<PAGE>
PRELIMINARY COPY - SUBJECT TO COMPLETION - DATED FEBRUARY , 2000
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Consent Revocation Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant |X|
Filed by a Party other than the Registrant |_|
Check the appropriate box:
|X| Preliminary Consent Revocation Statement
|_| Confidential, for Use of the Commission only (as permitted
by Rule 14a-6(e)(2))
|_| Definitive Consent Revocation Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to Rule 14a-12
VESTCOM INTERNATIONAL, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Consent Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
|X| No fee required.
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
______________________________________________________________________
(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 with preliminary materials.
|_| Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
______________________________________________________________________
(2) Form, Schedule or Registration Statement No.:
______________________________________________________________________
(3) Filing Party:
______________________________________________________________________
(4) Date Filed:
______________________________________________________________________
<PAGE>
[Vestcom Letterhead]
Dear Fellow Shareholder:
The Board of Directors of Vestcom International is writing to you today
to inform you that Harish Chopra and TimeTrust, Inc. (together referred to in
this letter as the "Outsiders") are attempting to seize control of your Company
without paying you anything. The Outsiders are seeking to remove five of the
current members of your duly elected Board of Directors, without cause, and
replace them with their own hand-picked nominees.
For all of the reasons discussed in the materials included with this
letter, we strongly urge you to REJECT the solicitation made by these Outsiders
and NOT sign any gold consent card they send you.
In order to REJECT the Outsiders' proposals, the Board unanimously
recommends that you sign, date and mail the enclosed BLUE consent revocation
card. Even if you have previously signed the Outsiders' gold consent card, you
have every right to REVOKE YOUR CONSENT by voting the BLUE consent revocation
card today.
Thank you for your continued interest and support.
Very truly yours,
Joel Cartun
Chairman of the Board
<PAGE>
CONSENT REVOCATION STATEMENT
BY THE BOARD OF DIRECTORS
OF VESTCOM INTERNATIONAL, INC.
IN OPPOSITION TO THE SOLICITATION OF CONSENTS
BY HARISH K. CHOPRA AND TIMETRUST, INC.
This Consent Revocation Statement and the accompanying BLUE Consent
Revocation Card are being furnished by the Board of Directors of Vestcom
International, Inc., a New Jersey corporation ("Vestcom" or the "Company"), to
the holders of the outstanding shares of Vestcom's common stock in opposition to
the solicitation by Harish K. Chopra ("Chopra") and TimeTrust, Inc.
("TimeTrust", and, with Chopra, the "Outsiders").
The Outsiders are soliciting consents in favor of five separate proposals
(collectively, the "Outsiders' Proposals"), each designed to enable the
Outsiders to seize control of Vestcom without paying you anything. We are asking
you to oppose the Outsiders' scheme to steal control of your Company because:
o The Outsiders have not communicated any specific business plan.
o The Outsiders' past business experience in our industry is extremely
limited and unrelated to our core businesses.
o Your current Board and management have undertaken specific strategies
to improve the Company's profitability. Results for the fourth quarter
of 1999 have begun to reflect the benefits of our efforts.
o Your Board believes that Vestcom is at a critical juncture and that
any change in our management could substantially jeopardize our future
growth and success.
o We believe that the Company's current Board, whom you elected, and
management are in the best position to evaluate the strategic
alternatives available to Vestcom and to decide on the courses of
action that are in the best interests of all of the shareholders.
We unanimously oppose the consent solicitation by the Outsiders and urge
you not to sign the Gold consent card that they sent to you.
Even if you previously signed and returned the Gold consent card, you have
every right to change your vote. We urge you to sign, date and mail the enclosed
BLUE Consent Revocation Card today in the postage-paid envelope provided. Your
prompt action is very important. In order to be sure that you are revoking a
prior consent, you must either mark the "Revoke Consent" box on the BLUE Consent
Revocation Card or sign the BLUE Consent Revocation Card without marking any
boxes.
If any of your shares are held in the name of a bank, broker or other
nominee, please contact the person responsible for your account today and direct
him or her to vote the BLUE Consent Revocation Card immediately.
This Consent Revocation Statement and the enclosed BLUE Consent Revocation
Card are first being mailed to shareholders beginning on or about February __,
2000.
If you have any questions or need assistance in voting your shares, please
contact the firm assisting the Company in this solicitation of consent
revocations:
Georgeson Shareholder Communications Inc.
Call Toll Free (800) 223-2064
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<PAGE>
QUESTIONS AND ANSWERS ABOUT THIS REQUEST
FOR CONSENT REVOCATION
Q: WHO IS MAKING THE REQUEST FOR REVOCATION?
A: This Request is being made by your duly elected Board of
Directors.
Q: WHAT ARE WE ASKING YOU TO DO?
A: We are asking you to oppose the solicitation made by Mr. Chopra
and TimeTrust, Inc. in connection with their scheme to steal
control of your Company. They are seeking to take control of your
Company without paying you anything (and possibly costing you
money). They are asking you, among other things, to replace five
of your seven duly elected directors with their slate of
underqualified hand-picked nominees in order to gain control of
your Board. To oppose their scheme, you can withhold your consent
from their proposals, or, if you have already given your consent,
you can revoke it.
Q: WHY ARE WE ASKING YOU TO REVOKE YOUR CONSENT?
A: We are asking you to oppose the Outsiders' scheme to steal your
Company because we believe that your current Board and management
are in the best position to evaluate the strategic alternatives
available to Vestcom. We are committed to enhancing shareholder
value for all of Vestcom's shareholders. While current management
has taken specific actions to improve the Company's profitability,
the Outsiders have no specific plans for improving shareholder
value, and only speak in broad generalities that are not
applicable to Vestcom's business.
Q: WHO ARE THE OUTSIDERS' NOMINEES?
A: The Outsiders' nominees are Harish K. Chopra, Howard April, Parker
S. Kennedy, Frank E. Raab and Robert J. Verrilli, none of whom are
currently affiliated with Vestcom and, with the exception of Mr.
April who previously served on Vestcom's Board of Directors, none
of whom has had any experience in Vestcom's core businesses. When
Vestcom acquired Mr. April's company, Mr. April was eligible to
receive an earnout based on the future performance of his company,
which he continued to run as a subsidiary of Vestcom. The
subsidiary's performance was so poor that Mr. April was not
entitled to receive any part of the earnout. As a result of this
poor performance, the Company replaced Mr. April and his
management team.
The two current Vestcom directors whom the Outsiders are not
seeking to replace, Leonard Fassler and Stephen R. Bova, have not
consented to serving on a Board comprised of the Outsiders'
nominees.
Q: WHO CAN WITHHOLD OR REVOKE THEIR CONSENT?
A: If you already sent in a Gold consent card, you can send in a BLUE
Consent Revocation Card to revoke your consent to one or more of
the Outsiders' Proposals. If you owned Vestcom shares on February
8, 2000, you have the right to send in a BLUE Consent Revocation
Card.
Q: HOW MANY SHARES MUST BE VOTED IN FAVOR OF THE OUTSIDERS' PROPOSALS TO
IMPLEMENT THEM?
A: The Outsiders must receive consents from a majority of Vestcom's
outstanding shares for their proposals to be adopted. As of
February 8, 2000, Vestcom had 9,056,806 shares of common stock
outstanding (including voting rights attributable to the shares of
a Vestcom subsidiary in Canada which are convertible into shares
of Vestcom's common stock). Each share is entitled to one vote.
Therefore, the affirmative vote of at least 4,528,404 shares is
necessary to effect the Outsiders' Proposals. Abstentions,
failures to vote and broker non-votes will have the same effect as
a "no" vote.
<PAGE>
Q: WHAT IS THE DEADLINE FOR SUBMITTING REVOCATIONS?
A. The consents the Outsiders receive will be tabulated on April 7,
2000. If the Outsiders were to receive the required vote, Vestcom
would promptly notify you, and the Outsiders' Proposals would
become effective 10 days after that notice is sent, unless
sufficient Consent Revocation Cards are received by such date.
This means that you can submit your BLUE Consent Revocation Card
until April 17, 2000, although we urge you to mail it today.
Q: WHAT SHOULD YOU DO TO REVOKE YOUR CONSENT?
A: Sign, date and return the enclosed BLUE Consent Card Revocation
TODAY to Georgeson in the postage paid envelope provided.
Q: WHO DO YOU CALL IF YOU HAVE QUESTIONS ABOUT THE CONSENT REVOCATION?
A: Please call Georgeson toll free at (800) 223-2064.
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<PAGE>
OUR REASONS FOR OPPOSING THE OUTSIDERS' PROPOSALS
AND RECOMMENDING THAT YOU OPPOSE THEM TOO
Each of the Outsiders' five Proposals is designed to enable
the Outsiders to take control of your Vestcom Board. We believe that the
Outsiders' consent solicitation is an attempt to take complete control of
Vestcom without offering shareholders any value at all for their shares and
without presenting any specific plan for increasing shareholder value.
The Board of Directors of the Company unanimously believes
that the Outsiders' Proposals are not in the best interests of the Company's
shareholders and urges shareholders to reject them. Your Board of Directors
requests that you sign, date and return the enclosed BLUE Consent Revocation
Card, whether or not you have previously signed and returned the Gold consent
card solicited by the Outsiders.
Vestcom's Board of Directors strongly believes that the
arguments set forth by the Outsiders are seriously flawed and misinformed, and
that the Outsiders are simply trying to take control of the Company for their
own benefit and advantage. The Outsiders are strangers to the Company and its
core businesses.
Your Board of Directors is, and has always been, committed to
increasing shareholder value for all shareholders. We have implemented several
long-term, strategic initiatives to enhance shareholder value. These initiatives
are now beginning to generate positive financial results . Our results of
operations for the fourth quarter of 1999 have begun to reflect the benefits of
our efforts. We have:
o Substantially completed the consolidation and integration of our
businesses in the Mid-Atlantic and New England regions.
o Eliminated redundant personnel and facilities, modernized our
facilities, upgraded our technology, improved efficiencies and
increased our capacity.
o Significantly expanded our Internet offerings, providing
additional services for our clients to choose from and broadening
our potential client base.
o Improved the quality of our sales force by recruiting and hiring
experienced sales associates, providing cross-training on all of
our service offerings and integrating the sales force by vertical
markets.
As your duly elected Board of Directors, it is our duty to
identify for you our deep and serious concerns about the Outsiders. We will
describe these concerns in greater detail later in this document, however, we
have highlighted a number of these below:
o We believe that Mr. Chopra and his associates have repeatedly
violated the securities laws. Many of these violations, we
believe, amount to fraud and misrepresentation of the Outsiders'
real objectives. We have sued them over these violations, and
their consequent efforts to correct their mistakes indisputably
reflect the truth of our allegations.
o The Outsiders' preliminary consent solicitation documents reflect
a material misunderstanding on the Outsiders' part of basic
principles of New Jersey corporate law.
o Mr. Chopra and the Outsiders' other nominees have no valuable
experience in Vestcom's core businesses.
o The track record of the public corporation with which Mr. Chopra
and his affiliates are currently associated is poor, and is not a
model to be followed.
o The Outsiders point to the industry experience of Howard April,
one of their nominees and formerly a director of Vestcom, whom
Vestcom removed as head of the Company's Montreal operations
because of the poor performance of that operation.
o Fiscal improvement demands carefully designed, specific measures
like the ones we implemented. Our operating results for the
fourth quarter of 1999 have begun to reflect the benefits of our
efforts. The Outsiders have no real plans. Their solicitation
materials speak in broad terms and hypothetical, conceptual
strategies. The Outsiders claim to know how to improve Vestcom's
performance, but they have not offered anything other than
rhetoric and generalities.
<PAGE>
The Outsiders' Proposals are designed to do more than replace
the Board of Directors and management with Mr. Chopra and his underqualified
hand-picked nominees. Those Proposals are designed to seize control of your
Company, which Mr. Chopra himself now readily admits, as a result of our lawsuit
against him. He only admitted his true intentions once we challenged his
purported ones in federal court. He claims that he is prepared to take control
of the Company with what he portrays as an altruistic offer to refuse any
salaried compensation for one year. The Outsiders' consent solicitation
materials do, however, provide that he would expect to receive stock options.
Mr. Chopra does not describe the number of stock options he expects to receive
or what kind of compensation he would demand following the one year period.
If Mr. Chopra is successful, while he foregoes a salary for
one year, he will have seized control of your Company and will have deprived you
of any fair value you are entitled to receive. In fact, the Outsiders' Proposals
could end up costing you money. If the Outsiders are successful, their
solicitation materials indicate that they might have the Company reimburse them
for their solicitation expenses. Effectively, Mr. Chopra will have acquired
control of Vestcom for a virtually "free ride", with no real plans for the
Company's growth, and without paying you anything.
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<PAGE>
BACKGROUND
Your Board of Directors and management have drawn upon their
collective industry-specific experience to develop strategies to improve
Vestcom's profitability. We have embarked upon a strategic program that, despite
the Outsiders' characterization of it, is now beginning to achieve financial
results which, we believe, will increase shareholder value. We have serious and
deep concerns about the Outsiders' forthrightness and ability to improve
shareholder value without any real plans for doing so, as compared to current
management's industry-focused, ongoing program. Our concerns stem from, among
other things, the Outsiders' lack of industry experience, poor track record and
repeated and blatant violations of the federal securities laws. Finally, as many
of our recent shareholder protective measures reflect, we do not want to see
your Company undergo a change of control without you receiving the fair value
that you are entitled to receive.
IMPROVING SHAREHOLDER VALUE
During 1999, your current Board and management implemented
several long-term, strategic initiatives to enhance shareholder value. These
initiatives are focused on streamlining, consolidating and integrating the
Company's operations, improving efficiencies, increasing capacity and
introducing new capabilities, such as our Internet services, to position Vestcom
for enhanced profitability, growth and success. The results of these initiatives
are now beginning to be realized in our financial performance.
Some of the initiatives that we implemented, and our actual or
anticipated goals are:
o Vestcom's revenues for the fourth quarter of 1999 were $________, an
increase of ___% from the third quarter of 1999 and ____% from the
fourth quarter of 1998.
o Vestcom's "EBITDA" (earnings before interest, taxes, depreciation and
amortization), which represents the Company's operating cash flow, for
the fourth quarter of 1999 was $_______, an increase of ___% from the
third quarter of 1999.
o Vestcom's gross profit margin increased _____ basis points from the
third quarter of 1999 to the fourth quarter of 1999.
o We have reduced the number of our facilities from 36 at the beginning
of 1999 to 28 at the beginning of 2000.
o The consolidation and integration of facilities is expected to
generate increased efficiencies, quality and competitiveness, all
of which, we believe, will translate into increased revenues,
decreased costs and greater profitability.
o Using fewer, but bigger, more modern and technologically advanced
facilities should enable Vestcom to compete more effectively for
larger, more profitable projects from new and existing regional
and national accounts, and also improve our efficiency,
turn-around time and capacity.
o As part of our restructuring program, we eliminated redundant
personnel, which should reduce our costs and increase our
profitability, without sacrificing revenues.
o An example of our facility integration is the consolidation of
seven of our operations in the Mid-Atlantic region into two
significantly larger, more streamlined locations.
o We improved the quality of our sales force by recruiting and hiring
experienced sales associates, providing cross-training on all of our
service offerings and integrating the sales force by vertical markets.
-5-
<PAGE>
o In 1999, we expanded our Internet capabilities:
o We are beginning to see the conversion of existing and new
customers into our Internet suite of products.
o Our Internet product offerings expand Vestcom's range of
document management and delivery services to include
Internet-based solutions, such as electronic bill
presentment and payment, that provide streamlined customer
communications and an efficient, secure distribution of
business critical documents.
o Our web-based fulfillment services provide customers with
the ability to order products and marketing materials via
the Internet.
o In 1999, we adopted our shareholder protection plan to protect
shareholder value, which New Jersey law expressly permits us to
adopt for this very reason.
o Your Board carefully considered adopting its shareholder
protection plan. Over 2,500 public companies have similar
plans. We reviewed current, widely accepted empirical
studies which clearly show that companies with such plans
receive a significantly greater takeover premium than
companies without them. This potential for increased
shareholder value was one of the compelling reasons that we
considered in taking our action.
o We have retained CIBC World Markets ("CIBC") as Vestcom's
financial advisor to assist the Board in its continuing review of
strategic alternatives to enhance shareholder value for all
shareholders.
THE OUTSIDERS
Repeated Violations of Laws
The Outsiders have repeatedly failed to make proper
disclosures under the federal securities laws. The Williams Act amendments to
the federal securities laws, adopted in response to the activities of hostile
corporate raiders in the 1980s, are designed to provide an early warning system
to public companies potentially coming under hostile attack. The cornerstone of
this early warning system is an obligation, imposed on any person or group who
acquires more than 5% of a public company's outstanding stock, to publicly
disclose in filings with the Securities and Exchange Commission (the "SEC") his
or her true intentions with respect to that company. In their initial filings,
the Outsiders disclosed that they had no present intention to effect a change of
control of Vestcom. We have discovered that some of the Outsiders had contacted
many large shareholders of the Company both before and after their initial
filing with the SEC to garner support for overthrowing the current Board of
Directors and ousting management.
In response to this discovery, we instructed management to
commence an action in federal court to enjoin these disclosure violations. You
can read more about this ongoing litigation below, under the section entitled
"Pending Litigation". Two days after our attorneys served them with the summons
and complaint, the Outsiders filed additional disclosure documents with the SEC
and the Company in which they indicated their intent to seek control of Vestcom.
The Outsiders only corrected the material deficiencies in their filings after we
began our lawsuit, which correction, we believe, reflected their earlier
purposeful concealment of their true intentions to wage a hostile contest for
control of the Company.
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<PAGE>
In the preliminary consent solicitation materials that the
Outsiders filed with the SEC, the Outsiders made what we believe to be
fraudulent and misleading disclosures. Consent solicitation materials, like the
ones circulated by the Outsiders, cannot contain any statements which, at the
time and in light of the circumstances made, are misleading. The very first
example given by the SEC in its rules of what may constitute misleading
statements within the rules' prohibition is "[p]redictions as to specific future
market values." Numerous times in the solicitation materials that the Outsiders
filed with the SEC on January 27, and again on February 3, 2000, the Outsiders
made various unlawful predictions regarding future market value of Vestcom's
shares.
The Outsiders have demonstrated a "do anything, say anything"
strategy to achieve their goal, even at the cost of violating federal securities
disclosure laws. If they fail to report accurately now and continue to
demonstrate a repeated disregard for these laws, what will they disclose and how
much attention will they pay to their legal obligations if they gain control of
your Company?
Misunderstanding of State Law
The Outsiders' disclosures in their preliminary solicitation
materials reflect a fundamental misunderstanding of New Jersey corporate law.
They say that the consents they are asking you for "will be effective when
[they] deliver to Vestcom consents of a majority of the shares of Vestcom common
stock." In other words, the Outsiders state that their Proposals would take
effect as soon as the Outsiders deliver consents to Vestcom constituting a
majority of the total number of shares entitled to vote. Their description of
the process is incorrect. It is clear under New Jersey law that when a board of
directors sets a date to tabulate consents, the action consented to (assuming a
majority of consents is received) will not take effect until 10 days after
notice is given to shareholders by the Company, such notice to be given promptly
after the consents are tabulated.
We set a record date of February 8, 2000 (the "Record Date")
and a tabulation date of April 7, 2000 (the "Tabulation Date"). If after the
Outsiders' consents are tabulated on the Tabulation Date, the results show that
the Outsiders have received the required majority, Vestcom would promptly send a
notice to shareholders advising them that the Outsiders' Proposals would be
effective 10 days later. Therefore, the earliest the Outsiders' consents (and
their Proposals) would be effective, if at all, is April 17, 2000, and not as
soon as a majority of consents are delivered, as the Outsiders incorrectly
assert.
We think that this material misunderstanding of a fundamental
concept of New Jersey corporate law is evidence of an inattention and
carelessness that should erode your confidence in the Outsiders' ability to
manage the Company at this critical time.
Who Is Really Behind the Outsiders' Scheme?
The Outsiders' initial Schedule 13D was jointly filed by
TimeTrust and R-Squared Limited. R-Squared is an Irish company based in the
Cayman Islands, whose owners are unknown to Vestcom. According to their SEC
filing, R-Squared owns 85.7% of TimeTrust. Since we do not know who owns
R-Squared, we have concerns about the Outsiders' true motives and their
commitment to our business.
In addition, two of the Outsiders' five nominees are from the
insurance industry, and three of them are affiliated with, including one who is
the president of, First American Financial Corp. ("First American"). In July,
1999, Mr. Chopra resigned as president of DataTree Corporation ("DataTree"),
which he sold to First American, and remained as its chairman. DataTree is now a
subsidiary of First American. Also in July, 1999, Mr. Chopra apparently formed
TimeTrust, Inc.--the other Outsider. Shortly afterwards, in October, 1999, Mr.
Verrilli, one of the Outsiders' nominees for director, left DataTree and joined
TimeTrust, Inc. as its chief financial officer. In light of all these ties to
First American, it is possible that Mr. Chopra is acting for First American and
trying to gain control of the Company for the benefit of First American. If this
is correct, this scheme would permit First American to gain control of your
Company without paying a fair (or any) price.
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<PAGE>
The Outsiders' Nominees Have Inadequate Experience and Knowledge of Our Industry
The Outsiders' nominees for the Board are Messrs. Chopra,
April, Kennedy, Raab and Verrilli. Their lack of knowledge about Vestcom's core
businesses is apparent.
Messrs. Kennedy and Raab have backgrounds in the insurance
industry, not our industry. Indeed, Mr. Kennedy is President of First American,
and Mr. Raab, now 78, was previously president of Insurance Company of North
America. According to information provided by the Outsiders, Mr. Raab has been a
business consultant for the last five years. They do not disclose what
businesses he has consulted to, however.
According to publicly available information, First American
provides real-estate related financial and information services to real property
buyers and mortgage lenders, including title insurance, tax monitoring, mortgage
credit reporting, property data services, flood certification, field inspection
services, appraisal services, mortgage loan origination and servicing systems,
mortgage document preparation and home warranty services. First American also
provides credit and various database related services to automobile dealers,
consumer lenders, employers and property management companies, as well as
investment, trust and thrift services. First American's businesses clearly are
very different from Vestcom's core businesses.
The Outsiders report that Mr. Chopra is the Chairman and Mr.
Verrilli was the CFO of DataTree, a "document imaging and database management
systems company." According to our research, DataTree primarily images and
databases public real estate records for municipalities, and largely serves the
title insurance industry. DataTree does not provide the value-added document and
information management solutions or serve the markets that Vestcom does.
Mr. Chopra apparently has chosen Howard April as his source of
industry-specific expertise. Mr. April was an owner of one of the original seven
founding companies that formed Vestcom, and served on Vestcom's Board from
August 1997 until May 1998. When Vestcom acquired Mr. April's company, Mr. April
was eligible to receive an earnout based on the future performance of his
company, which he continued to run as a subsidiary of Vestcom. The subsidiary's
performance was so poor that Mr. April was not entitled to receive any part of
the earnout. As a result of this poor performance, the Company replaced Mr.
April and his management team.
Neither insurance underwriting nor imaging public records for
local database storage purposes is the business conducted by the Company. The
Outsiders are asking you to accept them without any meaningful industry
experience. As reflected in your Board members' backgrounds described later in
this document, your present Board of Directors has substantial industry-specific
experience, and, we believe, knows your Company better than any of the Outsiders
or their slate of nominees.
The Outsiders Don't Understand Vestcom or Its Business
One of the Outsiders' stated goals is to pursue national
accounts. However, they criticize current management for consolidating and
integrating many of the Company's smaller, older facilities into fewer, larger,
more technologically advanced facilities. These consolidations will, in fact,
enable us to better meet the demands of our larger national clients. To meet the
demands of these customers, we need large-scale production capacity, rapid and
high volume fulfillment capabilities, and cutting edge technology, which can be
provided more effectively in our newly equipped, larger facilities.
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<PAGE>
In addition, the Outsiders' solicitation materials cite
decentralization as another goal. The Outsiders clearly do not understand
Vestcom's current operating structure. Vestcom's current structure includes a
small number of executives at the holding company level, and allows day to day
operating decisions to be made by regional executives. In addition, Vestcom's
sales personnel are familiar with the various customer needs and market trends
in the various regions.
While it is easy to criticize what you do not know, the costs
of acting without the requisite knowledge can be severe. This is precisely the
type of strategic error that can occur if the Company is managed by people who
know very little about its industry.
The Outsiders' Track Record Is Poor
Given the Outsiders' strong ties to First American and the
fact that First American's President and CEO is described as having outstanding
corporate credentials to run your Company, you should be aware of certain facts
about First American's recent financial performance. We have included a chart of
First American's stock performance over the last year, which is based on
publicly available information. This chart shows a precipitous decline in their
stock price. We believe that this track record is poor, and is not a model to be
followed by Vestcom.
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<PAGE>
FIRST AMERICAN FINANCIAL CORP.
STOCK PERFORMANCE
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Jun-98 Sep-98 Dec-98 Mar-99 Jun-99 Sep-99 Dec-99 Jan-00
NO REAL PLANS FOR THE COMPANY
The Outsiders are asking you to support their slate of
nominees for the Board without having offered you a comprehensive,
industry-specific business plan. They are asking for your support without
telling you how they plan to increase shareholder value. In their solicitation
materials, which consisted of several dozen pages, their "business plan"
occupied less than one page. Their attempt at a business plan appears to call
for decentralizing operations, separating operations for national accounts,
centralizing certain corporate functions and exploiting technology. Nowhere do
they mention which operations they plan to decentralize, or which corporate
functions they plan to centralize. They do not tell you how they plan to make
their decisions, what national accounts they plan to pursue, or whether they
have an Internet strategy. It is possible that they are not providing any of
this detail because they have not yet undertaken this analysis, or because they
cannot undertake the analysis since they do not know or understand our industry
or our Company.
Our business strategies include tangible, ongoing changes and
initiatives that have been explained to shareholders over the last year and are
beginning to bear positive results. You can see the successful results of our
business plan by the facilities we have consolidated and integrated, our
Internet service offerings and our retrained and motivated sales force. Our
strategic, industry-specific business plan is now beginning to yield results,
while the Outsiders have yet to show you any real plan at all.
YOUR COMPANY IS ABOUT TO BE STOLEN FROM YOU
The Outsiders are trying to take control of your Company for
free! People who seek control of a company usually either make a proposal to the
board of directors to buy the company, or, if the board refuses their proposal,
commence a tender offer for the outstanding shares. In either case, a person
trying to obtain control usually offers a control or sales premium to the
shareholders, that is, they pay more than market value for the shares. That
excess price is called a control premium because it is worth something to
control a public company. If a control premium is paid, the shareholders
generally will profit.
-10-
<PAGE>
The Outsiders have not offered you a control premium or any
other consideration, except a naked, unsupported promise of fiscal improvement.
This promise comes from people who have concealed their true intentions from you
in the past, and who have made misleading and, we believe, fraudulent
misrepresentations in the materials they have filed with the SEC.
Mr. Chopra has offered not to take any salaried compensation
for one year. He expects, however, to receive Company stock options. He does not
state what kind of compensation he expects to receive after such one year
period. In addition, Mr. Chopra only extended this offer to himself, and does
not mention any of the other members of his new management team or their
compensation arrangements.
In fact, by seizing control of your Company, the Outsiders
could cost you money. First, you would be deprived of any control premium or
other value you should be entitled to receive in connection with any acquisition
of control of the Company. Second, the Outsiders have indicated that they may
seek reimbursement from the Company for the costs they incur in making their
solicitation. If successful, the Outsiders can approve the reimbursement of
these costs.
Each of the Outsiders' Proposals is designed to enable the
Outsiders to take control of the Board that you elected and of your Company. We
believe that their consent solicitation is an attempt to pressure you without
giving you the opportunity to consider all of Vestcom's strategic alternatives.
We believe that this undue pressure created by the Outsiders is not in the
Company's or your best interests. The Outsiders' Proposals are:
(1) Remove five of the seven current Vestcom directors (other
than Stephen R. Bova and Leonard J. Fassler) and remove any
other director elected or appointed to the Vestcom Board
before the effective date of this shareholder action other
than the five nominees hand-picked by the Outsiders.
(2) Amend Section 3.7 of Article III of the Vestcom by-laws to
provide that any vacancy or vacancies on the Vestcom Board
created as a result of the removal of any of the current
directors by Vestcom's shareholders may be filled only by a
majority vote of Vestcom's shareholders.
(3) Amend Section 3.2 of Article III of the Vestcom by-laws to
set the number of directors of Vestcom at seven.
(4) Elect the five nominees hand-picked by the Outsiders to
serve as directors of Vestcom (or, if any of those five
nominees is unable to serve as a director of Vestcom, any
other person designated as a nominee by the remaining
nominee or nominees).
(5) Repeal any amendment to the Vestcom by-laws that is adopted
by the current Vestcom Board after December 16, 1999 and
before these proposals become effective and the nominees are
seated.
The Outsiders' acknowledged purpose in pursuing their
solicitation is to replace a majority of the Board that you duly elected, with
their own underqualified hand-picked nominees. While we recognize that the
Outsiders' nominees, if elected, would have certain fiduciary obligations under
New Jersey law to Vestcom and you, we expect that the nominees would act in
furtherance of the Outsiders' interests and not your interests. In particular,
if the nominees are elected as your directors, conflicts of interests might
arise that we believe would be detrimental to your interests and the Company's
interests. For example, if First American does attempt to acquire the Company,
people loyal to First American will be the ones recommending a purchase price to
you.
-11-
<PAGE>
In light of the reasons discussed above, we have determined
that the Outsiders' Proposals are not in the best interests of you or Vestcom.
The above discussion of reasons and factors considered by us is not intended to
be exhaustive, but does reflect the material information and factors we
considered in our review and analysis of the Outsiders' Proposals. In view of
the variety of factors and the amount of information considered, we did not find
it practicable to provide specific assessments of, quantify or otherwise assign
any relative weights to, the specific factors considered in determining to
recommend that you reject the Outsiders' Proposals. Our determination was made
after we considered all the factors taken as a whole. In addition, some of us
may have given differing weights to different factors. Throughout our
deliberations regarding the Outsiders' Proposals, we received advice from CIBC
World Markets, Lowenstein Sandler PC, and Proskauer Rose LLP. Proskauer Rose LLP
was retained to advise the independent members of the Board in connection with
the Outsiders' Proposals and related matters.
We unanimously oppose the Outsiders' consent solicitation and
urge you NOT to sign the Gold consent card that they sent to you.
Even if you previously signed and returned the Gold consent
card, you have every right to change your vote. We urge you to sign, date and
mail the enclosed BLUE Consent Revocation Card in the postage-paid envelope
provided. Your prompt action is very important. Please return the BLUE Consent
Revocation Card today.
If any of your shares are held in the name of a bank, broker
or other nominee, please contact the person responsible for your account today
and direct him or her to vote the BLUE Consent Revocation Card immediately.
If you have any questions about giving your revocation of
consent or require assistance, please call Georgeson, the firm assisting the
Company in this request for revocations, at:
Georgeson Shareholder Communications Inc.
Call Toll-Free: (800) 223-2064
-12-
<PAGE>
PENDING LITIGATION
On December 17, 1999, Vestcom commenced an action in the
United States District Court for the District of New Jersey against Mr. Chopra
and two entities controlled by him, TimeTrust, Inc. and R-Squared Limited.
Vestcom alleged two claims: (i) the Schedule 13D filed by Mr. Chopra in November
1999 violated Section 13(d) of the Exchange Act because it failed to provide
appropriate disclosures to shareholders, especially with respect to Mr. Chopra's
intent to take control of the Company, oust current management, and install
himself as Chief Executive Officer and Chairman of the Board; and (ii) Mr.
Chopra had violated Section 14(a) of the Williams Act because he had solicited
Vestcom shareholders without complying with the proxy solicitation rules.
Vestcom contended that Mr. Chopra had violated these shareholder-protection
provisions of the federal securities laws in order to advance his effort to take
control of the Company.
On December 27, 1999, Vestcom applied to the Court for a
temporary restraining order barring defendants from any further contacts with
Vestcom shareholders, barring defendants from any further violation of the
federal securities laws, and compelling corrective disclosures to remedy the
Section 13(d) and Section 14(a) violations. In a tacit admission that he had, in
fact, violated Section 13(d) of the 1934 Act, two days later, on December 29,
1999, Mr. Chopra filed an amended Schedule 13D that provided most, though not
all, of the disclosures which were omitted from the initial Schedule 13D. Mr.
Chopra subsequently contended that this corrected disclosure resolved the
Section 13(d) claim.
The Court scheduled a hearing on Vestcom's application for a
temporary restraining order for January 14, 2000. On January 6, 2000, Mr. Chopra
filed a counterclaim challenging the enforceability of the Shareholder Rights
Protection Agreement adopted by Vestcom's Board on December 16, 1999. Mr. Chopra
also applied for temporary restraints against the enforcement of the Shareholder
Rights Protection Agreement. Given Mr. Chopra's request for temporary
restraints, the Court adjourned the hearing date to January 28, 2000, at which
time the Court was to address both applications for temporary restraints.
Vestcom opposed Mr. Chopra's request for restraints, as New Jersey corporate law
specifically authorizes the adoption of shareholder protection agreements and
many commentators have recognized the important protections that such agreements
provide to shareholders against coercive and abusive takeover tactics. Several
days later, Mr. Chopra abandoned and withdrew his request for temporary
restraints against the Shareholder Rights Protection Agreement.
Effective January 24, 2000, a new SEC rule altered the legal
standards for the solicitation of shareholders prior to the filing of a proxy
statement. Among other things, the new SEC rule permits parties soliciting a
public company's shareholders, including the public company itself, to make
certain prescribed solicitations to those shareholders prior to filing a proxy
statement. This pre-filing solicitation was prohibited under prior law, except
in certain limited circumstances. Mr. Chopra filed his solicitation materials
with the SEC on January 27, 2000 and on February 3, 2000 under this new rule. In
view of this new rule and Mr. Chopra's filing, Vestcom withdrew its application
for temporary restraints against Mr. Chopra in connection with this previously
illegal solicitation of shareholders. However, Vestcom continues to seek a
remedy for Mr. Chopra's violations of the federal securities laws, including (i)
the invalidation of any proxies or consents obtained by Mr. Chopra and (ii) the
dissemination of a corrective disclosure to all Vestcom shareholders.
The litigation remains pending. We intend to vigorously defend
the counterclaim and intend to continue pursuing this litigation in order to
assure that any contest for control of Vestcom is conducted in accordance with
applicable law, including policing any further misleading or inappropriate
disclosures by the Outsiders.
-13-
<PAGE>
OUTSTANDING VESTCOM SECURITIES
As of February 8, 2000, there were 9,056,806 shares of Vestcom
common stock outstanding (including voting rights attributable to the shares of
a Vestcom subsidiary in Canada which are convertible into shares of Vestcom
common stock).
THE CONSENT PROCEDURE
Under Section 14A:5-6(2) of the Business Corporation Act of
the State of New Jersey ("BCA"), unless otherwise provided in the certificate of
incorporation, any action required or permitted to be taken at a meeting of
shareholders may be taken, other than the annual election of directors, without
a meeting, without prior notice and without a vote, upon the written consent of
shareholders who would have been entitled to cast the minimum number of votes
which would be necessary to authorize such action at a meeting at which all
shareholders entitled to vote were present. Vestcom's Certificate of
Incorporation does not prohibit shareholder actions by consent. Section 2.15.1
of Vestcom's current By-Laws provides that any action required to be taken under
the BCA may be taken without a meeting by written consent.
Both Section 14A:5-6(2)(a) of the BCA and Section 2.15.2 of
Vestcom's current By-Laws permit the Board to fix a record date for determining
the shareholders entitled to consent to the Outsiders' Proposals. The Board also
is authorized under Section 14A:5-6(2)(a) of the BCA to fix a date on which
consents are to be tabulated. Under Section 14A:5-7(1) of the BCA, the Record
Date to determine shareholders entitled to give a written consent may not be
more than 60 days before the tabulation date.
The Secretary of the Company is obligated under Section 2.15.3
of the By-Laws to designate an independent, qualified inspector with respect to
such consents and revocations. That inspector shall provide for the safekeeping
of the consents and revocations received by the Company, and conduct a
reasonable investigation for the purpose of ascertaining the validity of the
consents and all matters incident thereto, including without limitation, whether
the holders of shares having the requisite voting power to authorize or take the
action specified in the consents have given consent. If after such investigation
the inspector shall determine that any action purportedly taken by such consents
has been validly taken, the fact shall be certified on the records of the
Company kept for the purpose of recording the proceedings of meetings of
shareholders, and the consents shall be filed with such records.
Under Section 14A:5-25(5) of the BCA, each inspector is
required to take and sign an oath faithfully to execute the duties of inspector
with strict impartiality and according to the best of his ability. In addition
to the obligations mandated by the Company's By-Laws that are set forth above,
the inspectors are specifically obligated, under the BCA, to determine the
number of shares of the Company's common stock outstanding, the voting power of
each share, the validity and effect of consents and consent revocations, to
receive votes and consents, hear and determine all challenges and questions
arising in connection with the right to consent or revoke consent, count and
tabulate all consents and consent revocations and to determine the result, and
do such other acts as are proper to conduct the vote with fairness to all
shareholders.
To be effective, the unrevoked consents of the holders of not
less than a majority of the shares of common stock outstanding and entitled to
vote on the record date must be obtained within the time limit specified herein
to adopt each of the Outsiders' Proposals. Each share of common stock is
entitled to one vote per share. Since consents are required from holders as of
the record date of not less than a majority of the outstanding shares of the
common stock in order for each of the Outsiders' Proposals to be adopted, an
abstention from voting on any one of the Outsiders' Proposals or a broker
non-vote will have the practical effect of a vote against such Proposals.
A shareholder may revoke any previously signed consent by
signing, dating and returning a BLUE Consent Revocation Card accompanying this
Consent Revocation Statement in the postage paid envelope provided, and either
marking the "Revoke Consent" box, the "Abstain" Box or not marking any boxes. A
consent may also be revoked by delivery of a written consent revocation to the
Company. If you do not indicate a specific vote on the BLUE Consent Revocation
Card with respect to Outsiders' Proposals, your card will be used in accordance
with the Board's recommendation to revoke any consent with respect to any
Proposal not specifically voted on.
-14-
<PAGE>
If the Outsiders obtain consents from a majority of the
outstanding shares for their Proposals, the Company will promptly deliver, after
the tabulation date, a notice to all shareholders, as required under Section
14A:5-6(2)(b) of the BCA, stating the proposed effective date of the Outsiders'
Proposals. If the Outsiders receive the requisite number of consents, the
effective date of the consents and of the Outsiders' Proposals would be 10 days
after the date such notice is given, unless a sufficient number of Consent
Revocation Cards are received by the effective date.
We fixed the "Record Date" as February 8, 2000 and the
"Tabulation Date" as April 7, 2000. In accordance with Vestcom's current
By-Laws, the Secretary of the Company has designated ____________ to act as
inspector with respect to the consents and consent revocations. The Company has
retained Georgeson to assist in communicating with shareholders in connection
with the Outsiders' solicitation and to assist in our efforts to obtain consent
revocations. If you have any questions about how to complete or submit your BLUE
Consent Revocation Card or any other questions, Georgeson will be pleased to
assist you. You may call Georgeson toll-free at 800-223-2064.
Shareholders are Urged to Deliver all BLUE Consent
Revocations Cards to Georgeson
If you are against the Outsiders' Proposals and have not
signed a Gold consent, you may show your opposition to the Outsiders' Proposals
by signing, dating and returning the enclosed BLUE Consent Revocation Card. This
will better enable the Company to keep track of how many shareholders oppose the
Outsiders' Proposals.
The Company requests that if you deliver your BLUE Consent
Revocation Card to the Company instead of Georgeson, that you also deliver a
photocopy to Georgeson, so that Georgeson will be aware of all revocations.
If any shares of common stock that you owned on the Record
Date were held for you in an account with a stock brokerage firm, bank nominee
or other similar "street name" holder, you are not entitled to vote such shares
directly, but rather must give instructions to the stock brokerage firm, bank
nominee or other "street name" holder to grant or revoke consent for the shares
of common stock held in your name. Accordingly, you should contact the person
responsible for your account and direct him or her to execute the enclosed BLUE
Consent Revocation Card on your behalf.
You are urged to confirm in writing your instructions to the
persons responsible for your account and provide a copy of those instructions to
the Company so that the Company will be aware of your instructions and ensure
that your instructions are followed.
-15-
<PAGE>
INFORMATION ABOUT US,
THE PEOPLE ASKING YOU
TO REVOKE YOUR CONSENT
The table below sets forth the names and ages (as of February
1, 2000) of each of Vestcom's directors, and the other positions and offices
presently held by each of the directors within the Company, the period during
which each such person has served on the Board of Directors of the Company, and
the principal occupations and employment of each such person during the past
five years. In each instance in which dates are not provided in connection with
a director's business experience, such director has held the position indicated
for at least the past five years.
<TABLE>
<CAPTION>
Director
Name and Age Since Business Experience
- ------------ --------- ---------------------
<S> <C> <C>
Joel Cartun, 60 1996 Chairman of the Board of Vestcom (August 1997 to present);Chief Executive
Officer of Vestcom (from Vestcom's incorporation in September 1996 to
present); President of Vestcom from Vestcom's incorporation in 1996 to
March 1999; Chief Executive Officer of Comvestrix Corp. (now known as
Vestcom Mid-Atlantic, Inc. ("VMA")) (from its incorporation in 1969 to
present); President of VMA (1969 to October 1998).
Stephen R. Bova, 52(1) 1997 President and Chief Operating Officer of Staffmark, Inc. (a temporary
staffing company) (September 1999 to present); Managing Director,
International Operations, Intelligroup, Inc. (a computer services company)
(January 1999 to November 1999); President of the Global Banking Division
of Electronic Data Systems Corporation (a provider of technical and
information services) (November 1996 to December 1998); President of the
Global Financial Division of Alltel Information Services, Inc. (a provider
of software and information services) (prior years to November 1996)
Leonard J. Fassler, 68(1) 1997 Co-Chairman of Interliant, Inc. (a web-hosting company) (December 1997 to
present); Consultant to GE Capital Information Technology Systems, Inc. (an
international computer reselling and integration company affiliated with
General Electric) (August 1996 to January 1999); Co-Chairman of AmeriData
Technologies, Inc. (an international computer integration and support
company) (prior years to July 1996).
Brendan Keating, 45 1998 President of Vestcom (March 1999 to present); Chief Operating Officer of
Vestcom (October 1997 to present); Executive Vice President of Vestcom
(October 1997 to March 1999); Vice President of Bowne & Co., Inc. (a
financial printing company) (1991 to October 1997); Vice President of
Operations of Bowne of New York City, Inc. (1985 to 1991); President of
Bowne Business Communications (1993 to 1995).
Fred S. Lafer, 70 1997 President of the Taub Foundation (a charitable foundation) (1994 to
present); Senior Vice President and Secretary of Automatic Data Processing,
Inc. (a provider of employer, financial and data services) (prior years to
1996).
Robert J. Levenson, 58 1998 Executive Vice President of First Data Corporation (a transaction and
information processing company) (1993 to present). Mr. Levenson is also a
director of First Data Corporation, Superior Telecom Inc. and Emisphere
Technologies, Inc.
Richard D. White, 46 1997 Managing Director of CIBC Capital Partners (February 1998 to present);
Managing Director of CIBC Oppenheimer Corp. (successor to Oppenheimer &
Co., Inc. and referred to herein as "CIBC Oppenheimer") (prior years to
February 1998). Mr. White is also a director of Midway Games Inc.
</TABLE>
- ----------------------
(1) These two directors are not subject to removal under the Outsiders'
Proposals.
-16-
<PAGE>
Board Meetings and Committees
The Board of Directors of the Company held 15 meetings during
1999. The Board's Audit Committee, which is responsible for reviewing
significant audit and accounting principles, policies and practices and for
meeting with the Company's independent accountants, met 2 times during 1999. The
Audit Committee presently consists of Leonard J. Fassler and Richard D. White.
In February 1998, the Board established a Nominating
Committee, composed of Joel Cartun and Fred S. Lafer, which met once during
1999. The Company's current By-Laws establish formal procedures for considering
nominees recommended by shareholders.
The Board has a Compensation Committee to, among other things,
administer the Company's Stock Option Plan. The Compensation Committee presently
consists of Stephen R. Bova and Fred S. Lafer and held 7 meetings during 1999.
During the year ended December 31, 1999, each member of the
Company's Board of Directors was present for 75% or more of the aggregate of the
total meetings of the Board and each Board committee on which he serves.
Compensation Committee Interlocks and Insider Participation
Compensation decisions are made by the members of the
Compensation Committee. During the fiscal year ended December 31, 1999, Stephen
R. Bova and Fred S. Lafer served as members of the Compensation Committee.
Neither Mr. Lafer nor Mr. Bova has ever served as an employee or officer of
Vestcom or any of its subsidiaries.
Certain Transactions
Joel Cartun, Vestcom's Chairman of the Board, has a 50%
interest in the partnership which owns the property previously used by Vestcom
and VMA in Lyndhurst, New Jersey. The partnership leases the property to VMA,
pursuant to a lease which expires in 2001. VMA's related party rent expense for
this property for 1999 was $_______. Gary Marcello, a greater than 5%
shareholder of Vestcom, owns interests ranging from 75% to 100% in the
partnerships which own the properties previously leased by VMA in Dover, New
Jersey and previously leased in Scranton, Pennsylvania. VMA's related party rent
expenses for these properties for 1999 was $______. Pursuant to a written
agreement with the owners, the lease obligations ceased in August 1999.
In August 1999, Vestcom entered into an agreement with CIBC
World Markets for advisory services. Pursuant to that agreement, Vestcom is
obligated to pay CIBC World Markets $25,000 each calendar quarter for such
services. In 1999, Vestcom paid $25,000 to CIBC World Markets under this
agreement. In December 1999, Vestcom entered into another agreement with CIBC
World Markets pursuant to which it agreed to pay $25,000 for services rendered
in connection with the Company's adoption of its shareholder rights plan. This
amount will be paid in 2000. Richard D. White, a director of Vestcom, is a
Managing Director of CIBC Capital Partners, an affiliate of CIBC World Markets.
Company Policy
Future transactions with affiliates of the Company are
anticipated to be minimal, are generally required to be approved by the Fairness
Committee of the Board of Directors and by a majority of the full Board of
Directors, and will be made on terms no less favorable to the Company than those
that could be obtained from unaffiliated third parties.
-17-
<PAGE>
Principal Shareholders
Based upon information available to the Company, the only
shareholders known by the Company to beneficially own more than 5% of the
outstanding common stock as of February 8, 2000 are (i) Joel Cartun, (ii) Gary
J. Marcello, (iii) Brookside Capital Partners Fund, L.P. ("Brookside"), (iv)
Dresdner RCM Global Investors LLC, Dresdner RCM Global Investors US Holdings
LLC, RCM Limited L.P. and RCM General Corporation (the "RCM Group"), (v)
Dresdner Bank AG ("Dresdner") and (vi) R-Squared Limited, TimeTrust, Inc. and
Harish K. Chopra (the "Chopra Group"). For information concerning the holdings
of Mr. Cartun, see "Security Ownership of Management." Pursuant to filings made
by the respective holders with the SEC, Gary Marcello, Brookside, the RCM Group,
Dresdner and the Chopra Group owned the following number of shares of the
Company's common stock as of February 8, 2000:
<TABLE>
<CAPTION>
Percent of
Name and Address of Beneficial Owner Shares Beneficially Owned Class
- ------------------------------------ -------------------------- -----------
<S> <C> <C>
Brookside Capital Partners Fund, L.P. 1,150,700(A) 12.71%
Two Copley Place
Boston, MA 02116
Dresdner RCM Global Investors LLC 867,200(B) 9.58%
Dresdner RCM Global Investors US Holdings LLC
RCM Limited L.P.
RCM General Corporation
Four Embarcadero Center
San Francisco, California 94111
Dresdner Bank AG (C) (C)
Jurgen-Ponto-Platz 1
60301 Frankfurt, Germany
R-Squared Limited 742,100(D) 8.19%
P.O. Box 1586 GT
Cardinal Avenue
George Town, Grand Cayman
British West Indies
Harish K. Chopra (D) (D)
TimeTrust, Inc.
1455 Frazee Road, Suite 420
San Diego, California 92108
Gary J. Marcello 541,170(E) 5.98%
1 Penny Lane
Boonton, New Jersey 07005
</TABLE>
- ---------------------
(A) Brookside has indicated in its filing with the SEC that it has the sole
power to vote and dispose of these shares.
(B) Dresdner RCM Global Investors LLC and Dresdner RCM Global Investors US
Holdings LLC have sole voting power with respect to 707,740 shares of
common stock and sole dispositive power with respect to 867,200 shares of
common stock. The RCM Group's filing with the SEC indicates that RCM Global
Investors LLC ("Dresdner RCM") is an investment adviser and a wholly owned
subsidiary of Dresdner RCM Global Investors US Holdings LLC, and that until
July 8, 1998, RCM Limited L.P. served as managing agent of Dresdner RCM.
The filing further indicates that RCM General Corporation is the general
partner of RCM Limited L.P. According to the filing, RCM Limited L.P. and
RCM General Corporation have beneficial ownership of the securities
reported only to the extent they may be deemed to have beneficial ownership
of the securities beneficially owned by Dresdner RCM.
(C) Dresdner, an international banking organization, is the parent of Dresdner
RCM Holdings.
(D) R-Squared Limited has the sole voting power and the sole dispositive power
with respect to 527,100 shares of common stock. TimeTrust, Inc. has the
sole voting power and the sole dispositive power with respect to 184,500
shares of common stock. Harish K. Chopra has the sole voting power and the
sole dispositive power with respect to 30,500 shares of common stock.
TimeTrust, Inc. is an investment company of which Mr. Chopra is the Chief
Executive Officer and President. Mr. Chopra and R-Squared Limited are the
sole owners of TimeTrust, Inc.
(E) Includes 445,323 shares with respect to which Mr. Marcello has sole voting
and sole dispositive power and 95,847 shares (comprised of 1,184 shares
held by a family trust, 27,436 shares held by a family partnership and
67,227 shares held by a foundation) with respect to which Mr. Marcello
shares voting and dispositive power.
-18-
<PAGE>
Security Ownership of Management
The following table sets forth information regarding the
beneficial ownership of the Company's common stock as of February 1, 2000 by (i)
each current director of the Company; (ii) each Named Officer (as defined
herein) of the Company; and (iii) all current executive officers and directors
of the Company as a group. Unless otherwise indicated, each of the named
shareholders possesses sole voting and investment power with respect to the
shares beneficially owned. Shares covered by stock options are included in the
table below to the extent that they are exercisable by April 1, 2000.
<TABLE>
<CAPTION>
Shares
Beneficially Owned
------------------
Shareholder Number Percent
----------- ------ -------
<S> <C> <C>
Joel Cartun........................................................ 1,488,198(1) 16.4%
Brendan Keating.................................................... 43,000(2) *
Stephen R. Bova.................................................... 153,000(3) 1.7
Leonard J. Fassler................................................. 18,500(4) *
Fred S. Lafer...................................................... 22,100(5) *
Robert J. Levenson................................................. 20,100(6) *
Richard D. White................................................... 115,000(7) 1.3
Michael D. Helfand................................................. 1,000 *
Sheryl B. Cilenti.................................................. 12,700(8) *
All current executive officers, directors and nominees for
director as a group (9 persons)................................... 1,873,598(9) 20.4%
</TABLE>
- --------------------
*Less than one percent.
(1) Includes 200,000 shares held by trusts for the benefit of Mr. Cartun's
children. As trustee of such trusts, Mr. Cartun's wife has the right to
vote and dispose of such shares.
(2) Includes 32,500 shares issuable upon the exercise of stock options.
(3) Includes 15,000 shares issuable upon the exercise of stock options.
(4) Includes 1,000 shares held by Mr. Fassler's wife. Mr. Fassler
disclaims beneficial ownership of such shares. Also includes
15,000 shares issuable upon the exercise of stock options.
(5) Includes 1,200 shares held by family trusts of which Mr. Lafer is trustee.
Also includes 15,000 shares issuable upon the exercise of stock options.
(6) Includes 600 shares held by Mr. Levenson's wife as custodian for the
benefit of her children. Also includes 10,000 shares issuable upon the
exercise of stock options.
(7) Includes 61,704 shares held in the aggregate by CIBC World Markets
and an affiliate of CIBC World Markets. Mr. White is a Managing
Director of CIBC Capital Partners, an affiliate of CIBC World Markets.
Mr. White disclaims beneficial ownership of these 61,704 shares. Also
includes 15,000 shares issuable upon the exercise of stock options.
Pursuant to Mr. White's employment arrangement with CIBC, any economic
benefit derived from these options must be contributed by him to CIBC.
(8) Includes 11,700 shares issuable upon the exercise of stock options.
(9) Includes an aggregate of 114,200 shares issuable upon the exercise of
stock options.
-19-
<PAGE>
Summary of Cash and Certain Other Compensation
The Company did not commence operations until August 1997 upon
consummation of its initial public offering (the "IPO"). The following table
sets forth, for the fiscal years ended December 31, 1999, 1998 and 1997, the
annual and long-term compensation of the Company's Chief Executive Officer and
the other three executive officers of the Company at December 31, 1999 (the
"Named Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Long-Term
Compensation Compensation
---------------------------------------------------- --------------
Common
Shares
Subject to
Name and Other Annual Options All Other
Principal Position Year Salary Bonus Compensation(B) Granted Compensation (C)
- ------------------ ---- ----- ----- --------------- -------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Joel Cartun...................... 1999 $200,000 $ -- $-- -- $3,775
Chairman of the Board and 1998 196,728 -- -- -- 11,481
Chief Executive Officer 1997 211,568 30,000(A) -- -- 5,427
Brendan Keating(D)............... 1999 $200,000 $70,000 -- 50,000 $3,775
President and Chief Operating 1998 200,000 85,000 -- 95,000 3,804
Officer 1997 39,615 -- -- 100,000(E) --
Michael D. Helfand(F)............ 1999 $46,154 -- -- 50,000 --
Executive Vice President,
Chief Financial Officer and
Treasurer
Sheryl Bernstein Cilenti(G)...... 1999 $122,885 $20,000 -- 16,000 $1,558
Vice President, General 1998 103,923 20,000 -- 4,000 1,551
Counsel and Secretary 1997 24,231 -- -- 15,000 --
</TABLE>
- ------------------------
(A) Represents bonuses paid during 1997 by Vestcom Mid-Atlantic, Inc., a
subsidiary of Vestcom, prior to Vestcom's IPO.
(B) No Named Officer received personal benefits from the Company in excess of
10% of such individual's reported salary and bonus. Amounts below the
threshold are not included in the table.
(C) For 1999, includes contributions made by the Company of $3,775 for Mr.
Cartun, $3,775 for Mr. Keating and $1,558 for Ms. Cilenti to the Company's
401(k) plan to match 1999 pre-tax elective deferral contributions (included
under "Salary") made by such persons to such plan.
(D) Mr. Keating joined the Company in October 1997.
(E) These options were canceled in August 1998.
(F) Mr. Helfand joined the Company in October 1999.
(G) Ms. Cilenti joined the Company in October 1997.
Employment Agreements
Mr. Cartun entered into an employment agreement with Vestcom
which commenced on August 4, 1997, upon the consummation of the Company's IPO.
Mr. Cartun's employment agreement terminates in August 2000. Mr. Cartun serves
as Chairman and Chief Executive Officer at an annual base salary of $200,000.
Mr. Cartun's employment agreement provides that in the event
of a termination of employment by the Company without cause, Mr. Cartun will be
entitled to receive from the Company an amount in cash equal to the employee's
then-current annual base salary for the remainder of the term. In the event of a
termination of employment as a result of his death or disability, he (or his
heirs or legal representatives, as the case may be) will be entitled to receive
a lump-sum amount in cash equal to one time his then-current base salary, offset
by any payments made by the Company pursuant to any life insurance or disability
policies. If employment terminates for cause or he terminates his employment for
reasons other than death or permanent disability, he will only be entitled to
receive earned but unpaid salary as of the date of termination.
-20-
<PAGE>
Mr. Keating serves as President and Chief Operating Officer of
the Company at an annual base salary of $200,000. He was subject to a two year
employment agreement which terminated in October 1999, and is currently an
at-will employee. His employment agreement provided for a guaranteed annual
bonus of 35-50% of his annual salary, based on performance, during the two year
term of the agreement.
Ms. Cilenti, Vice President and General Counsel of the
Company, entered into a letter agreement with Vestcom in October 1997, pursuant
to which she serves as an at-will employee with a current salary of $135,000.
Mr. Helfand, Executive Vice President and Chief Financial
Officer of the Company, entered into a letter agreement with the Company in
September 1999, pursuant to which he serves as an at-will employee with a
current salary of $200,000. The letter agreement also provides that Mr. Helfand
will be entitled to earn a bonus of up to 50% of his annual salary for each of
2000 and 2001 (which will be pro-rated for calendar 1999) based on achieving
mutually agreed-upon goals and the Company's performance. Mr. Helfand is
guaranteed a minimum bonus of $50,000 in each of 2000 and 2001 (which will also
be pro-rated for calendar 1999, but payable in 2000).
All of the Named Officers are entitled to participate in all
compensation and employee benefit plans maintained by the Company and its
subsidiaries, including such bonuses as may be authorized by the Board of
Directors from time to time. Each executive is also entitled to a car allowance
of $850 per month.
Each of the Named Officers has a Change in Control agreement
with the Company. Pursuant to these Change in Control agreements, upon the
occurrence of a "Trigger Event", the executive would be entitled to receive a
lump sum payment equal to two times the sum of his or her annualized base salary
immediately prior to the "Change in Control" and the annual bonus the executive
received during the full fiscal year immediately prior to the Change in Control.
In addition, upon a Change in Control, all stock options would immediately
become vested.
Pursuant to the Change in Control agreements, a "Change in
Control" will be deemed to have occurred if (a) any person acquires 40% or more
of the total voting power of the Company's then outstanding securities, (b) in
general, over 50% of the composition of the Board of Directors changes without
the approval of the existing directors, (c) there is a merger or reorganization
of the Company after which less than 75% of the voting power of the surviving
entity is owned by holders of the Company's securities prior to the transaction,
or (d) the shareholders of the Company approve a plan of complete liquidation.
A "Trigger Event" means either (i) termination of the
executive's employment at any time from the effective date of a Change in
Control until 12 months after the Change in Control (other than for cause and
other than a termination by the executive for Good Reason (as defined)), or (ii)
a failure, upon a Change in Control, of the Company or a successor to continue
the executive's employment for at least 12 months with a salary and bonus at
least equal to what the executive received immediately prior to the Change in
Control, or (iii) a failure, upon a Change in Control, for the executive's
employer to be a public company, or (iv) the executive's termination of
employment after failure of the Company or any successor to acknowledge upon
request the obligations set forth in the executive's employment agreement and
Change in Control Agreement.
-21-
<PAGE>
Stock Options
The following table contains information regarding the grant
of stock options to the Named Officers during the year ended December 31, 1999.
In addition, in accordance with rules adopted by the SEC, the following table
sets forth the hypothetical gains or "option spreads" that would exist for the
respective options assuming rates of annual compound price appreciation in the
Company's common stock of 5% and 10% from the date the options were granted to
their final expiration date.
OPTION GRANTS IN LAST FISCAL YEAR
Individual Grants (A)
<TABLE>
<CAPTION>
Potential
Number of Common Realizable Value
Shares % of Total at Assumed Annual
Underlying Options Granted Exercise Price Rates of Stock
Options to Employees in Per Share Price Appreciation
Name Granted Fiscal 1999 ($/sh.) Expiration Date for Option Term
- ---- ----------------- ---------------- -------------- --------------- -------------------
<S> <C> <C> <C> <C> <C> <C>
5% 10%
-- ---
Joel Cartun.................. -- -- $ -- -- $ -- $ --
Brendan Keating.............. 50,000 12.5 3.094 11/22/09 97,290 246,550
Michael D. Helfand........... 50,000 12.5 2.875 10/03/09 90,403 229,100
Sheryl Bernstein Cilenti..... 11,000 2.7 5.375 3/10/09 37,183 94,230
Sheryl Bernstein Cilenti..... 5,000 1.2 3.094 11/22/09 9,729 24,655
</TABLE>
- -------------------
(A) The options granted to Messrs. Keating and Helfand and to Ms. Cilenti were
granted under the Company's 1997 Equity Compensation Program (the "Stock Option
Plan"). Options generally are granted at exercise prices equal to the fair
market value of the common stock on the grant date and typically vest in 20%
increments commencing one year after the date of grant. The committee which
administers the Stock Option Plan may accelerate the vesting of any option upon
the occurrence of a change in control event (as defined in the Stock Option
Plan).
During 1998, the Company canceled options previously granted to Mr. Keating and
granted new options to him. The following table provides certain information
with respect to these "repricings". No other repricings have occurred since the
IPO.
Ten Year Option/SAR Repricings (A)
<TABLE>
<CAPTION>
Length of
Number of Market Original
Securities Price of Exercise Option Term
Underlying Stock at Price at Remaining
Options Time of Time of New at Date of
Repriced or Repricing or Repricing or Exercise Repricing or
Name Date Amended(#) Amendment($) Amendment($) Price($) Amendment
---- ---- ---------- ------------ ------------ -------- ---------
<S> <C> <C> <C> <C> <C> <C>
Brendan Keating........... 08/12/98 100,000 $8.25 $21.625 $8.25 9 years
President and Chief
Operating Officer
</TABLE>
- --------------------
(A) On August 12, 1998, options covering 100,000 shares of common stock granted
to Mr. Keating in 1997 at an exercise price of $21.625 were canceled. Also on
August 12, 1998, Mr. Keating was granted options to purchase 60,000 shares at an
exercise price of $8.25 per share, the then current market price. On March 16,
1998, Mr. Keating was granted options covering 35,000 shares at an exercise
price of $10.125 per share.
No stock options were exercised by the Named Officers during
the year ended December 31, 1999. The following table provides information
concerning the number of shares of the Company's common stock covered by both
exercisable and non-exercisable stock options held by the Named Officers at
December 31, 1999. Also reported are the values for "in-the-money" options,
which represent the positive spread between the exercise prices of existing
options and $3.50, the closing sale price of the Company's common stock on
December 31, 1999. On February 8, 2000, the closing sale price of the Company's
common stock on the Nasdaq National Market was $4.75.
-22-
<PAGE>
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END VALUES
<TABLE>
<CAPTION>
Number of Shares
Number of Underlying Unexercised Value of Unexercised
Shares Acquired Value Options at In-the-Money Options at
on Exercise(#) Realized ($) Year-End (#) Year-End ($)
-------------- ------------ ------------ ------------
Exercisable Unexercisable Exercisable Unexercisable
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Joel Cartun.................. -- $-- -- -- $ -- $ --
Brendan Keating.............. -- -- 23,750 121,250 -- 20,300
Michael D. Helfand........... -- -- -- 50,000 -- 31,250
Sheryl Bernstein Cilenti..... -- -- 8,500 26,500 -- 2,030
</TABLE>
Arrangements with Directors
Directors who are employees of the Company do not receive
additional compensation for serving as directors. Each director who is not an
employee of the Company receives an annual retainer of $6,000 and an additional
fee of $1,000 for each day's attendance at a Board of Directors meeting and/or
committee meeting. Under the Company's Stock Option Plan, each non-employee
director also receives options to acquire 10,000 shares of common stock at the
beginning of his or her first year of service as a director, and options
covering 5,000 shares of common stock for each year of service thereafter. The
options become fully exercisable one year after the date of grant. Directors of
the Company are entitled to reimbursement for out-of-pocket expenses incurred in
their capacity as directors of the Company.
Board Report on Executive Compensation
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Pursuant to rules adopted by the SEC designed to enhance
disclosure of corporate policies regarding executive compensation, the following
is a report of the Compensation Committee of the Board of Directors regarding
compensation policies as they affect Mr. Cartun and the other Named Officers.
The Compensation Committee views compensation of executive
officers as having three distinct parts, a current compensation program, a set
of standard benefits and a long-term benefit program. The current compensation
element focuses upon the executive officer's salary and is designed to provide
competitive reimbursement for services rendered. The Company's standard benefit
package consists primarily of the matching portion of the Company's 401(k) plan,
health insurance benefits and eligibility for annual bonuses based upon
performance of the specific individual and the Company. The long-term benefit
element is reflected in the grants of stock options.
Stock options granted to executive officers of the Company
have been granted at a price equal to fair market value on the date of grant.
Accordingly, such options will gain appreciable value if, and only if, the
market value of the common stock increases. The Compensation Committee believes
that the issuance of stock options at fair market value provides incentives to
employees to maximize the Company's performance and to assure continued
affiliation with the Company.
Mr. Cartun did not receive any significant increase in salary
for 1999 from 1998. The decision not to raise his salary was based on the
Company's performance. Mr. Keating received a cash bonus and stock options in
1999 to reward his individual performance and contributions to the Company. Ms.
Cilenti received an increase in salary for 1999 as well as a cash bonus and
stock options to reward her individual performance and contributions to the
Company. Mr. Helfand received options upon his joining the Company in October
1999.
-23-
<PAGE>
All of the Named Officers have change in control agreements
which contain identical terms. The Compensation Committee thought it was
important for the Company to enter into these arrangements in order to provide
security to these officers in the event of a change in control (as defined) to
promote their continued affiliation with the Company and to protect both the
Company and the shareholders by assuring continuity during a transition period
related to any change in control.
The Compensation Committee believes that an appropriate
compensation program can help in promoting strong earnings performance if it
reflects an appropriate balance between providing current rewards to executive
officers while at the same time effectively controlling cash compensation costs.
It is the Committee's objective to continue monitoring the Company's
compensation program to assure that this balance is maintained.
By: Stephen R. Bova
Fred S. Lafer
Shareholder Return Comparison
Set forth below is a line-graph presentation comparing the
cumulative shareholder return on the Company's common stock, on an indexed
basis, against the cumulative total returns of the NASDAQ Market Index and a
Peer Group consisting of FYI Incorporated, Lason Inc. and Ikon Office Solutions,
Inc. for the period from July 30, 1997 (the date the Company's common stock
first began trading on the Nasdaq National Market) (July 30, 1997 = 100) through
December 31, 1999. The Company's management considers the companies included in
the Peer Group to be those companies whose primary businesses are most similar
to the business of the Company. The performance of the Company's common stock
reflected below is not necessarily indicative of future performance.
[TO BE REPLACED WITH NEW GRAPH]
-24-
<PAGE>
COMPARISON OF TOTAL RETURN SINCE JULY 30, 1997
AMONG VESTCOM INTERNATIONAL, INC. COMMON STOCK,
NASDAQ MARKET INDEX AND PEER GROUP
<TABLE>
<CAPTION>
7/30/97 9/30/97 12/31/97 3/31/98 6/30/98 9/30/98 12/31/98
------- ------- -------- ------- ------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Vestcom International, Inc. 100.00 117.69 137.69 64.23 56.92 56.92 55.38 [to be
completed]
Peer Group 100.00 89.93 96.98 120.13 62.55 38.40 45.91
Nasdaq Market Index 100.00 105.60 98.95 115.97 118.96 107.22 139.38
</TABLE>
Assumes $100 invested in July 30, 1997
Assumes dividend reinvested
Fiscal Year Ended December 31, 1999
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under Section 16(a) of the Securities Exchange Act of 1934,
Vestcom's executive officers and directors, and persons who own more than ten
percent of Vestcom's common stock, are required to file reports of ownership and
changes in ownership with the SEC and Nasdaq. These persons also are required by
federal securities regulations to give Vestcom copies of these reports.
Management has reported to us that, based solely on their review of reports
filed for 1999, all reporting requirements applicable to these persons were
complied with for 1999.
SOLICITATION OF CONSENT REVOCATIONS
Consent revocations may be solicited by mail, telephone,
facsimile transmission or other electronic media and in person. Solicitation of
consent revocations may be made by directors, officers and regular employees of
Vestcom for which they will receive no additional compensation.
Georgeson will receive a fee of $15,000 for its services to
Vestcom in connection with the solicitation of the consent revocations, plus
reimbursement for reasonable out-of-pocket expenses. Vestcom has also agreed to
indemnify Georgeson for certain liabilities in connection with this
solicitation. Approximately 20 persons will be employed by Georgeson to solicit
shareholders.
Banks, brokers, custodians, nominees and fiduciaries will be
requested to forward solicitation material to beneficial owners of shares of
Vestcom common stock. Vestcom will reimburse banks, brokers, custodians,
nominees and fiduciaries for their reasonable expenses for sending solicitation
material to the beneficial owners.
The entire cost of soliciting the consent revocations,
including, without limitation, costs, if any, relating to advertising, printing,
fees of attorneys, financial advisors, proxy solicitors, accountants, public
relations, transportation, litigation and related expenses and filing fees, will
be borne by Vestcom. Vestcom estimates that total expenditures relating to the
Vestcom Board's solicitation of the consent revocations will be approximately
$________. Such costs do not include the amount normally expended for a
solicitation for an uncontested election of directors or costs represented by
salaries and wages of regular employees and officers. To date, no fees have been
paid by Vestcom in connection with its solicitation of revocations of consents.
ABSENCE OF APPRAISAL RIGHTS
Under New Jersey law, you do not have appraisal rights in
connection with our solicitation of consent revocations.
-25-
<PAGE>
PARTICIPANTS IN THE SOLICITATION
Under applicable regulations of the SEC, each member of the
Vestcom Board and each executive officer of Vestcom may be deemed to be a
"participant" in Vestcom's solicitation of revocations of consent. In the event
each of these persons is deemed a "participant", and without acknowledging that
any such person is a "participant", we furnish the following information. Except
as set forth below, the principal business addresses of each director and
executive officer are 5 Henderson Drive, West Caldwell, New Jersey 07006. The
principal occupation of each director and executive officer is set forth in this
Revocation Statement under the sections entitled "Information About Us, The
People Asking You To Revoke Your Consent" and "Summary of Cash and Certain Other
Compensation", respectively. Information about the present ownership by
directors and executive officers and any of their respective "associates" of
Vestcom common stock is set forth under the section entitled "Security Ownership
of Management." Information about transactions by each director and executive
officer in Vestcom's common stock during the past two years can be found in such
director's or executive officer's filings under Section 16 of the Securities
Exchange Act of 1934, as amended, during that period. Information about related
party transactions involving directors and executive officers can be found under
the sections entitled "Certain Transactions" and "Employment Agreements". Except
as otherwise set forth in this Revocation Statement, none of the directors or
executive officers or any of their respective "associates" has any arrangement
or understanding with any person with respect to future employment or future
transactions with Vestcom.
Stephen R. Bova Robert J. Levenson
President and COO Executive Vice President
Staffmark, Inc. First Data Corp.
234 E. Millsap Road One Mack Centre Drive
Fayetteville, AR 72703 Paramus, NJ 07652
Leonard J. Fassler Richard D. White
Co-Chairman Managing Director
Interliant, Inc. CIBC Capital Partners
2 Manhattanville Road 425 Lexington Avenue
Purchase, NY 10577 9th Floor
New York, NY 10017
Fred S. Lafer
President
c/o Taub Foundation
300 Frank W. Burr Blvd.
Teaneck, NJ 07666
SHAREHOLDER PROPOSALS
If a shareholder intends to present a proposal at Vestcom's
next Annual Meeting of Shareholders (excluding proposals for nominations to the
Board of Directors, which are governed by the Company's By-Laws), the proposal
must be received by March 12, 2000 in order for the proposal to be considered at
the next Annual Meeting (but not included in the proxy statement for such
meeting). As reported in our proxy statement for last year's Annual Meeting of
Shareholders, shareholder proposals must have been received by the Company in
writing no later than December 27, 1999 in order for such proposal to be
eligible for inclusion in the Company's proxy statement and form of proxy for
the 2000 Annual Meeting.
INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP served as the Company's independent
accountants for the year ended December 31, 1999 and are expected to serve in
that capacity for 2000.
-26-
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
The Company files reports, proxy statements and other
information with the SEC under the Securities Exchange Act of 1934, as amended.
The SEC maintains an Internet world wide web site that provides access, without
charge, to reports, proxy statements and other information about issuers, like
Vestcom, who file electronically with the SEC. The address of that site is
http://www.sec.gov.
You also may obtain copies of these materials by mail from the
Public Reference Section of the Securities and Exchange Commission, 450 Fifth
Street, N.W., Room 1024, Washington, D.C. 20549, at prescribed rates. These
materials are also available from the SEC in person at any one of its public
reference rooms. Please call the SEC at l-800-SEC-0330 for further information
on its public reference rooms. You may read and copy this information at the
following locations of the SEC:
<TABLE>
<CAPTION>
<S> <C> <C>
Public Reference Room New York Regional Office Chicago Regional Office
450 Fifth Street, N.W. 7 World Trade Center Citicorp Center
Room 1024 Suite 1300 500 West Madison Street
Washington, D.C. 20549 New York, New York 10048 Suite 1400
Chicago, Illinois 60661-2511
</TABLE>
You can also obtain, without charge, reports, proxy statements
and other information, including without limitation, any information we may
incorporate by reference herein, about the Company, by contacting: Vestcom
International, Inc., 5 Henderson Drive, West Caldwell, New Jersey 07006, Attn:
Corporate Secretary, telephone: 973.882.7000, facsimile: 973.882.9724, or on the
Company's Internet world wide web site: http://www.vestcomintl.com.
-27-
<PAGE>
CAUTION ABOUT FORWARD LOOKING STATEMENTS
This Consent Revocation Statement contains forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended,
that are based on the beliefs of the Company's management and Board of
Directors, as well as assumptions made by and information currently available to
the Company's management and Board of Directors. Such statements reflect the
current views of the Company or the Board of Directors with respect to future
events based on currently available information and are subject to risks and
uncertainties that could cause actual results to differ materially from those
contemplated in such forward-looking statements.
Factors that could cause actual results to differ materially
from the Company's expectations include, but are not limited to, the following:
the ability of the Company to execute and manage the Company's growth strategy,
the results of the Company's investment spending, the ability to effectively
consolidate and integrate its production facilities and functions as part of the
Company's integration program, the ability to realize reduced overhead costs,
increased operating efficiencies and enhanced services at the newly consolidated
facilities, the ability of the Company to execute and manage its renewed
profitability and growth strategy, acceptance of the Company's new products in
the marketplace, the entry of new competitors into the marketplace, changes in
the business document outsourcing industry, the ability to attract and retain
key customers, the ability to improve its business pipeline, the ability to
positively modify its revenue mix, variations in quarterly results and the
sufficiency of the Company's working capital. Other factors are described from
time to time in the Company's public filings with the Securities and Exchange
Commission, news releases and other communications. Also, when Vestcom uses the
words "believes," "expects," "anticipates," "estimates," "plans," "intends,"
"objectives," "goals," "aims," "projects" or similar words or expressions,
Vestcom is making forward-looking statements. Readers are cautioned not to place
undue reliance on these forward-looking statements, which speak only as of the
date hereof. The Company does not undertake any obligation to release publicly
any revisions to these forward-looking statements to reflect events or
circumstances after the date hereof or to reflect the occurrence of
unanticipated events.
February ___, 2000 By Order of the Board of Directors
Sheryl Bernstein Cilenti, Secretary
-28-
<PAGE>
IMPORTANT
1. If your shares are registered in your name, please sign, date and
mail the enclosed BLUE Consent Revocation Card to Georgeson in the postage-paid
envelope provided.
2. If you have previously signed and returned a Gold consent card to
the Outsiders, you have every right to change your vote. Only your latest dated
card will count. You may revoke any Gold consent card already sent to the
Outsiders by signing, dating and mailing the enclosed BLUE Consent Revocation
Card in the postage-paid envelope provided.
3. If your shares are held in the name of a brokerage firm, bank
nominee or other institution, only it can sign a BLUE Consent Revocation Card
with respect to your shares and only after receiving your specific instructions.
Accordingly, please sign, date and mail the enclosed BLUE Consent Revocation
Card in the postage-paid envelope provided. To ensure that your shares are
voted, you should also contact the person responsible for your account and give
instructions for a BLUE Consent Revocation Card to be signed representing your
shares.
4. After signing the enclosed BLUE Consent Revocation Card, do not sign
or return the Gold consent card. Do not even use the Outsiders' Gold consent
card to indicate your opposition to the Outsiders' Proposals.
If you have any questions above giving your revocation of consent or
require assistance, please call:
GEORGESON SHAREHOLDER COMMUNICATIONS INC.
CALL TOLL FREE: (800) 223-2064
-29-
<PAGE>
PRELIMINARY COPY
SUBJECT TO COMPLETION, DATED FEBRUARY ___, 2000
VESTCOM INTERNATIONAL, INC.
THIS REVOCATION OF CONSENT IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
VESTCOM INTERNATIONAL, INC. ("VESTCOM") IN OPPOSITION TO THE CONSENT
SOLICITATION BY HARISH K. CHOPRA AND TIMETRUST, INC. (the "OUTSIDERS").
The undersigned, a holder of shares of common stock, par value $0.01 per share,
of Vestcom, is acting with respect to all the shares of common stock of Vestcom
held by the undersigned, and hereby revokes any and all consents that the
undersigned may have given in respect of the following proposals submitted by
the Outsiders:
[X] PLEASE MARK YOUR VOTE AS IN THIS EXAMPLE.
THE BOARD OF DIRECTORS OF VESTCOM UNANIMOUSLY RECOMMENDS THAT YOU VOTE
"REVOKE CONSENT" ON EACH PROPOSAL SET FORTH BELOW. PLEASE SIGN, DATE AND
MAIL THIS CONSENT REVOCATION CARD TODAY.
1. Remove five (Joel Cartun, Brendan Keating, Fred S. Lafer, Robert J.
Levenson, and Richard D. White) of the seven current Vestcom directors
(other than Stephen R. Bova and Leonard J. Fassler) and remove any other
director elected or appointed to the Vestcom Board before the effective
date of this shareholder action other than the five nominees hand-picked by
the Outsiders.
[_] REVOKE CONSENT [_] DO NOT REVOKE CONSENT [_] ABSTAIN
INSTRUCTIONS: To revoke consent, withhold revocation of
consent or abstain from revoking your consent to the removal
of all the persons named in the above proposal, check the
appropriate box. If you wish to revoke the consent to the
removal of certain of the persons named above, but not all of
them, check the "Revoke Consent" box and write the name of
each such person as to whom you do not wish to revoke consent
(i.e., the persons you want removed) in the following space:
____________________________________________________________
______________________________ .
<PAGE>
2. Amend Section 3.7 of Article III of the Vestcom By-Laws to provide
that any vacancy or vacancies on the Vestcom Board created as a result of the
removal of any of the current directors by Vestcom's shareholders may be filled
only by a majority vote of Vestcom's shareholders.
[_] REVOKE CONSENT [_] DO NOT REVOKE CONSENT [_] ABSTAIN
3. Amend Section 3.2 of Article III of the Vestcom By-Laws to set the
number of directors of Vestcom at seven.
[_] REVOKE CONSENT [_] DO NOT REVOKE CONSENT [_] ABSTAIN
4. Elect the five nominees hand-picked by the Outsiders (Harish K.
Chopra, Howard April, Parker S. Kennedy, Frank E. Raab, Robert J. Verrilli) to
serve as directors of Vestcom (or, if any of those five nominees is unable to
serve as a director of Vestcom, any other person designated as a nominee by the
remaining nominee or nominees).
[_] REVOKE CONSENT [_] DO NOT REVOKE CONSENT [_] ABSTAIN
INSTRUCTIONS: To revoke consent, withhold revocation of
consent or abstain from revoking your consent to the election
of all the persons named in the above proposal, check the
appropriate box. If you wish to revoke the consent to the
election of certain of the persons named above, but not all
of them, check the "Revoke Consent" box and write the name of
each such person as to whom you do not wish to revoke consent
(i.e., the persons you want elected) in the following space:
___________________________________________________________
___________________________________ .
5. Repeal any amendment to the Vestcom By-Laws that is adopted by the
current Vestcom Board after December 16, 1999 and before these proposals become
effective and the nominees are seated.
[_] REVOKE CONSENT [_] DO NOT REVOKE CONSENT [_] ABSTAIN
Note: The Outsiders have imposed the following condition on the adoption of
their Proposals: unless Proposals 1 and 4 are approved, none of the other
Proposals will become effective.
<PAGE>
IF NO DIRECTION IS MADE WITH RESPECT TO ONE OR MORE OF THE FOREGOING PROPOSALS,
OR IF YOU MARK EITHER THE "REVOKE CONSENT" OR "ABSTAIN" BOX WITH RESPECT TO ONE
OR MORE OF THE FOREGOING PROPOSALS, THIS REVOCATION OF CONSENT WILL REVOKE ALL
PREVIOUSLY EXECUTED CONSENTS WITH RESPECT TO SUCH PROPOSALS.
Dated:____________________
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Signature
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Signature, if held jointly
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Title of Authority
Please sign exactly as your name appears hereon. If shares are held jointly,
each stockholder should sign. When signing as attorney, executor, administrator,
trustee, guardian, corporate officer, etc., give full title as such. Please
sign, date and mail your Revocation of Consent promptly in the enclosed
postage-paid envelope.
If you have any questions or need assistance, please contact Georgeson
Shareholder Communications Inc., which is assisting Vestcom in this solicitation
of consent revocations. Call toll free: (800) 223-2064.
