DEFC14A
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
Filed by the Registrant þ
Filed by a Party other than the
Registrant o
Check the appropriate box:
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o Preliminary
Proxy Statement
þ Definitive
Proxy Statement
o Definitive
Additional Materials
o Soliciting
Material Under Rule 14a-12 |
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o Confidential,
for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2)) |
CENVEO, INC.
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
Payment of Filing Fee (Check the appropriate box):
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No fee required. |
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Fee computed on table below per Exchange Act
Rules 14a-6(i)(4) and 0-11. |
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(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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Fee paid previously with preliminary materials. |
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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. |
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(1) |
Amount previously paid: |
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(2) |
Form, schedule or registration statement no.: |
Invitation to Special Meeting Of Stockholders
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James R. Malone |
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Chief Executive Officer |
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August 5, 2005 |
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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 7:00 a.m., local time, at the
Manor House Restaurant, 1 Manor House Road, Littleton,
Colorado.
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., are soliciting proxies in support of the removal
of all of the current directors of Cenveo and their replacement
by Burtons 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 Burtons own
nominees. In the boards opinion, Burtons proposals
are not in the best interests of all stockholders of Cenveo, but
rather were made in furtherance of Burtons own interests
to give himself immediate value by way of providing employment
to himself and three of his sons and 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 Cenveos current board of
directors and management with their associates, including three
of Mr. Burtons children.
Cenveos 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
companys 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 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 Burtons white
proxy card. I can assure you that Cenveos 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.
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Sincerely, |
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James R. Malone |
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Chief Executive Officer |
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Cenveo, Inc. |
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8310 South Valley Highway, #400 |
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Englewood, Colorado 80112 |
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August 5, 2005 |
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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 7:00 a.m., local
time, at the Manor House Restaurant, 1 Manor House Road,
Littleton, Colorado, to consider the following proposals:
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Proposal 1 |
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To amend Section 3.1 of Cenveos 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. |
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Proposal 2 |
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To repeal by amendment to Section 3.2 of Cenveos
bylaws the provision in Cenveos 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. |
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Proposal 3 |
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To remove all persons currently serving as directors of Cenveo
and remove any other persons elected to Cenveos board of
directors prior to the special meeting. The board unanimously
recommends a vote AGAINST this proposal. |
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Proposal 4 |
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In the event Proposal 1 is passed, to set the size of
Cenveos board of directors at seven seats. The board
unanimously recommends a vote AGAINST this
proposal. |
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Proposal 5 |
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To repeal each provision of or amendment to Cenveos 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 Cenveos 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 |
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In the event Proposal 3 is passed, to elect a slate of
nominees to Cenveos 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. |
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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 Burtons attempt to take control
of Cenveos 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 Burtons 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 Burtons
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.
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By order of the board of directors |
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Mark L. Zoeller |
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Vice President General Counsel |
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and
Chief Legal Officer |
TABLE OF CONTENTS
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i
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 Cenveos board of directors for
use at the special meeting of Cenveos 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 August 5, 2005.
The special meeting is scheduled to be held at 7:00 a.m.,
local time, on September 14, 2005 at the Manor House
Restaurant, 1 Manor House Road, Littleton, Colorado.
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
Cenveos 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 Cenveos board of directors,
(iv) nominating a slate of Burtons nominees as
directors (in addition to Mr. Burtons appointment as
Chairman), and (v) replacing Cenveos management team
with Burtons designees, including appointing three of
Mr. Burtons children to be members of Cenveos
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 Mr. Burton to two Cenveo directors
at a meeting) to replace current management with their own
designees. We believe that Burtons actions and his
intention to provide employment for himself and three of his
sons make clear that this proxy campaign is self-serving, may be
intended to provide value to Burton or his colleagues under
circumstances that may not allow all Cenveo stockholders to
participate in the same value or at the same price, and is 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, leading the Board to
believe 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 Cenveos 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
Burtons proposals to remove Cenveos 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 Burtons 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
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Who is entitled to vote at the special meeting? |
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A: |
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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, 50,691,249 shares of Cenveos common
stock were issued and outstanding. Each stockholder is entitled
to one vote for each share of common stock held on the record
date. Cenveos Articles of Incorporation do not permit
stockholders to cumulate their votes in the election of
directors of the corporation. |
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What is the difference between holding shares as a
stockholder of record and as a beneficial owner? |
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A: |
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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: |
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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. |
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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. |
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3.
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What may I vote on at the meeting? |
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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. |
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4.
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How does the board of directors recommend I vote? |
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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 Burtons
white proxy card. |
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5.
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How can I vote my shares? |
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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. |
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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 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. |
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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. |
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6.
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What identification should I bring to the meeting? |
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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 drivers 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. |
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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 drivers
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 stockholders 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. |
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7.
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What voting choices do I have? |
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A: |
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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 Cenveos 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 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 of Cenveo, who are our
nominees for purposes of Proposal 6. |
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8.
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Q: |
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How many votes are required to approve a proposal? |
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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. |
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Proposal |
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Votes Required for Approval |
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Proposal 1 |
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The number of votes cast for the proposal exceeds
the number of votes cast against the proposal. |
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Proposal 2 |
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The number of votes cast for the proposal exceeds
the number of votes cast against the proposal. |
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Proposal 3 |
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The number of votes cast for the proposal exceeds
the number of votes cast against the proposal. |
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Proposal 4 |
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The number of votes cast for the proposal exceeds
the number of votes cast against the proposal. |
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Proposal 5 |
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The number of votes cast for the proposal exceeds
the number of votes cast against the proposal. |
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Proposal 6 |
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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). |
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9.
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Q: |
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How are abstentions and broker non-votes treated? |
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A: |
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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.
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Q: |
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Can I change my vote? |
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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. |
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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. |
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11.
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Q: |
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Who will count the votes? |
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A: |
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Cenveo has retained IVS Associates, Inc. to tabulate the votes
and act as Inspector of Election. |
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12.
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What should I do with the WHITE proxy card I may receive from
Burton? |
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A: |
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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. |
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13.
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Q: |
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What does it mean if I get more than one proxy card? |
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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. |
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14.
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Q: |
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How will voting on any other business be conducted? |
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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. |
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15.
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Q: |
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Where and when will I be able to find the results of the
voting? |
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A: |
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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.
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Q: |
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Is my vote confidential? |
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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: |
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as necessary to meet applicable legal requirements, |
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to allow for the counting and certification of
votes, or |
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to help our board solicit proxies. |
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17.
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Q: |
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When are stockholder proposals for the 2006 Annual Meeting
due? |
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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. |
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18.
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Q: |
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How will proxies for the meeting be solicited? |
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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
Cenveos 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 $300,000, plus out-of-pocket expenses. Innisfree will
employ approximately 50 persons in connection with its
solicitation of proxies. |
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19.
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Who will bear the cost of soliciting proxies? |
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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 $750,000, of which approximately
$325,000 has been spent to date. |
5
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 Cenveos 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 Burtons 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 Cenveos bylaws is proposed
to permit Cenveos 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 Burtons
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 Cenveos
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:
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Name |
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Current Position |
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Thomas E. Costello
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Director |
Paul F. Kocourek
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Director |
James R. Malone
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Director, President, Chief Executive Officer |
Martin J. Maloney
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Director |
David M. Olivier
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Director |
Jerome W. Pickholz
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Director |
Alister R. Reynolds
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Director |
Susan O. Rheney
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Director, Chairman of the Board |
Wellington E. Webb
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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.
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, Burtons
nominees will constitute the entire board of directors. This
proposal would facilitate Burtons plan to
6
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
Cenveos 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 Cenveos 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 Cenveos 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 Burtons
nominees would not be in the best interest of all Cenveos
stockholders and encourages you to vote FOR the
current directors of Cenveo, who are our nominees for purposes
of Proposal 6. Disregard Burtons white proxy card.
In the event a vote on this proposal becomes necessary,
Cenveos 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:
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Name |
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Current Position |
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Thomas E. Costello
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Director |
Paul F. Kocourek
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Director |
James R. Malone
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Director, President, Chief Executive Officer |
Martin J. Maloney
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Director |
David M. Olivier
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Director |
Jerome W. Pickholz
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Director |
Alister R. Reynolds
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Director |
Susan O. Rheney
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Director, Chairman of the Board |
Wellington E. Webb
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Director |
For information about these individuals, please see the section
entitled Board of Directors included in this proxy
statement on page 10.
7
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:
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Director |
Name |
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Age |
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Since |
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Thomas E. Costello(3)(4)
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65 |
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2003 |
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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,
publishers 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. |
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Paul F. Kocourek (1)(2)
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54 |
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2004 |
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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 Allens 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. |
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James R. Malone
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62 |
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2005 |
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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 is the
Managing Partner of Qorval, LLC, a financial and business
restructuring firm, which he founded in 2003. In his capacity
with Qorval, he also assumed the role of Chief Executive Officer
of Mail Contractors of America, Inc. and Avborne, Inc. 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 2002,
Mr. Malone was a Managing Director of Bridge Associates
LLC, which engaged in activities similar to those of Qorval, and
headed its crisis consulting team for InaCom Corporation.
Mr. Malone also serves on the boards of Ametek, Inc., Brown
Jordan International, Inc. and AmSouth Bancorporation. 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
Grimes Aerospace Company from 1990 to 1993, and President and
Chief Executive Officer of Anchor Glass Container
Corporation from 1993 to 1996. |
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8
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Director |
Name |
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Age |
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Since |
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Martin J. Maloney (1)(2)
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60 |
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2003 |
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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 NYSE-listed 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. |
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David M. Olivier (3)(4)
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61 |
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2003 |
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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. |
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Jerome W. Pickholz (1)(2)
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72 |
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1994 |
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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 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. |
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Alister W. Reynolds (3)(4)
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47 |
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2002 |
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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. |
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Susan O. Rheney (1)(2)
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45 |
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2003 |
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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. 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. |
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9
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Director |
Name |
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Age |
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Since |
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Wellington E. Webb (3)(4)
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64 |
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2004 |
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Former Mayor Wellington Webb was elected Mayor of Denver in 1991
and reelected in 1995 and 1999. In 2003 he founded Webb Group
International LLC, which works with businesses and cities on
economic development projects, public relations and other
consulting areas. He is also a director of Maximus Corporation
and serves on the advisory board for U.S. Bank and the
National Homebuyers Association. He is a member of the Denver
Rotary and Colorado Black Chamber of Commerce. He is also
managing director of The Webb Development Group, a Real Estate
development firm. |
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(1) |
Member Governance and Nominating Committee. |
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(2) |
Member Audit Committee. |
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(3) |
Member Compensation and Human Resources Committee. |
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(4) |
Member Employee Health and Safety Committee. |
10
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:
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updated various committee charters; |
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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 |
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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:
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the current committee charters for our Governance and Nominating
Committee, Audit Committee, and Compensation and Human Resources
Committee; |
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our corporate governance guidelines; and |
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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:
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identifies candidates for open director positions; |
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selects, or recommends that our board select, the director
nominees for each annual stockholders meeting, oversees the
evaluation of our boards effectiveness; |
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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 companys bylaws stockholders of record are
also entitled to nominate director candidates for election at
Cenveos 2006 annual meeting of stockholders by giving
timely notice in writing to the companys 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
companys 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.
11
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 Exchanges 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
members qualifications and business experience is found
beginning on page 10. Our Audit Committee:
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monitors the integrity of our financial statements, including
our financial reporting process; |
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monitors our systems of internal controls regarding finance,
accounting, and compliance with legal and regulatory
requirements; |
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monitors the independence and performance of our independent
auditor; |
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monitors the performance of our internal audit function and our
financial executives; |
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reviews our annual and quarterly financial statements and
earnings press releases; and |
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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:
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reviews and administers our executive compensation programs; |
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reviews matters relating to management advancement and
succession; |
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reviews and recommends to our board the compensation for our
officers and directors, including incentive compensation plans
and equity-based plans; and |
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reviews and approves corporate goals for our chief executive
officers 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:
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our employee health and safety policies and plans; |
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our safety results, including employee incident rates; |
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our compliance with health and safety laws; and |
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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. Reillys resignation and severance
from the positions of Chief Executive Officer, President and
Chairman of Cenveo, and Paul V. Reillys 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,
12
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 Cenveos 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.
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:
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an annual retainer of $20,000 paid quarterly; |
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$1,500 for each board meeting attended in person; |
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$1,000 for each board meeting attended by telephone; |
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$1,000 for each board committee meeting attended in person; |
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$750 for each board committee meeting attended by
telephone; and |
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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 Cenveos bylaws to
provide for Director Emeritus positions for former directors
who, at the boards 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
13
Committee. In light of Paul V. Reillys lengthy tenure of
service as an officer, director and Chairman of the board of
Cenveo and his extensive knowledge of Cenveos business,
customers and strategy, the board appointed him a Director
Emeritus at the last annual meeting.
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 August 1,
2005 (unless otherwise noted), with respect to the beneficial
ownership of our common stock by:
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beneficial owners of more than five percent of Cenveo common
stock; |
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each Cenveo director and nominee for director; |
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each of the executive officers named in the Summary Compensation
Table set forth under Compensation of Executive
Officers; and |
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all directors, nominees and named executive officers of Cenveo
as a group. |
This information is based upon Cenveos 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.
14
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Number of | |
|
Options | |
|
Percentage | |
|
|
Shares | |
|
Exercisable | |
|
of Shares | |
|
|
Beneficially | |
|
Within 60 | |
|
Beneficially | |
Name and Address |
|
Owned(1) | |
|
Days | |
|
Owned(2) | |
|
|
| |
|
| |
|
| |
5% Stockholders
|
|
|
|
|
|
|
|
|
|
|
|
|
FMR Corp.
|
|
|
3,314,130 |
(3) |
|
|
|
|
|
|
6.53% |
|
|
82 Devonshire Street
Boston, Massachusetts 02109 |
|
|
|
|
|
|
|
|
|
|
|
|
OZ Management, L.L.C.
|
|
|
3,121,300 |
(4) |
|
|
|
|
|
|
6.15% |
|
|
9 West 57th Street, 39th Floor,
New York, NY 10019 |
|
|
|
|
|
|
|
|
|
|
|
|
Ronald Gutfleish
|
|
|
|
|
|
|
|
|
|
|
|
|
|
c/o Elm Ridge Management, LLC |
|
|
2,801,600 |
(5) |
|
|
|
|
|
|
5.52% |
|
|
747 Third Avenue, 33rd Floor
New York, NY 10017 |
|
|
|
|
|
|
|
|
|
|
|
|
Cenveo 401(k) Savings and Retirement Plan
|
|
|
2,682,368 |
(6) |
|
|
|
|
|
|
5.29% |
|
|
c/o Cenveo, Inc.
8310 S. Valley Hwy., #400
Englewood, Colorado 80112 |
|
|
|
|
|
|
|
|
|
|
|
|
Burton Capital Management, LLC
|
|
|
2,591,882 |
(7) |
|
|
|
|
|
|
5.11% |
|
Robert G. Burton, Sr.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100 Northfield Street
Greenwich, CT 06830 |
|
|
|
|
|
|
|
|
|
|
|
|
Directors and Executive Officers
|
|
|
|
|
|
|
|
|
|
|
|
|
Thomas E. Costello
|
|
|
27,246 |
|
|
|
26,335 |
|
|
|
* |
|
Paul F. Kocourek
|
|
|
16,335 |
|
|
|
6,335 |
|
|
|
* |
|
James R. Malone
|
|
|
300,000 |
|
|
|
25,000 |
|
|
|
* |
|
Martin J. Maloney
|
|
|
27,246 |
|
|
|
26,335 |
|
|
|
* |
|
David M. Olivier
|
|
|
27,246 |
|
|
|
26,335 |
|
|
|
* |
|
Jerome W. Pickholz
|
|
|
94,800 |
|
|
|
53,735 |
|
|
|
* |
|
Alister W. Reynolds
|
|
|
114,143 |
|
|
|
21,335 |
|
|
|
* |
|
Susan O. Rheney
|
|
|
78,422 |
(8) |
|
|
26,335 |
|
|
|
* |
|
Wellington E. Webb
|
|
|
1,335 |
|
|
|
6,335 |
|
|
|
* |
|
Allen C. Conway
|
|
|
2,000 |
|
|
|
2,000 |
|
|
|
* |
|
Gordon A. Griffiths
|
|
|
244,750 |
(9) |
|
|
97,750 |
|
|
|
* |
|
Michel Salbaing
|
|
|
260,061 |
|
|
|
162,875 |
|
|
|
* |
|
All directors and executive officers as a group (19 persons)
|
|
|
1,805,743 |
|
|
|
819,253 |
|
|
|
3.56% |
|
|
|
(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 50,733,791 shares outstanding on August 1,
2005. |
|
|
|
(3) |
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 holders Schedule 13G filed with the
Securities and Exchange Commission on February 14, 2005. |
|
|
|
(4) |
OZ Management, L.L.C. (OZ) serves as principal
investment manager to a number of investment funds and
discretionary accounts with respect to which it has voting and
dispositive authority over the shares reported above, including
such account for OZ Master Fund, Ltd. (OZMD). OZMD
is the beneficial owner of 2,968,513 shares.
Mr. Daniel S. Och is the Senior Managing Member of OZ. As
such, he may be deemed to be the beneficial owner of the shares
reported above. The information contained in this footnote and
in the table above is based solely on the Schedule 13G filed by
OZ, OZMD and Mr. Och with the Securities and Exchange
Commission on April 1, 2005. |
|
|
|
(5) |
This information is based solely on such holders Schedule
13G filed with the Securities and Exchange Commission on
May 4, 2005. |
|
|
|
(6) |
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. Information is as of
August 3, 2005. |
|
|
|
(7) |
This information is based solely on such holders Schedule
13D/A filed with the Securities and Exchange Commission on
June 10, 2005. |
|
|
|
(8) |
Includes 54,600 shares held by the Rheney Living Trust of
which Ms. Rheney is a trustee. |
|
|
|
(9) |
Includes 45,000 shares held by his spouse. |
|
15
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 Burtons director nominees are elected, the following
change of control obligations will be triggered:
Senior Secured Credit Facility. Under the terms of
Cenveos 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
95/8% 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 holders 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
77/8% subordinated
notes due 2013 in the aggregate principal amount of
$320 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 holders 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 Burtons
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 companys
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, Burtons nominees will
have been elected without the approval of the current board and
a change of control will have occurred.
16
If Burtons director nominees are elected, the following
equity based compensation will vest under the companys
long-term equity incentive plan:
Options and Restricted Stock. Upon election of
Burtons 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 companys long-term equity incentive plan defines a
change of control as occurring if a majority of the
companys board of directors are not persons who were
directors at the time of the plans adoption, or whose
nomination or election as directors was not approved by 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, Burtons 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. Malones is
the Managing Partner of Qorval, LLC, a financial and business
restructuring firm, which he founded in 2003. In his capacity
with Qorval, he also assumed the role of Chief Executive Officer
of Mail Contractors of America, Inc. and Avborne, Inc. 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 2002
Mr. Malone was a Managing Director of Bridge Associates
LLC, which engaged in activities similar to those of Qorval, and
headed its crisis consulting team for InaCom Corporation.
Mr. Malone also serves on the boards of Ametek, Inc., Brown
Jordan International, Inc, and AmSouth Bancorporation. 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
Grimes 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, Canadas 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
17
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
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.
18
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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-Term Compensation | |
|
|
|
|
|
|
| |
|
|
|
|
Annual Compensation | |
|
|
|
Securities | |
|
|
|
|
|
|
| |
|
|
|
Underlying | |
|
|
|
|
|
|
|
|
Other Annual | |
|
Restricted Stock | |
|
Options | |
|
All Other | |
Name and Principal Position |
|
Year |
|
Salary | |
|
Bonus(1) | |
|
Compensation | |
|
Awards | |
|
Granted | |
|
Compensation | |
|
|
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
Paul V. Reilly
|
|
2004 |
|
$ |
641,192 |
|
|
$ |
0 |
|
|
|
(2) |
|
|
$ |
372,000 |
(3) |
|
|
275,000 |
|
|
$ |
0 |
|
|
President and Chief |
|
2003 |
|
|
618,077 |
|
|
|
0 |
|
|
|
(2) |
|
|
|
0 |
|
|
|
90,000 |
|
|
|
0 |
|
|
Executive 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 Commercial |
|
2002 |
|
|
271,176 |
(5) |
|
|
75,000 |
|
|
|
(2) |
|
|
|
142,500 |
(6) |
|
|
85,000 |
|
|
|
9,881 |
(7) |
|
Segment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Michel P. Salbaing
|
|
2004 |
|
$ |
360,962 |
|
|
$ |
0 |
|
|
|
(2) |
|
|
$ |
93,000 |
(3) |
|
|
80,000 |
|
|
$ |
0 |
|
|
Senior Vice President and |
|
2003 |
|
|
349,038 |
|
|
|
0 |
|
|
|
(2) |
|
|
|
0 |
|
|
|
25,875 |
|
|
|
0 |
|
|
Chief Financial Officer |
|
2002 |
|
|
325,692 |
|
|
|
75,000 |
|
|
|
(2) |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
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 and |
|
2002 |
|
|
313,750 |
|
|
|
75,000 |
|
|
|
(2) |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
Chief Legal Officer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allen C. Conway
|
|
2004 |
|
$ |
299,022 |
|
|
$ |
0 |
|
|
|
(2) |
|
|
$ |
0 |
|
|
|
21,000 |
|
|
$ |
0 |
|
|
Executive Vice President |
|
2003 |
|
|
254,241 |
|
|
|
72,677 |
|
|
|
(2) |
|
|
|
0 |
|
|
|
10,000 |
|
|
|
0 |
|
|
and President Resale |
|
2002 |
|
|
246,330 |
|
|
|
110,250 |
|
|
|
(2) |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
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 persons 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. |
|
|
(7) |
Reflects relocation expenses. |
|
|
(8) |
Mr. Hart has served as Special Assistant to the Chairman
since September 1, 2004. |
19
|
|
|
|
(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.
Reillys resignation as Chairman effective January 6,
2005. As a result of the agreement, Paul V. Reilly received the
following payments and benefits:
|
|
|
|
|
severance pay of $2,446,200; |
|
|
|
two times his pro-rata 2005 target bonus under our cash bonus
annual incentive plan described on page 31; |
|
|
|
24 months of premiums paid for medical and dental
coverage; and |
|
|
|
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. Malones Employment Date.
If, prior to his one year anniversary, Mr. Malones
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
first anniversary of his employment, he will receive an
additional payment equal to one years salary and one
years 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. Malones 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 executives employment is
terminated in certain circumstances relating to a change of
control, the executive will receive:
|
|
|
|
|
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 (other than for
Mr. Malone who will receive one year base salary plus one
year target annual bonus and no pro-rata bonus if the change of
control occurs in 2005); |
|
|
|
reimbursement of post-termination medical and dental premiums
(up to 12 months of COBRA reimbursement for
Mr. Salbaing, Mr. Griffiths and Mr. Conway and up
to 18 months reimbursement for Mr. Malone); and |
|
|
|
reimbursement of up to $10,000 for outplacement services for
Mr. Salbaing, Mr. Griffiths and Mr. Conway and
reimbursement of up to $15,000 for outplacement services for
Mr. Malone. |
These agreements include covenants from the executive not to
compete with Cenveo for a period of two years after he leaves
Cenveo.
20
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 |
|
$ |
1,730,300 |
|
Michel P. Salbaing
|
|
Senior Vice President and Chief Financial Officer |
|
$ |
1,302,263 |
|
Gordon A. Griffiths
|
|
Executive Vice President and President Commercial
Segment |
|
$ |
1,425,200 |
|
Allen C. Conway
|
|
Executive Vice President and President Resale Segment |
|
$ |
1,144,200 |
|
Total |
|
$ |
5,601,963 |
|
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. Salbaings cessation of employment with Cenveo,
his sale of certain real property located in Canada or the sale
of Mr. Salbaings 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.
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 Cenveos 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:
|
|
|
|
|
options for our common stock; |
|
|
|
stock appreciation rights based on our common stock; |
|
|
|
restricted shares of our common stock; |
|
|
|
restricted share units based on our common stock; and |
|
|
|
performance awards. |
The plan provides that:
|
|
|
|
|
no more than 1,500,000 shares may be issued in connection
with free-standing stock appreciation rights; |
|
|
|
no more than 1,000,000 shares may be granted as restricted
stock; and |
21
|
|
|
|
|
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:
|
|
|
|
|
options for 6,774,186 shares; |
|
|
|
288,788 shares of restricted stock; |
|
|
|
658,172 shares of performance accelerated restricted
stock; and |
|
|
|
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
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:
|
|
|
|
|
select participants; |
|
|
|
determine the type and number of awards to be granted; |
|
|
|
determine the exercise or purchase price, vesting periods and
performance goals, if any; |
|
|
|
determine and later amend the terms and conditions of any award; |
|
|
|
interpret the rules relating to the plan; and |
|
|
|
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
22
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 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 participants 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 holders
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.
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 participants
disposition of shares acquired upon the exercise of
23
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 participants 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
participants 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
companys 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
$1 million deduction limit and therefore remains fully
deductible by Cenveo. Cenveo intends that the following grants
will qualify as performance-based compensation so
that these awards will not be subject to the Section 162(m)
deduction limitations:
|
|
|
|
|
performance awards; |
|
|
|
options granted with an exercise price at least equal to 100% of
fair market value of the underlying shares of common stock at
the date of grant; and |
|
|
|
options granted to employees that the committee expects to be
named executive officers at the time a deduction arises. |
24
Options/ SAR Grants in Last Fiscal Year
The following table presents information concerning stock
options granted to each of the named executive officers in 2004
under our long-term equity incentive plan and the potential
realizable value for those stock options based on future
appreciation assumptions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Individual Grants | |
|
|
| |
|
|
|
|
Potential Realizable | |
|
|
|
|
Value at Assumed | |
|
|
|
|
Annual Rates of Stock | |
|
|
Number of Securities | |
|
Percent of Total | |
|
|
|
Price Appreciation for | |
|
|
Underlying | |
|
Options SARs | |
|
Exercise | |
|
|
|
Option Term(1) | |
|
|
Options/SARs | |
|
Granted to | |
|
Price | |
|
Expiration | |
|
| |
Name |
|
Granted | |
|
Employees in 2004 | |
|
($/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
Cenveos common stock) multiplied by the number of shares
underlying the option.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Securities | |
|
|
|
|
|
|
|
|
Underlying Unexercised | |
|
Value of Unexercised in-the- | |
|
|
|
|
|
|
Options/SARs at | |
|
Money Options at | |
|
|
Number of | |
|
$ Value | |
|
12-31-04(#) | |
|
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 |
|
|
|
(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). |
25
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 participants
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.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(c) | |
|
|
|
|
|
|
| |
|
|
|
|
|
|
Number of | |
|
|
|
|
|
|
securities | |
|
|
|
|
|
|
remaining | |
|
|
|
|
(b) | |
|
available for | |
|
|
|
|
| |
|
future issuance | |
|
|
(a) | |
|
Weighted | |
|
under equity | |
|
|
| |
|
average exercise | |
|
compensation | |
|
|
Number of securities | |
|
price of | |
|
plans | |
|
|
to be issued upon | |
|
outstanding | |
|
(excluding | |
|
|
exercise of | |
|
options, | |
|
securities | |
|
|
outstanding options, | |
|
warrants and | |
|
reflected in | |
Plan Category |
|
warrants and rights | |
|
rights | |
|
column (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 |
|
|
|
|
|
|
|
|
|
|
|
26
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
participants current taxable income. During 2004 Cenveo
made a matching contribution to participant accounts equal to
50% of the participants contributions, up to a maximum of
6% of the participants 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
participants 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 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.
27
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:
|
|
|
|
|
link executive compensation with our annual and long-term
performance goals; |
|
|
|
attract and retain a highly qualified and motivated management
team; |
|
|
|
reward individual performance; and |
|
|
|
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:
|
|
|
|
|
setting average base salaries for our executives at the 50th
percentile for salaries given to executives in similar positions
with similar experience; |
|
|
|
providing average annual pay-for-performance bonus
incentive opportunities with a target at the 55th
percentile; and |
|
|
|
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 Cenveos 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.
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 Cenveos 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
corporations 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
28
Cenveos best interest to try to satisfy the requirements
of Section 162(m) by structuring performance-based
compensation for executive officers to satisfy the
statutes 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 statutes 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 Cenveos 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
individuals performance, experience within the industry
and with Cenveo and its predecessors, and the executives
support of Cenveos 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 Cenveos
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 executives 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 Cenveos
past performance, identifying future objectives and evaluating
our ability to achieve corporate goals 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 Cenveos 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 Cenveos
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,
Cenveos financial performance and competitive practices.
In addition, the committee considers Cenveos 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
29
50% restricted stock. The approximate combined value for these
grants ranged from 100% to 110% of an executives 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 Cenveos 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
Cenveos stockholders and employees. Such agreements also
allow our executives to focus 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 31. 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
committees outside consultants, the committee increased
Paul V. Reillys 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. Reillys 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. Reillys 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 committees independent compensation consultants,
Mr. Malones professional experience and track record
of
30
performance, as well as the companys particular
circumstances. In keeping with our overall philosophy, a
significant portion of Mr. Malones 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 committees compensation policy,
was appropriate and in the best interests of the company and its
stockholders. In particular, due to the circumstances
surrounding Burtons 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 Cenveos performance was met and
that Cenveos 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,
Cenveos executive compensation programs and policies
support our overall objective to enhance stockholder value
through the profitable management of Cenveos operations.
The committee is firmly committed to the ongoing review and
evaluation of Cenveos executive compensation program.
|
|
|
Respectfully submitted: |
|
|
|
Alister W. Reynolds (Chair) |
|
|
|
Thomas E. Costello |
|
|
|
David M. Olivier |
|
|
|
Wellington E. Webb |
|
31
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.
|
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| |
|
|
| |
|
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| |
|
|
| |
|
|
| |
|
|
| |
|
Total Shareholder Returns (In Dollars) | |
|
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
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|
1999 |
|
|
2000 |
|
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2001 |
|
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2002 |
|
|
2003 |
|
|
2004 |
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| |
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| |
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| |
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| |
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| |
|
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| |
|
Cenveo Incorporated
|
|
|
|
100 |
|
|
|
|
31.94 |
|
|
|
|
30.37 |
|
|
|
|
18.52 |
|
|
|
|
34.15 |
|
|
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|
22.96 |
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|
S&P 500 Index
|
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|
|
100 |
|
|
|
|
107.04 |
|
|
|
|
137.08 |
|
|
|
|
116.57 |
|
|
|
|
150.74 |
|
|
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|
171.62 |
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|
Peer Group
|
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|
100 |
|
|
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|
89.86 |
|
|
|
|
78.14 |
|
|
|
|
59.88 |
|
|
|
|
75.68 |
|
|
|
|
82.49 |
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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.
32
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 managements assessment of these controls
which totaled $801,351 in 2004. |
|
(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
Cenveos 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
33
Highway, #400, Englewood, CO 80112, Attention: Corporate
Secretary. These materials may also be accessed on our web site
at www.cenveo.com.
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 Burtons 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
34
Appendix I
Information Concerning Persons Who May Be Deemed
Participants In The Companys 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 persons 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
|
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 Cenveos 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 August 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
August 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
|
|
|
244,750 |
|
|
|
97,750 |
|
|
|
* |
|
Michel Salbaing
|
|
|
260,061 |
|
|
|
162,875 |
|
|
|
* |
|
Allen C. Conway
|
|
|
2,000 |
|
|
|
2,000 |
|
|
|
* |
|
Brian P. Hairston
|
|
|
107,244 |
|
|
|
50,254 |
|
|
|
* |
|
William W. Huffman
|
|
|
84,681 |
|
|
|
52,106 |
|
|
|
* |
|
D. Robert Meyer, Jr.
|
|
|
122,143 |
|
|
|
73,937 |
|
|
|
* |
|
Matthew H. Mitchell
|
|
|
38,634 |
|
|
|
9,900 |
|
|
|
* |
|
Keith T. Pratt
|
|
|
91,784 |
|
|
|
58,812 |
|
|
|
* |
|
Wayne M. Wolberg
|
|
|
52,645 |
|
|
|
24,265 |
|
|
|
* |
|
Mark Zoeller
|
|
|
115,028 |
|
|
|
69,274 |
|
|
|
* |
|
|
|
** |
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. |
A-I-2
Information Regarding Transactions in the Companys
Securities by Participants
The following table sets forth purchases and sales during the
twenty-four months following August 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 | |
|
|
Name |
|
Date | |
|
or (Disposed of) | |
|
Note | |
|
|
| |
|
| |
|
| |
Directors and Nominees
|
|
|
|
|
|
|
|
|
|
|
|
|
Thomas E. Costello
|
|
|
4/29/04 |
|
|
|
5,000 |
|
|
|
(1 |
) |
|
|
|
4/29/04 |
|
|
|
2,487 |
|
|
|
(3 |
) |
|
|
|
4/27/05 |
|
|
|
1,335 |
|
|
|
(3 |
) |
|
|
|
4/27/05 |
|
|
|
5,000 |
|
|
|
(1 |
) |
Paul F. Kocourek
|
|
|
4/27/05 |
|
|
|
1,335 |
|
|
|
(3 |
) |
|
|
|
4/27/05 |
|
|
|
5,000 |
|
|
|
(1 |
) |
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 |
|
|
|
1,335 |
|
|
|
(3 |
) |
|
|
|
4/27/05 |
|
|
|
5,000 |
|
|
|
(1 |
) |
David Olivier
|
|
|
4/29/04 |
|
|
|
5,000 |
|
|
|
(1 |
) |
|
|
|
4/29/04 |
|
|
|
2,487 |
|
|
|
(3 |
) |
|
|
|
4/27/05 |
|
|
|
1,335 |
|
|
|
(3 |
) |
|
|
|
4/27/05 |
|
|
|
5,000 |
|
|
|
(1 |
) |
Jerome W. Pickholz
|
|
|
4/29/04 |
|
|
|
5,000 |
|
|
|
(1 |
) |
|
|
|
4/29/04 |
|
|
|
2,487 |
|
|
|
(3 |
) |
|
|
|
4/29/04 |
|
|
|
5,000 |
|
|
|
(1 |
) |
|
|
|
5/21/04 |
|
|
|
2,487 |
|
|
|
(3 |
) |
|
|
|
4/27/05 |
|
|
|
1,335 |
|
|
|
(3 |
) |
|
|
|
4/27/05 |
|
|
|
5,000 |
|
|
|
(1 |
) |
Alister Reynolds
|
|
|
4/29/04 |
|
|
|
2,487 |
|
|
|
(3 |
) |
|
|
|
4/27/05 |
|
|
|
1,335 |
|
|
|
(3 |
) |
|
|
|
4/29/04 |
|
|
|
5,000 |
|
|
|
(1 |
) |
|
|
|
4/29/04 |
|
|
|
2,487 |
|
|
|
(3 |
) |
|
|
|
4/27/05 |
|
|
|
5,000 |
|
|
|
(1 |
) |
Susan Rheney
|
|
|
4/27/05 |
|
|
|
1,335 |
|
|
|
(3 |
) |
|
|
|
4/27/05 |
|
|
|
5,000 |
|
|
|
(1 |
) |
Wellington Webb
|
|
|
4/27/05 |
|
|
|
1,335 |
|
|
|
(3 |
) |
|
|
|
4/27/05 |
|
|
|
5,000 |
|
|
|
(1 |
) |
A-I-3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
No. of Shares of | |
|
|
|
|
|
|
Common Stock, or | |
|
|
|
|
|
|
Options to Acquire | |
|
|
|
|
|
|
Such Stock, Acquired | |
|
|
Name |
|
Date | |
|
or (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 |
) |
A-I-4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
No. of Shares of | |
|
|
|
|
|
|
Common Stock, or | |
|
|
|
|
|
|
Options to Acquire | |
|
|
|
|
|
|
Such Stock, Acquired | |
|
|
Name |
|
Date | |
|
or (Disposed of) | |
|
Note | |
|
|
| |
|
| |
|
| |
Wayne M. Wolberg
|
|
|
2/5/04 |
|
|
|
11,000 |
|
|
|
(1 |
) |
|
|
|
5/25/04 |
|
|
|
(5,000 |
) |
|
|
(4 |
) |
|
|
|
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 Companys periodic matching or
other contributions under the Companys 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 Companys 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 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
A-I-5
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 Cenveos bylaws
set forth in Proposal 1:
|
|
|
Delete Section 3.1 of Cenveos bylaws in its
entirety and replace it with the following: |
|
|
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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 Cenveos bylaws
set forth in Proposal 2:
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Delete Section 3.2 of Cenveos bylaws in its
entirety and replace it with the following: |
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Section 3.2. Reserved. |
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.
501 Madison Avenue, 20th Floor
New York, NY 10022
STOCKHOLDERS CALL TOLL FREE: (888) 750-5834
BANKS AND
BROKERS CALL COLLECT: (212) 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.
6 PLEASE DETACH HERE AND RETURN 6
YOUR BOARD OF DIRECTORS RECOMMENDS A
VOTE AGAINST PROPOSALS 1 THROUGH 5.
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1.
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Amendment of Bylaws to Permit Stockholders
to Set Board of Directors Size
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AGAINST
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FOR
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ABSTAIN
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2.
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Repeal of Bylaws Requiring Vacancies to Be
Filled By Remaining Directors
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AGAINST
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FOR
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ABSTAIN
o |
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3.
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Removal Without Cause of All Persons
Currently Serving As Directors of Cenveo
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AGAINST
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FOR
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ABSTAIN
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4.
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In the Event That Proposal 1 Passes, Set
Board of Directors Size to Seven Directors
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AGAINST
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FOR
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ABSTAIN
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5.
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Repeal of Bylaw Amendments Passed
Following April 17, 2005
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AGAINST
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FOR
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ABSTAIN
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YOUR BOARD OF DIRECTORS RECOMMENDS A
VOTE FOR OUR NOMINEES IN PROPOSAL 6.
6. |
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In the Event That Proposal 3
Passes, Election of the
Following Director Nominees of
Cenveo: |
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Nominees are:
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1. Thomas E. Costello
2. Paul F. Kocourek
3. James R. Malone
4. Martin J. Maloney
5. David M. Oliver
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6. Jerome W. Pickholz
7. Alister R. Reynolds
8. Susan O. Rheney
9. Wellington E. Webb |
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o FOR ALL |
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o FOR ALL, except nominee(s) indicated below |
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o WITHHOLD ALL |
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Date
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, 2005 |
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Signature |
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Signature |
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Title(s) |
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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.
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6 PLEASE DETACH HERE AND RETURN 6
GOLD PROXY CARD
CENVEO INC.
SPECIAL MEETING OF STOCKHOLDERS
THIS PROXY IS SOLICITED ON BEHALF OF THE CENVEOS 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 7:00 a.m., local time, at the Manor House
Restaurant, 1 Manor House Road, Littleton, Colorado, 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 Cenveos 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 THE REVERSE SIDE)