UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 14A 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: / / 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 ss.240.14a-11(c) or section 240-14a-12 Moore Products Co. - -------------------------------------------------------------------------------- (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 [LOGO] MOORE PRODUCTS CO. Sumneytown Pike Spring House, Pennsylvania 19477 ----------------------------- NOTICE OF 1998 ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON MAY 1, 1998 ----------------------------- To Our Shareholders: The Annual Meeting of Shareholders of Moore Products Co. (the "Company") will be held on Friday, May 1, 1998, at 11:00 A.M. local time at the office of the Company, Spring House, Pennsylvania, for the following purposes: 1. To elect three directors of the Company for a term of four years; 2. To transact such other business as may properly come before the meeting, or any adjournments thereof. The close of business on March 12, 1998, has been fixed by the Board of Directors as the record date for the determination of shareholders entitled to notice of, and to vote at, this meeting or any adjournments thereof. Whether or not you expect to be present in person at the meeting, you are requested to execute promptly the enclosed proxy and return it in the envelope provided, which requires no further postage if mailed in the United States. By Order of the Board of Directors Robert E. Wisniewski Secretary and Treasurer March 27, 1998 Moore Products Co. Sumneytown Pike Spring House, PA 19477 PROXY STATEMENT Proxies in the form enclosed are solicited by the Board of Directors of Moore Products Co. ("the Company") for use at the Annual Meeting ("the Meeting") of the Shareholders of the Company to be held May 1, 1998 and any adjournments thereof. Execution of the enclosed proxy will not in any way affect a shareholder's right to attend the meeting and vote in person; and shareholders giving proxies may revoke them at any time before they are exercised by a written revocation or duly executed proxy bearing a later date filed with the Secretary of the Company. The solicitation of the proxies being on behalf of the Board of Directors, all expenses in connection therewith will be paid by the Company. No solicitation is intended to be made by any manner other than the sending of this Proxy Statement through the mail which is expected to occur on or about April 1, 1998. Voting Securities As of the record date, March 12, 1998, the Company had outstanding 2,604,581 shares of common stock, par value $1.00, each share entitled to one vote, and 175,950 shares of convertible preferred stock, par value $1.00, each share entitled to five votes. The preferred stock is convertible at any time, at the option of the holder, into common stock at the rate of one share of common stock for each 2-1/2 shares of preferred stock. The common and preferred shares are collectively referred to herein as the "voting shares." In the election of directors, assuming a quorum is present, the nominees receiving the highest number of votes cast at the Meeting (with the common stock and preferred stock voting as a single class) will be elected. Abstentions, or the withholding of, or specific direction not to cast any vote on a specific matter, such as broker non-votes, will not constitute the casting of a vote on such matter. Beneficial Ownership of Principal Shareholders and Management The following table sets forth, as of March 12, 1998, (except where otherwise indicated) certain information concerning the beneficial ownership of the Company's outstanding voting shares by (i) each person who is known by the Company to be the beneficial owner of more than 5% of either class of such voting shares, (ii) each director and nominee for director of the Company; (iii) each executive officer of the Company named in the Summary Compensation Table appearing later in this Proxy Statement, and (iv) all directors and executive officers of the Company as a group. Such information is based upon information supplied by such persons. 1 Name of Beneficial Class of Amount and Nature of Percent Owner of Group(1) Voting Shares Beneficial Ownership(2) of Class - ------------------ ------------- ----------------------- -------- Mellon Bank Corporation Common 633,167(3)(4) 23.79 Preferred 172,890(4) 98.3 Moore Products Co. Pension Plan Common 500,000(5) 19.2 Frances O. Moore Common 326,854(3)(6) 12.2 Preferred 172,890(6) 98.3 Dimensional Fund Advisors Inc. Common 188,400(7) 7.28 Wachovia Corporation Common 144,315(8) 5.6 Franklin Resources, Inc. Common 134,700(9) 5.1 Robert B. Adams, Director Common 5,033(10) * Donald E. Bogle, Director Common -- -- President and Chief Executive Officer Edward J. Curry, Director Common 11,892(10)(11) * Executive Vice President and Chief Operating Officer F. Lawton Hindle, Director Common 4,360(10) * Edward T. Hurd, Director Common 36,000(10) 1.4 James O. Moore, Director Common 353,233(3)(10)(12) 13.5 Preferred 1,020 * Thomas C. Moore, Director Common 345,992(3)(10)(13) 13.3 Preferred 1,020 * William B. Moore, Director Common 364,128(3)(10)(14) 13.9 Vice Chairman of the Board Preferred 1,020 * and Chief Technology Officer Raymond M. Reed, Director Common 7,000(10) * Ralph H. Owens, Director Common 5,331(10) * Edwin G. Rorke, Director Common 7,022(10) * 2 Edward M. Coll, Vice President, Common 7,905(10) * International Sales James McDonald, Vice President, Common 7,621(10) * North American Sales All directors and executive Common 1,039,143(3)(15) 38.4 officers as a group Preferred 3,060 1.7 (15 in number) - ----------------- *Less than 1% (1) The address of Mellon Bank Corporation is One Mellon Bank Center, Pittsburgh, PA 15258. The address of the Moore Products Co. Pension Plan is c/o Benefits Committee, Moore Products Co., Sumneytown Pike, Spring House, PA 19477. The addresses of F. O. Moore, T. C. Moore, J. O. Moore and W. B. Moore are c/o Moore Products Co., Sumneytown Pike, Spring House, PA 19477. The address of Dimensional Fund Advisors Inc. is 1299 Ocean Avenue, 11th Floor, Santa Monica, California 90401. The address of Franklin Resources, Inc. is 777 Mariners Island Blvd., P.O. Box 7777, San Mateo, CA 94403-7777. The address of Wachovia Corporation is 301 North Main Street, Winston-Salem, NC 27150-3099. (2) Except as otherwise indicated, the beneficial ownership reflected in this Proxy Statement is based upon sole voting and dispositive power (other than in the case of co-trustees, where such powers are shared). (3) Includes shares issuable upon the assumed conversion of the preferred shares beneficially owned by such person or entity. (4) Represents shares held as of December 31, 1997 by Mellon Bank Corporation and its affiliates ("Mellon") in various fiduciary capacities according to the Schedule 13G filed by it with the Securities and Exchange Commission. Includes: an aggregate of 257,698 common shares, and all of the indicated preferred shares, held as co-trustee (with Frances O. Moore) of the Trust under the Will of the late Coleman B. Moore; and an aggregate of 300,000 common shares held as co-trustee (with T. C. Moore, J. O. Moore, and W. B. Moore) of two trusts established by Coleman B. Moore; but does not include any of the common shares referred to in footnote (5) below. (5) Under the terms of the Company's Pension Plan and Trust, the Company's Benefits Committee has the power and duty to direct Mellon Bank Corporation, as Trustee, as to the voting, holding and sale of the Company common shares held in the Plan; however, by law Mellon, as Trustee, may have certain duties as to the management and voting of such common shares. The current members of the Company's Benefits Committee are: E. J. Curry, Executive Vice President and Chief Operating Officer of the Company; R. E. Wisniewski, Secretary and Treasurer of the Company; and M. Moran, Personnel Manager, all of whom disclaim beneficial ownership of the common shares held by the Plan. The decisions of the Benefits Committee with respect to the voting, holding and sale of such common shares are required to be made by a majority of the members of the Benefits Committee. 3 (6) Includes the common and preferred shares held by her as co-trustee of the Trust under the Will of Coleman B. Moore referred to in footnote (4) above. (7) According to their Schedule 13G, Dimensional Fund Advisors Inc. ("Dimensional"), a registered investment advisor, is deemed to have beneficial ownership of such shares as of December 31, 1997, all of which shares are held in portfolios of DFA Investment Dimensions Group Inc., a registered open-end investment company, or in series of the DFA Investment Trust Company, a Delaware business trust, or the DFA Group Trust and DFA Participation Group Trust, investment vehicles for qualified employee benefit plans, all of which Dimensional Fund Advisors Inc. serves as investment manager. Dimensional disclaims beneficial ownership of all such shares. (8) According to their Schedule 13G, shares are held as of December 31, 1997 by Wachovia Corporation. (9) Shares are owned by investment funds or other managed accounts as to which Franklin Advisory Services, Inc., an investment advisor and subsidiary of Franklin Resources Inc. ("FRI"), has sole voting and dispository power. FRI's principal shareholders are Charles B. Johnson and Rupert H. Johnson, Jr. (10) Includes, with respect to the particular named individual, common shares issuable under stock options granted to him which are exercisable currently or within 60 days as follows: R. B. Adams - 1,000; E. J. Curry - 10,800; L. Hindle - 4,360; E. T. Hurd - 36,000; J. O. Moore - 2,900; T. C. Moore - 1,000; W. B. Moore - 10,750; R. M. Reed - 7,000; R. H. Owens - 1,000; E. G. Rorke - 1,000; E. M. Coll - 7,080; J. McDonald - 7,400. (11) Does not include the 500,000 common shares held by the Company's Pension Plan (see footnote (5) above). (12) Includes: 300,000 common shares held by him as co-trustee of the two trusts referred to in footnote (4) above; and 13,000 common shares held by him as co-trustee of a trust established by Frances O. Moore. (13) Includes: 10,000 common shares held by him as trustee for his children; 300,000 common shares held by him as co-trustee of the two trusts referred to in footnote (4) above; 13,000 common shares held by him as co-trustee of a trust established by Frances O. Moore; and 2,294 common shares held by him as custodian for his minor grandchildren. (14) Includes: 300,000 common shares held by him as co-trustee of the two trusts referred to in footnote (4) above; 13,000 common shares held by him as co-trustee of a trust established by Frances O. Moore; and an aggregate of 7,350 common shares owned directly by his minor children. (15) Includes 99,270 common shares issuable under stock options which are exercisable currently or within 60 days, and the 500,000 common shares held by the Company's Pension Plan (see footnote (5) above). - -------------- Thomas C. Moore, James O. Moore, and William B. Moore are brothers and the sons of the late Coleman B. Moore, founder of the Company. 4 COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934 Section 16(a) of the Securities Exchange Act of 1934 requires the Company's directors, executive officers and persons who own more than ten percent of a registered class of the Company's equity securities, to file with the Securities and Exchange Commission (the "SEC") initial reports of ownership and reports of changes in ownership of common stock and other equity securities of the Company. Officers, directors and greater than ten-percent beneficial owners are required by SEC regulations to furnish the Company with copies of all Section 16(a) reports they file. Based solely upon review of the copies of such reports furnished to the Company and/or written representations, the Company believes that, except as further described below, there was compliance for the fiscal year ended December 31, 1997 with all Section 16(a) filing requirements applicable to the Company's officers, directors and greater than ten-percent beneficial owners. 5 1. ELECTION OF DIRECTORS The By-Laws of the Company provide for a Board of Directors not less than five nor more than eleven in number, to be divided into four classes of directors. At the 1998 Annual Meeting, the shareholders will elect three directors for a term expiring in 2002. The following have been nominated by the Board of Directors to serve as directors until the 2002 Annual Meeting of shareholders, or until a successor is elected and has duly qualified. Donald E. Bogle F. Lawton Hindle Thomas C. Moore The above nominees currently are serving as directors of the Company and were elected by the Company's shareholders, except for Mr. Bogle who was elected by the Board in January 1998. It is intended that the proxies will be voted for the nominees or for substituted nominees, in case any nominee becomes unavailable, which is not contemplated. However, proxies will not be voted for the election of more than three directors. The following table sets forth as of March 12, 1998, certain information with respect to the nominees for election as a director, and each director whose term of office will continue after the Annual Meeting. Present Director Term Name and Occupation(1) Age Since Expires - ---------------------- --- ----- ------- Donald E. Bogle * 52 1998 1998 President and Chief Executive Officer of the Company since October 1997; from October 1996 through September 1997 he was President of Home and Building Control, a unit of Honeywell, Inc. (a provider of home and building, and industrial control products); from 1992 to October 1996 various executive and management capacities with Home and Building Control; and Industrial Automation and Control, units of Honeywell, Inc. F. Lawton Hindle 66 1995 1998 Retired in 1995 as President of Moore Products Co. (Canada), Inc. (a wholly-owned subsidiary of the Company) Thomas C. Moore 65 1969 1998 Retired in 1994 as Regional Manager of the Company 6 Edward J. Curry* 51 1986 1999 Executive Vice President and Chief Operating Officer of the Company Raymond M. Reed 62 1991 1999 President, R. Reed & Associates, Inc. (a management consulting firm) and R. Reed Business Systems Consulting, Inc. (a systems implementation support firm); independent consultant to the Company since 1984 James O. Moore 57 1978 2000 Director of Corporate Technology of the Company William B. Moore* 55 1978 2000 Vice Chairman of the Board and Chief Technology Officer since October 1997; formerly President and Chief Executive Officer of the Company Ralph H. Owens 81 1974 2000 Retired in 1986 as Senior Vice President of the Company Robert B. Adams 67 1986 2001 President, CEO & Director, EST Group, Inc. (a manufacturer of pressure plugging and testing equipment) since 1994; President, Product Development Services Co. (a management and engineering consulting firm) since 1993; Retired in 1993 as Vice President, Engineering and Secretary of the Company Edward T. Hurd* 59 1996 2001 Chairman of the Board of the Company since August 1996, and independent consultant to the Company since April 1996; formerly Executive Vice President of Honeywell, Inc. and President of Industrial Control, a unit of Honeywell, Inc.; Director, Total Control Products Inc. (a provider of control products for the industrial automation market); Director, Iconics, Inc. (a manufacturer of industrial automation software) 7 Edwin G. Rorke 75 1968 2001 Chairman Emeritus; formerly Chairman of the Board of the Company; Retired in 1988 as Chief Executive Officer of the Company - ---------------- * member of the Executive Committee (1) Unless otherwise indicated, the named individuals have held the specified positions (other than directorships), or other positions with the indicated entities, for at least five years. Information Concerning Meetings and Certain Committees Four meetings of the Board of Directors were held in 1997. No director attended fewer than 75% of the total meetings of the Board and of any Board Committees on which he served. The Company has Audit and Compensation Committees, but does not have a Nominating Committee. The Audit Committee, the members of which are presently Robert B. Adams, Edward J. Curry, and Edwin G. Rorke, held two meetings in 1997. The Audit Committee recommends the engagement of independent accountants, reviews the scope of the audit, reviews the financial statements and performance of the independent accountants, considers comments made by the independent accountants with respect to the Company's system of internal accounting controls, reviews controls with the Company's financial and accounting staff and reviews nonaudit services provided by the Company's independent accountants. A Compensation Committee is appointed each year to study and make recommendations to the Board regarding compensation of officers and to administer employee stock option plans. The Committee held four meetings in 1997. The members of the Committee are (and during all of 1997 were) Robert B. Adams, Thomas C. Moore, and Ralph H. Owens. Compensation Committee Interlocks and Insider Participation Messrs. Owens and Adams formerly were officers and Thomas C. Moore formerly was a Regional Manager of the Company. 8 Compensation of Directors Directors, other than those currently employed by the Company, are paid $1,000 per day plus travel expenses for each Board and Committee meeting they attend on separate days. Current Non-employee Directors each receive 1,000 stock options granted annually under the 1997 Non-Employee Directors Equity Incentive Plan. On occasion, directors are compensated on a per diem basis for specific consulting services and related business expenses. Consulting fees during 1997 of $7,749 were paid to Raymond M. Reed or his affiliated consulting firm pursuant to a consulting agreement entered into in June 1996, and $111,000 was paid to Edward T. Hurd pursuant to a consulting agreement entered into in June 1996. At his retirement in 1995, F. Lawton Hindle, (former officer of the Company's Canadian subsidiary and a member of the Board of Directors) entered into a consulting and non-compete agreement with the Company for a three-year period ending December 31, 1997. Mr. Hindle was paid $10,000 under this agreement during 1997. 2. OTHER MATTERS The Board of Directors does not know at present of any matters to be presented at the Meeting other than those mentioned in the Notice of Meeting and customary procedural matters. However, if other matters should properly come before the Meeting, the proxies solicited hereby will be voted on such matters in accordance with the judgment of the persons voting such proxies, to the extent permitted by applicable rules of the Securities and Exchange Commission. 9 ADDITIONAL INFORMATION Report of the Compensation Committee Executive compensation at the Company is comprised primarily of base salary, a performance-related variable incentive bonus (initiated in 1997), split-dollar life insurance, a pension plan, a 401(k) employee retirement savings plan with corporate matching contributions and a stock option plan The Company's executive compensation program, including that for its Chief Executive Officer, is guided by principles designed to align compensation with overall business strategy, the current and long-term initiatives of management, overall corporate performance and Company values. The program is also compared against statistical studies of comparable positions and responsibilities in similar organizations to test the competitiveness of total executive compensation. The Committee periodically reviews overall compensation policy and design with the intention of considering changes dictated by industry trends and Company performance. In 1997, base compensation was determined by an assessment of each executive's performance, current salary in relation to the salary range designated for the job, experience, and potential for advancement. The Committee considered aspects of performance as measured in financial terms, but also evaluated the success of the management team in areas of performance that cannot be measured by purely qualitative tools, including development and execution of strategic plans, development of management and employees, and the exercise of leadership. All of these factors were collectively taken into account by management and the Committee in determining the proper levels of base compensation and annual increases. Incentive compensation ranging from 10% to 25% was accrued for executives based on meeting overall corporate operating profit goals, individual performance and on the extent to which the business plans for their areas of responsibility were met or exceeded. Between 40% and 80% of 1997 bonuses were based upon overall operating profit of the Company. The remaining percentage was based on the achievement of individual and group performance goals. On balance the performance goals were met or exceeded and therefore compensation was paid accordingly. The Company's stock option plan is intended to motivate and reward employees for establishing and executing long-term business objectives that are linked to shareholder value. Options granted in 1997 were determined based upon individual influence, initiative and managerial ability in initiating changes that are intended to yield long-term profitability and enhance shareholder value. No particular weight was ascribed by the Committee to any one or more of these factors. Furthermore, the Committee did not rely on any particular hurdles, benchmarks or other objective criteria in awarding these options. 10 For much of 1997 W. B. Moore held the position of President and Chief Executive Officer of the Company. During 1997 the Committee granted Mr. Moore a base salary increase of 5.4% which is consistent with the Company's established merit increase program, relevant experience and competitive market surveys. As reflected in the Company's financial statements, operating performance in 1997 reflected significant sales growth and much improved operating income. In light of this performance and assessment of his personal performance, the Committee granted Mr. Moore a bonus and stock option grant consistent with the criteria described above. Upon his appointment as President and Chief Executive Officer in October 1997, the Committee established a compensation package for D. E. Bogle that was consistent with the established criteria noted above. Base salary was set with due consideration of survey data and reference to his experience. Incentive pay, which ranges from 25% to 50% of base salary, is tied to the overall annual operating performance of the Company. Options granted at the time of his employment are intended to encourage long term success for the Company that contributes to shareholder value. It is the Committee's policy to establish and maintain compensation programs for executive officers which operate in the best interests of the Company and its shareholders in achieving the corporation's long-term business objectives. Compensation Committee: Thomas C. Moore Ralph H. Owens Robert B. Adams March 1998 11 Summary Compensation Table The following table sets forth certain information concerning the compensation paid or accrued to or for: (i) the Company's Chief Executive Officer and (ii) the four most highly compensated other executive officers whose total annual salary and bonus exceeded 100,000 for 1997. Annual Compensation Long-Term Compensation -------------------------- ------------ Shares Underlying All Other Name and Salary Bonus Options Compensation Principal Position Year ($) ($) (#) ($)(3) - --------------------------------------------------------------------------------------------------------------------- Donald E. Bogle(1)(2) 1997 39,423 10,000 100,000 -- President and Chief Executive Officer William B. Moore(1) 1997 171,885 25,783 2,000 5,800 Vice Chairman of 1996 166,000 0 3,000 5,851 the Board and 1995 166,000 0 0 5,851 Chief Technology Officer Edward J. Curry 1997 162,231 32,446 22,000 5,424 Executive Vice 1996 157,000 0 3,000 5,320 President and 1995 147,385 0 11,000 5,152 Chief Operating Officer James McDonald 1997 120,884 12,088 2,000 4,482 Vice President, 1996 111,885 0 2,000 4,496 North American 1995 101,231 0 8,000 4,597 Sales Edward M. Coll 1997 122,731 12,273 2,000 4,408 Vice President, 1996 109,808 0 2,000 4,423 International Sales 1995 94,515 0 7,800 1,890 - --------------- (1) Mr. Moore served as President and Chief Executive Officer until October 31, 1997 at which time Mr. Bogle was elected President and Chief Executive Officer. (2) See "Employment Terms" below regarding compensation arrangements for Mr. Bogle. (3) Except for Mr. Bogle, amounts disclosed as "all other compensation" represent Company matching contributions under a 401(k) retirement savings plan, and annual premiums paid under an officer split-dollar insurance program that provides supplemental life insurance coverage for each executive officer (to a maximum of $100,000) to retirement and $100,000 after retirement. A portion of the premiums paid by the Company for an executive officer's split-dollar policy will be repaid to the Company out of the death benefit under such policy. 12 Employment Terms The Company and Mr. Bogle have agreed upon certain basic terms of employment that it is expected will ultimately be incorporated into a written employment agreement. The basic elements of that agreement are as follows: Mr. Bogle's compensation as approved by the Compensation Committee includes a base salary of $250,000 per year plus a bonus ranging from 25% to 50% of base salary if certain business plan objectives are achieved. Long-term compensation tied to shareholder value was provided with the granting in 1997 of non-qualified stock options to purchase 100,000 shares of common stock. Half of the granted shares vest on January 1, 1999. The remaining 50,000 shares vest on January 1, 2003, but vesting will be accelerated upon achievement of certain operating performance goals. Furthermore, if certain operating goals are achieved for 1999 an additional grant of options for 50,000 shares will be made at the then current common stock market price. In addition, to the above the Company will reimburse Mr. Bogle for relocation costs, grossed up for taxes and will provide employee benefits, use of an automobile, and premiums on an executive life insurance policy. It is contemplated that in the event of termination of employment in certain circumstances, Mr. Bogle will be entitled to one years salary plus bonus to the extent earned, continuation of various insurance benefits, and immediate vesting of granted options to be exercised within one year. Pension Plan The Company has a defined benefit pension plan which covers all employees over age 21 with one year of service. A plan member's annual pension is 1.5% of the average of his highest five consecutive years' base salary, multiplied by the number of years of credited service at date of retirement. The base salary or wages paid by the Company to plan participants is the only compensation covered by the plan. The 1997 covered compensation and credited years of service for the executive officers listed above were as follows: D. E. Bogle - $250,000 with no years; W. B. Moore - $175,000 with 30 years; E. J. Curry - $165,000 with 18 years; J. McDonald - $124,000 with 26 years; and E. M. Coll - 130,000 with 26 years. The following table illustrates the estimated straight-life annual retirement benefits payable at normal retirement age under the plan. The benefits listed are not subject to any deduction for Social Security benefits or other offset amounts. Benefits are subject to limitations imposed by the Internal Revenue Code, which includes a $160,000 annual compensation limit. Years of Service ----------------------------------------------- Remuneration 10 Years 20 Years 30 Years 40 Years - ------------- -------- -------- -------- -------- $ 100,000 $ 15,000 $ 30,000 $ 45,000 $ 60,000 125,000 18,750 37,500 56,250 75,000 150,000 22,500 45,000 67,500 90,000 175,000 24,000 48,000 72,000 96,000 200,000 24,000 48,000 72,000 96,000 225,000 24,000 48,000 72,000 96,000 250,000 24,000 48,000 72,000 96,000 275,000 24,000 48,000 72,000 96,000 300,000 24,000 48,000 72,000 96,000 13 Stock Option Grants, Exercises and Holdings The following tables set forth information concerning options to purchase common stock granted to and exercised by the individuals named in the Summary Compensation Table during 1997, and unexercised stock options held by them at the end of 1997. All options were granted under the 1994 Incentive Stock Option and Non-Qualified Stock Option Plan. Option Grants in 1997 Individual Grants ---------------------------------------------- % of Total Potential Realizable Number of Options Value at Assumed Shares Granted Exercise Annual Rate of Stock Underlying Employees or Base Price Appreciation For Options in Fiscal Price Expiration Option Term Name Granted(#) Year ($/Sh) Date 5%($) 10%($) ---- ---------- --------- -------- ----------- --------- --------- Donald E. Bogle 100,000(1) 40.77 28.875 10/30/2007 1,815,933 4,601,931 William B. Moore 2,000(2) .82 23.38 4/29/2002 7,482 21,687 Edward J. Curry 2,000(3) .82 21.25 4/29/2002 26,728 67,734 20,000(4) 8.15 28.875 10/30/2007 363,187 920,386 James McDonald 2,000(3) .82 21.25 4/29/2007 26,728 67,734 Edward M. Coll 2,000(3) .82 21.25 4/29/2007 26,728 67,734 - ---------------- (1) The exercise price of these options was 100% of the fair market value on the date of grant. 50,000 options become exercisable on 1/1/1999. The remaining 50,000 options become exercisable on 1/1/2003, but will be accelerated if certain operating performance goals are met. (2) The exercise price of these options was 110% of the fair market value on the date of grant, and they become exercisable in four equal installments commencing on date of grant, subject to possible acceleration in certain circumstances. (3) The exercise price of these options was 100% of the fair market value on the date of grant, and they become exercisable in five equal installments commencing on date of grant, subject to possible acceleration in certain circumstances. (4) The exercise price of these options was 100% of the fair market value on the date of grant. Options become exercisable on 1/1/2003, except that vesting will be accelerated upon completion of certain strategic goals. 14 Aggregate Option Exercises in 1997 and Year-End Option Values Shares Acquired Number of Shares Value of Unexercised On Value Underlying Unexercised In-the-Money Options at Exercise Realized Options at FY-End(#) FY-End($) Name (#) ($) Exercisable/Unexercisable Exercisable/Unexercisable(1) ---- -------- -------- ------------------------- ---------------------------- Donald E. Bogle None N/A 0 /100,000 0 /762,500 William B. Moore None N/A 8,250/ 6,750 156,544/112,371 Edward J. Curry None N/A 9,200/33,800 183,100/419,150 James McDonald None N/A 6,300/10,200 128,225/194,900 Edward M. Coll None N/A 6,040/ 9,960 122,890/190,010 - -------------- (1) Market value of underlying securities at year-end, minus the exercise price of "in-the-money" options. Shareholder Return Performance Graph The following graph compares for the years 1993 through 1997 the yearly change in the cumulative total shareholder return on the Company's common stock with the cumulative total returns, as calculated by Media General Financial Services, for the NASDAQ Market Value Index and an index comprised of 150 publicly traded companies as classified by Dow Jones & Company, Inc. into an industry group identified as "Industrial Technology." [GRAPHIC OMITTED] [GRAPHIC] In the printed version of the document, a line graph appears which depicts the following plot points: FIVE YEAR CUMULATIVE TOTAL RETURN --------------------------------- 1992 1993 1994 1995 1996 1997 ---- ------ ------ ------ ------ ------ MOORE PRODUCTS CO. 100 89.28 87.84 102.96 103.68 213.12 INDUSTRY INDEX 100 103.25 112.63 168.3 169.98 184.33 NASDAQ 100 119.95 125.94 163.35 202.99 248.3 The above graph assumes that the value of the investment was $100 on December 31, 1992, and that all dividends were reinvested. 15 INDEPENDENT PUBLIC ACCOUNTANTS Ernst & Young LLP served as the Company's independent public accountants to audit the accounts of the Company and its subsidiaries for 1997. Auditors to serve in 1998 will be appointed in May, 1998 in accordance with the Company's standard practice. Ernst & Young LLP has served as the Company's auditors since 1968. Representatives of Ernst & Young LLP will not be present at the Annual Meeting. SUBMISSION OF SHAREHOLDER PROPOSALS Under Securities and Exchange Commission rules, shareholders meeting specific eligibility requirements are entitled to have certain types of proposals included in the Company's Proxy Statement. Any such shareholder desiring to have a proposal included in the Company's Proxy Statement for its 1999 Annual Meeting must deliver such proposal (which must comply with the requirements of Rule 14a-8 under the Securities Exchange Act of 1934) to the attention of the Corporate Secretary, at the address of the Company set forth below, not later than December 7, 1998. Annual Report The Annual Report to shareholders containing audited results for the year 1997 accompanies this Proxy Statement, but is not to be regarded as proxy solicitation material. A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR 1997, AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, WILL BE FURNISHED TO ANY SHAREHOLDER WITHOUT CHARGE UPON WRITTEN REQUEST TO THE ATTENTION OF THE CORPORATE TREASURER, MOORE PRODUCTS CO., SPRING HOUSE, PENNSYLVANIA 19477. ROBERT E. WISNIEWSKI Secretary & Treasurer March 27, 1998 MOORE PRODUCTS CO. Annual Meeting of Shareholders May 1, 1998 This Proxy Solicited on Behalf of the Board of Directors The undersigned hereby appoint(s) EDWARD J. CURRY and ROBERT E. WISNIEWSKI or either of them, with full power of substitution, proxies to vote, as designated on the reverse side, all of the voting shares of capital stock of MOORE PRODUCTS CO. held of record by the undersigned on March 12, 1998, at the Annual Meeting of Shareholders to be held on May 1, 1998, and at any adjournments thereof. THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED. IF NO CONTRARY DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR PROPOSAL 1 ON THE REVERSE SIDE AND IN ACCORDANCE WITH THE PROXIES' BEST JUDGEMENT UPON OTHER MATTERS PROPERLY COMING BEFORE THE MEETING AND ANY ADJOURNMENTS THEREOF. (Continued on reverse side) MOORE PRODUCTS CO. YOUR VOTE IS IMPORTANT TO US. PLEASE COMPLETE, DATE AND SIGN THE ABOVE PROXY CARD AND RETURN IT PROMPTLY IN THE ACCOMPANYING ENVELOPE. IF YOUR STOCK CERTIFICATE IS LOST, STOLEN OR DESTROYED, OR IF YOU CHANGE YOUR ADDRESS, PLEASE CONTACT OUR STOCK TRANSFER AGENT, CHASEMELLON SHAREHOLDER SERVICES, AT 1-800-526-0801. 1. Election of Directors To vote FOR To Withhold the nominees Authority to vote listed below for the nominees check this box check this box (except as marked to the contrary below) / / / / (To withhold authority to vote for any individual nominee, strike a line through the nominee's name listed below.) Donald E. Bogle F. Lawton Hindle Thomas C. Moore 2. In their discretion, the proxies are authorized to vote upon such other business as may properly come before the meeting. DATED: 1998 ----------------------------- --------------------------------------- Signature --------------------------------------- Signature if held jointly Please sign exactly as name appears hereon. When shares are held by joint tenants, both should sign. When signing as attorney, or as executor, administrator, trustee, or guardian, please give full title as such. If a corporation, please sign in full corporate name by President or other authorized officer. If a partnership, please sign in partnership name by authorized person. PLEASE PROMPTLY MARK, SIGN, DATE AND RETURN THE PROXY CARD(S) USING THE ENCLOSED ENVELOPE. 2