Item 1.
BUSINESS
Moore-Handley, Inc. (the "Company") is a full-service, wholesale distributor of plumbing and electrical supplies, power and hand tools, lawn and garden equipment and other hardware and building materials products. The Company's customers include retail home centers, hardware stores, building materials dealers, combination stores and a limited number of mass merchandisers. These customers are located mainly in the Southeast. The Company has approximately 1,100 active customers located throughout the Southeast which it services from a 430,000 square foot distribution center located in Pelham, Alabama, a suburb of Birmingham, and 20,000 square foot redistribution centers located in Winston-Salem, North Carolina and Ocala, Florida.
DESCRIPTION OF BUSINESS
In connection with its wholesale distribution activities, the Company offers a wide range of marketing, advertising and other support services which are designed to assist customers in maintaining and improving their market positions. These support services include computer-generated systems for the control of inventory, pricing and gross margin, as well as advertising and store installation and design services.
Home centers and hardware and building supply retailers have a continuing need for a wide variety of items produced by a number of different manufacturers. Purchasing from a distributor rather than directly from manufacturers allows independent retailers to simplify the purchasing process and to place smaller orders on an as-needed basis, thereby reducing their inventory carrying costs and excess stock risks. Moreover, wholesale distributors purchase products in quantities that enable them to obtain favorable prices and payment terms, which are reflected in prices and payment terms to independent retailers. Finally, the support services the Company offers to customers (in most instances at or near the Company's cost) are generally not available from manufacturers, nor can most customers afford to develop them independently. The Company believes that its ability to provide a broad range of merchandise from a single source on a timely basis and at competitive prices, together with support services, offers its customers a substantial advantage over purchasing directly from manufacturers.
In recent years there has been a trend towards consolidation in many wholesale industries, including the grocery, drug and hard goods distribution businesses. This trend also is apparent in the building supply and hardware wholesale business.
The Company believes that this consolidating trend is attributable to, among other things, the inability of small distributors to provide a full range of advertising, store layout and computer-generated pricing and inventory control services offered by larger entities. The Company has benefitted from this consolidating trend by recruiting experienced territory managers from competitors who have been acquired, gone out of business or reduced market area, thereby increasing the Company's customer base and sales.
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PRODUCTS
The Company closely monitors its items in stock, maintaining a full range of products while concentrating its efforts on carrying quantities of stock designed to achieve high inventory turns. The following table indicates the percentage of net sales by class of merchandise sold by the Company in the past three years:
MARKETING PROGRAMS AND CUSTOMER SERVICES
Sales Force. The Company's marketing program is implemented primarily by its sales force of territory managers, each of whom is responsible for specific customers within a particular geographic area. Territory managers generally call on customers weekly to check inventories, take orders and perform various in-store services. In addition, the territory managers act as liaison between the customer and the Company to promote the Company's support services.
In the second quarter of 1994 the Company began a program of hiring sales assistants to work with certain of the more senior territory managers. At December 31, 1996 there were 68 territory managers and assistants employeed by the Company.
At December 31, 1996, the COmpany also employed four district managers, each responsible for supervising and monitoring the activities of territory managers located in his assigned area. To supplement its primary sales force, the Company maintains a telemarketing group which solicits and accepts orders from customers between regular visits by territory managers.
Customer Services. An important component of the Company's marketing strategy is the range of support services it offers to its customers. These services, which the Company believes not only strengthen its relationships with existing customers but also attract new customers, are designed to enable customers to improve their marketing efforts and compete more effectively, thereby increasing the Company's sales.
The Company's support services include advertising and promotional services, store installation and design services, and computer-generated systems for control of inventory, pricing and gross margin. The Company also provides a store identification program, as well as additional promotional services, to selected customers under the name "Hardware House", a registered trade name owned and developed by the Company, and similar programs under the national trade name of "Pro".
The Company has developed a personal computer-based system for use by its customers which includes a color digitized catalog, electronic ordering and order editing capabilities and, additional software programs to enable the dealer to increase profitablity.
Operations. The Company's ability to fill and deliver small quantity orders for many different items enables customers to place orders on an as-needed basis, and in turn, to reduce inventory investment, storage and control costs. The Company's "fill-rate" - the percentage of items shipped within 48 hours of receipt of an order - is a measure of the efficiency of its order processing, inventory control and warehouse operations. In 1996 the Company's fill-rate, which has generally exceeded 95%, fell as a result of disruption to operations caused by changes made to the warehouse. See Management's Discussion and Analysis of Financial Condition and Results of Operations.
Deliveries are made on a regular basis primarily by the Company's fleet of approximately 46 owned and leased trucks and vans. The Company's sales personnel
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generally call on customers weekly, and deliveries of merchandise are normally made within two or three business days after placement of an order.
Direct Shipment Program. As an additional service to its customers, the Company maintains a direct shipment program under which customers order and receive shipments of some products directly from suppliers but are invoiced through the Company. These programs enable the Company to distribute products that would be inconvenient or expensive to stock at its warehouse, such as commodity building materials, and allow customers to receive discounts that otherwise might not be available to them. In 1996, approximately 31% of the Company's net sales were attributable to purchases under the direct shipment program.
CUSTOMERS
The Company currently services approximately 1,100 customers, including retail home centers, hardware stores, building materials dealers, combination stores and a limited number of mass merchandisers. No customer or affiliated group of customers accounted for more than 3% of the Company's 1996 net sales.
The Company's current customers are located primarily in Alabama, Florida, Georgia, Kentucky, Louisiana, Mississippi, North Carolina, South Carolina, Tennessee and Virginia.
From time to time the Company receives extended terms from its suppliers which it passes on to its customers.
PURCHASING, SUPPLIERS AND INVENTORY MANAGEMENT
The Company distributes approximately 36,600 items purchased from approximately 1,400 manufacturers. The Company's ten largest vendors in 1996 accounted for approximately 28.6% of total Company purchases, but no single manufacturer accounted for more than 5.8% of the Company's total purchases during the year. The Company has no long-term supply or distribution agreements with its vendors. Substantially all products of the type distributed by the Company are available from a number of manufacturers.
Because inventory constitutes a substantial portion of the Company's total assets, efficient control of inventory is an important management priority. The Company's inventory turns (determined by dividing monthly cost of stocked goods sold by average monthly inventory) were 5.1 in 1996 as compared to 5.0 in 1995.
COMPETITION
The Company's markets and those of its customers are highly competitive. The Company competes directly with other national and regional wholesalers (including co-ops), with direct-selling manufacturers and with specialty distributors on the basis of fill-rate, delivery time, price, breadth of product lines, marketing programs and support services. A number of these competitors are larger and have greater financial resources than the Company. The Company's business depends on its ability to distribute a large volume and variety of products efficiently and to provide high quality support services.
EMPLOYEES
As of December 31, 1996, the Company employed 455 persons, of whom approximately 182 are subject to a collective bargaining agreement expiring in December 1998. The
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Company has not experienced any strikes or work stoppages and considers its relationship with employees to be good.
EXECUTIVE OFFICERS OF THE COMPANY
The executive officers of the Company as of March 1, 1997, their ages and their present positions with the Company and their principal occupations since 1991 are as follows:
(1) Mr. White was employed by a subsidiary of K-Mart, Builders Square, a retailer of home improvement merchandise and building materials from 1992 to 1994. From 1985 to 1992 he was employed by Emery-Waterhouse, a wholesale distributor.
(2) Mr. Norris was employed by Agway Consumer Products, Inc., a wholesaler/retailer, from 1990 to 1995.
(3) Mr. Trant was self employed as a consultant from 1995 through August 1996; he was employed by C. D. Smith Co., a pharmaceutical distributor, from September through December of 1984. Prior to that he had been self employed as a consultant since 1990.
(4) Mr. Gaines was employed by Grossman's, a home center chain, from 1993 to 1996; he was employed by Triangle Building Centers, a home center chain, from 1992 to 1993; prior to that he was employed by Mr. Goodbuys, a home center chain, from 1990 to 1992.
Officers are elected annually and serve at the discretion of the Board of Directors.
Item 2.
Item 2.
PROPERTIES
The Company's distribution facility and executive offices are located in a single 430,000 square foot facility, with a 100,000 square foot mezzanine, on a 30-acre site in Pelham, Alabama. The Company leases the Pelham facility pursuant to leases entered into in connection with the issuance of three series of industrial development bonds. The Company has guaranteed payment of the principal and interest on such bonds, and in 1996 paid an aggregate of $949,700 pursuant to such lease agreements. The Company has options to purchase the property for a nominal cost at the expiration of the leases. The Company believes that its Pelham facility is adequate for its presently foreseeable needs. The Company also leases 20,000 square foot warehouse redistribution facilities in Winston-Salem, North Carolina and in Ocala, Florida for monthly rental of approximately $4,700 and $5,300, respectively, and office space in Atlanta, Georgia and New York, New York for which lease payments are approximately $64,000 and $87,000 per annum, respectively.
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PART II Item 5.
Item 5.
MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The Company's common stock is traded in the over-the-counter market and quoted on the NASDAQ National Market System, symbol MHCO. The following table shows the high and low sales prices by quarter in 1996 and 1995.
At March 7, 1997 there were 74 holders of record of the Company's common stock. Since a large number of these holders are nominees, the Company believes beneficial holders represent a substantially larger number.
The Company has not paid cash dividends on its common stock. It has been the policy of the Board of Directors to retain all available earnings to support the growth and expansion of its business. The payment of dividends on common stock in the future and the rate of such dividends, if any, will be determined by the Board of Directors based on the Company's earnings, financial condition and capital requirements.
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Item 6.
SELECTED FINANCIAL DATA
QUARTERLY FINANCIAL DATA - UNAUDITED
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Item 7.
Item 7.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
During the year the Company made major changes and improvements to its warehouse. Operations were disrupted while these changes were made resulting in higher expenses and a lower than normal service level, which the Company estimates have reduced net income for the year by about $1,500,000. By the end of the year service level was back to a normal level of 95% and warehouse expenses had begun to decrease. There may have been additional costs which cannot be quantified.
Net Sales
Net sales increased by $3,628,000, or 2.6%, in 1996 compared to 1995. However, the Company estimates sales would have been $3,818,000 higher if a normal service level had been maintained throughout the year.
As the Company's customer base has changed towards larger customers, sales shipped direct from the factory to the customer have increased. Gross margins on direct shipments are lower than gross margins on warehouse shipments; however, expenses related to direct shipments are also substantially lower, and the Company believes that direct shipments are an important part of its business as a full-service wholesale distributor.
The following table sets forth the major elements of net sales in the past three years.
Operations
The following table sets forth certain financial data as a percentage of net sales for the past three years:
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Gross Margin
Gross margin percentage has decreased due to the elimination of a number of smaller accounts which did not qualify for more competitive prices available to the Company's larger customers and the introduction of a more competitively priced dealer buying plan. Gross margin increased $416,000, or 1.8%, to $23,364,000 compared with 1995 although the gross margin percentage decreased slightly from 16.1% in 1995 to 16.0% in 1996. The following table sets forth gross margin and gross margin percentages and year-to-year changes by quarter for the last three years.
Warehouse and Delivery Expenses
Warehouse and delivery expenses increased by $2,041,000, or 25.9%, compared to 1995. As noted above, warehouse operations were disrupted while major changes and improvements to its warehouse were being made resulting in higher warehouse expenses. By the end of the year warehouse expenses had begun to reduce.
The following table shows the trend of warehouse and delivery expense by quarter for the last three years.
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Selling and Administrative Expenses
In 1996 selling and administrative expenses increased by $1,046,000, or 8%, compared to 1995. The increase was due in part to severance pay to terminated employees and moving expenses of new employees. See "Management Changes". In 1995 selling and administrative expenses increased by $734,000, or 5.9%, over 1994, largely due to upgrading the Corporation's computer system and changing the compensation package for salesmen.
The following table shows the quarterly trend of selling and administrative expenses in the last three years.
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Interest Expense
Interest expense increased by $249,000, or 37.8% over 1995 due to increased borrowings to finance the warehouse improvements and higher average inventories.
Liquidity and Capital Resources
The Company's working capital requirements are met with funds provided by operations and bank lines of credit providing for maximum borrowings of up to $12,000,000. Actual borrowings under these lines of credit and the average interest rate were as follows during the past three years:
(1) The average amount outstanding during the period was computed by dividing the daily outstanding principal balances by the number of days of the year.
(2) The weighted average interest rate during the period was computed by dividing the actual interest expense by the average borrowings.
Trade receivables were up $728,000 and $918,000 at December 31, 1996 and 1995, respectively, compared to the prior year because of increased sales with extended payment terms in the fourth quarters.
The following are the number of inventory items carried and average inventory turns for the last three years.
At December 31, 1996 inventories were up $2,362,000 compared to the prior year. In order to improve the "fill rate" (the percentage of items shipped within 48 hours of the receipt of an order) on customer orders, which was down due to warehouse disruption, inventories were increased in the later part of 1996. Accounts payable at December 31, 1996 were up $2,528,000 from December 31, 1995 as a result of the increase in inventories.
Capital expenditures in 1996 were $2,519,000 including the $2,000,000 warehouse modernization and computerization program which is being financed with a 7-year term loan. Depreciation and amortization for 1996 was $1,176,000.
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Management Changes
In May 1995 Mr. Emery H. White was elected President and Chief Executive Officer of the Company. Mr. White previously served as Senior Vice President of Builders Square, a 185 unit home center chain, and before that was President of Emery-Waterhouse Co., a Maine based distributor of hardware and home center products.
During 1996 and early 1997 the following executives were hired for key positions in operations, sales and merchandising:
Mr. Kenneth A. Trant was hired as Vice President of Operations. Mr. Trant has had many years experience with various major companies in the distribution industry.
Mr. John L. Norris was hired as Senior Vice President, Sales and Marketing. He was previously President of the consumer products group of Agway, Inc.
Mr. Michael J. Gaines was hired as Vice President of Merchandising. He was formerly Vice President-General Merchandise Manager for Grossman's, a home center chain.
INFORMATION CONCERNING FORWARD-LOOKING STATEMENTS
Certain of the statements contained in this report (other than the financial statements and other statements of historical fact) are forward-looking statements. There can be no assurance that future developments will be in accordance with management's expectations or that the effect of future developments on the Company will be those anticipated by management. Among the factors that could cause actual results to differ materially from estimates reflected in such forward-looking statements are the following:
- competitive pressures on sales and pricing, including those from other wholesale distributors and those from retailers in competition with the Company's customers;
- the Company's ability to achieve projected cost savings from its warehouse modernization program and ongoing cost reduction efforts;
- changes in cost of goods and the effect of differential terms and conditions available to larger competitors of the Company;
- uncertainties associated with any acquisition the Company may seek to implement; and
- changes in general economic conditions.
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Item 8.
Item 8.
Financial Statements and Supplementary Data
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
Board of Directors Moore-Handley, Inc.
We have audited the accompanying balance sheets of Moore-Handley, Inc. as of December 31, 1996 and 1995, and the related statements of operations, changes in stockholders' equity and cash flows for each of the three years in the period ended December 31, 1996. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Moore-Handley, Inc. at December 31, 1996 and 1995, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 1996, in conformity with generally accepted accounting principles.
Ernst & Young LLP
Birmingham, Alabama February 14, 1997
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MOORE-HANDLEY, INC.
BALANCE SHEETS DECEMBER 31, 1996 AND 1995
See accompanying notes.
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MOORE-HANDLEY, INC.
BALANCE SHEETS DECEMBER 31, 1996 AND 1995
See accompanying notes.
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MOORE-HANDLEY, INC.
STATEMENTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
See accompanying notes.
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MOORE-HANDLEY, INC.
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
See accompanying notes.
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See accompanying notes.
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MOORE-HANDLEY, INC. STATEMENTS OF CASH FLOW
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
SUPPLEMENTAL DISCLOSURES OF NON-CASH FINANCING ACTIVITIES
See accompanying notes.
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MOORE-HANDLEY, INC.
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
Cash and Cash Equivalents
The Company considers all highly liquid securities with maturities at the time of purchase of three months or less to be cash equivalents.
Basis of Financial Statements
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Concentration of Credit Risk
The Company is a wholesaler of hardware and building material products and as such grants credit to its customers, most of whom are independent retailers located in the Southeast. The Company performs periodic credit evaluations of its customers' financial condition and obtains personal guarantees and/or security interests where it deems necessary.
Inventory
Inventory is stated at the lower of weighted average cost or market.
Property and Equipment
Property and equipment is stated at cost and depreciation is computed using the straight line method over estimated useful lives as follows:
Income Taxes
Deferred income taxes are provided for temporary differences between financial and income tax reporting, primarily related to depreciation, inventory valuation and certain accrued costs.
Deferred Charges
Deferred charges, consisting of financing costs, are amortized over the term of the indebtedness.
Stock Option Accounting
The Company accounts for its stock compensation arrangements under the provisions of APB 25, "Accounting for Stock Issued to Employees," and intends to continue to do so.
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Income per Common Share
Income per common share is computed based on the weighted average number of common and common equivalent shares outstanding during the year. Common equivalent shares include dilutive employees' stock options.
2. LOANS TO OFFICERS
In 1989 two officers of the Company, Mr. Sawyer and Mr. West, purchased an aggregate of 35,000 shares of treasury stock, at market value, for notes of $149,000 collateralized by the shares and bearing interest at 10%. Mr. Sawyer's note for $106,000 was repaid in 1995 and Mr. West's note for $43,000 was repaid in January 1996. The outstanding balance of the notes had been reflected as a reduction of stockholders' equity in the accompanying balance sheet.
In 1990 the Company also loaned Mr. Sawyer $60,000 in connection with the purchase of a home. This note was repaid in 1995. The Company also loaned Mr. West $50,000 in 1990 and $72,000 in 1992. The balance was $31,000 at December 31, 1995 and was repaid in 1996.
In 1996 the Company loaned Mr. Norris $100,000 in connection with the purchase of a home and is due upon the sale of his former residence. This note bears interest at 1% above the prime lending rate.
The Company also has a demand note of $5,000 outstanding to Mr. Reid which bears interest at the prime rate.
3. BANK LOANS
The Company has lines of credit, renewable annually, with three banks which allow unsecured borrowings in the aggregate of up to $12,000,000 at the banks' prime interest rates. The Company is charged a commitment fee of 3/8 of 1% on the unused portion of one of the lines of credit.
As of December 31, 1996, the Company was in violation of a covenant contained in one of its line of credit agreements that required the Company to maintain a certain ratio of income before income taxes and interest expense to interest expense. The lender has waived this debt covenant violation as of December 31, 1996 and has amended the covenant requirements for 1997.
4. LONG-TERM DEBT
Long-term debt at December 31, 1996 and 1995 includes industrial development bonds with interest payable at rates from 85% to 93% of prime and obligations under capital leases financing transportation equipment. The Company is a party to lease agreements with an industrial development board which are being accounted for as asset purchases. Under the agreements, industrial development bonds were issued and the proceeds used to purchase land of $534,000 and building and equipment of $8,881,000. The Company has an unconditional obligation to pay the principal and interest on the bonds.
The Company has financed the purchase of certain transportation and computer equipment with leases. The leases, which include interest, are being accounted for as capital leases. Annual installments of principal on all capital leases decrease from approximately $206,000 in 1997 to $19,000 in 2000.
Maturities of long-term debt during the next five years are as follows:
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Interest expense on long-term debt and bank loans for the years ended December 31, 1996, 1995 and 1994 was $975,000, $739,000, and $677,000 respectively.
5. COMMITMENTS
Total future rental payments under non-cancelable equipment operating leases which expire in 1998 are $120,000. Annual rentals for the remainder of the lease terms are as follows:
Rental expense was $394,000, $442,000, and $408,000 in 1996, 1995 and 1994, respectively.
6. INCOME TAX
The (benefit) provision for income tax consists of the following:
Deferred income tax expense (benefit) is related to the following items:
The deferred income tax liabilities (assets) are reflected in the balance sheet as follows:
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The (benefit) provision for income taxes differs from the statutory federal income tax rate as a result of the following:
7. PENSION PLANS
The Company has two trusteed, noncontributory, qualified defined benefit pension plans ("Pension Plans") covering substantially all employees of the Company. Retirement benefits are provided based on employees' years of service and earnings. Contributions to the Pension Plans are based on the amount necessary to fund the net periodic pension cost. Contributions are limited to the amount that can be currently deducted for federal income tax purposes and are based on the amount necessary to fund the minimum level required by the Employee Retirement Income Security Act of 1974.
The Company's net periodic pension cost for the last three years included the following components:
The following table sets forth the assets and liabilities of the plans and the amount of the net prepaid pension cost recognized in the Company's balance sheets as of December 31, 1996 and 1995.
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(a) Plan assets consist of debt securities and comingled funds.
The assumed rates used to measure the projected benefit obligations and the expected earnings on plan assets at December 31 for the last three years were:
Weighted average discount rate 7% Long-term rate of return on assets 7% Increase in future compensation levels 4%
The Company has 401(k) savings plans covering substantially all employees. Contributions by the Company are discretionary and no contributions were made in 1996, 1995 or 1994.
8. INCENTIVE COMPENSATION PLAN
On May 23, 1991 the stockholders approved the 1991 Incentive Compensation Plan pursuant to which a maximum aggregate of 350,000 shares of common stock may be issued to employees and directors until April 12, 2001.
The Company has elected to follow Acounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees" (APB 25) and related Interpretation in accounting for its employee stock options. Under APB 25, because the exercise price for the Company's employees stock options equals the market price of the underlying stock on the date of grant, no compensation expense is recognized.
Pro forma information regarding net income and earnings per share is required by Financial Accounting Standards Board (FASB) Statement 123, and has been determined as if the Company had accounted for its employee stock options under the fair value method of that Statement. The fair value for these options was estimated at the date of grant using a Black-Scholes option pricing model with the following weighted-average assumptions for 1996 and 1995; respectively: risk-free interest rate of 7% and 7%; dividend yield of 0% and 0%; volatility factor of the expected market price of the Company's common stock of .34 and .34; and a weighted-average expected life of the option of 5.3 and 6.8 years.
For purposes of pro forma disclosures, the estimated fair value of the options is amortized to expense over the options' vesting period. The Company's pro forma information follows:
The effects of FASB Statement 123 on pro forma net income or loss in 1996 and 1995 is not likely to be representative of the effects on pro forma net income or loss in futures years.
As of December 31, 1996 the following options have been granted under this plan:
A. Options to officers for 80,000 shares at $3.75 per share (market value at date of grant) exercisable through April 2001 in four equal annual installments beginning April 12, 1992. Options for 40,000 shares were forfeited in 1996, 30,000 shares have been exercised, and 10,000 were outstanding as of December 31, 1996.
B. Options to Independent Directors for 12,000 shares at $5.00 per share, 4,000 shares at $4.75 per share, 4,000 shares at $4.875 per share and 4,000 at
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$3.50 per share (market value at date of grant) exercisable through May 2005.
C. Options to Officer-Directors for 110,000 shares at $5.36 per share (approximately 143% of market value at date of grant) exercisable, if at all, through April 2001 upon the first to occur of (i) the Company earning $.85 or more per share in any fiscal year during the term of the option; (ii) three months before the tenth anniversary of the date of grant of the option if the holder is still an employee; or (iii) the date of retirement of the holder if he is age 70 or older.
D. Options to Officer for 100,000 shares at $5.50 per share (market value at date of grant) exercisable through June, 2005, in five installments of 18,181 shares and one installment of 9,095 beginning in June 1996.
E. Options to Officers and employees for 150,000 shares were granted in 1996 at $3.375 to $3.625 per share (market value at date of grant) exercisable through 2006 in five equal installments beginning in 1997. These options, which have a weighted average exercise price of approximately $3.48, are subject to shareholder approval of an increase in the maximum shares which may be issued under the Plan.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Moore-Handley, Inc.
By: /s/ L. Ward Edwards ------------------------- L. Ward Edwards Vice President, Treasurer and Secretary and Director (Principal Accounting and Financial Officer)
March 25, 1996
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
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MOORE-HANDLEY, INC. INDEX OF EXHIBITS
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