SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box: [ ] Confidential, for Use of the
[ ] Preliminary Proxy Statement Commission Only (as permitted
[X] Definitive Proxy Statement by Rule 14a-6(e)(2))
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 9 Rule 240.14a-11(c) or 9 Rule 240.14a-12
IPI, 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
[ ] $125 per Exchange Act Rule o-11(c)(1)(ii), 14a-6(i)(1) or Item 22(a)(2)
of Schedule 14A 9 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 transactions applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
IPI, INC.
NOTICE OF THE ANNUAL MEETING OF SHAREHOLDERS
Minneapolis, Minnesota
April 5, 1999
TO THE SHAREHOLDERS OF IPI, INC.:
Notice is hereby given that the Annual Meeting of the Shareholders of
IPI, Inc. will be held on May 10, 1999, at 2:00 p.m. at the IPI, Inc. corporate
offices located at 15155 Technology Drive, Eden Prairie, Minnesota, for the
following purposes:
1. To elect six directors to serve until the next Annual Meeting
of Shareholders;
2. To ratify and appoint Arthur Andersen LLP as independent
auditors for fiscal year 1999; and
3. To transact such other business as may properly come before
the meeting or any adjournments or postponements thereof.
The Board of Directors has fixed the close of business on March 24,
1999 as the record date for the determination of shareholders entitled to notice
of and to vote at the meeting.
By Order of the Board of Directors
David A. Mahler
SECRETARY
TO ASSURE YOUR REPRESENTATION AT THE ANNUAL MEETING, PLEASE SIGN, DATE AND
RETURN YOUR PROXY IN THE ENCLOSED ENVELOPE, WHETHER OR NOT YOU EXPECT TO ATTEND
IN PERSON. SHAREHOLDERS WHO ATTEND THE MEETING MAY REVOKE THEIR PROXIES AND VOTE
IN PERSON IF THEY SO DESIRE. THIS PROXY IS SOLICITED ON BEHALF OF THE COMPANY.
<PAGE>
IPI, INC.
15155 TECHNOLOGY DRIVE, EDEN PRAIRIE, MINNESOTA 55344
ANNUAL MEETING OF SHAREHOLDERS
MAY 10, 1999
PROXY STATEMENT
This Proxy Statement is furnished to the holders of Common Stock of IPI,
Inc. (the "Company") in connection with the solicitation of proxies by the Board
of Directors of the Company for use in connection with the 1999 Annual Meeting
of the Shareholders to be held May 10, 1999, and all adjournments or
postponements thereof, for the purposes set forth in the accompanying Notice of
Annual Meeting of the Shareholders. The Company expects that the Notice of
Annual Meeting, Proxy Statement and form of proxy will be mailed to the
Shareholders on or about April 5, 1999.
Shareholders of record at the close of business on March 24, 1999 will
be entitled to vote at the Annual Meeting or any adjournment thereof. As of
March 24, 1999, the Company had 4,734,087 shares of its common stock, $.01 par
value (the "Common Stock"), issued, outstanding and entitled to be voted at the
Annual Meeting. The Common Stock is the only class of voting securities of the
Company. Each holder of outstanding shares of the Common Stock is entitled to
one vote per share on all matters being presented at the Annual Meeting. There
is no cumulative voting. If a shareholder abstains from voting as to any matter,
then the shares held by such shareholder shall be deemed present at the Annual
Meeting for purposes of determining a quorum and for purposes of calculating the
vote with respect to such matter, but shall not be deemed to have been voted in
favor of such matter. If a broker returns a "non-vote" proxy, indicating a lack
of authority to vote on such matter, then the shares covered by such non-vote
shall be deemed present at the Annual Meeting for purposes of determining a
quorum but shall not be deemed to be represented at the meeting for purposes of
calculating the vote with respect to such matter.
The enclosed proxy, when properly signed and returned to the Company,
will be voted by the persons named therein at the Annual Meeting as directed
therein. Proxies in which no designation is made with respect to the various
matters of business to be transacted at the Annual Meeting will be voted for the
nominees for directors as proposed herein; for the ratification of the
appointment of Arthur Andersen LLP as independent auditors of the Company for
the current year; and in the best judgment of the persons named in the proxy as
to any other matters which may properly come before the Annual Meeting.
A proxy may be revoked at any time prior to its being exercised at the
Annual Meeting by written notification to the Secretary of the Company. Personal
attendance at the Annual Meeting is not sufficient to revoke a proxy unless a
written notice of proxy termination is filed with an officer of the Company at
the Annual Meeting.
The solicitation of this proxy is made by the Board of Directors of the
Company. The solicitation will be by mail and the expense thereof will be paid
by the Company. Some of the officers, directors and regular management employees
of the Company may also solicit proxies on behalf of management in person or by
facsimile transmission or telephone. No additional compensation will be paid to
such persons therefor; however, any costs thereof will be borne by the Company.
The Company will reimburse brokerage firms, banks and other custodians, nominees
and fiduciaries for their expenses reasonably incurred in forwarding
solicitation material to the beneficial owners of the Common Stock.
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The following table sets forth certain information with respect to the
beneficial ownership of the Common Stock of the Company as of March 24, 1999,
(i) by each person known by the Company to beneficially own more than five
percent (5%) of the outstanding Common Stock, (ii) by each of the directors and
nominees for election to the Board of Directors of the Company, (iii) each of
the executive officers of the Company named in the Summary Compensation Table
below and (iv) by all directors and executive officers as a group. Unless
otherwise noted, each person or group identified has sole voting and investment
power with respect to the shares listed.
<TABLE>
<CAPTION>
Number of Shares Percent of
Name and Address Beneficially Owned(1) Outstanding Shares(2)
---------------- --------------------- ---------------------
<S> <C> <C>
Jacobs Industries, Inc. 1,672,772 35.33%
100 South Fifth Street, Suite 2500
Minneapolis, MN 55402
Irwin L. Jacobs (3) 1,672,772 (4) 35.33%
100 South Fifth Street, Suite 2500
Minneapolis, MN 55402
Dennis M. Mathisen (3) 1,601,044 (5) 33.82%
903 North Third Street
Minneapolis, MN 55401
Marshall Financial Group, Inc. 1,592,044 33.63%
903 North Third Street
Minneapolis, MN 55401
Daniel T. Lindsay (3) 394,771 (6) 8.32%
100 South Fifth Street, Suite 2500
Minneapolis, MN 55402
Robert J. Sutter (3) 96,000 2.00%
15155 Technology Drive
Eden Prairie, MN 55344
Dr. Kenneth J. Roering (3) 50,000 1.06%
University of Minnesota Dept. of Marketing
3-140 Carlson School of Business
321 19th Avenue South
Minneapolis, MN 55455
David M. Engel 16,000 (7) *
15155 Technology Drive
Eden Prairie, MN 55344
Howard Grodnick (3) 24,600 (8) *
901 Third Street North
Minneapolis, MN 55401
2
<PAGE>
David C. Oswald 12,100 *
15155 Technology Drive
Eden Prairie, MN 55344
Thomas C. Johnson 7,000 *
15155 Technology Drive
Eden Prairie, MN 55344
All directors and officers as a group 3,902,287 80.03%
(10 individuals)
</TABLE>
* Less than one percent
(1) The table above contains options exercisable within 60 days of March
24, 1999 in the following amounts: Daniel T. Lindsay - 8,000 shares;
Robert J. Sutter - 76,000 shares; David M. Engel - 12,000 shares;
Howard Grodnick - 16,000 shares; David C. Oswald - 12,000 shares;
Thomas C. Johnson - 6,000 shares, and all directors and executive
officers as a group (ten persons) - 142,000 shares.
(2) Shares not outstanding but deemed beneficially owned by virtue of the
right to acquire them as of March 24, 1999 or within sixty days of such
date are treated as outstanding when determining the percentage shown
for a person or group, but are not treated as outstanding when
determining the percentages shown for any other person or group.
(3) Currently a member of, and nominee for election to, the Board of
Directors of the Company.
(4) Includes 1,672,772 shares owned by Jacobs Industries, Inc. Jacobs
Industries, Inc. is owned by Irwin L. Jacobs (66.7%), James O. Pohlad
(11.1%), Robert C. Pohlad (11.1%) and William M. Pohlad (11.1%). Mr.
Jacobs disclaims beneficial ownership of the shares held by Jacobs
Industries, Inc. in excess of his pro rata portion.
(5) Includes 1,592,044 shares held by Marshall Financial Group, Inc. which
is owned 100% by Mr. Mathisen.
(6) Includes 49,271 shares held by Mr. Lindsay's wife, 5,000 shares held by
Mr. Lindsay's adult son, and 5,000 shares held by Mr. Lindsay's minor
son, all of which Mr. Lindsay disclaims beneficial interest.
(7) Includes 1,000 shares owned by Mr. Engel's wife, of which Mr. Engel
disclaims beneficial interest.
(8) Includes 6,600 shares owned by Mr. Grodnick's wife, of which Mr.
Grodnick disclaims beneficial interest.
CHANGE IN CONTROL
On January 5, 1998, Jacobs Industries, Inc. ("JII") sold 1,608,500
shares (approximately 34%) of common stock, par value $.01 per share, of the
Company ("Common Stock") to Marshall Financial Group, Inc. ("Marshall"), and
certain affiliates of Marshall, pursuant to an Option Agreement, Security
Agreement and Buy-Sell Agreement, dated May 28, 1997 (the "Agreement") for a
purchase price per share of $4.20. In addition, concurrently with such sale, JII
and Marshall each exercised an option agreement, on substantially the same
terms, with Dorothy Galloway, wife of a former officer and director of the
Company and the holder
3
<PAGE>
of approximately 6.7% of the Common Stock, for the purchase and sale of an
aggregate of 158,544 shares of the Common Stock.
The price for the shares purchased pursuant to each option agreement
was paid one-half in cash on January 5, 1998 and one-half in a promissory note
of the purchaser, due and payable January 5, 1999 and bearing interest (payable
quarterly) at 1% per annum in excess of the prime rate in effect from time to
time at U.S. Bancorp. A portion of the shares purchased pursuant to the three
option agreements were pledged to the seller to secure the respective promissory
notes. The notes were paid in full in January, 1999.
Concurrent with the January 5, 1998 transaction, Ms. Galloway sold her
remaining 158,543 shares (approximately 3.3%) of Common Stock, for all cash at a
per share price of $4.00, to Marshall, JII, their affiliates or affiliates of
the Company. As a result of these transactions, such persons own the shares
described in the Section "Security Ownership of Certain Beneficial Owners and
Management."
Pursuant to the Agreement, JII and Marshall have entered into a
buy-sell agreement, pursuant to which upon specified notice either party has the
right to purchase certain shares owned by the other party, or to require the
other party to purchase certain of its shares. The buy-sell agreement terminates
upon mutual agreement of JII and Marshall. JII owns 1,672,772 shares subject to
the buy-sell agreement, and Marshall owns 1,592,044 shares subject to the
buy-sell agreement.
PROPOSAL ONE: ELECTION OF DIRECTORS
The number of members of the Board of Directors is currently six. All of
the nominees below were elected to the Board at the last Annual Meeting and all
are currently serving as directors of the Company. Dr. Roering resigned from the
Board on September 22, 1998, and was re-elected to the Board in December 1998.
Under Minnesota law, as well as the Company's Articles of Incorporation and
Bylaws, directors elected to fill vacancies serve only until the next annual
meeting of shareholders.
Proxies solicited by the Board of Directors will, unless otherwise
directed, be voted to elect the six nominees. If a shareholder of record returns
a proxy withholding authority to vote the proxy with respect to any of the
nominees, then the shares of the Common Stock covered by such proxy shall be
deemed present at the Annual Meeting for purposes of determining a quorum and
for purposes of calculating the vote with respect to such nominee or nominees,
but shall not be deemed to have been voted for such nominee or nominees. The
affirmative vote of a majority of the outstanding shares of the Common Stock is
necessary to elect each nominee. In the unlikely event that any of the nominees
is not a candidate for election at the Annual Meeting, the persons named in the
accompanying form of proxy will vote for such other persons as the Board of
Directors may designate. The Board of Directors has no reason to believe that
any nominee will not be a candidate for election.
4
<PAGE>
Certain biographical information furnished by the Company's Board of
Directors is set forth below.
NAME, BUSINESS EXPERIENCE DURING THE PAST FIVE YEARS AND SELECTED
OTHER INFORMATION CONCERNING THE DIRECTORS AND NOMINEES
ROBERT J. SUTTER, 55, was elected President and Chairman of the Board
of Directors of the Company in March 1994. Since September 1995, Mr. Sutter has
also served as CEO of the Company and as CEO of Insty-Prints, Inc. Mr. Sutter is
currently on the Board of Directors of Integrated Network Technologies, Inc.
From August 1991 to March 1994, Mr. Sutter was President of Minstar, Inc. and
President and Chief Executive Officer of its subsidiary, Genmar Industries,
Inc., a leading recreational power boat manufacturer. From 1989 to August 1991,
Mr. Sutter was Senior Vice President of Operations of Jacobs Management
Corporation. Prior to 1989, Mr. Sutter was President of the Sports Products
Group of Minstar, Inc.
IRWIN L. JACOBS, 57, was elected a Director in March 1997. Mr. Jacobs
is Chairman of the Board of Genmar Holdings, Inc. a leading recreational power
boat manufacturer. Mr. Jacobs has also served as: Chairman and President of
Jacobs Industries, Inc., a holding company (since 1977); President and a
director of Jacobs Management Corporation, a management services company (since
1981); Chairman of Watkins, a company engaged in direct marketing of household
and health products (since 1978); Chairman of Jacobs Trading Company, a company
engaged in wholesale and retail sale of close-out merchandise (since 1989);
President and Chief Executive Officer of Jacobs Investors, Inc., a management
services company and of IMR General, Inc., which is the general partner of IMR
Management Partners, L.P., the general partner of the IMR Fund, L.P., an equity
investment fund partnership (since 1990). Mr. Jacobs is the father-in-law of
Howard Grodnick.
DANIEL T. LINDSAY, 54, was elected a Director in March 1997. Mr.
Lindsay has served as: a director of Genmar Holdings, Inc., a leading
recreational power boat manufacturer since 1994; Secretary and a director of
Jacobs Industries, Inc. (since 1977); Secretary and a director of Watkins (since
1979); Secretary and a director of Jacobs Management Corporation (since 1981);
and Secretary and a director of Jacobs Investors, Inc. and IMR General, Inc., a
limited partner in IMR Management L.P., the general partner of IMR Fund, L.P.
(since 1992).
HOWARD GRODNICK, 37, was elected a Director in March 1994. From 1990 to
the present, Mr. Grodnick has been Vice President of Sales of Jacobs Trading
Co., a business that purchases and sells close-out and discontinued merchandise,
excess inventories and bankruptcy assets. From 1986 to 1990, Mr. Grodnick was a
manufacturers representative for various lines of fashion apparel. Mr. Grodnick
is the son-in-law of Irwin Jacobs.
DENNIS M. MATHISEN, 59, was elected a Director in December 1997. Mr.
Mathisen is the Chairman of the Board of Governors of Marshall Ventures, LLC,
and Chief Executive Officer of Marshall Financial Partners, L.P. Mr. Mathisen is
President and 100% owner of Marshall Financial Group, Inc., and most recently
was President, Chairman of the Board and Chief Executive officer of Mountain
Parks Financial Corp. Mr. Mathisen is currently on the Board of Directors of
Community First Bancshares, Inc. and Sheldahl, Inc. In 1977, he became
associated with Irwin L. Jacobs and related companies, where he served until
December 1988, principally as Executive Vice President of Jacobs Management
Corporation.
5
<PAGE>
DR. KENNETH J. ROERING, 56, was elected a Director in December 1998, to
fill a vacancy on the Company's board of Directors. Dr. Roering is the Pillsbury
Company - Paul S. Gerot Chair in Marketing and Professor of marketing in the
Carlson School of Management at the University of Minnesota. He is currently on
the Board of Directors of ArcticCat Inc., TSI Inc., Sheldahl, Inc. and Transport
Corporation of America, Inc. Dr. Roering also serves as the Chief Marketing
Strategist of Marshall Financial Partners, L.P., and is an employee of Marshall
Financial Group, Inc.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
Directors who are employees of the Company do not receive any
additional compensation for service as directors. Each non-employee director is
solely compensated under the 1994 Non-Employee Directors' Stock Option Plan,
except for Messrs. Jacobs and Mathisen who chose not to accept any options under
the Plan.
The Board of Directors has established two Board committees, an Audit
Committee and a Compensation Committee. In December 1997, the Board elected
Messrs. Lindsay, Grodnick and Roering to serve on both the Audit and
Compensation Committees. The Company does not have a nominating committee.
The Audit Committee met once during fiscal 1998. The Audit Committee is
authorized to recommend to the Company's Board of Directors the independent
public accountants to be selected to audit the Company's annual financial
statements and to review the planned scope of the annual external audit, the
independent accountants' report to management and management's responses
thereto. The Compensation Committee met one time during fiscal 1998. The
Compensation Committee is authorized to establish remuneration levels for
Executive Officers, review the performance of the Chief Executive Officer,
review management organization and development, review significant non-equity
based employee benefit and executive compensation programs and establish and
administer equity-based executive compensation programs.
There were three meetings of the Board of Directors during fiscal 1998.
Each director attended 100% of the meetings of the Board and committees on which
they served, except Mr. Jacobs & Dr. Roering who each missed one meeting.
EXECUTIVE OFFICERS OF THE COMPANY
DAVID M. ENGEL, 51, was elected Chief Financial Officer of IPI, Inc. on
March 17, 1995 and has been Vice President - Finance, Chief Financial Officer of
Insty-Prints since January 1995. From January 1993 to January 1995, Mr. Engel
was President and Chief Operating Officer of Mac Birdie Golf Gifts, Inc., a
Minnesota corporation and franchisor of retail shops selling golf accessories
and related items. From January 1978 to January 1993, Mr. Engel was employed by
Farm Credit Bank of St. Paul, Minnesota with his most recent position being that
of Senior Vice President - Finance.
DAVID A. MAHLER, 42, was elected Secretary of the Company in March
1994. He also served as Chief Financial Officer of the Company from March 1994
to March 17, 1995. Mr. Mahler has been Treasurer of Insty-Prints since September
1989. He has been Vice President and Treasurer of Jacobs Management Corporation
since 1985 and also currently serves as an officer for several other companies
affiliated with Jacobs Management Corporation. Mr. Mahler spends approximately
20% of his time working for the Company.
6
<PAGE>
DAVID C. OSWALD, 44, was elected Vice President of the Company and
Executive Vice President of Insty-Prints, Inc. in December 1997. Prior to that
he was Vice President-Development of Insty-Prints since October 1993. Mr. Oswald
was an independent consultant in the quick printing industry from February 1993
to October 1993. From July 1989 through January 1993, Mr. Oswald was Director of
Franchise Development for AlphaGraphics, Inc., a national quick print
franchisor. From March 1988 to June 1989, Mr. Oswald was Vice President of
Franchise Development for CopyMat, Inc., a regional quick print franchisor.
THOMAS C. JOHNSON, 54, was elected Vice President-Marketing of
Insty-Prints, Inc. on April 1, 1997. Mr. Johnson owned and operated an
Insty-Prints franchise from June 1985 to March 1997 in Bloomington, Minnesota.
From April 1975 to May 1985 Mr. Johnson was employed by Telex Communications,
Inc. a worldwide manufacturer and distributor of electronic recording and
communications devices. While at Telex, Inc. Mr. Johnson held several positions
in sales and marketing management.
7
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth the cash and noncash compensation for
each of the last three fiscal years awarded to or earned by the Chief Executive
Officer of the Company and each of the Company's most highly paid executive
officers whose total annual salary and bonus exceeded $100,000 (the "Named
Executives").
<TABLE>
<CAPTION>
Long Term Compensation
Annual Compensation Awards
---------------------------------------- -------------------------------
Other Securities
Name and Annual Underlying All Other
Principal Compen- Options Compen-
Position Year Salary ($) Bonus ($) sation ($)(1) (#)(2) sation ($)(3)
- ------------------------ ---- ---------- --------- ------------- -------------- -------------
<S> <C> <C> <C> <C> <C>
Robert J. Sutter 1998 205,300 109,750 528 -- 2,500
PRESIDENT & CHIEF 1997 207,800 103,000 527 -- 2,375
EXECUTIVE OFFICER 1996 190,483 50,000 288 60,000 -0-
David C. Oswald 1998 94,182 43,000 364 -- 1,110
VICE PRESIDENT 1997 83,324 41,700 164 10,000 1,532
1996 75,600 32,680 145 -- 788
David M. Engel 1998 69,382 34,250 235 -- 1,544
CHIEF FINANCIAL 1997 69,167 35,400 112 10,000 1,458
OFFICER 1996 59,750 28,000 101 -- 1,249
Thomas C. Johnson 1998 83,266 34,950 308 10,000 1,773
1997 60,333 28,000 158 10,000
</TABLE>
(1) Represents amounts paid for life insurance.
(2) Represents options granted to purchase shares of common stock of the
Company.
(3) The amount represents the Company contribution for its 401(k) Plan for
the individual.
8
<PAGE>
STOCK OPTION GRANTS AND EXERCISES TABLES
The following tables summarize stock option grants and exercises
during fiscal 1998 to or by the Named Executives. Although the Company's 1994
Long Term Incentive Plan allows the granting of SARs, no SARs were granted or
exercised during fiscal 1998.
OPTION GRANTS IN FISCAL 1998
<TABLE>
<CAPTION>
Individual Grants
--------------------------------------------------------------------------
Number of
Securities Underlying % of total Options Exercise or
Options Granted Granted to Employees Base Price Expiration
Name (#)(1) in Fiscal 1998 ($/Sh)(2) Date
- ----------------------- --------------------- -------------- --------- ----
<S> <C> <C> <C> <C>
Robert J. Sutter -0- -0- -- --
David M. Engel -0- -0- -- --
David C. Oswald -0- -0- -- --
Thomas C. Johnson 10,000 45.4% 4.00 12/18/07
</TABLE>
(1) Each stock option granted has a ten-year term. The options granted vest
and become exercisable over five years in equal installment.
(2) All stock options were granted with an exercise price equal to the fair
market value of the Common Stock on the date of grant, which was the
closing price of the Common Stock as reported on the Nasdaq SmallCap
Market on such date.
AGGREGATED OPTION EXERCISES IN FISCAL 1998 AND
OPTION VALUES AT END OF FISCAL 1998
<TABLE>
<CAPTION>
Number of Value of
Securities Underlying Unexercised
Unexercised Options In-the-Money Options
Shares at November 30, 1998 (#) at November 30, 1998($)(1)
Acquired on Value Exercisable/ Exercisable/
Name Exercise (#) Realized ($)(1) Unexercisable Unexercisable
- ---------------------- ------------ --------------- ------------- -------------
<S> <C> <C> <C> <C>
Robert J. Sutter -0- -0- 64,000/46,000 -0-/-0-
David M. Engel -0- -0- 8,000/12,000 -0-/-0-
David C. Oswald -0- -0- 10,000/10,000 -0-/-0-
Thomas C. Johnson -0- -0- 2,000/18,000 -0-/-0-
</TABLE>
(1) "Value" has been determined based upon the difference between the per
share option exercise price and the market value of the Common Stock at
the date exercised or November 30, 1998.
9
<PAGE>
CERTAIN TRANSACTIONS
MANAGEMENT AGREEMENT WITH JACOBS MANAGEMENT CORPORATION
IPI, Inc. and Insty-Prints, Inc. have each entered into separate, but
substantially identical, one year Management Services Agreements (collectively,
the "Management Agreements") with Jacobs Management Corporation, an affiliate of
the Company, each effective as of December 1, 1998. The Management Agreements
are renewable for two additional one year terms, unless the parties otherwise
agree. Accordingly, the Agreements are in effect until December 1, 2000. Jacobs
Management Corporation is owned approximately 68% by Irwin L. Jacobs and 32% by
Daniel T. Lindsay.
Pursuant to the Management Agreements, each of IPI, Inc. and
Insty-Prints, Inc. has engaged Jacobs Management Corporation to provide
managerial and advisory services to both companies when required, including
services with respect to general management, financial management, general
accounting, marketing and sales assistance, insurance, tax matters, and
personnel administration and public relations. The Management Agreements provide
that Jacobs Management Corporation shall make available upon request qualified
personnel to assist the Company and that Jacobs Management Corporation personnel
shall monitor, examine and review the operations of the Company on a regular
basis.
For the services rendered under the Management Agreements and
predecessor agreements, Jacobs Management Corporation received an annual
management fee of $55,000, payable over twelve months, from IPI, Inc. and
$20,000 from Insty-Prints, Inc. in fiscal 1998, 1997 and 1996. David A. Mahler,
Secretary, who is an employee of Jacobs Management Corporation, received no
salary from the Company during fiscal 1996, 1997, or 1998, but was compensated
by Jacobs Management Corporation.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's directors and
executive officers and all persons who beneficially own more than ten percent of
the outstanding shares of the Company's Common Stock to file with the Securities
and Exchange Commission initial reports of ownership and reports of changes in
ownership of such Common Stock. Officers, directors and greater than ten percent
beneficial owners are also required to furnish the Company with copies of all
Section 16(a) reports they file. To the Company's knowledge, based upon a review
of the copies of such reports furnished to the Company and written
representations that no other reports were required during the fiscal year ended
November 30, 1998, all Section 16(a) filing requirements applicable to the
Company's directors, executive officers and greater than ten percent beneficial
owners were satisfied.
PROPOSAL TWO: RATIFICATION AND APPOINTMENT OF INDEPENDENT AUDITORS
Arthur Andersen LLP were the auditors for the fiscal year ended
November 30, 1998, and the Company has selected them as auditors for the fiscal
year ending November 30, 1999. Representatives of Arthur Andersen LLP are
expected to be present at the meeting and will be allowed to make a statement if
they wish. Additionally, they will be available to respond to appropriate
questions from Shareholders during the meeting.
10
<PAGE>
VOTE REQUIRED
If a quorum is present and voting, the affirmative vote of a majority
of the votes cast for the ratification and appointment of the independent
auditors will be required to ratify and appoint the independent auditors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION AND APPOINTMENT OF
THE INDEPENDENT AUDITORS.
SHAREHOLDER PROPOSALS
Rule 14a-8 of the SEC permits shareholders of a company, after timely
notice to the company, to present proposals for shareholder action in the
company's proxy statement where such proposals are consistent with applicable
law, pertain to matters appropriate for shareholder action and are not properly
omitted by company action in accordance with the proxy rules. The Company 2000
Annual Meeting of Shareholders is expected to be held on or about May 10, 2000,
proxy materials for that meeting are expected to be mailed on or about April 5,
2000. Under SEC Rule 14a-8, shareholder proposals to be included in the Company
proxy statement for that meeting must be received by the Company on or before
January 11, 2000.
OTHER MATTERS
The Board of Directors does not know of any matters to be presented at
the Annual Meeting other than those listed in the Notice of Annual Meeting of
Shareholders. However, if other matters properly come before the Annual Meeting,
it is the intention of the persons named in the accompanying proxy to vote in
accordance with their best judgment on such matters insofar as the proxies are
not limited to the contrary.
To the extent that information contained in the Proxy Statement is
peculiarly within the knowledge of persons other than the management of the
Company, it has relied on such persons for the accuracy and completeness
thereof.
ANNUAL REPORT
An Annual Report of the Company setting forth the Company's activities
and containing financial statements of the Company for the fiscal year ended
November 30, 1998 accompanies this Notice of Annual Meeting and proxy
solicitation material.
PLEASE SIGN, DATE AND RETURN YOUR PROXY IN THE ENCLOSED ENVELOPE.
By Order of the Board of Directors,
David A. Mahler, SECRETARY
11
<PAGE>
IPI, INC.
ANNUAL MEETING OF STOCKHOLDERS
IPI, Inc. Corporate Offices
15155 Technology Drive
Eden Prairie, Minnesota
MONDAY, MAY 10, 1999
2:00 P.M.
IPI, Inc.
15155 Technology Drive
Eden Prairie, MN 55344 PROXY
- --------------------------------------------------------------------------------
The undersigned, revoking all prior proxies given by the undersigned for the
Annual Meeting of the Shareholders of IPI, Inc. to be held on Monday, May 10,
1999 at 2:00 p.m., at the principal offices of IPI, Inc. located at 15155
Technology Drive, Eden Prairie, Minnesota, hereby appoints Robert J. Sutter as
proxy, with full power of substitution and revocation, to vote for the
undersigned and in the name of the undersigned all shares of common stock of
IPI, Inc. of the undersigned, as if the undersigned were personally present and
voting at said Annual Meeting, and all adjournments or postponements thereof,
upon the matters set forth below.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. It will be voted on
the matters set forth on the reverse side of this form as directed by the
stockholder, but if no direction is made in the space provided, it will be voted
FOR the election of all nominees to the Board of Directors named herein and FOR
the other proposals.
SEE REVERSE FOR VOTING INSTRUCTIONS.
<PAGE>
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope
we've provided.
-- PLEASE DETACH HERE --
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1, 2 AND 3.
1. Election of directors: 01 Robert J. Sutter 04 Irwin L. Jacobs
02 Dennis M. Mathisen 05 Daniel T. Lindsay
03 Dr. Kenneth J. Roering 06 Howard Grodnick
[ ] Vote FOR [ ] Vote WITHHELD
all nominees from all nominees
(INSTRUCTIONS: TO WITHHOLD AUTHORITY
TO VOTE FOR ANY INDICATED NOMINEE, _______________________________________
WRITE THE NUMBER(S) OF THE NOMINEE(S) | |
IN THE BOX PROVIDED TO THE RIGHT.) |_______________________________________|
2. Ratification and appointment of
Arthur Andersen LLP as independent
auditors for the fiscal year 1999. [ ] For [ ] Against [ ] Abstain
3. In their discretion, the proxies are
authorized to transact such other
business as may properly come before
the meeting and any adjournments or
postponements thereof.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION
IS GIVEN, WILL BE VOTED FOR EACH PROPOSAL.
Address Change? Mark Box [ ]
Indicate changes below: Date ______________________
_______________________________________
| |
|_______________________________________|
Signature(s) in Box
Shareholder must sign exactly as the
name appears at left. When signed as a
corporate officer, executor,
administrator, trustee, guardian, etc.
please give full title as such. Both
joint tenants must sign.
