QUIP Quipp (MM)

 

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K/A

(Amendment No. 1)

(MARK ONE)

þ		ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2007

or

o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES ACT OF 1934

For the transition period from _______________ to _______________

Commission file number 0-14870

Quipp, Inc.

(Exact name of Registrant as specified in its charter)

Florida		59-2306191
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)
4800 NW 157th Street, Miami, Florida		33014
(Address of principal executive offices)		(Zip code)

Registrant’s telephone number, including area code (305) 623-8700

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Name of exchange on which registered
Common Stock, $.01 par value		The NASDAQ Stock Market LLC

Securities Registered Pursuant to Section 12(g) of the Act : None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes  o  No  þ

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes  o  No  þ

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  þ  No  o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of the Form 10-K or any amendment to this Form 10-K.  o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer  o		Accelerated filer  o		Non-accelerated filer  o		Smaller reporting company  þ
		(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes  o  No  þ

The aggregate market value of voting stock held by non-affiliates of the Registrant on June 30, 2007 was approximately $7,830,795*. The number of shares of the Registrant’s common stock, $.01 par value, outstanding at April 18, 2008 was 1,477,746.

DOCUMENTS INCORPORATED BY REFERENCE

None

 

 

TABLE OF CONTENTS

PART III

ITEM 10 — DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Board of Directors

     Set forth below is certain information concerning Quipp’s directors:

Name		Age				Position with the Company
Cristina H. Kepner			62			Chairman of the Board
William A. Dambrackas			64			Director
Lawrence J. Gibson			55			Director
Michael S. Kady			58			President, Chief Executive Officer and Director
John D. Lori			39			Director
Arthur J. Rawl			65			Director
Robert C. Strandberg			50			Director

     Ms. Kepner has been a director of Quipp since January 1995 and Chairman of the Board of Directors since April 2004. She was Executive Vice President of Invemed Associates, LLC, an investment banking firm, from February 1978 to December 2000. Ms. Kepner is a director of Monogram Bioscience, Inc. and Cepheid.

     Mr. Dambrackas has been a director of Quipp since October 2004. Mr. Dambrackas is Executive Vice President, Advanced Technology of Avocent Corporation, a provider of digital KVM (keyboard, video and mouse) switching systems, serial connectivity devices, and extension and wireless extension products and technologies for the computer industry. He was the Chairman, President and Chief Executive Officer of Equinox Systems, Inc., a designer and marketer of server-based communications products, from March 1983, when he founded the company, until January 2001, when Equinox was acquired by Avocent. Mr. Dambrackas has been granted United States patents for four computer technology inventions, and is the inventor of Dambrackas Video Compression (DVC), a patent-pending remote server management technology.

     Mr. Gibson has been a director of Quipp since October 2001. He has been President of Gibson Consulting, a private business consulting firm, since June 1999. Mr. Gibson was Senior Vice President, Human Resources, Quality Management and Information Technology of Harvard Pilgrim Health Care from April 1992 to June 1999. From October 1986 to April 1992, he served in various capacities for Motorola/Information Systems Group, the most recent of which was Vice President, Human Resources. Mr. Gibson is a director of Intersearch Group, Inc.

     Mr. Kady has been President and Chief Executive Officer and a director of Quipp since February 2002 and President of Quipp Systems, Inc. since March 2002. From January 2000 to January 2001, he served as President of GMP Metal Products, a manufacturer of engineered components. From May 1996 to May 1999, Mr. Kady was President and Chief Operating Officer of Shuttleworth, Inc., a global manufacturer of automated material handling equipment. Prior to that time, he held a variety of general management, engineering and financial roles with Danly-Komatsu LP, Cooper Industries, Inc. and FMC Corporation.

     Mr. Lori has been a director of Quipp since October 2006. He has been the managing member of JDL Capital, LLC since February 2004. JDL Capital is an investment management firm and the general partner of JDL Partners, LP, an investment limited partnership. From September 1997 to February 2004, Mr. Lori was a Managing Director — Portfolio Manager at U.S. Trust, an investment management company.

     Mr. Rawl has been a director of Quipp since May 2004. He has been Chairman and Chief Executive Officer of Rawl & Associates, a private strategic consulting firm, since May 2003. From September 1999 until May 2003, he was President and Chief Executive Officer of Brazil American Auto Group, Inc., a Sao Paulo-based consolidator of South American automotive retailers. From 1997 to 1999, Mr. Rawl was a consultant to Chrysler Financial Corp. in connection with the development of a new structured financial product line. From 1994 to 1997, he was Executive Vice President and Chief Financial Officer of United Auto Group, Inc., a consolidator and operator of automobile dealerships and related businesses. From 1990 to 1994, Mr. Rawl was Executive Vice President of Hanlin Group, Inc., a chemical and PVC products manufacturer. Prior to that time, he had a 23 year tenure at Deloitte & Touche LLP, including 12 years as a partner. Mr. Rawl is a director of Ecolocap,Inc. and Tiger Ethanol Inc.. Mr. Rawl is the Board Chairman of the British Memorial Garden Trust, Inc., a public charity. Mr. Rawl is a certified public accountant.

     Mr. Strandberg has been a director of Quipp since October 2004. Mr. Strandberg has been, since January 2006, the principal executive officer of Mattern Wholesale, Inc., a company owned by Mr. Strandberg that is a distributor of flowers serving florists in the Southeastern United States. He was, from May 2001 until December 2005, the Chief Executive Officer of Xytrans, Inc., a supplier of high performance wireless radio components that are sold to the defense, VSAT and cellular/PCS infrastructure markets worldwide. From May 1997 until August 2000, he was President and Chief Executive Officer of PSC, Inc., a provider of bar code scanners, related optical devices and mobile/wireless data collection devices. Mr. Strandberg was also Chairman and CEO of Datamax Inc., a provider of specialized, high performance printers and related systems, from April 1989, when he founded the company, until June 1996. He is a director of Merix Corporation.

     On October 19, 2006, Quipp entered into an agreement (the “JDL Agreement”) with the members of the “JDL Group,” consisting of JDL Capital, LLC, JDL Partners, LP (“JDL Partners”), John D. Lori and five other individuals who, together with Mr. Lori, were nominated by JDL Partners for election to the Board of Directors at Quipp’s 2006 Annual Meeting of Shareholders. Under the JDL Agreement, the Company increased the size of the Board by one director, and Mr. Lori was elected to serve on the Board of Directors. Quipp also agreed to nominate Mr. Lori for election to the Board of Directors at future annual meetings so that, if elected by shareholders, Mr. Lori would serve on the Board of Directors for a period of at least three years. In accordance with the JDL Agreement, Mr. Lori was also named to the Audit Committee of the Board of Directors and a special committee of the Board of Directors that is considered strategic alternatives (the other members of this committee are Messrs. Dambrackas and Strandberg and Ms. Kepner). In addition, Quipp agreed that Mr. Lori will serve on any other committee that deals with strategic alternatives, business combination or disposition transactions, debt or equity financings, and similar matters.

     As part of the JDL Agreement, JDL Partners withdrew its nomination of candidates for election to the Board of Directors. In addition, the members of the JDL Group agreed that, until the end of a “standstill period,” the JDL Group will vote their shares of Quipp stock in favor of all directors nominated by the Board of Directors for election at the 2006 and subsequent annual meetings of shareholders, against any shareholder nominations that are not approved by the Board of Directors, and against any proposals that are not approved by the Board of Directors relating in any manner to Board of Directors composition, structure or election, the calling of a special meeting of shareholders, the ability of shareholders to act by written consent, or any shareholder rights plan or “poison pill.” In addition, the members of the JDL Group have agreed to certain other commitments and standstill provisions through the standstill period. Under the JDL Agreement, the standstill period will terminate upon the earlier of (i) the first anniversary of the next annual meeting of shareholders at which Mr. Lori is not elected to the Board of Directors and (ii) the first anniversary of the date on which Mr. Lori resigns as a director (subject to early termination if, among other events, Quipp materially breaches certain of its commitments or obligations in the JDL Agreement).

     In connection with his election as a director, and in accordance with the JDL Agreement, Mr. Lori receives the same cash compensation and reimbursement of expenses as are payable to other non-employee directors. In addition, he is entitled to receive equity compensation, generally on the same basis as provided to members of the Board of Directors, subject to the right of the Board of Directors to substitute comparable instruments that settle in cash.

Section 16(a) Beneficial Ownership Reporting Requirement

     Section 16(a) of the Securities Exchange Act of 1934 requires Quipp’s officers and directors and beneficial owners of more than 10 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. Based on its review of Section 16(a) filings, Quipp believes that all filings required to be made during 2007 were made on a timely basis.

Code of Conduct

     Quipp has a Code of Conduct applicable to all of its officers, other employees and directors. Among other things, the Code of Conduct is designed to deter wrongdoing and to promote honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; to promote full, fair, accurate, timely, and understandable disclosures in periodic reports required to be filed by Quipp; and to promote compliance with applicable governmental laws, rules and regulations. The Code of Conduct provides for the prompt internal reporting of violations of the Code of Conduct to an appropriate person identified in the Code of Conduct and contains provisions regarding accountability for adherence to the Code of Conduct. Quipp intends to satisfy the disclosure requirements regarding any amendment to, or waiver from, a provision of Quipp’s Code of Conduct by disclosing such matters in the Investor Information section of Quipp’s website.

Audit Committee

     Quipp’s Board of Directors has established an Audit Committee for the purpose of overseeing Quipp’s accounting and financial reporting process and audits of its financial statements. Quipp’s Audit Committee is currently comprised of Mr. Rawl (Chairman), Ms. Kepner, Mr. Lori and Mr. Strandberg.

Audit Committee Financial Expert

     Quipp’s Board of Directors has determined that Mr. Rawl is an “audit committee financial expert,” as that term is defined in Securities and Exchange Commission regulations, and that Mr. Rawl is independent within the meaning of the rules of the Nasdaq Stock Market, Inc.

SUMMARY COMPENSATION TABLE — 2007

     The following table sets forth certain information regarding compensation for Quipp’s Chief Executive Officer and other two most highly paid executive officers, who are referred to as “named executive officers.”

Name and														Stock				Option				All Other				Total
Principal Position		Year				Salary				Bonus				Awards (1)				Awards (2)				Compensation				Compensation
Michael S. Kady			2007			$	233,194				—			$	39,450			$	7,998			$	23,114	(3)		$	303,756
President and			2006			$	222,772				—			$	33,411			$	7,992			$	22,457	(3)		$	286,632
Chief Executive Officer
John F. Connors III			2007			$	200,000				—				—				—				—			$	200,000
Vice President of			2006			$	200,000			$	15,000				—				—				—			$	215,000
Corporate Development
Angel Arrabal			2007			$	163,849	(4)			—				—				—			$	7,373			$	163,849
Vice President—Sales			2006			$	160,852	(4)			—				—				—			$	7,155			$	160,852
and Marketing of Quipp Systems, Inc.

Employment Agreements

     Quipp entered into an employment agreement with Michael S. Kady, Quipp’s President and Chief Executive Officer, on October 25, 2005. Under the agreement, Mr. Kady serves as Quipp’s President and Chief Executive Officer and as President of its wholly-owned subsidiary, Quipp Systems, Inc. and in such additional executive positions as Quipp’s Board of Directors determines. The agreement expires in October 2008, but in the event of a change of control, as defined in the agreement, the expiration date will be extended until 24 months following the month in which the change of control occurs.

     In connection with Quipp’s acquisition of Newstec, Inc., Quipp entered into an employment agreement with John F. Connors, III on August 10, 2005. Under the agreement, Mr. Connors serves as Quipp’s Vice President — Corporate Development. In addition, Quipp pays Mr. Connors an annual base salary at the minimum rate of $200,000, subject to such upward adjustment as the Board may determine. Mr. Connors also is eligible for a discretionary annual bonus under Quipp’s Management Incentive Compensation Plan. He received a minimum annual bonus of $15,000 with respect to 2005 and 2006, as

required under the agreement. Mr. Connors also is entitled to receive any benefits accrued and due under all of Quipp’s applicable benefit plans and programs. The agreement expires in August 2008.

Supplemental Executive Retirement Plan (“SERP”)

     Quipp’s SERP provides an opportunity for participants to receive stock units based on Quipp’s performance over three-year performance periods. The Corporate Governance and Compensation Committee determines the amount of allocations to participant accounts, in the form of stock units, following the end of each performance period. The first three-year performance period was January 1, 2005 — December 31, 2007. A new three-year performance period will begin each January 1, unless the Corporate Governance and Compensation Committee determines otherwise, so that there will be overlapping performance periods. For example, there are performance periods for 2006-2008 and 2007-2009, with allocations, if any, to be made following the end of each performance period.

     The total amount available for allocations following the end of each performance period will be equal to five percent of Quipp’s net income during the three years in the relevant performance period, as reported in Quipp’s Annual Report on Form 10-K, up to a maximum dollar amount specified by the Corporate Governance and Compensation Committee. At any time during a performance period, the Corporate Governance and Compensation Committee may review the amount expected to be allocated following the end of the performance period under this formula to determine whether five percent continues to be an appropriate multiple, and the Corporate Governance and Compensation Committee may make such adjustments to the formula and the maximum dollar amount as it deems appropriate. The Corporate Governance and Compensation Committee also will have discretion to make adjustments to the calculation of net income for purposes of the SERP to take into account extraordinary events and other circumstances as the Corporate Governance and Compensation Committee determines.

     The total number of shares (expressed as stock units) to be allocated at the end of each performance period will be calculated by dividing the total allocation by the closing price of Quipp common stock on the date of allocation. The Corporate Governance and Compensation Committee will determine the number of shares (expressed as stock units) to be allocated to the account of each participant. The Corporate Governance and Compensation Committee will make the allocation within 120 days after the end of the performance period. Each participant will become 100% vested in his or her account on the last day of the performance period.

     Quipp generally will distribute a participant’s vested interest in his or her account in a lump sum payment after termination of employment. However, upon a change in control, as defined in the SERP, all ongoing performance periods will end, allocations will be made to participants for an abbreviated performance period as specified in the SERP, and all accounts will be distributed in a lump sum payment immediately after the change of control.

     The first three-year performance period was completed at the end of 2007. No amounts were available for allocation under the SERP with respect to this period.

Outstanding Equity Awards At Fiscal Year End — 2007

     The following table sets forth information with respect to outstanding option awards and unvested restricted stock held by Mr. Kady. No other named executive officer holds option awards or restricted stock.

Option Awards

Stock Awards

Number of

Number of

Number of

Market

Securities

Securities

Shares of

Value of

Underlying

Underlying

Option

Option

Stock That Have Not

Shares That Have Not

Unexercised Options

Unexercised Options

Exercise

Expiration

Vested

Vested

Name

Exercisable

Unexercisable

Price

Date

(#)

($)

Michael S. Kady

7,500

2,500

(1)

$

13.60

2/15/11

—

—

—

—

10,000

(2)

$

34,000

(3)

Potential Payments Upon Termination or Change of Control

     This section contains a description of payments that may be made to Quipp’s named executive officers upon several events of termination, including termination in connection with a change of control. The information in this section does not include information relating to the following:

	•		payments and benefits provided on a nondiscriminatory basis to salaried employees generally upon termination of employment, including under Quipp’s tax-qualified defined contribution plan, and
	•		short-term incentive payments that would not be increased due to the termination event.

Change of Control and Severance Arrangements

     Mr. Kady’s employment agreement provides that, in the event his employment is terminated by Quipp without “cause” (as defined in the agreement), or in the event of a “constructive termination without cause,” and Mr. Kady provides Quipp with a general release as specified in the agreement, he will be entitled to receive, in addition to any earned but unpaid compensation, an amount equal to the greater of his annual base salary or his base salary for the balance of the then existing term of the agreement, payable in accordance with Quipp’s normal payroll practices. However, if such termination or constructive termination without cause occurs during the period commencing 90 days prior to a “change of control” and ending 12 months following the change of control, Mr. Kady will receive a lump sum payment in an amount equal to the greater of two times his annual base salary or his base salary for the balance of the then existing term of the agreement.

     In addition, for a period of 12 months following any termination without cause or constructive termination without cause, Quipp will reimburse Mr. Kady for the cost of COBRA health insurance continuation coverage under Quipp’s health plan. Mr. Kady also will be entitled to receive any benefits

accrued and due under all of Quipp’s applicable benefit plans and programs. In addition, the agreement contains certain non-competition and non-solicitation provisions. The restrictions under these provisions will remain in effect until two years after the date of Mr. Kady’s termination of employment. Mr. Kady also agreed to certain confidentiality provisions.

     Mr. Connors’ employment agreement provides that, in the event Mr. Connors’ employment is terminated by Quipp without cause (as defined in the agreement) and Mr. Connors provides Quipp with a general release as specified in the agreement, he will be entitled to receive, in addition to any earned but unpaid compensation, an amount equal to his base salary for the balance of the then existing term of the agreement, payable in accordance with Quipp’s normal payroll practices (the “Salary Continuation Payments”). Such amounts also will be payable to Mr. Connors if he terminates his employment as a result of a significant diminution in his duties and responsibilities from those initially contemplated in the agreement or a material breach of the agreement by the Company. The agreement also contains certain non-competition and non-solicitation provisions. The restrictions under these provisions will remain in effect until the last to occur of (i) August 10, 2010, (ii) two years after the date of Mr. Connors’ termination of employment, or (iii) two years after any Salary Continuation Payments end. In addition, Mr. Connors agreed to certain confidentiality provisions.

     In December 2000, Quipp and its wholly-owned subsidiary, Quipp Systems, Inc. entered into change of control agreements with several officers of Quipp Systems, including Mr. Arrabal. Under each change of control agreement, if the officer is terminated for any reason other than “cause” (as defined in the agreement) or suffers a “constructive termination without cause” during the period commencing 90 days prior to a change of control and ending 12 months following the change of control, the officer will receive an amount equal to two times his base salary. In addition, for a period of 12 months following each termination or constructive termination, Quipp will reimburse the officer for the cost of COBRA health insurance continuation coverage under Quipp’s health plan and will continue to provide any automobile or automobile allowance made available to the officer prior to the change of control (Mr. Arrabal does not have an automobile allowance). The officer also will be entitled to receive any benefits accrued and due under all of Quipp’s applicable benefit plans and programs.

     Under Mr. Kady’s and Mr. Connors’ employment agreements, “cause” generally is defined as meaning (i) the executive’s indictment or conviction for a felony or a crime involving fraud, misrepresentation or moral turpitude; (ii) the executive’s fraud, dishonesty, theft or misappropriation in connection with his duties; or (iii) gross negligence or willful misconduct in the performance of his duties, unless cured within 30 days after his receipt of written notice thereof.

     Under each change of control agreement “cause” generally is defined as a finding by Quipp that the executive has (i) performed his duties in a grossly negligent manner and does not remedy the breach within 30 days after receiving written notice specifying the details thereof, (ii) been engaged in disloyalty to the company or (iii) violated the agreement’s confidentiality and noncompetition provisions.

     Under Mr. Kady’s employment agreement and the change of control agreements described above, a “change of control” is defined generally as meaning the acquisition by a person of securities having more than 20 percent of the voting power of Quipp’s outstanding securities; a sale or other disposition of substantially all of Quipp’s assets; any transaction as a result of which Quipp’s shareholders do not beneficially own at least 80 percent of the voting power of the surviving company in the election of directors; or a change in the composition of Quipp’s Board of Directors as a result of which “incumbent board members” (as defined in the agreement) constitute less than a majority of the Board of Directors. However, the Board of Directors may determine that one or more of these events do not constitute a change of control, provided that a majority of the Board of Directors consists of incumbent board members. A “constructive termination without cause” means an executive’s resignation following a material reduction in his compensation, a significant diminution in his duties and responsibilities,

assignment of duties and responsibilities that are materially and adversely inconsistent with the duties and responsibilities he held on the date of the agreement, or the required relocation of the executive out of the greater Miami, Florida area, in each case except as is due to cause or disability.

Acceleration of Vesting Provisions Pertaining to Stock Options and Restricted Stock Upon a Change of Control

     Under our Equity Compensation Plan, upon a change of control all stock options and restricted stock granted prior to the change of control immediately vest, unless otherwise determined by the Corporate Governance and Compensation Committee.

     Under the Equity Compensation Plan, a “change of control” is defined generally as meaning (i) the date Quipp’s shareholders approve a plan of dissolution or liquidation, or the sale of substantially all of Quipp’s assets, (ii) the date Quipp’s shareholders and, if required, the shareholders of the other constituent corporation have approved a merger or consolidation of Quipp with another corporation, unless Quipp’s shareholders would hold a majority of the common stock and, if the surviving corporation has more than one class of voting securities, a majority of the voting power of the surviving corporation’s securities in the same proportion as such shareholders owned Quipp stock prior to the transaction, (iii) the date any person becomes beneficial owner of, or has voting control over, Quipp securities having 20 percent of the combined voting power of Quipp’s outstanding securities in the election of directors or (iv) the date directors are elected such that a majority of the Board of Directors have been members of the Board for less than two years, unless the nomination or election of such director was approved by a vote of at least two-thirds of the directors then in office who were directors at the beginning of the two-year period.

Director Compensation

     Quipp currently pays each non-employee director an annual cash retainer of $6,000 ($8,000 for the Chairman of the Board and $7,000 for each Committee chair), a fee of $1,200 for attendance at each meeting of the Board of Directors ($600 for each meeting attended by teleconference) and a fee of $400 for each meeting of a Board committee ($200 for each meeting attended by teleconference). Quipp also grants an option to purchase 5,000 shares of its common stock to each new director. The options have an exercise price per share equal to the closing price of the Company’s common stock on the date of grant generally. The options vest immediately upon grant and expire on the tenth anniversary of the date of grant.

     The following table summarizes the compensation paid to non-management directors during the fiscal year ended December 31, 2007:

Director Compensation Table — 2007

		Fees Earned or				Option Awards				Total
Name		Paid in Cash				($)				($)
William A. Dambrackas		$	17,600			$	—			$	17,600
Larry J. Gibson		$	16,400			$	—			$	16,400
Cristina H. Kepner		$	18,400			$	—			$	18,400
John D. Lori		$	18,454			$	—			$	18,454
Arthur J. Rawl		$	16,200			$	—			$	16,200
Robert C. Strandberg		$	17,200			$	—			$	17,200
David W. Wright*		$	13,282			$	—			$	13,282

ITEM 12 — SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

     The following table sets forth certain information concerning ownership of Quipp common stock as of April 9, 2008 (unless otherwise noted) by (a) each shareholder that has indicated in public filings that the shareholder beneficially owns more than five percent of the common stock, (b) each 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.

		Number of Shares				Percent of
Name of Beneficial Owner		Beneficially Owned				Outstanding Shares (1)
William A. Dambrackas (2)			5,000				*
Lawrence J. Gibson (2)			5,000				*
Michael S. Kady (3)			23,160				1.6	%
Cristina H. Kepner (4)			26,174				1.8	%
John D. Lori (2)(5)			147,000				9.9	%
Arthur J. Rawl (2)			5,100				*
Robert C. Strandberg (2)			—				*
Angel Arrabal			10				*
Eric Bello			25				*
John Connors III			23,986				1.6	%
Mohammed Jamil			35				*
Christer A. Sjogren			858				*
David Switalski			15				*
Aegis Financial Corp. (6)			97,350				6.6	%
Boston Avenue Capital, LLC. (7)			114,516				7.7	%
Farnam Street Partners, L.P. (8)			233,574				15.8	%
Kenneth G. Langone (9)			79,607				5.4	%
Pyramid Trading Limited Partnership (10)			162,838				11.0	%
David W. Wright (11)			85,000				5.8	%
All directors and executive officers as a group (12)			241,363				15.9	%

     The following table provides information, as of December 31, 2007, regarding securities issuable under Quipp’s Equity Compensation Plan, which is its only equity compensation plan currently in effect and was approved by our shareholders.

Equity Compensation Plan Information

Number of

Number of

Securities

Securities to be

Remaining Available

Issued Upon

Weighted-Average

for Future Issuance

Exercise of

Exercise Price of

Under Equity

Plan Category

Outstanding Options

Outstanding Options

Compensation Plans

Equity compensation plans approved by security holders

45,000

$

13.57

140,389

Equity compensation plans not approved by security holders

—

—

—

Total

45,000

$

13.57

140,389

ITEM 13 — CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Newstec Acquisition

     As previously disclosed, on August 10, 2005, Quipp entered into a Share Purchase Agreement (the “Purchase Agreement”) with the shareholders of Newstec, including Mr. John F. (“Skip”) Connors, III, under which Quipp acquired all of the outstanding stock of Newstec. Prior to Quipp’s execution of the Purchase Agreement, Newstec was privately held by Mr. Connors and his brother, Terrence B. Connors, and Quipp’s negotiation of the agreement with the Messrs. Connors was on an arm’s-length basis. Under the Purchase Agreement, Quipp paid $4,026,000 in cash and issued 43,971 shares of common stock.

     In connection with the entry into the Purchase Agreement, Quipp also entered into employment agreements with each of the Messrs. Connors. John F. Connors’ employment agreement is described above in the narrative accompanying the Summary Compensation Table and under “Potential Payments Upon Termination or Change of Control.” The terms of Terrence B. Connors’ employment agreement are substantially similar to Mr. John F. Connors’ employment agreement, except that Mr. Terrence B. Connors’ minimum annual salary specified in the agreement is $150,000. Mr. Terrence B. Connors’ compensation in 2007, calculated in the same manner as the amounts listed under the “Total” column in the Summary Compensation Table, was $169,547.

Director Independence

     The Board of Directors has determined that each of Cristina H. Kepner, William A. Dambrackas, Lawrence J. Gibson, John D. Lori, Arthur J. Rawl, and Robert C. Strandberg is an independent director within the meaning of the rules of the Nasdaq Stock Market LLC. In addition, the Board has determined that each of the members of the two Board committees is also independent within the meaning of the rules of the Nasdaq Stock Market LLC, including additional rules relating to audit committee members.

ITEM 14 — INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FEES AND SERVICES

Fees for all services provided by KPMG LLP for 2006 and 2007 were as follows:

Audit Fees

     The aggregate fees billed for professional services rendered by KPMG LLP for the audit of Quipp’s annual consolidated financial statements and the reviews of Quipp’s consolidated financial statements included in Quipp’s quarterly reports on Form 10-Q were $245,000 in 2006 and $369,000 in 2007.

Audit Related Fees

     There were no audit related services rendered by KPMG LLP to Quipp billed in 2006 and 2007 that were reasonably related to the performance of the audit or review of Quipp’s consolidated financial statements and were not reported under “Audit Fees” above.

Tax Fees

     There were no professional services rendered by KPMG LLP billed in 2006 and 2007 for tax compliance, tax advice and tax planning.

All Other Fees

     There were no products and services provided by KPMG LLP billed in 2006 and 2007, other than the services referred to above.

PART IV

ITEM 15 — EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a)			1			Financial Statements — See “Index to Financial Statements” in Item 8 of the Annual Report on Form 10-K for the year ended December 31, 2006 (the “Form 10-K”) previously filed by the Registrant.
			2			Schedule II — Valuation and Qualifying Accounts was included in the Form 10-K. All other schedules are omitted because they are inapplicable.
			3			Exhibits (Note: The file number of all referenced reports and registration statements is 0-14870.)

Exhibit
No.
3.1		Articles of Incorporation, as amended (incorporated by reference to Exhibit 3.2 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2004).
3.2		By-Laws, as amended (Incorporated by reference to Exhibit 99.1 to Registrant’s Current Report on Form 8-K, filed March 5, 2007).
*10.1		Quipp, Inc. Equity Compensation Plan, as amended (incorporated by reference to Exhibit A to the Registrant’s Proxy Statement relating to the Registrant’s 2005 Annual Meeting of Stockholders).
*10.2		Quipp, Inc. Supplemental Executive Retirement Plan (incorporated by reference to Exhibit 99.1 to the Registrant’s Current Report on Form 8-K, filed on October 31, 2005).
*10.3		Quipp Inc. Management Incentive Plan (incorporated by reference to Exhibit 10.8 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 1998).
*10.4		Change of Control Agreement, dated as of December 23, 2000, among the Registrant, Quipp Systems, Inc. and Christer Sjogren (incorporated by reference to Exhibit 10.7 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2000). Identical agreements, also dated as of December 23, 2000, were entered into with David Switalski, Angel Arrabal and Mohammed Jamil. In accordance with Instruction 2 of Item 601 of Regulation S-K, those agreements need not be filed with this report.
*10.5		Change of Control Agreement, dated as of October 28, 2005, among the Registrant, Quipp Systems, Inc. and Eric Bello (incorporated by reference to Exhibit 99.3 to the Registrant’s Current Report on Form 8-K, filed October 31, 2005).
*10.6		Employment Agreement, dated October 25, 2005, between the Registrant and Michael S. Kady (incorporated by reference to Exhibit 99.2 to the Registrant’s Current Report on Form 8-K, filed

Exhibit
No.
		October 31, 2005).
*10.7		Employment Agreement, dated August 10, 2005, between the Registrant and John F. Connors, III (incorporated by reference to Exhibit 99.1 to the Registrant’s Current Report on Form 8-K, filed August 16, 2005).
†*10.8		Summary of Directors’ Compensation.
10.9		Share Purchase Agreement, dated August 10, 2005, among the Registrant, John F. Connors, III and Terence B Connors (incorporated by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8-K, filed August 16, 2005).
10.10		Agreement, dated as of October 19, 2006, by and among the Company and JDL Capital, LLC, JDL Partners, L.P., John D. Lori, David S. Dillmeier, Mark A. Goodman, Sean McCarthy, Edward McCoyd and Michael McGee (incorporated by reference to Exhibit 99.1 to the Registrant’s Current Report on Form 8-K, filed October 20, 2006.
†22		Subsidiaries of the Registrant.
†23		Consent of KPMG LLP.
†† 31.1		Certificate of the Chief Executive Officer of the Registrant required by Rule 13a-14(a) under the Securities Exchange Act of 1934.
†† 31.2		Certificate of the principal financial officer of the Registrant required by Rule 13a-14(a) under the Securities Exchange Act of 1934.
† 32.1		Certificate of the Chief Executive Officer of the Registrant required by Rule 13a-14(b) under the Securities Exchange Act of 1934 and U.S.C. Section 1350.
† 32.2		Certificate of the principal financial officer of the Registrant required by Rule 13a-14(b) under the Securities Exchange Act of 1934 and U.S.C. Section 1350.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized:

QUIPP, INC.
ANNUAL REPORT ON FORM 10-K
EXHIBIT INDEX

Exhibit
No.
3.1		Articles of Incorporation, as amended (incorporated by reference to Exhibit 3.2 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2004).
3.2		By-Laws, as amended (Incorporated by reference to Exhibit 99.1 to Registrant’s Current Report on Form 8-K, filed March 5, 2007).
*10.1		Quipp, Inc. Equity Compensation Plan, as amended (incorporated by reference to Exhibit A to the Registrant’s Proxy Statement relating to the Registrant’s 2005 Annual Meeting of Stockholders).
*10.2		Quipp, Inc. Supplemental Executive Retirement Plan (incorporated by reference to Exhibit 99.1 to the Registrant’s Current Report on Form 8-K, filed on October 31, 2005).
*10.3		Quipp Inc. Management Incentive Plan (incorporated by reference to Exhibit 10.8 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 1998).
*10.4		Change of Control Agreement, dated as of December 23, 2000, among the Registrant, Quipp Systems, Inc. and Christer Sjogren (incorporated by reference to Exhibit 10.7 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2000). Identical agreements, also dated as of December 23, 2000, were entered into with David Switalski, Angel Arrabal and Mohammed Jamil. In accordance with Instruction 2 of Item 601 of Regulation S-K, those agreements need not be filed with this report.
*10.5		Change of Control Agreement, dated as of October 28, 2005, among the Registrant, Quipp Systems, Inc. and Eric Bello (incorporated by reference to Exhibit 99.3 to the Registrant’s Current Report on Form 8-K, filed October 31, 2005).
*10.6		Employment Agreement, dated October 25, 2005, between the Registrant and Michael S. Kady (incorporated by reference to Exhibit 99.2 to the Registrant’s Current Report on Form 8-K, filed October 31, 2005).
*10.7		Employment Agreement, dated August 10, 2005, between the Registrant and John F. Connors, III (incorporated by reference to Exhibit 99.1 to the Registrant’s Current Report on Form 8-K, filed August 16, 2005).
†*10.8		Summary of Directors’ Compensation.
10.9		Share Purchase Agreement, dated August 10, 2005, among the

Exhibit
No.
		Registrant, John F. Connors, III and Terence B Connors (incorporated by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8-K, filed August 16, 2005).
10.10		Agreement, dated as of October 19, 2006, by and among the Company and JDL Capital, LLC, JDL Partners, L.P., John D. Lori, David S. Dillmeier, Mark A. Goodman, Sean McCarthy, Edward McCoyd and Michael McGee (incorporated by reference to Exhibit 99.1 to the Registrant’s Current Report on Form 8-K, filed October 20, 2006.
†22		Subsidiaries of the Registrant.
†23		Consent of KPMG LLP.
††31.1		Certificate of the Chief Executive Officer of the Registrant required by Rule 13a-14(a) under the Securities Exchange Act of 1934.
††31.2		Certificate of the principal financial officer of the Registrant required by Rule 13a-14(a) under the Securities Exchange Act of 1934.
†32.1		Certificate of the Chief Executive Officer of the Registrant required by Rule 13a-14(b) under the Securities Exchange Act of 1934 and U.S.C. Section 1350.
†32.2		Certificate of the principal financial officer of the Registrant required by Rule 13a-14(b) under the Securities Exchange Act of 1934 and U.S.C. Section 1350.

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