-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Kt1vlg3YhQIRD3AQoRtloJVg+oTNhJryPS8dT20BvY1yhC3v1DgpbVPf1/ILOZji PO1nDi4LH6jd/mZCzItM4Q== /in/edgar/work/0000950109-00-004547/0000950109-00-004547.txt : 20001115 0000950109-00-004547.hdr.sgml : 20001115 ACCESSION NUMBER: 0000950109-00-004547 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20000930 FILED AS OF DATE: 20001114 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MOORE MEDICAL CORP CENTRAL INDEX KEY: 0000074691 STANDARD INDUSTRIAL CLASSIFICATION: [5047 ] IRS NUMBER: 221897821 STATE OF INCORPORATION: DE FISCAL YEAR END: 0102 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-08903 FILM NUMBER: 764845 BUSINESS ADDRESS: STREET 1: PO BOX 1500 STREET 2: 389 JOHN DOWNEY DR CITY: NEW BRITAIN STATE: CT ZIP: 06050 BUSINESS PHONE: 2038263600 MAIL ADDRESS: STREET 1: 389 JOHN DOWNEY DRIVE STREET 2: 389 JOHN DOWNEY DRIVE CITY: NEW BRITAIN STATE: CT ZIP: 06050 FORMER COMPANY: FORMER CONFORMED NAME: OPTEL CORP DATE OF NAME CHANGE: 19850611 10-Q 1 0001.txt FORM 10-Q ================================================================================ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ---------------------- 2000 FORM 10-Q For the Fiscal THIRD QUARTER Ended September 30, 2000 Quarterly Report Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934 MOORE MEDICAL CORP. (Exact name of registrant as specified in its charter) - -------------------------------------------------------------------------------- Delaware 1-8903 (State of incorporation) (Commission File Number) P.O. Box 1500, New Britain, CT 06050 22-1897821 (Address of principal executive offices) (I.R.S. Employer Identification Number) 860-826-3600 (Registrant's telephone number) Securities registered pursuant to Section 12(b) of the Act: Common Stock ($.01 Par Value) American Stock Exchange Rights to Purchase Series I Junior Preferred Stock American Stock Exchange (Title of Each Class) (Name of each exchange on which registered) - -------------------------------------------------------------------------------- Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding twelve months, and (2) has been subject to such filing requirements for the past 90 days. Yes X No _______ -------- Approximately 3,101,434 Number of shares of Common Stock outstanding as of October 26, 2000 Total number of pages in the numbered original (including exhibits) is 18 This is page 1 of 14 pages. ================================================================================ 1 MOORE MEDICAL CORP. Index
Page No. -------- Part I. Financial Information Item 1. Financial Statements Balance Sheets at the end of the third quarter of 2000 and at the end of the year 1999....................... 3 Statements of Operations for the third quarters of 2000 and 1999........................................... 4 Statements of Operations for the first three quarters of 2000 and 1999........................................... 5 Statements of Cash Flows for the first three quarters of 2000 and 1999........................................... 6 Notes to Financial Statements................................... 7-8 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations........................ 8-13 Item 3. Quantative and Qualitative Disclosures About Market Risk................................................ 13 Part II. Other Information Item 6. Exhibits and Reports on Form 8-K............................... 14 Signatures................................................................. 14
2 MOORE MEDICAL CORP. Balance Sheets
- ---------------------------------------------------------------------------------------------------------------- (Amounts in thousands, except par value) Third Quarter 2000 Year 1999 (Unaudited) - ---------------------------------------------------------------------------------------------------------------- ASSETS Current Assets Cash $ 3,962 $ 744 Accounts receivable, less allowances of $200........................................................ 14,006 11,488 Inventories........................................................ 11,439 14,242 Prepaid expenses and other current assets.......................... 2,731 1,852 Deferred income taxes.............................................. 2,330 2,330 ------- ------- Total Current Assets...................................... 34,468 30,656 ------- ------- Noncurrent Assets Equipment and leasehold improvements, net.. 10,146 10,641 Other assets....................................................... 2,442 669 ------- ------- Total Noncurrent Assets................................... 12,588 11,310 ------- -------- $47,056 $41,966 ======= ======= LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities Accounts payable................................................... $11,206 $ 7,483 Accrued expenses................................................... 4,831 4,665 ------- ------- Total Current Liabilities................................. 16,037 12,148 ------- ------- Deferred Income Taxes..................................................... 2,368 2,368 Long-term Notes Payable................................................... 500 -- Shareholders' Equity Preferred stock - no shares outstanding........................... -- -- Common stock - $.01 par value; shares authorized - 10,000 and 5,000 shares issued - 3,246 34 33 Capital in excess of par value..................................... 21,694 21,675 Retained earnings.................................................. 7,706 8,449 ------- ------- 29,434 30,157 Less treasury shares, at cost, 145 and 305 shares......................................................... (1,283) (2,707) ------- ------- Total Shareholders' Equity................................ 28,151 27,450 ------- ------- $47,056 $41,966 ======= ======= - -----------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements. 3 MOORE MEDICAL CORP. Statements of Operations - -------------------------------------------------------------------------------- (Amounts in thousands, except per share data) Third Quarter ------------------------- 2000 1999 (Unaudited) - -------------------------------------------------------------------------------- Net sales .......................................... $33,038 $31,077 Cost of products sold .............................. 23,127 21,631 -------- -------- Gross profit ....................................... 9,911 9,446 Selling, general & administrative expenses ......... 10,890 8,654 -------- -------- Operating (loss) income ............................ (979) 792 Interest (income) expense, net ..................... (65) 14 -------- -------- (Loss) income before income taxes .................. (914) 778 Income tax (benefit) provision ..................... (347) (25) -------- -------- Net (loss) income .................................. $(567) $803 ======== ======== Basic and diluted net (loss) income per share ...... $(.18) $.27 ======== ======== - -------------------------------------------------------------------------------- The accompanying notes are an integral part of the financial statements. 4 MOORE MEDICAL CORP. Statements of Operations - -------------------------------------------------------------------------------- (Amounts in thousands, except per share data) First Three Quarters ----------------------- 2000 1999 (Unaudited) - -------------------------------------------------------------------------------- Net sales ........................................... $92,808 $89,499 Cost of products sold ............................... 65,146 61,328 -------- -------- Gross profit ........................................ 27,662 28,171 Selling, general & administrative expenses .......... 29,017 26,009 -------- -------- Operating (loss) income ............................. (1,355) 2,162 Interest income, net ................................ 168 38 -------- -------- (Loss) income before income taxes ................... (1,187) 2,200 Income tax (benefit) provision ...................... (444) 492 -------- -------- Net (loss) income ................................... $(743) $1,708 ======== ======== Basic and diluted net (loss) income per share ....... $(.24) $.58 ======== ======== - -------------------------------------------------------------------------------- The accompanying notes are an integral part of the financial statements. 5 MOORE MEDICAL CORP. Statements of Cash Flows
- -------------------------------------------------------------------------------------- (Amounts in thousands) First Three Quarters --------------------- 2000 1999 (Unaudited) - -------------------------------------------------------------------------------------- Cash Flows From Operating Activities Net (loss) income ................................... $(743) $1,708 Adjustments to reconcile net (loss) income to net cash flows provided by (used in) operating activities Depreciation and amortization ................... 2,036 1,299 Deferred income taxes ........................... -- 1,766 Changes in operating assets and liabilities Accounts receivable ........................ (2,518) (4,895) Inventories ................................ 2,803 (2,123) Other current assets ....................... (879) (1,379) Accounts payable ........................... 3,723 3,816 Other current liabilities .................. 39 (1,951) ------- ------- Net cash flows provided by (used in) operating activities ...................... 4,461 (1,759) ------- ------- Cash Flows From Investing Activities Equipment and leasehold improvements ................ (1,503) (4,463) Acquisition of business ............................. (1,684) -- ------- ------- Net cash flows (used in) investing activities ... (3,187) (4,463) ------- ------- Cash Flows From Financing Activities Revolving credit financing, net ..................... -- 2,661 Sale of treasury stock............................... 1,444 41 Long term notes payable.............................. 500 -- -------- -------- Net cash flows provided by financing activities.................................. 1,944 2,702 ------- ------- Increase (decrease) in cash................................. 3,218 (3,520) Cash at beginning of period................................. 744 3,520 -------- ------- Cash At End Of Period....................................... $3,962 $ -- ====== ========
- -------------------------------------------------------------------------------- The accompanying notes are an integral part of the financial statements. 6 MOORE MEDICAL CORP. NOTES TO FINANCIAL STATEMENTS Note 1 - Summary of Significant Accounting Policies The Company Moore Medical Corp. is an internet-enabled marketer and distributor of medical/surgical products and pharmaceuticals to nearly 100,000 healthcare professionals in non-hospital settings nationwide, including: Physicians; Podiatrists; Surgeons; Emergency Medical Technicians; Schools; Corrections; Municipalities; and Occupational/Industrial Health Doctors and Nurses; and other specialty practice communities. It markets and serves its customers through direct mail, industry specialized telephone support representatives, key opportunity and field sales representatives, and through the Internet. Moore Medical's distribution and fulfillment business has more than fifty years of operating experience. Basis of Presentation The Company has prepared the accompanying unaudited financial statements in accordance with generally accepted accounting principles for interim financial statements. In the opinion of management, all adjustments necessary for a fair presentation of the results for the interim period have been made. The results for the three months ended September 30, 2000 do not necessarily indicate the results to be expected for the fiscal year ended December 30, 2000 or any other future period. The fiscal quarters ended on September 30, 2000 and October 2, 1999. The accompanying unaudited financial statements should be read in conjunction with the Notes to Financial Statements and Management's Discussion and Analysis of Financial Condition and Results of Operations included in the Company's 1999 Annual Report filed on Form 10-K and in this Form 10-Q Report. Certain prior year amounts have been reclassified to conform with the current year presentation. Note 2 - Contingencies Beginning in 1991, the Company entered into various supply contracts with the U.S. Department of Veterans Affairs and the Defense Department. In April 1997, the Company completed a review of its compliance with various pricing provisions of these contracts and, with the assistance of special legal counsel, concluded that adjustments may be due to the federal agencies for potential asserted claims against the Company relating to pricing deficiencies under product supply contracts subject to General 7 Services Administration and Department of Defense regulations. In the fourth quarter of 1996 the Company established a $3.8 million reserve for estimated pricing deficiency liabilities and associated costs. As of the end of 1999 and the third quarter of 2000, the reserve balance was $3.1 million and $2.9 million, respectively. The final amount of the pricing deficiency adjustment is subject to the outcome of contract settlement discussions with the governmental agencies or to an adjudicated disposition. Management believes it is possible that the final resolution will exceed the reserve, and have a material impact on the statement of operations and cash flow. Note 3 - Acquisition On July 14, 2000, the Company acquired 100% of the assets of MERGInet Medical Resources, the premier internet magazine serving as the largest internet resource for emergency medical services (EMS) and emergency medical professionals. The initial cost totaled $450,000, consisting of $300,000 in cash and 26,432 shares of the Company's common stock valued at $150,000, with an additional revenue growth payment, if applicable, to be paid in July, 2002. The tangible and intangible assets are being amortized over their respective useful lives. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS ----------------------------------------------------------------------- OF OPERATIONS ------------- OVERVIEW - -------- In 1999, the Company committed to transforming itself from a catalog-based distributor of medical and surgical supplies into an electronic commerce enterprise. It is also committed to enlarging its customer-base in the practice communities it serves on a business-to-business (b2b) basis through Internet marketing and by web site affiliate linkages and selective acquisitions. The transformation strategy continues to entail substantial expenditures for technology, talent and infrastructure to benefit all customer communities; as a result, the Company sustained losses through the third quarter of 2000 and it expects that to continue for 2001. It also entails the risks and uncertainties attendant to the transformation to a "bricks and clicks" enterprise. 8 As its initial step toward web-powered marketing, the Company spent heavily during 1999 and in the first quarter of 2000 to develop a full-featured b2b web site. It successfully launched its site (www.mooremedical.com) at the end of May, 2000. The Company acquired a controlling interest in Podiatry Online, in June, 2000 and in July, 2000 it acquired MERGInet Medical Resources, both premier online information sources for their respective practice communities, as further implementations of its strategic plan. Podiatry Online, an established e-zine (www.podiatryonline.com) serving podiatry professionals, provides the Company with significant electronic sales channels in that market. MERGInet, the Internet's most heavily trafficked resource center for emergency medical services and professionals (EMS), features the only online publication (www.merginet.com) in its market. Podiatry and EMS were already among the largest b2b offline customer practice communities of the Company. During the third quarter of 2000, the Company added expertise in e-business to its senior management team, which will allow the Company to focus on driving its e-commerce strategy. Also, during the third quarter, eleven independent healthcare specialty associations and membership communities web sites serving healthcare professionals agreed to link their sites to (www.mooremedical.com) under affiliate linkage arrangements. The following table sets forth items included in the Statements of Operations as a percentage of sales for the third quarter, and the first three quarters of 2000 and 1999. The table also shows, for each line item, the percentage change of the amount in the 2000 period from the comparable 1999 period.
Third Quarter First Three Quarters ---------------------------------------- --------------------------------------- % of Sales % % of Sales % ------------------------- ------------------------ 2000 1999 Change 2000 1999 Change ----------- ---------- ---------- ---------- ---------- ---------- Net sales........................ 100.0% 100.0% 6% 100.0% 100.0% 4% Cost of products sold ........... 70.0 69.6 (7) 70.2 68.5 (6) ---- ---- ---- ---- Gross profit .................... 30.0 30.4 (5) 29.8 31.5 (2) Selling, general & admin. exp ... 33.0 27.9 (26) 31.3 29.1 (12) ---- ---- ---- ---- Operating (loss) income ......... (3.0) 2.5 (+200) (1.5) 2.4 (163) Interest income, net ............ 0.2 -- +200 0.2 -- +200 ---- ---- ---- ---- (Loss) income before income taxes (2.8) 2.5 (+200) (1.3) 2.4 (154) Income tax (benefit) provision .. (1.1) (0.1) +200 (0.5) 0.5 190 ---- ---- ---- ---- Net (loss) income ............... (1.7)% 2.6% (171)% (0.8)% 1.9% (144)% ==== ==== ==== ==== ==== ====
9 RESULTS OF OPERATIONS - --------------------- Third Quarter 2000 Compared with 1999 - ----------------------- Third quarter revenues of $33.0 million, the Company's highest quarterly revenue in more than two years, increased over 6% compared with $31.1 million in the third quarter of 1999. Increased market penetration into key specialty practice markets, in conjunction with e-commerce initiatives, drove top line results. The year over year quarterly revenue growth of over 6.0% was achieved despite the shortage for distribution of influenza vaccine (which accounted for nearly $1.0 million or 3.2% of 1999's third quarter's revenues) because of the manufacturers' lower than anticipated production yields. Gross profit dollars for the third quarter of 2000 increased approximately $0.5 million or nearly 5.0% to $9.9 million, from $9.4 million in 1999's third quarter. The increase correlates directly to the revenue increase. Selling, general and administrative expenses, expressed as a percentage of revenue, were 33.0% for the third quarter, as compared to 27.9% for the same period a year ago. This increase largely reflects the Company's aggressive e-commerce implementation strategy. The strategy includes costs such as higher depreciation and amortization charges associated with investments in technology and acquisition of e-community sites in target markets, along with significant advertising and promotional media costs associated with the Company's e-business site (www.mooremedical.com). Net loss for the third quarter was $(0.6) million, or $(0.18) per share, as compared to net income for the same fiscal quarter last year of $0.8 million, or $0.27 per share. First Three Quarters 2000 Compared with 1999 - ----------------------- For the nine months of 2000 revenues of $92.8 million achieved overall growth of nearly 4% compared with $89.5 million in the nine months period in 1999. The increase continued to be primarily attributable to revenue growth in key specialty practices and e-commerce initiatives. The revenue reflects strong growth in e-commerce revenue by surpassing 1999 total year e-commerce revenue of $1.6 million during the third quarter with e-commerce revenues of nearly $2.9 million through this year's third quarter. 10 For the first nine months of 2000, the gross profit dollars decreased approximately $0.5 million to $27.7 million, compared to $28.2 million for the same period a year ago. The year to date decrease was primarily attributable to price erosion of pharmaceutical products slightly offset by higher margins associated with greater product diversity in key specialty practices. Selling, general and administrative expenses during the first nine months of 2000 increased to 31.3% of revenues compared to 29.1% a year ago as a result of the ongoing transformation to a "bricks and clicks" enterprise. The year over year increase can be attributable to higher depreciation and amortization along with significant advertising and promotional media strategies. Results for the first nine months of 2000 showed a net loss of $(0.7) million or $(0.24) per share compared with net income of $1.7 million or $0.58 per share in the first nine months of 1999. LIQUIDITY AND CAPITAL RESOURCES - ------------------------------- The Company ended the third quarter with $4.0 million in cash and short-term investments, a $3.2 million increase from January 1, 2000. Liquidity improvement was the result of net cash provided by operating and financing activities. The Company's operations provided $4.5 million in cash during the first three quarters of 2000. The primary sources of cash included a $2.8 million decrease in inventory levels and a $3.7 million increase in accounts payable attributable to supply chain management. Non-cash sources included $2.0 million related to depreciation and amortization mainly associated with increased technology investments. The primary uses of cash included $0.7 million of net loss, an increase in accounts receivable of $2.5 million attributable to an increase in net sales, and $0.8 million in other assets and liabilities. Investing activities used $3.2 million in the first nine months of the year 2000 and included technology purchases of $1.5 million, $1.25 million in connection with the Company's acquisition of a controlling interest in Podiatry Online and $0.4 million for the acquisition of MERGInet Medical Resources. (See Note 3 to financial statements) Financing activities provided $1.9 million for the nine months ended September 30, 2000, primarily from sales of common stock and for the minimum purchase cost for the remaining minority interests in Podiatry Online. The Company's previous line of credit expired on March 31, 2000, and management is currently negotiating a proposed loan commitment. Management believes that the proposed loan commitment, once consummated by a definitive loan agreement, will provide adequate funds for the Company's operations. In the interim, until the commitment letter is negotiated and a definitive loan agreement is executed, the 11 Company had, as of September 30, 2000, $4.0 million cash and cash equivalents to fund its operations in the short term. FORWARD-LOOKING INFORMATION - --------------------------- From time to time, the Company may make forward-looking statements, that is statements not of past or present fact but of beliefs, expectations or plans for the future. The words "expects", "anticipates", "believes", "seeks", "plans", "estimates", "projects", "intends", and similar expressions identify forward-looking statements. Such statements are qualified by the following discussion of certain factors, which could possibly cause actual results to differ materially from the forward-looking statements: . pressures on revenues resulting, for example, from customer consolidations or changes in customer buying patterns; . reductions in healthcare funding affecting its customers' services or revenues resulting, for example, from changes in legislation or regulations or in HMO, managed care or other insurance programs; . intensified competition resulting, for example, from distributor consolidations or pricing pressures from larger distributors able to benefit from economies of scale or other operating efficiencies; . adjustments under exited government contracts in excess of amounts reserved, or unfavorable outcomes of litigation; . disruptions in or cost increases for services or systems on which the Company is dependent, such as by truckers in deliveries from its suppliers, by UPS or other common carriers in deliveries to its customers, by its catalog printers or in telecommunication services, or relating to its computer systems; . changes in supply chain relationships, such as product availability and regulations, decreasing reliance on distributors as manufacturers establish direct internet sales channels to end-users, that could adversely effect the market, supply and flow of products; . rapidly changing technology and customer expectations; increased costs of hosting services; loss of business and costs to business interruptions arising from the Company's e-business platform; . further Internet and infrastructure developments (for example, in high speed data lines and modems); . difficulties in attracting and retaining qualified technical and marketing talent in an economy in which such talent is in short supply and in high demand; 12 . new laws or regulations or government agency policies or positions affecting e-commerce or the distribution of pharmaceuticals or other regulated products, which could increase the cost of doing business or customers' purchase costs (for example, by the introduction of sales taxes to Internet transactions); and . security breaches that could significantly disrupt the Internet network, halt sales, or discourage customers. These factors are not presently all-inclusive. In addition, new factors may emerge from time to time, and it is not possible to predict all factors, nor can management necessarily identify or assess all factors. The factors identified should therefore not be relied on as comprehensive. Moreover, the Company does not necessarily update its forward looking statements. Accordingly, they should not be relied upon as a prediction of actual results. Item 3. Quantitative and Qualitative Disclosures About Market Risk ---------------------------------------------------------- The Company has no material market risk exposure associated with activities in derivative financial instruments, other financial instruments, or derivative commodity instruments. 13 PART II. OTHER INFORMATION ----------------- Item 6. Exhibits and Reports on Form 8-K -------------------------------- (a) Exhibits -------- Employment Agreement between Exhibit 10.24 the Company and Chad A. Roffers, effective September 15, 2000 Financial Data Schedule Exhibit 27 (b) Reports on Form 8-K ------------------- No report on Form 8-K was filed during the quarter. 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 MEDICAL CORP. (REGISTRANT) By: /s/ Linda M. Autore By: /s/ Susan G. D'Amato ------------------------------------ ------------------------------- Linda M. Autore, President Susan G. D'Amato, Vice (Chief Executive Officer) President of Finance and November 14, 2000 Controller (Chief Accounting Officer) November 14, 2000 14 EX-10.4 2 0002.txt CHAD A. ROFFERS EMPLOYMENT AGREEMENT Exhibit 10.4 EMPLOYMENT AGREEMENT, effective as of September 5, 2000, by and between MOORE MEDICAL CORP., a Delaware corporation (the "Employer"), and CHAD A. ROFFERS of 235 West 56th Street, New York, New York 10019 (the "Employee"). The Employer and Employee hereby agree as follows: 1. Term; Duties. For the period from September 5, 2000 through December 31, ------------ 2001 (or earlier, pursuant to paragraphs 7, 8 or 15) (the "Term"), the Employer will employ the Employee, and the Employee will serve the Employer, as its Senior Executive Vice President - e-Business & Emerging Channels, reporting to its President and subject at all times to the direction of its Board of Directors and Executive Committee. The Employee's office will be at such office of the Employer in Connecticut as the Employer may designate. The Employee agrees that during the Term he will devote his entire working time and give his best efforts and attention to the business of the Employer. 2. Salary. As compensation for his services during the Term, the Employer ------ will pay the Employee, in installments on the Employer's regular payroll payment dates and subject to statutory withholding amounts, a salary: (a) for the period from September 5, 2000 through December 31, 2000, at the annual rate of $218,000; and (b) for 2001, at the annual rate of $218,000 plus an inflationary adjustment for any increase during 2000 in the Consumer Price Index. 3. Bonus Compensation. As additional compensation for his services during ------------------ the Term, the Employer will pay the Employee bonus compensation on December 29, 2000 of $40,875, in lieu of his participation under the 2000 Executive Officers' Bonus Plan of the Employer, subject to the Employee's continued employment by the Employer through that date. 4. Resettlement Allowance. The Employer will pay the Employee a ---------------------- resettlement allowance of $40,000 within 30 days of his relocation of his residence to Connecticut. 5. Vacation. The Employee will be entitled to three weeks vacation during -------- 2001. 6. Non-Competition. The Employee covenants and agrees that during the Term, --------------- and for a period of six months thereafter, he will not, directly or indirectly, engage or own any interest in any business competing with or planning to compete with any business or planned business of the Employer, whether as principal, agent, partner, director, officer, stockholder, investor, lender, consultant, employee, or in any other capacity. The Employee agrees that a remedy at law for any breach or threatened breach of the foregoing covenant will be inadequate, and that Employer will be entitled to temporary and permanent injunctive relief in respect thereof without the necessity of posting a bond or proving actual damage to Employer. 7. Death. The death of the Employee will terminate the Term. ----- 8. Incapacity. If during the Term the Employee is unable, on account of ---------- illness or other incapacity, to perform his duties for a total of more than 45 days during any twelve month period, the Employer has the right to terminate the Term on ten days' written notice to the Employee, and the Employee will thereafter be entitled to receive only one-half of his salary installments otherwise payable until the earlier of the last day of (i) the month-end after the delivery of said notice, or (ii) the Term (determined without giving effect to such termination). 9. Employer Information. All information and materials furnished by the -------------------- Employer to the Employee or acquired at the Employer's expense by the Employee or acquired or developed by the Employee in connection with his services under this Agreement, all trade secrets of the Employer and all Work-Product (hereinafter defined) 1 (herein collectively "Employer Information") shall be and remain the sole -------------------- property of the Employer. The Employee shall protect all Employer Information which may be in his possession or custody and shall deliver all such Information (and all copies thereof, in any media) to the Employer at its request. 10. Work-Product. All right, title and interest in and to any work_product ------------ which the Employee acquires, compiles, authors, invents, makes or otherwise generates, in whole or in part, including all works authored and all inventions made, for use in connection with or arising out of or in relation to his services under this Agreement, whether or not copyrightable or patentable (herein collectively "Work-Product"), shall belong exclusively to the Employer. ------------ During and after the Term of this Agreement, the Employee shall execute, acknowledge, and deliver all documents, including, without limitation, all instruments of assignment, and perform all acts, which the Employer may reasonably request to secure its rights hereunder. 11. Confidentiality; Non-use. During and after the Term, the Employee shall ------------------------ not, without first obtaining the written consent of the Employer, divulge or disclose to anyone outside the Employer, whether by private or public communication or publication or otherwise, or use except pursuant to this Agreement, any Employer Information or Work-Product. 12. Conflicts of Interest; Conflicting Obligations. The Employee agrees ---------------------------------------------- that it is his responsibility to recognize and avoid, and disclose to the President of the Employer in writing, any situation which might, either directly or indirectly, adversely affect his judgment in serving the Employer or which might otherwise involve a conflict between his personal interests and the interests of the Employer. The Employee represents and warrants to the Employer that at the date hereof no such situation exists or is contemplated or anticipated. The Employee agrees not to disclose or use in the course of his services for the Employer any trade secret, confidential or proprietary information, or work-product of any party other than the Employer. The Employee represents and warrants to the Employer that his entry into and performance of this Agreement do not and will not conflict with any obligation by which he is or may become bound or any right of a third party to which or he is or may become subject. 13. Non_Solicitation. The Employee agrees that, until one year after the ---------------- Term, he will not solicit, induce, attempt to hire, or hire any employee of the Employer, or assist in such hiring by any other party, or encourage any such employee to terminate his or her employment with the Employer. 14. Stock Option as an Inducement. As an inducement to the Employee to ----------------------------- enter into this Agreement, on September 5, 2000 the Compensation Committee of the Employer's Board of Directors authorized the grant to the Employee of a non-qualified stock option pursuant to the Employer's 2000 Incentive Compensation Program to purchase 50,000 shares of the common stock of the Employer at an exercise price of $7.25, the closing market price of said stock on that date; the option becomes exercisable in four cumulative annual installments commencing on September 5, 2001, and it expires on September 4, 2005. Although the option will have the tax treatment of a non-qualified, non-incentive option, it will be subject to the terms and conditions required for an incentive stock option and to the conditions that the Employee not be in material breach of this Agreement and that (except as provided in paragraph 15) the Term not terminate before December 31, 2001; it will also be subject to acceleration of exercisability of 50% of all otherwise non-exercisable installments in the event the Employee becomes entitled to a severance payment under paragraph 15. 15. Effect of "Change of Control". The Employer or Employee may terminate ----------------------------- the Term, on written notice to the other within 30 days after a "change of control" (as defined in Section 3(a) of the Employer's Change of Control and Change of Position Payment Plan), provided that the "change of control" occurs during the Term. The termination will be effective 30 days after the delivery of the notice. In the event of a termination (and if it was by the Employee's notice, also a "change of position" (as defined in Section 3(b) of the Plan)), the Employee will be entitled to a severance payment, under Section 4 of the Plan and subject thereto, in the amount of 75% of the annual salary rate provided for in paragraph 2. 16. Governing Law; Etc. This Agreement is governed by the laws of ------------------ Connecticut. It represents the entire agreement of the parties and it can not be changed except by a writing signed by the President of the Employer and the Employee. 2 IN WITNESS WHEREOF, the parties have signed and delivered this Employment Agreement, effective as of September 5, 2000. MOORE MEDICAL CORP. /s/ Chad A. Roffers By: /s/ Linda M. Autore - -------------------------------- ------------------------------ Chad A. Roffers Linda M. Autore, President 3 EX-27 3 0003.txt FINANCIAL DATA SCHEDULE
5 1,000 3-MOS DEC-30-2000 JUL-02-2000 SEP-30-2000 3,962 0 14,206 200 11,439 34,468 24,724 (14,578) 47,056 16,037 0 0 0 34 28,117 47,056 33,038 33,038 23,127 23,127 10,890 0 (65) (914) (347) (567) 0 0 0 (567) (0.18) (0.18)
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