<PAGE> 1
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:
<TABLE>
<S> <C>
/ / Preliminary Proxy Statement / / Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
EQUITRAC CORPORATION
- --------------------------------------------------------------------------------
(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):
/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / 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:
/ / 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> 2
EQUITRAC CORPORATION
836 Ponce de Leon Boulevard
Coral Gables, Florida 33134
---------------------------
NOTICE OF
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JULY 25, 1996
---------------------------
Dear Fellow Shareholders:
You are cordially invited to attend the Company's 1996 Annual Meeting of
Shareholders to be held at 11:00 a.m. on Thursday, July 25, 1996 at the
Colonnade Hotel, 180 Aragon Avenue, Coral Gables, Florida 33134.
The proposals to be acted upon include the election of directors and other
business as may be properly brought before the meeting and each adjournment
thereof. Your Board of Directors urges you to read the accompanying proxy
statement and recommends that you vote "FOR" Proposal No. 1.
All shareholders are cordially invited to attend, although only
shareholders of record at the close of business on June 7, 1996 will be
entitled to notice of, and to vote at, the Annual Meeting or any adjournment
thereof.
It is important that your shares be represented at the Annual Meeting.
Accordingly, even if you plan to attend the Annual Meeting, please sign, date
and promptly mail the enclosed proxy card in the postage-prepaid envelope.
A copy of the Company's 1996 Annual Report to Shareholders, which includes
certified financial statements, is enclosed. On behalf of the Board of
Directors, thank you for your cooperation and continued support.
Sincerely,
/s/ John T. Kane
----------------------------------
John T. Kane
Chairman of the Board of Directors
Coral Gables, Florida
June 21, 1996
<PAGE> 3
EQUITRAC CORPORATION
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JULY 25, 1996
-----------------
PROXY STATEMENT
-----------------
This Proxy Statement is furnished to the shareholders of Equitrac
Corporation (the "Company") in connection with the solicitation of proxies to
be used in voting at the 1996 Annual Meeting of Shareholders (the "Annual
Meeting") to be held at 11:00 a.m. on July 25, 1996 at the Colonnade Hotel, 180
Aragon Avenue, Coral Gables, Florida 33134. The proxy materials were mailed on
or about June 21, 1996 to shareholders of record at the close of business on
June 7, 1996. The complete mailing address of the Company's principal
executive offices is 836 Ponce de Leon Boulevard, Coral Gables, Florida 33134.
INFORMATION CONCERNING PROXY
The enclosed proxy is solicited on behalf of the Company's Board of
Directors. The giving of a proxy does not preclude the right to vote in person
should any shareholder giving a proxy so desire. Shareholders have an
unconditional right to revoke their proxy at any time prior to the exercise
thereof, either in person at the Annual Meeting or by filing with the Company's
Secretary at the Company's headquarters a written revocation or duly executed
proxy bearing a later date. No revocation will be effective, however, until
written notice of the revocation is received by the Company at or prior to the
Annual Meeting.
The cost of preparing, assembling and mailing this Proxy Statement, the
Notice of Annual Meeting of Shareholders and the enclosed proxy is to be borne
by the Company. In addition to the use of mail, employees of the Company may
solicit proxies personally and by telephone and facsimile. They will receive
no compensation therefor in addition to their regular salaries. Arrangements
will be made with banks, brokers and other custodians, nominees and fiduciaries
to forward copies of the proxy material to their principals and to request
authority for the execution of proxies. The Company will reimburse such
persons for their expenses in so doing.
Unless contrary instructions are indicated on the enclosed proxy, all
shares represented by valid proxies received pursuant to this solicitation (and
which have not been revoked in accordance with the procedures set forth above)
will be voted for the election of the five directors named below and for such
other business as may be properly brought before the Meeting and each
adjournment thereof. In the event a shareholder specifies a different choice by
means of the enclosed proxy, his shares will be voted in accordance with the
specification so made.
1
<PAGE> 4
VOTING SECURITIES OUTSTANDING
Only holders of record of Common Stock at the close of business on June 7,
1996 will be entitled to vote at the Annual Meeting. At that date, there were
3,392,900 shares of Common Stock outstanding. Each share of Common Stock is
entitled to one vote on all matters on which shareholders may vote.
The presence in person or by proxy of a majority of the outstanding shares
of Common Stock is necessary to constitute a quorum at the Annual Meeting. To
be elected, directors must receive a plurality of the votes cast by holders of
shares of Common Stock present or represented at the Annual Meeting.
Abstentions are considered as shares present and entitled to vote for purposes
of determining the presence of a quorum and for purposes of determining the
outcome of any matter submitted to the shareholders for a vote, but are not
counted as votes "for" or "against" any matter. The Company will treat shares
referred to as "broker or nominee non-votes" (shares held by brokers or
nominees as to which instructions have not been received from the beneficial
owners or persons entitled to vote and the broker or nominee does not have
discretionary voting power on a particular matter) as shares that are present
and entitled to vote for purposes of determining the presence of a quorum. For
purposes of determining the outcome of any matter as to which the proxies
reflect broker or nominee non-votes, shares represented by such proxies will be
treated as not present and not entitled to vote on that subject matter and
therefor would not be considered by the Company when counting votes cast on the
matter (even though those shares are considered entitled to vote for quorum
purposes and may be entitled to vote on other matters). If less than a majority
of the outstanding shares of Common Stock are represented at the Annual
Meeting, a majority of the shares so represented may adjourn the Annual Meeting
from time to time without further notice.
2
<PAGE> 5
ELECTION OF DIRECTORS
(ITEM NO. 1)
Five directors are to be elected by the holders of the outstanding Common
Stock. The persons named in the enclosed proxy will vote shares of Common Stock
for the election of the nominees named below, unless such proxy directs
otherwise. The nominees named below will serve until the next annual meeting of
shareholders and until their respective successors are duly elected and
qualified. The Board of Directors does not expect that any of the nominees
named in this proxy will be unable to stand for election, but, in the event
that vacancies in the slate of nominees should occur unexpectedly, the shares
represented by the proxies will be voted for substitutes chosen by the Board of
Directors.
INFORMATION CONCERNING DIRECTORS
Information concerning the names, ages, positions with the Company and
business experience of the Company's current directors, each of whom is a
nominee for director, is set forth below.
<TABLE>
<CAPTION>
DIRECTOR
NAME AGE POSITION SINCE
- ---- --- -------- --------
<S> <C> <C> <C>
Chairman of the Board
John T. Kane(2) 52 President, Chief Executive 1978
George P. Wilson(2) 52 Officer and Director 1978
James F. Courbier(1)(3) 53 Director 1979
Marc M. Watson(1)(2)(3) 50 Director 1992
Peter Marx(1) 54 Director 1992
</TABLE>
- -----------------------
(1) Member of the Audit Committee
(2) Member of the Compensation Committee
(3) Member of the Stock Option Committee
JOHN T. KANE is the founder of the Company, has served as the Company's
Chairman of the Board since its inception in January 1978 and was President of
the Company from its inception until October 1989.
GEORGE P. WILSON has been President, Chief Executive Officer and Director
of the Company since October 1989. Mr. Wilson served as Executive Vice
President of the Company from 1978 through October 1989.
JAMES F. COURBIER has served as a director of the Company since 1979. Mr.
Courbier has been a private investor for more than five years.
MARC M. WATSON was elected as a director in April 1992. Mr. Watson has
been the Chairman of the Board of Sano Corporation, a pharmaceutical company,
since August 1994. Mr. Watson has been Of Counsel to the law firm of
Greenberg, Traurig, Hoffman, Lipoff, Rosen & Quentel, P.A. since March 1990.
PETER MARX was elected as a director in July 1992. Mr. Marx has been
engaged in the practice of law for more than five years.
3
<PAGE> 6
MEETINGS AND COMPENSATION
During the fiscal year ended February 29, 1996 ("Fiscal 1996"), the Board
of Directors of the Company met on four occasions. During Fiscal 1996, each of
the Directors attended at least 75% of the meetings of the Board of Directors
and the committees on which he served, except Mr. Watson who attended 50% of
such meetings. The Company's nonemployee directors each receive a fee of $750
($1,500 for directors who reside outside of the South Florida area) for
attendance at each meeting of the Board of Directors. In addition, nonemployee
directors are eligible for stock option grants under the Company's Directors
Stock Option Plan, under which options to purchase 1,000 shares of common stock
will be granted to each such director upon his reelection, exercisable at the
fair market value of the common stock on the date of grant. The Company's
nonemployee directors are reimbursed by the Company for their travel expenses
incurred in connection with their attendance at meetings. In addition, James
F. Courbier, a director of the Company, received approximately $72,000 in
Fiscal 1996 for consulting services.
The Audit Committee, which met two times in Fiscal 1996, is responsible
for recommending to the Board the engagement of independent accountants,
reviewing the scope of and budget for the annual audit and reviewing with the
independent accountants the results of the audit engagement, including the
financial statements of the Company. The Audit Committee also considers such
other matters relating to the financial affairs of the Company as may be
necessary or appropriate in order to facilitate accurate and timely financial
reporting.
The Compensation Committee, which met one time in Fiscal 1996, reviews and
reports to the Board on all matters involving compensation of employees and
management.
The Stock Option Committee, which met one time in Fiscal 1996, recommends
to the Board the adoption and implementation of stock option plans and oversees
administration of the Company's present stock option plan.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Compliance with Section 16(a) of the Exchange Act requires the Company's
officers and directors, and persons who own more than 10% of the Company's
Common Stock to file reports of ownership and changes in ownership with the
Securities and Exchange Commission ("SEC"). Officers, directors and greater
than 10% shareholders are required by SEC regulation to furnish the Company
with copies of all Section 16(a) forms they file.
To the best of the Company's knowledge, based solely on a review of the
copies of such reports furnished to the Company and written representations
that no other reports were required, during Fiscal 1996 all Section 16(a)
filing requirements applicable to its officers, directors and greater than ten
percent beneficial owners were complied with, except that one report covering
one transaction was filed late by John P. Jones.
4
<PAGE> 7
SECURITY OWNERSHIP OF PRINCIPAL
SHAREHOLDERS AND MANAGEMENT
The following table sets forth, as of June 7, 1996, the number and percentage
of outstanding shares of Common Stock beneficially owned by (a) each person
known by the Company to beneficially own more than 5% of such stock, (b) each
director of the Company, (c) each of the Named Officers (defined below) and (d)
all directors and executive officers of the Company as a group:
<TABLE>
<CAPTION>
SHARES PERCENT
NAME OF BENEFICIAL OWNER BENEFICIALLY OWNED OWNED
- ------------------------ -------------------- -------
<S> <C> <C> <C>
John T. Kane................................................. 1,020,600 (1)(3) 29.7%
George P. Wilson............................................. 648,000 (2)(3) 18.9%
Fidelity Low-Priced Stock Fund............................... 205,500 (4) 6.1%
Peak Investment Limited Partnership.......................... 185,500 (5) 5.5%
James F. Courbier............................................ 48,000 (3) 1.4%
Marc M. Watson............................................... 38,000 (3) 1.1%
Peter Marx................................................... 18,000 (3) *
Scott J. Modist.............................................. 32,000 (3) *
Patrick J. Raftery........................................... 17,500 (3) *
John P. Jones................................................ 11,400 (3) *
All directors and executive officers as a group (10 persons). 1,865,000 (3) 51.4%
</TABLE>
- -------------------------
* Represents less than 1% of the Company's outstanding Common Stock
(1) Includes (i) 885,752 shares of Common Stock directly owned and (ii)
84,848 shares of Common Stock owned by Mr. Kane's children.
(2) Includes (i) 456,586 shares of Common Stock directly owned and (ii)
141,414 shares owned by a general partnership, the sole managing partner
of which is a corporation all the outstanding stock of which is owned by
Mr. Wilson.
(3) Includes shares of Common Stock subject to stock options exercisable as
of June 7, 1996 or within 60 days thereof in the following amounts: John
T. Kane (50,000), George P. Wilson (50,000), James F. Courbier (8,000),
Marc M. Watson (36,000), Peter Marx (18,000), Scott J. Modist (32,000),
Patrick J. Raftery (15,700), John P. Jones (8,800) and all directors and
executive officers as a group (240,600).
(4) Based solely upon Schedule 13(g) filed by the beneficial owner on
February 14, 1996, to report beneficial ownership as of December 31, 1995,
and other institutional holding reports.
(5) Based solely upon Schedule 13(d) filed by the beneficial owner on
February 2, 1994, to report beneficial ownership as of January 28, 1994.
The addresses of John T. Kane and George P. Wilson, both of whom are beneficial
owners of more than 5% of the Company's Common Stock is c/o Equitrac
Corporation, 836 Ponce de Leon Boulevard, Coral Gables, Florida 33134. The
address of Fidelity Low-Priced Stock Fund, a beneficial owner of more than 5% of
the Company's Common Stock, is 82 Devonshire Street, Boston, Massachusetts
02109. The address of Peak Investment Limited Partnership, a beneficial owner
of more than 5% of the Company's Common Stock, is One Financial Center, Suite
1600, Boston, Massachusetts 02111.
5
<PAGE> 8
COMPENSATION AND STOCK OPTION COMMITTEES REPORT ON EXECUTIVE COMPENSATION
The Company's executive compensation program is administered by the
Compensation Committee of the Board of Directors and the Company's Stock Option
Plan is administered by the Stock Option Committee of the Board of Directors.
The Committees' general philosophy with respect to compensation of its
executive officers has been to offer competitive compensation programs designed
to attract and retain key executives critical to the long-term success of the
Company and to recognize an individual's contribution and personal performance.
The Company compensates its executives through a mix of short-term and
long-term compensation programs. The principal components of executive
compensation are base salary, an annual bonus program or, in the case of
marketing and sales personnel, sales commissions, and stock options. The
Company believes that this balanced approach to compensation helps the Company
attract and retain executives and rewards executives for their collective and
individual contribution to the leadership and short-term and long-term growth
and profitability of the Company.
Base Salaries
Base salaries are initially determined by evaluating the responsibilities
of the position held and by reference to the competitive marketplace for
executive talent through review of an individual's background and overall
experience and expertise in the Company's line of business and the salaries of
similarly situated executives. The Company believes that it is competitive with
respect to initial base salaries.
In evaluating base salary increases, as well as total compensation, the
Compensation Committee evaluates individual performance, inflation rates and
the salary levels prevailing at companies which are similar to the Company.
Increases to base salaries are also influenced by the performance of the
Company and the individual against established goals and objectives. The
Compensation Committee examines a number of financial indicators of corporate
performance, including results of revenues, net profits, earnings per share and
return on stockholders' investment in setting base salaries.
The compensation of George Wilson, the Company's President and Chief
Executive Officer, and John T. Kane, the Company's Chairman of the Board, was
determined by the Compensation Committee and the Board of Directors based upon
the previous employment agreements of Messrs. Wilson and Kane, individual
performance and financial indicators of corporate performance.
Annual Bonus
The Company maintains an annual incentive compensation program which
provides for the payment of cash bonuses to executive officers and other key
employees of the Company based upon Company's financial performance and
individual performance. While these bonus awards are based upon annual bonus
targets, the Committee strives to align the bonus plan targets with the
Company's long-term goals so that strategic focus is maintained.
6
<PAGE> 9
Options
The Committees believe that a significant portion of executive
compensation should be comprised of long-term incentives which encourage
strategic management decision-making. The Company's Stock Option Plan provides
such an incentive through the award of stock options to executive officers and
other key employees. The Stock Option Plan is administered by the Stock Option
Committee, which is comprised of Marc M. Watson and James F. Courbier, outside
directors of the Company, who consider the recommendations of Messrs. Kane and
Wilson with respect to stock option grants to management and other employees.
<TABLE>
Compensation Committee Stock Option Committee
<S> <C>
John T. Kane Marc M. Watson
George P. Wilson James F. Courbier
Marc M. Watson
</TABLE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee is comprised of Marc M. Watson, John T. Kane
and George P. Wilson. John T. Kane and George P. Wilson are executive officers
of the Company who serve on the Compensation Committee. Neither Mr. Kane nor
Mr. Wilson participate in discussions regarding their own compensation or
performance appraisals.
7
<PAGE> 10
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth information concerning the annual and
long-term compensation for services in all capacities to the Company for the
fiscal years ended February 29, 1996 and February 28, 1995 and 1994, earned by,
paid or awarded to the persons who were, at February 29, 1996 (i) the chief
executive officer and (ii) the other four most highly compensated executive
officers of the Company (the "Named Officers"):
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
------------------------------- ------------
FISCAL OTHER ANNUAL STOCK ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION OPTIONS COMPENSATION(1)
- --------------------------- ------ -------- ------- ------------ ------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
George P. Wilson 1996 $322,560 $ - $ - 15,000 $68,515
President and Chief 1995 $313,182 $ - $ - - $67,041
Executive Officer 1994 $303,412 $ - $ - 20,000 $69,227
John T. Kane 1996 $322,560 $ - $ - 15,000 $65,251
Chairman of the Board 1995 $313,182 $ - $ - - $63,776
of Directors 1994 $303,412 $ - $ - 20,000 $65,278
Scott J. Modist 1996 $115,054 $11,500 $ - 12,000 $ 5,681
Vice President - Finance, Treasurer 1995 $109,182 $ 5,000 $ - - $ 4,542
and Chief Financial Officer 1994 $ 99,008 $ 5,000 $ - 5,000 $ 4,267
Patrick J. Raftery 1996 $224,546 $ - $ - 7,500 $ 7,496
Vice President - Sales, 1995 $237,358 $5,000 $ - - $ 5,230
U.S. Professional Division 1994 $177,542 $ - $ - 4,000 $ 4,085
John P. Jones 1996 $154,146 $ - $ - 4,000 $ 7,788
Vice President - Sales 1995 $162,820 $ - $ - - $ 5,522
International Division 1994 $133,369 $ - $ - 2,000 $ 5,566
</TABLE>
- --------------------------
(1) This column is composed of (a) Company contributions to the 401(k) Plan
for Messrs. Modist, Raftery and Jones in Fiscal 1996, 1995, and 1994; (b)
Company contributions to the 401(k) Plan for Mr. Wilson in the amounts of
$9,046, $7,569 and $9,071 in Fiscal 1996, 1995 and 1994, respectively, and
for Mr. Kane in the amounts of $9,046, $7,569, and $9,071 in Fiscal 1996,
1995 and 1994, respectively, and (c) the payment of life insurance policy
premiums for Mr. Wilson in the amount of $59,469, $59,472, and $60,156 in
Fiscal 1996, 1995 and 1994, respectively, and life insurance policy
premiums for Mr. Kane in the amount of $56,205 in Fiscal 1996 and $56,207
in Fiscal 1995 and 1994.
8
<PAGE> 11
OPTION GRANTS
The following table provides information regarding the grants of stock
options to the Named Officers in Fiscal 1996. In addition, in accordance with
SEC regulations, hypothetical gains of 5% and 10% required by the SEC are shown
for these stock options. These hypothetical gains are based on assumed rates
of annual compound stock appreciation of 5% and 10% from the date the stock
options were granted over the full option term of ten years.
OPTION GRANTS IN FISCAL YEAR 1996
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
INDIVIDUAL GRANTS VALUE AT ASSUMED
------------------------------------------------------------- ANNUAL RATE
PERCENT OF OF STOCK PRICE
OPTIONS APPRECIATION FOR
NUMBER OF GRANTED TO OPTION TERM (2)
OPTIONS EMPLOYEES IN EXERCISE EXPIRATION --------------------
NAME GRANTED FISCAL YEAR PRICE (1) DATE 5% 10%
- ---- --------- -------------- --------- --------------- -- --
<S> <C> <C> <C> <C> <C> <C>
George P. Wilson 15,000 14.5% $4.25 May 9, 2005 $40,500 $101,550
John T. Kane 15,000 14.5% $4.25 May 9, 2005 40,500 101,550
Scott J. Modist 12,000 11.6% $4.25 May 9, 2005 32,040 81,240
Patrick J. Raftery 7,500 7.2% $4.25 May 9, 2005 20,025 50,775
John P. Jones 4,000 3.9% $4.25 May 9, 2005 10,680 27,080
</TABLE>
(1) Exercise price represents fair market value at date of grant.
(2) If the 5% or 10% annual compound stock price appreciation shown in the
table were to occur, the price of the stock would be $6.92 or $11.02,
respectively, on May 9, 2005 and the appreciation in the market value of
the Company's outstanding Common Stock would be $9,059,043 and
$22,969,933, respectively. The appreciation during this period realized
by the Named Officers from these stock options would be 1.6% of the gain
to all shareholders under these two cases. The use of 5% and 10% rates
set by the SEC is not intended by the Company to forecast possible future
appreciation of the Company's stock price.
9
<PAGE> 12
AGGREGATED OPTION EXERCISES AND FISCAL YEAR-END 1996 OPTION VALUES
The following table provides information, with respect to the Named
Officers, regarding options exercised in Fiscal 1996 and the number and value
of unexercised options held as of the end of Fiscal 1996.
<TABLE>
<CAPTION>
NUMBER OF NUMBER OF SECURITIES VALUE OF UNEXERCISED
SHARES UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS AT
ACQUIRED VALUE FISCAL YEAR-END 1996 (#) FISCAL YEAR-END 1996 ($) (3)
ON REALIZED --------------------------- -----------------------------------
NAME EXERCISE ($) (1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- -------- --------------- ------------ ------------- ----------- ----------------------
<S> <C> <C> <C> <C> <C> <C>
George P. Wilson 0 0 50,000 - 24,375 -
John T. Kane 0 0 50,000 - 24,375 -
Scott J. Modist 0 0 32,000 - 19,500 -
Patrick J. Raftery 0 0 15,700 - 29,408 -
John P. Jones 2,800 10,570 8,800 - 17,980 -
</TABLE>
(1) The "value realized" represents the difference between the exercise price
of the option shares and the market price of the option shares on the date
the option was exercised. The value realized was determined without
considering any taxes which may have been owed.
(2) "In-the-money" options are options whose exercise price was less than the
market price of Common Stock at February 29, 1996.
(3) Amounts reflect unrealized gains on outstanding stock options based on a
fair market value of $5.875 for the Common Stock, as determined by the
closing price on February 29, 1996, as reported by NASDAQ.
10
<PAGE> 13
STOCK PRICE PERFORMANCE GRAPH
The graph below compares the cumulative total return of the Company's
Common Stock, with the NASDAQ stock market index (U.S. and foreign) and the
NASDAQ Computer and Data Processing index from June 1992, when the Company went
public, to February 29, 1996. The graph assumes that the value of the
investment in the Company and each index was $100 on June 12, 1992 (date of the
Company's initial public offering of Common Stock), and that all dividends are
reinvested.
[GRAPH]
<TABLE>
<CAPTION>
02/28/91 02/28/92 02/26/93 02/28/94 02/28/95 02/29/96
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
97.7 51.1 45.5 53.4
77.9 111.1 118.2 140.6 140.7 193.1
69.5 116.7 114.9 129.9 156.3 238.2
</TABLE>
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
The firm of Coopers & Lybrand, LLP, independent public accountants, served
as the Company's independent public accountants for the fiscal year ended
February 29, 1996. One or more representatives of Coopers & Lybrand, LLP are
expected to be present at the Annual Meeting. Such representatives will have
the opportunity to make a statement if they desire to do so and are expected to
be available to respond to appropriate questions from shareholders.
11
<PAGE> 14
CERTAIN TRANSACTIONS
The Company's corporate headquarters are located in a building owned by a
partnership in which Messrs. John T. Kane and George P. Wilson, directors and
principal shareholders of the Company and James F. Courbier, director of the
Company, each own a one-third interest. The Company has occupied these premises
since 1986. In September 1990, the Company entered into a lease agreement that
expires on September 30, 2000 which provides for monthly rent of approximately
$33,000, annual rent increases based on increases in the Consumer Price Index
and the payment by the Company of all insurance and utilities. The Company
believes that the terms of the lease are no less favorable to the Company than
could have been obtained in an arm's length transaction with a third party at
the time the lease was executed.
In connection with the Company's stock repurchase program, the Company
repurchased 34,000 shares of its Common Stock from James F. Courbier for an
aggregate purchase price of $189,125 on January 23, 1996. The repurchase price
was determined based upon the fair market value of the Company's Common Stock
at the time of the transaction.
James F. Courbier, a director of the Company, received approximately
$72,000 in Fiscal 1996 for consulting services.
SHAREHOLDERS PROPOSALS
Pursuant to Rule 14a-8 promulgated by the Securities and Exchange
Commission, any proposal by a shareholder intended to be presented at the 1997
Annual Meeting of Shareholders must be received by the Company no later than
February 22, 1997, for inclusion in the Company's proxy statement and form of
proxy relating to such meeting.
OTHER MATTERS
The Board of Directors knows of no other matters to be presented at the
Annual Meeting. Should any unanticipated business properly come before the
Annual Meeting, however, it is intended that the holders of proxies solicited
hereby will vote thereon at their discretion.
The Company's Annual Report to its shareholders is being mailed with this
proxy statement; however, the Annual Report does not form a part of this proxy
statement or the Company's solicitation of proxies.
The above notice and proxy statement are sent by order of the Board of
Directors.
/s/ John Kane
-----------------------
John T. Kane
Chairman
Coral Gables, Florida
June 21, 1996
12
<PAGE> 15
Appendix A
EQUITRAC CORPORATION
PROXY FOR 1996 ANNUAL MEETING OF SHAREHOLDERS
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned holder of shares of Common Stock of EQUITRAC CORPORATION, a
Florida corporation (the "Company"), hereby appoints John T. Kane and George P.
Wilson, and each or either of them, the proxy or proxies of the undersigned,
with full power of substitution to such proxy and substitute, to vote all
shares of Common Stock of the Company which the undersigned is entitled to vote
at the 1996 Annual Meeting of Shareholders of the Company to be held at the
Colonnade Hotel, 180 Aragon Avenue, Coral Gables, Florida 33134, at 11:00 a.m.,
local time, on July 25, 1996 and at any and all adjournments thereof with
authority to vote said Common Stock on the matters set forth below:
The shares of Common Stock represented by this Proxy will be voted in the
manner directed herein by the undersigned shareholder, who shall be entitled
to one vote for each share of Common Stock held. If no direction is made, this
Proxy will be voted for each item listed below.
The Board of Directors recommends a vote FOR this proposal.
1. ELECTION OF DIRECTORS
/ / FOR all nominees listed below / / WITHHOLD AUTHORITY
(except as marked to the contrary to vote for all nominees
below). listed below.
John T. Kane, George P. Wilson, James F. Courbier, Marc M. Watson
and Peter Marx
INSTRUCTION: To withhold authority for any individual nominee, strike a line
through the nominee's name above.
2. In their discretion, the proxies are authorized to vote upon such other
business as may be properly brought before the meeting and each adjournment
thereof.
(Continued and to be signed on the other side)
(Continued from other side)
THIS PROXY WHEN PROPERLY EXECUTED, WILL BE VOTED AS SPECIFIED. IF NO
SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED FOR EACH OF THE MATTERS
MENTIONED.
Dated:________________________, 1996
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(Signature)
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(Signature)
Please sign your name exactly as it
appears on the left. Executors,
administrators, trustees, guardians,
attorneys and agents should give their
full titles and submit evidence of
appointment unless previously furnished
to the Company or its transfer agent.
All joint owners should sign.
PLEASE MARK, DATE, SIGN AND RETURN USING
THE ENCLOSED ENVELOPE. YOUR PROMPT
ATTENTION WILL BE APPRECIATED.
