UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
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
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)(4) 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):
___________________________________________________________________________
4) Proposed maximum aggregate value of transaction:
___________________________________________________________________________
5) Total fee paid:
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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 2000 annual meeting of shareholders of Quipp, Inc. will be held at
its corporate offices at 4800 N.W. 157 Street, Miami, Florida on May 2, 2000 at
10:00 a.m. Eastern Daylight Time, for the following purposes:
(1) To elect two members of the Board of Directors to serve until the
2003 Annual Meeting;
(2) To ratify the appointment of KMPG LLP as independent public
accountants to examine Quipp's financial statements for 2000; 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 22, 2000 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 4, 2000
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 2000 annual meeting. This proxy statement and accompanying form of
proxy are first being mailed to our shareholders on or about April 4, 2000.
Time and Place; Purpose
The annual meeting will be held at Quipp's corporate offices, 4800 N.W.
157 Street, Miami, Florida, on May 2, 2000, starting at 10:00 a.m., Eastern
Daylight Time. At the meeting, you will be asked to vote upon (1) the election
of two directors to serve until the 2003 annual meeting; (2) a proposal to
ratify the appointment of KPMG LLP as independent public accountants to examine
Quipp's financial statements for 2000; 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 22,
2000 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
the meeting. On the record date, there were 1,887,184 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 two 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.
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
<PAGE>
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 a signed notice
of revocation or a later-dated signed proxy to the Secretary of Quipp, at 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 22, 2000 (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) ............................. 40,476 2.1%
Richard H. Campbell(3) ......................... 16,411 *
Cristina H. Kepner(4) .......................... 26,189 1.4%
Louis D. Kipp(5) ............................... 83,489 4.4%
Anthony P. Peri(6) ............................. 22,882 1.2%
William L. Rose(3).............................. 15,000 *
Jeffrey S. Barocas(7) .......................... 20,025 1.1%
Christer A. Sjogren(8) ......................... 29,025 1.5%
Kenneth G. Langone(9) .......................... 176,048 9.3%
John L. Morgan(10) ............................. 328,100 17.4%
Summit Capital Management, LLC (11) ............ 228,780 12.1%
All directors and executive officers
as a group(12) ............................... 253,497 12.9%
</TABLE>
- -----------
*Less than 1%
(1) Applicable percentage of ownership is based on 1,887,184 shares of common
stock outstanding on March 20, 2000. Beneficial ownership is determined in
accordance with rules of the Securities and Exchange Commission and means
2
<PAGE>
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 22, 2000 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 13,000 shares underlying options that are currently exercisable.
(3) Includes 5,000 shares underlying options that are currently exercisable.
(4) Includes 10,000 shares underlying currently exercisable options. 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 5,000 shares underlying options that are
currently exercisable.
(6) Includes 16,625 shares underlying options that are exercisable within 60
days of March 22, 2000.
(7) Includes 9,000 shares underlying options that are exercisable currently or
within 60 days of March 22, 2000.
(8) Includes 9,000 shares underlying options that are exercisable currently or
within 60 days of March 22, 2000.
(9) Includes 74,948 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 328,100
shares, including 155,000 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 155,000 shares. The beneficial ownership of Mr. Morgan also
includes 173,100 shares held by Farnam Street Partners, L.P., a Minnesota
limited partnership of which Mr. Morgan is the general partner. The address
of Messrs. Morgan, MacKenzie, Norqual and Rush River Group, LLC is 10400
Viking Drive, Suite 160, Eden Prairie, Minnesota 55344. The address of
Farnam Street Partners, L.P. is U.S. Bank Place, Suite 4930, Minneapolis,
Minnesota 55402. The information in this note is derived from Amendment No.
1 to Schedule 13D, dated September 30, 1999, filed by Messrs. Morgan,
MacKenzie and Norqual and Rush River Group, LLC, Amendment No. 2 to
Schedule 13G, dated January 25, 2000, filed by Farnam Street Partners,
L.P., and a Form 4 for the month of December 1999 filed by Mr. Morgan.
(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. 2 to Schedule 13G, dated February 11, 2000, filed by Summit Capital
Management, LLC, Summit Capital Partners LP and Mr. Rudolf.
(12) Includes 72,625 shares underlying options that are exercisable currently or
within 60 days of March 22, 2000.
3
<PAGE>
ELECTION OF DIRECTORS
Nominees for Election
At the Meeting, two directors are to be elected. The Board of Directors
is divided into three classes, whose terms expire at successive annual meetings.
The two 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 2003.
The persons named in the enclosed proxy intend to vote the proxy for
the election of each of the two 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> <C>
Nominees for Election to Serve Until the 2003 Annual Meeting of Shareholders
Ralph M. Branca 64 Director
Louis D. Kipp 68 Director
Directors Whose Terms Will Expire at the 2001 Annual Meeting of Shareholders
Richard H. Campbell 63 Chairman of the Board
Cristina H. Kepner 53 Director
Directors Whose Terms Will Expire at the 2002 Annual Meeting of Shareholders
Anthony P. Peri 57 President, Chief Executive Officer and Director
William L. Rose 74 Director
</TABLE>
Mr. Branca has been a director of Quipp since July 1991. He was
President and Chief Executive Officer of Quipp 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.
4
<PAGE>
Mr. Campbell has been a director of Quipp since May 1996 and Chairman of the
Board since February 2000. 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.
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 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.
Meetings and Committees of the Board of Directors.
The Board of Directors held eight meetings during 1999. The Board has
an Audit Committee and a Compensation and Nominating Committee.
The Audit Committee is currently comprised of Messrs. Rose (Chairman)
and Campbell 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 one time during 1999.
The Compensation and Nominating Committee is currently comprised of
Messrs. Campbell (Chairman), 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 accordance with procedures
set forth in the bylaws. The Compensation and Nominating Committee met two times
during 1999.
5
<PAGE>
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 received 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 was equal to the fair market value of a share of Quipp common stock on
the date of grant.
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 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,
but do include consideration of the local and industry market. Accordingly, the
Committee is confident that, as compared to most other public companies, the
salaries paid to its executive officers are modest. Mr. Peri's base salary was
set through negotiations relating to his employment by Quipp.
Bonuses are paid under the Quipp, Inc. Management Incentive
Compensation Plan. Under that plan, an incentive pool, based on a percentage of
Quipp's operating income, is made available for awards to Quipp's executive
officers. A target award is determined for each participant, including Quipp's
executive officers. The actual award is made based on three different criteria:
(1) 60 percent of the award is based upon the Company's operating income for the
year; (2) 25 percent of the award is based on the achievement of specific
personal objectives by the participant; and (3) 15 percent of the award is based
on the achievement by the Company of budgeted orders for the year. The portion
of the award relating to the achievement of orders may be increased to the
extent that actual orders exceed budgeted orders, thereby further rewarding
achievement of Company growth. For 1999, the Company achieved its budgeted
operating income, so the entire portion of the award relating to operating
income was paid to each participant. With regard to orders, the Company exceeded
its budgeted orders by approximately 15 percent, and payment for that portion of
the award was made accordingly. Payments regarding personal objectives varied
among participants. For the executive officers other than Mr. Peri, such
objectives included achievement of milestones in the development of new
products, successful installations of large systems, identification of a
potential acquisition candidate and improvements to certain accounting systems.
In the case of Mr. Peri, the operating income and orders portions of his award
were based on the same achievement criteria as was applied to other
participants. With regard to individual objectives, the Committee evaluated
overall Company performance against the annual budget plan. Specifically, the
Committee considered that the Company achieved record sales and earnings in
1999, developed two new products and established an enhanced sales presence
in Latin America. In the case of four participants, including Mr. Peri and one
other executive officer, the Committee felt it appropriate to award each an
additional $4,000 in light of their individual contributions to the excellent
performance of the Company during 1999.
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. As explained in more detail
below, grant levels for most continuing employees during 1998 were equivalent to
1997 levels. The determination of the number of options to be granted to Quipp's
executive officers was generally related to the participant's position and base
salary level. In the case of Mr. Peri, the number of shares underlying options
granted in 1999 were less than the number of shares underlying options granted
in 1998. The decrease was based on the fact that the original grant served, in
part, as an incentive for Mr. Peri to accept employment with Quipp.
During 1999, Quipp paid a special dividend of $7.00 per share to its
shareholders. Partly in consideration of the anti-dilution provisions relating
to the stock options, the Committee determined to provide all employee
participants who were granted options in 1998, other than Mr. Peri, options
covering a number of shares equivalent to the number of shares underlying
options granted in 1998. In addition, the Committee determined to provide
additional awards to these participants, other than Mr. Peri, aggregating
$49,438 per year for all participants from 1999 to 2002 subject, in years
following 1999, to continued employment by the participants. The awards will be
made in Quipp stock pursuant to the 1996 Equity Compensation Plan.
During 1998, Mr. Peri was granted options in connection with the
commencement of his employment at an exercise price, based on the then current
fair market value, that was less than the exercise price of options granted
later in the year to the other participants. Therefore, no adjustments were made
to Mr. Peri's options in respect of the antidilution provisions of the options.
As a result of past option grants and awards, only a limited number of
shares remain available for grants or awards under the 1996 Equity Compensation
Plan. Quipp has determined to reevaluate the compensation structure for all
employees, including its executive officers, and has retained a consulting firm
to provide an analysis and recommendations with respect to base salary, bonus
levels and other forms of compensation.
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 $1 million limitation in the foreseeable future. In addition,
Quipp's 1996 Equity Compensation Plan is designed to preserve, to the extent
otherwise available, the deductibility of income realized upon the exercise of
stock options under the plan regardless of whether such income, together with
salary, bonus and other compensation, exceeds the limitation.
Richard H. Campbell, Chairman
Cristina H. Kepner
William L. Rose
7
<PAGE>
EXECUTIVE COMPENSATION
Compensation Summary
The following table sets forth certain information regarding
compensation paid by Quipp with respect to Quipp's Chief Executive Officer and
Quipp's two other executive officers.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Long-term
Compensation Compensation
--------------------------------------- -----------------
Awards
-----------------
Securities
Name and Other Annual Underlying All Other
Principal Position Year Salary Bonus Compensation Options(#) Compensation($)(1)
------------------ ---- ------ ----- ------------- ---------- ------------------
<S> <C> <C> <C> <C> <C> <C>
Anthony P. Peri (2) 1999 $135,000 $63,500 __ 26,500 $2,725
President and 1998 $98,654 $47,090 -- 30,000 $ 831
Chief Executive
Officer
Jeffrey S. Barocas(2) 1999 $101,436 $41,414 __ 12,000 $4,143
Chief Financial 1998 $98,759 $40,687 $50,308(3) 12,000 $2,607
Officer and
Treasurer
Christer A. Sjogren(2) 1999 $103,216 $40,044 __ 12,000 $2,971
Executive Vice 1998 $103,839 $42,040 __ 12,000 $2,077
President of Quipp
Systems, Inc.
</TABLE>
- ---------------
(1) Constitutes amounts contributed by Quipp, for the benefit of the executive
officer, to Quipp's Employee Savings and Investment Plan.
(2) Mr. Peri became Quipp's President and Chief Executive Officer in April
1998. Messrs. Barocas and Sjogren became "executive officers" of Quipp, as
defined in SEC regulations, in 1998.
(3) Constitutes moving expenses reimbursed by Quipp.
8
<PAGE>
Stock Option Grants
The following table presents information about the grant of stock
options during the fiscal year ended December 31, 1999 to the executive officers
of Quipp named on the Summary Compensation Table:
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Number of
Shares Percent of Total
Underlying Options Granted to Exercise
Options Employees in Price Expiration Grant Date
Name Granted Fiscal Year ($/Sh)(1) Date Value (2)
---- ----------- ------------------ ------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Anthony P. Peri 26,500(3) 24.1% $14.00 5/10/2004 $130,034
Jeffrey S. Barocas 12,000(3) 11.1% $14.00 5/10/2004 $ 58,883
Christer A. Sjogren 12,000(3) 11.1% $14.00 5/10/2004 $ 58,883
</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 27.63%; an expected term to
exercise of five years for 1999 grants; interest rates equal to the
U.S. Treasury Note rates in effect at the date of the grant (May 11,
1999 - 5.539%) 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 four
anniversaries of the date of grant.
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, 1999 by the executive
officers of Quipp who are named in the Summary Compensation Table.
AGGREGATED OPTION EXERCISES IN
LAST FISCAL YEAR AND FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
Number of Shares Value of Unexercised
Underlying Unexercised In-the-Money Options
Options at Fiscal Year-End at Fiscal Year-End(1)
------------------------------ -------------------------------
Shares
Acquired Value
Name on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
- ------------------ --------------- ---------- ------------- --------------- ------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Anthony P. Peri 10,000 $ 49,500 (2) -- 46,500 -- $744,000
Jeffrey S. Barocas 10,000 $110,000 (3) 3,000 21,000 $48,000 $336,000
Christer A. Sjogren 20,000 $191,250 (4) 3,000 21,000 $48,000 $336,000
</TABLE>
- ----------------------
(1) Based upon $16.00 per share, which was the last sale price of the
Company's common stock as reported by Nasdaq on December 31, 1999.
(2) Based upon the difference between $20.65 per share with respect to
5,000 shares, and $20.00 per share with respect to 5,000 shares, which
were the last sales prices on the respective dates of exercise as
reported by Nasdaq, and the $15.375 per share exercise price.
(3) Based upon the difference between $20.00 per share, which was the last
sale price on the date of exercise as reported by Nasdaq, and the $9.00
per share exercise price.
(4) Based upon the difference between $20.00 per share, which was the last
sales price on the date of exercise as reported by Nasdaq, and the
$11.875 exercise price with regard to 10,000 shares, and the $9.00
exercise price with regard to the other 10,000 shares.
INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has selected KMPG LLP as the independent public
accountants to examine the financial statements of Quipp for 2000. 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 Composite Index 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.
[GRAPHIC OMITTED]
<TABLE>
<CAPTION>
=================================================================================================================
Index FY end FY end FY end FY end FY end FY end
1994 1995 1996 1997 1998 1999
<S> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------
Quipp, Inc. $100.00 $150.00 $132.00 $234.96 $270.20 $ 327.09
- -----------------------------------------------------------------------------------------------------------------
Nasdaq Composite Index $100.00 $139.92 $171.69 $208.83 $291.60 $ 541.16
- -----------------------------------------------------------------------------------------------------------------
Factory Equipment Group $100.00 $131.86 $135.10 $153.50 $121.91 $ 120.01
=================================================================================================================
</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:
Baldwin Technology Inc. Class A, Bethlehem Corporation, Brown & Sharpe
Manufacturing Co. Class A, Chicago Rivet & Machine Co., Farrel Corporation, Flow
International Corp., Gardner Denver, Inc., Genesis Worldwide, Inc., Gleason
Corporation, Gorman-Rupp Company, Hirsch International Corp. Class A, Hurco
Companies Inc., Innovex Inc., 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., Moore Products Co., Paul Mueller Company, Nordson Corporation, Oilgear
Company, Quipp Inc., Regal-Beloit Corp., Riviera
11
<PAGE>
Tool Company, Sames Corporation, Secom General Corporation, Selas Corporation of
America, SI Handling Systems, Inc., Speizman Industries Inc., L.S. Starrett
Company, Summa Industries, Taylor Devices, Inc., Thermo Fibertek Inc., Thermo
Terratech, Inc., Twin Disc Incorporated, and Utilx Corporation.
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"). Based on its
review of Section 16(a) filings, Quipp believes that all filings required to be
made during 1999 were made on a timely basis except as follows: Louis D. Kipp
and Christer A. Sjogren each filed one late report covering three transactions.
John L. Morgan filed his initial report of beneficial ownership after the
applicable due date, did not properly file two reports covering an aggregate of
at least four transactions (although the shares underlying these transactions
were reflected in the aggregate holdings listed in his initial report of
beneficial ownership) and did not file on a timely basis two other reports, each
covering one transaction. Farnam Street Partners, L.P. did not file its initial
ownership report on a timely basis.
SHAREHOLDER PROPOSALS AND DIRECTOR NOMINATIONS
Any shareholder proposal to be presented at the 2001 Annual Meeting of
Shareholders must be received by Quipp on or before December 5, 2000 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 2001 Annual Meeting of
Shareholders, and the proposal is received by Quipp on or before February 18,
2001, 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 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 4, 2000
12
<PAGE>
(front)
QUIPP, INC.
Annual Meeting of Shareholders - May 2, 2000
This Proxy is solicited on behalf of the Board of Directors
The undersigned hereby appoints RICHARD H. CAMPBELL 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 2, 2000 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
<PAGE>
(reverse)
Please date, sign and mail your
proxy card back as soon as possible!
Annual Meeting of Shareholders
QUIPP, INC.
May 2, 2000
| Please Detach and Mail in the Envelope Provided |
A: [X] Please mark your votes
as in this example
WITHHELD
FOR ALL FROM ALL
nominees nominees
1. Election of Nominees: Ralph M. Branca
Directors [ ] [ ] Louis D. Kipp
[ ] FOR ALL EXCEPT the nominees indicated
on the line immediately below
FOR AGAINST ABSTAIN
2. Proposal to ratify the [ ] [ ] [ ]
appointment of KPMG LLP
as independent public
accountants for 2000.
3. To vote on such other matters
that may properly come before the meeting.
Signature ________________ Signature________________ Date _______________ 2000
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.
