SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
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 Section 240.14a-11(c) or Section 240.14a-12
Quipp, Inc.
-----------
(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.
[ ] Fee computed on 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 transaction 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):
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act 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>
QUIPP, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To the Shareholders of Quipp, Inc.:
The 1999 annual meeting of shareholders of Quipp, Inc. will be held at
its corporate offices at 4800 N.W. 157 Street, Miami, Florida on May 11, 1999 at
10:00 a.m. Eastern Daylight Time, for the following purposes:
(1) To elect three members of the Board of Directors to serve
until the 2002 Annual Meeting;
(2) To ratify the appointment of KMPG LLP as independent public
accountants to examine Quipp's financial statements for 1999;
and
(3) To transact such other business as may properly be presented
at the annual meeting or any adjournments thereof.
Holders of Quipp's common stock of record at the close of business on
March 29, 1999 are entitled to receive this notice and to vote at the meeting
and any adjournment.
Your vote is important. Whether you plan to attend the meeting or not,
we urge you to complete, sign and return your proxy card as soon as possible in
the envelope provided. This will ensure representation of your shares in the
event you are not able to attend the meeting. You may revoke your proxy and vote
in person at the meeting if you so desire.
Miami, Florida By Order of the Board of Directors
April 20, 1999
Alan Singer,
Secretary
<PAGE>
QUIPP, INC.
4800 N.W. 157 STREET
MIAMI, FLORIDA 33014-6434
PROXY STATEMENT
This proxy statement is furnished in connection with the solicitation
of proxies from the holders of Quipp Common Stock by the Board of Directors for
use at the 1999 annual meeting. This proxy statement and accompanying form of
proxy are first being mailed to our shareholders on or about April 20, 1999.
Time and Place; Purpose
The annual meeting will be held at Quipp's corporate offices, 4800 N.W.
157 Street, Miami, Florida, on May 11, 1999, starting at 10:00 a.m., Eastern
Daylight Time. At the meeting, you will be asked to vote upon (1) the election
of three directors to serve until the 2002 annual meeting; (2) a proposal to
ratify the appointment of KPMG LLP as independent public accountants to examine
Quipp's financial statements for 1999; and (3) such other matters as may
properly come before the meeting.
Voting Rights; Votes Required for Approval
The Board of Directors has fixed the close of business on March 29,
1999 as the record date for the meeting. Only holders of record of shares of
Quipp common stock on the record date are entitled to notice of and to vote at
our the meeting. On the record date, there were 1,670,394 shares of Quipp common
stock outstanding and entitled to vote at the meeting.
Each holder of record, as of the record date, of Quipp common stock is
entitled to cast one vote per share. The presence, in person or by proxy, of the
holders of a majority of the outstanding shares of Quipp common stock entitled
to vote is necessary to constitute a quorum at the meeting. Directors are
elected by a plurality of votes cast (in other words, the nominees with the
highest number of votes are elected). Generally, under Florida law, action on a
matter, other than the election of directors, is approved if the votes cast in
favor of the proposal exceed the votes cast against the proposal. Therefore, a
properly executed proxy marked "ABSTAIN," although counted for purposes of
determining whether there is a quorum and for purposes of determining the
aggregate number of shares represented and entitled to vote at the meeting, will
have no effect on the vote. In addition, where brokers are prohibited from
exercising discretionary authority in voting shares for beneficial owners who
have not provided voting instructions (commonly referred to as "broker
non-votes"), those shares will not be included in vote totals, but will be
counted for purposes of determining whether there is a quorum at the meeting.
All shares of Quipp common stock represented by properly executed
proxies received prior to or at the meeting and not revoked will be voted in
accordance with the instructions indicated in the proxies. If no instructions
are indicated on a properly executed and timely returned proxy, the persons
named in the proxy will vote the shares for election of the three nominees of
the Board of Directors and the ratification of the appointment of KPMG LLP. If
you decide to attend the meeting, you can vote your shares in person, even if
you have already returned your proxy.
1
<PAGE>
The Board of Directors is not currently aware of any business to be
acted upon at the meeting other than as described in this proxy statement. If,
however, other matters are properly brought before the meeting, or any
adjournments or postponements of the meeting, the persons appointed as proxies
will have discretion to vote or act on such matters according to their best
judgment.
You may revoke your proxy at any time prior to its use by delivering or
mailing in sufficient time to be received prior to the meeting, to the Secretary
of Quipp, a signed notice of revocation or a later-dated signed proxy to the
address listed on the notice of annual meeting of shareholders or by attending
the meeting and voting in person. Attendance at the meeting will not in itself
constitute the revocation of a proxy.
Quipp will pay the cost of solicitation of proxies. In addition to
solicitation by mail, arrangements will be made with brokerage houses and other
custodians, nominees and fiduciaries to send proxy material to beneficial
owners, and Quipp will, upon request, reimburse them for their reasonable
expenses in so doing. To the extent necessary in order to ensure sufficient
representation at the meeting, Quipp may request, in person, by telephone or
telecopy the return of proxy cards. Such solicitation may be made by Quipp's
directors, officers or regular employees. The extent to which this will be
necessary depends entirely upon how promptly proxy cards are returned. You are
urged to send in your proxies without delay.
Securities Ownership of Certain Beneficial Owners and Management
The following table set forth certain information concerning ownership
of the Quipp common stock as of March 29, 1999 (unless otherwise noted) by (a)
each shareholder known to Quipp to beneficially own more than five percent of
the common stock, (b) each director and each nominee for election as a director
of Quipp, (c) each executive officer of Quipp named in the Summary Compensation
Table under "Executive Compensation" and (d) all directors and executive
officers of Quipp as a group. Except as otherwise noted, each person listed
below, either alone or together with members of the person's family sharing the
same household, had sole voting and investment power with respect to the shares
listed next to such person's name.
<TABLE>
<CAPTION>
Number of Shares Percent of
Name of Beneficial Owner Beneficially Owned Outstanding Shares(1)
- ------------------------------------------------ -------------------------- ---------------------------
<S> <C> <C>
Ralph M. Branca(2).............................. 58,000 3.4%
Richard H. Campbell(3).......................... 15,601 *
Jack D. Finley(3)............................... 71,414 4.2%
Cristina H. Kepner(3)(4)........................ 21,189 1.3%
Louis D. Kipp(5)................................ 153,105 8.8%
Anthony P. Peri(6).............................. 10,000 *
William L. Rose................................. 10,000 *
Jeffrey S. Barocas(7)........................... 14,000 *
Christer A. Sjogren(8).......................... 41,280 2.4%
Kenneth G. Langone(9)........................... 146,500 8.8%
John L. Morgan(10).............................. 328,169 19.6%
Summit Capital Management, LLC (11)............. 171,100 10.2%
All directors and executive officers
as a group(12)................................ 394,589 20.9%
- -----------
*Less than 1%
</TABLE>
2
<PAGE>
(1) Applicable percentage of ownership is based on 1,670,394 shares of
common stock outstanding on March 29, 1999. Beneficial ownership is
determined in accordance with rules of the Securities and Exchange
Commission and means voting or investment power with respect to
securities. Shares of common stock issuable upon the exercise of stock
options exercisable currently or within 60 days of March 29, 1999 are
deemed outstanding and to be beneficially owned by the person holding
such option for purposes of computing such person's percentage
ownership, but are not deemed outstanding for the purpose of computing
the percentage ownership of any other person.
(2) Includes 55,000 shares underlying options that are exercisable
currently or within 60 days of March 29, 1999.
(3) Includes 15,000 shares underlying options that are exercisable
currently or within 60 days of March 29, 1999.
(4) Does not include shares held by Invemed Associates, Inc. (see Note 9).
Ms. Kepner is Executive Vice President of Invemed Associates, Inc.
(5) The address of Mr. Kipp is Quipp, Inc., 4800 N.W. 157 Street, Miami,
Florida 33014-6434. Includes 75,000 shares underlying options that are
exercisable currently or within 60 days of March 29, 1999.
(6) Includes 10,000 shares underlying options that are exercisable within
60 days of March 29, 1999.
(7) Includes 13,000 shares underlying options that are exercisable
currently or within 60 days of March 29, 1999.
(8) Includes 23,000 shares underlying options that are exercisable
currently or within 60 days of March 29, 1999.
(9) Includes 45,400 shares held by Invemed Associates, Inc. Mr. Langone is
the Chairman of the Board and President of Invemed Associates, Inc. and
principal owner of its corporate parent. The address of Mr. Langone is
Invemed Associates, Inc., 375 Park Avenue, New York, New York 10152.
(10) Mr. Morgan has shared beneficial ownership with regard to all 328,169
shares, including 152,669 shares as to which beneficial ownership is
shared with Rush River Group, LLC, a Minnesota limited liability
company, the members of which are Mr. Morgan, Kirk A. MacKenzie and
Jack A. Norqual. Messrs. MacKenzie and Norqual have also claimed shared
beneficial ownership as to the 152,669 shares. The beneficial ownership
of Mr. Morgan also includes 175,500 shares held by Farnham Street
Partners, L.P., a Minnesota limited partnership of which Mr. Morgan is
the general partner. The address of Messrs. Morgan, MacKenzie and
Norqual is 1015 Opus Center, 9900 Bren Road East, Minnetonka, Minnesota
55343. The address of Rush River Group, LLC is 2730 Woolsley Lane,
Wayzata, Minnesota 55391. The information in this note is derived from
a Schedule 13D, dated February 16, 1999, filed by Messrs. Morgan,
MacKenzie and Norqual and Rush River Group, LLC.
(11) Beneficial ownership of these shares shared between Summit Capital
Management, LLC and John C. Rudolf. The address of Summit Capital
Management, LLC and Mr. Rudolf is 601 Union Street, Suite 3900,
Seattle, Washington 98101. The information in this note is derived from
Amendment No. 1 to Schedule 13G, dated March 10, 1999, filed by Summit
Capital Management, LLC, Summit Capital Partners LP and Mr. Rudolf.
(12) Includes 221,000 shares underlying options that are exercisable
currently or within 60 days of March 29, 1999.
3
<PAGE>
ELECTION OF DIRECTORS
Nominees for Election
At the Meeting, three directors are to be elected. The Board of
Directors is divided into three classes, whose terms expire at successive annual
meetings. The three Directors to be elected at the meeting will be elected to
serve for a three year term expiring at Quipp's annual meeting in the year 2002.
The persons named in the enclosed proxy intend to vote the proxy for
the election of each of the three nominees named below, unless you indicate that
your vote should be withheld from any or all of them. Each nominee elected as a
director will continue in office until his or her successor has been duly
elected or qualified, or until the earliest of his or her death, resignation or
retirement.
The Board of Directors believes that all the nominees will be able to
serve as directors, if elected. If any nominee is unable to serve, proxies will
be voted for the election of such other persons as the Board of Directors may
recommend, unless the Board of Directors reduces the number of directors.
Set forth below is certain information concerning the nominees for
election as directors and those directors whose terms will continue following
the meeting:
<TABLE>
<CAPTION>
Name Age Position with the Company
- ---- --- -------------------------
<S> <C>
Nominees for Election to Serve Until the 2002 Annual Meeting of Shareholders
Jack D. Finley 71 Chairman of the Board
Anthony P. Peri 56 President, Chief Executive Officer and Director
William L. Rose 73 Director
Directors Whose Terms Will Expire at the 2000 Annual Meeting of Shareholders
Ralph M. Branca 63 Director
Louis D. Kipp 67 Director
Directors Whose Terms Will Expire at the 2001 Annual Meeting of Shareholders
Richard H. Campbell 62 Director
Cristina H. Kepner 52 Director
</TABLE>
Mr. Finley has been a director of Quipp since July 1989. He has been an
independent business investor and advisor since 1986. From 1968 to 1986, Mr.
Finley served in various capacities with Eikonix Corporation, a company he
co-founded that developed and produced color scanners. He served as Eikonix's
Executive Vice-President and, subsequently, Chairman of the Board, prior to the
sale of Eikonix to Eastman Kodak Company in 1985.
Mr. Peri has been President and Chief Executive Officer of Quipp and
President of Quipp Systems, Inc., Quipp's operating subsidiary, since April
1998. From May 1997 to March 1998, Mr. Peri was President and Chief Operating
Officer of CText Inc., a pre-press systems supplier to the newspaper industry.
From August 1986 to May 1997, he served in various capacities at Harris
Publishing Systems
4
<PAGE>
Corporation, the most recent of which was Vice President and General Manager,
with responsibility for the Company's software and systems integration business.
Mr. Rose has been a director of Quipp since it commenced operations in
August 1983. From July 1982 to June 1991, he was President and Chairman of the
Board of Technit, Inc., a supplier of EMI shielding for the electronics
industry. Since 1991, he has remained a director of Technit, Inc.
Mr. Branca has been a director of Quipp since July 1991. He was
President and Chief Executive Officer of the Company from May 1995 to April
1998. He has also been President of RMB Associates, a business consulting firm
that he owns, since November 1989. Prior to November 1989, he was employed by
Emhart Corporation, where he held numerous positions, the most recent of which
was Corporate Vice President of Operations.
Mr. Kipp, a founder of Quipp, was President of Quipp Systems, Inc. from
July 1987 until April 1998. He has been a director of Quipp since July 1995. He
also served previously as a director of Quipp from August 1983 to January 1995.
Mr. Kipp was President of Quipp from August 1983 to July 1987.
Mr. Campbell has been a director of Quipp since May 1996. He has been
president of Seacoast Consulting, a private business consulting firm, since
August 1994. Mr. Campbell was Group Vice President of the Commercial and Outdoor
Products Group of Textron, Inc. from March 1992 to August 1994. From 1989 to
March 1992, he was Group Vice President of Black and Decker Corporation and also
served as President of that company's Hardware and Home Improvement Group. Prior
to that time, he was Executive Vice President of Emhart Corporation and
President of that company's Consumer Sector Group until the company was acquired
by Black and Decker Corporation.
Ms. Kepner has been a director of Quipp since January 1995. She has
been Executive Vice President of Invemed Associates, Inc., an investment banking
firm, since February 1978. Ms. Kepner is also a director of NeoPath, Inc.
Meetings and Committees of the Board of Directors.
The Board of Directors held nine meetings during 1998. The Board has an
Audit Committee and a Compensation and Nominating Committee.
The Audit Committee is currently comprised of Messrs. Rose (Chairman),
Campbell and Finley and Ms. Kepner. The principal functions of the Committee are
to recommend to the Board of Directors the engagement of the independent
auditors and to review with the auditors the plan and results of the audit
engagement and evaluation of the adequacy of Quipp's system of internal
accounting controls. The Audit Committee met two times during 1998.
The Compensation and Nominating Committee is currently comprised of
Messrs. Finley (Chairman), Campbell and Rose and Ms. Kepner. The Committee
approves the salary, bonus and other benefits of members of senior management,
and administers certain of Quipp's benefit plans. In addition, the Committee
recommends to the Board of Directors nominees for election to the Board of
Directors and the compensation of the directors. The Committee will consider
qualified candidates for election as directors suggested by shareholders that
are submitted in writing to the Secretary of Quipp in
5
<PAGE>
accordance with procedures set forth in the bylaws. The Compensation and
Nominating Committee met three times during 1998.
Compensation of Directors
Quipp currently pays each non-employee director a fee of $1,200 for
attendance at each meeting of the Board of Directors ($400 if the director
participates by telephone) and $200 for each meeting of a Board committee.
In addition, under Quipp's 1996 Equity Compensation Plan, each
non-employee director receives an annual grant of options to purchase 5,000
shares (which generally are granted immediately after the election of directors
at the annual meeting of shareholders). The exercise price per share of the
options is equal to the fair market value of a share of Quipp common stock on
the date of grant.
The Company employs Mr. Branca and Mr. Kipp on a part-time basis and
pays them a per diem rate of $1,200 per day and $600 per day, respectively.
REPORT OF COMPENSATION AND NOMINATING
COMMITTEE ON EXECUTIVE COMPENSATION
The Compensation and Nominating Committee follows two basic principles
in setting the compensation for Quipp's executive officers. First, annual
compensation should, to a meaningful extent, reflect the financial performance
of the Company. Second, incentives should be provided to executive officers that
will tie long-term rewards for the executive officers to increases in
shareholder value. The Committee attempts to effect this policy through three
components of compensation: salary, bonuses and stock options.
Salary determinations have not been based upon any specific criteria.
Nevertheless, the Committee is confident that, as compared to most other public
companies, the salaries paid to its executive officers are modest. Mr. Peri's
salary was set through negotiations relating to his employment by Quipp. In
setting Mr. Branca's salary prior to the hiring of Mr. Peri, the Committee
considered the fact that he was not serving Quipp on a full-time basis, and his
duties were principally focused upon the pursuit and analysis of strategic
alternatives (including acquisition and joint venture opportunities).
Accordingly, Mr. Branca's salary was set at a level substantially below that of
Mr. Kipp, who was, prior to the hiring of Mr. Peri, responsible for the
operations of Quipp Systems, Inc., the Company's operating subsidiary.
Bonuses are paid pursuant to the Quipp, Inc. Executive Incentive
Compensation Plan. Under that plan, an incentive pool, based on a percentage of
Quipp's before-tax profit, is made available for awards to Quipp's executive
officers. While the plan sets forth the total maximum amount of bonus
compensation that can be paid to participants, the Committee is not required to
pay the full amount of the pool, and has the discretion to determine how much of
the pool should be paid to the individual participants. The individual bonuses
were not based on any specific criteria. Mr. Peri did not participate in the
plan in 1998, but received a bonus based on the Committee's judgment that he did
an excellent job in assuming the leadership of both Quipp and Quipp Systems. In
this regard, the Committee noted the strong financial performance of Quipp in
1998. Other bonuses under the pool also reflected the strong financial
performance of the Company during 1998.
6
<PAGE>
The stock option component of the executive officers' compensation is
designed to provide incentives for the enhancement of shareholder value, since
the full benefit of stock option grants typically is not realized unless there
has been appreciation in share values over several years. Options have been
granted to executive officers under the Quipp, Inc. 1996 Equity Compensation
Plan at fair market value on the date of grant. Grant levels for most continuing
employees during 1998 remained roughly equivalent to 1997 levels. In the case of
Mr. Peri, who received options to purchase 30,000 shares of Quipp common stock,
the amount of the grant was determined through negotiations relating to his
employment by Quipp. The determination of the number of options to be granted to
Quipp's executive officers was not based on any specific criteria.
Certain provisions of the Internal Revenue Code provide generally that
publicly held corporations may not deduct compensation for its chief executive
officer or each of other specified executive officers to the extent that such
compensation exceeds $1 million for the executive. It is not expected that these
provisions will adversely affect Quipp based on its current compensatory
structure. In this regard, base salary and bonus levels are expected to remain
well below the $1 million limitation in the foreseeable future. In addition, the
Company's 1996 Equity Compensation Plan is designed to preserve, to the extent
otherwise available, the deductibility of income realized upon the exercise of
stock options under the plan regardless of whether such income, together with
salary, bonus and other compensation, exceeds the limitation.
Jack D. Finley, Chairman
Richard H. Campbell
Cristina H. Kepner
William L. Rose
7
<PAGE>
EXECUTIVE COMPENSATION
Compensation Summary
The following table sets forth certain information regarding
compensation paid by Quipp with respect to Quipp's Chief Executive Officer,
Quipp's two other current executive officers, Quipp's former Chief Executive
Officer, and other one former executive officer.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Annual Long-term
Compensation Compensation
------------------------------------------------- Awards
--------------
Securities
Name and Other Annual Underlying All Other
Principal Position Year Salary Bonus Compensation Options(#) Compensation($)(1)
- --------------------- -------- ------------ ----------- --------------- -------------- ------------------
<S> <C> <C> <C> <C> <C>
Anthony P. Peri(2) 1998 $ 98,654 $47,090 -- 30,000 $ 831
President and
Chief Executive
Officer
Jeffrey S. Barocas 1998 $ 98,759 $40,687 $50,308(3) 12,000 $2,607
Treasurer and
Chief Financial
Officer
Christer A. Sjogren 1998 $103,839 $42,040 -- 12,000 $2,077
Executive Vice
President of Quipp
Systems, Inc.
Ralph M. Branca(4) 1998 $ 35,180 -- -- 5,000 --
Former President 1997 $ 50,000 $30,000 -- 10,000 --
and Chief 1996 $ 50,000 $30,000 -- 40,000 --
Executive Officer
Louis D. Kipp(5) 1998 $ 86,858 $21,045 -- 5,000 $1,749
Former President 1997 $110,000 $81,300 -- 10,000 $2,212
Quipp Systems, 1996 $110,000 $61,710 -- 60,000 $2,342
Inc.
</TABLE>
- --------------------
(1) Constitutes amounts contributed by Quipp, for the benefit of the
executive officer, to Quipp's Employee Savings and Investment Plan.
(2) Mr. Peri became Quipp's President and Chief Executive Officer in
April 1998.
(3) Constitutes moving expenses reimbursed by Quipp.
(4) Mr. Branca was Quipp's President and Chief Executive Officer until
April 1998. He continues to be employed by Quipp on a part-time basis.
(5) Mr. Kipp was president of Quipp Systems, Inc. until April 1998.
He continues to be employed by Quipp on a part-time basis.
8
<PAGE>
Stock Option Grants
The following table presents information about the grant of stock
options during the fiscal year ended December 31, 1998 to the executive officers
of Quipp named on the Summary Compensation Table:
<TABLE>
<CAPTION>
OPTION GRANTS IN LAST FISCAL YEAR
Number of
Shares Percent of Total
Underlying Options Granted to Exercise
Options Employees in Price Expiration Grant Date
Name Granted Fiscal Year ($/Sh)(1) Date Value (2)
- ---- ------------- ------------------------- ----------------- ------------------ ----------
<S> <C> <C> <C> <C> <C> <C>
Anthony P. Peri 30,000(3) 27.6% $15.375 4/5/2003 $215,586
Jeffrey S. Barocas 12,000(4) 11.0% $17.50 5/18/2003 $ 71,351
Christer A. Sjogren 12,000(4) 11.0% $17.50 5/18/2003 $ 71,351
Ralph M. Branca 5,000(5) 4.6% $17.125 5/11/2003 $ 46,654
Louis D. Kipp 5,000(5) 4.6% $17.125 5/11/2003 $ 46,654
</TABLE>
- --------------------------
(1) The exercise price was based on the last sale price of Quipp's common
stock reported on the Nasdaq National Market on the date of grant.
(2) These amounts represent the estimated fair value of stock options,
measured at the date of grant using the Black- Scholes option pricing
model. There are four underlying assumptions used in developing the
grant valuations: an expected volatility of 19.59%; an expected term to
exercise of five years for 1998 grants; interest rates equal to the
U.S. Treasury Note rates in effect at the date of the grant (April 6,
1998 - 5.75%; May 12, 1998 - 5.625%; May 19, 1998 - 5.625%) for the
expected term of the option; and an expected dividend yield of zero.
The actual value, if any, an officer may realize will depend on the
amount by which the stock price exceeds the exercise price on the date
the option is exercised. Consequently, there is no assurance the value
realized by an officer will be at or near the value estimated above.
These amounts should not be used to predict stock performance.
(3) This option provides for vesting in equal increments on the first three
anniversaries of the date of grant.
(4) This option provides for vesting in equal increments on the first four
anniversaries of the date of grant.
(5) This option was fully exercisable on the grant date.
9
<PAGE>
Stock Option Exercise and Holdings
The following table presents information about stock option exercises
and the number and value of options held at December 31, 1998 by the executive
officers of Quipp who are named in the Summary Compensation Table.
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN
LAST FISCAL YEAR AND FISCAL YEAR END OPTION VALUES
Number of Shares Value of Unexercised
Underlying Unexercised In-the-Money Options
Options at Fiscal Year-End (#) at Fiscal Year-End(1)
---------------------------------- -----------------------------------
Shares
Acquired on Value
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
- --------------------- --------------- ------------ ------------- ---------------- -------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Anthony P. Peri -- -- -- 30,000 -- $108,750
Jeffrey S. Barocas 1,000 $6,000(2) 10,000 12,000 $100,000 $ 18,000
Christer A. Sjogren -- -- 20,000 12,000 $171,250 $ 18,000
Ralph M. Branca -- -- 47,000 8,000 $337,375 $ 57,000
Louis D. Kipp -- -- 75,000 -- $536,875 --
</TABLE>
- --------------------------------
(1) Based upon $19.00 per share, which was the last sale price of the
Company's common stock as reported on the Nasdaq National Market on
December 31, 1998.
(2) Based upon the difference between $16.50 per share, which was the last
sale price on the date of exercise as reported by Nasdaq, and the
$10.50 per share exercise price.
INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has selected KMPG LLP as the independent public
accountants to examine the financial statements of Quipp for 1999. In accordance
with the resolution of the Board of Directors, this selection will be presented
to the shareholders for ratification at the meeting. The firm of KMPG LLP has
audited Quipp's financial statements annually since 1983. If the shareholders do
not ratify the appointment of KPMG LLP, the selection of independent public
accountants will be reconsidered by the Board of Directors. A representative of
KPMG LLP is expected to be present at the meeting and will have an opportunity
to make a statement if he or she desires to do so and will also be available to
respond to appropriate questions raised at the meeting.
THE BOARD OF DIRECTORS RECOMMENDS THE RATIFICATION OF THE APPOINTMENT
OF KPMG LLP.
10
<PAGE>
FIVE YEAR PERFORMANCE COMPARISON
The following line graph compares the yearly change in the cumulative
total shareholder return on Quipp's common stock for the past five fiscal years
with the cumulative total return of the Nasdaq Stock Market (U.S. issuers) and
the Dow Jones Factory Equipment Industry Group, described more fully below (the
"Factory Equipment Group"). Dividend reinvestment has been assumed and, with
respect to companies in the Factory Equipment Group, the returns of each such
company have been weighted at each measurement point to reflect relative stock
market capitalization.
[PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
=======================================================================================================================
Index FY end FY end FY end FY end FY end FY end
1993 1994 1995 1996 1997 1998
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Quipp, Inc. $100.00 $143.00 $214.50 $189.20 $336.78 $387.29
Nasdaq Stock Market (US) $100.00 $ 97.75 $138.22 $170.01 $208.44 $293.69
Factory Equipment Group $100.00 $ 99.01 $130.57 $134.14 $149.63 $128.34
=======================================================================================================================
</TABLE>
The Factory Equipment Group is not a "published industry or
line-of-business index" as that term is defined by Securities and Exchange
Commission regulations. Accordingly, the Factory Equipment Group is considered a
"peer index" and the identity of the issuers used in the index is as follows:
American Vanguard Corp., Baldwin Technology Inc. Class A, Bethlehem Corporation,
Binks Sames Corp., Bridgeport Machines Inc., Brown & Sharpe Manufacturing Co.
Class A, Chicago Rivet & Machine Co., Devlieg-Bullard Inc., Farrel Corporation,
Flow International Corp., Gardner Denver, Inc., Gleason Corporation, Gorman-Rupp
Company, Hirsch International Corp. Class A, Hurco Companies Inc., Innovex Inc.,
Inotek Technologies Corp., Interlake Corp., Invivo Corporation, K-Tron
International, Inc., Katy Industries, Inc., Key Technology Inc., Kulicke & Soffa
Industries, Inc., Lynch Corporation, McClain Industries, Inc., Middleby
Corporation, Milacron Inc., Monarch Machine Tool Co., Moore Products Co., Paul
Mueller Company, Nordson Corporation, Oilgear Company, Orbotech Ltd., Princeton
Media Group Inc., Quipp Inc., Regal-Beloit Corp., Riviera Tool Company, Secom
General Corporation, Selas Corporation of America, SI Handling Systems, Inc.,
Sonics & Materials, Inc.,
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<PAGE>
Speizman Industries Inc., L.S. Starrett Company, Summa Industries, Taylor
Devices, Inc., Thermo Fibertek Inc., Thermo Terratech, Inc., Twin Disc
Incorporated, Unit Instruments Inc. (CA), Utilx Corporation and Valmet Oy Ads.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires Quipp's
officers and directors and beneficial owners of more than ten percent of Quipp's
common stock to file reports of ownership of Quipp's securities and changes in
ownership with the Securities and Exchange Commission ("SEC"). Quipp believes
that, except for the filing after the due date of Mr. Peri's initial ownership
report, all filings required to be made during 1998 were made on a timely basis.
SHAREHOLDER PROPOSALS AND DIRECTOR NOMINATIONS
Any shareholder proposal to be presented at the 2000 Annual Meeting of
Shareholders must be received by Quipp on or before December 21, 1999 in order
to be included in the proxy statement relating to the meeting. If a shareholder
does not seek to have a proposal included in the proxy statement, but
nevertheless wishes to present a proper proposal at the 2000 Annual Meeting of
Shareholders, and the proposal is received by Quipp on or before March 6, 2000,
Quipp will provide information in the proxy statement relating to that meeting
as to the nature of the proposal and how persons named in the proxy solicited by
the Board of Directors intend to exercise their discretion to vote on the
matter. In addition, Quipp's Bylaws provide that any shareholder wishing to make
a nomination for director must give Quipp notice no later than seven days
following the date of the notice of the meeting accompanying this proxy
statement (in subsequent years, if notice of the annual meeting is given at
least 28 days prior to the meeting, the shareholder must give notice regarding
the nomination no less than 21 days nor more than 50 days prior to the meeting).
The notice must meet certain other requirements set forth in the Bylaws.
Shareholders may request a copy of the Bylaws from the Secretary, Quipp, Inc.,
4800 N.W. 157 Street, Miami, FL 33014-6434.
SOLICITATION OF PROXIES
The expense of solicitation of proxies for the meeting will be paid by
the Company. In addition to the mailing of the proxy material, such solicitation
may be made in person or by telephone or telecopy by directors, officers or
regular employees of the Company.
April 20, 1999
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<PAGE>
(front)
QUIPP, INC.
Annual Meeting of Shareholders - May 11, 1999
This Proxy is solicited on behalf of the Board of Directors
The Undersigned hereby appoints JACK D. FINLEY, LOUIS D. KIPP and
ANTHONY P. PERI, with full power of substitution, proxies of the undersigned to
represent the undersigned and to vote all shares of Common Stock of Quipp, Inc.
which the undersigned would be entitled to vote if personally present at the
Annual Meeting of Shareholders of Quipp, Inc. to be held at the company offices
at 4800 N.W. 157th Street, Miami, FL 33014-6434, at 10:00 A.M. Eastern Daylight
Time on May 11, 1999 and any adjournment thereof, subject to the directions
indicated on the reverse side.
If no directions are given, the shares will be voted FOR the election
of the listed nominees for director and FOR the proposal to ratify the
appointment of KPMG LLP. This Proxy also delegates discretionary authority to
vote with respect to any other matters that may properly come before the meeting
or any adjournment or postponement thereof.
THE UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT OF THE NOTICE OF ANNUAL
MEETING, PROXY STATEMENT AND ANNUAL REPORT OF QUIPP, INC.
Note: THIS PROXY MUST BE SIGNED AND DATED ON THE REVERSE SIDE
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<PAGE>
(reverse)
Please date, sign and mail your proxy
card back as soon as possible!
Annual Meeting of Shareholders
QUIPP, INC.
May 11, 1999
Please Detach and Mail in the Envelope Provided
A|X|Please mark your votes
as in this example
FOR ALL WITHHELD
nominees FROM ALL
nominees
1. Election [ ] [ ] Nominees: Jack D. Finley
of Directors Anthony P. Peri
William L Rose
[ ] FOR ALL EXCEPT the nominees indicated on
the line immediately below
- -----------------------------------------
2. Proposal to ratify the appointment of KPMG LLP as independent public
accountants for 1999.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. To vote on such other matters that may properly come before the meeting.
Signature ___________ Signature ______________ Signature Date: __________, 1999
NOTE: Please sign this proxy exactly as name(s) appears thereon. When signing as
attorney-in-fact, executor, administrator, trustee or guardian, please add your
title as such, and if signed as a corporation, please sign with full corporate
name by duly authorized officer or officers and affix the corporate seal. Where
stock is issued in the name of two or more persons, all such persons should
sign.
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