Schedule 14A
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
(PROXY STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934)
Filed by the Registrant |_|
Filed by a party other than the Registrant |X|
Check the appropriate box:
|X| Preliminary Proxy Statement
|_| Confidential, For Use of the Commission Only (as permitted by
Rule 14a-6(e)-2)
|_| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to §240.14a-12
CENVEO, INC.
--------------------------------------------------------------------------------
(Name of Registrant Specified in Its Charter)
BURTON CAPITAL MANAGEMENT, LLC
GOODWOOD INC.
1354037 ONTARIO INC.
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than Registrant)
Payment of Filing Fee (Check the appropriate box):
|X| No fee required
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is
calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
|_| Fee paid previously by written preliminary materials:
|_| Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing party:
(4) Date filed:
PRELIMINARY PROXY STATEMENT, AS FILED WITH THE SEC ON JULY 7, 2005
BURTON CAPITAL MANAGEMENT, LLC GOODWOOD INC.
100 NORTHFIELD STREET 212 KING STREET WEST, SUITE 201
GREENWICH, CT 06830 TORONTO, ONTARIO M5H 1K5 CANADA
____ _, 2005
Dear Fellow Cenveo, Inc. Shareholder:
Together with certain individuals, Burton Capital Management, LLC and Goodwood
Inc. own 5,427,934 shares, or approximately 11% of the outstanding common stock
of Cenveo, Inc. ("Cenveo"). We believe that, over the past several years,
Cenveo's board of directors has failed to make the decisions necessary to
improve Cenveo's performance and enhance shareholder value. WE BELIEVE THAT THE
BOARD'S TRACK RECORD IS UNSATISFACTORY AND THEIR RESULTS TELL THE WHOLE STORY.
Not surprisingly, between January 1, 2000 and April 7, 2005 (the date our
ownership of Cenveo's common stock was publicly disclosed), a period of over
five years, an investment in Cenveo's shares lost approximately 53% of its
value. WE BELIEVE THIS IS COMPLETELY UNACCEPTABLE. In an effort to enhance
shareholder value, we have called a special meeting of Cenveo's shareholders to
elect our slate of directors, several of whom have significant printing and
publishing industry experience. If elected, these persons intend to appoint
Robert G. Burton, Sr. as Chairman and Chief Executive Officer of Cenveo. Mr.
Burton has over 30 years of experience in the printing and media industries and
a superior track record of increasing shareholder value as the Chief Executive
Officer of public companies. We believe that a change of direction is required
for Cenveo to become successful and to enhance shareholder value.
VOTE FOR CHANGE. VOTE TO REPLACE THE DIRECTORS WHO HAVE SO BADLY FAILED US. VOTE
"FOR" THE REMOVAL OF ALL OF THE CURRENT DIRECTORS, VOTE "FOR" THE ELECTION OF
ROBERT G. BURTON, SR., PATRICE M. DANIELS, LEONARD C. GREEN, MARK J. GRIFFIN,
MICHAEL W. (MAX) HARRIS, THOMAS OLIVA AND ROBERT T. KITTEL AND "FOR" EACH OF OUR
OTHER PROPOSALS, BY SIGNING THE ENCLOSED WHITE PROXY AND RETURNING IT TO D.F.
KING & CO., INC. IN THE SELF-ADDRESSED, POSTAGE-PAID ENVELOPE PROVIDED.
We urge you to read the enclosed proxy statement carefully, as it contains more
detailed information about the nominees and the other proposals we will present
at the special meeting.
If you have any questions, please call D.F. King & Co., Inc. toll free at (800)
967-7921. Banks and brokers may call collect at (212) 269-5550.
Thank you for your support.
Sincerely,
Burton Capital Management, LLC Goodwood Inc.
By: /S/ ROBERT G. BURTON, SR. By: /S/ PETER H. PUCCETTI
------------------------------- ----------------------------
Robert G. Burton, Sr. Peter H. Puccetti
Chairman, CEO and Chairman and Chief
Managing Member Investment Officer
PRELIMINARY PROXY STATEMENT, AS FILED WITH THE SEC ON JULY 7, 2005
SPECIAL MEETING OF SHAREHOLDERS OF CENVEO, INC.
PROXY STATEMENT
OF
BURTON CAPITAL MANAGEMENT, LLC
AND
GOODWOOD INC.
This proxy statement and the enclosed WHITE proxy card are being furnished to
you, the shareholders of Cenveo, Inc. ("Cenveo"), in connection with the
solicitation of proxies by Burton Capital Management, LLC ("BCM") and Goodwood
Inc. ("Goodwood") for use at the special meeting of Cenveo's shareholders that
they have called with certain other shareholders. This proxy statement and the
WHITE proxy card are first being furnished to the shareholders of Cenveo on or
about ________, 2005.
Cenveo has announced that the special meeting of its shareholders will be held
on Wednesday, September 14, 2005, beginning at _____ _.m. (Colorado time) at
________________. Cenveo has announced that the record date for determining
shareholders entitled to notice of and to vote at the special meeting is ____
__, 2005.
* * * * *
THIS SOLICITATION IS BEING MADE BY BCM AND GOODWOOD AND NOT ON BEHALF OF THE
INCUMBENT BOARD OF DIRECTORS OF CENVEO.
YOUR VOTE AT THE SPECIAL MEETING IS VERY IMPORTANT, NO MATTER HOW MANY OR HOW
FEW SHARES YOU OWN. BCM AND GOODWOOD RECOMMEND THAT YOU ELECT THE INDIVIDUALS
NAMED IN THIS PROXY STATEMENT (AND THE ACCOMPANYING WHITE PROXY CARD) AS
DIRECTORS OF CENVEO AT THE SPECIAL MEETING OF SHAREHOLDERS TO BE HELD ON
WEDNESDAY, SEPTEMBER 14, 2005. PLEASE SIGN AND DATE THE ENCLOSED WHITE PROXY
CARD AND RETURN IT IN THE ENCLOSED POSTAGE-PAID ENVELOPE PROMPTLY.
PLEASE DO NOT RETURN ANY PROXY CARD SENT TO YOU BY CENVEO'S INCUMBENT BOARD OF
DIRECTORS. EVEN IF YOU MAY HAVE VOTED ON CENVEO'S PROXY CARD, YOU CAN EASILY
CHANGE YOUR VOTE AND REVOKE THAT PROXY BY SIGNING, DATING AND RETURNING THE
ENCLOSED WHITE PROXY CARD. ONLY YOUR LATEST DATED PROXY WILL COUNT AT THE
SPECIAL MEETING.
* * * * *
IF YOU HAVE ANY QUESTIONS CONCERNING THIS PROXY STATEMENT, WOULD LIKE TO REQUEST
ADDITIONAL COPIES OF THIS PROXY STATEMENT OR NEED HELP VOTING YOUR SHARES,
PLEASE CONTACT:
D.F. KING & CO., INC.
48 WALL STREET
NEW YORK, NY 10005
CALL TOLL FREE: (800) 967-7921
BANKS AND BROKERS, CALL COLLECT: (212) 269-5550
OR
ROBERT G. BURTON, JR. ROBERT T. KITTEL
BURTON CAPITAL MANAGEMENT, LLC GOODWOOD INC.
100 NORTHFIELD STREET 212 KING STREET WEST, SUITE 201
GREENWICH, CT 06830 TORONTO, ONTARIO M5H 1K5 CANADA
(203) 302-3700 (416) 203-2022
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TABLE OF CONTENTS
REASONS FOR THE SOLICITATION...................................................1
PROPOSED PLAN FOR CENVEO.......................................................4
ROBERT G. BURTON, SR. AND BURTON CAPITAL MANAGEMENT, LLC.......................6
BACKGROUND TO THE SOLICITATION.................................................7
MATTERS TO BE CONSIDERED AT THE SPECIAL MEETING...............................10
ELECTION OF DIRECTORS.........................................................12
Background of the Director Nominees.......................................12
Share Ownership of the Director Nominees..................................13
Corporate Governance Matters..............................................14
Other Information About the Director Nominees.............................14
Information About the "Participants in the Solicitation"..................15
Section 16(a) Beneficial Ownership Reporting Compliance...................16
CHANGE OF CONTROL PROVISIONS..................................................17
Cenveo's Debt Instruments.................................................17
Cenveo's Employment Agreements, Benefit Plans and Other Agreements........18
QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING...............................20
How do I vote in person?..................................................20
How do I vote by proxy?...................................................20
What if I am not the record holder of my shares?..........................20
What should I do if I receive a [ ] proxy card?......................20
What if I want to revoke my proxy?........................................21
Should I submit a proxy if I plan to attend the special meeting?..........21
Who can vote?.............................................................21
How many votes do I have?.................................................21
How will my shares be voted?..............................................21
What is a "quorum" and why is it necessary?...............................21
What vote is required to approve each proposal and how
will votes be counted?..................................................22
Am I entitled to appraisal rights?........................................22
How can I receive more information?.......................................22
SOLICITATION OF PROXIES.......................................................23
INFORMATION ABOUT CENVEO......................................................23
ANNEX A -- PROPOSED AMENDMENTS TO BYLAWS.....................................A-1
ANNEX B -- INFORMATION ABOUT THE "PARTICIPANTS IN THE SOLICITATION"..........B-1
Background of the Participants....................................B-1
Transactions in Cenveo Securities.................................B-1
Arrangements, Interests and Transactions..........................B-6
ANNEX C -- CERTAIN BENEFICIAL OWNERS OF CENVEO...............................C-1
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REASONS FOR THE SOLICITATION
Over the past several years, Cenveo's board of directors has failed to take the
actions we believe are necessary to enhance shareholder value. While many of
Cenveo's competitors have made the tough decisions necessary to adjust to a more
challenging printing industry, Cenveo has stood still and underperformed. NOT
SURPRISINGLY, BETWEEN JANUARY 1, 2000 AND APRIL 7, 2005 (THE DATE OUR OWNERSHIP
OF CENVEO'S COMMON STOCK WAS PUBLICLY DISCLOSED), A PERIOD OF OVER FIVE YEARS,
AN INVESTMENT IN CENVEO'S SHARES LOST APPROXIMATELY 53% OF ITS VALUE. DURING
THAT SAME TIME, THE STOCK PRICE OF THREE OF CENVEO'S PEERS, CONSOLIDATED
GRAPHICS, INC., R.R. DONNELLEY & SONS COMPANY AND CADMUS COMMUNICATIONS
CORPORATION, OUTPERFORMED CENVEO'S STOCK PRICE.
As the holder of approximately 11% of Cenveo's outstanding common stock, we find
Cenveo's performance unacceptable. In an effort to enhance shareholder value, we
are proposing the slate of directors listed below under "Election of Directors,"
several of whom have significant printing and publishing industry experience. If
elected, these persons intend to appoint Robert G. Burton, Sr. as Chairman and
Chief Executive Officer of Cenveo. Mr. Burton has over 30 years of experience in
the printing and media industries and a superior track record of increasing
shareholder value as Chief Executive Officer of public companies. We believe for
the following reasons that a change of direction is required for Cenveo to
become successful and enhance shareholder value.
POOR SHARE PRICE PERFORMANCE
To understand why change is necessary, one need look no further than Cenveo's
share price. On December 31, 1999, Cenveo's stock closed at $13.50 per share on
the New York Stock Exchange. Over five years later, on April 7, 2005 (the date
our ownership of Cenveo was publicly announced), the closing price was $6.28 per
share, representing a 53% decrease. Over the same time period, Cenveo also
underperformed the overall equity market by a wide margin. The chart below
illustrates Cenveo's share price performance from December 31, 1999 through
April 7, 2005, assuming a $100 investment, compared to an investment of the same
amount in the NYSE Composite Index:
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FIGURE 1: CENVEO VS. NYSE COMPOSITE INDEX (1)
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(1) The NYSE Composite Index is an average of prices for all stocks traded on
the New York Stock Exchange.
We acknowledge that the market conditions in the printing industry have been
difficult, particularly since 2001. However, we believe that this represents
only one reason for the underperformance of Cenveo. While we believe Cenveo's
competitors made adjustments to their businesses to become more competitive and
achieve adequate Operating EBIT Margins (as defined in note 2 of Table 1 below),
Cenveo's board of directors has not done so. We believe that the inability of
Cenveo's board of directors to make hard decisions to improve Cenveo's business
has cost Cenveo shareholders dearly.
POOR OPERATING PERFORMANCE AND MISSED PUBLIC TARGETS
Over the past several years, Cenveo's financial performance has eroded
substantially. We believe that this poor performance is due primarily to the
board's inability to properly right-size the cost structure to meet the ever
changing dynamics of the printing industry and realities associated with the
economic downturn that started in 2001. Over the past several years under the
stewardship of Cenveo's board of directors, Cenveo has:
o PRODUCED POOR OPERATING RESULTS, as Cenveo's Operating EBIT Margin has
fallen from 8.9% in fiscal year 1999 to 4.5% in fiscal year 2004, despite
Cenveo incurring approximately $145 million of restructuring costs,
impairments and other charges over the five fiscal years through fiscal
year 2004;
o FAILED TO GROW THE BUSINESS DESPITE INCREASED COSTS, as sales at Cenveo
have fallen from $1.85 billion in fiscal year 1999 to $1.74 billion in
fiscal year 2004, while selling, general and administrative expenses at
Cenveo ACTUALLY ROSE from $252.1 million in fiscal year 1999 to $265.9
million in fiscal year 2004; and
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o DESTROYED SUBSTANTIAL SHAREHOLDER VALUE, as shareholders equity has fallen
from $375.3 million at December 31, 1999 to $57.4 million at December 31,
2004.
In addition to this poor operating performance, Cenveo has missed its publicly
stated goals and targets on more than one occasion. Most recently, on December
10, 2004, Cenveo announced that it would not achieve its goal for fiscal year
2004 of EBITDA in the range of $135 - $142 million. On February 14, 2005 Cenveo
reported EBITDA for fiscal year 2004 of $128.4 million or approximately 5% less
than the low end of its previously announced range.
We believe that this poor operating performance, combined with a history of
missing established targets is not acceptable to Cenveo shareholders. We believe
substantial changes are required at Cenveo to reverse this decline and improve
operating performance.
BLOATED COST STRUCTURE
Despite the sales and Operating EBIT Margin decline at Cenveo since fiscal year
1999, Cenveo's board of directors has not been able to, or is unwilling to,
reduce Cenveo's cost structure to adjust to market realities. We believe that
Cenveo's cost structure is above industry norms. This is evidenced by the
following Operating EBIT Margin comparisons with certain of Cenveo's printing
industry competitors:
TABLE 1: OPERATING EBIT MARGIN COMPARISON
CONSOLIDATED
TTM TO DECEMBER 31, 2004(1) CENVEO GRAPHICS RR DONNELLEY CADMUS
------ -------- ------------ ------
Sales (Millions US$) $1,742 $765 $7,156 $435
Operating EBIT Margin(2) 4.5% 7.0% 9.0% 7.8%
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(1) Information derived from Cenveo's annual report on Form 10-K for its year
ended December 31, 2004, Consolidated Graphics' annual report on Form 10-K
for its year ended March 31, 2004 and its quarterly reports on Form 10-Q
for the quarterly periods ended June 30, 2004, September 30, 2004 and
December 31, 2004, RR Donnelley's annual report on Form 10-K for its year
ended December 31, 2004 (and its current report on Form 8-K dated (date of
earliest event reported) March 1, 2005) and Cadmus's annual report on Form
10-K for its year ended June 30, 2004 and its quarterly reports on Form
10-Q for its quarterly periods ended March 31, 2004, September 30, 2004 and
December 31, 2004.
(2) Operating EBIT for Cenveo, Consolidated Graphics, RR Donnelley and Cadmus
is equal to reported operating income excluding restructuring, impairments
and other charges, settlement of litigation, impairment on operations
formerly held for sale, impairment loss (gain) on assets held for sale, and
loss on early extinguishment of debt. For RR Donnelley, Operating EBIT also
excludes $80.8 million of costs deemed by it to be non-recurring. Operating
EBIT Margin for Cenveo, Consolidated Graphics, RR Donnelley and Cadmus is
defined as Operating EBIT (as defined above) divided by sales.
Cenveo's board of directors claimed in Cenveo's 2004 annual report that Cenveo
had completed substantial cost reductions. However, despite reported cost
reductions, we believe that Cenveo has not seen a material improvement in
operating performance. In the letter to shareholders contained in Cenveo's
fiscal year 2004 annual report, Cenveo's former CEO and President said that:
"OVER THE PAST THREE YEARS, CENVEO HAS CUT MORE THAN $130 MILLION IN
COSTS FROM OUR BUSINESS"
In addition, on Cenveo's May 2, 2005 conference call, Susan Rheney, Cenveo's
Chairperson, said that:
"SINCE THE LOW POINT OF Q2 2002, CENVEO HAS CONSISTENTLY IMPROVED ITS
OPERATING RESULTS EVEN IN THE FACE OF AN ESTIMATED $60 MILLION OF
PRICE REDUCTIONS BY TAKING SUBSTANTIAL COSTS OUT OF THE BUSINESS."
Unfortunately, Cenveo shareholders have not seen the benefits that are referred
to. While the above statements would imply a substantial increase in Cenveo's
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Operating EBIT, operating performance has stayed virtually the same. Operating
EBIT was $78.1 million for fiscal year 2004, essentially unchanged from
Operating EBIT of $77.4 million in fiscal year 2002, and down substantially from
$94.4 million in fiscal year 2001.(1)
CENVEO'S CURRENT STRATEGY IS FLAWED
Cenveo's board of directors has articulated a strategy whose success is based on
Cenveo's ability to increase its market share. On the May 2, 2005 conference
call, Ms. Rheney said that Cenveo's strategy is to "grow our share of the
markets we are in and increase our return on capital employed." We believe that
a strategy based on growing market share in the printing industry requires
Cenveo to be the low cost producer in the industry. We believe that Cenveo's
current bloated cost structure, combined with the Company's history of poor
operating performance, make this strategy inherently flawed.
We do not believe that Cenveo's board of directors has the competence or
experience necessary to implement a cost-cutting program with the breadth and
scope necessary to align Cenveo's cost structure with that of its peers.
Although Cenveo's board of directors has also announced a review of "strategic
alternatives" that could include selling all or part of Cenveo, refinancing,
raising additional capital or restructuring Cenveo, we do not believe the
current review of alternatives will produce any outcome that is superior to the
value we believe we can create for Cenveo's shareholders. We have reached these
conclusions due to the inability of the current board of directors to produce
results over the past several years. We believe that a competent and successful
board of directors would have delivered stock price performance more in line
with that of Cenveo's peers.
CENVEO'S LATEST COST CUTTING DOES NOT GO FAR ENOUGH
We believe that the cost cutting program announced by Cenveo management on June
1, 2005 is insufficient to turn around Cenveo and make it more cost competitive.
The cost savings announced include staff reductions of only approximately 1% of
Cenveo's workforce of approximately 10,000 employees, and barely covers the
increase of approximately $13 million in selling general and administrative
expenses for increased management incentive compensation expected by Cenveo for
fiscal year 2005. We believe that significant additional cost reductions are
required to make Cenveo cost competitive and enhance shareholder value.
WE BELIEVE THAT THE TRACK RECORD OF CENVEO'S BOARD OF DIRECTORS OVER THE PAST
SEVERAL YEARS HAS BEEN POOR. WE BELIEVE THAT IT IS TIME FOR A CHANGE IN CENVEO'S
DIRECTION IN ORDER TO ENHANCE SHAREHOLDER VALUE. GIVEN CENVEO'S POOR OPERATING
PERFORMANCE, ITS REPEATED MISSED PUBLIC TARGETS AND CURRENT HIGH LEVEL OF
INDEBTEDNESS, WE BELIEVE THAT CHANGE IS REQUIRED NOW BEFORE IT IS TOO LATE.
PROPOSED PLAN FOR CENVEO
ELECT A SHAREHOLDER-FOCUSED BOARD OF DIRECTORS WITH SUBSTANTIAL INDUSTRY
EXPERIENCE
As stated below in the section entitled "Election of Directors," we propose to
nominate Robert G. Burton, Sr., Patrice M. Daniels, Leonard C. Green, Mark J.
Griffin, Michael W. (Max) Harris, Thomas Oliva, and Robert T. Kittel for
election as directors of Cenveo.
Our nominees include established business leaders with an established track
record of producing results for shareholders, several of whom have valuable
experience in the printing, publishing and graphic arts industries. Robert G.
Burton, Sr., Mark J. Griffin and Patrice M. Daniels are former directors of
World Color Press, Inc., which is now part of Quebecor World, Inc., one of the
world's largest commercial printers. Thomas Oliva and Michael W. (Max) Harris
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(1) Fiscal year 2001 Operating EBIT is derived from Cenveo's annual report on
Form 10-K for its year ended December 31, 2003 and includes income from
operations that were discontinued but subsequently restated to include such
amounts, which reflect operations that are still part of Cenveo's business.
-4-
are both successful printing industry veterans each with over 20 years industry
experience in sales and manufacturing and have worked closely with Mr. Burton on
previous turnarounds in the printing industry. Leonard C. Green has been a long
term investor in the printing industry. We believe that our nominees have the
business experience, perspective and track record to provide Cenveo with a new
direction and improve Cenveo's focus on customers and shareholder returns.
INSTALL A NEW MANAGEMENT TEAM, LED BY ROBERT G. BURTON, SR. AS CHIEF EXECUTIVE
OFFICER
We intend, upon the election of the proposed slate of directors, to appoint
Robert G. Burton, Sr. as Chairman and Chief Executive Officer of Cenveo. We
believe that Mr. Burton has an exceptional track record in bringing renewed
operational focus and executing corporate turnarounds. His successful business
experience at International Business Machines Corporation, Capital Cities/ABC,
World Color and Moore Corporation Limited have prepared him well for this new
assignment.
Upon being hired as Cenveo's Chairman and Chief Executive Officer, Mr. Burton
plans to put in place the people who he believes are the best managers and
employees possible, derived from internal and external candidates, and hold them
personally accountable for driving results within their areas of responsibility.
Mr. Burton has a long track record of successfully attracting top industry
talent and working successfully with a company's existing management. During his
tenure at Moore, Mr. Burton hired over 100 executives that had worked with him
previously to assist in the turnaround. Mr. Burton has already made preliminary
contact with several executives with extensive printing, technology, and
manufacturing experience whom Mr. Burton would want to become part of the Cenveo
team upon his appointment as Chairman and CEO. Despite these preliminary
contacts, there are no contracts, arrangements or understandings with any of
these persons with respect to their future employment at Cenveo.
OUR PLAN FOR CENVEO
We believe that there is nothing fundamentally wrong with Cenveo except for the
fact that the current Cenveo board of directors has lost sight of its cost
structure and the resources that made it successful in the past. We will hold
our management team personally accountable for results. EXCUSES WILL BE
UNACCEPTABLE. We will look to aggressively control costs, leverage our
partnerships with suppliers, and expand our relationship with our customers
through a more aggressive and comprehensive "one-stop shopping" platform across
Cenveo's business lines. We will intensify our focus on our customers in order
to enhance shareholder value.
RIGHT-SIZE CENVEO'S COST STRUCTURE
We intend to implement a plan to adjust Cenveo's cost structure, bringing it
more in line with that of its competitors and the realities of the printing
industry. The goal will be to eliminate unnecessary costs, making Cenveo more
cost competitive in the marketplace and making Cenveo a low-cost producer in the
industry. We expect that the cost savings plan will include:
o a thorough review of all of Cenveo's operating units, resulting in the
sale, spin-off, restructuring or elimination of those that do not generate
appropriate returns or are not related to Cenveo's core business;
o the centralization of all corporate functions to reduce facilities costs
and eliminate duplication and the shut down of all non-essential activities
and programs;
o implementation of plant-wide manufacturing and productivity programs to
drive efficiency improvements; and
o further leveraging Cenveo's size and partnering with strategic suppliers to
further reduce costs and improve efficiency.
-5-
We believe that, before giving effect to the cost reductions announced by Cenveo
on June 1, 2005, this review will result in cost reductions having a run rate of
at least $50 million in the first 12 months, and an additional $25 million in
the second 12 months after Mr. Burton is appointed CEO. We believe that these
efforts will result in a much stronger Cenveo, one that can begin to profitably
grow market share again, compete over the long-term and enhance shareholder
value.
PURSUE PROFITABLE GROWTH ORGANICALLY
We will continue to bring to Cenveo's customers world class solutions to their
printing needs. To do this we will look to strengthen the sales infrastructure
within Cenveo. We will recruit and hire senior sales managers who will be held
personally accountable for their results. We will further leverage Cenveo's vast
array of products and services via a "one-stop shopping" platform to offer
Cenveo's customers access to all of our products with efficiencies and cost
saving for them. We will examine all contracts and customer relationships and
when they do not drive acceptable levels of returns for Cenveo, we will make the
painful and tough decisions to walk away from unprofitable business.
REDUCE LEVERAGE OVER TIME
It is our intention to reduce Cenveo's financial leverage over time. Cenveo has
indicated, as recently as its first quarter earnings call on May 2, 2005, that
it expects to generate $35 million of free cash flow from operations during
fiscal year 2005. IN LIGHT OF THIS, WE DO NOT BELIEVE THAT CENVEO NEEDS ANY
ADDITIONAL NEW LIQUIDITY CURRENTLY. We believe that if our plans to right-size
Cenveo's cost structure are successful, together with improved operating
performance, any excess free cash flow will be used to pay down debt and reduce
Cenveo's leverage.
ALIGN MANAGEMENT AND EMPLOYEE INTERESTS WITH SHAREHOLDERS INTERESTS
We believe that it is critical that the interests of Cenveo's employees and
management be completely aligned with those of its shareholders. We believe that
the only way to achieve this is through management and employee ownership of
Cenveo's stock, a determination Mr. Burton has made based on his experience
leading public companies.
We intend to immediately implement an employee stock purchase plan to facilitate
the purchase of shares by management and employees at market prices, through
regular payroll deductions. In addition, we intend to require all senior
managers to own a specified amount Cenveo's stock, purchased at market prices.
DELIVER RESULTS TO SHAREHOLDERS
Finally, we intend to deliver on the promises that we make. EXCUSES WILL BE
UNACCEPTABLE. We also intend to aggressively control costs going forward and to
refocus Cenveo's sales efforts on establishing its position in the marketplace.
We believe that our plan will result in the changes that are necessary to make
Cenveo successful and improve the focus on its customers. We also believe that
this plan will result in superior returns for shareholders as compared to the
returns expected if Cenveo's current direction is continued. However, no
assurance can be given that the election of our nominees to Cenveo's board of
directors will result in the changes necessary to make Cenveo successful or will
provide superior returns to Cenveo's shareholders.
ROBERT G. BURTON, SR. AND BURTON CAPITAL MANAGEMENT, LLC
It is our intention, following the election of our slate of directors outlined
below, to hire Robert G. Burton, Sr. as Cenveo's Chief Executive Officer and as
Chairman of its board of directors. We believe that Mr. Burton, a Printing
Impressions Hall of Fame member, is recognized for his intense focus on
customers and on enhancing shareholder value. We believe that Mr. Burton has
proven his ability to turn around underperforming companies.
-6-
Mr. Burton is the Chairman, CEO and Managing Member of Burton Capital. BCM was
formed to invest in middle market manufacturing companies that provide an
opportunity for increased shareholder value through intense management and
operational changes and organic and acquisitive growth. Through BCM, Mr. Burton,
who is the Managing Member and majority holder of the membership interests in
BCM, has purchased 2,591,882 shares of Cenveo's common stock to date.
From December 2000 through December 2002, Mr. Burton was the Chairman, President
and CEO of Moore, a leading printing company with over $2.0 billion in revenues
for fiscal year 2002. During his tenure at Moore, Mr. Burton led Moore to a
turnaround by significantly reducing costs, recruiting top-tier executive talent
and growing revenue through acquisitions and a "one-stop shopping" customer
focus. Moore's share price increased from $2.38 on December 12, 2000, the first
date of Mr. Burton's employment, to $10.16 on December 6, 2002, the date of his
resignation. This was not the first time Mr. Burton delivered results to
shareholders.
From April 1991 through October 1999, Mr. Burton was the Chairman, President and
CEO of World Color, a Kohlberg Kravis & Roberts portfolio company and a leading
commercial printing company with revenues in excess of $2.3 billion in fiscal
year 1998. During his nine-year tenure as the senior executive of World Color,
Mr. Burton led its turnaround, which culminated in a sale to Quebecor Printing,
Inc. in 1999. The sale created Quebecor World, one of the world's largest
commercial printers. World Color completed its IPO on January 25, 1996 at a
price of $19.00 per share and was sold to Quebecor at $38.00 per share.
From 1981 to 1991, Mr. Burton held a series of senior executive positions at
Capital Cities/ABC, including President of ABC Publishing. At Capital
Cities/ABC, Mr. Burton was instrumental in turning around the operations he ran
from a loss position to a major profit contributor for the company. Mr. Burton
has also held senior executive media positions at CBS and IBM and Walter
Industries, Inc.
We believe that Mr. Burton's track record of exceptional performance, his
knowledge of the commercial printing industry and his understanding of the needs
of commercial print customers, will result in improved financial performance,
increased shareholder confidence and, most importantly, increased value for
Cenveo's shareholders.
BACKGROUND TO THE SOLICITATION
In July 2004, BCM contacted Cenveo's then Chairman, President and Chief
Executive Officer, Mr. Paul Reilly, to discuss its interest in potentially
acquiring Cenveo. A meeting was subsequently held between BCM and Mr. Reilly to
explore this opportunity. As a result of this meeting and after several
subsequent discussions, BCM proposed a transaction to acquire Cenveo at a price
of $7.00 per share. The proposal was subject to, among other things, limited due
diligence (BCM indicated that it could complete its diligence in less than a
month and finalize the deal early in 2005) and a financing contingency, and was
based upon Cenveo's public statements, namely that it expected to generate
between $135 and $142 million of EBITDA for the fiscal year ending December 31,
2004, and that it intended to use Cenveo's free cash flow to reduce debt
meaningfully by the end of fiscal 2004.
Subsequently, Cenveo advised BCM that Cenveo was only willing to entertain
discussions with BCM if it would indicate a valuation range in the "high
single-digits."
In early 2005, after learning of Mr. Reilly's plans to resign, BCM again
contacted Cenveo's board of directors to express its continued interest in
Cenveo. BCM indicated, in response to a statement that Cenveo was "not for
sale," that BCM was willing to consider an alternative proposal. In February
2005, BCM proposed to invest up to $100 million in exchange for newly issued
securities of Cenveo that would be priced based on the then current market price
of approximately $3.00 per share. BCM also proposed that Robert G. Burton, Sr.
would succeed Mr. Reilly as Chairman and Chief Executive Officer and that BCM
would have the right to appoint two directors to Cenveo's then current board (in
addition to Mr. Burton's appointment as Chairman). Cenveo never formally
responded to this proposal.
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During March 2005, BCM attempted to meet with Susan O. Rheney, Cenveo's
Chairperson, to further discuss its proposals. BCM requested that Cenveo bring a
financial advisor to a meeting with BCM to discuss BCM's proposals. On March 23,
2005, Ms. Rheney, informed BCM that Cenveo's board would not hire an independent
financial advisor to assist in the review of BCM's proposals or to accompany her
at a meeting with BCM.
On April 7, 2005, BCM sent a letter to Cenveo's board of directors that included
discussion of certain of BCM's prior contacts with Cenveo, as well as a summary
of BCM's assessment of the causes of Cenveo's poor performance. The letter also
requested a meeting to discuss various matters, including but not limited to,
the following:
o the installation of Robert G. Burton, Sr. as Chairman of Cenveo's board of
directors and Chief Executive Officer; and
o the appointment of two additional industry-experienced individuals chosen
by BCM to Cenveo's existing board of directors to support Mr. Burton's
efforts.
On April 8, 2005, Cenveo sent a letter to BCM disagreeing with "virtually all of
the assertions" in BCM's letter of April 7, 2005.
On April 18, 2005, Cenveo issued a press release announcing that it had adopted
a "poison pill," certain amendments to its bylaws (which could, among other
things, delay special meetings of shareholders called by the holders of more
than 10% of Cenveo's common stock) and a "severance benefit plan," which we have
described below under "Change of Control Provisions -- Cenveo's Employment
Agreements, Benefit Plans and Other Agreements -- Severance Plan." At the same
time, Cenveo announced that it had retained Rothschild Inc. to assist the board
in a "thorough evaluation" of Cenveo's strategic alternatives, and that the law
firms of Wachtell, Lipton, Rosen & Katz and Hogan & Hartson, L.L.P. had been
retained in connection with such evaluation.
On April 21, 2005, BCM sent Cenveo a letter discussing, among other things, the
offer by Robert G. Burton, Sr. to serve as the Chairman and Chief Executive
Officer of Cenveo, and to appoint two other individuals to its board of
directors.
On May 6, 2005, BCM, Goodwood and a representative from Hughes Hubbard & Reed
LLP, counsel for BCM and Goodwood, met with Ms. Rheney and Jerry Pickholz,
another member of Cenveo's board, as well as representatives from Rothschild and
Wachtell, Lipton, Rosen & Katz. At the meeting, BCM presented proposals to,
among other things:
o elect Mr. Burton as Cenveo's Chairman of the board of directors and Chief
Executive Officer and elect two other individuals nominated by him to its
board;
o to hire other senior managers; and
o improve Cenveo's manufacturing/productivity, rationalize its existing
plants, move its headquarters, changes its benefits and insurance programs
and adopt an employee stock purchase plan for executives and all other
employees.
On or about May 13, 2005, a representative from Rothschild informed a
representative from Hughes Hubbard & Reed that:
o Cenveo would not accept BCM's proposal to elect Mr. Burton as Cenveo's
Chairman and Chief Executive Officer and to elect two other individuals
nominated by him to its board;
o Cenveo would very much like BCM and Goodwood to "participate" in the
"process"; and
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o a significant investment in Cenveo (of at least $50 million) by BCM and
Goodwood might help Cenveo's board of directors determine that the proposal
by BCM and Goodwood was attractive.
On or about May 16, 2005, a representative from Hughes Hubbard & Reed informed a
representative from Rothschild that BCM and Goodwood might be willing to make a
small additional investment in Cenveo if such an investment would be helpful to
induce the board to accept BCM and Goodwood's proposal. The representative from
Rothschild was also informed that BCM and Goodwood would consider making such an
investment only if Cenveo would agree to negotiate exclusively with them to see
if the parties could reach an agreement in a short period of time.
On May 20, 2005, a representative of Rothschild called a representative of
Hughes Hubbard & Reed to inform them that Cenveo would not stop its process to
negotiate with BCM and Goodwood. Rothschild further informed Hughes Hubbard &
Reed that Cenveo's board would only consider the proposal by BCM and Goodwood,
which would have resulted in the election of Mr. Burton as Chairman and Chief
Executive Officer and two other designees of BCM and Goodwood as directors, if
they were willing to make an investment significantly larger than $50 million,
and only if they signed a confidentiality agreement, the terms of which would be
negotiated with Wachtell, Lipton, Rosen & Katz.
On May 25, 2005, BCM sent Cenveo a letter stating its intention to call a
special meeting of Cenveo's shareholders to nominate a slate of directors who
will "act affirmatively in the best interests of" Cenveo's stockholders.
On June 10, 2005, BCM, Goodwood and certain other shareholders sent Cenveo a
letter demanding the special meeting of shareholders with respect to which this
proxy statement relates. The letter was sent in accordance with Section
7-107-102(1)(b) of the Colorado Business Corporation Act, which requires a
Colorado corporation to hold a special meeting of shareholders if "the
corporation receives one or more written demands for [a special] meeting,
stating the purpose or purposes for which it is to be held, signed and dated by
the holders of shares representing at least ten percent of all the votes
entitled to be cast on any issue proposed to be considered at the meeting."
Additionally, the letter included additional information required by certain
provisions of Cenveo's bylaws.
Also on June 10, 2005, BCM, Goodwood and the same other shareholders sent Cenveo
a letter demanding, among other things, information about the record and
beneficial ownership of Cenveo's common stock.
On June 16, 2005, Cenveo's attorneys made a list of the record holders of
Cenveo's common stock available to BCM and Goodwood and informed them of their
view that the Colorado Business Corporation Act did not require Cenveo to
provide the other information BCM and Goodwood had requested.
On June 17, 2005, Cenveo announced that the special meeting would be held on
Wednesday, September 14, 2005. Cenveo's bylaws required the meeting to be called
within 90 days of the date Cenveo confirmed that the persons making the demand
actually owned the number of shares of its common stock required to call a
special meeting on the date the demand was made. Accordingly, the meeting date
selected was the last date permitted by Cenveo's bylaws.
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MATTERS TO BE CONSIDERED AT THE SPECIAL MEETING
In order to replace the current board, we are soliciting proxies to take the
following actions at the special meeting of shareholders:
PROPOSAL 1 To amend Cenveo's bylaws to permit the shareholders to fix the
number of directors constituting the entire board of directors,
including by appropriate amendment to Section 3.1 of Cenveo's
bylaws. The text of the amendment to the bylaws is set forth in
Annex A. Adoption of this bylaw by shareholders will not prevent
shareholders or the board from further amending the bylaws to
again change the number of directors following the special
meeting. No action by Cenveo's board of directors is required to
implement this amendment.
PURPOSE
The purpose of Proposal 1 is to ensure that Cenveo's shareholders
have the right to set the number of directors on the board and to
prevent the incumbent board from thwarting our intentions.
Proposal 1 will allow the shareholders to ensure that the
directors elected at the special meeting are Cenveo's only
directors immediately following the special meeting.
PROPOSAL 2 To repeal by appropriate amendment to Section 3.2 of Cenveo's
bylaws the provision in Cenveo's bylaws that may purport to
require 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.
PURPOSE
The purpose of Proposal 2 is to ensure that Cenveo's shareholders
are entitled to fill the vacancies they might create and to
prevent the incumbent board from thwarting our intentions. The
Colorado Business Corporation Act permits vacancies to be filled
by the board or shareholders. BCM and Goodwood believe that the
Colorado Business Corporation Act governs the procedures for
filling vacancies in the board of directors notwithstanding any
bylaw that may purport to be to the contrary. BCM and Goodwood
nevertheless believe that it would be advisable to eliminate any
possible confusion on the subject by repealing Section 3.2 of
Cenveo's bylaws.
PROPOSAL 3 To remove all persons currently serving as directors of Cenveo
and remove any other persons elected to the Company's board of
directors prior to the special meeting.
PURPOSE
Under applicable law, in order to replace the current directors
at the special meeting of shareholders, the existing board first
must be removed and then the vacancies created by such removal
may be filled with new directors. Under the Colorado Business
Corporation Act, Cenveo's directors may be removed with or
without cause by the vote of the shareholders specified under
"Questions and Answers About the Special Meeting -- What Vote is
Required to Approve Each Proposal and How Will Votes be Counted?"
PROPOSAL 4 To set the size of Cenveo's board of directors at seven seats.
PURPOSE
The purpose of Proposal 4 is to ensure that once our nominees are
elected as directors, they will constitute the entire board.
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PROPOSAL 5 To repeal each provision of or amendment to Cenveo's bylaws
(other than the amendments added or effected pursuant to
Proposals 1 and 2) adopted after the version of the bylaws
included as Exhibit 3.2 to Cenveo's current report on Form 8-K
dated (date of earliest event reported) April 17, 2005 as filed
with the SEC on April 18, 2005.
PURPOSE
The purpose of Proposal 5 is to protect the transparency and
fairness of the election process by ensuring that the provisions
governing or related to the election of Cenveo's directors, as
stipulated in the latest publicly available draft of the bylaws,
remain unchanged through the time of the special meeting.
Proposal 5 is designed to prevent the current board from changing
the bylaws before the special meeting in ways that could limit
the ability of Cenveo's shareholders to elect their choice of
directors. Proposal 5 would apply only to bylaw amendments
adopted before the special meeting.
PROPOSAL 6 To elect our seven nominees (referred to below under the heading
"Election of Directors") to Cenveo's board of directors, in lieu
of any persons who may be nominated by Cenveo's incumbent board
or by any other person.
PURPOSE
The purpose of Proposal 6 is to elect our nominees. Our nominees
would then comprise the entire board and commence implementing
turnaround measures at Cenveo.
On June 10, 2005, together with certain other shareholders of Cenveo, we
delivered written notice to the Secretary of Cenveo of our intention to nominate
Robert G. Burton, Sr., Patrice M. Daniels, Leonard C. Green, Mark J. Griffin,
Michael W. (Max) Harris, Thomas Oliva and Robert T. Kittel for election to
Cenveo's board at the special meeting and to present Proposals 1, 2, 3, 4, 5 and
6 described above to the shareholders of Cenveo for their approval at the
special meeting. We believe that our nominees are highly qualified individuals
who have the credibility and the solid experience in the commercial printing
industry necessary to maximize the value and productivity of Cenveo's employees
and assets. For more information regarding our nominees, see "Election of
Directors" below.
If we become aware of a new matter raised by the board of directors of Cenveo
after their proxy cards have been delivered to shareholders of Cenveo, but a
reasonable time before the special meeting, we will either:
o include this new matter in a revised proxy card and disseminate it to
shareholders with accompanying explanatory soliciting material, thus giving
shareholders a meaningful opportunity to revoke any previously executed
proxy granting discretionary authority; or
o if the new matter is not so included in the card, forego the exercise of
discretionary voting authority on such matter.
If we do not receive notice of a new matter a reasonable time before the special
meeting, our proxies may still exercise discretionary voting authority with
respect to that matter in accordance with applicable laws and regulations.
-11-
ELECTION OF DIRECTORS
Cenveo's bylaws currently provide that there will be not less than one director,
with the number of directors to be fixed from time to time by the board. The
board currently consists of eight directors. We are asking Cenveo's shareholders
to approve the reduction of the size of the board from eight to seven and elect
our seven nominees.
Our nominees are Robert G. Burton, Sr., Patrice M. Daniels, Leonard C. Green,
Mark J. Griffin, Michael W. (Max) Harris, Thomas Oliva and Robert T. Kittel. We
believe our nominees are highly qualified individuals based on their extensive
business and professional experience.
BACKGROUND OF THE DIRECTOR NOMINEES
The following table sets forth the name, age (as of July 1, 2005) and background
of each of our nominees. This information has been furnished to us by the
respective nominees.
NAME AGE BACKGROUND
---- --- ----------
Robert G. Burton, Sr.......... 66 Mr. Burton formed BCM in January 2003
and has been its Chairman, Chief
Executive Officer and sole managing
member since its formation. From
December 2000 through December 2002,
he was the Chairman, President and
Chief Executive Officer of Moore
Corporation Limited, a leading
printing company with over $2.0
billion in revenue for fiscal year
2002. From April 1991 through October
1999, he was the Chairman, President
and Chief Executive Officer of World
Color Press, Inc., a leading
commercial printing company. From 1981
through 1991, he held a series of
senior executive positions at Capital
Cities/ABC, including President of ABC
Publishing. Preceding his employment
at Moore, Mr. Burton was Chairman,
President, and Chief executive Officer
of Walter Industries, Inc., a
diversified holding company.
Patrice M. Daniels............ 44 Ms. Daniels has been a Partner at Onyx
Capital Ventures, a private investment
firm that she co-founded, since
October 2001. From March 1997 to
October 2001, she was a Managing
Director, High Yield and Acquisition
Financing, at CIBC World Markets, an
investment bank. Ms. Daniels is a
director of CB Richard Ellis Group,
Inc., a commercial real estate
services firm.
Leonard C. Green.............. 68 Mr. Green has been President of The
Green Group, a financial services firm
of CPAs, consultants and
entrepreneurs, since 1976. Mr. Green
is a Professor of Entrepreneurship at
Babson College in Wellesley,
Massachusetts. He is presently, and
has served, on the board of directors
of a number of private companies.
Mark J. Griffin............... 57 Mr. Griffin was the Founder of the
Eagle Hill School, an independent
private school in Greenwich,
Connecticut. He has been its
headmaster since 1975.
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NAME AGE BACKGROUND
---- --- ----------
Michael W. (Max) Harris....... 50 Mr. Harris was the co-founder of OEM,
an optical disc manufacturing company
in Charlotte, North Carolina, in March
2001. He has since served as its
Chairman and CEO since that date. Mr.
Harris has been a director of Ad-Plex
Rhodes, a retail printing company,
since January 2002, and has been its
Chairman since February 2003. From
1973 until 2001, Mr. Harris served in
a variety of roles at World Color,
where he served as Executive
Vice-President of Manufacturing from
1991 until March 1995. From March 1995
until October 1998, he served as the
President of World Color's
Manufacturing Operations, and he
served as President of World Color's
Retail Group from October 1998 until
March 2001.
Thomas Oliva.................. 47 From December 2002 until January 2004,
Mr. Oliva was the President and Chief
Operating Officer of Moore Wallace
Inc., a commercial printing company.
From June 2002 until December 2002, he
was the Group President of the
outsourcing division of Moore (Moore
acquired Wallace Computer Services,
Inc. and changed its name to Moore
Wallace Inc. during 2003). From
December 2000 until December 2002, he
was the Group President of the Forms
and Labels Division of Moore. From
January 2000 until May 2000, Mr. Oliva
was the Group President of World
Color.
Robert T. Kittel.............. 33 Mr. Kittel has been a Partner of
Goodwood, an investment management
firm, since June 2003, and with
Goodwood since June 2002. From June
2000 until February 2002, he was a
Partner at Silvercreek Management
Inc., an investment management firm.
From February 1996 until May 2000, Mr.
Kittel was employed by Cadillac
Fairview Corporation, a commercial
real estate development company.
SHARE OWNERSHIP OF THE DIRECTOR NOMINEES
The following table contains a summary of the total number of shares of common
stock of Cenveo beneficially owned by the nominees of BCM and Goodwood as of
June 10, 2005.
The address for each nominee is listed below. The information in the following
table has been furnished to us by the respective nominees. The percentage of
ownership of common stock for each person listed below is based on 49,067,921
shares of common stock that Cenveo reported as outstanding as of April 29, 2005,
based on information publicly disclosed by Cenveo in its Quarterly Report on
Form 10-Q for the quarterly period March 31, 2005, filed with the Securities and
Exchange Commission (the "SEC") on May 3, 2005)
NUMBER OF SHARES PERCENTAGE OF SHARES
NAME AND ADDRESS BENEFICIALLY OWNED BENEFICIALLY OWNED
---------------- ------------------ ------------------
Robert G. Burton, Sr.......................... 2,591,882 5.3%
100 Northfield Street
Greenwich, CT 06830
Patrice M. Daniels............................ -- --
116 32nd Street
Manhattan Beach, CA 90266
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NUMBER OF SHARES PERCENTAGE OF SHARES
NAME AND ADDRESS BENEFICIALLY OWNED BENEFICIALLY OWNED
---------------- ------------------ ------------------
Leonard C. Green.............................. 328,230 *
900 Route 9, 6th Floor
Woodbridge, NJ 07095
Mark J. Griffin............................... -- --
Eagle High School
45 Glenville Road
Greenwich, CT 06831
Michael W. Harris............................. -- --
8500 South Tyron Street
Charlotte, NC 28273
Thomas Oliva.................................. 342,948 *
21380 N. Middletown Drive
Kildeer, IL 60047
Robert T. Kittel.............................. -- --
212 King Street West, Suite 201
Toronto, Canada M5H 1K5
All nominees as a group (seven persons)....... 3,226,060 6.7%
-----------
* Represents less than 1% of Cenveo's outstanding common stock.
In addition to the stock listed as owned by the director nominees in the above
table, each of the director nominees who owns stock may be deemed to be a member
of a group that collectively owns 5,427,934 shares of Cenveo's common stock.
Each of the nominees disclaims beneficial ownership of the shares owned by the
other members of the group. Additional information regarding the ownership by,
and composition of, the group is included elsewhere in this proxy statement,
including under "Annex C -- Certain Beneficial Owners of Cenveo" and in "Annex B
-- Information About the 'Participants in the Solicitation.'"
CORPORATE GOVERNANCE MATTERS
We expect that our nominees, if elected, will adopt and follow corporate
governance policies that meet or exceed all of the requirements of the
Sarbanes-Oxley Act of 2002, the rules and regulations of the SEC and the listing
guidelines for the New York Stock Exchange ("NYSE").
None of our nominees nor any of their respective immediate family members is an
employee of, or a consultant to, or has any other contractual relationship with
Cenveo. Further, none of them is or has been a partner of or otherwise employed
by any present or former auditor of Cenveo in the past five years and none of
them is an officer of a company of which any of the others is also a board
member. When elected, we expect that all of our nominees other than Robert G.
Burton, Sr., will be "independent" for purposes of the listing requirements and
guidelines of the NYSE (as Cenveo's Chief Executive Officer, Mr. Burton would
not satisfy the NYSE's independence guidelines).
OTHER INFORMATION ABOUT THE DIRECTOR NOMINEES
Our nominees will not receive any compensation from BCM or Goodwood for agreeing
to be nominated by us and to serve as directors of Cenveo, if elected pursuant
to our solicitation. We have agreed to reimburse our nominees for all reasonable
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and out of pocket expenses incurred by them in connection with this proxy
solicitation and any related proceedings.
According to Cenveo's proxy statement for its 2005 annual meeting, under
compensation arrangements currently in effect, non-employee directors received
the following during 2004:
o an annual retainer of $20,000 paid quarterly;
o $1,500 for each board meeting attended in person;
o $1,000 for each board meeting attended by telephone;
o $1,000 for each committee meeting attended in person;
o $750 for each committee meeting attended by telephone; and
o non-qualified options for 5,000 shares of common stock under Cenveo's
long-term equity incentive plan (these options may be exercised six months
following the grant date).
Non-employee directors who were re-elected at Cenveo's 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. Cenveo's lead director
was paid an additional stipend of $5,000 for his or her service in such role
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 Cenveo's corporate governance
policies. Cenveo also provides directors' and officers' liability insurance and
indemnity agreements for its directors.
We expect that our nominees will be paid the same amounts as described above,
except that fees received by them for 2005 will be pro rated to reflect the fact
that they will be elected in the third quarter.
Each of our nominees has consented to being nominated to the board, being named
in this proxy statement as a nominee and serving as a director of Cenveo, if
elected pursuant to our solicitation. However, Thomas Oliva has informed us that
he will not serve as a director until July 24, 2005 due to restrictions in an
agreement with a former employer that will be in effect until that date.
Accordingly, if the special meeting is held prior to July 24, 2005, he would not
accept election to Cenveo's board at the special meeting. As permitted by
Cenveo's bylaws, if any individual nominee (including Mr. Oliva) shall be unable
or unwilling to serve for any reason, we reserve the right to propose a
replacement nominee at the special meeting. Shares represented by the WHITE
proxy cards will be voted for any such substitute or additional nominees by us.
If Proposals 1, 3 and 4 are not adopted at the special meeting, it may not be
possible for us to elect our nominees to Cenveo's board of directors pursuant to
Proposal 6. We therefore urge you to vote not only "FOR" our nominees, but also
"FOR" the adoption of each of our proposals, including Proposals 1, 3 and 4.
INFORMATION ABOUT THE "PARTICIPANTS IN THE SOLICITATION"
BCM and Goodwood and their nominees and certain other persons are "participants
in the solicitation" by BCM and Goodwood of proxies for the special meeting
within the meaning of the federal securities laws. Additional information
related to the participants in the solicitation, including their beneficial
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ownership of Cenveo's common stock, is set forth on Annex B to this proxy
statement and is incorporated into this proxy statement by reference.
Information in this proxy statement about each participant was provided by that
participant.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16 of the Securities Exchange Act of 1934, as amended, requires Cenveo's
directors and officers, and persons who own more than 10% of a registered class
of Cenveo's equity securities, to file initial reports of ownership and reports
of changes in ownership with the SEC. The SEC requires us to disclose whether
our nominees for directors have filed such reports. Based on representations
from such nominees, to our knowledge, all filings by such nominees were made on
a timely basis, except that Leonard C. Green did not timely disclose ownership
of certain shares when he first filed a Form 3 and did not timely disclose the
acquisition of certain shares on a Form 4 that was filed with the SEC on April
11, 2005.
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CHANGE OF CONTROL PROVISIONS
In the event of a "change of control" of Cenveo (which may include the election
of our nominees):
o Cenveo's senior lender could declare an "event of default" under the terms
of its senior secured credit facility;
o Cenveo would be required to offer to repurchase its outstanding senior
notes and senior subordinated notes; and
o Cenveo could be required to make certain severance payments to its top
executives if they are terminated by our director nominees following their
election to the board.
THESE DOCUMENTS GENERALLY PROVIDE THAT A CHANGE OF CONTROL WILL OCCUR IF A
MAJORITY OF CENVEO'S DIRECTORS ARE NOT PERSONS WHO WERE DIRECTORS AT THE TIME
SUCH DEBT WAS ISSUED (OR SUCH SEVERANCE ARRANGEMENTS WERE PUT INTO PLACE) OR
WHOSE NOMINATION OR ELECTION WAS NOT APPROVED EITHER BY A MAJORITY OF SUCH
DIRECTORS (OR, IN THE CASE OF SUCH SEVERANCE ARRANGEMENTS, AT LEAST TWO-THIRDS)
OR BY PERSONS WHOSE ELECTION OR NOMINATION TO THE BOARD WAS SO APPROVED.
ACCORDINGLY, WE BELIEVE THAT IF THE INCUMBENT BOARD ACTS TO APPROVE THE ELECTION
OF OUR NOMINEES, NO SUCH CHANGE OF CONTROL OBLIGATIONS WILL BE TRIGGERED. WE
FURTHER BELIEVE THAT, UNDER THESE CIRCUMSTANCES, THE INCUMBENT BOARD'S FIDUCIARY
DUTIES REQUIRE IT TO TAKE SUCH ACTION BECAUSE THE FAILURE TO DO SO COULD INHIBIT
CENVEO'S SHAREHOLDERS FROM EXERCISING THEIR RIGHT TO SELECT A BOARD OF THEIR
CHOOSING AND WOULD POTENTIALLY IMPOSE A LARGE EXPENSE ON CENVEO AT A TIME WHEN
WE BELIEVE IT DOES NOT HAVE THE FUNDS REQUIRED TO MAKE SUCH PAYMENTS. WE EXPECT
THAT IF THE INCUMBENT DIRECTORS FAIL TO TAKE ALL ACTIONS REQUIRED TO ELIMINATE
THE APPLICATION OF THESE CHANGE OF CONTROL PROVISIONS, WE WILL PURSUE
APPROPRIATE ALTERNATIVES (INCLUDING POTENTIAL LEGAL ACTION AGAINST THE INCUMBENT
DIRECTORS FOR BREACH OF THEIR FIDUCIARY DUTIES).
CENVEO'S DEBT INSTRUMENTS
According to Cenveo's public filings, certain of Cenveo's debt instruments would
potentially impose costs on Cenveo and require Cenveo to take certain actions in
the event of a change of control under the Company's debt instruments. The
following summary of certain of the provisions of those debt instruments is
based on the copies of those documents included in Cenveo's public filings.
Under each of the debt instruments described below, except as otherwise noted, a
change of control will be deemed to have occurred on the first day on which a
majority of the members of Cenveo's board are not "continuing directors"
(generally defined to mean the Cenveo directors as of the date of the debt
instrument or directors who were nominated for election or elected to the board
with the approval of the continuing directors who were members of the board at
the time of the new director's nomination or election).
SENIOR SECURED CREDIT FACILITY
Under the terms of Cenveo's credit agreement dated as of March 25, 2004, a
change of control is deemed to constitute an event of default, upon which the
lenders may terminate the revolving credit commitments and/or declare all loans
thereunder to be due and payable. As of March 31, 2005, there was $110.9 million
outstanding under this credit agreement.
SENIOR NOTES
As of March 31, 2005, Cenveo had outstanding 9 5/8% senior notes due 2012 in the
aggregate principal amount of $350 million. The indenture to which these notes
are subject, provides that, upon a change of control, each holder of these notes
will have the right to require Cenveo to repurchase all or any part of such
-17-
holder's notes at an offer price in cash equal to 101% of the principal amount
of these Notes, plus accrued and unpaid interest.
SENIOR SUBORDINATED NOTES
As of March 31, 2005, Cenveo had outstanding 7 7/8% 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 holder's notes at an offer price in cash equal to 101% of the principal
amount of such notes, plus accrued and unpaid interest.
CENVEO'S EMPLOYMENT AGREEMENTS, BENEFIT PLANS AND OTHER AGREEMENTS
Cenveo's board of directors has taken affirmative steps to impose costs on any
person that may seek to acquire control of Cenveo by requiring payments to its
senior top executives in the event of a change of control in Cenveo's board of
directors. The following is derived from Cenveo's 2005 proxy statement and other
public filings (except that information regarding Mr. Malone's severance
agreement is derived from the current report on Form 8-K dated (date of earliest
event reported) June 24, 2005, which announced that he had been hired).
SEVERANCE PLAN
On April 17, 2005, Cenveo's board adopted a severance plan for its senior top
executives. The severance plan provides severance benefits upon terminations of
employment by Cenveo as a result of permanent layoff or reduction in force, lack
of work or job elimination, the sale of a facility, division or business segment
or an involuntary termination without cause (as defined in the severance plan).
In addition, severance benefits will be provided upon a participant's
termination of employment as a result of a relocation of employment of greater
than 50 miles or a substantial diminution of the participant's duties,
authorities, responsibilities, or status (including title, offices, reporting
requirements or supervisory functions).
Upon a severance event, the amount of severance to be paid will be based upon a
participant's position. The senior vice presidents for corporate development
(Chief Legal Officer) and finance (Chief Financial Officer) and the presidents
of Cenveo's commercial and resale segments will be entitled to receive two years
of base salary, 12 months outplacement services and 12 months of health benefit
continuation reimbursement, and the Company's vice presidents (other than
segment vice presidents and segment executive vice presidents) will be entitled
to one year of base salary, 12 months outplacement services and 12 months of
health benefit continuation reimbursement. Currently seven vice presidents would
be covered under the severance plan.
Severance under the severance plan is offset by any other severance payments due
under individual agreements or otherwise.
SEVERANCE AGREEMENTS
Cenveo has entered into severance agreements, triggered by a change of control
with Mr. Salbaing, Mr. Davis, Mr. Griffiths and Mr. Conway. These agreements
provide that if the executive's employment is terminated in certain
circumstances relating to a change of control, the executive will receive:
o a payment equal to two years' base salary plus two years' target bonus;
o annual bonus plus the target bonus for the portion of the year completed
before termination;
o reimbursement of post-termination medical and dental premiums; and
o reimbursement of up to $10,000 for outplacement services.
-18-
These agreements include covenants from the executive not to compete with Cenveo
for a period of two years after he leaves Cenveo's employ.
Additionally, Cenveo has entered into an employment agreement with Mr. Malone.
This agreement provides that if his employment is terminated in certain
circumstances relating to a change of control, he will receive:
o a payment equal to two years' base salary plus two years' target bonus (or,
if he is terminated in connection with a change of control before June 22,
2006, one years' base salary plus one years' target bonus);
o if he is terminated after December 31, 2005, the annual bonus plus the
target bonus for the portion of the year completed before termination;
o reimbursement of post-termination medical and dental premiums; and
o reimbursement of up to $15,000 for outplacement services.
The election of our nominees to Cenveo's board will be a "change of control"
under these severance agreements.
-19-
QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING
HOW DO I VOTE IN PERSON?
If you owned shares of Cenveo's common stock on the record date, ____ __, 2005,
you may attend the special meeting and vote in person. If you are not the record
holder of your shares, please refer to the discussion following the question
"What if I am not the record holder of my shares?" If you hold your shares in
the name of a bank or broker, you will not be able to vote in person at the
special meeting, unless you have previously specially requested and obtained a
"legal proxy" from your bank or broker and present it at the special meeting.
WHEN YOU SIGN AND RETURN THE WHITE PROXY CARD YOU WILL BE VOTING FOR OUR
NOMINEES TO SERVE AS DIRECTORS AND FOR ADOPTION OF OUR PROPOSALS, UNLESS YOU
APPROPRIATELY MARK YOUR CARD OTHERWISE.
WE BELIEVE THAT IT IS IN THE BEST INTEREST OF SHAREHOLDERS TO ELECT OUR NOMINEES
AT THE SPECIAL MEETING, AND STRONGLY RECOMMEND A VOTE "FOR" THE ELECTION OF EACH
OF OUR NOMINEES AND "FOR" THE ADOPTION OF EACH OF OUR PROPOSALS.
HOW DO I VOTE BY PROXY?
To vote by proxy, you should complete, sign and date the enclosed WHITE proxy
card and return it promptly in the enclosed postage-paid envelope. To be able to
vote your shares in accordance with your instructions at the special meeting, we
must receive your proxy as soon as possible but in any event prior to the
special meeting.
WHAT IF I AM NOT THE RECORD HOLDER OF MY SHARES?
If your shares are held in the name of a brokerage firm, bank nominee or other
institution (a "custodian"), only it can give a proxy with respect to your
shares. You may have received either a blank, executed proxy card from your
custodian (which you can complete and send directly to BCM and Goodwood) or an
instruction card (which you can complete and return to the custodian to direct
its voting of your shares). If your custodian has not sent you either a blank,
executed proxy card or an instruction card, you may contact the custodian
directly to provide it with instructions. If you need assistance, please contact
our solicitor, D.F. King & Co., Inc., toll-free at (800) 967-7921 (in the United
States) or (212) 269-5550 (collect, for international calls).
If your shares are held in the name of a custodian, and you want to vote in
person at the special meeting, you may request a document called a "legal proxy"
from the custodian and bring it to the special meeting. If you need assistance,
please contact our solicitor, D.F. King & Co., Inc., toll-free at (800) 967-7921
(in the United States) or (212) 269-5550 (collect, for international calls).
WHAT SHOULD I DO IF I RECEIVE A [ ] PROXY CARD?
Proxies on the [ ] proxy card are being solicited by the incumbent management
and board of Cenveo. If you submit a proxy to us by signing and returning the
enclosed WHITE proxy card, do not sign or return the [ ] proxy card or follow
any voting instructions provided by the incumbent management and board of Cenveo
unless you intend to change your vote, because only your latest-dated proxy will
be counted.
If you have already sent a [ ] proxy card to Cenveo, you may revoke it and
provide your support for our nominees and our other proposals by signing, dating
and returning the enclosed WHITE proxy card.
-20-
WHAT IF I WANT TO REVOKE MY PROXY?
If you give a proxy, you may revoke it at any time before it is voted on your
behalf. You may do so in three ways:
o by delivering a later-dated proxy to either our proxy solicitor, D.F. King
& Co., Inc., or directly to us; or
o by delivering a written notice of revocation to either our proxy solicitor
or directly to us; or
o by voting in person at the special meeting.
SHOULD I SUBMIT A PROXY IF I PLAN TO ATTEND THE SPECIAL MEETING?
Whether you plan to attend the special meeting or not, we urge you to submit a
WHITE proxy card. Returning the enclosed WHITE proxy card will not affect your
right to attend the special meeting and vote.
WHO CAN VOTE?
You are eligible to vote or to execute a proxy only if you owned shares of
Cenveo's common stock on the record date for the special meeting, ____ __, 2005.
Even if you sell your shares after the record date, you will retain the right to
execute a proxy in connection with the special meeting. It is important that you
grant a proxy regarding shares you held on the record date, or vote those shares
in person, even if you no longer own those shares.
Based on information publicly disclosed by Cenveo in its definitive proxy
statement, filed with the SEC on ____ __, 2005, at the close of business on ____
__, 2005, _________ shares of Cenveo's common stock were entitled to vote.
HOW MANY VOTES DO I HAVE?
With respect to each matter to be considered at the special meeting, each
shareholder will have one vote for each share of Cenveo's common stock held by
it on the record date.
HOW WILL MY SHARES BE VOTED?
If you give a proxy on the accompanying WHITE proxy card, your shares will be
voted as you direct. If you submit a proxy to BCM and Goodwood without
instructions, their representatives will vote your shares in favor of all of our
proposals. Submitting a WHITE proxy card will entitle our representatives to
vote your shares in accordance with their discretion on matters not described in
this proxy statement that may arise at the special meeting. As of the date of
this proxy statement, neither BCM nor Goodwood knows of any such matters.
Unless a proxy specifies otherwise, it will be presumed to relate to all shares
held of record on the record date by the person who submitted it.
WHAT IS A "QUORUM" AND WHY IS IT NECESSARY?
Conducting business at the special meeting requires a quorum. For a quorum to
exist, shareholders representing a majority of the outstanding shares entitled
to vote must be present in person or represented by proxy. Under the Colorado
Business Corporation Act, Cenveo's articles of incorporation and bylaws,
abstentions and broker non-votes are treated as present for purposes of
determining whether a quorum exists.
-21-
WHAT VOTE IS REQUIRED TO APPROVE EACH PROPOSAL AND HOW WILL VOTES BE COUNTED?
If a quorum is present, directors will be elected by a plurality of the votes
cast. This means that the seven nominees receiving the highest number of votes
will be elected as directors. Cenveo's articles of incorporation do not permit
shareholders to cumulate their votes.
Broker-dealers do not have discretionary authority for beneficial owners in
contested matters. Since directors will be elected by a plurality of the votes
cast, abstentions and broker non-votes will not have the effect of a vote for or
against the election of any nominees.
Cenveo's bylaws provide that, except as otherwise provided by law or Cenveo's
articles of incorporation or bylaws, the other proposals to be presented at the
special meeting of shareholders will be decided by a majority of the shares
represented in person or by proxy at the special meeting and entitled to vote at
the special meeting. The bylaws further provide that Cenveo's directors may be
removed, and the resulting vacancies filled, by shareholders only if such action
is taken by the holders of a majority of shares entitled to vote at an election
of directors. We believe that these bylaw provisions contradict applicable
provisions of the Colorado Business Corporation Act and are, as such, invalid.
Accordingly, we believe that, pursuant to the terms of the Colorado Business
Corporation Act, each of our proposals other than the election of directors will
be adopted if votes cast in favor of the proposal exceed the votes cast against
the proposal, and therefore that abstentions and broker non-votes will have no
effect on the proposal. In the event that these bylaw provisions are given
effect at the special meeting, then abstentions and broker non-votes will have
the effect of a vote against the proposal.
AM I ENTITLED TO APPRAISAL RIGHTS?
Cenveo shareholders do not have dissenter's rights of appraisal as a result of
this solicitation or the adoption of any of the proposals included in this proxy
statement.
HOW CAN I RECEIVE MORE INFORMATION?
If you have any questions about giving your proxy or about our solicitation, or
if you require assistance, please contact our proxy solicitor, D.F. King & Co.,
Inc., toll-free at (800) 967-7921 (in the United States) or (212) 269-5550
(collect, for international calls).
-22-
SOLICITATION OF PROXIES
In connection with the solicitation of proxies by BCM and Goodwood for use at
the special meeting, proxies may be solicited by mail, courier service,
advertisement, telephone, facsimile, electronic mail, internet, television,
radio and in person (however, proxies may not be submitted by, or voted over,
the Internet). Solicitations may be made, in the manner set forth in this proxy
statement, by BCM, Goodwood or any nominee of BCM and Goodwood to the board,
none of whom will receive additional compensation for such solicitations. We may
request banks, brokerage firms, and other custodians, nominees and fiduciaries
to forward all of the solicitation materials to the beneficial owners of the
shares of Cenveo common stock they hold of record. We will reimburse these
record holders for customary clerical and mailing expenses incurred by them in
forwarding these materials to their customers.
We have retained D.F. King & Co., Inc. for solicitation and advisory services in
connection with the solicitation of proxies for a fee of up to $120,000,
together with reimbursement for its reasonable out-of-pocket expenses. We have
also agreed to indemnify D.F. King & Co., Inc. against certain liabilities and
expenses (including under federal securities laws). D.F. King & Co., Inc. has
informed us that it will employ up to approximately 75 persons to solicit
proxies for use at the special meeting.
All expenses associated with any solicitation of proxies by us in connection
with the special meeting will be split by BCM and Goodwood We intend to seek
reimbursement from Cenveo upon completion of the solicitation of all expenses
incurred by us in connection with our nomination of directors, the submission of
our other proposals and this solicitation. We do not intend to seek the approval
of Cenveo's shareholders for that reimbursement. We estimate that the costs
incidental to his solicitation of proxies, including expenditures for
advertising, printing, postage, legal and related expenses will be approximately
$___. Total costs incurred to the date of this proxy statement by us have been
approximately $____.
INFORMATION ABOUT CENVEO
We believe that Cenveo's incumbent board also will solicit proxies for use at
the special meeting and will furnish a proxy statement in connection with that
solicitation. Neither BCM and Goodwood, nor any of the other participants in the
solicitation, nor any of their respective affiliates or associates is presently
an officer or director of, or otherwise engaged in the management of, Cenveo.
Accordingly, we do not have current information concerning Cenveo, Cenveo's
shareholders (other than the participants in our solicitation), Cenveo's
management, the procedures for submitting proposals for consideration at the
next annual meeting of Cenveo's shareholders or certain other matters regarding
Cenveo and the special meeting. All of the information in this proxy statement
about the foregoing matters has been derived from publicly-available sources
that we have been unable to independently verify. Reference for that information
is made to management's definitive proxy statement, which is expected to be
filed with the SEC during __ 2005.
Under the federal securities laws, we are required to disclose certain
information as to the security ownership of Cenveo's management, its current
directors and the holders of significant amounts of Cenveo's common stock. That
information, which has been obtained from Cenveo's definitive proxy statement
for its annual meeting of shareholders filed with the SEC, on March 11, 2005 is
provided in Annex C.
* * * * *
Some of the statements in this proxy statement may constitute "forward-looking
statements," which for this purpose include all statements that are not of
historical facts. The actual future financial performance of Cenveo could differ
materially from those anticipated by these forward-looking statements.
Particularly given the condition to which Cenveo has been reduced under its
current board and management, there can be no assurance that we or our nominees
to the board of Cenveo will succeed in our and their efforts to turn Cenveo
around.
-23-
* * * * *
IF YOU HAVE ANY QUESTIONS CONCERNING THIS PROXY STATEMENT, WOULD LIKE TO
REQUEST ADDITIONAL COPIES OF THIS PROXY STATEMENT OR NEED HELP VOTING YOUR
SHARES, PLEASE CONTACT:
D.F. KING & CO., INC.
48 WALL STREET
NEW YORK, NY 10005
CALL TOLL FREE: (800) 967-7921
BANKS AND BROKERS, CALL COLLECT: (212) 269-5550
OR
ROBERT G. BURTON, JR. ROBERT T. KITTEL
BURTON CAPITAL MANAGEMENT, LLC GOODWOOD INC.
100 NORTHFIELD STREET 212 KING STREET WEST, SUITE 201
GREENWICH, CT 06830 TORONTO, ONTARIO M5H 1K5 CANADA
(203) 302-3700 (416) 203-2022
-24-
ANNEX A
PROPOSED AMENDMENTS TO BYLAWS
PROPOSAL 1
Following is the text to the amendment to Cenveo's bylaws set forth in
Proposal 1:
"Delete Section 3.1 of Cenveo's bylaws in its entirety and replace it with
the following:
'Section 3.1. NUMBER; QUALIFICATIONS. The number of directors shall be
as fixed in such a manner as may be determined by the vote of not less than
a majority of the directors then in office or by the shareholders, but
shall not be less than one. The directors shall be elected at the annual
meeting of the stockholders, and each director elected shall hold office
until his successor is elected and qualified or until his earlier death,
resignation or removal. A director need not be a stockholder of the
corporation. A majority of the directors may elect from its members a
chairman, who shall also serve as chairman of any annual or special meeting
of the stockholders. The chairman, if any, shall hold this office until his
successor shall have been elected and qualified.'"
PROPOSAL 2
Following is the text to the amendment to Cenveo's bylaws set forth in
Proposal 2:
"Delete Section 3.2 of Cenveo's bylaws in its entirety and replace it with
the following:
'Section 3.2. RESERVED.'"
A-1
ANNEX B
INFORMATION ABOUT THE "PARTICIPANTS IN THE SOLICITATION"
Under applicable SEC regulations, BCM, Goodwood, their nominees to the board of
Cenveo and certain other persons are deemed to be "participants" in their
solicitation of proxies from Cenveo's shareholders to vote in favor of the
election of the directors they have nominated and the approval of their other
proposals.
BACKGROUND OF THE PARTICIPANTS, ETC.
The following is the principal occupation or employment of each of the
participants in the solicitation:
o The principal occupation or employment of each of the nominees for director
is listed in the proxy statement under "Election of Directors -- Background
of the Director Nominees."
o BCM is principally engaged in making investments.
o Robert G. Burton, Jr. is the President of BCM.
o Michael G. Burton, Joseph P. Burton, Gina Zambrana and Donald Zegzdryn are
employees of BCM.
o Brendan Tobin, Stephen Winslow and Colin Christ are independent investors
and/or investment consultants.
o Thomas Higgins is a physician at Westchester Pathology Associates.
o Goodwood Inc. is the sole investment manager of each of Goodwood Fund,
Goodwood Capital Fund, Arrow Goodwood Fund, The Goodwood Fund 2.0 Ltd. and
KBSH Goodwood Canadian Long/Short Fund. Each of Goodwood Fund, Goodwood
Capital Fund, Arrow Goodwood Fund, The Goodwood Fund 2.0 Ltd. and KBSH
Goodwood Canadian Long/Short Fund is principally engaged in making
investments. 1354037 Ontario Inc. owns all of the capital stock of Goodwood
Inc. Peter H. Puccetti and J. Cameron MacDonald are the executive officers
and directors of 1354037 Ontario Inc. Mr. Puccetti is the Chairman and
Chief Investment Officer, Mr. MacDonald is the Chief Executive Officer and
they are directors of Goodwood Inc. Curt S. Cumming is the other executive
officer and director of Goodwood Inc. Robert T. Kittel is a Partner of
Goodwood Inc.
During the past ten years, none of the participants in the solicitation has been
convicted in a criminal proceeding (excluding traffic violations and similar
misdemeanors).
TRANSACTIONS IN CENVEO SECURITIES
Information relating to each participant's business address and additional
information concerning transactions in shares of common stock of Cenveo during
the past two years is as follows:
NUMBER OF SHARES
NAME AND BUSINESS ADDRESS DATE ACQUIRED OR (DISPOSED OF) NOTES
------------------------- ---- ------------------------- -----
Burton Capital Management, LLC............ 1/13/05 7,500 (a)
100 Northfield Street 1/14/05 400 (a)
Greenwich, CT 06830 1/14/05 2,000 (a)
1/14/05 90,100 (a)
1/19/05 4,600 (a)
B-1
NUMBER OF SHARES
NAME AND BUSINESS ADDRESS DATE ACQUIRED OR (DISPOSED OF) NOTES
------------------------- ---- ------------------------- -----
1/21/05 22,000 (a)
1/24/05 21,800 (a)
2/1/05 30 (a)
2/1/05 33,300 (a)
2/8/05 82,250 (a)
2/9/05 167,785 (a)
2/10/05 67,100 (a)
2/14/05 50 (a)
2/14/05 68,200 (a)
2/15/05 1,700 (a)
2/15/05 48,300 (a)
2/16/05 250,000 (a)
2/17/05 404,100 (a)
2/22/05 66,800 (a)
2/22/05 250,000 (a)
2/23/05 200,000 (a)
2/24/05 5,900 (a)
2/25/05 99,500 (a)
2/28/05 141,400 (a)
2/28/05 232,300 (a)
3/4/05 6,100 (a)
3/4/05 100 (a)
3/7/05 16,000 (a)
3/8/05 5,600 (a)
3/9/05 27,200 (a)
3/11/05 5,000 (a)
3/28/05 227,700 (a)
3/29/05 100,000 (a)
3/29/05 161,400 (a)
3/30/05 64,300 (a)
3/30/05 130,400 (a)
3/31/05 68,800 (a)
3/31/05 150,000 (a)
4/1/05 100,000 (a)
4/1/05 142,000 (a)
4/1/05 300,000 (a)
4/4/05 169,296 (a)
4/5/05 104,859 (a)
4/6/05 43,188 (b)
5/24/05 20,183
Robert G. Burton, Sr...................... -- --
100 Northfield Street
Greenwich, CT 06830
Robert G. Burton, Jr...................... 2/10/05 10,000
100 Northfield Street 2/11/05 800
Greenwich, CT 06830 2/14/05 4,200
2/15/05 1,300
2/16/05 2,800
2/17/05 5,900
4/7/05 20,000
B-2
NUMBER OF SHARES
NAME AND BUSINESS ADDRESS DATE ACQUIRED OR (DISPOSED OF) NOTES
------------------------- ---- ------------------------- -----
Michael G. Burton......................... 3/9/04 5,000
100 Northfield Street 3/10/04 2,500
Greenwich, CT 06830 2/1/05 12,500
3/28/05 100
3/28/05 100
3/30/05 800
3/30/05 1,200
3/31/05 1,800
4/7/05 5,000
4/7/05 9,800
4/7/05 3,000
4/7/05 100
4/7/05 6,100
4/7/05 1,000
4/7/05 5,000
5/24/05 6,492
Joseph P. Burton.......................... 3/9/04 2,000
100 Northfield Street 4/27/04 (500)
Greenwich, CT 06830 5/7/04 2,000
1/25/05 8,000
1/26/05 500
1/31/05 2,000
1/31/05 6,000
2/4/05 400
2/7/05 9,000
2/8/05 600
2/9/05 15,000
3/29/05 13,500
5/24/05 4,997
Gina Zambrana............................. 5/24/05 3,246
100 Northfield Street
Greenwich, CT 06830
Donald Zegzdryn........................... 2/10/05 13,500
100 Northfield Street 3/28/05 12,000
Greenwich, CT 06830
Thomas Oliva.............................. 5/24/05 12,984
21380 N. Middletown Drive
Kildeer, IL 60047
Brendan Tobin............................. 4/7/05 14,000
193 Sound Beach Avenue, North Aptartment 5/24/05 1,000
Old Greenwich, CT 06870
Colin Christ.............................. 4/7/05 6,219
116 Woodbury Avenue 5/24/05 1,298
Stamford, CT 06907
B-3
NUMBER OF SHARES
NAME AND BUSINESS ADDRESS DATE ACQUIRED OR (DISPOSED OF) NOTES
------------------------- ---- ------------------------- -----
Leonard C. Green.......................... 2/18/05 100
900 Route 9, 6th Floor 3/22/05 1,000
Woodbridge, NJ 07905 3/23/05 600
3/23/05 400
3/24/05 1,000
3/28/05 1,000
3/30/05 3,000
3/18/05 2,500
3/24/05 1,000
3/24/05 700
3/24/05 700
3/24/05 700
3/24/05 700
3/24/05 700
3/22/05 1,000
3/23/05 1,000
3/24/05 1,000
3/28/05 1,000
3/30/05 3,000
3/24/05 700
3/24/05 300
3/24/05 400
3/24/05 700
3/24/05 700
4/5/05 (300)
4/5/05 (400)
3/24/05 1,000
4/5/05 (100)
4/5/05 (200)
4/5/05 (700)
3/24/05 700
4/5/05 (700)
3/24/05 700
4/5/05 (700)
4/7/05 8,500
4/7/05 71,500
5/24/05 104,000
Stephen Winslow........................... 4/7/05 5,000
15 Arlington Road 5/24/05 2,100
Stamford, CT 06902
Thomas Higgins............................ -- --
400 East Main Street
Mount Kisco, NY 10549
Goodwood Inc.............................. -- --
212 King Street West, Suite 201
Toronto, Ontario M5H 1K5 Canada
B-4
NUMBER OF SHARES
NAME AND BUSINESS ADDRESS DATE ACQUIRED OR (DISPOSED OF) NOTES
------------------------- ---- ------------------------- -----
1354037 Ontario Inc....................... -- --
212 King Street West, Suite 201
Toronto, Ontario M5H 1K5 Canada
Goodwood Fund............................. 4/4/05 179,904
212 King Street West, Suite 201 4/5/05 112,841
Toronto, Ontario M5H 1K5 Canada 4/6/05 49,112
4/7/05 164,500
Goodwood Capital Fund..................... 4/4/05 17,500
212 King Street West, Suite 201 4/5/05 10,700
Toronto, Ontario M5H 1K5 Canada 4/6/05 3,800
4/7/05 15,500
Arrow Goodwood Fund....................... 4/4/05 104,100
212 King Street West, Suite 201 4/5/05 64,300
Toronto, Ontario M5H 1K5 Canada 4/6/05 24,700
4/7/05 77,200
The Goodwood Fund 2.0 Ltd................. 4/4/05 16,300
212 King Street West, Suite 201 4/5/05 8,700
Toronto, Ontario M5H 1K5 Canada 4/6/05 3,300
4/7/05 10,400
KBSH Goodwood Canadian Long/Short Fund.... 4/4/05 2,900
212 King Street West, Suite 201 4/5/05 2,100
Toronto, Ontario M5H 1K5 Canada 4/6/05 900
4/7/05 2,400
Peter H. Puccetti......................... -- --
212 King Street West, Suite 201
Toronto, Ontario M5H 1K5 Canada
J. Cameron MacDonald...................... -- --
212 King Street West, Suite 201
Toronto, Ontario M5H 1K5 Canada
Robert T. Kittel.......................... -- --
212 King Street West, Suite 201
Toronto, Ontario M5H 1K5 Canada
Patrice M. Daniels........................ -- --
116 32nd Street
Manhattan Beach, CA 90266
Mark J. Griffin........................... -- --
Eagle High School
45 Glenville Road
Greenwich, CT 06831
Michael W. Harris......................... -- --
8500 South Tyron Street
Charlotte, NC 28273
B-5
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(a) Includes shares purchased by Burton Capital Management, LLC, Gina Zambrana,
Thomas Oliva, Colin Christ, Leonard C. Green, Stephen Winslow, Thomas
Higgins, Goodwood Fund, Goodwood Capital Fund, Arrow Goodwood Fund, The
Goodwood Fund 2.0 Ltd. or KBSH Goodwood Canadian Long/Short Fund.
(b) Includes shares purchased by Burton Capital Management, LLC, Gina Zambrana,
Thomas Oliva, Colin Christ, Leonard C. Green, Stephen Winslow or Thomas
Higgins.
ARRANGEMENTS, INTERESTS AND TRANSACTIONS
No participant in the solicitation by BCM and Goodwood is, or was within the
past year, a party to any contract, arrangement or understanding with any person
with respect to any securities of Cenveo, 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. BCM and Goodwood have agreed, however, to share the
expenses of the solicitation and, as discussed under "Solicitation of Proxies,"
expect to seek reimbursement from Cenveo upon completion of the solicitation.
The director nominees expect to name Robert G. Burton, Sr. as Cenveo's Chairman
and Chief Executive Officer. Except as set forth in the prior sentence, no
participant in the solicitation by BCM and Goodwood, no nominee of BCM and
Goodwood for director and no associate of any of the foregoing persons and no
person who is a party to any arrangement or understanding pursuant to which a
nominee of BCM and Goodwood is proposed to be elected has any arrangement or
understanding with any person with respect to any future employment by Cenveo or
its affiliates or with respect to any future transactions to which Cenveo or any
of its affiliates will or may be a party.
As discussed in the proxy statement under the heading "Election of Directors --
Other Information About the Director Nominees," participants in the solicitation
who were nominated by BCM and Goodwood are expected to receive the same
compensation from Cenveo in exchange for their services as directors, if
elected, as Cenveo's directors have received in the past. These nominees also
have an interest in the solicitation through the arrangements described in the
proxy statement under the same heading.
B-6
ANNEX C
CERTAIN BENEFICIAL OWNERS OF CENVEO
The following table sets forth certain information from Cenveo's definitive
proxy statement on Schedule 14A for its annual meeting of shareholders filed
with the SEC as of March 11, 2005 with respect to the beneficial ownership of
shares of common stock at that time (as updated by subsequent filings through
the date of this proxy statement on Schedule 13D or Schedule 13G) by:
o each person who was known to Cenveo to beneficially own more than 5% of the
outstanding shares of common stock;
o each director of Cenveo;
o each executive officer of Cenveo; and
o all executive officers and directors of Cenveo as a group.
Unless otherwise indicated, each shareholder has sole voting and investment
power with respect to the shares shown. This information is presented as
reported by Cenveo in the filing referenced above.
NUMBER OF SHARES PERCENTAGE OF SHARES
NAME AND ADDRESS BENEFICIALLY OWNED BENEFICIALLY OWNED
---------------- ------------------ ------------------
Thomas E. Costello(a)......................... 25,911 *%
Paul F. Kocourek.............................. 15,000 *
Martin J. Maloney(a).......................... 25,911 *
David M. Olivier(a)........................... 25,911 *
Jerome W. Pickholz(b)......................... 94,798 *
Paul V. Reilly(c)............................. 1,108,344 2.3
Alister W. Reynolds(d)........................ 112,808 *
Susan O. Rheney(e)............................ 77,087 *
Wellington E. Webb............................ -- --
Michel P. Salbaing(f)......................... 137,433 *
Herbert H. Davis III(g)....................... 166,975 *
Allen C. Conway(h)............................ 18,566 *
Gordon A. Griffiths(i)........................ 166,497 *
Robert A. Hart(j)............................. 193,591 *
All directors and officers as a group
(17 persons)(k).. ......... 2,371,318 4.9
Burton Capital Management, LLC(l)............. 5,427,934 11.1
Goodwood Inc.
Oz Management, L.L.C.(m)...................... 3,121,300 6.4
9 West 57th Street, 39th Floor
New York, NY 10019
Cenveo 401(k) Savings and Retirement Plan(n).. 4,594,544 9.4
c/o Cenveo, Inc.
8310 S. Valley Hwy., #400
Englewood, CO 80112
FMR Corp.(o).................................. 3,314,130 6.8
82 Devonshire Street
Boston, MA 02109
-----------
* Less than 1%.
(a) Includes stock options for 20,000 shares.
(b) Includes stock options for 47,400 shares.
C-1
(c) Includes 26,698 shares held by his spouse, 696 shares held by a trust
benefiting his child of which Mr. Reilly is trustee, stock options for
961,833 shares, 1,823 shares held through Cenveo's 401(k) plan and 644
shares held by one of his children. Mr. Reilly disclaims beneficial
ownership of the shares held by his child. Excludes 411,000 shares of
restricted stock which have not vested.
(d) Includes stock options for 15,000 shares.
(e) Includes 54,600 shares held by the Rheney Living Trust of which Ms. Rheney
is a trustee and stock options for 20,000 shares.
(f) Includes 4,620 shares held through Cenveo's 401(k) plan and stock options
for 127,247 shares. Excludes 87,000 shares of restricted stock which have
not vested.
(g) Includes 21,000 shares held in an individual retirement accounts, 11,985
shares held through Cenveo's 401(k) plan and stock options for 83,248
shares. Excludes 87,000 shares of restricted stock which have not vested.
(h) Includes stock options for 18,566 shares.
(i) Includes 45,000 shares held by his spouse, stock options for 71,497 shares.
Excludes 97,000 shares of restricted stock which have not vested.
(j) Includes 2,000 shares held by family members and stock options for 175,091
shares. Mr. Hart disclaims beneficial ownership of the shares held by
family members. Excludes 57,000 shares of restricted stock which have not
vested.
(k) Includes stock options for 1,757,744 shares and 40,682 shares held through
Cenveo's 401(k) plan. Excludes 885,119 shares of restricted stock which
have not vested.
(l) BCM, Goodwood, Robert G. Burton, Sr., Robert G. Burton, Jr., Michael G.
Burton, Joseph P. Burton, Gina Zambrana, Donald Zegsdryn, Thomas Oliva,
Brendan Tobin, Colin Christ, Leonard C. Green, Stephen Winslow, 1354037
Ontario Inc., Goodwood Fund, Goodwood Capital Fund, Arrow Goodwood Fund,
The Goodwood Fund 2.0 Ltd., KBSH Goodwood Canadian Long/Short Fund, Peter
H. Puccetti and J. Cameron MacDonald are deemed to constitute a group under
the applicable rules of the SEC and may be deemed to beneficially own all
of the shares owned by each member of the group. The Schedule 13D/A filed
with the SEC on June 10, 2005 by the members of the group contains
additional information about the holdings of each member thereof.
(m) OZ Management, L.L.C. serves as principal investment management to a number
of investment funds and discretionary accounts with respect to which it has
voting and dispositive authority over such shares, including 2,968,513
shares (representing approximately 6.1% of Cenveo's outstanding common
stock) owned by OZ Master Fund, Ltd. The address for OZ Master Fund, Ltd.
is c/o Goldman Sachs (Cayman) Trust, Limited, P.O. Box 896, G.T. Harbour
Centre, Second Floor, North Church Street, George Town, Grand Cayman,
Cayman Islands. Mr. Daniel S. Och is the Senior Managing Member of OZ
Management, L.L.C. and, as such, may be deemed to be the beneficial owner
of the shares reported as owned by such entity. All of the foregoing
information is based solely on such holder's Schedule 13G filed with the
SEC on April 1, 2005.
(n) 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 as indicated in the footnotes above.
(o) Fidelity Management & Research Company is a registered investment adviser
and a wholly owned subsidiary of FMR Corp. This amount reflects the shares
held by its clients based solely on such holder's Schedule 13G filed with
the SEC on February 14, 2005.
C-2
IMPORTANT
Please review this proxy statement and the enclosed materials carefully. YOUR
VOTE IS VERY IMPORTANT, no matter how many or how few shares you own.
1. If your shares are registered in your own name, please sign, date and mail
the enclosed WHITE proxy card to D.F. King & Co., Inc., in the postage-paid
envelope provided today.
2. If you have previously signed and returned a [ ] proxy card to Cenveo, you
have every right to change your vote. Only your latest dated card will
count. You may revoke any [ ] proxy card already sent to Cenveo by signing,
dating and mailing the enclosed WHITE proxy card in the postage-paid
envelope provided. Any proxy may be revoked at any time prior to the 2005
Special Meeting by delivering a written notice of revocation or a later
dated proxy for the 2005 Special Meeting to D.F. King & Co., Inc., or by
voting in person at the 2005 Special Meeting.
3. If your shares are held in the name of a brokerage firm, bank nominee or
other institution, only it can sign a WHITE proxy card with respect to your
shares and only after receiving your specific instructions. Accordingly,
please sign, date and mail the enclosed WHITE proxy card in the
postage-paid envelope provided, and to ensure that your shares are voted,
you should also contact the person responsible for your account and give
instructions for a WHITE proxy card to be issued representing your shares.
4. After signing the enclosed WHITE proxy card, do not sign or return the [ ]
proxy card unless you intend to change your vote, because only your latest
dated proxy card will be counted.
If you have any questions concerning this proxy statement, would like to request
additional copies of this proxy statement or need help voting your shares,
please contact our proxy solicitor:
D.F. KING & CO., INC.
48 WALL STREET
NEW YORK, NY 10005
CALL TOLL FREE: (800) 967-7921
BANKS AND BROKERS, CALL COLLECT: (212) 269-5550
OR
ROBERT G. BURTON, JR. ROBERT T. KITTEL
BURTON CAPITAL MANAGEMENT, LLC GOODWOOD INC.
100 NORTHFIELD STREET 212 KING STREET WEST, SUITE 201
GREENWICH, CT 06830 TORONTO, ONTARIO M5H 1K5 CANADA
(203) 302-3700 (416) 203-2022
PRELIMINARY PROXY CARD
PROXY CARD
CENVEO, INC.
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS -- SEPTEMBER 14, 2005
THIS PROXY IS SOLICITED BY: BURTON CAPITAL MANAGEMENT, LLC AND
GOODWOOD INC.
The undersigned shareholder(s) of Cenveo, Inc., a Colorado corporation
(hereinafter the "corporation"), hereby acknowledge(s) receipt of the notice of
special meeting of shareholders and proxy statement, each dated , 2005, and
hereby appoint(s) _________ and _________ and each or either of them, proxies
and attorneys-in-fact, with full power to each of substitution, on behalf and in
the name of the undersigned, to represent the undersigned at the corporation's
special meeting of shareholders to be held on Wednesday, September 14, 2005 at ,
local time, at , and at all postponements or adjournments thereof, and to vote
all shares of the corporation's common stock that the undersigned would be
entitled to vote if then and there personally present, on all matters set forth
on the reverse side.
Each properly executed proxy will be voted in accordance with the
specifications made below and in the discretion of the proxies on any other
matter that may come before the meeting. Where no choice is specified, this
proxy will be voted FOR each of the proposals set forth below.
PLEASE MARK, SIGN AND DATE THIS PROXY ON THE REVERSE SIDE
(Continued, and to be signed and dated, on the reverse side.)
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED
BURTON CAPITAL MANAGEMENT, LLC AND GOODWOOD INC. RECOMMENDS A VOTE FOR PROPOSAL
1, PROPOSAL 2, PROPOSAL 3, PROPOSAL 4 AND PROPOSAL 5 AND FOR THE ELECTION OF
EACH NOMINEE LISTED IN PROPOSAL 6 BELOW.
1. Proposal to amend the corporation's bylaws to permit the shareholders to
fix the number of directors constituting the entire board.
|_| FOR |_| AGAINST |_| ABSTAIN
2. Proposal to repeal provision in the corporation's bylaws that may purport
to require vacancies on the board of directors to be filled by directors.
|_| FOR |_| AGAINST |_| ABSTAIN
3. Proposal to remove all persons currently serving as directors of the
corporation and any other persons elected to the corporation's board of
directors prior to the special meeting.
|_| FOR |_| AGAINST |_| ABSTAIN
4. Proposal to set the size of the corporation's board at seven persons.
|_| FOR |_| AGAINST |_| ABSTAIN
5. Proposal to repeal each provision of or amendment to the corporation's
bylaws (other than the amendments added or adopted pursuant to Proposals 1
and 2) adopted after the version of the bylaws filed by the corporation
with the SEC as Exhibit 3.2 to the corporation's current report on Form 8-K
dated (date of earliest event reported) April 17, 2005.
|_| FOR |_| AGAINST |_| ABSTAIN
6. Election of seven directors |_| FOR all nominees listed |_| WITHHOLD AUTHORITY
(except as marked to to vote for all listed nominees
the contrary)
Nominees: Robert G. Burton, Sr., Patrice M. Daniels, Leonard C. Green, Mark J.
Griffin, Michael W. Harris, Thomas Oliva and Robert T. Kittel
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, CIRCLE
THAT NOMINEE'S NAME IN THE LIST PROVIDED ABOVE.)
The shares represented by this proxy will be voted in the manner directed. IN
THE ABSENCE OF ANY DIRECTION, THE SHARES WILL BE VOTED FOR PROPOSAL 1, PROPOSAL
2, PROPOSAL 3, PROPOSAL 4 AND PROPOSAL 5 AND FOR EACH NOMINEE LISTED IN PROPOSAL
6 AND IN ACCORDANCE WITH THEIR DISCRETION ON SUCH OTHER MATTERS AS MAY PROPERLY
COME BEFORE THE MEETING.
Dated: , 200
----------------------- -- ----------------------------------
----------------------------------
Signature(s)
(Signature(s) should conform to
names as registered. For jointly
owned shares, each owner should
sign. When signing as attorney,
executor, administrator, trustee,
guardian or officer of a
corporation, please give full
title).
PLEASE MARK, SIGN AND DATE THIS PROXY ON THIS SIDE
-2-