 Chairman of the Board
Wilmer J. Thomas, Jr. 76 Director
Dan K. Wassong 72 Director
Ms. Autore is President and Chief Executive Officer and has been a director of
Moore Medical since August 1999. Ms. Autore joined Moore Medical in October 1998
as Senior Vice President Sales and Marketing. She was elected a Member of Office
of the President (Chief Executive Office) and to her present position in 1999.
Prior to joining Moore Medical, she was Senior Vice President, Worldwide
Marketing of Intellution, Inc., a division of Emerson Electric Corp., now a
division of GE Finance, from 1997 to 1998. Prior thereto, Ms. Autore was a
business development and marketing consultant and also held sales and marketing
management positions of increasing responsibility at IBM Corp. for fifteen
years.
8
Mr. Brody has served as a director of Moore Medical since February 2000. Mr.
Brody has been the Chairman of Vantage Partners, LLC, a private investment firm
since January 1999. From 1971 through 1998, Mr. Brody was a partner of Warburg,
Pincus & Co. Mr. Brody serves as a director of Intuit, Inc. and several
privately held companies. He is the former Chairman of the National Venture
Capital Association.
Mr. Derow has served as a director since November 2001. He serves as a director
of CACI, Inc., Dice, Inc. and several other privately held companies. During a
35-year career in the media and communications industries, he served as
President and CEO of Newsweek, Inc. and a director of the Washington Post
Company, President and CEO of CBS Publishing Group, a director of CBS, Inc. and
President and CEO of Institutional Investor, Inc. a wholly-owned subsidiary of
Capital Cities/ABC, Inc.
Mr. Kotler has served as a director since 1977. Mr. Kotler has been the Vice
Chairman of Gilbert Global Equity Partners, a private equity firm since 2000. He
was formerly Co-Chairman, President and Chief Executive Officer of Schroder &
Co., Inc. (investment bankers). Mr. Kotler is a director of Del Laboratories,
Inc., a cosmetic and drugs company.
Mr. Steele became a director of Moore Medical in 1981. He has served as Chairman
of the Board since February 1998. Mr. Steele is Vice Chairman of John Ryan
Company, an international financial services marketing firm and has so served
since 1997. Mr. Steele is a member of the Board of Directors of NLC Companies
(insurance), Scan Optics, Inc. (data entry), Smart Serv OnLine, Inc. (web and
wireless service provider) and the New York Mercantile Exchange.
Mr. Thomas has been a director of Moore Medical since 1977. He is a private
investor and financial consultant. Mr. Thomas is also a director and the Vice
Chairman of American Country Holding Co. (insurance).
Mr. Wassong became a director of Moore Medical in 1994. He is Chairman,
President and Chief Executive Officer of Del Laboratories, Inc., a cosmetic and
drugs company. Mr. Wassong is also a director of Southern Union Company, a gas
utility company.
The Board of Directors recommends a vote FOR the election of the persons
nominated for director.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires the Company's executive officers and
directors and persons who own more than ten percent of the Common Stock of the
Company to file reports of ownership and changes in ownership with the SEC and
the exchange on which the Common Stock is listed for trading. Executive
officers, directors and more than ten percent stockholders are required by
regulations under the Exchange Act to furnish the Company with copies of all
Section 16(a) reports filed. Based on the Company's review of such reports filed
for its fiscal year ended December 28, 2002, the Company believes that all
reporting requirements applicable to its executive officers,
9
directors and more than ten percent stockholders were complied with in a timely
manner for the year ended December 28, 2002.
Executive Officers
Set forth below are the names, ages and positions of the executive officers of
the Company.
Name Age Position
---- --- --------
Linda M. Autore 52 President and Chief Executive Officer
Jon Garrity 41 Senior Vice President of Supply Chain and Customer Support
Jerry Flasz 42 Executive Vice President, Information Systems and Chief
Information Officer
John Zinzarella 37 Vice President of Finance, Treasurer and Chief Financial Officer
Mr. Garrity has served as Senior Vice President of Supply Chain since October 1,
2001. Mr. Garrity joined the Company as Vice President of Supply Chain in June
2000. Prior to joining Moore Medical, he was Vice President of Logistics for
Remington Products from 1998 to 2000 and with the BIC Corporation from 1989 to
1998 in various supply chain capacities.
Mr. Flasz has served as Chief Information Officer and Executive Vice President,
Information Systems since January 15, 2001. Prior to joining Moore Medical, he
was Vice President of eCommerce/End User Computing Information Systems, Revlon
Corporation, from 1998 to 2001; and Vice President of Operations, A.P. Products
LTD, from 1993 to 1998.
Mr. Zinzarella is a certified public accountant who joined Moore Medical in
October 2001 as Vice President, Controller and Chief Accounting Officer. On July
12, 2002, he assumed the role of Interim Chief Financial Officer. On November
14, 2002, the Moore Medical Board of Directors elected him Vice President of
Finance, Treasurer and Chief Financial Officer. Prior to joining Moore Medical,
he held various financial management positions with Aventis Pasteur from 1999 to
2001 and Wyeth Ayerst Laboratories from 1991 to 1999. Prior to 1991, he began
his career with Ernst & Young and was a member of its audit group.
Meetings of Board and Committees
Board of Directors
The Board of Directors is responsible for supervision of the overall affairs of
the Company. To assist it in carrying out its duties, the Board has delegated
certain authority to several committees. The Board of Directors held five
meetings during 2002 at which formal action was taken. All directors attended
75% or more of the aggregate number of meetings of the Board and Committees of
the Board on which he or she served that were held during his or her period of
service. Following the Meeting, the Board will consist of seven directors. In
the interim, between annual meetings, the
10
Board has the authority under the By-Laws to increase or decrease the size of
the Board and fill vacancies.
Committees of the Board
The Executive Committee, the Audit Committee, the Compensation Committee, and
the Nominating Committee are the standing committees of the Board of Directors.
Following are the names of the directors currently serving on each committee:
Executive Audit Compensation Nominating
--------- ----- ------------ -----------
Steven Kotler* Peter A. Derow Peter A. Derow Steven Kotler
Robert H. Steele Steven Kotler Steven Kotler Wilmer J. Thomas, Jr.
Wilmer J. Thomas, Jr. Robert H. Steele* Wilmer J. Thomas, Jr.
* Chair
Executive Committee
The Executive Committee is empowered to act for the full Board in intervals
between Board meetings, with the exception of certain matters that by Delaware
General Corporation Law may not be delegated. The committee meets as often as
necessary, and all actions by the committee are reported at the next Board of
Directors meeting. The committee held one meeting in 2002.
Audit Committee
The Audit Committee is responsible for reviewing reports of the Company's
financial results, audits, internal controls and compliance with federal
procurement laws and regulations. The committee recommends to the Board of
Directors the selection of the Company's independent accountants and reviews
their procedures for ensuring their independence with respect to the services
performed for the Company. Moore Medical's Board of Directors adopted a written
charter for the Audit Committee during 2000.
The Audit Committee is composed of outside directors who are not officers or
employees of Moore Medical. In the opinion of the Board, as "independent" is
defined under the standards of the American Stock Exchange, these directors are
independent of management and free of any relationship that would interfere with
their exercise of independent judgment as members of the committee. The
committee held seven meetings during 2002.
Nominating Committee
The Nominating Committee advises and makes recommendations to the Board on all
matters concerning directorship practices and compensation for non-employee
directors and recommendations concerning the functions and duties of the
committees of the Board. The committee held no meeting in 2002.
11
The Nominating Committee also considers nominees recommended by stockholders of
the Company. Stockholders wishing to submit recommendations for the 2004 Annual
Meeting must comply with the procedures, requirements and time limitations set
forth in the Company's By-laws and outlined in this Proxy Statement under
STOCKHOLDER PROPOSALS AND NOMINATIONS FOR 2004 ANNUAL MEETING - Nominating
Procedures.
Compensation Committee
The Compensation Committee has responsibility for administering and approving
all elements of compensation for elected corporate officers and certain other
senior management positions. It also approves, by direct action or through
delegation, participation in bonus and option programs. The committee reports to
stockholders on executive compensation items as required by the SEC. The
committee held two meetings in 2002.
Compensation of Directors
A director who is not also a salaried employee receives an annual fee of $8,000
plus $1,000 for each Board meeting attended. A member of the Executive Committee
who is not a salaried employee receives an annual additional fee of $1,000 for
services in such capacity. A member of the Audit Committee receives $2,000
annually for services in such capacity. In addition, pursuant to Board action,
(i) Mr. Steele is paid a fee of $100,000 per annum as the non-executive Chairman
of the Board of Directors for Board services, (ii) Mr. Kotler is paid a fee of
$50,000 per annum as Chairman of the Executive Committee, and (iii) Mr. Thomas
is paid a fee of $50,000 per annum under a consulting arrangement with the
Company. Directors are reimbursed for related expenses.
The following Compensation Committee, Audit Committee and Executive Committee
Reports do not constitute soliciting material and shall not be deemed "filed" or
incorporated by reference into any other Company filing under the Securities Act
of 1933, as amended, or the Exchange Act, except to the extent the Company
specifically incorporates these Compensation Committee, Audit Committee and
Executive Committee Reports by reference therein.
Compensation Committee Report
In 2002, the Committee approved all forms of compensation for Named Officers
including employment agreements, base salaries, annual bonuses and stock
options. Mr. Derow was appointed by the Board of Directors to the Compensation
Committee in September 2002 joining Messrs. Kotler and Thomas on the Committee.
Key senior executive officers entered into employment agreements with the
Company during 2002: Linda M. Autore, the Company's President and Chief
Executive Officer since August 1999, entered into an amended and restated
employment agreement dated as of October 25, 2002; Jerry Flasz, its Executive
Vice President and Chief Information Officer since January 15, 2001, entered
into an amended and restated employment agreement as of October 25, 2002; and
Jon Garrity, the Company's Senior Vice President of Supply Chain since October
1, 2001, entered into an amended and restated employment agreement dated October
25, 2002. Each employment agreement provided for a compensation package
consisting of a base salary and the potential for an annual bonus under the
current year's Executive Officers' Bonus Plan.
12
During June 2002, James R. Simpson resigned from the Company to pursue other
business interests. The Compensation Committee approved a severance agreement
that paid Mr. Simpson approximately $123,000 in fiscal 2002. Upon Mr. Simpson's
termination, he was given 60 days to exercise all stock options that were
vested, but none were exercised by Mr. Simpson prior to their expiration.
The Committee aligned the value of the Named Officers' compensation packages
with those of the stockholders by tying the cash bonus compensation to the
Company's financial performance, through the 2002 Corporate Bonus Plan. The
components of the Named Officers' compensation packages, which the Committee
reviewed and approved, were, accordingly:
Base Salaries. Base salaries reflected the achievements, responsibilities and
experience of the individual, as well as competitive conditions in the executive
employment market.
Annual Bonuses. In 2002, incentive bonuses for Named Officers under the 2002
Corporate Bonus Plan were approved by the Committee. This plan entitled Named
Officers to earn bonuses, ranging from 0% to 20% of their annual salaries, if
the Company's net revenue and earnings before interest and taxes exceeded
specified amounts.
Peter Derow
Steven Kotler
Wilmer J. Thomas, Jr.
Executive Committee Report on CEO Compensation
Ms. Autore has served as President and Chief Executive Officer since August
1999. Her 2002 compensation was determined by her employment agreement and was
based on establishing and achieving the Company's short-term business goals and
long-term strategic plans. See "Executive Compensation and Other Benefits -
Employment Related Agreements". She received a base salary of $295,550 during
the year 2002.
Steven Kotler, Chair
Robert H. Steele
Wilmer J. Thomas, Jr.
Audit Committee Report
Management is responsible for the preparation and integrity of the Company's
financial statements. The Committee reviewed the Company's audited financial
statements for the fiscal year ended December 28, 2002 and met with both
management and PricewaterhouseCoopers LLP, the Company's independent auditors
(the "Auditors") to discuss those financial statements, including the critical
accounting policies on which the financial statements are based. Management and
the Auditors have represented to the Committee that the financial statements
were prepared in accordance with generally accepted accounting principles.
13
The Committee is composed of three directors, each of whom meet the independence
requirements of the applicable American Stock Exchange. The Committee operates
under a written charter adopted by the Board of Directors.
For the fiscal year ended December 28, 2002, the Committee also discussed with
the Auditors the matters required to be discussed by SAS 61 Codification of
Statements on Auditing Standards (AU ss. 380). The Audit Committee has received
the written disclosures and the letter from the Auditors required by
Independence Standards Board Standard No. 1, Independence Discussions with Audit
Committees, and has discussed with the Auditors their independence. Based on the
review and discussions described in this paragraph, the Audit Committee
recommended to the Board of Directors of the Company that the Financial
Statements be included in the Company's Annual Report on Form 10-K for the
fiscal year ended December 28, 2002.
The Audit Committee concluded that the non-audit services rendered in 2002 did
not impair the independence of PricewaterhouseCoopers LLP.
Robert H. Steele, Chair
Peter A. Derow
Steven Kotler
APPOINTMENT OF INDEPENDENT AUDITORS
In past years, the Audit Committee has recommended the appointment of
independent auditors for the current year to the Board of Directors, which in
turn has recommended ratification of such appointment by our stockholders. This
year, the Audit Committee has decided to evaluate several independent auditing
firms before making a selection. There are no disagreements with our current
auditors, PricewaterhouseCoopers, but the Audit Committee believes it is prudent
and good corporate governance to explore the market in order to evaluate and
assess several auditing firms before hiring an outside auditor. Accordingly, the
stockholders are not being asked to ratify the appointment of independent
auditors to audit the Company's financial statements for the fiscal year ending
December 27, 2003. The Audit Committee and the Board of Directors intend to make
a decision with respect to the appointment of independent auditors for the
fiscal year ending December 27, 2003 later this year.
Representatives of PricewaterhouseCoopers LLP, our independent auditors for the
fiscal year ended December 28, 2002, are expected to be present at the Meeting.
They will have the opportunity to make a statement at the Meeting if they wish
to do so, and they will be available to respond to appropriate questions from
stockholders.
PRINCIPAL ACCOUNTANT FEES AND SERVICES
The Audit Committee reviewed aggregate fees paid to PricewaterhouseCoopers LLP
for services related to fiscal year 2002 which were as follows:
Audit Fees: $ 221,500
All Other Fees:
Tax planning and compliance 26,435
---------
$ 247,935
=========
14
EXECUTIVE COMPENSATION AND OTHER BENEFITS
Executive Compensation
The following table sets forth the annual and long-term compensation for the
fiscal year ended December 28, 2002 and for the two prior fiscal years for Linda
M. Autore, the Company's President and Chief Executive Officer, the three other
most highly compensated executive officers of the Company (the "Named
Officers"), and one Vice President who served in such capacity on December 28,
2002 and whose total annual compensation exceeded $100,000 in said fiscal year
and the compensation paid to the former Executive Vice President and Chief
Financial Officer. The Company has not granted stock appreciation rights.
Summary Compensation Table
Long-Term
Annual Compensation Compensation
------------------- Awards
------
Securities
Name and Underlying All Other
Principal Position Year Salary Bonus Options Compensation
------------------ ---- ($) ($) (#) ($)
----- ------ ------- ------------
Linda M. Autore, 2002 295,550 27,957 -- 18,069 (2)
President and Chief Executive Officer since 2001 279,567 -- -- 4,800 (1)
August 17, 1999, Member Office of the 2000 260,577 -- 27,000 4,800 (1)
President (Chief Executive Office)
June 15, 1999-August 17, 1999, Senior Vice
President Sales and Marketing since October
1998
Jerry Flasz, 2002 225,000 20,192 -- 4,800 (1)
Executive Vice President and Chief Information 2001 193,896 -- 20,000 4,365 (1)
Officer since January 2001 2000 -- -- -- --
Jon Garrity, 2002 190,769 13,832 -- 4,800 (1)
Senior Vice President of Supply Chain since 2001 153,692 -- 10,000 4,611 (1)
November 2001, Vice President of Supply Chain 2000 72,500 -- 10,000 1,950 (1)
from June 2000 until November 2001
James R. Simpson, 2002 130,334 18,529 -- 136,662 (3)
Executive Vice President and Chief Financial 2001 185,288 -- 30,000 3,390 (1)
Officer since March 2001 until June 2002 2000 -- -- -- --
John M. Zinzarella, 2002 145,077 2,150 10,000 710 (1)
Vice President of Finance, Treasurer and Chief 2001 23,885 -- 6,500 --
Financial Officer since November 14, 2002, 2000 -- -- -- --
Vice President and Controller (October 15,
2001 until November 13, 2002)
15
Patrick F. Early Jr., 2002 133,846 23,365 -- 4,716 (1)
Vice President, Logistics and Purchasing since 2001 103,846 -- 3,000 2,668 (1)
February 2001 2000 -- -- -- --
(1) Consists of the Company's contribution to the Named Officer's
retirement account under its defined contribution plan.
(2) Included in Ms. Autore's other compensation for 2002 is $4,800, which
consists of the Company's contribution to Ms. Autore's retirement
account under its defined contribution plan, and $13,269, which
represents a payment for unused earned vacation.
(3) Included in Mr. Simpson's other compensation for 2002 is $122,887 paid
under a severance agreement, $9,038 paid for unused earned vacation and
the Company's contribution of $4,737 to Mr. Simpson's retirement
account under its defined contribution plan.
Employment Related Agreements
Ms. Autore has an amended and restated employment agreement, dated as of October
25, 2002, to continue to serve as the Company's President and Chief Executive
Officer for a term starting October 25, 2002 and ending December 31, 2003. Under
the agreement, Ms. Autore's 2002 annual base salary rate was $295,550 and for
2003 and thereafter, at an annual rate of $295,550, plus an inflationary
adjustment for 2003.
Mr. Garrity has an amended and restated employment agreement, dated October 30,
2002, to continue to serve as the Company's Senior Vice President of Supply
Chain and Customer Support effective October 25, 2002 and ending December 31,
2003. Under the agreement, Mr. Garrity's 2003 annual base salary rate is
$200,000, plus an inflationary adjustment for 2003.
Mr. Flasz has an amended and restated employment agreement, dated October 25,
2002, to continue to serve as the Company's Chief Information Officer effective
October 25, 2002 and ending December 31, 2003. Under the agreement, Mr. Flasz's
2003 annual base salary rate is $225,000, plus an inflationary adjustment for
2003.
Mr. Zinzarella has an employment agreement, dated February 10, 2003 to serve as
the Company's Vice President of Finance, Treasurer and Chief Financial Officer
for a term starting February 10, 2003 and ending December 31, 2003. Under the
agreement, Mr. Zinzarella's 2003 annual base salary rate is $175,000, plus an
inflationary adjustment for 2003. Detailed information on Mr. Zinzarella's
options can be found in the table "Option Grants in Last Fiscal Year".
Each executive officer's employment agreement or amended and restated employment
agreement entitles him or her to participate under the Executive Officers' Bonus
Plan, in effect for the applicable fiscal year, entitling each a percentage of
his/her annual salary if the Company obtains specific key metrics (as defined in
the plan). Under the Company's 2001 - 2002 Change of Control and Position
Payment Plan, each executive officer participates under the plan entitling each
to a payment equal to a
16
percentage ranging from 75% to 100% of his/her salary in the event of a change
of control (as defined in the plan) followed by a termination of employment on
or following a change of position (as defined in the plan) within twelve months
after the change of control. In the event an executive officer becomes entitled
to a severance payment, he or she will also be entitled to acceleration of
exercisability of 50% of the otherwise unexercisable installments of the stock
options granted when such officer entered into his or her employment agreement.
Defined Benefit Plans
The following table shows the estimated annual benefits payable under the Plan
upon retirement at age 65 to persons in specified remuneration and
years-of-service classifications:
Average Highest
Consecutive Years of Service
5 Years' -------------------------------------------------------------
Compensation 10 Years 15 Years 20 Years 25 Years
------------ -------- -------- -------- --------
$130,000 $19,392 $29,088 $38,784 $48,480
$140,000 $21,242 $31,863 $42,484 $53,105
$150,000 $23,092 $34,638 $46,184 $57,730
$160,000 $24,942 $37,413 $49,884 $62,355
$170,000 $26,792 $40,188 $53,584 $66,980
The Company has a noncontributory, defined benefit pension plan (the "Plan").
Under the Plan, retirement benefits are based on the number of years of service
(up to a maximum of 25 years) multiplied by the sum of (i) 1.25% of the
employee's average base compensation during the highest consecutive five years,
and (ii) 0.6% of such compensation in excess of earnings for Social Security
benefits as promulgated in an Internal Revenue Service "Covered Compensation
Table Number l"; the normal form of payment is a single life annuity with ten
(10) years certain. Base compensation taken into account under the Plan is equal
to the salary reported in the Summary Compensation Table, except that the
Internal Revenue Code limits the compensation that may be taken into account in
calculating benefits payable under the Plan to $170,000 (as such may change from
time to time). Ms. Autore will have 17 years, Mr. Flasz will have 25 years, Mr.
Garrity will have 27 years, Mr. Zinzarella will have 29 years and Mr. Early will
have 19 years of service assuming retirement from the Company at age 65.
Stock Options
Option Grants in Last Fiscal Year
The following table sets forth information concerning the number of options
granted and the potential realized value of the stock options granted to each of
the Company's Named Officers to whom options were granted during its fiscal year
ended December 28, 2002:
17
Individual Grants
Percent of Potential
Total Realizable Value at
Number of Options Exercise Assumed Annual
Securities Granted to or Rates of Stock Price
Underlying Employees Base Appreciation for
Options in Fiscal Price Expiration Option Term
Name Granted (#) Year ($/Sh) Date 5% ($) 10% ($)
---- ----------- ---- ------ ---- ------- -------
John M. Zinzarella 10,000(1) 19.5% $7.70 11/26/07 21,274 47,009
(1) The options were granted at fair market value and vest over four years in
equal installments.
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option
Values
The following table sets forth information concerning options exercised during
the fiscal year ended December 28, 2002 and the number of unexercised options
and the imputed value thereof held by the Named Officers at December 28, 2002:
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money
Options at Options at
Shares Fiscal Year-End (#) Fiscal Year-End($)
Acquired ------------------- ------------------
on Value
Name Exercise (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
---- ------------ ------------ ----------- ------------- ----------- -------------
Linda M. Autore -- -- 32,750 17,250 -- --
Jerry Flasz -- -- 5,000 15,000 $5,750 $17,250
Jon Garrity -- -- 12,500 7,500 -- --
John M. Zinzarella -- -- 1,625 14,875 -- --
Patrick F. Early, Jr. -- -- 750 2,250 -- --
Compensation Committee Interlocks and Insider Participation
The current members of the Company's Compensation Committee are Messrs. Derow,
Kotler and Thomas, none of whom is or has been an officer or an employee of the
Company. There were no "Compensation Committee Interlocks" during fiscal year
2002.
18
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Indebtedness of Management
On January 11, 2001, the Board of Directors authorized the sale of 50,000 shares
of common stock from the Company's treasury at the then current market price to
Ms. Autore, President and Chief Executive Officer of the Company, in
consideration of Ms. Autore's execution and delivery of a promissory note in the
principal amount of $281,250. The promissory note bears an interest rate of 6.0%
per annum and is secured by said shares. The largest aggregate amount of
indebtedness outstanding during 2002 was $316,250. As of March 29, 2003, the
amount due to the Company under the Ms. Autore's note was $321,018.
COMPARISON OF TOTAL STOCKHOLDER RETURN
The graph below compares the cumulative total stockholders' return of the Common
Stock of the Company for the last five years with the American Stock Exchange
Composite Index and a composite index of Medical, Dental & Hospital Equipment &
Supply companies. The peer group composite index consists of the following six
companies within SIC Code 5047 Medical, Dental and Hospital Equipment and
Supplies (weighting based upon market capitalization): Henry Schein, Inc.
(HSIC), Owens & Minor Inc. (OMI), Prod-Dex, Inc. (PDEX), PSS World Medical, Inc.
(PSSI), and Chindex International, Inc. (CHDX). The graph plots the value of a
$100 investment on December 31, 1997, assuming that all dividends were
reinvested.
[THE FOLLOWING TABLE WAS REPRESENTED AS A LINE GRAPH IN THE PRINTED MATERIAL]
Return to Shareholders
Moore Medical Corp.
INDEXED RETURNS
Base
Period
Dec. 97 Dec. 98 Dec. 99 Dec. 00 Dec. 01 Dec. 02
------- ------- ------- ------- ------- -------
Moore Medical Corp. 100 124.08 89.61 44.85 79.5 65.72
American Stock Exchange Index 100 107.35 141.64 131.37 122.26 99.88
Peer Group Composite Index 100 120.97 44.33 94.19 102.2 113.09
19
ANNUAL REPORT
All stockholders of record as of April 10, 2003 are being sent concurrently with
this Proxy Statement a copy of the Company's 2002 Annual Report. The 2002 Annual
Report is not incorporated by reference into this Proxy Statement and is not to
be deemed a part hereof. The Company's consolidated financial statements for the
fiscal years ended December 30, 2000, December 29, 2001 and December 28, 2002,
as well as additional information required to be provided to stockholders
pursuant to Rule 14a-3(b) under the Exchange Act, are included in the 2002
Annual Report.
STOCKHOLDER PROPOSALS AND NOMINATIONS FOR 2004 ANNUAL MEETING
Stockholder Proposals
If a Stockholder intends to present a proposal at the Company's 2004 Annual
Meeting of Stockholders and seeks to have the proposal included in the Company's
Proxy Statement relating to that meeting, pursuant to Rule 14a-8 of the Exchange
Act, the proposal must be received by the Company no later than the close of
business on December 22, 2003. A stockholder may present a proposal not included
in said Proxy Statement at the Company's 2004 Annual Meeting of Stockholders
only if it is presented in compliance with the Company's By-Laws and the Company
has notice of such a matter no later than April 16, 2004; however, nominations
are governed by special By-Law procedures (described below). Any proposal
submitted after April 16, 2004 will be considered untimely and the Company's
proxies will have discretionary voting authority with respect to such matter.
Any proposals, as well as any related questions, should be directed to the Chief
Financial Officer of the Company.
Nominating Procedures
The Company's By-Laws provide that any stockholder entitled to vote for the
election of directors may nominate persons for election as directors only if
such stockholder has given written notice of such stockholder's intent to make
such nominations, either by personal delivery or by United States mail, postage
prepaid, to the Secretary of the Company, in care of the Chief Financial
Officer, Moore Medical Corp., P.O. Box 1500, New Britain, CT 06050, not later
than 60 days before the date of an annual meeting and not less than seven days
after the date on which notice of a special meeting is first given to
stockholders. Each such notice shall set forth:
(a) The name and address of the stockholder who intends to make the
nominations and of the person or persons to be nominated;
(b) A representation that the stockholder is a holder of record of
stock of the Company entitled to vote at such meeting and intends
to appear in person or by proxy at the meeting to nominate the
person or persons specified in the notice;
(c) A description of all arrangements or understandings between the
stockholder and each nominee and any other person or persons
(naming such person or persons) pursuant to which nominations are
to be made by the stockholder;
20
(d) Such other information regarding each nominee proposed by such
stockholder as would be required to be included in a proxy
statement filed pursuant to the proxy rules of the SEC; and
(e) The consent of each nominee to serve as a director of the Company
if so elected.
The presiding officer of the annual or special meeting may refuse to acknowledge
the nomination of any person not made in compliance with the foregoing
procedure. The Company has not received notice of nominations other than those
proposed by management for election at the meeting.
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors of the Company
does not know of any other matters to be brought before the Meeting. However, if
any other matters not mentioned in the Proxy Statement are properly brought
before the Meeting or any adjournments thereof, the persons named in the
enclosed Proxy or their substitutes will have discretionary authority to vote
Proxies given in said form, or otherwise act in respect of such matters in
accordance with their best judgment.
It is important that Proxies be returned promptly. Stockholders are, therefore,
urged to fill in, date, sign and return the Proxy immediately. No postage need
be affixed if the Proxy is mailed in the enclosed envelope in the United States.
A STOCKHOLDER MAY OBTAIN A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR
ITS FISCAL YEAR ENDED DECEMBER 28, 2002 WITHOUT CHARGE BY WRITING TO: CHIEF
FINANCIAL OFFICER, MOORE MEDICAL CORP., P.O. BOX 1500, NEW BRITAIN, CONNECTICUT
06050, OR E-MAIL TO: WWW.IR@MOOREMEDICAL.COM.
This Proxy Statement and the Company's Annual Report on Form 10-K are also
available on the Company's web site at www.mooremedical.com.
BY ORDER OF THE BOARD OF DIRECTORS
JOSEPH GREENBERGER, ESQ.
Secretary
April 21, 2003
21
--------------------------------------------------------------------------------
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
MOORE MEDICAL CORP. - ANNUAL MEETING OF STOCKHOLDERS
Thursday, May 22, 2003
The undersigned hereby appoints JOHN M. ZINZARELLA and JOSEPH GREENBERGER, and
each of them, with the full power of substitution, and as proxies to represent
the undersigned at the Annual Meeting of Stockholders to be held at The
Michelangelo Hotel, in the Roman Room, located at 152 West 51st Street, New
York, NY 10019, on Thursday, May 22, 2003 at 11:00 a.m., local time and at any
adjournment or postponement thereof, and to vote all the shares of stock the
undersigned would be entitled to vote if personally present at the meeting as
indicated on the reverse side.
(To be signed below)
--------------------------------------------------------------------------------
[X] Please mark your votes as in this example
The Board of Directors recommends a vote FOR Proposal 1.
FOR WITHHOLD
all nominees authority to vote Nominees: Linda M. Autore, Christopher Brody
(see instructions) for all nominees Peter A. Derow, Steven Kotler,
Item 1. ELECTION OF Robert H. Steele, Wilmer J. Thomas, Jr.
DIRECTORS [_] [_] Dan K. Wassong
Instruction: To withhold authority to vote for any nominee(s), print the name(s)
on the line below.
________________________________________________________________________________
Item 2. IN THEIR DISCRETION THE PROXIES
ARE AUTHORIZED TO VOTE UPON
SUCH OTHER BUSINESS AS MAY
PROPERLY COME BEFORE THE
MEETING
The shares represented by this proxy will be voted as directed. If no contrary
instruction is given, the shares will be voted FOR Item 1 and pursuant to
Item 2.
SIGNATURE(S)________________________________ DATE____________________________
NOTE REGARDING SIGNATURE: Please sign and date as name appears hereon and return
promptly. Joint owners should each sign. When signing as Corporate Officer,
Partner, Executor Administrator, Trustee or Guardian, please give full title.
Please note any change in your address alongside the address as it appears
hereon.