UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
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 (AMENDMENT NO. 1)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement [ ] CONFIDENTIAL, FOR USE OF THE
[ ] Definitive Proxy Statement COMMISSION ONLY (AS PERMITTED
[ ] Definitive Additional Materials BY RULE 14A-6(E)(2))
[ ] Soliciting Material Under Rule 14a-12
CENVEO, INC.
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(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
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(2) Form, schedule or registration statement no.:
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(3) Filing party:
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(4) Date filed:
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PRELIMINARY PROXY STATEMENT, DATED JULY 28, 2005
SUBJECT TO COMPLETION
INVITATION TO SPECIAL MEETING OF STOCKHOLDERS
CENVEO, INC. LOGO
James R. Malone
Chief Executive Officer
[____] [____], 2005
Dear Fellow Stockholder:
We cordially invite you to attend a special meeting of stockholders of
Cenveo, Inc., which is scheduled to be held on September 14, 2005 at [__], local
time, at [___].
The items to be considered and voted on at the special meeting are
described in the notice of the special meeting of stockholders and are more
fully addressed in our proxy materials accompanying this letter. We encourage
you to read all of these materials carefully and then vote the enclosed GOLD
proxy card.
YOUR PARTICIPATION AT THIS MEETING IS EXTREMELY IMPORTANT. As you know,
Burton Capital Management, LLC and Goodwood Inc. ("Burton"), are soliciting
proxies in support of the removal of all of the current directors of Cenveo and
their replacement by Burton's nominees, thus allowing them to take control of
the board of directors and your company, Cenveo.
THE PURPOSE OF THE MEETING IS TO CONSIDER PROPOSALS MADE BY THE BURTON
GROUP, AND OPPOSED BY THE BOARD AND MANAGEMENT OF CENVEO, INCLUDING PROPOSALS TO
REMOVE ALL OF THE CURRENT MEMBERS OF THE BOARD WITHOUT CAUSE AND REPLACE THE
BOARD WITH BURTON'S OWN NOMINEES. IN THE BOARD'S OPINION, BURTON'S PROPOSALS ARE
NOT IN THE BEST INTERESTS OF ALL STOCKHOLDERS OF CENVEO, BUT RATHER WERE MADE IN
FURTHERANCE OF BURTON'S OWN INTERESTS TO TAKE CONTROL OF YOUR COMPANY - WITHOUT
GIVING YOU, THE STOCKHOLDERS OF CENVEO, ANY IMMEDIATE VALUE IN RETURN. Burton
has not offered to buy your shares or to pay you a control premium. In addition,
we believe that Burton does not have any realistic or credible business plan,
other than a list of generic initiatives and an intention (expressed by Mr.
Burton to two Cenveo directors at a meeting) to replace Cenveo's current board
of directors and management with their associates, including three of Mr.
Burton's children.
Cenveo's board of directors recently hired me as President and Chief
Executive Officer of Cenveo. I believe that I have a proven track record of
helping companies grow and prosper. I am deeply committed to working closely
with the board of directors as we continue an aggressive and thorough evaluation
of the company's strategic alternatives (including a possible sale or merger of
the company) with the goal of maximizing value for the benefit of ALL
stockholders.
We will be continuing to communicate with you in the coming weeks
regarding the issues addressed in this proxy statement. In addition, we look
forward to sharing with you
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developing plans for the strategic repositioning of Cenveo - plans that will be
evaluated in light of what is in the best interest of ALL our stockholders.
THE FUTURE OF CENVEO IS IN YOUR HANDS AND YOUR VOTE IS VERY IMPORTANT. I
URGE YOU TO VOTE AGAINST PROPOSALS 1 THROUGH 5 AND TO VOTE FOR YOUR CURRENT
CENVEO DIRECTORS IN PROPOSAL 6 BY SIGNING, DATING AND RETURNING THE
ENCLOSED GOLD PROXY CARD TODAY. PLEASE DISREGARD BURTON'S WHITE PROXY CARD. I
can assure you that Cenveo's board of directors and management will continue to
act in the best interests of ALL Cenveo stockholders.
It is important that your shares be represented at the special meeting
even if you cannot attend the meeting and vote your shares in person. Please
complete, sign and date the GOLD proxy card and return it in the enclosed,
postage-prepaid envelope at your earliest convenience to ensure that your shares
will be duly represented and voted at the special meeting.
If you have any questions or need assistance in voting of your shares,
please contact our proxy solicitor, Innisfree M&A Incorporated, toll free at
(888) 750-5834. Banks and brokers may call collect at (212) 750-5833.
We appreciate your continued support.
Sincerely,
James R. Malone
Chief Executive Officer
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CENVEO, INC. LOGO
CENVEO, INC.
8310 South Valley Highway, #400
Englewood, Colorado 80112
[______] [__], 2005
Notice of Special Meeting of Stockholders
to Be Held September 14, 2005
Notice is hereby given that a special meeting of the stockholders of
Cenveo, Inc. is scheduled to be held on Wednesday, September 14, 2005, at
[____], local time, at [____], to consider the following proposals:
Proposal 1 - To amend Section 3.1 of Cenveo's bylaws to permit the
holders of a majority of shares entitled to vote at an election
of directors to fix the number of directors constituting the
entire board of directors. The text of the amendment to the
bylaws is set forth in Annex A. THE BOARD UNANIMOUSLY RECOMMENDS
A VOTE AGAINST THIS PROPOSAL.
Proposal 2 - To repeal by amendment to Section 3.2 of Cenveo's bylaws the
provision in Cenveo's bylaws that requires vacancies on the
board of directors to be filled by the directors. The text of
the amendment to the bylaws is set forth in Annex A. THE BOARD
UNANIMOUSLY RECOMMENDS A VOTE AGAINST THIS PROPOSAL.
Proposal 3 - To remove all persons currently serving as directors of
Cenveo and remove any other persons elected to Cenveo's board of
directors prior to the special meeting. THE BOARD UNANIMOUSLY
RECOMMENDS A VOTE AGAINST THIS PROPOSAL.
Proposal 4 - In the event Proposal 1 is passed, to set the size of
Cenveo's board of directors at seven seats. THE BOARD
UNANIMOUSLY RECOMMENDS A VOTE AGAINST THIS PROPOSAL.
Proposal 5 - To repeal each provision of or amendment to Cenveo's bylaws
(other than the amendments added or effected pursuant to
Proposals 1 and 2) adopted after the version of the bylaws
included as Exhibit 3.2 to Cenveo's current report on Form 8-K,
as filed with the SEC on April 18, 2005. THE BOARD UNANIMOUSLY
RECOMMENDS A VOTE AGAINST THIS PROPOSAL.
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Proposal 6 - In the event Proposal 3 is passed, to elect a slate of
seven nominees to Cenveo's board of directors. THE BOARD
UNANIMOUSLY RECOMMENDS A VOTE FOR THE CURRENT DIRECTORS OF
CENVEO, WHO ARE OUR NOMINEES FOR PURPOSES OF PROPOSAL 6. We urge
you not to vote for any individuals who may be nominated by
Burton Capital Management LLC. ("Burton"), controlled by Robert
G. Burton, Sr., or Goodwood Inc. ("Goodwood"), and not to
execute any proxy card other than a GOLD card.
The board of directors has fixed the close of business on July 18, 2005 as
the record date for determination of those stockholders who will be entitled to
notice of and to vote at the meeting and any adjournment of the meeting.
THIS SPECIAL MEETING IS EXTREMELY IMPORTANT FOR ALL CENVEO STOCKHOLDERS IN
LIGHT OF BURTON'S ATTEMPT TO TAKE CONTROL OF CENVEO'S BOARD. YOUR VOTE IS
CRITICAL. WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING, AND REGARDLESS
OF THE NUMBER OF SHARES OF COMMON STOCK YOU OWN, WE URGE YOU TO VOTE AGAINST
PROPOSALS 1 THROUGH 5 AND TO VOTE FOR THE CURRENT DIRECTORS OF CENVEO, WHO ARE
OUR NOMINEES FOR PURPOSES OF PROPOSAL 6, BY PROMPTLY COMPLETING, SIGNING, DATING
AND RETURNING THE ENCLOSED GOLD PROXY CARD TODAY IN THE POSTAGE-PAID ENVELOPE
PROVIDED. PLEASE DISREGARD BURTON'S WHITE PROXY CARD.
WE URGE YOU NOT TO SIGN OR RETURN ANY WHITE PROXY CARD THAT MAY BE SENT TO
YOU BY BURTON OR GOODWOOD, EVEN AS A PROTEST VOTE AGAINST THEM. IF YOU
PREVIOUSLY VOTED ON BURTON'S WHITE PROXY CARD, YOU HAVE EVERY LEGAL RIGHT TO
CHANGE YOUR VOTE. YOU CAN DO SO SIMPLY BY SIGNING, DATING AND RETURNING THE
ENCLOSED GOLD PROXY CARD. ONLY YOUR LATEST DATED PROXY CARD WILL COUNT.
If you have any questions or need assistance in voting your shares, please
contact our proxy solicitors, Innisfree M&A Incorporated, toll free at (888)
750-5834. Banks and brokers may call collect at (212) 750-5833.
By order of the board of directors
Mark L. Zoeller
Vice President - General Counsel and Chief
Legal Officer
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TABLE OF CONTENTS
The Special Meeting............................................................1
Questions & Answers - Voting...................................................2
Proposals To Be Voted On.......................................................8
Board Of Directors............................................................10
Corporate Governance..........................................................13
Board Procedures and Committees.............................................13
Board Meetings and Attendance...............................................15
Board Compensation..........................................................16
Directors Emeritus..........................................................16
Compensation and Human Resources Committee Interlocks and
Insider Participation.....................................................17
Ownership Of Voting Securities................................................17
Change Of Control Provisions..................................................19
Executive Officers And Key Employees..........................................20
Compensation Of Executive Officers............................................22
Long-Term Equity Incentive Plan.............................................26
Other Terms.................................................................28
Options/SAR Grants in Last Fiscal Year......................................29
Aggregated Option/SAR Exercises in Last Fiscal Year and
Fiscal Year-End Option/SAR Values.........................................30
Long-Term Incentive Plan Awards.............................................31
Executive Perquisite and Benefits Expense Reimbursement Plan................31
Cash Bonus Annual Incentive Plan............................................31
Equity Compensation Plan Information........................................31
Other Benefit Plans.........................................................32
Report On Executive Compensation..............................................33
Compensation Philosophy.....................................................33
Components of Compensation..................................................34
Retired Chief Executive Officer Compensation................................36
Chief Executive Officer Compensation........................................36
Conclusion..................................................................37
Five-Year Performance Comparison..............................................37
Independent Public Auditors...................................................38
Other Information.............................................................39
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Section 16(a) Beneficial Ownership Reporting Compliance.....................39
Annual Report/ Financial Materials..........................................39
Contact the Board...........................................................40
Appendix I Information Concerning Persons Who May Be Deemed Participants In
The Company's Solicitation Of Proxies
ANNEX A Proposed Amendments To Bylaws
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SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD SEPTEMBER 14, 2005
CENVEO, INC.
8310 South Valley Highway, #400
Englewood, Colorado 80112
THE SPECIAL MEETING
DATE, TIME & PLACE OF THE SPECIAL MEETING
We are sending you this proxy statement as part of a solicitation of
proxies by Cenveo's board of directors for use at the special meeting of
Cenveo's stockholders, and at any adjournment, postponement, continuation or
rescheduling of the meeting. We anticipate that the notice of special meeting,
this proxy statement and the accompanying GOLD proxy card will first be mailed
to the holders of our common stock, par value $.01 per share, on or about [____]
[____], 2005.
The special meeting is scheduled to be held at [_____], local time, on
September 14, 2005 at [___________].
PURPOSE OF THE SPECIAL MEETING - THE PROXY CONTEST
On June 10, 2005, Burton Capital Management LLC ("Burton") and Goodwood
Inc. ("Goodwood"), who are collectively the beneficial owners of 10.24% of all
outstanding voting securities of Cenveo as of the same date, filed a preliminary
proxy statement seeking to replace your board of directors. Burton and its
allies are attempting to take effective control of Cenveo by (I) REMOVING ALL OF
CENVEO'S CURRENT DIRECTORS, EVEN THOUGH THEY WERE JUST RE-ELECTED BY THE
SHAREHOLDERS IN APRIL (OTHER THAN MR. MALONE, WHO WAS APPOINTED IN JUNE), (II)
APPOINTING ROBERT BURTON, SR. AS CHIEF EXECUTIVE OFFICER OF CENVEO, (III)
APPOINTING MR. BURTON AS CHAIRMAN OF CENVEO'S BOARD OF DIRECTORS, (IV)
NOMINATING A SLATE OF BURTON'S NOMINEES AS DIRECTORS (IN ADDITION TO MR.
BURTON'S APPOINTMENT AS CHAIRMAN), AND (V) REPLACING CENVEO'S MANAGEMENT TEAM
WITH BURTON'S DESIGNEES, INCLUDING APPOINTING THREE OF MR. BURTON'S CHILDREN TO
BE MEMBERS OF CENVEO'S SENIOR MANAGEMENT TEAM.
ALTHOUGH THE BURTON GROUP IS ATTEMPTING TO TAKE CONTROL OF YOUR COMPANY,
THEY ARE NOT GIVING STOCKHOLDERS ANY IMMEDIATE VALUE IN RETURN. They are not
offering to buy Cenveo shares or to pay a control premium. IN ADDITION, WE
BELIEVE THEY OFFER LITTLE IN THE WAY OF A DETAILED OR CREDIBLE PLAN OR STRATEGY
ON HOW TO IMPROVE YOUR COMPANY IN ORDER TO RETURN VALUE TO YOU IN THE FUTURE,
other than a list of generic initiatives and an intention (expressed by
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Mr. Burton to two Cenveo directors at a meeting) to replace current management
with their own designees. We believe that Burton's actions make clear that this
proxy campaign is self-serving and not in the best interests of all Cenveo
stockholders. In this regard, you should know that although Mr. Burton expects
his director nominees to install him as Chief Executive Officer, Mr. Burton
refused to participate in our recently-completed chief executive officer search
process, indicating to the board that Mr. Burton was not willing to have his
ideas and qualifications compared rigorously against those of other stronger
candidates for the job.
In contrast, your board of directors is already taking substantive action
with the goal of maximizing value for all stockholders. We have initiated a
thorough and aggressive evaluation of strategic alternatives aimed at boosting
stockholder return, including a possible sale or merger of the company, or any
other business combination that would produce value for our stockholders; we
have adopted a strategy which implements comprehensive cost-cutting and presents
opportunities for top-line growth; and we have hired James R. Malone on June 22,
2005 as Cenveo's new Chief Executive Officer. WHILE THERE CAN BE NO GUARANTEE OF
SUCCESS, WE ARE COMMITTED TO THE EXPLORATION OF ALL POSSIBLE WAYS TO MAXIMIZE
STOCKHOLDER VALUE.
We will be continuing to communicate with you in the coming weeks
regarding the issues addressed in this proxy statement. In addition, we look
forward to sharing with you developing plans for the strategic repositioning of
Cenveo - plans that will be evaluated in light of what is in the best interest
of ALL our stockholders.
FOR THESE REASONS, YOUR BOARD SEEKS YOUR SUPPORT. AFTER CAREFUL
CONSIDERATION, YOUR BOARD RECOMMENDS THAT YOU REJECT BURTON'S PROPOSALS TO
REMOVE CENVEO'S INCUMBENT BOARD OF DIRECTORS, AND STRONGLY URGES YOU TO VOTE
AGAINST PROPOSALS 1 THROUGH 5 AND FOR THE CURRENT DIRECTORS OF CENVEO, WHO ARE
OUR NOMINEES FOR PURPOSES OF PROPOSAL 6. PLEASE DISREGARD BURTON'S WHITE PROXY
CARD. INSTEAD, PLEASE SIGN, DATE AND RETURN THE ENCLOSED GOLD PROXY CARD TODAY
IN THE ACCOMPANYING ENVELOPE. IF YOU HAVE PREVIOUSLY RETURNED A WHITE PROXY
CARD, YOU HAVE THE RIGHT TO CHANGE YOUR VOTE-SIMPLY SIGN, DATE AND RETURN THE
ENCLOSED GOLD PROXY CARD IN THE POSTAGE-PAID ENVELOPE PROVIDED. ONLY YOUR LATEST
DATED PROXY CARD WILL COUNT.
QUESTIONS & ANSWERS - VOTING
1. Q: WHO IS ENTITLED TO VOTE AT THE SPECIAL MEETING?
A: Only stockholders of record at the close of business on the record
date, July 18, 2005, may vote at the meeting. As of the record date,
[__________] shares of Cenveo's common stock were issued and
outstanding. Each stockholder is entitled to one vote for each share
of common stock held on the record date. Cenveo's Articles of
Incorporation do not permit stockholders to cumulate their votes in
the election of directors of the corporation.
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2. Q: WHAT IS THE DIFFERENCE BETWEEN HOLDING SHARES AS A STOCKHOLDER OF
RECORD AND AS A BENEFICIAL OWNER?
A: Most stockholders hold shares through a stockbroker, bank or other
nominee rather than directly in their own name. There are some
distinctions between shares held of record and shares owned
beneficially, which are summarized below:
STOCKHOLDER OF RECORD. If your shares are registered directly in your
name with our transfer agent, Computershare Trust Company, Inc., you
are considered to be the stockholder of record of those shares and
these proxy materials are being sent directly to you by Cenveo. As the
stockholder of record, you have the right to vote by proxy or to vote
in person at the meeting. In that case, we have enclosed a GOLD proxy
card for you to use.
BENEFICIAL OWNER. If your shares are held in a stock brokerage account
or by a bank or other nominee, you are considered the beneficial owner
of shares held in street name, and these proxy materials are being
forwarded to you by your broker or bank which is considered to be the
stockholder of record of those shares. As the beneficial owner, you
have the right to direct your broker how to vote and are also invited
to attend the meeting. If you wish to vote these shares at the
meeting, you must contact your bank or broker for instructions as to
how to do so. Your broker or bank has enclosed a voting instruction
card for you to use in directing the broker or nominee how to vote
your shares for you.
3. Q: WHAT MAY I VOTE ON AT THE MEETING?
A: You may vote on Proposals 1 through 6 as described below. However, in
the event that Proposal 1 is not passed, no vote will be taken on
Proposal 4, and in the event that Proposal 3 is not passed, no vote
will be taken on Proposal 6.
4. Q: HOW DOES THE BOARD OF DIRECTORS RECOMMEND I VOTE?
A: The board of directors recommends that you vote your shares AGAINST
Proposals 1 through 5 and FOR the current directors of Cenveo, who are
our nominees for purposes of Proposal 6. Please disregard Burton's
white proxy card.
5. Q: HOW CAN I VOTE MY SHARES?
A: If you are a stockholder of record, you may either vote in person at
the meeting or by signing, dating and returning the enclosed GOLD
proxy card. Whether or not you plan to attend the annual meeting in
person you should submit your proxy as soon as possible.
If your Cenveo shares are held in the name of a broker, bank or other
nominee, you must instruct them to sign for you. You are therefore
urged to contact the person responsible for your account and give
instructions for a GOLD proxy card
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to be signed representing your shares. You also should confirm in
writing your instructions to the person responsible for your account
and provide a copy of those instructions to our proxy solicitor,
Innisfree M&A Incorporated, so that they can attempt to ensure that
your instructions are followed.
EMPLOYEE SAVINGS PLANS. If you are a participant in the Cenveo 401(k)
Savings and Retirement Plan, you will receive a separate packet of
information about how to provide voting instructions to the plan
trustee. The plan trustee will vote the Cenveo shares that are
allocable to your account under the plan in accordance with your
instructions unless it determines that it is legally obligated to do
otherwise. If you do not provide the plan trustee with instructions,
then, with respect to each matter to be voted upon, the plan trustee
will vote Cenveo shares for which no instructions are received in the
proportions in which it votes the shares allocable to other plan
participants who provided instructions.
6. Q: WHAT IDENTIFICATION SHOULD I BRING TO THE MEETING?
A: All stockholders who owned shares of our common stock on July 18,
2005, may attend the meeting. In order to gain admission to the
meeting, please be sure to bring with you valid government-issued
personal identification with a picture (such as a driver's license or
passport). If your shares are held in the name of a bank, broker or
other nominee, you must also bring evidence of your ownership of
Cenveo shares as of the record date, in the form of a letter or
statement from your bank, broker, or other nominee or the voting
instruction card provided by the broker, in each case, indicating that
you owned shares as of the record date.
If you are a proxy holder for a Cenveo stockholder, then you must
bring (i) the validly executed proxy naming you as the proxy holder,
signed by a Cenveo stockholder who owned Cenveo shares as of the
record date; (ii) valid government-issued personal identification with
a picture (such as a driver's license or passport); and (iii) if the
stockholder whose proxy you hold was not a record holder of Cenveo
shares as of the record date, proof of the stockholder's ownership of
Cenveo shares as of the record date, in the form of a letter or
statement from a bank, broker, or other nominee or the voting
instruction card provided by the broker, in each case, indicating that
the stockholder owned those shares as of the record date.
7. Q: WHAT VOTING CHOICES DO I HAVE?
A: You may vote AGAINST, FOR, or ABSTAIN on Proposals 1 through 5. If a
vote on Proposal 6 becomes necessary, you may vote FOR all of Cenveo's
director nominees or you may "withhold authority" to do so. THE BOARD
RECOMMENDS YOU VOTE AGAINST PROPOSALS 1 THROUGH 5 AND FOR THE CURRENT
DIRECTORS OF CENVEO, WHO ARE OUR NOMINEES FOR PURPOSES OF PROPOSAL 6.
If you sign your GOLD proxy card but do not make any selections, you
will give authority to Susan O. Rheney, our Interim Chairman, James R.
Malone, our Chief Executive Officer and Mark L. Zoeller, our Vice
President - General Counsel and Chief
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Legal Officer, to vote on the proposals. Ms. Rheney, Mr. Malone and
Mr. Zoeller intend to use that authority to vote AGAINST PROPOSALS 1
THROUGH 5 AND FOR THE CURRENT DIRECTORS FOR CENVEO, WHO ARE OUR
NOMINEES FOR PURPOSES OF PROPOSAL 6.
8. Q: HOW MANY VOTES ARE REQUIRED TO APPROVE A PROPOSAL?
A: The following table sets forth the vote requirement for approval of a
proposal, assuming a quorum is present at the meeting. Under our
bylaws, a majority of the shares of Cenveo common stock entitled to
vote, present in person or represented by proxy, constitutes a
quorum.
PROPOSAL VOTES REQUIRED FOR APPROVAL
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PROPOSAL 1 The number of votes cast "for" the proposal
exceeds the number of votes cast "against"
the proposal.
PROPOSAL 2 The number of votes cast "for" the proposal
exceeds the number of votes cast "against"
the proposal.
PROPOSAL 3 The number of votes cast "for" the proposal
exceeds the number of votes cast "against"
the proposal.
PROPOSAL 4 The number of votes cast "for" the proposal
exceeds the number of votes cast "against"
the proposal.
PROPOSAL 5 The number of votes cast "for" the proposal
exceeds the number of votes cast "against"
the proposal.
PROPOSAL 6 Plurality of the votes cast (i.e., the
directors receiving the highest numbers of
votes cast in favor of their election will be
elected as directors).
9. Q: HOW ARE ABSTENTIONS AND BROKER NON-VOTES TREATED?
A: Abstentions and broker non-votes will be counted for purposes of
determining whether a quorum is present, but will have no effect on
the outcome of any vote.
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10. Q: CAN I CHANGE MY VOTE?
A: You have the power to revoke your proxy, regardless of whether it was
solicited by Cenveo or by Burton, at any time before the voting, by
returning a duly executed proxy bearing a later date or submitting a
written revocation. A written revocation must be received by Cenveo,
Inc., 8310 South Valley Highway, #400, Englewood, CO 80112, Attention:
Corporate Secretary, no later than the beginning of voting at the
special meeting. In addition, any stockholder who attends the special
meeting in person may vote by ballot at the meeting, thereby canceling
any proxy previously given, or may give notice of revocation to the
inspector of election. Merely attending without voting, however, will
not revoke any previously executed proxy.
YOU ARE URGED NOT TO SIGN ANY WHITE PROXY CARDS SENT TO YOU BY BURTON
OR GOODWOOD. EVEN IF YOU HAVE PREVIOUSLY SIGNED A PROXY CARD SENT TO
YOU BY BURTON, YOU CAN REVOKE IT BY SIGNING, DATING AND RETURNING THE
ENCLOSED GOLD PROXY CARD IN THE ENVELOPE PROVIDED.
11. Q: WHO WILL COUNT THE VOTES?
A: Cenveo has retained IVS Associates, Inc. to tabulate the votes and
act as Inspector of Election.
12. Q: WHAT SHOULD I DO WITH THE WHITE PROXY CARD I MAY RECEIVE FROM BURTON?
A: The Board recommends that you do nothing with the WHITE proxy card.
The Board recommends that you sign, date and return the GOLD proxy
card. If you have already returned a WHITE proxy card, you can
effectively revoke it by signing, dating and returning the GOLD proxy
card.
13. Q: WHAT DOES IT MEAN IF I GET MORE THAN ONE PROXY CARD?
A: If your shares are registered differently and are held in more than
one account, then you will receive more than one proxy card. Be sure
to vote all of your accounts so that all of your shares are voted.
14. Q: HOW WILL VOTING ON ANY OTHER BUSINESS BE CONDUCTED?
A: The board of directors is not aware of any matters, other than those
described above, that have been brought for consideration at the
special meeting.
15. Q: WHERE AND WHEN WILL I BE ABLE TO FIND THE RESULTS OF THE VOTING?
A: The results of the voting will be announced promptly following
certification by the Inspector of Election. We will also publish the
final results in our quarterly report on Form 10-Q for the third
quarter of 2005 to be filed with the Securities and Exchange
Commission.
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16. Q: IS MY VOTE CONFIDENTIAL?
A: Proxy instructions, ballots and voting tabulations that identify
individual stockholders are handled in a manner that protects your
voting privacy. Your vote will not be disclosed either within Cenveo
or to third parties except:
o as necessary to meet applicable legal requirements,
o to allow for the counting and certification of votes, or
o to help our board solicit proxies.
17. Q: WHEN ARE STOCKHOLDER PROPOSALS FOR THE 2006 ANNUAL MEETING DUE?
A: All stockholder proposals to be considered for inclusion in our proxy
statement for the 2006 annual meeting must be received by our
corporate secretary at our principal office by November 10, 2005.
18. Q: HOW WILL PROXIES FOR THE MEETING BE SOLICITED?
A: Proxies may be solicited, without additional compensation, by
directors, officers or employees of Cenveo by mail, telephone,
telegram, by email, in person or otherwise. Appendix I to this proxy
statement sets forth certain information relating to Cenveo's
directors, nominees, officers and other employees of Cenveo who will
be soliciting proxies on our behalf. In addition, we have retained
Innisfree M&A Incorporated, 501 Madison Avenue, New York, New York
10022, to assist in soliciting proxies. We will pay Innisfree a fee
expected not to exceed $[______], plus out-of-pocket expenses.
Innisfree will employ approximately 50 persons in connection with its
solicitation of proxies.
19. Q: WHO WILL BEAR THE COST OF SOLICITING PROXIES?
A: We will bear our costs of the solicitation of proxies, which may
include the cost of preparing, printing and mailing the proxy
materials. In addition, we will request banks, brokers and other
custodians, nominees and fiduciaries to forward our proxy materials to
the beneficial owners of Cenveo common stock and obtain their voting
instructions. We will reimburse those firms for their expenses in
accordance with the rules of the SEC and the NYSE. Expenses related to
the solicitation of stockholders in excess of those normally spent for
an annual meeting, and excluding the costs of litigation (if any), are
expected to aggregate approximately $[__] million, of which
approximately $[__________] has been spent to date.
-7-
PROPOSALS TO BE VOTED ON
PROPOSAL NO. 1 - AMENDMENT OF BYLAWS TO PERMIT STOCKHOLDERS TO
SET BOARD OF DIRECTORS SIZE
An amendment to Section 3.1 of Cenveo's bylaws is proposed to permit the
holders of a majority of shares entitled to vote at an election of directors to
fix the number of directors constituting the entire board of directors. The text
of the amendment is set forth in Annex A. THIS PROPOSAL WOULD FACILITATE
BURTON'S PLAN TO TAKE CONTROL OF YOUR COMPANY. ACCORDINGLY, THE BOARD OF
DIRECTORS RECOMMENDS A VOTE AGAINST THIS PROPOSAL ON THE GOLD PROXY CARD.
PROPOSAL NO. 2 - REPEAL OF BYLAWS REQUIRING VACANCIES TO BE
FILLED BY REMAINING DIRECTORS
A repeal of Section 3.2 of Cenveo's bylaws is proposed to permit Cenveo's
stockholders to fill the vacancies they might create in accordance with the
Colorado Business Corporation Act. The text of the amendment is set forth in
Annex A. THIS PROPOSAL WOULD FACILITATE BURTON'S PLAN TO TAKE CONTROL OF YOUR
COMPANY. ACCORDINGLY, THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THIS
PROPOSAL ON THE GOLD PROXY CARD.
PROPOSAL NO. 3 - REMOVAL OF CENVEO'S DIRECTORS
Burton proposes to remove, without cause, all persons currently serving as
directors of Cenveo. All of the following directors were re-elected by
stockholders at our annual meeting held April 27, 2005, other than Mr. Malone,
who was first appointed in June:
NAME CURRENT POSITION
---- ----------------
Thomas E. Costello Director
Paul F. Kocourek Director
James R. Malone Director, President, Chief Executive Officer
Martin J. Maloney Director
David M. Olivier Director
Jerome W. Pickholz Director
Alister R. Reynolds Director
Susan O. Rheney Director, Chairman of the Board
Wellington E. Webb Director
For information about these individuals, please see the section entitled
"Board of Directors" included in this proxy statement beginning on page 10. For
the reasons we describe in this proxy statement, we believe that the removal of
the current board of directors would not be in the best interests of all Cenveo
stockholders, and would jeopardize the value of stockholders' investment in
Cenveo. ACCORDINGLY, THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THIS
PROPOSAL ON THE GOLD PROXY CARD.
-8-
PROPOSAL NO. 4 - SET BOARD OF DIRECTORS SIZE TO SEVEN DIRECTORS
In the event that Proposal 1 passes, this proposal is intended to ensure
that if elected as directors, Burton's nominees will constitute the entire board
of directors. THIS PROPOSAL WOULD FACILITATE BURTON'S PLAN TO TAKE CONTROL OF
YOUR COMPANY. ACCORDINGLY, THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THIS
PROPOSAL ON THE GOLD PROXY CARD.
PROPOSAL NO. 5 - REPEAL OF BYLAW AMENDMENTS PASSED FOLLOWING
APRIL 17, 2005
Burton is seeking to repeal each future amendment to Cenveo's bylaws
(other than amendments pursuant to Proposal 1, if approved) through the time of
the special meeting. We believe that a categorical repeal of all future
amendments to Cenveo's bylaws through the time of the special meeting could
interfere with effective governance and policy making by the board of directors,
and would not be in the best interests of all Cenveo stockholders. ACCORDINGLY,
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THIS PROPOSAL ON THE GOLD PROXY
CARD.
PROPOSAL NO. 6 - ELECTION OF DIRECTORS
In an attempt to take control of the board and the Company, Burton is
seeking to elect his own slate of seven nominees to replace the incumbent board
of directors, if Proposal 3 is approved by Cenveo's stockholders and the
incumbent board of directors is removed. In the event that Proposal 3 is not
passed, no directors will be elected at the meeting. THE BOARD OF DIRECTORS
BELIEVES THAT THE ELECTION OF BURTON'S NOMINEES WOULD NOT BE IN THE BEST
INTEREST OF ALL CENVEO'S STOCKHOLDERS AND ENCOURAGES YOU TO VOTE FOR THE CURRENT
DIRECTORS OF CENVEO, WHO ARE OUR NOMINEES FOR PURPOSES OF PROPOSAL 6. DISREGARD
BURTON'S WHITE PROXY CARD.
In the event a vote on this proposal becomes necessary, Cenveo's nominees
for the director positions are listed below. In accordance with Colorado law, if
Proposals 1 and 4 are passed, the seven nominees receiving the most votes will
be elected. All of the following directors were re-elected by stockholders at
the annual meeting held on April 27, 2005, other than Mr. Malone who was
appointed in June:
-------------------------------------------------------------
NAME CURRENT POSITION
-------------------------------------------------------------
Thomas E. Costello Director
-------------------------------------------------------------
Paul F. Kocourek Director
-------------------------------------------------------------
James R. Malone Director, President, Chief
Executive Officer
-------------------------------------------------------------
Martin J. Maloney Director
-------------------------------------------------------------
David M. Olivier Director
-------------------------------------------------------------
Jerome W. Pickholz Director
-------------------------------------------------------------
Alister R. Reynolds Director
-------------------------------------------------------------
Susan O. Rheney Director, Chairman of the Board
-------------------------------------------------------------
Wellington E. Webb Director
-------------------------------------------------------------
For information about these individuals, please see the section entitled
"Board of Directors" included in this proxy statement on page 10.
-9-
BOARD OF DIRECTORS
Set forth below are the names and ages of your directors, the year in
which each was first elected a director, the business experience of each for at
least the past five years and certain other information concerning each of the
directors. There are no family relationships among the directors, director
nominees and executive officers of Cenveo. All of the following individuals
satisfy the independence requirements of the New York Stock Exchange listing
standards and the "standards of independence" required by our corporate
governance guidelines, except for Mr. Malone, who is not considered independent
because of his position as President and Chief Executive Officer. In the event a
vote on Proposal 6 becomes necessary, each of these individuals is a nominee for
the election of directors:
DIRECTOR
NAME AGE SINCE
THOMAS E. COSTELLO (3)(4) 65 2003
From 1992 through retirement in 2002, Mr. Costello
served as Chief Executive Officer of xpedx, a
multi-billion dollar distributor of printing and
packaging products, and Senior Vice President of
International Paper Co. xpedx is a wholly owned
division of International Paper. He is also a
director of Cadmus Communications Corporation, a
customized content management, publisher's
fulfillment, including printing services, and
custom packaging fulfillment company, Intertape
Polymer Group, a manufacturer of tape for plastic
packaging, and Eagle Hospitality Properties, Inc.,
a real estate investment trust. He received an
MBA from Indiana University.
PAUL F. KOCOUREK (1)(2) 54 2004
Mr. Kocourek has been a Senior Partner with
Booz/Allen/Hamilton, a global strategy and
technology consulting firm since 1993. Mr. Kocourek
is the managing partner of Booz Allen's West Coast
practice, based in San Francisco and specializes in
corporate transformation. Mr. Kocourek has extensive
experience in the printing business and in working
with industry consolidators. From 1993 through 1995,
Mr. Kocourek served on the board of directors of
Booz/Allen/Hamilton. He received an MBA in finance
and accounting from the Wharton School of Business.
JAMES R. MALONE 62 2005
Mr. Malone has served as our President and Chief
Executive Officer since June 2005. Mr. Malone has
over 25 years of experience in international joint
ventures, strategic alliances and strategy
positioning. Mr. Malone's successful career most
recently includes the role of Chief Executive
Officer of Qorval, LLC, a financial and business
restructuring firm, which he founded in 2003. From
2004 through June 2005, Mr. Malone served as Vice
Chairman, President and Chief Executive Officer of
Brown Jordan International, Inc., a manufacturer of
retail and contract furnishings. He
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DIRECTOR
NAME AGE SINCE
was Chairman of the Board from 1996 to 2004 and
Chief Executive Officer from 1997 to 2004 of HMI
Industries, Inc., a producer of cleaners for
residential and commercial use and other industrial
manufactured products. From 2000 to 2003 Mr. Malone
was a Managing Director of Bridge Associates LLC,
which engaged in activities similar to those of
Qorval. Mr. Malone also serves on the boards of
Ametek, Inc. and Brown Jordan International, Inc.
Prior to that, Mr. Malone held a variety of
leadership roles from President and Chief Operating
Officer of Purolator Products, Inc. from 1979 to
1990, Chairman and Chief Executive Officer of
Aerospace Company from 1990 to 1993, and President
and Chief Executive Officer of Anchor Glass
Container Corporation from 1993 to 1996.
MARTIN J. MALONEY (1)(2) 60 2003
Mr. Maloney, a 35-year printing industry expert, is
presently the chief executive of The Print Council,
a fast-track organization which represents the
industry as a whole. Since 1984 Mr. Maloney has also
served as Chairman and co-founder of Broadford and
Maloney, Inc., which has performed marketing
consulting and public relations services to major
graphic arts companies for the past 21 years.
Previously he was the chief marketing officer for
two large N.Y.S.E. graphic arts corporations for 14
years. Mr. Maloney serves on the board of New York
University Center for Graphics Management, is a
director of the Association of Graphic
communications, and is on the Board of Governors of
Legatus. He has also served as an internal auditor
and produced annual reports for companies for over
20 years.
DAVID M. OLIVIER (3)(4) 61 2003
Mr. Olivier was with Wyeth Corporation, a
pharmaceutical company, and its affiliated
entities for over 35 years when he retired in
2002. He was a member of the Executive and
Finance Committees and a Corporate Senior Vice
President at the time of his retirement. He is a
director and advisor to Taratec Corp., a
pharmaceutical compliance company, and Chairman
of Alterna, LLC, a private equity investment
company. He received an MBA from the University
of California at Berkeley.
JEROME W. PICKHOLZ (1)(2) 72 1994
Mr. Pickholz is Chairman Emeritus of Ogilvy &
Mather Direct Worldwide, a direct advertising
agency, where he served as Chief Executive
Officer from 1978 until 1994, and as Chairman in
1994 and 1995. Mr. Pickholz served as founder
and Chairman of Pickholz, Tweedy, Cowan, L.L.C.,
a marketing communications company, from 1996
until 2001 and he has been a direct marketing
consultant since
-11-
NAME AGE SINCE
2001. He also serves as a director of Gift
Certificates.com, Inc., a provider of gift
certificate products and services. Mr. Pickholz is
a certified public accountant.
ALISTER W. REYNOLDS (3)(4) 47 2002
In 2004 Mr. Reynolds concluded a 22-year career
with Quest Diagnostics, Inc., a provider of
diagnostic laboratory testing services, and its
former parent company, Corning Incorporated. Mr.
Reynolds served in various positions including
Senior Vice President of Operations and, most
recently, Senior Advisor to the Office of the
Chairman. Mr. Reynolds received an MBA in finance
from Cornell University. He is also a director of
three privately held companies: SomaLogic
Incorporated, Healthcare Waste Solutions, and
Viecore Incorporated.
SUSAN O. RHENEY (1)(2) 45 2003
Ms. Rheney was appointed Chairman of the board of
directors in January 2005. Ms. Rheney previously
served as a director of Cenveo from 1993 to
1997. She was a principal in The Sterling Group,
L.P., a private investment company, from 1992 to
2002. Ms. Rheney is a director of Genesis Energy
LP, an oil pipeline company, and Texas
Petrochemical Holdings, Inc., a chemical
manufacturer. Texas Petrochemical filed a
voluntary petition for reorganization under
Chapter 11 of the United States Bankruptcy Code
in July 2003. In connection with this filing,
the holder of discount notes issued by Texas
Petrochemical filed a lawsuit against the
directors and officers of Texas Petrochemical in
December 2003, which suit has been
administratively terminated by the bankruptcy
court. Ms. Rheney received an MBA from Harvard
University. She is a certified public accountant
and was a public accounting auditor for the
accounting firm of Deloitte & Touche.
WELLINGTON E. WEBB (3)(4) 64 2004
Former Mayor Webb was elected Mayor of Denver in
1991 and reelected in 1995 and 1999. In 2003 he
established a consulting service, Webb Group
International LLC, which assists cites with local
economic projects and economic opportunities in
Asia and Africa. He is also a director of
Maximus Corporation, which provides services to
governmental agencies, the National Homebuyers
Association and The Labor's Community Agency and
is the Vice Chair of the Democratic National
Committee.
------------------------
(1) Member Governance and Nominating Committee.
-12-
(2) Member Audit Committee.
(3) Member Compensation and Human Resources Committee.
(4) Member Employee Health and Safety Committee.
CORPORATE GOVERNANCE
Our board and management are committed to diligently exercising their
oversight responsibilities throughout Cenveo and managing our affairs consistent
with the highest principles of business ethics. We have adopted a code of
business conduct and ethics that applies to all employees, including our senior
officers. We continue to review our corporate governance policies and practices
along with the provisions of the Sarbanes-Oxley Act of 2002, the rules of the
Securities and Exchange Commission and the listing standards of the New York
Stock Exchange. Since our 2004 annual stockholders meeting the board has:
o updated various committee charters;
o affirmatively determined that all of our current directors, except for
James R. Malone, qualify as independent directors as defined by the
rules of the New York Stock Exchange and our corporate governance
guidelines; and
o affirmatively determined that three of our directors qualify as audit
committee financial experts under the rules of the Securities and
Exchange Commission.
You can view the following information on our website at WWW.CENVEO.COM
under "Investor Relations - Governance," or receive copies by writing to our
corporate secretary at Cenveo, Inc., 8310 South Valley Highway, #400, Englewood,
Colorado 80112, phone 303-790-8023:
o the current committee charters for our Governance and Nominating
Committee, Audit Committee, and Compensation and Human Resources
Committee;
o our corporate governance guidelines; and
o our code of business conduct and ethics.
BOARD PROCEDURES AND COMMITTEES
Our full board of directors considers all major decisions. However, we
have established a Governance and Nominating Committee, an Audit Committee, a
Compensation and Human Resources Committee, and an Employee Health and Safety
Committee so that some matters can be addressed in more depth than may be
possible in a full board meeting. These four committees each operate under a
written charter and are described below.
GOVERNANCE AND NOMINATING COMMITTEE. The current members of the Governance
and Nominating Committee are Mr. Maloney (Chairman), Mr. Kocourek, Mr. Pickholz
and Ms. Rheney. This committee:
o identifies candidates for open director positions;
-13-
o selects, or recommends that our board select, the director nominees
for each annual stockholders meeting, oversees the evaluation of our
board's effectiveness;
o and develops and recommends to our board our corporate governance
principles.
The committee currently has no policy in place regarding the consideration
of director candidates recommended by stockholders. We believe that our
independent committee can successfully identify appropriate candidates for the
board.
Pursuant to the company's bylaws stockholders of record are also entitled
to nominate director candidates for election at Cenveo's 2006 annual meeting of
stockholders by giving timely notice in writing to the company's Secretary. This
notice shall set forth all information relating to the person the stockholder
proposes to nominate that is required to be disclosed in solicitations for
proxies for the election of directors pursuant to Regulation 14A under the
Securities and Exchange Act of 1934. As to the stockholder giving notice, the
name and address of such stockholder, as they appear on the company's books, and
the number of shares of stock of the corporation which are beneficially owned by
the stockholder must also be included in the notice. To be timely, notice must
be received by Cenveo by November 10, 2005.
The committee met four times in 2004.
AUDIT COMMITTEE. The current members of our Audit Committee are Mr.
Pickholz (Chairman), Mr. Kocourek, Mr. Maloney and Ms. Rheney. The board has
determined that each member of the committee is financially literate under the
New York Stock Exchange's listing standards and is independent under special
standards established by the Securities and Exchange Commission for Audit
Committee members. The board has also determined that Mr. Kocourek, Mr. Pickholz
and Ms. Rheney are each an Audit Committee financial expert under the rules of
the Securities and Exchange Commission. A description of each committee member's
qualifications and business experience is found beginning on page 10. Our Audit
Committee:
o monitors the integrity of our financial statements, including our
financial reporting process;
o monitors our systems of internal controls regarding finance,
accounting, and compliance with legal and regulatory requirements;
o monitors the independence and performance of our independent auditor;
o monitors the performance of our internal audit function and our
financial executives;
o reviews our annual and quarterly financial statements and earnings
press releases; and
o annually retains our independent auditor and approves the terms and
scope of the work to be performed.
The committee met six times in 2004.
COMPENSATION AND HUMAN RESOURCES COMMITTEE. The current members of our
Compensation and Human Resources Committee are Mr. Reynolds
(Chairman), Mr. Costello, Mr. Olivier and Mr. Webb. This committee:
o reviews and administers our executive compensation programs;
-14-
o reviews matters relating to management advancement and succession;
o reviews and recommends to our board the compensation for our officers
and directors, including incentive compensation plans and equity-based
plans; and
o reviews and approves corporate goals for our chief executive officer's
compensation and evaluates his performance of those goals.
The committee met ten times in 2004.
EMPLOYEE HEALTH AND SAFETY COMMITTEE. The current members of our Employee
Health and Safety Committee are Mr. Costello (Chairman), Mr. Olivier, Mr.
Reynolds and Mr. Webb. This committee reviews with management:
o our employee health and safety policies and plans;
o our safety results, including employee incident rates;
o our compliance with health and safety laws; and
o our programs and procedures for promoting employee safety.
This committee met six times in 2004.
SPECIAL AD-HOC COMMITTEES. In 2004 we formed two special ad-hoc board
committees composed of independent directors. The Chief Executive Officer
transition committee determined the structure of Paul V. Reilly's resignation
and severance from the positions of Chief Executive Officer, President and
Chairman of Cenveo, and Paul V. Reilly's duties until he formally left Cenveo on
April 30, 2005. Members of this committee included Mr. Maloney (Chairman), Mr.
Costello, Mr. Olivier and Mr. Pickholz.
We also formed a search committee to conduct an executive search for a new
President and Chief Executive Officer. The committee also hired an independent
executive search firm to provide information regarding potential candidates.
Members of this committee have been Ms. Rheney, Mr. Costello, Mr. Maloney and
Mr. Reynolds. Although our corporate governance guidelines provide that the
Governance and Nominating Committee shall conduct a search for a successor in
the event that Cenveo's Chief Executive Officer is no longer able to serve due
to resignation, the independent directors determined that this role would be
better served in this instance by a special ad-hoc committee composed of two
members of the Governance and Nominating Committee and two members of the
Compensation and Human Resources Committee and delegated these duties to the
search committee. Our board of directors unanimously approved the selection of
James R. Malone as our new President and Chief Executive Officer.
BOARD MEETINGS AND ATTENDANCE
Our board met ten times during 2004. Each director attended at least 75%
of our board meetings and the meetings of the board committees on which they
served. We strongly encourage each director to attend our annual stockholders'
meeting, although this is not stated in a formal policy. In 2004, all of our
directors then serving as directors attended the annual stockholders' meeting.
-15-
Our corporate governance guidelines provide that each regular board
meeting be scheduled for at least eight hours, including at least one hour for
executive sessions of our independent directors. All non-management directors
meet in executive sessions at each regular board meeting. In 2004, these
executive sessions were chaired by the non- management director then serving as
lead director. The lead director role is currently filled by Ms. Rheney who is
serving as non-executive Chairman of the board and the board intends that an
independent director will serve as non-executive chairman indefinitely.
BOARD COMPENSATION
During 2004 each non-employee director received:
o an annual retainer of $20,000 paid quarterly;
o $1,500 for each board meeting attended in person;
o $1,000 for each board meeting attended by telephone;
o $1,000 for each board committee meeting attended in person;
o $750 for each board committee meeting attended by telephone; and
o non-qualified options for 5,000 shares of common stock under our long-
term equity incentive plan described on page 26. These options may be
exercised six months following the grant date.
Non-employee directors who were re-elected at our 2004 annual meeting also
received 2,487 shares of restricted stock valued at approximately $10,000 on May
1, 2004. These shares vested immediately, but were restricted from sale for six
months after issuance.
In addition, the Chairman of the Audit Committee received $7,500, the
Chairman of the Compensation and Human Resources Committee received $5,000 and
the chairmen of the other board committees received $3,500. Mr. Maloney was paid
an additional stipend of $5,000 for his role as lead director during the fourth
quarter of 2004. Directors who are employees of Cenveo do not receive
compensation for their service on the board.
Board members are reimbursed for expenses incurred in connection with
their attendance at board meetings and in complying with our corporate
governance policies. Cenveo also provides directors' and officers' liability
insurance and indemnity agreements for its directors.
DIRECTORS EMERITUS
In February, 2005, the board amended Cenveo's bylaws to provide for
Director Emeritus positions for former directors who, at the board's discretion,
may be asked to serve as consultants to the board. Directors Emeritus are
intended to be non-voting participants at board meetings and are to be
compensated as recommended by the Chairman of the board and approved by the
Compensation and Human Resources Committee. In light of Paul V. Reilly's lengthy
tenure of service as an officer, director and Chairman of the board of Cenveo
and his extensive knowledge of Cenveo's business, customers and strategy, the
board appointed him a Director Emeritus at the last annual meeting.
-16-
COMPENSATION AND HUMAN RESOURCES COMMITTEE INTERLOCKS AND INSIDER
PARTICIPATION
No member of the Compensation and Human Resources Committee is an officer,
or former officer, or employee of Cenveo. No executive officer of Cenveo had any
interlocking relationship with any other for-profit entity during 2004.
OWNERSHIP OF VOTING SECURITIES
The following table sets forth information, as of July 1, 2005 (unless
otherwise noted), with respect to the beneficial ownership of our common stock
by:
o beneficial owners of more than five percent of Cenveo common stock;
o each Cenveo director and nominee for director;
o each of the executive officers named in the Summary Compensation Table
set forth under "Compensation of Executive Officers"; and
o all directors, nominees and named executive officers of Cenveo as a
group.
This information is based upon Cenveo's records, as well as publicly
available information filed with the SEC. This beneficial ownership is reported
in accordance with the rules of the SEC, under which a person may be deemed to
be the beneficial owner of shares if that person has or shares the power to vote
or dispose of those shares or has the right to acquire beneficial ownership of
those shares within 60 days (for example, through the exercise of an option).
Accordingly, the shares shown in the table as beneficially owned by certain
individuals may include shares owned by certain members of their respective
families. Because of these rules, more than one person may be deemed to be the
beneficial owner of the same shares. The inclusion of the shares shown in the
table is not necessarily an admission of beneficial ownership of those shares by
the person indicated.
NUMBER OF OPTIONS PERCENTAGE
SHARES EXERCISABLE OF SHARES
BENEFICIALLY WITHIN 60 BENEFICIALLY
NAME AND ADDRESS OWNED (1) DAYS OWNED(2)
--------------------------------------------------------------------------------
5% STOCKHOLDERS
Burton Capital Management, LLC
100 Northfield Street
Greenwich, CT 06830............. 5,427,934 10.71%
Cenveo 401(k) Savings and
Retirement Plan
c/o Cenveo, Inc.
8310 S. Valley Hwy., #400
Englewood, Colorado 80112....... 3,548,771(3) 7.00%
FMR Corp.
82 Devonshire Street
Boston, Massachusetts 02109..... 3,314,130(4) 6.54%
Oz Management, LLC 3,121,300 6.16%
-17-
NUMBER OF OPTIONS PERCENTAGE
SHARES EXERCISABLE OF SHARES
BENEFICIALLY WITHIN 60 BENEFICIALLY
NAME AND ADDRESS OWNED (1) DAYS OWNED(2)
--------------------------------------------------------------------------------
9 West 57th Street, 39th Floor,
New York, NY 10019............
Elm Ridge Management, LLC
747 Third Avenue, 33rd Floor
New York, NY 10017 2,801,600 5.53%
DIRECTORS
Thomas E. Costello................ 27,244 20,000 *
Paul F. Kocourek.................. 16,333 0 *
James R. Malone................... 300,000 25,000 *
Martin J. Maloney................. 27,244 20,000 *
David M. Olivier.................. 27,244 20,000 *
Jerome W. Pickholz................ 94,798 47,400 *
Alister W. Reynolds............... 114,141 15,000 *
Susan O. Rheney................... 78,420(5) 20,000 *
Wellington E. Webb................ 1,333 0 *
EXECUTIVE OFFICERS
Allen C. Conway................... 18,566 18,566 *
Gordon A. Griffiths............... 218,497(6) 71,497 *
Michel Salbaing................... 224,433 127,247 *
All directors and executive
officers as a group
(12 persons)...................... 1,148,253 384,710 2.27%
-------------
* Less than 1%.
(1) Includes shares that may be acquired within 60 days through the exercise
of stock options. The number of these exercisable shares is listed in the
adjacent column.
(2) Based on 50,688,849 shares outstanding on July 1, 2005.
(3) Shares held are voted by trustee Putnam Fiduciary Trust Company at the
direction of participants. Certain of these shares are held by executive
officers of Cenveo.
(4) Fidelity Management & Research Company is a registered investment adviser
and a wholly owned subsidiary of FMR Corp. This amount reflects the shares
held by its clients based solely on such holder's Schedule 13D filed with
the Securities and Exchange Commission on February 14, 2005.
-18-
(5) Includes 54,600 shares held by the Rheney Living Trust of which Ms. Rheney
is a trustee.
(6) Includes 45,000 shares held by his spouse.
EXECUTIVE STOCK OWNERSHIP REQUIREMENT.
Effective February 5, 2004, we established the following stock ownership
requirements for our executive officers in order to more closely align their
interests with our stockholders:
POSITION MULTIPLE OF SALARY TIME TO ATTAIN
-------------------------------- ----------------------------------
Chief Executive Officer......... 5 X 5 years
Senior Vice Presidents.......... 3 X 5 years
Segment Presidents.............. 3 X 5 years
Other eligible executives....... 1 X 5 years
The number of shares of our stock that must be held by an executive is
determined by multiplying his annual base salary on February 5, 2004, or, for
newly hired or promoted executives, his base salary when he is hired or
promoted, by the applicable multiple listed in the chart and dividing the result
by the average closing price of our stock during the immediately preceding 12
months. These executives have until February 5, 2009, or five years from the
date of their hiring or promotion, to acquire the appropriate number of our
shares. The number of shares to be held will be adjusted annually to reflect any
subsequent increase in salary. In addition to direct ownership of shares, these
ownership requirements may be met by vested or unvested grants of restricted
stock, shares received as payment from stock appreciation rights or performance
restricted unit grants.
CHANGE OF CONTROL PROVISIONS
IF BURTON'S DIRECTOR NOMINEES ARE ELECTED, THE FOLLOWING CHANGE OF CONTROL
OBLIGATIONS WILL BE TRIGGERED:
SENIOR SECURED CREDIT FACILITY. Under the terms of Cenveo's credit
agreement dated as of March 25, 2004, a change of control is deemed to
constitute an event of default, upon which the lenders may terminate the
revolving credit commitments and/or declare all loans under the credit
commitments to be due and payable. As of July 1, 2005, there was $93,265,993
outstanding under this credit agreement.
SENIOR NOTES. As of July 1, 2005, Cenveo had outstanding 9 5/8% senior
notes due 2012 in the aggregate principal amount of $350 million. The indenture
to which these notes are subject, provides that, upon a change of control, each
holder of these notes will have the right to require Cenveo to repurchase all or
any part of such holder's notes at an offer price in cash equal to 101% of the
principal amount of these Notes, plus accrued and unpaid interest.
SENIOR SUBORDINATED NOTES. As of July 1, 2005, Cenveo had outstanding
7 7/8% subordinated notes due 2013 in the aggregate principal amount of $320
million. The indenture to
-19-
which these notes are subject provides that, upon a change of control, each
holder of these notes will have the right to require Cenveo to repurchase all or
any part of such holder's notes at an offer price in cash equal to 101% of the
principal amount of such notes, plus accrued and unpaid interest.
SEVERANCE AGREEMENTS. The election of Burton's nominees to the board will
be a "change of control" under various severance agreements entered into between
the company and certain executives on the latter of 2001 or the date of such
executives hire, including those described in the section entitled "Executive
Agreements" included in this proxy statement.
These agreements and indentures define a "change of control" as occurring
if a majority of the company's board of directors are not persons who were
directors at the time such debt was issued or such agreement was entered into,
or whose nomination or election as directors was not approved by a majority (or
in the case of the severance agreements, a two-thirds majority) of such
directors, or by a like majority of directors whose election or nomination to
the board was approved in such fashion. In the event Proposal 3 is approved by
stockholders at the special meeting, Burton's nominees will have been elected
without the approval of the current board and a change of control will have
occurred.
IF BURTON'S DIRECTOR NOMINEES ARE ELECTED, THE FOLLOWING EQUITY BASED
COMPENSATION WILL VEST UNDER THE COMPANY'S LONG-TERM EQUITY INCENTIVE PLAN:
OPTIONS AND RESTRICTED STOCK. Upon election of Burton's nominees to the
board, all outstanding unvested stock options and restricted stock shall vest,
become immediately exercisable or payable and have all restrictions lifted. As
of July 1, 2005, there was an aggregate of 2,093,224 unvested stock options and
an aggregate of 679,239 previously unvested restricted shares.
The company's long-term equity incentive plan defines a "change of
control" as occurring if a majority of the company's board of directors are not
persons who were directors at the time of the plan's adoption, or whose
nomination or election as directors was not approved by a at least two-thirds of
such directors. The plan also provides that no individual shall be considered a
member of the incumbent board if such individual initially assumed office as a
result of actual or threatened solicitation of proxies or consents by or on
behalf of a person other than the board. In the event Proposal 3 is approved by
stockholders at the special meeting, Burton's nominees will have been elected
without the approval of the current board and a change of control will have
occurred.
EXECUTIVE OFFICERS AND KEY EMPLOYEES
NAME
JAMES R. MALONE, Age 62
Mr. Malone has served as our President and Chief Executive Officer since
June 2005. Mr. Malone has over 25 years of experience in international joint
ventures, strategic alliances and strategy positioning. Mr. Malone's
successful career most recently includes the role of Chief
-20-
Executive Officer of Qorval, LLC, a financial and business restructuring
firm, which he founded in 2003. From 2004 through June 2005, Mr. Malone
served as Vice Chairman, President and Chief Executive Officer of Brown
Jordan International, Inc., a manufacturer of retail and contract
furnishings. He was Chairman of the Board from 1996 to 2004 and Chief
Executive Officer from 1997 to 2004 of HMI Industries, Inc., a producer of
cleaners for residential and commercial use and other industrial
manufactured products. From 2000 to 2003 Mr. Malone was a Managing Director
of Bridge Associates LLC, which engaged in activities similar to those of
Qorval. Mr. Malone also serves on the boards of Ametek, Inc. and Brown
Jordan International, Inc. Prior to that, Mr. Malone held a variety of
leadership roles from President and Chief Operating Officer of Purolator
Products, Inc. from 1979 to 1990, Chairman and Chief Executive Officer of
Aerospace Company from 1990 to 1993, and President and Chief Executive
Officer of Anchor Glass Container Corp. from 1993 to 1996.
GORDON A. GRIFFITHS, Age 62
Mr. Griffiths has served as Executive Vice President since 2002 and as
President - Commercial Segment since our reorganization in October 2003.
From April 2002 until October 2003 he served as President and Chief
Executive Officer of our former commercial printing division. From 2000
until April 2002 Mr. Griffiths was Chief Executive Officer of Pareto
Corporation, a Canadian knowledge services provider. He continues to serve
as a director of Pareto Corporation. In 2000 Mr. Griffiths co-founded the
Caxton Group, a marketing services agency, which became a public company in
2001. He was President of St. Joseph Corporation, Canada's largest privately
owned printer, from 1997 until 2000.
MICHEL P. SALBAING, Age 59
Mr. Salbaing has served as Senior Vice President - Finance, and Chief
Financial Officer since 2000. From 1996 to 2000, Mr. Salbaing was with
Quebecor World, the largest North American printer, where he held a number
of positions including Chief Financial Officer of the overall corporation,
President and Chief Executive Officer of Quebecor Printing Europe and Senior
Vice President and Chief Financial Officer of Quebecor World North America.
Before 1996 Mr. Salbaing held various senior financial positions with three
large Canadian manufacturing firms and spent eight years with Ernst & Young,
LLP. Mr. Salbaing is a member of the Canadian Institute of Chartered
Accountants.
ALLEN C. CONWAY, SR., Age 47
Mr. Conway has served as Executive Vice President and President of our
resale segment since September 2004. Mr. Conway has served Cenveo and its
predecessor companies for over 26 years, including as Vice President of our
Printxcel division from 2000 to 2003 and Executive Vice President of our
resale segment from 2003 until September 2004 when he became President of
our resale segment.
BRIAN P. HAIRSTON, Age 47
Brian Hairston, age 47, has been Vice President - Human Resources since
August 2002. From 2001 through August 2002 he was a human resources
consultant for a variety of firms. From 1999 to 2001 he was senior Vice
President - Human
-21-
Resources for Kellogg Corporation, a cereal producer. From 1997 to 1999 he
served as Vice President - Human Resources for Citigroup, a financial
institution.
WILLIAM W. HUFFMAN, JR., Age 56
Mr. Huffman has been Vice President - Corporate Controller since 2000.
From 1999 to 2000 he was Vice President - Chief Financial Officer of our
commercial printing division. In 1997 and 1998 he was a financial
consultant. Mr. Huffman began his career with the accounting firm of
Coopers & Lybrand and is a certified public accountant.
D. ROBERT MEYER, JR., Age 48
Mr. Meyer has been Vice President - Treasurer since 1998. From 1994 to 1998
Mr. Meyer was a partner in the tax department of the accounting firm of
Deloitte & Touche LLP. Mr. Meyer is a licensed attorney, certified public
accountant and certified financial planner.
MATTHEW H. MITCHELL, Age 40
Mr. Mitchell has been Vice President - Chief Information Officer since
December 2003. From 1996 to November 2003 he served as Vice President -
Information Services with Aramark Educational Resources, Inc., an
educational service provider.
KEITH T. PRATT, Age 58
Mr. Pratt has been Vice President - Purchasing and Supply Chain Management
since 1998. From 1994 to 1998 Mr. Pratt was Vice President of Material
Sourcing and Logistics of Ply Gem Industries, a subsidiary of Nortek, Inc.,
a building products manufacturer.
WAYNE M. WOLBERG, Age 55
Mr. Wolberg has been Vice President - General Auditor since 2001. From 2000
to 2001 he served as Vice President - Finance of AT&T Broadband. Mr. Wolberg
was Vice President and General Auditor of MediaOne from 1996 to 2000. He is
a certified management accountant.
MARK L. ZOELLER, Age 45
Mr. Zoeller has been Vice President - General Counsel since January 2003,
and became Chief Legal Officer in 2005. He joined Cenveo in 1997 as
corporate counsel, served as Assistant General Counsel from 2000 to 2001 and
was Vice President - Corporate Development from 2001 until January 2003. He
is a licensed attorney.
COMPENSATION OF EXECUTIVE OFFICERS
The following table presents information concerning all compensation
received for all services rendered during 2004, 2003 and 2002 by Paul V. Reilly,
our retired Chief Executive Officer and President in 2004, the four other most
highly compensated executive officers in 2004 who were serving as executive
officers at December 31, 2004, and Mr. Hart who served as President of our
resale segment until his retirement from that position on September 1, 2004. Mr.
Davis left the company in July 2005.
SUMMARY COMPENSATION TABLE
-22-
Annual Compensation Long-Term Compensation
------------------------------------ ---------------------------------------------------
Securities
Name and Principal Other Annual Restricted Underlying All Other
Position Year Salary Bonus(1) Compensation Stock Awards Options Granted Compensation
------------------------- -------- -------- --------- -------------- -------------- ----------------- --------------
Paul V. Reilly, President 2004 $641,192 $ 0 (2) $372,000(3) 275,000 $ 0
and Chief Executive 2003 618,077 0 (2) 0 90,000 0
Officer 2002 579,231 192,000 (2) 0 0 0
Gordon A. Griffiths 2004 $393,269 $ 0 (2) $124,000(3) 105,000 $ 0
Executive Vice President 2003 375,000 0 (2) 0 33,750 27,665(4)
and President - 2002 271,176(5) 75,000 (2) 142,500(6) 85,000 9,881(7)
Commercial Segment
Michel P. Salbaing 2004 $360,962 $ 0 (2) $ 93,000(3) 80,000 $ 0
Senior Vice President 2003 349,038 0 (2) 0 25,875 0
and Chief Financial 2002 325,692 75,000 (2) 0 0 0
Officer
Herbert H. Davis III 2004 $349,692 $ 0 (2) $ 93,000(3) 80,000 $ 0
Senior Vice President - 2003 336,750 0 (2) 0 25,875 0
Corporate Development 2002 313,750 75,000 (2) 0 0 0
and Chief Legal
Officer
Allen C. Conway 2004 $299,022 $ 0 (2) $ 0 21,000 $ 0
Executive Vice 2003 254,241 72,677 (2) 0 10,000 0
President and 2002 246,330 110,250 (2) 0 0 0
President -
Resale Segment
Robert A. Hart (8) 2004 $362,423 $ 0 (2) $ 0 83,188 $ 0
Former Senior Vice 2003 349,038 0 (2) 0 33,750 33,805(9)
President and President 2002 325,691 75,000 (2) 0 0 25,000(10)
- Resale Segment
-------------
(1) Bonus amounts are shown for the year earned and are paid in the following
year.
(2) None of the named executive officers has received perquisites the value of
which exceeded the lesser of either $50,000 or 10% of his total salary and
bonus. Perquisites paid include contributions to each person's 401(k)
account, tax services, life insurance, the allowance received under our
executive perquisite and benefits expense reimbursement plan described on
page 31 and car allowance.
(3) Reflects a grant of restricted stock under our long-term equity incentive
plan described on page 26, based on the closing price of our common stock as
quoted on the New York Stock Exchange on December 31, 2004 ($3.10 per
share). These shares will vest on May 1, 2009.
(4) Reflects club dues of $13,665 and relocation expenses of $14,000.
(5) $209,133.50 of this amount was paid to Gordon Group Enterprises as a
consulting fee. Mr. Griffiths is the sole owner of Gordon Group Enterprises.
(6) Reflects the grant of performance accelerated restricted stock under our
long-term equity incentive plan described on page 26, based on the closing
sale price of our common stock as quoted on the New York Stock Exchange on
December 31, 2002 ($2.50 per share). None of these shares has vested.
-23-
(7) Reflects relocation expenses.
(8) Mr. Hart has served as Special Assistant to the Chairman since September 1,
2004.
(9) Reflects club dues of $2,616 and loan forgiveness of $31,189. The loan to
Mr. Hart is described on page 25.
(10) Reflects loan forgiveness for the loan to Mr. Hart described on page 25.
EXECUTIVE AGREEMENTS
AGREEMENTS WITH PAUL V. REILLY. On January 6, 2005, Cenveo entered into an
employment and separation agreement and general release with Paul V. Reilly when
Paul V. Reilly announced his resignation as Chairman, President and Chief
Executive Officer of Cenveo. The board accepted Paul V. Reilly's resignation as
Chairman effective January 6, 2005. As a result of the agreement, Paul V. Reilly
received the following payments and benefits:
o severance pay of $2,446,200;
o two times his pro-rata 2005 target bonus under our cash bonus annual
incentive plan described on page 31;
o 24 months of premiums paid for medical and dental coverage; and
o outplacement and accounting assistance.
These are generally the benefits Paul V. Reilly would have received if his
employment was terminated without cause under his 2003 employment and executive
severance agreement described above. However, as an incentive for Paul V. Reilly
to remain in his position as President and Chief Executive Officer to assist in
the transition to a successor, Paul V. Reilly received an amount equal to two
times his pro-rata 2005 target bonus rather than one times his bonus provided in
his 2003 agreement. Paul V. Reilly also granted Cenveo a general release and
agreed to refrain from competing with Cenveo for two years following his actual
termination date.
AGREEMENTS WITH MR. MALONE. Effective as of June 22, 2005, we entered into
a three-year employment agreement with Mr. Malone, which provides: an annual
base salary of $850,000 and an annual incentive bonus opportunity; for 2005, a
bonus equal to 100% of base salary will be paid on a pro-rated basis,
irrespective of any performance goals; options to purchase 400,000 shares of our
common stock at a price equal to the market price on the date of grant, which
vest in monthly installments over the next four years; and a restricted stock
award of 275,000 shares which vests on the three-year anniversary of Mr.
Malone's Employment Date.
If, prior to his one year anniversary, Mr. Malone's employment is
terminated under certain circumstances which are not for "cause," he will
receive a payment equal to one times his base salary and one times his target
bonus. If his employment is so terminated after his first anniversary, Mr.
Malone will receive two times his base salary and two times his target bonus. If
Mr. Malone is terminated under certain circumstances relating to a change of
control after the
-24-
first anniversary of his employment, he will receive an additional payment equal
to one year's salary and one year's target bonus. Mr. Malone would also be
reimbursed for post-termination medical premiums and receive any salary or other
benefits owed to him under various Cenveo employment benefit plans and programs.
A copy of Mr. Malone's Employment Agreement as contained in our Current Report
on Form 8-K, filed with the SEC on June 24, 2005.
SEVERANCE AGREEMENTS. Cenveo has entered into severance agreements,
triggered by a change in control, with Mr. Salbaing, Mr. Griffiths and
Mr. Conway. These agreements provide that if the executive's employment is
terminated in certain circumstances relating to a change of control, the
executive will receive:
o a payment equal to two years' base salary plus two years' target
annual bonus plus the target bonus for the portion of the year
completed before termination;
o reimbursement of post-termination medical and dental premiums; and
o reimbursement of up to $10,000 for outplacement services.
These agreements include covenants from the executive not to compete with
Cenveo for a period of two years after he leaves Cenveo.
The following table sets forth the total severance that will become due to
Mr. Malone under his employment agreement and to the other named executive
officers under their severance agreements, in each case in the event of
termination of their employment following a change of control during 2005:
----------------------------------------------------------------------
NAME POSITION TOTAL SEVERANCE
----------------------------------------------------------------------
James R. Malone President, Chief Executive $ [_]
Officer
----------------------------------------------------------------------
Michel P. Salbaing Senior Vice President and $ [_]
Chief Financial Officer
----------------------------------------------------------------------
Gordon A. Griffiths Executive Vice President and $ [_]
President - Commercial Segment
----------------------------------------------------------------------
Allen C. Conway Executive Vice President and $ [_]
President - Resale Segment
----------------------------------------------------------------------
TOTAL $ [_]
----------------------------------------------------------------------
INDEMNITY AGREEMENTS. Cenveo has entered into indemnity agreements with
each executive officer which provide that Cenveo will indemnify the executives
in lawsuits brought against any executive in his capacity as an officer of
Cenveo.
LOAN TO MR. SALBAING. During 2000 Cenveo loaned $100,000 to Mr. Salbaing
to help him purchase a home in Colorado as part of his relocation. The loan
bears interest at 5% and is due upon the earliest to occur of Mr. Salbaing's
cessation of employment with Cenveo, his sale of certain real property located
in Canada or the sale of Mr. Salbaing's home in Colorado.
LOAN TO MR. HART. During 2000 Cenveo loaned $50,000 to Mr. Hart to assist
him in his relocation to Colorado. The loan bore interest at 8%. Half of this
loan was forgiven in 2002 and the remaining half was forgiven in 2003.
-25-
In accordance with our corporate governance guidelines adopted in 2002, we
no longer make loans to executive officers.
LONG-TERM EQUITY INCENTIVE PLAN
In 2001 our stockholders adopted a long-term equity incentive plan which
provides incentive compensation to key officers, employees, directors and
consultants. This plan was amended by stockholders in 2004 to provide, among
other things, that an aggregate of 7,450,000 shares of Cenveo's common stock may
be granted under the plan. Our former stock option plans were merged into this
plan in 2001 and no longer separately exist. However, options for 3,370,751
shares still outstanding under the old stock option plans continue to be
governed by their grant agreements but are administered under this plan. Awards
may be granted under this plan for:
o options for our common stock;
o stock appreciation rights based on our common stock;
o restricted shares of our common stock;
o restricted share units based on our common stock; and
o performance awards.
The plan provides that:
o no more than 1,500,000 shares may be issued in connection with
free-standing stock appreciation rights;
o no more than 1,000,000 shares may be granted as restricted stock; and
o no more than 750,000 shares may be granted as performance restricted
stock or performance restricted units payable in stock.
As of March 4, 2004, the number of shares that were outstanding was as
follows with an additional 2,993,604 shares available for grant in the future:
o options for 6,774,186 shares;
o 288,788 shares of restricted stock;
o 658,172 shares of performance accelerated restricted stock; and
o 750 shares of stock as performance awards.
No stock appreciation rights or restricted share units have been granted
under the plan. The charts beginning on page 29 show the stock options and
restricted shares which were granted to the named executive officers in 2004.
All awards of restricted shares or stock appreciation rights have a minimum
vesting period of three years for time-based vesting or one year for
performance-based vesting, except for grants of shares to directors in lieu of
cash stipends or fees, which vest immediately.
SHARES AVAILABLE FOR AWARDS UNDER THE PLAN. Shares subject to an award
that are cancelled, expire unexercised, forfeited, settled in cash or otherwise
terminated remain available for awards under the plan. Shares issued under the
plan may be either newly issued shares or shares which we have reacquired.
Shares issued as substitute awards when we assume
-26-
outstanding awards previously granted by a company which we acquire do not
reduce the number of shares available for awards. The number of shares reserved
for issuance can be increased only with the approval of holders of a majority of
our outstanding shares.
The plan imposes individual limitations on the amount of certain awards in
order to comply with Section 162(m) of the Internal Revenue Code of 1986. Under
these limitations no single participant may generally receive options or stock
appreciation rights in any calendar year that relate to more than $1 million.
Finally, awards may generally be adjusted to prevent dilution or enlargement of
benefits when certain events occur, such as a stock dividend, reorganization,
recapitalization, stock split, combination, merger or consolidation.
ELIGIBILITY. Current and prospective officers, employees, directors and
consultants of Cenveo or its subsidiaries or affiliates may be granted awards
under the plan. As of March 4, 2005, approximately 306 individuals were eligible
to participate in the plan.
ADMINISTRATION. The plan is administered by our Compensation and Human
Resources Committee. Awards to directors serving on the committee are determined
and administered by the full board of directors. The committee may:
o select participants;
o determine the type and number of awards to be granted;
o determine the exercise or purchase price, vesting periods and
performance goals, if any;
o determine and later amend the terms and conditions of any award;
o interpret the rules relating to the plan; and
o otherwise administer the plan.
STOCK OPTIONS AND STOCK APPRECIATION RIGHTS. The committee may grant both
incentive stock options, which can result in potentially favorable tax treatment
to the participant, and non-qualified stock options. The committee may also
grant stock appreciation rights either with or without a related option. The
committee determines the terms and individual vesting schedules for each grant
including the exercise price that generally may not be less than the fair market
value of a share of common stock on the date of the grant. All stock options
have been granted at exercise prices equal to the fair market value of our stock
at the date of grant. In 2004 all stock options granted to management
proportionately vest over either a two-year period or a five-year period on the
anniversary of the grant date, and all non-qualified stock options granted to
directors vest six months following the grant date.
RESTRICTED SHARES AND RESTRICTED SHARE UNITS. The committee may grant
restricted shares of common stock and restricted share units. Restricted shares
are shares of common stock with transfer restrictions. These restrictions lapse
on the basis of performance and/or continued employment as determined in advance
by the committee. They may be forfeited by participants as specified by the
committee in the award agreement. A participant who has received a grant of
restricted shares will receive dividends and the right to vote those shares.
Restricted shares may not be transferred, encumbered or disposed of during the
restricted period or until after the restrictive conditions are met. Restricted
stock granted to executives in 2004 will vest on the
-27-
fifth anniversary of the grant date. Restricted stock granted to directors in
2004 vested six months after the date of grant.
Each restricted share unit has a value equal to the fair market value of a
share of our common stock on the date of grant. The committee determines the
restrictions applicable to the restricted share units. A participant is credited
with dividend equivalents on any vested restricted share units when dividends
are paid to stockholders. Restricted share units generally may not be
transferred, encumbered or disposed of unless the participant is continuously
employed by Cenveo during the restricted period or until after the restrictive
conditions are met.
PERFORMANCE AWARDS. A performance award is a right that is denominated in
cash or shares of common stock, and valued by the achievement of certain
performance goals during performance periods as established by the committee.
The plan specifies the types of goals the committee may consider when granting
performance awards. The committee determines the form, time and type of payment.
Performance awards may be forfeited when employment is terminated other than for
death or total disability. A participant's rights to any performance award may
not be transferred, encumbered or disposed of in any manner, except by will or
the laws of descent and distribution.
OTHER TERMS
OTHER STOCK-BASED AWARDS. The committee may grant any other type of awards
that are payable in or valued by our common stock. The committee determines the
terms and conditions of these awards.
CHANGE IN CONTROL. All outstanding awards vest, become immediately
exercisable or payable and have all restrictions lifted immediately when Cenveo
experiences a change in control.
AMENDMENT AND TERMINATION. The board may amend or terminate the plan
subject to applicable stockholder approval. The committee may not amend the
terms of previously granted options to reduce the exercise price or cancel
options and grant substitute options with a lower exercise price than the
cancelled options. The committee also may not adversely affect the rights of any
award holder without the award holder's consent.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES. Following is a brief description
of the federal income tax consequences generally arising for awards under the
plan. Tax consequences to Cenveo and to participants receiving awards will vary
with the type of award.
EFFECTS ON PARTICIPANTS. Generally a participant will not recognize
income, and Cenveo is not entitled to take a deduction, when an incentive stock
option, a nonqualified option, a stock appreciation right or a restricted share
award is granted. A participant generally will not have taxable income when he
exercises an incentive stock option. When a participant exercises an option
other than an incentive stock option, he must generally recognize ordinary
income equal to the difference between the exercise price and fair market value
of the shares acquired on the date of exercise.
-28-
If a participant sells shares of common stock acquired from an incentive
stock option before the end of two years from the date of grant and one year
from the date of exercise, the participant must generally recognize ordinary
income equal to the difference between the fair market value of the shares at
the date of exercise and the exercise price. Otherwise, a participant's
disposition of shares acquired upon the exercise of an option generally will
result in short-term or long-term capital gain or loss measured by the
difference between the sale price and the participant's tax basis in the shares.
EFFECTS ON CENVEO. Cenveo generally may receive a tax deduction equal to
the amount recognized as ordinary income by the participant in connection with
an option. Cenveo generally is not entitled to a tax deduction relating to
amounts that represent a capital gain to a participant. Accordingly, Cenveo will
not be entitled to any tax deduction with respect to an incentive stock option
if the participant holds the shares of common stock for the incentive stock
option holding periods prior to selling the shares.
Similarly, the exercise of a stock appreciation right will result in
ordinary income on the value of the stock appreciation right to the participant
at the time of exercise. Cenveo will be allowed a deduction for the amount of
ordinary income recognized by a participant with respect to a stock appreciation
right. When restricted stock is granted the participant will recognize ordinary
income on the fair market value at the time shares of restricted stock become
vested unless a participant makes an election under Section 83(b) of the
Internal Revenue Code to be taxed at the time of grant. The participant also is
subject to capital gains treatment on the sale of any common stock acquired
through the exercise of a stock appreciation right or restricted share award.
For this purpose, the participant's basis in the common stock is generally its
fair market value at the time the stock appreciation right is exercised or the
restricted share becomes vested. Payments made under performance awards are
taxable as ordinary income at the time an individual attains the performance
goals and the payments are made available to the participant.
PERFORMANCE-BASED COMPENSATION. Section 162(m) of the Internal Revenue
Code generally disallows a public company's tax deduction for compensation paid
in excess of $1 million in any tax year to its five most highly compensated
executives. However, compensation that qualifies as "performance-based
compensation" is excluded from this $1 million deduction limit and therefore
remains fully deductible by Cenveo. Cenveo intends that the following grants
will qualify as "performance-based compensation" so that these awards will not
be subject to the Section 162(m) deduction limitations:
o performance awards;
o options granted with an exercise price at least equal to 100% of fair
market value of the underlying shares of common stock at the date of
grant; and
o options granted to employees that the committee expects to be named
executive officers at the time a deduction arises.
OPTIONS/SAR GRANTS IN LAST FISCAL YEAR
The following table presents information concerning stock options granted
to each of the named executive officers in 2004 under our long-term equity
incentive plan and the potential realizable value for those stock options based
on future appreciation assumptions:
-29-
Individual Grants
------------------------------------------------------------------------------------------------------------------------------
Potential
Realizable
Value at Assumed
Annual Rates of
Number Stock Price
of Securities Percent of Total Appreciation
Underlying Options SARs Exercise for Option Term (1)
Options/SARs Granted to Price Expiration -------------------
Name Granted Employees in 2004 ($/Share) Date 5%($) 10%($)
------------------------- ------------- ----------------- --------- ---------- ------- -------
Paul V. Reilly 85,000(2) 3.96 4.06 02-05-11 72,673 420,998
190,000(3) 8.86 3.28 08-03-11 253,705 591,240
Gordon A. Griffiths 30,000(2) 1.40 4.06 02-05-11 49,585 115,554
75,000(3) 3.50 3.28 08-03-11 100,146 233,384
Michel P. Salbaing 30,000(2) 1.40 4.06 02-05-11 49,585 115,554
50,000(3) 2.33 3.28 08-03-11 66,765 155,590
Herbert H. Davis 30,000(2) 1.40 4.06 02-05-11 49,585 115,554
50,000(3) 2.33 3.28 08-03-11 66,765 155,590
Allen C. Conway 11,000(2) 0.51 4.06 02-05-11 18,181 42,370
10,000(3) 0.47 3.28 08-03-11 13,353 31,118
Robert C. Hart 30,000(2) 1.40 4.06 02-05-11 49,585 115,554
53,188(3) 2.48 3.28 08-03-11 71,021 165,510
-------------
(1) Potential realizable value is based on an assumption that the market price
of our common stock will appreciate at the stated rates (5% and 10%),
compounded annually from the date of grant until the end of the term. The
values are calculated based on rules of the Securities and Exchange
Commission and do not reflect our estimate or projection of future stock
prices. Actual gains, if any, on stock option exercises will depend on the
future performance of the price of our common stock and the timing of
exercises.
(2) Granted in February, 2004 under the 2001 Long-Term Equity Incentive Plan.
These options vest in equal increments over a two-year period.
(3) Granted in August, 2004 under the 2001 Long-Term Equity Incentive Plan, as
amended. These options vest in equal increments over a five-year period.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL
YEAR-END OPTION/SAR VALUES
The following table contains information concerning the exercise of stock
options (exercised and unexercised) during the last completed fiscal year by the
executive officers named in the Summary Compensation Table, as well as
information concerning the number and value of unexercised options. The value of
options is calculated using the difference between the option exercise price and
$3.10 (representing the year-end price of Cenveo' common stock) multiplied by
the number of shares underlying the option.
Number of Securities Value of
Underlying Unexercised Unexercised in-the-Money
Number of $ Value Options/SARs at 12-31-04 (#) Options at 12-31-04 ($) (1)
Shares Acquired Received Upon ---------------------------- ----------------------------
Name on Exercise Exercise Exercisable Unexercisable Exercisable Unexercisable
------------------------- --------------- ------------- ----------- ------------- ----------- -------------
Paul V. Reilly 0 - 928,925 479,407 $72,540 $28,207
Gordon A. Griffiths 0 - 56,497 167,253 21,147 10,578
Michel P. Salbaing 0 - 112,247 138,628 16,212 8,110
Herbert H. Davis 0 - 68,248 122,627 16,213 8,109
Allen C. Conway 0 - 0 11,000 6,266 3,134
Robert C. Hart 0 - 133,497 143,441 21,147 10,578
-30-
(1)Based on the closing price per share of Cenveo stock as quoted on the New
York Stock Exchange on December 31, 2004 ($3.10 per share).
LONG-TERM INCENTIVE PLAN AWARDS
The following table presents information about awards of restricted stock
to each of the named executive officers in 2004 under our long-term equity
incentive plan described beginning on page 26. These shares vest on May 1, 2009.
PERFORMANCE OR
NUMBER OF SHARES OF OTHER PERIOD UNTIL
NAME RESTRICTED STOCK MATURATION
--------------------------------------------------------------------------------
Paul V. Reilly........... 120,000 05-01-09
Gordon A. Griffiths...... 40,000 05-01-09
Michel P. Salbaing....... 30,000 05-01-09
Herbert H. Davis......... 30,000 05-01-09
Allen C. Conway.......... 0 --
Robert C. Hart........... 0 --
EXECUTIVE PERQUISITE AND BENEFITS EXPENSE REIMBURSEMENT PLAN
Effective April 2004 we adopted an executive perquisite and benefits
expense reimbursement plan for our executive officers. Eligible executives may
receive reimbursement for certain perquisites and benefits including medical
expenses, supplemental life insurance, financial counseling, airline clubs,
health clubs or golf club dues. The Chairman and Chief Executive Officer may be
reimbursed a maximum of $13,000 annually and the other eligible executives may
be reimbursed a maximum of $8,000 annually. In addition, each executive receives
a car allowance of $12,000 per year payable in 26 equal installments.
CASH BONUS ANNUAL INCENTIVE PLAN
We have a cash bonus annual incentive plan which provides bonus
compensation to our executives and other key employees. The bonus plan is
designed to promote achievement of our financial goals by making a portion of
each participant's compensation depend on his achievement of goals established
by the board and individual performance objectives. Participants must be
employed on the date the incentive payments are paid before they can receive any
payment under the bonus plan. The report on executive compensation beginning on
page 33 further describes the cash bonus plan for 2004.
EQUITY COMPENSATION PLAN INFORMATION
The following table contains information as of December 31, 2004
concerning (1) the number of shares of common stock to be issued upon the
exercise of outstanding options, warrants and rights issued under all of our
existing equity compensation plans, (2) the weighted average exercise price of
those options, warrants and rights, and (3) the number of securities remaining
available for future issuance under those plans. All of our equity compensation
plans have been approved by our stockholders.
-31-
(A) (B) (C)
NUMBER OF
SECURITIES
REMAINING
AVAILABLE
FOR FUTURE
ISSUANCE
UNDER
NUMBER OF WEIGHTED EQUITY
SECURITIES TO AVERAGE COMPENSATION
BE ISSUED UPON EXERCISE PLANS
EXERCISE OF PRICE OF (EXCLUDING
OUTSTANDING OUTSTANDING SECURITIES
OPTIONS, OPTIONS, REFLECTED
WARRANTS AND WARRANTS IN COLUMN
PLAN CATEGORY RIGHTS AND RIGHTS (A))
--------------------------------------------------------------------------------
Equity compensation plans not
approved by security holders..... 0 N/A 0
Equity compensation plans
approved by security holders..... 6,991,375 $5.55 3,042,315
----------- ------- -----------
Total............................ 6,991,375 $5.55 3,042,315
----------- ------- -----------
----------- ------- -----------
OTHER BENEFIT PLANS
We do not provide any defined benefit or actuarial plan that is payable
upon retirement to the named executive officers. The named executive officers
may participate in other benefit plans available to all employees, two of which
are described below.
401(K) SAVINGS RETIREMENT PLANS. We adopted a 401(k) savings and
retirement plan in 1994 for non-union employees. United States based, union-free
employees of Cenveo and affiliated companies who are classified as an employee
expected to work a minimum of 1,000 hours per year are eligible to participate
in the plan. For 2004 a participant could contribute to the plan up to the
lesser of $13,000 or 50% of his compensation. A maximum of $205,000 is
considered for purposes of plan contributions. Contributions are not included in
the participant's current taxable income. During 2004 Cenveo made a matching
contribution to participant accounts equal to 50% of the participant's
contributions, up to a maximum of 6% of the participant's compensation.
We also sponsor a 401(k) savings and retirement plan for union employees.
Collective bargaining agreements determine eligibility for participation and the
amount of employer match.
PLAN ASSETS ARE HELD IN TRUST. A plan participant can direct the
investment of his contributions and the matching contributions into one of
twelve mutual funds and other investment vehicles, one of which is Cenveo common
stock. Participant contributions to the plan are always fully vested. Cenveo
contributions vest at a rate of 20% for each year of service completed by the
participant. Generally, a participant's vested plan benefit is distributable
upon his retirement, disability, death or other separation from employment. On
August 1, 2004 our former employee stock ownership plan was merged into our
401(k) plan.
KEY EMPLOYEE SHARE OPTION PLAN. We adopted a key employee share option
plan in 1997 for executive officers and other key employees. Under the plan,
participants receive options to purchase shares in regulated investment
companies from Cenveo at exercise prices set
-32-
by the administering committee. This plan was amended in 2002 to "freeze" both
participation and future contributions to the plan. Participants with balances
at December 31, 2002, maintain their accounts and distributions to them will
continue to be allowed at retirement, disability, death or other termination
from employment. Account balances are held in trust and are invested in various
mutual funds.
REPORT ON EXECUTIVE COMPENSATION
TO OUR STOCKHOLDERS:
The report of the Compensation and Human Resources Committee for 2004
includes our activities related to compensation review and recommendations for
the Chief Executive Officer and the other executive officers named on pages 20
through 22. In 2004 the committee engaged an independent compensation consultant
to conduct a comprehensive assessment of our overall executive compensation
program to ensure that our compensation levels are reasonable, appropriate and
competitive. The committee adopted a balanced executive compensation program
after reviewing the market data and recommendations prepared by our outside
consultant. The committee intends to continue to regularly evaluate the impact
of the executive compensation program on the performance of the executives and
Cenveo and will make changes it believes are necessary to assist in our success.
COMPENSATION PHILOSOPHY
Our executive compensation policies are designed to:
o link executive compensation with our annual and long-term performance
goals;
o attract and retain a highly qualified and motivated management team;
o reward individual performance; and
o emphasize long-term stock incentives that will encourage our executive
officers to maintain their focus on long-term stockholder interests.
The committee implements these policies through the balanced executive
compensation program which includes:
o setting average base salaries for our executives at the 50th
percentile for salaries given to executives in similar positions with
similar experience;
o providing average annual "pay-for-performance" bonus incentive
opportunities with a target at the 55th percentile; and
o providing incentives under our long-term incentive plan at the 50th
percentile.
The committee has generally designed its policies to compensate our
executives at the 50th percentile when compared to counterparts at organizations
similar in size in general industry and our lines of business including, but not
limited to, those companies listed in Cenveo's peer group index in the
performance chart on page 38. Executives have an opportunity to receive payment
above the 50th percentile for above average performance.
-33-
COMPONENTS OF COMPENSATION
The committee sets total compensation for each executive officer at
competitive levels related to companies of similar type and size based on the
study and recommendations provided by our independent compensation consultant.
Executive compensation packages include salary, participation in the cash bonus
annual incentive plan discussed on page 31 and equity awards under the long-term
incentive plan discussed on page 31. To attract and retain talented executives
who will focus on the implementation of Cenveo's strategic plan, our executive
officers also received the severance agreements described on page 25 and
participation in the executive perquisite and benefits expense reimbursement
plan described on page 31. The committee typically sets our executive officers'
compensation in the first quarter of each year.
Section 162(m) of the Internal Revenue Code generally disallows a tax
deduction to public corporations for compensation over $1,000,000 paid in any
fiscal year to a corporation's Chief Executive Officer and to the four other
most highly paid executive officers. However, this statute exempts qualifying
performance-based compensation from the deduction limit if certain requirements
are met. The committee believes it is in Cenveo's best interest to try to
satisfy the requirements of Section 162(m) by structuring performance-based
compensation for executive officers to satisfy the statute's requirements, such
as grants of stock options and cash bonus incentive plan payments. However, the
committee also recognizes the need to remain flexible when making compensation
decisions so that Cenveo may meet its overall objectives, even if it may not
meet the statute's standards and Cenveo may not be able to deduct all of the
compensation. Accordingly, the board and the committee have expressly kept the
right to award non-deductible compensation when appropriate. Because of
uncertainties as to the interpretation of Section 162(m) and related
regulations, in spite of Cenveo's efforts, it is not certain that compensation
intended by Cenveo to satisfy the deductibility requirements under Section
162(m) will in fact satisfy those requirements.
BASE SALARY. The committee reviews our executives' salaries each year and
fixes base salaries with appropriate performance requirements at levels at or
around the mid-point for amounts paid to senior executives with similar
qualifications, experience and responsibilities at similar companies. The base
salaries also take into account the individual's performance, experience within
the industry and with Cenveo and its predecessors, and the executive's support
of Cenveo's values. Our Chairman and Chief Executive Officer submits salary
recommendations each year to the committee for all other officers. In
determining the salary to be paid, the committee considers individual
performance, financial and operating performance compared to Cenveo's internal
operating plan and external benchmarking data, as well as whether management has
reached certain long-term and short-term strategic goals.
CASH BONUS ANNUAL INCENTIVE COMPENSATION. We offer bonus incentive
compensation to officers and other employees under our cash bonus annual
incentive plan described on page 31, to be paid after the end of a fiscal year.
Incentive compensation is usually paid as a percentage of each executive's base
salary and is based on how well an executive meets corporate financial goals and
individual performance goals established by the committee. The committee sets
minimum, target and maximum goals at the beginning of each year by examining
Cenveo's past performance, identifying future objectives and evaluating our
ability to achieve corporate goals
-34-
in light of economic conditions. The weighting of the goals for officers varies
from year to year based on our strategic business plan.
The bonus opportunity for our named executive officers for 2004 was based
70% on Cenveo achieving a specific target consolidated corporate financial
measure, earnings before interest, taxes, depreciation and amortization (EBITDA)
and 30% on achieving other measures directly related to our long-term strategy,
such as employee satisfaction and safety, productivity and customer
satisfaction. No incentive cash bonus was paid to any executive for 2004
performance because the minimum consolidated corporate financial goals were not
reached.
Payment of bonuses for 2005 will be based 75% on achieving corporate
financial measures and 25% on achieving other measures directly related to our
long-term strategy, such as employee satisfaction and safety, productivity,
customer satisfaction and financial forecasting. For 2005 a named executive may
potentially earn a cash bonus ranging from 50% to 100% of his salary. The
committee believes this level of potential award strikes the right balance
between incentive and reward without offering undue incentives to management to
make short-term decisions that could be harmful for Cenveo's long-term
performance.
LONG-TERM EQUITY INCENTIVE PLAN. The committee believes that the long-term
interests of stockholders and our key employees, including officers and
directors, are more closely linked when key employees are given the opportunity
to own our common stock. This provides incentives to reach Cenveo's long-term
goals and is an important instrument for retaining key employees. The amount of
stock options and restricted stock granted to any executive is generally tied to
level of responsibility, position, salary, individual performance, Cenveo's
financial performance and competitive practices. In addition, the committee
considers Cenveo's average three-year grant run-rate to determine the size of
the pool for grants. Management recommends to the committee those executives to
whom grants of stock options or restricted shares should be granted and the
number of options or restricted shares to be granted to them. The committee
solely determines the awards for our Chief Executive Officer.
In 2004 the committee granted restricted stock and options to purchase
common stock to our named executive officers under our long-term equity
incentive plan in allocations of approximately 50% options and 50% restricted
stock. The approximate combined value for these grants ranged from 100% to 110%
of an executive's salary, according to the values estimated by our independent
consultants based on our stock price at the time of each grant, for the named
executives other than the Chief Executive Officer. The restricted stock granted
to the named executive officers in 2004 will vest in five years on May 1, 2009.
There is no incremental vesting of these shares.
In order to keep our executives' interests linked to that of our
stockholders by motivating executives to remain focused on Cenveo's long-term
performance, the committee also implemented mandatory executive stock ownership
requirements ranging from one to five-times base salary, depending on their
position. Further details are described on page 19.
EMPLOYMENT AGREEMENTS. The committee believes that the selective use of
employment, severance and change in control agreements provides continuity in
leadership which benefits Cenveo's stockholders and employees. Such agreements
also allow our executives to focus
-35-
exclusively on financial and operational issues affecting our business and
create an incentive for executives to perform in a manner that will contribute
to stockholder value and future growth. Accordingly, we have entered into
agreements with the named executive officers which are described on pages 24
through 25.
OTHER ANNUAL COMPENSATION. Cenveo makes certain matching contributions to
our 401(k) plan described on page 32 on behalf of participants which include
executive officers. Our health and insurance plans are the same for all
union-free employees. Our executives also receive a car allowance and
reimbursement for certain expenses under our executive perquisite and benefits
allowance reimbursement plan described on page 30. Benefits and perquisites are
targeted to be at the low end of the competitive range to provide reasonable
levels of security but so as to not emphasize this compensation component.
RETIRED CHIEF EXECUTIVE OFFICER COMPENSATION
Based upon the compensation assessment conducted by the committee's
outside consultants, the committee increased Paul V. Reilly's salary 3.74% to
$641,192 in 2004 from $618,077 in 2003. Paul V. Reilly did not receive a bonus
for 2004 because the minimum consolidated corporate financial goals were not
reached. Paul V. Reilly's long-term incentive compensation package for 2004
included options for 275,000 shares of common stock and 120,000 shares of
restricted stock, the value of which together represented approximately 200% of
his salary at May 1, 2004, according to the values estimated by our independent
consultants based on our stock price at the time of grant. Options for 85,000
shares were granted in February 2004 which vest 50% in 2005 and 50% in 2006.
Options for 190,000 shares were granted in August 2004 which become exercisable
in 20% increments on each of the next five anniversaries of the grant date and
the restricted stock vests in five years on May 1, 2009.
Paul V. Reilly total compensation for 2004, including the estimated value
of the grants of options and restricted stock, was established on the basis of a
comparison to other Chief Executive Officers with comparable qualifications,
experience and responsibilities at comparable companies. Consistent with our
executive compensation philosophy, a significant portion of Paul V. Reilly's
total compensation package consisted of long-term incentive compensation.
On January 6, 2005, Paul V. Reilly announced his resignation as Chairman,
President and Chief Executive Officer of Cenveo, although he continued to serve
as President and Chief Executive Officer until April 30, 2005 to assist in the
transition to a successor. Paul V. Reilly received a pro-rata bonus for 2005
equal to a third of the full amount based on the number of months he served as
President and Chief Executive Officer.
CHIEF EXECUTIVE OFFICER COMPENSATION
On June 22, 2005, we entered into the employment agreement with Mr. Malone
described on pages 24 through 25. The compensation package offered to Mr.
Malone, consisting of base salary, bonus opportunity and long-term incentive
compensation, was based on consideration of the recommendations of the
committee's independent compensation consultants, Mr. Malone's professional
experience and track record of performance, as well as the company's particular
circumstances. In keeping with our overall philosophy, a significant portion of
Mr. Malone's
-36-
total compensation package consists of long-term incentive compensation. Based
on a study of chief executive officer compensation and recruitment practices of
comparable companies conducted by our independent consultants, the committee
determined that the compensation offered Mr. Malone, while above the 50th
percentile typically targeted by the committee's compensation policy, was
appropriate and in the best interests of the company and its stockholders. In
particular, due to the circumstances surrounding Burton's call for a special
meeting and our exploration of strategic alternatives, the committee determined
that a severance arrangement should be tailored such that, if terminated in the
first year of his employment, Mr. Malone would be entitled to less severance
than might otherwise be payable to a chief executive officer in comparable
circumstances.
CONCLUSION
In summary, the committee believes that our policy of linking executive
compensation to Cenveo's performance was met and that Cenveo's compensation
levels properly reflect our philosophy. The committee believes that compensation
for our executive officers has been competitive, appropriate and comparable to
similarly situated companies. In addition, Cenveo's executive compensation
programs and policies support our overall objective to enhance stockholder value
through the profitable management of Cenveo's operations. The committee is
firmly committed to the ongoing review and evaluation of Cenveo's executive
compensation program.
RESPECTFULLY SUBMITTED:
Alister W. Reynolds (Chair)
Thomas E. Costello
David M. Olivier
Wellington E. Webb
FIVE-YEAR PERFORMANCE COMPARISON
The following graph shows the performance of an initial investment of $100
in our common stock compared to equal investments in the S&P 500 Index and a
peer group with companies similar to Cenveo (including Consolidated Graphics,
Inc., Deluxe Corporation, R. R. Donnelley & Sons Company and Standard Register
Company), weighted by market capitalization, over the five-year period beginning
December 31, 1999 and ending December 31, 2004. The graph reflects reinvestment
of all dividends paid.
The total stockholder return shown on the graph below is not necessarily
indicative of future returns on our common stock.
-37-
[TOTAL SHAREHOLDER RETURNS GRAPH]
TOTAL SHAREHOLDER RETURNS (IN DOLLARS)
---------------------------------------------------------------------------
1999 2000 2001 2002 2003 2004
---- ---- ---- ---- ---- -----
Cenveo Incorporated.... 100 31.94 30.37 18.52 34.15 22.96
S&P 500 Index.......... 100 107.04 137.08 116.57 150.74 171.62
Peer Group............. 100 89.86 78.14 59.88 75.68 82.49
This graph does not constitute soliciting material and should not be
deemed filed or incorporated by reference into any other of our filings under
the Securities Act or the Exchange Act, except to the extent we specifically
incorporate the graph by reference therein.
INDEPENDENT PUBLIC AUDITORS
The audit committee selected Ernst & Young, LLP as our independent
auditors for 2005, which selection was ratified by stockholders at the last
annual meeting.
FEES
The following table shows the fees we paid to Ernst & Young in 2004 and
2003:
2004 2003
---- ----
Audit fees(1) $1,639,014 $946,807
Audit-related fees(2) 104,400 167,000
Tax fees(3) 41,000 31,000
Total $1,784,414 $1,144,807
---------- ----------
---------- ----------
(1) For auditing our annual consolidated financial statements and
accounting consultations during the audit and reviews of our interim
financial statements in our reports filed with the Securities and
Exchange Commission. In addition, these fees include the audit of our
internal controls over financial reporting and management's assessment
of these controls which totaled $801,351 in 2004.
-38-
(2) For audits of our employee benefit plans, accounting and auditing
consultation services and assistance with our debt offering in 2004.
(3) For tax return review and preparation and tax advice and planning.
AUDITOR INDEPENDENCE
The audit committee considered the effect that provision of the "Tax fees"
fees" may have on the independence of Ernst & Young. These fees amounted to
approximately 2.7% of our total fees paid to Ernst & Young in 2003 and
approximately 2.3% of our total fees paid in 2004. The committee approved these
services and determined that those non-audit services were compatible with
maintaining the independence of Ernst & Young as our principal auditor. Ernst &
Young provided the committee with the written disclosures required by
Independence Standards board Standard No. 1 (independence discussions with audit
committees), and the committee discussed with Ernst & Young their independence.
OTHER INFORMATION
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended
("Exchange Act"), requires our directors and officers, and persons who own more
than 10% of a registered class of our equity securities, to file initial reports
of ownership and reports of changes in ownership with the Securities and
Exchange Commission. Such persons are required by Securities and Exchange
Commission regulations to furnish us with copies of all Section 16(a) reports
that they file. To our knowledge, based solely on its review of the copies of
such reports received by it with respect to fiscal 2005, or written
representations from certain reporting persons, we believe that all filing
requirements applicable to its directors, officers and persons who own more than
10% of a registered class of our equity securities have been satisfied, except
that (i) filings relating to a stock purchase by Robert G. Burton in May, 2005
and (ii) filings relating to stock purchase by Leonard C. Green in April, 2005,
were not filed timely.
ANNUAL REPORT/ FINANCIAL MATERIALS
Cenveo's 2004 Annual Report was distributed on or about March 11, 2005.
The Annual report does not form any part of the material for the solicitation of
proxies. Stockholders of record may request free copies of our financial
materials (Annual Report, Form 10-K and Proxy Statement) from Cenveo, 8310 South
Valley Highway, #400, Englewood, CO 80112, Attention: Corporate Secretary. These
materials may also be accessed on our web site at www.cenveo.com.
-39-
CONTACT THE BOARD
Stockholders may at any time direct questions to Ms. Rheney, the
independent Chairman of the Board, by sending an e-mail to
leaddirector@cenveo.com. All communications required by law or regulation to be
relayed to the Board will be promptly delivered to the Chairman. The independent
Chairman monitors these e-mail messages and facilitates an appropriate response.
IMPORTANT
YOUR VOTE AT THE SPECIAL MEETING IS ESPECIALLY IMPORTANT BECAUSE OF
BURTON'S ATTEMPT TO TAKE CONTROL OF CENVEO AND ITS BOARD OF DIRECTORS. PLEASE
SIGN AND DATE THE ENCLOSED GOLD PROXY CARD AND RETURN IT IN THE ENCLOSED
ENVELOPE PROMPTLY.
WE URGE YOU NOT TO SIGN OR RETURN ANY PROXY CARD THAT MAY BE SENT TO YOU
BY BURTON, EVEN AS A PROTEST VOTE AGAINST THEM. If you previously voted on a
Burton white proxy card, you have every legal right to change your vote. You can
do so simply by signing, dating and returning the enclosed GOLD proxy card. Only
your latest dated proxy card will count. Please refer to "Questions & Answers -
Voting" for a discussion of how to revoke your proxy.
If the Cenveo shares you own are held in the name of a broker, bank, or
other nominee, only it can sign a GOLD proxy card with respect to your shares
and only upon specific instructions from you. Please contact the person
responsible for your account and give instructions for a GOLD proxy card to be
signed representing your Cenveo shares. We urge you to confirm in writing your
instructions to the person responsible for your account and to provide a copy of
such instructions to our proxy solicitor, Innisfree M&A Incorporated, at the
address indicated below so that it can attempt to ensure that your instructions
are followed.
If you have any questions about executing your proxy or require
assistance, please contact:
Innisfree M&A Incorporated
501 Madison Avenue
New York, New York 10022
Stockholders Call Toll Free: (888) 750-5834
Banks and Brokers Call Collect: (212) 750-5833
-40-
APPENDIX I
INFORMATION CONCERNING PERSONS WHO MAY BE DEEMED
PARTICIPANTS IN THE COMPANY's SOLICITATION OF PROXIES
The following table sets forth the name, principal business address and
the present principal occupation or employment, and the name, principal business
and address of any corporation or other organization in which their employment
is carried on, of the directors, director nominees, officers and employees of
Cenveo who, under SEC rules, may be deemed "participants" in our solicitation of
proxies from its stockholders in connection with the special meeting.
DIRECTORS AND NOMINEES
The principal occupations of our directors and director nominees who may
be deemed participants in our solicitation are set forth under "Board of
Directors" section of this proxy statement. The name and business addresses of
the organizations of employment of our directors and director nominees are as
follows:
NAME BUSINESS ADDRESS
------------------------- -----------------------------------
Thomas E. Costello *
Paul F. Kocourek Booz Allen & Hamilton, Inc.
101 California Street, Suite 3300
San Francisco, CA 94111
James R. Malone *
Martin J. Maloney Broadford & Maloney, Inc.
Two Soundview Drive
Greenwich, CT 06830
David M. Olivier *
Jerome W. Pickholz *
Alister W. Reynolds *
Susan O. Rheney *
Wellington E. Webb Webb Group International
1660 Lincoln Street, Suite 2820
Denver, CO 80264
-------------------
* c/o Cenveo, Inc., 8310 South Valley Highway, #400, Englewood, Colorado 80112.
OFFICERS AND EMPLOYEES
The principal occupations of our executive officers and other officers and
employees who may be deemed "participants" in our solicitation of proxies are
set forth below. Unless otherwise indicated, the principal occupation refers to
such person's position with Cenveo, and the business address is Cenveo, Inc.,
8310 South Valley Highway, #400, Englewood, Colorado 80112.
A-I-1
NAME PRINCIPAL OCCUPATION
----------------------- --------------------------------------------
James R. Malone President and Chief Executive Officer
NAME PRINCIPAL OCCUPATION
Gordon A. Griffiths Executive Vice President and President -
Commercial Segment
Michel P. Salbaing Senior Vice President and Chief Financial
Officer
Allen C. Conway Executive Vice President and President -
Resale Segment
Brian P. Hairston Vice President - Human Resources
William W. Huffman, Jr. Vice President - Corporate Controller
D. Robert Meyer, Jr. Vice President-Treasurer
Matthew H. Mitchell Vice President - Chief Information Officer
Keith T. Pratt Vice President - Purchasing and Supply Chain
Management
Wayne M. Wolberg Vice President - General Auditor
Mark L. Zoeller Vice President - General Counsel and Chief
Legal Officer
INFORMATION REGARDING OWNERSHIP OF CENVEO'S SECURITIES BY
PARTICIPANTS
None of the persons listed above under "Directors and Nominees" and
"Officers and Employees" owns any Cenveo securities of record but not
beneficially. The number of shares of our common stock held by directors,
director nominees and the named executive officers as of July 1, 2005, is set
forth in the "Ownership of Voting Securities" section of this proxy statement.
The number of shares of our common stock held by the other officers and
employees listed above under "Officers and Employees" as of July 1, 2005 is set
forth below.
NUMBER OF OPTIONS PERCENTAGE
SHARES EXERCISABLE OF SHARES
BENEFICIALLY WITHIN 60 BENEFICIALLY
NAME AND ADDRESS OWNED** DAYS OWNED
---------------------------------- ------------ ----------- ------------
James R. Malone................... 300,000 25,000 *
Gordon A. Griffiths............... 218,497 71,497 *
Michel Salbaing................... 224,433 127,247 *
Allen C. Conway................... 18,566 18,566 *
Brian P. Hairston................. 89,539 32,549 *
William W. Huffman................ 71,741 39,166 *
D. Robert Meyer, Jr. ............. 107,404 59,198 *
Matthew H. Mitchell............... 38,634 9,900 *
Keith T. Pratt.................... 79,921 46,949 *
Wayne M. Wolberg.................. 52,645 24,265 *
Mark Zoeller...................... 111,604 65,850 *
-------------
* Less than 1%.
A-I-2
** Includes shares that may be acquired within 60 days through the exercise
of stock options. The number of these exercisable shares is listed in the
adjacent column.
INFORMATION REGARDING TRANSACTIONS IN THE COMPANY'S SECURITIES BY
PARTICIPANTS
The following table sets forth purchases and sales during the twenty-four
months following July 1, 2003 of shares of our common stock by the persons
listed above under "Directors and Nominees" and "Officers and Employees." Unless
otherwise indicated, all transactions were in the public market and none of the
purchase price or market value of those shares is represented by funds borrowed
or otherwise obtained for the purpose of acquiring or holding such securities.
To the extent that any part of the purchase price or market value of any of
those shares is represented by funds borrowed or otherwise obtained for the
purpose of acquiring or holding such securities, the amount of the indebtedness
as of the latest practicable date is set forth below. If those funds were
borrowed or obtained otherwise than pursuant to a margin account or bank loan in
the regular course of business of a bank, broker or dealer, a description of the
transaction and the parties is set forth below.
NO. OF SHARES
OF COMMON
STOCK, OR
OPTIONS TO
ACQUIRE SUCH
STOCK,
ACQUIRED OR
NAME DATE (DISPOSED OF) NOTE
------------------------------ -------- --------------- ----
DIRECTORS AND NOMINEES
Thomas E. Costello............ 4/29/04 5,000 (1)
4/29/04 2,487 (3)
4/27/05 1,333 (3)
Paul F. Kocourek.............. 4/27/05 1,333 (3)
James R. Malone............... 6/27/05 275,000 (3)
6/27/05 400,000 (1)
Martin J. Maloney............. 4/29/04 5,000 (1)
4/29/04 2,487 (3)
4/27/05 1,333 (3)
David Olivier................. 4/29/04 5,000 (1)
4/29/04 2,487 (3)
4/27/05 1,333 (3)
Jerome W. Pickholz............ 4/29/04 5,000 (1)
4/29/04 2,487 (3)
5/21/04 2,487 (3)
4/27/05 1,333 (3)
Alister Reynolds.............. 4/29/04 5,000 (1)
4/29/04 2,487 (3)
4/27/05 1,333 (3)
4/29/04 5,000 (1)
4/29/04 2,487 (3)
Susan Rheney.................. 4/27/05 1,333 (3)
Wellington Webb............... 4/27/05 1,333 (3)
A-I-3
NO. OF SHARES
OF COMMON
STOCK, OR
OPTIONS TO
ACQUIRE SUCH
STOCK,
ACQUIRED OR
NAME DATE (DISPOSED OF) NOTE
------------------------------ -------- --------------- ----
OFFICERS AND EMPLOYEES
Gordon A. Griffiths........... 2/5/04 33,750 (1)
8/3/04 22,122 (1)
8/3/04 52,878 (1)
8/3/04 40,000 (3)
3/14/05 50,000 (4)
Michel P. Salbaing............ 2/5/04 30,000 (1)
8/3/04 10,000 (1)
8/3/04 40,000 (1)
8/3/04 30,000 (3)
6/21/04 2,059 (5)
Allen C. Conway............... 2/5/04 10,000 (1)
8/3/04 10,000 (1)
5/3/05 10,000 (2)
5/3/05 5,500 (2)
5/3/05 6,400 (2)
5/3/05 (400) (4)
5/3/05 (13,500) (4)
5/3/05 (8,000) (4)
Brian P. Hairston............. 2/5/04 13,500 (1)
8/3/04 29,022 (1)
8/3/04 19,925 (3)
6/21/05 8,760 (5)
William W. Huffman, Jr........ 2/5/04 10,000 (1)
8/3/04 2,206 (1)
8/3/04 8,827 (1)
8/3/04 7,575 (3)
D. Robert Meyer, Jr........... 2/5/04 13,000 (1)
8/3/04 3,587 (1)
8/3/04 14,348 (1)
8/3/04 12,313 (3)
6/21/05 (415) (6)
Matthew H. Mitchell........... 2/17/04 25,000 (4)
6/21/05 3,734 (5)
Keith T. Pratt................ 2/5/04 9,000 (1)
8/3/04 1,837 (1)
8/3/04 7,348 (1)
8/3/04 6,306 (3)
6/21/05 667 (5)
Wayne M. Wolberg.............. 2/5/04 11,000 (1)
5/25/04 (5,000) (4)
A-I-4
NO. OF SHARES
OF COMMON
STOCK, OR
OPTIONS TO
ACQUIRE SUCH
STOCK,
ACQUIRED OR
NAME DATE (DISPOSED OF) NOTE
------------------------------ -------- --------------- ----
8/3/04 10,326 (1)
8/3/04 (4,000) (4)
11/9/04 (3,400) (4)
11/10/04 (3,000) (4)
11/12/04 (18,600) (4)
11/16/04 (4,300) (4)
12/15/04 7,090 (3)
2/28/05 3,400 (4)
5/4/05 6,750 (2)
5/4/05 5,500 (2)
6/21/05 8,481 (5)
Mark L. Zoeller............... 2/5/04 12,000 (1)
8/3/04 3,424 (1)
8/3/04 13,696 (1)
8/3/04 11,754 (3)
(1) Grant of stock option.
(2) Exercise of stock option.
(3) Stock grant.
(4) Open market purchase or (sale).
(5) The aggregate number of shares acquired, as of the date indicated, that
were acquired through periodic employee contributions and/or the
Company's periodic matching or other contributions under the Company's
401(k) plan.
(6) The aggregate number of shares disposed of, as of the date indicated,
that were disposed of through periodic employee dispositions under the
Company's 401(k) plan.
MISCELLANEOUS INFORMATION CONCERNING PARTICIPANTS
Except as described in this Appendix I or otherwise disclosed in this
proxy statement, to the best of our knowledge, no "associates" of the persons
listed above under "Directors and Nominees" and "Officers and Employees"
beneficially owns (within the meaning of Rule 13d-3 under the Exchange Act),
directly or indirectly, any shares or other securities of Cenveo or any of its
subsidiaries. Furthermore, except as described in this Appendix I or otherwise
disclosed in this proxy statement, to the best of our knowledge, no such person
or any of his or her affiliates
A-I-5
or associates is either a party to any transaction or series of similar
transactions since December 31, 2003, or any currently proposed transaction or
series of similar transactions (i) to which we or any of our subsidiaries was or
is to be a party, (ii) in which the amount involved exceeds $60,000 and (iii) in
which such person, affiliate or associate had or will have a direct or indirect
material interest.
To the best of our knowledge, except as described in this Appendix I or
otherwise disclosed in this proxy statement, no person listed above under
"Directors and Nominees" and "Officers and Employees" or any of his or her
associates has entered into any arrangement or understanding with any person
with respect to (i) any future employment with Cenveo or our affiliates or (ii)
any future transactions to which Cenveo or any of our affiliates will or may be
a party. Except as described in this Appendix I or otherwise disclosed in this
proxy statement, to the best of our knowledge, there are no contracts,
arrangements or understandings by any of the persons listed under "Directors and
Nominees" and "Officers and Employees" within the past year with any person with
respect to any of our securities, including, but not limited to, joint ventures,
loan or option arrangements, puts or calls, guarantees against loss or
guarantees of profit, division of losses or profits, or the giving or
withholding of proxies. Except as described in this Appendix I or otherwise
disclosed in this proxy statement, to the best of our knowledge, no persons
listed under "Directors and Nominees" and "Officers and Employees" has any
substantial interest, direct or indirect, by security holdings or otherwise, in
any matter to be acted upon at the special meeting of Cenveo stockholders (and
no other person who is a party to an arrangement or understanding pursuant to
which a nominee for election as director is proposed to be elected, has any such
interest).
A-I-6
ANNEX A
PROPOSED AMENDMENTS TO BYLAWS
PROPOSAL 1
Following is the text to the amendment to Cenveo's bylaws set forth in
Proposal 1:
"Delete Section 3.1 of Cenveo's bylaws in its entirety and replace it with
the following:
"Section 3.1. Number; Qualifications. The number of directors shall be as
fixed in such a manner as may be determined by the vote of not less than a
majority of the directors then in office or by the shareholders, but shall not
be less than one. The directors shall be elected at the annual meeting of the
stockholders, and each director elected shall hold office until his successor is
elected and qualified or until his earlier death, resignation or removal. A
director need not be a stockholder of the corporation. A majority of the
directors may elect from its members a Chairman, who shall also serve as
Chairman of any annual or special meeting of the stockholders. The Chairman, if
any, shall hold this office until his successor shall have been elected and
qualified"."
PROPOSAL 2
Following is the text to the amendment to Cenveo's bylaws set forth in
Proposal 2:
"Delete Section 3.2 of Cenveo's bylaws in its entirety and replace it with
the following:
"Section 3.2. Reserved"."
PRELIMINARY PROXY MATERIAL, DATED JULY 12, 2005
SUBJECT TO COMPLETION
GOLD PROXY CARD
[PROXY CARD - FRONT SIDE]
CENVEO, INC.
SPECIAL MEETING OF STOCKHOLDERS
THIS PROXY IS SOLICITED ON BEHALF OF THE CENVEO'S BOARD OF DIRECTORS
FOR THE SPECIAL MEETING OF STOCKHOLDERS ON SEPTEMBER 14, 2005.
The undersigned hereby appoints Susan O. Rheney, James R. Malone and Mark
L. Zoeller, and each of them, as proxies, acting jointly and severally and with
full power of substitution, for and in the name of the undersigned to vote all
shares of common stock of Cenveo, Inc. that the undersigned is entitled to vote
at the Special Meeting of Stockholders to be held on Wednesday, September 14,
2005, at [__], local time, at [________], or at any adjournments or
postponements of the meeting, as directed, upon the matters set forth in the
Cenveo Proxy Statement and upon such other matters as may properly come before
the Special Meeting.
Signing, dating and returning Cenveo's proxy card will have the effect of
revoking any proxy card you signed on an earlier date, and will constitute a
revocation of all previously granted authority to vote for every proposal
included on any proxy card.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN. IF NO CHOICE IS SPECIFIED WITH REGARD TO A PROPOSAL, AND THE PROXY IS
SIGNED AND RETURNED, THEN THE PROXY WILL BE VOTED AGAINST APPROVAL OF PROPOSALS
1 THROUGH 5 AND FOR THE CURRENT DIRECTORS OF CENVEO, WHO ARE OUR NOMINEES FOR
PURPOSES OF PROPOSAL 6, AND IN THE DISCRETION OF THE PROXIES THE PROXY WILL BE
VOTED ON ANY OTHER MATTERS AS MAY PROPERLY COME BEFORE THE SPECIAL MEETING.
(CONTINUED AND TO BE SIGNED AND DATED ON REVERSE SIDE)
[PROXY CARD - REVERSE SIDE]
Please mark votes as in this sample: [X]
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST" PROPOSALS 1 THROUGH 5
1. Amendment of Bylaws to Permit Stockholders to Set Board of Directors Size
AGAINST FOR ABSTAIN
[ ] [ ] [ ]
2. Repeal of Bylaws Requiring Vacancies to be Filled By Remaining Directors
AGAINST FOR ABSTAIN
[ ] [ ] [ ]
3. Removal Without Cause of All Persons Currently Serving As Directors of
Cenveo:
Thomas E. Costello - Director
Paul F. Kocourek - Director
James R. Malone - Director, President, Chief Executive Officer
Martin J. Maloney - Director
David M. Olivier - Director
Jerome W. Pickholz - Director
Alister R. Reynolds - Director
Susan O. Rheney - Director, Chairman of the Board
Wellington E. Webb - Director
AGAINST FOR ABSTAIN
[ ] [ ] [ ]
4. In the Event That Proposal 1 Passes, Set Board Of Directors Size to Seven
Directors
AGAINST FOR ABSTAIN
[ ] [ ] [ ]
5. Repeal of Bylaw Amendments Passed Following April 17, 2005
AGAINST FOR ABSTAIN
[ ] [ ] [ ]
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" OUR NOMINEES IN PROPOSAL 6
6. In the Event That Proposal 3 Is Passed, Election of the Following Director
Nominees of Cenveo:
Nominees are: 1. Thomas E. Costello
2. Paul F. Kocourek
3. James R. Malone
4. Martin J. Maloney
5. David M. Oliver
6. Jerome W. Pickholz
7. Alister R. Reynolds
8. Susan O. Rheney
9. Wellington E. Webb
-------------------------------------------------------
FOR WITHHOLD AUTHORITY
all nominees to vote for all nominees
-------------------------------------------------------
-------------------------------------------------------
[ ] [ ]
-------------------------------------------------------
Instruction: To withhold authority to vote for any individual nominee(s),
write that nominee name in the space provided below:
-----------------------------
* * * *
Date: , 2005
--------- --
Signature: Signature:
---------------------- ----------------------
Title(s): __________________
NOTE: Please sign exactly as name or names appear on this proxy. Joint owners
should each sign personally. When signing as attorney, executor, administrator,
trustee or guardian, please give your full title as such. When signing as a
corporation or a partnership, please sign in the name of the entity by an
authorized person.
- PLEASE DETACH HERE AND RETURN -
If you have any questions about our proxy solicitation or need additional
information about the Cenveo stockholder meeting, please call Innisfree M&A
Incorporated at the phone numbers listed below.
[LOGO]
501 Madison Avenue, 20th Floor
New York, NY 10022
STOCKHOLDERS CALL TOLL-FREE, (888) 750-5834
BANKS AND BROKERS CALL COLLECT: (888) 750-5833
YOUR VOTE IS VERY IMPORTANT
PLEASE SIGN, DATE AND RETURN THIS GOLD PROXY CARD TODAY
IN THE ENVELOPE PROVIDED,
WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING.