SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
NEFF CORPORATION
(Name of Registrant as Specified in Its Charter)
N/A
(Name of Persons(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of filing fee (Check the appropriate box):
[x] No fee required.
[ ] Fee computed on the table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transactions applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the form or schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
[GRAPHIC OMITTED NEFF LOGO]
May 20, 2000
Dear Stockholder:
Please accept this invitation to attend our Annual Meeting of Stockholders
on June 19, 2000 at 10:00 a.m. This year's meeting will be held at the Hilton
Miami Airport & Towers, 5101 Blue Lagoon Drive, Miami, Florida.
At the Annual Meeting you will be asked to (1) elect directors and (2)
ratify the selection of Neff's independent auditors for the year ending
December 31, 2000. Your vote is important. I urge you to complete, sign and
return the enclosed proxy card. This way, your shares will be voted as you
direct, even if you do not attend the meeting. By returning the proxy card
promptly, you will help Neff avoid additional solicitation costs.
I look forward to seeing you on June 19, 2000.
Sincerely,
/s/ KEVIN P. FITZGERALD
--------------------------
Kevin P. Fitzgerald
President and
Chief Executive Officer
<PAGE>
NEFF CORP.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 19, 2000
To Our Stockholders:
The 2000 Annual Meeting (the "Annual Meeting") of Stockholders of Neff
Corp. ("Neff" or the "Company") will be held at the Hilton Miami Airport &
Towers, 5101 Blue Lagoon Drive, Miami, Florida, on June 19, 2000 at 10:00 a.m.
eastern daylight savings time. The purpose of the meeting is to consider and
act upon the following:
1. The election of two Directors to serve for the ensuing three years.
2. The selection of Deloitte & Touche as Neff's independent public
accountants for the year ending December 31, 2000.
3. The transaction of such other business as may properly come before the
meeting or any adjournment thereof.
Stockholders of record at the close of business on May 16, 2000 are
entitled to notice of and to vote at the Annual Meeting.
/s/ KEVIN P. FITZGERALD
----------------------------------
Kevin P. Fitzgerald
President, Chief Executive Officer
and Secretary
PLEASE FILL OUT, DATE AND SIGN THE ENCLOSED FORM OF PROXY AND RETURN IT IN THE
ACCOMPANYING POSTAGE PAID ENVELOPE, EVEN IF YOU PLAN TO ATTEND THE MEETING. YOU
MAY REVOKE YOUR PROXY IN WRITING OR AT THE ANNUAL MEETING, IF YOU WISH TO VOTE
IN PERSON.
<PAGE>
NEFF CORP.
3750 N.W. 87th Avenue, Miami, Florida 33178
PROXY STATEMENT
May 20, 2000
The Board of Directors is soliciting proxies to be used at the 2000 Annual
Meeting to be held at 10:00 a.m. eastern daylight savings time, June 19, 2000
at the Hilton Miami Airport & Towers, 5101 Blue Lagoon Drive, Miami, Florida.
This Proxy Statement and an accompanying proxy are being mailed to
stockholders on or about May 22, 2000. The 1999 Annual Report, which includes
audited financial statements for the year ended December 31, 1999 was
previously mailed to Neff's stockholders. The Consolidated Balance Sheets as of
December 31, 1999 and 1998 and the Consolidated Statements of Operations, the
Consolidated Statements of Stockholders' Equity, the Consolidated Statements of
Cash Flows, and the Notes to Consolidated Financial Statements (each of such
Statements being for the years ended December 31, 1999, 1998 and 1997),
contained in Neff's 1999 Annual Report, are incorporated herein by reference to
that Report.
Who Can Vote
Record holders of Class A Common Stock at the close of business on May 16,
2000 are entitled to notice of and to vote at the meeting. On that date, there
were 16,065,350 shares of Class A Common Stock and 5,100,000 shares of Class B
Special Common Stock outstanding. Each Stockholder has one vote for each share
of Class A Common Stock and one vote for each share of Class B Special Common
Stock. Holders of Class A Common Stock and Class B Special Common Stock will
vote together, without regard to class, on the matters to be voted upon at the
meeting. Holders of Class A Common Stock have 75.9% of the general voting
power; holders of Class B Special Common Stock have the remaining 24.1% of the
general voting power.
How You Can Vote
If you sign and return the proxy before the Annual Meeting, we will vote
your shares as specified in the proxy. You may specify on your proxy whether
your shares should be voted for both, one or none of the nominees for director.
If you do not indicate any specific voting instructions, the proxy will be
voted in favor of the two Directors nominated and in the named Proxies'
discretion as to other matters at the Annual Meeting.
How You Can Revoke Your Proxy
You can revoke your proxy at any time before it is exercised by:
/bullet/ submitting written notice of revocation to the Secretary of the
Company;
/bullet/ submitting another proxy that is properly signed and later dated;
or
/bullet/ voting in person at the Annual Meeting.
Required Votes
A majority of the votes that could be cast in the election or on a
proposal by stockholders who are either present in person or represented by
proxy at the Annual Meeting is required to elect the nominees for director and
to approve the proposal to select Deloitte & Touche as Neff's independent
public accountants for the year ending December 31, 2000.
The total number of votes that could be cast at the Annual Meeting is the
number of votes actually cast plus the number of abstentions. Abstentions are
counted as shares present at the Annual
<PAGE>
Meeting for purposes of determining whether a quorum exists and have the effect
of a vote "against" any matter as to which they are specified.
Rule 452 of the New York Stock Exchange permits its members to vote shares
held by them as nominees on certain discretionary or routine matters without
instructions from the beneficial owner, provided that the broker has furnished
the beneficial owner with proxy materials and received no voting instructions
in advance of the Annual Meeting. If a matter is not discretionary or routine
for Rule 452 purposes, a broker or bank is not permitted to vote stock held in
street name on such matter in the absence of instructions from the beneficial
owner of the stock. These "non-voted Shares" may or may not be considered
present and entitled to vote depending on the nature of the matter upon which a
vote is being taken. If the broker holding your shares in street name indicates
to us on a proxy that you have not voted and it lacks discretionary authority
to vote your shares, we will not consider your shares present or entitled to
vote for any purpose at the Annual Meeting.
Other Matters to be Acted Upon at the Annual Meeting
We do not know of any other matters to be presented or acted upon at the
Annual Meeting. If, however, any other matter is properly presented at the
Annual Meeting, shares represented by proxies will be voted in accordance with
the judgment of the person or persons voting those shares.
2
<PAGE>
OWNERSHIP OF SHARES BY CERTAIN BENEFICIAL OWNERS
The following table sets forth, as of April 18, 2000, information
regarding the beneficial ownership of Class A Common Stock and Class B Special
Common Stock by (1) each person whom Neff knows beneficially to own 5% or more
of any class of Neff's voting securities; (2) each director, Neff's Chief
Executive Officer and each of Neff's two other most highly compensated
executive officers and (3) all directors and executive officers as a group.
Unless otherwise indicated, (1) each such Stockholder has sole voting and
investment power with respect to the shares beneficially owned by such
Stockholder and (2) has the same address as Neff.
<TABLE>
<CAPTION>
Number of Shares Number of Shares
of Class A Percent of Class of Class B Special Percent of Class
Name of Beneficial Owner Common Stock (1) Owned Common Stock (1) Owned
----------------------------- ------------------------ ------------------ -------------------- -----------------
<S> <C> <C> <C> <C>
Jorge Mas ................... 3,802,744(2)(3) 18.0% -- --
Juan Carlos Mas ............. 2,381,303(2)(4) 11.3 -- --
Jose Ramon Mas .............. 2,381,303(2)(5) 11.3 -- --
General Electric Capital
Corporation ............... 5,100,000(6) 24.1 5,100,000(6) 100%
Santos Fund I, L.P. ......... 900,000(7) 4.3 -- --
Kevin P. Fitzgerald ......... 403,276(2) 1.9 -- --
Peter G. Gladis ............. 29,554 * -- --
Mark H. Irion ............... 1,666 * -- --
Arthur B. Laffer ............ 2,000 * -- --
Joel-Tomas Citron ........... 4,000 * -- --
Michael Markbreiter ......... -- * -- --
Paul E. Dean ................ -- * -- --
All directors and executive
officers as a group
(10 persons) .............. 9,005,846(2) 42.5% -- --
</TABLE>
----------------
* Less than 1 percent.
(1) A person is deemed as of any date to have "beneficial ownership" of any
security that such person has a right to acquire within 60 days after such
date. Shares that each identified person has a right to acquire within 60
days of the date of the table set forth above are deemed to be outstanding
in calculating the percentage ownership of such stockholder, but are not
deemed to be outstanding when calculating the percentage ownership of any
other person.
(2) Excludes shares beneficially owned through Santos Fund I, L.P. ("Santos").
(3) Includes shares beneficially owned by Jorge Mas Holding I, Limited
Partnership.
(4) Includes shares beneficially owned by Juan Carlos Mas Holding I, Limited
Partnership.
(5) Includes shares beneficially owned by Jose Ramon Mas Holding I, Limited
Partnership.
(6) Includes shares owned by GECFS, Inc., an affiliate of General Electric
Capital Corporation ("GE Capital"). All of these shares are convertible
into Class A Common Stock. GE Capital's and GECFS, Inc.'s address is 777
Long Ridge Road, Building B, First Floor, Stamford, CT, 06927.
(7) Santos is beneficially owned by Jorge Mas, Juan Carlos Mas, Jose Ramon Mas
and Kevin P. Fitzgerald.
3
<PAGE>
PROPOSAL 1
Election of Directors
Pursuant to Neff's Certificate of Incorporation, the Directors are divided
into three classes serving three year terms. Two Directors, comprising one
class of Directors, are to be elected at the Annual Meeting. Mr. Juan Carlos
Mas and Mr. Jose Ramon Mas have been nominated for election as Directors to
hold office until the 2002 Annual Meeting and until their successors have been
elected and shall qualify. Proxies may not be voted for more than two
Directors.
<TABLE>
<CAPTION>
Principal Occupations Director Term to
Name Age and Other Directorships* Since Expire
------------------------- ----- -------------------------------------------------- ---------- --------
<S> <C> <C> <C> <C>
Juan Carlos Mas ......... 34 Principal occupations: President, Construction 1995 2003
Division, Church & Tower, a subsidiary of MasTec,
Inc.
Other directorships: Church & Tower.
Jose Ramon Mas .......... 28 Principal occupations: President, 1995 2003
Telecommunications Division, Church & Tower, a
subsidiary of MasTec, Inc.
Other directorships: none.
</TABLE>
Terms of office of the four directors named below will continue until the
Annual Meeting in the years indicated.
<TABLE>
<CAPTION>
Principal Occupations Director Term to
Name Age and Other Directorships* Since Expire
----------------------------- ----- ---------------------------------------------------- ---------- --------
<S> <C> <C> <C> <C>
Jorge Mas ................... 37 Principal occupations: Chairman of the Board, 1995 2001
MasTec, Inc. since January 1998, Chief Executive
Officer, MasTec, Inc. from March 1994 to October
1999.
Other directorships: First Union National Bank
Kevin P. Fitzgerald ......... 43 Principal occupations: President and Chief 1995 2001
Executive Officer, Neff Corp. since 1995, Senior
Vice President, Houlihan Lokey Howard and
Zukin, from 1991 to 1995.
Other directorships: Geoworks Corporation.
Paul E. Dean ................ 62 Principal occupations: Senior executive of the Dow 2000 2001
Chemical Corporation, retired.
Arthur B. Laffer ............ 59 Principal occupations: Chief Executive Officer, 1998 2002
Laffer Advisors, Inc., Chief Executive Officer,
Calport Asset Management.
Other directorships: Chairman of the Board, Laffer
& Associates, director of Nicholas Applegate
Mutual Funds, Coinmach Laundry Corporation,
Oxigene, Inc. and MasTec, Inc.
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
Principal Occupations Director Term to
Name Age and Other Directorships* Since Expire
----------------------------- ----- ---------------------------------------------------- ---------- ---------
<S> <C> <C> <C> <C>
Joel-Tomas Citron ........... 36 Principal occupations: Chief Executive Officer, 1998 2002
MasTec, Inc. since October 1999 and President,
MasTec, Inc. since May 1999, Managing Partner,
Triscope Capital, LLC, a private investment
partnership from January 1998 to December 1998,
Chairman of the Board, Proventus AB from
January 1992 to December 1997.
Other directorships: MasTec, Inc., Telergy, Inc.
Michael Markbreiter ......... 37 Principal occupations: Management consulting and 2000 2002
investing for Displaytech, Inc. since February 2000
and Teletrax, Inc. since September 1999, portfolio
manager for Kingdon Capital Management Corp., a
manager of investment funds from March 1995 to
December 1998.
Other directorships: Alyn Corp., Impax
Laboratories.
</TABLE>
----------------
* The business histories set forth in these tables cover a five-year period.
Jorge Mas, Juan Carlos Mas and Jose Ramon Mas, all of whom are members of
the Board of Directors, are brothers. There are no other family relationships
among the members of the Board of Directors.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE TWO NOMINEES.
5
<PAGE>
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
The Board of Directors has established an Audit Committee. The Audit
Committee has the power and authority to initiate or review the results of all
audits or investigations into the business affairs of the Company and its
subsidiaries, and to conduct pre- and post-audit reviews with the Company's
management, financial employees and independent auditors. Messrs. Laffer and
Citron were appointed to the Audit Committee in 1998. The Audit Committee met
once in 1999. Mr. Citron resigned from the Audit Committee in October 1999
after he became an executive officer of MasTec, Inc., an affiliate of the
Company. In May 2000, the Company appointed Messrs. Markbreiter and Dean to
serve on the Audit Committee with Mr. Laffer.
In 1999, the entire Board of Directors determined the compensation of the
Company's Chief Executive Officer and all other corporate officers and
administered the Neff Corp. 1998 Incentive Stock Plan (the "1998 Plan") and the
Neff Corp. 1999 Incentive Stock Plan (the "1999 Plan").
The Board of Directors met four times in 1999. No incumbent member of the
Board of Directors attended fewer than 75% of the total number of meetings held
by the Board of Directors.
In March 2000, the Board of Directors formed a special committee to
evaluate a merger proposal received by the Board of Directors from Neff
Investors, Inc., a corporation in which General Electric Capital Corporation
and Kevin Fitzgerald will be stockholders, and any other business combination
proposals the Company receives. The members of the special committee are
Messrs. Laffer, Markbreiter and Dean. Any business combination transaction
involving the Company would be subject to approvals by the special committee
and the Board of Directors, shareholder approval, the negotiation and execution
of mutually satisfactory definitive agreements and other customary conditions.
The Company can not assure its stockholders that any agreements relating to the
proposal will be reached or that any transaction will be consummated.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
MasTec, Inc., an affiliate of the Company controlled by four of the
Company's Directors, Jorge Mas, Juan Carlos Mas, Jose Ramon Mas and Joel-Tomas
Citron, purchased and leased construction equipment from the Company in 1999.
Revenues from MasTec, Inc. during 1999 were $4,589,559. The Company believes
that these payments were equivalent to the payments that would have been made
between unrelated parties acting at arm's length.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The Directors and executive officers of Neff are required to file reports
of initial ownership and changes of ownership of Class A Common Stock with the
Securities and Exchange Commission and with the New York Stock Exchange. To the
Company's best knowledge, based solely on review of copies of such reports
furnished to the Company and written representations that no other reports were
required, the required filings of all Directors and executive officers were
filed timely, with the exception of the Form 3 for Mr. Markbreiter, which was
filed late and the Form 3 for Mr. Irion, which was filed late.
6
<PAGE>
EXECUTIVE AND DIRECTOR COMPENSATION
Executive Compensation
The following table sets forth information regarding the compensation for
services in all capacities to the Company and its subsidiaries, of the Chief
Executive Officer and each of the other two most highly paid executive officers
whose total compensation for 1999 exceeded $100,000 and two former executive
officers who would have been named officers but for the fact that they was not
serving as executive officers of the Company on December 31, 1999 ("named
executive officers").
Summary Compensation Table
<TABLE>
<CAPTION>
Securities
Underlying
Name and Principal Position Year Salary Bonus Options/SARs
----------------------------- ------ ----------- ----------- ----------------
<S> <C> <C> <C> <C>
Kevin P. Fitzgerald ......... 1999 $250,000 $250,000 --
President and Chief 1998 250,000 300,000 407,220(1)
Executive Officer 1997 246,000 150,000 --
Peter G. Gladis ............. 1999 $225,000 $ 75,000 --
Senior Vice President, 1998 185,000 75,000 60,000
Neff Rental, Inc. 1997 150,000 75,000 --
Mark H. Irion(2) ............ 1999 $110,000 $ 50,000 --
Chief Financial Officer 1998 25,600 5,000 5,000
Bonnie S. Biumi(3) .......... 1999 $ 86,000 -- --
Chief Financial Officer 1998 175,000 $ 60,000 35,000
1997 -- -- --
Robert G. Warren(4) ......... 1999 $ 71,150 -- --
Senior Vice President, 1998 160,000 $ 50,000 45,000
Neff Machinery, Inc. 1997 155,000 25,000 --
</TABLE>
----------------
(1) In 1995, Mr. Fitzgerald and the Company entered into an option agreement
granting him an option to purchase shares of Common Stock representing 3%
of the issued and outstanding Common Stock of the Company for an aggregate
purchase price of approximately $1.6 million. Upon consummation of the
Company's initial public offering in May 1998, the number of shares
subject to this option was increased by 207,220 shares in order to
maintain his 3% ownership interest in the Company. No further options will
be granted to Mr. Fitzgerald pursuant to the 1995 option agreement. Also
in 1998, Mr. Fitzgerald received options to purchase 200,000 shares of
Common Stock pursuant to the 1998 Plan. In 1999, Mr. Fitzgerald
transferred options to purchase 428,610 shares of Common Stock to his
ex-wife.
(2) Mr. Irion commenced work as the Chief Financial Officer of the Company's
wholly-owned subsidiary, Neff Rental, Inc. in September 1998 at an annual
salary of $92,000. He became the Company's Chief Financial Officer in May
1999.
(3) Ms. Biumi commenced work for the Company on December 29, 1997. Ms. Biumi
resigned from the Company in May 1999.
(4) Mr. Warren resigned from the Company in April 1999. In addition to the
amounts shown in the table, in April 1999 Mr. Warren received a severance
payment of $185,000 upon his resignation in accordance with the terms of a
Severance Agreement between himself and the Company. The terms of this
Severance Agreement are described below in "Employment Agreements; Change
in Control Arrangements."
7
<PAGE>
Stock Option Grants and Exercises
No stock options were granted to the named executive officers in 1999 and
none of the named executive officers exercised any options in 1999. No awards
under the Company's long-term incentive plan, the Phantom Stock Option Plan,
were granted to the named executive officers in 1999.
The following table provides information related to the number and value
of options held by the named executive officers at the end of 1999. The last
sales price of Class A Common Stock as reported by the New York Stock Exchange
on December 31, 1999 was $6.375.
Fiscal Year End Option Values
<TABLE>
<CAPTION>
Number of Securities Underlying Value of Unexercised
Unexercised Options at Fiscal "In-the-Money" Options
Year End at Fiscal Year End (1)
------------------------------- ------------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
-------------------------------- ------------- --------------- ------------- --------------
<S> <C> <C> <C> <C>
Kevin P. Fitzgerald,
President and Chief
Executive Officer 395,276 33,334 $1,296,168 $6,167
Peter G. Gladis, Senior Vice
President, Neff Rental, Inc. 19,999 40,001 $ 3,083 $6,167
Mark H. Irion
Chief Financial Officer 1,666 3,334 $ 123 $ 247
Bonnie S. Biumi
Chief Financial Officer -- -- -- --
Robert G. Warren,
Senior Vice President,
Neff Machinery, Inc. 84,650 -- $ 37,499 --
</TABLE>
----------------
(1) Options are "in-the-money" at the fiscal year end if the fair market value
of the underlying securities on such date exceeds the exercise price of
the option.
Director Compensation
In 1998, Messrs. Citron and Laffer each received one-time grants of (1)
options to purchase an aggregate of 70,000 shares of Class A Common Stock at an
exercise price equal to the fair market value (as defined in the Company's 1998
Plan) of the Class A Common Stock on the date of grant, and (2) a grant of
options to purchase 5,000 shares of Class A Common Stock at an exercise price
of $14.00 per share, the initial public offering price. A portion of these
options vest in equal installments over a five year period, the remainder vest
in equal installments over a two year period. The options have a ten year term,
unless (a) the Director leaves the Board of Directors for any reason other than
disability, death or cause, in which case the director will have three months
after termination to exercise vested options, (b) the Director is dismissed
from the Board of Directors for cause, in which case all options terminate
immediately, (c) the Director's service terminates by reason of disability or
resignation, in which case the Director will have one year after termination to
exercise vested options or (d) the Director dies, in which case the Director's
estate will have one year to exercise vested options.
Messrs. Markbreiter and Dean will each receive payments of $25,000 in 2000
as compensation for serving on the special committee of the Board of Directors.
8
<PAGE>
Employment Agreements; Change in Control Arrangements
Employment Agreements with Messrs. Gladis and Irion
The Company has entered into Employment Agreements with Peter G. Gladis,
the Senior Vice President of Neff Rental, Inc., a wholly-owned subsidiary of
the Company and Mark H. Irion, the Chief Financial Officer of the Company.
Mr. Gladis' employment agreement has an initial term of three years and
will be automatically extended for one year periods unless either party
terminates the agreement on six months advance notice. In the event of
termination of Mr. Gladis' employment due to his Disability (as defined in the
agreement) or death, the Company will pay Mr. Gladis or his estate as severance
pay each month for the two (2) years immediately following the date of
termination, the amount necessary to make up the difference between the amount
of payments the executive will receive during that month under the disability
insurance policies maintained by the Company and Mr. Gladis' base monthly
salary on the date of termination. In the event the Company terminates Mr.
Gladis' employment other than for Cause (as defined in the agreement), death or
Disability or he terminates his employment for Good Reason (as defined in the
agreement) or under certain circumstances following a Change in Control (as
defined in the agreement), then (a) the Company must pay Mr. Gladis a lump sum
amount equal to three times the sum of his base salary and bonus; (b) Mr.
Gladis is entitled, for a period of three years, to continuation of coverage at
the Company's expense of his life insurance, disability, medical and dental
benefits and (c) all restrictions on any outstanding awards granted to Mr.
Gladis will lapse and be immediately vested. Mr. Gladis is prohibited from
competing with the Company during the term of the agreement and for one year
after his employment with the Company terminates for any reason.
Mr. Irion's employment agreement has an initial term of one year and will
be automatically extended for one year periods unless either party terminates
the agreement on six months advance notice. In the event of termination of Mr.
Irion's employment due to his Disability (as defined in the agreement) or
death, the Company will pay Mr. Irion or his estate as severance pay each month
for the eighteen months immediately following the date of termination, the
amount necessary to make up the difference between the amount of payments the
executive will receive during that month under the disability insurance
policies maintained by the Company and Mr. Irion's base monthly salary on the
date of termination. In the event the Company terminates Mr. Irion's employment
other than for Cause (as defined in the agreement), death or Disability or he
terminates his employment for Good Reason (as defined in the agreement) or
under certain circumstances following a Change in Control (as defined in the
agreement), then (a) the Company must pay Mr. Irion a lump sum amount equal to
one and one-half times the sum of his base salary and bonus; (b) Mr. Irion is
entitled, for a period of eighteen months, to continuation of coverage at the
Company's expense of his life insurance, disability, medical and dental
benefits and (c) all restrictions on any outstanding awards granted to Mr.
Irion will lapse and be immediately vested. Mr. Irion is prohibited from
competing with the Company during the term of the agreement and for one year
after his employment with the Company terminates for any reason.
Severance Agreement with Mr. Warren
The Company entered into a severance agreement with Mr. Robert G. Warren
in April 1999 when he resigned from his position as Senior Vice President of
Neff Machinery, Inc., a wholly-owned subsidiary of the Company which was sold
in December 1999. The severance agreement provided that the Company would (a)
make a lump sum payment of $185,000 to Mr. Warren as severance pay and (b)
continue coverage of Mr. Warren's life insurance, disability, medical and
dental benefits for the twelve month period following April 23, 1999 (the
"Termination Date"). In accordance with the severance agreement, options
granted to Mr. Warren under the Company's 1998 Plan would remain exercisable
for the six month period following the Termination Date and options granted to
Mr. Warren under a stock option agreement dated as of June 28, 1996 would
remain exercisable for
9
<PAGE>
the twelve month period following the Termination Date. The severance agreement
prohibited Mr. Warren from competing with the Company for the six month period
following the Termination Date.
Stock Option Agreement with Mr. Fitzgerald
The Company has entered into a stock option agreement, dated as of
December 1, 1995, with Kevin P. Fitzgerald, the President and Chief Executive
Officer of the Company. This agreement was not entered into pursuant to one of
the Company's incentive stock plans. This option agreement provides that, in
the event of a change in control (as defined), within sixty (60) days after
such change in control, Mr. Fitzgerald will be permitted to surrender his
unexercised options for cancellation, and he shall receive a cash payment
calculated pursuant to a formula based on the excess, if any, of the fair
market value, on the date preceding the date of the surrender, of the shares
subject to the options surrendered over the aggregate exercise price for such
shares. A change in control is generally defined in the agreement as (1) the
acquisition by any person of more than 50% of the voting securities of the
Company, (2) certain mergers involving the Company or (3) the sale of all of
the assets of the Company.
Incentive Stock Plans
The 1998 Plan and the 1999 Plan permit the Company to provide that
recipients of awards granted pursuant to these Plans shall receive certain
benefits upon the occurrence of a change in control. A change in control is
generally defined as (1) the acquisition by any person of more than 30% of the
voting securities of the Company, (2) certain mergers involving the Company or
(3) the sale of all of the assets of the Company.
Report on Executive Compensation
During the fiscal year ended 1999, decisions concerning compensation of
executive officers were made by the entire Board of Directors.
The Board of Directors is responsible for setting and administering
executive officer compensation policies and programs. The Board of Directors is
also responsible for determining the recipients and terms of options and other
awards under the 1998 Plan and the 1999 Plan. The Board of Directors considers
the recommendations of management when making determinations regarding
executive compensation and awards under these Plans.
Philosophy
The members of the Board of Directors (the "Board") believe that the
Company's success is largely due to the efforts of its employees and, in
particular, the leadership exercised by its executive officers. Therefore, the
Board believes that it is important to:
/bullet/ Adopt compensation programs that stress stock ownership and,
thereby, tie long-term compensation to increases in stockholder
value as evidenced by price appreciation in the Class A Common
Stock.
/bullet/ Adopt compensation programs that enhance the Company's ability to
attract and retain qualified executive officers while providing
the financial motivation necessary to achieve continued high
levels of performance.
/bullet/ Provide a level of compensation that is competitive with a select
group of successful national and regional construction equipment
rental companies and dealerships that the Company believes are
comparable to Neff.
/bullet/ Select compensation programs that emphasize teamwork, corporate
efficiency and overall corporate results.
10
<PAGE>
The members of the Board believe, however, that fixed compensation
formulas may not adequately reflect all aspects of the Company's and an
individual executive officer's performance. Therefore, the Board has retained a
high degree of flexibility in structuring Neff's executive compensation. This
approach allows the Board to annually evaluate subjectively and reward each
executive officer's individual performance and contribution to the Company's
overall financial and operational success.
The components of the Company's executive compensation program for fiscal
year 1999 were (1) annual compensation consisting of base salaries, (2)
performance bonuses and (3) other benefits. Executive compensation is
determined on the basis of total compensation rather than as separate free-
standing components.
Base Salary and Bonus
The Board reviews each executive officer's base salary on an annual basis.
In determining base salary compensation for fiscal year 1999, the Board
considered financial and operational results of the previous fiscal year and
the contributions made by the executive officers to the achievement of those
results, and the compensation packages for executives of comparable position
and responsibility in the industry. Mr. Fitzgerald assists the other members of
the Board by making recommendations concerning salaries and bonuses to be paid
to executive officers, other than himself.
To provide additional incentive to achieve outstanding performance, the
Company awards cash bonuses to executive officers based on the Board's
subjective evaluation of corporate and individual performance. The Company's
increasing rate of growth and the competitive nature of the Company's business
placed greater demands than ever on the executive officers in 1999. The bonuses
awarded by the Company for 1999 and the salaries determined for 1999 reflect
this fact, as well as the attainment of certain performance goals in 1999 such
as the Company's continued revenue and earnings growth and the successful sale
by the Company of its investment in Sullair Argentina, S.A. and its equipment
dealership business.
Long-Term and Other Incentive Compensation
The Board believes that the financial interests of executive officers
should be aligned closely with those of stockholders through stock ownership.
Pursuant to the Company's incentive stock plans, the Board may grant stock
options, stock appreciation and dividend equivalent rights, restricted stock,
performance units and performance shares to employees, officers, employee
directors, consultants and advisors of the Company. These awards are based upon
an evaluation of the contribution of eligible individuals to the Company's
long-term performance and the importance of their responsibilities within the
Company. Stock options granted under the 1998 Plan generally have a term of ten
years, vest over three years and have an exercise price equal to the fair
market value of the Class A Common Stock on the grant date. Phantom Shares
granted under the Phantom Stock Plan generally vest over five years and must be
redeemed by the Company within one year of vesting.
In March 1999, the Company announced that it was evaluating strategic
alternatives to enhance stockholder value. The Board decided not to grant any
options or other stock-based awards under the 1998 Plan or the 1999 Plan while
the Company was engaged in this process.
Chief Executive Officer. Mr. Fitzgerald's compensation package for 1999
consisted of base salary and a cash bonus. In approving Mr. Fitzgerald's
compensation arrangements, the Board took into account the Company and Mr.
Fitzgerald's accomplishments during 1999, including successfully completing the
acquisition of three equipment rental companies and increasing gross profit to
35.5% of total revenues for the year ended December 31, 1999. In addition, the
Board also considered the overall compensation packages of other chief
executive officers of companies in the construction equipment rental and
dealership industries.
Deductibility of Executive Compensation in Excess of $1.0 Million. Section
162(m) of the Internal Revenue Code of 1986 generally disallows a federal
income tax deduction to any publicly
11
<PAGE>
held corporation for compensation paid in excess of $1 million in any taxable
year to a named executive officer. Exceptions are made for qualified
performance-based compensation, among other things. The Board generally intends
to structure its executive awards under the Company's incentive stock plans to
take advantage of this Section 162(m) exception. However, the Board does not
believe that it is necessarily in the best interest of the Company and its
stockholders that all compensation meet the requirements of Section 162(m) for
deductibility and the Committee may determine to award non-deductible
compensation in such circumstances as it deems appropriate. Moreover, in light
of the ambiguities and uncertainties under Section 162(m), no assurance can be
given that compensation intended by the Company to satisfy the requirements for
deductibility under Section 162(m) does in fact do so.
Jorge Mas
Jose Ramon Mas
Juan Carlos Mas
Kevin P. Fitzgerald
Arthur B. Laffer
Joel-Tomas Citron
Michael Markbreiter
Paul E. Dean
12
<PAGE>
Compensation Committee Interlocks and Insider Participation
During 1999, the entire Board of Directors was responsible for decisions
concerning compensation. Other than Kevin P. Fitzgerald, there were no officers
or employees of the Company who participated in deliberations concerning
compensation matters.
Stock Price Performance
The following stock price performance chart compares cumulative total
stockholder return, assuming reinvestment of dividends, for (1) the Class A
Common Stock, (2) Standard & Poor's 500 Stock Index and (3) a Competitor Group
Index, for the period indicated. The chart assumes that $100 was invested at
May 22, 1998, the date Neff Corp. began trading on the New York Stock Exchange,
at the initial public offering price of $14.00 per share. Past stock price
performance is not necessarily indicative of future results.
[GRAPHIC OMITTED]
<TABLE>
<CAPTION>
Measurement Period
(Fiscal Year Covered) Neff Corp. Standard & Poor's 500 Competitor Group Index(1)
--------------------------- ------------ ----------------------- --------------------------
<S> <C> <C> <C>
May 22, 1998 .............. $ 100.00 $ 100.00 $ 100.00
December 31, 1998 ......... 44.64 111.71 92.97
December 31, 1999 ......... 45.53 135.21 53.10
</TABLE>
----------------
(1) In accordance with the SEC's rules, the Company has elected to select a
group of peer companies on an industry basis for comparison purposes. The
Competitor Group includes three participants: National Equipment Services,
Inc., Nationsrent, Inc. and United Rentals, Inc. Total return calculations
were weighted according to the respective company's market capitalization.
13
<PAGE>
PROPOSAL 2
Ratification of Selection of Independent Public Accountants
The Board of Directors has appointed Deloitte & Touche as independent
auditors for the Company for the year ending December 31, 2000. As the
Company's independent auditors, Deloitte & Touche audits Neff's books of
account and other corporate records. The Company's stockholders are being asked
to ratify the selection of Deloitte & Touche as Neff's independent auditors at
the Annual Meeting. Deloitte & Touche has served as the Company's independent
auditors since 1996.
A representative of Deloitte & Touche will be present at the Annual
Meeting and will have the opportunity, if he or she desires, to make a
statement and will be available to answer appropriate questions from
stockholders.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR PROPOSAL 2.
ANNUAL REPORT
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED
DECEMBER 31, 1999, AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, WILL
BE MAILED WITHOUT CHARGE TO STOCKHOLDERS UPON REQUEST. REQUESTS SHOULD BE
ADDRESSED TO THE COMPANY, 3750 NW 87th AVENUE, MIAMI, FLORIDA, 33178,
ATTENTION: JAMAL GARCIA, INVESTOR RELATIONS. THE FORM 10-K INCLUDES CERTAIN
EXHIBITS, WHICH WILL BE PROVIDED ONLY UPON PAYMENT OF A FEE COVERING THE
COMPANY'S REASONABLE EXPENSES.
SOLICITATION OF PROXIES, STOCKHOLDER PROPOSALS AND OTHER MATTERS
The cost of this solicitation of proxies will be borne by Neff. In
addition to the use of the mail, Company officials may solicit proxies in
person and by telephone or telegraph, and may request brokerage houses and
other custodians, nominees and fiduciaries to forward soliciting materials to
the beneficial owners of Class A Common Stock.
Proposals of stockholders intended to be presented at the Annual Meeting
to be held in the year 2001 must be received by Neff no later than April 20,
2001 to be considered for inclusion in the Company's proxy statement and form
of proxy relating to such meeting.
The Directors know of no other business to be presented at the Annual
Meeting. If other matters properly come before the meeting, the persons named
as proxies will vote on them in accordance with their best judgment.
You are urged to complete, sign, date and return your proxy promptly to
make certain your shares of Class A Common Stock will be voted at the Annual
Meeting. For your convenience in returning the proxy, an addressed envelope is
enclosed, requiring no additional postage if mailed in the United States.
For the Directors,
/s/ KEVIN P. FITZGERALD
-----------------------------------
Kevin P. Fitzgerald
Chief Executive Officer, President,
Treasurer and Secretary
YOUR PROXY IS IMPORTANT.
PLEASE SIGN, DATE AND MAIL IT TODAY.
14
<PAGE>
[GRAPHIC OMITTED NEFF LOGO]
Annual Meeting of Shareholders
Hilton Miami Airport & Towers
5101 Blue Lagoon Drive
Miami, Florida
June 19, 2000
10:00 A.M.
- FOLD AND DETACH HERE -
PROXY FOR 2000 ANNUAL MEETING OF SHAREHOLDERS
SOLICITED BY THE BOARD OF DIRECTORS OF NEFF CORP.
The undersigned hereby constitutes and appoints Jorge Mas and Kevin P.
Fitzgerald (the "Proxies"), or any one of them with full power of substitution,
attorneys and proxies for the undersigned to vote all shares of Common Stock of
Neff Corp. (the "Company") that the undersigned would be entitled to vote at
the 2000 Annual Meeting of Shareholders to be held at the Hilton Miami Airport
& Towers, 5101 Blue Lagoon Drive, Miami, Florida 33126, at 10:00 a.m. on
Monday, June 19, 2000, or any adjournments or postponements thereof, on the
following matters coming before the Annual Meeting:
(1) Election of two (2) Class II Directors as described in the Proxy Statement
of the Board of Directors.
[ ] FOR the nominees listed below [ ] WITHHOLD AUTHORITY to vote
for the nominees listed below
JUAN CARLOS MAS
JOSE RAMON MAS
(To withhold authority to vote for any individual nominee,
write the nominee's name below:)
<TABLE>
<S> <C> <C> <C>
FOR AGAINST ABSTAIN
(2) To ratify the appointment of Deloitte & Touche as independent auditors for the fiscal [ ] [ ] [ ]
year ending December 31, 2000.
</TABLE>
(Continued and to be signed on reverse)
<PAGE>
- FOLD AND DETACH HERE -
(3) In their discretion, upon any other business which may properly be
presented at the Annual Meeting or any adjournments or postponements
thereof.
Receipt of the Notice of Annual Meeting of Stockholders, the Proxy
Statement dated May 20, 2000, and the Company's Annual Report on Form 10-K for
the year ended December 31, 1999 is acknowledged.
ANY PROPER PROXY RECEIVED BY THE COMPANY AS TO WHICH NO CHOICE HAS BEEN
INDICATED WILL BE VOTED BY THE PROXIES "FOR" THE NOMINEES AND THE PROPOSALS SET
FORTH ABOVE.
Date:________________________, 2000
Signature:_________________________
Signature:_________________________
(Please sign exactly as your name
or names appear on this proxy.
When signing as executor,
guardian, trustee, joint owners,
agent, authorized representative
or a corporate owner, or other
representative, please give your
full title as such.)
