[LOGO]CADMUS
COMMUNICATIONS
Dear Shareholder:
You are cordially invited to attend the 1999 Annual Meeting of
Shareholders of Cadmus Communications Corporation ("Cadmus"). The
meeting will be held on November 18, 1999, at 11:00 a.m., eastern
standard time, in the Auditorium of the Crestar Center, 919 East Main
Street, Richmond, Virginia.
The primary business of the meeting will be the election of directors
and the ratification of independent public accountants, as more fully
explained in the enclosed proxy statement.
During the meeting, we also will report to you on the condition and
performance of Cadmus and its subsidiaries, including developments
during the past fiscal year. You will have an opportunity to question
management on matters of interest to all shareholders.
We hope to see you on November 18, 1999. Whether you plan to attend
or not, please complete, sign, date and return the enclosed proxy card
as soon as possible in the postage-paid envelope provided. Your vote is
important. We appreciate your continued interest in and support of
Cadmus.
Cordially,
/s/ C. Stephenson Gillispie, Jr.
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C. Stephenson Gillispie, Jr.
CHAIRMAN OF THE BOARD,
PRESIDENT AND
CHIEF EXECUTIVE OFFICER
October 8, 1999
CADMUS COMMUNICATIONS CORPORATION
6620 West Broad Street, Suite 240, Richmond, Virginia 23230
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NOTICE OF 1999 ANNUAL MEETING OF SHAREHOLDERS
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TO BE HELD NOVEMBER 18, 1999
The 1999 Annual Meeting of Shareholders of Cadmus Communications
Corporation will be held on November 18, 1999, at 11:00 a.m., eastern standard
time, in the Auditorium of the Crestar Center, 919 East Main Street, Richmond,
Virginia, for the following purposes:
1. To elect three Class I directors to serve until the 2002 Annual Meeting
of Shareholders.
2. To ratify the designation of Arthur Andersen LLP as independent public
accountants for the current fiscal year.
3. To transact such other business as may properly come before the meeting
or any adjournments thereof.
The Board of Directors has fixed the close of business on September 24,
1999, as the record date for determination of shareholders entitled to notice of
and to vote at the meeting and any adjournments thereof.
By Order of the Board of Directors
/s/ Bruce V. Thomas
----------------------------------
Bruce V. Thomas
SENIOR VICE PRESIDENT AND
CHIEF FINANCIAL OFFICER
October 8, 1999
PLEASE COMPLETE AND RETURN THE ENCLOSED PROXY. IF YOU ATTEND THE MEETING IN
PERSON, YOU MAY WITHDRAW YOUR PROXY AND VOTE YOUR OWN SHARES.
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CADMUS COMMUNICATIONS CORPORATION
6620 West Broad Street, Suite 240, Richmond, Virginia 23230
------------------------------------------
PROXY STATEMENT
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1999 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON NOVEMBER 18, 1999
GENERAL
The enclosed proxy is solicited by the Board of Directors of Cadmus
Communications Corporation ("Cadmus" or "Company") for the 1999 Annual Meeting
of Shareholders ("Annual Meeting") of Cadmus to be held November 18, 1999, at
the time and place set forth in the accompanying Notice of Annual Meeting of
Shareholders and for the following purposes: (i) to elect three Class I
directors to serve until the 2002 Annual Meeting of Shareholders (see "Election
of Directors" page 6); (ii) to ratify the designation of Arthur Andersen LLP as
independent public accountants for the current fiscal year (see "Ratification of
the Selection of Independent Public Accountants," page 22); and (iii) to
transact such other business as may properly come before the Annual Meeting or
any adjournments thereof.
If a shareholder is a participant in the Cadmus Dividend Reinvestment Plan,
the enclosed proxy card represents the number of full shares in the dividend
reinvestment plan account, as well as shares registered in the participant's
name. A participant in the Cadmus Thrift Savings Plan with shares of Cadmus
common stock allocated to his or her account will receive a separate proxy card
representing the number of full shares allocated to his or her account as of the
record date for the Annual Meeting.
Cadmus will pay all costs for this proxy solicitation. Proxies are being
solicited by mail and may also be solicited personally, by telephone or
telegraph, by directors, officers, and employees of Cadmus. Cadmus may reimburse
banks, brokerage firms, and other custodians, nominees, and fiduciaries for
their reasonable expenses in sending proxy materials to the beneficial owners of
the stock. All shares of the common stock of Cadmus ("Common Stock") represented
by properly executed and delivered proxies will be voted according to their
terms and conditions at the Annual Meeting or any adjournments thereof.
Shareholders may revoke proxies at any time prior to their exercise by written
notice to Cadmus, by submitting a proxy bearing a later date, or by attending
the Annual Meeting and requesting to vote in person.
The approximate mailing date of this proxy statement and the accompanying
proxy is October 8, 1999.
VOTING RIGHTS
Only those shareholders of record at the close of business on September 24,
1999, are entitled to notice of and to vote at the Annual Meeting or any
adjournments thereof. The number of shares of
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Common Stock outstanding and entitled to vote as of the record date was
9,014,188. A majority of the votes entitled to be cast, represented in person or
by proxy, will constitute a quorum for the transaction of business.
With regard to the election of directors, votes may be cast in favor or
withheld. If a quorum is present, the nominees receiving a plurality of the
votes cast at the Annual Meeting will be elected directors. As a result, votes
withheld will have no effect. The ratification of Arthur Andersen LLP as
independent public accountants requires the affirmative vote of a majority of
the shares cast on the matter. Thus, although abstentions and broker non-votes
(shares held by customers which may not be voted on certain matters because the
broker has not received specific instructions from the customer) are counted for
purposes of determining the presence or absence of a quorum for the transaction
of business, they are generally not counted for purposes of determining whether
such proposals have been approved and therefore have no effect.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of July 31, 1999 (except as noted
below), the number and percentage of shares of Common Stock held by persons
known by Cadmus to be the owners of more than 5% of the Company's Common Stock,
each of the Cadmus directors and nominees for director, the executive officers
named in the "Summary Compensation Table," and all directors and executive
officers as a group.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF PERCENT OF
NAME AND ADDRESS BENEFICIAL OWNERSHIP COMMON STOCK ISSUED
OF BENEFICIAL OWNER OF COMMON STOCK(1) AND OUTSTANDING
- ------------------------------------- ---------------------- --------------------
<S> <C> <C>
Nathu Ram Puri
Isle of Man, United Kingdom 1,658,333(2) 18.4%
James C. Sheridan
Sheridan Printing Company, Inc.
Alpha, New Jersey 460,000 5.1%
J. & W. Seligman & Co. Inc.
New York, New York 478,545 5.3%
Dimensional Fund Advisors, Inc.
Santa Monica, California 423,800 4.7%
Brinson Partners, Inc.
Chicago, Illinois 419,900 4.65%
Bernstein Sanford Company, Inc.
New York, New York 417,600 4.63%
First Union Capital Management Group
Charlotte, North Carolina 404,050 4.48%
</TABLE>
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<TABLE>
<CAPTION>
AMOUNT AND NATURE OF PERCENT OF
NAME AND ADDRESS BENEFICIAL OWNERSHIP COMMON STOCK ISSUED
OF BENEFICIAL OWNER OF COMMON STOCK(1) AND OUTSTANDING
- ---------------------------------- ----------------------------- --------------------
<S> <C> <C>
Frank Daniels, III
Raleigh, North Carolina 32,000 (3) *
G. Waddy Garrett
Richmond, Virginia 5,600 (4) *
C. Stephenson Gillispie, Jr.
Richmond, Virginia 241,038 (5) 2.67%
Steven R. Isaac
Richmond, Virginia 32,600 (6) *
John C. Purnell, Jr.
Richmond, Virginia 11,182 (7) *
Jerry I. Reitman
Chicago, Illinois 2,500 (8)
Russell M. Robinson, II
Charlotte, North Carolina 21,272 *
John W. Rosenblum
Charlottesville, Virginia 8,000 *
Wallace Stettinius
Richmond, Virginia 188,053 (9) 2.09%
Bruce V. Thomas
Richmond, Virginia 62,799 (10) *
Bruce A. Walker
Seattle, Washington 7,800 *
Joseph J. Ward
Richmond, Virginia 0 *
David G. Wilson, Jr.
Richmond, Virginia 136,270 (11) 1.51%
All Directors and Executive
Officers as a Group (18 persons) 2,539,919 (12) 28.18%
</TABLE>
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* Indicates that percent of the Company's Common Stock does not exceed one
percent.
(1) Except as otherwise indicated and except to the extent that in certain
cases shares may be held in joint tenancy with a spouse, each nominee,
director, or executive officer has sole voting and
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investment power with respect to the shares shown. Except as otherwise
noted, beneficial ownership for each non-employee director includes 6,000
shares as to which each such director holds presently exercisable options
under the 1992 and 1997 Non-Employee Director Stock Compensation Plans. The
beneficial ownership shown for the five institutional shareholders and for
James E. Sheridan is based on a listing of institutional holders of the
Company's Common Stock as of July 31, 1999 provided to the Company by
Nasdaq Online(TM). Mr. Puri, Mr. Sheridan and these institutions also have
made either a Schedule 13G or 13D filing reflecting their respective
ownerships. Those filing 13Gs certify that the acquisition of the shares
reported thereon was in the ordinary course of business and not in
connection with or as a participant in any transaction having the purpose
or effect of changing or influencing the control of the Company.
(2) As of August 25, 1999, according to a 13D Amendment 3 filed with the
Securities and Exchange Commission on behalf of Mr. Puri, and companies
affiliated with him.
(3) Mr. Daniels holds 4,000 of his shares in the form of presently exercisable
options.
(4) Includes: 1,000 shares held by Mr. Garrett's wife, as to which shares Mr.
Garrett disclaims beneficial ownership, and 2,000 shares held in the form
of presently exercisable options.
(5) Includes: 204,200 shares as to which Mr. Gillispie holds presently
exercisable options; 986 shares held in his father's estate of which he is
executor; 10 shares held as custodian; and 581 shares held for his account
in the Cadmus account under the Cadmus Thrift Savings Plan.
(6) Includes: 500 shares held by Mr. Isaac's children and 350 shares held by
Mr. Isaac's wife, as to all of which shares Mr. Isaac disclaims beneficial
ownership; and 30,000 shares in the form of presently exercisable options.
(7) Includes 150 shares held by Mr. Purnell's wife, as to which shares Mr.
Purnell disclaims beneficial ownership.
(8) Mr. Reitman holds 2,000 of his shares in the form of presently exercisable
options.
(9) Includes: 148,831 shares held in an agency account by NationsBank, N.A., as
to all of which shares Mr. Stettinius is the beneficial owner; 2,222
shares, also held in an agency account by NationsBank, N.A., for Mr.
Stettinius' wife, as to which shares Mr. Stettinius disclaims beneficial
ownership; and 33,000 shares as to which Mr. Stettinius holds presently
exercisable options.
(10) Includes: 58,800 shares as to which Mr. Thomas holds presently exercisable
options and 2,063 shares held for his account in the Cadmus account under
the Cadmus Thrift Savings Plan.
(11) Includes: 79,900 shares as to which Mr. Wilson holds presently exercisable
options and 506 shares held for his account in the Cadmus account under the
Thrift Savings Plan.
(12) In addition to the executive officers named in the Summary Compensation
Table, the beneficial ownership shown for executive officers of Cadmus
reflects shares beneficially owned by David E. Bosher, Vice President and
Treasurer, Edward B. Fernstrom, Vice President, Information Technology,
Donald R. Fisher, Vice President of Strategy and Corporate Development, and
John H. Phillips, Vice President -- Procurement and Operations Finance.
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ELECTION OF DIRECTORS (PROPOSAL 1)
The Board of Directors is divided into three classes (I, II and III), with
one class being elected every year for a term of three years. John D. Munford,
II, Nathu Ram Puri, Jerry I. Reitman and Wallace Stettinius currently serve as
Class I directors. Mr. Munford will not stand for re-election. Messrs. Puri,
Reitman and Stettinius will be nominated to serve as Class I directors for terms
of three years expiring at the 2002 annual meeting. The persons named in the
proxy will vote for the election of the nominees named below unless authority is
withheld. If, for any reason, any of the persons named below should become
unavailable to serve, an event which management does not anticipate, proxies
will be voted for the remaining nominees and such other person or persons as the
Board of Directors of Cadmus may designate. In the alternative, the Board may
reduce the size of Class I to the number of remaining nominees, if any, for whom
the proxies will be voted.
Certain information concerning the three nominees for election at the
Annual Meeting is set forth below, as well as certain information about the
Class II and Class III directors, who will continue in office after the Annual
Meeting until the 2000 and 2001 annual meeting of shareholders, respectively.
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NOMINEES FOR ELECTION AS
CLASS I DIRECTORS
(TO SERVE UNTIL 2002 ANNUAL MEETING)
(PROPOSAL 1)
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION DURING
DIRECTOR PAST FIVE YEARS AND DIRECTORSHIPS
NAME AND (AGE) SINCE(1) IN OTHER PUBLIC COMPANIES
- ------------------------------------------ ---------- ----------------------------------------
<S> <C> <C>
1999 Chairman and Controlling Shareholder,
Melton Medes Group and Melham Holdings
Limited, Controlling Shareholder Condor
Structure Limited & Purico (IOM) Limited.
Started businesses in Building Services
and Environment Design Consultants in
1975 and 1976 Nathu Ram Puri
respectively.
Nathu Ram Puri (60)
- --------------------------------------------------------------------------------------------------
1997 Vice Chairman, The Callahan Group, a
Chicago-based consulting group
specializing in change management. Jerry
I. Reitman
Jerry I. Reitman (61)
- --------------------------------------------------------------------------------------------------
1967 Senior Executive Fellow at the School of
Business, Virginia Commonwealth
University, Richmond, Virginia. Formerly,
Chairman of the Board, President and
Chief Executive Officer, Cadmus.
Director, Chesapeake Corporation. Wallace
Stettinius
Wallace Stettinius (66)
- --------------------------------------------------------------------------------------------------
</TABLE>
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR PROPOSAL 1 TO ELECT THE
FOREGOING NOMINEES TO THE BOARD OF DIRECTORS TO SERVE UNTIL THE 2002 ANNUAL
MEETING.
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CLASS II DIRECTORS
(SERVING UNTIL 2000 ANNUAL MEETING)
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION DURING
DIRECTOR PAST FIVE YEARS AND DIRECTORSHIPS
NAME AND (AGE) SINCE(1) IN OTHER PUBLIC COMPANIES
- ------------------------------------------------------ ---------- --------------------------------------------
<S> <C> <C>
1994 Chairman and Chief Executive Officer, Total
Sports, Inc., a Raleigh-based news media
publisher. Chairman, KOZ inc., a
Raleigh-based provider of Web-based
data. Formerly, Publisher, Nando.net and
Vice President, Executive Editor and
Frank Daniels, III (43) Director of Operations, The News and
Observer Publishing Company.
- --------------------------------------------------------------------------------------------------------------------------
1991 Chairman of the Board, President and Chief
Executive Officer, Cadmus. Formerly,
Chief Operating Officer, Cadmus, and
President and Chief Executive Officer,
The William Byrd Press, Incorporated.
Director, First Union -VA/MD/DC
Advisory Board.
C. Stephenson Gillispie, Jr. (57)
- --------------------------------------------------------------------------------------------------------------------------
1977 Chairman, Valco Graphics, Inc., a Seattle
marketing firm providing printing, mailing
and fulfillment services.
Bruce A. Walker (65)
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
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<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION DURING
DIRECTOR PAST FIVE YEARS AND DIRECTORSHIPS
NAME AND (AGE) SINCE(1) IN OTHER PUBLIC COMPANIES
- ----------------------------------------------------- ---------------- -------------------------------------------------
<S> <C> <C>
1997 Chairman and Chief Executive Officer of
Alliance Agronomics, Inc., a
Mechanicsville, Virginia fertilizer
production and distribution concern.
Director, Ag-Chem Equipment Co., Inc.,
Reeds Jewelers, Inc., and County Bank of
Chesterfield, Inc.
G. Waddy Garrett (58)
- ----------------------------------------------------------------------------------------------------------------------------
CLASS III DIRECTORS
(TO SERVE UNTIL 2001 ANNUAL MEETING)
1979 Executive Director, Friends Association for
Children, Richmond, Virginia, a non-profit
child welfare organization.
John C. Purnell, Jr. (58)
- ----------------------------------------------------------------------------------------------------------------------------
1984 Attorney-at-law, President, Director and
shareholder of Robinson, Bradshaw &
Hinson, P.A., Charlotte, North Carolina.
Director, Caraustar Industries, Inc. and
Duke Energy Corporation.
Russell M. Robinson, II (67)
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
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<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION DURING
DIRECTOR PAST FIVE YEARS AND DIRECTORSHIPS
NAME AND (AGE) SINCE(1) IN OTHER PUBLIC COMPANIES
- -------------------------------------------------------- ----------------- --------------------------------------------------
<S> <C> <C>
1988 Dean, The Jepson School of Leadership
Studies, University of Richmond,
Richmond, Virginia. Formerly, Tayloe
Murphy Professor and Dean, the Darden
Graduate School of Business Adminis-
tration, University of Virginia. Director,
Chesapeake Corporation, Comdial
John W. Rosenblum (55) Corporation, Cone Mills Corporation, and
T. Rowe Price Associates.
- -------------------------------------------------------------------------------------------------------------------------------
1998 Chairman, Cadmus Professional Communi-
cations. Formerly, Executive Vice
President, Professional Communications
Sector; President, Cadmus Journal
Services; and Senior Vice President and
General Manager of Cadmus' Byrd
Journal division.
David G. Wilson, Jr. (58)
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) All service by Cadmus directors prior to June 30, 1984, refers to service as
directors of Cadmus' predecessors, The William Byrd Press, Incorporated or
Washburn Graphics, Inc.
CADMUS BOARD AND COMMITTEE MEETINGS AND ATTENDANCE
The Board of Directors of Cadmus held five meetings during the fiscal year
ended June 30, 1999. All directors attended at least 75% of all meetings of the
Board and committees on which they served, except Mr. Munford who attended 25%
of the Audit Committee meetings.
The Board has five standing committees: the Executive Committee, the
Nominating Committee, the Audit Committee, the Executive Compensation and
Organization Committee and the Benefits and Investment Committee.
The Executive Committee has a wide range of powers, but its primary duty is
to act if necessary between scheduled Board meetings. For such purpose, the
Executive Committee possesses all the powers of the Board in management of the
business and affairs of Cadmus except as otherwise limited by Virginia law. The
Executive Committee held one meeting during the fiscal year ended June 30, 1999.
Members of the Committee are Messrs. Daniels, Gillispie (Chairman), and
Stettinius.
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The Nominating Committee selects and recommends to the Board a slate of
nominees to be voted on for election as directors at each annual meeting, and
makes recommendations concerning committee membership, appointment of officers
and nominees to fill vacancies occurring on the Board. The Nominating Committee
met one time during the fiscal year ended June 30, 1999. Members of the
Committee are Messrs. Daniels, Reitman (Chairman), Rosenblum and Stettinius.
The function of the Audit Committee is to recommend the appointment of a
firm of independent public accountants to audit the Company's consolidated
financial statements, to review and approve the scope, purpose and type of audit
services to be performed internally and by the external auditors, to review the
activities and findings of all the external auditors and employees conducting
internal audits, to determine the effectiveness of the audit function and to
render regular reports to the Board on its activities and findings. The Audit
Committee met four times during the fiscal year ended June 30, 1999. Members of
the Committee are Messrs. Purnell, Rosenblum (Chairman) and Stettinius.
The primary function of the Executive Compensation and Organization
Committee (the "ECOC") is to review and approve the design and administration of
salary, benefits and incentive plans for senior management. This Committee also
evaluates the Company's organizational structure and the development, goals and
performance of senior management. The ECOC met six times during the fiscal year
ended June 30, 1999. Members of the ECOC are Messrs. Garrett (Chairman), and
Walker.
The primary function of the Benefits and Investment Committee is to review
the operation of employee benefit plans and programs and to evaluate the
performance of Plan administrators, trustees and investment managers. The
Benefits and Investment Committee met twice during the fiscal year ended June
30, 1999. Members of the Committee are Messrs. Daniels, Purnell (Chairman),
Reitman and Walker.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Members of the ECOC are Messrs. Garrett (Chairman) and Walker. No member of
the ECOC is or has been an employee of Cadmus. Furthermore, none of Cadmus'
executive officers has served on the board of directors of any company of which
an ECOC member is an employee except for John H. Phillips, Vice President,
Procurement and Operations Finance of Cadmus, who serves as a director of Valco
Graphics, Inc., a privately-held Seattle marketing firm providing printing,
mailing and fulfillment services, of which Bruce A. Walker, an ECOC member, is
President.
Russell M. Robinson, II, a Class III director, served as Chairman of the
ECOC until August 12, 1997, and currently serves as lead outside director of the
Board of Directors. The firm of Robinson, Bradshaw and Hinson, P.A., of which
Mr. Robinson is President, a Director and a shareholder, was retained to perform
legal services for Cadmus during fiscal year 1999. It is anticipated that the
firm will continue to provide legal services to Cadmus during fiscal year 2000.
On April 1, 1999, Cadmus purchased all of the outstanding shares of Melham
Holdings, Inc. whose principal operating subsidiary is Mack Printing Company.
As a result of the purchase, Nathu R.
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Puri, a Class I director standing for election, directly and indirectly received
as consideration approximately $11.2 million in cash, approximately 1.06 million
shares of Cadmus common stock, approximately $5.8 million in subordinated notes
of Cadmus and approximately $52.9 million in bridge financing notes of Cadmus.
Cadmus subsequently refinanced the $52.9 million bridge notes and redeemed Mr.
Puri's bridge notes. In addition, after the closing of the purchase Cadmus
caused Mack Printing Company to pay Mr. Puri a cash bonus of $500,000.00, which
had accrued prior to closing.
VOTING OF SHARES
As a part of the Stock Purchase Agreement dated April 1, 1999, by which
Cadmus purchased all of the shares of Melham Holdings, Inc., and as previously
disclosed by Cadmus in its April 6, 1999 Form 8-K, Nathu R. Puri, a Class I
director standing for election, agreed that for a period of two years, he would
vote his shares of Cadmus common stock, held directly and indirectly, in favor
of those director nominees recommended by Cadmus' Board of Directors and in
favor of the Board's recommendations on other matters.
DIRECTORS' COMPENSATION
CASH COMPENSATION. Each director of Cadmus who is not also an executive
officer of Cadmus receives: (a) an annual retainer of $10,000; (b) $1,000 for
attendance at each Board meeting; (c) $750 for attendance at each committee
meeting; and (d) $300 for each conference call Board meeting in which he
participates. The Chairmen of the Audit, the Nominating, the Executive
Compensation and Organization, and the Benefits and Investment Committees each
receive an additional $2,000 annually. Each director also is reimbursed for
usual and ordinary expenses of meeting attendance. A director who also is an
employee of Cadmus or its subsidiaries receives no additional compensation for
serving as a director.
In May, 1997, the Board created the position of lead outside director and
appointed Russell M. Robinson, II, to serve in this position. The general duties
of the lead outside director include serving as liaison between the
non-management members of the Board and the Chief Executive Officer and
assisting the Chairman of the Board in the performance of certain of his duties.
The lead outside director receives an additional annual retainer of $15,000 for
such services.
Cadmus has in effect a plan under which directors may elect to defer their
annual retainers and attendance fees generally until after the termination of
their service on the Board.
NON-EMPLOYEE DIRECTOR STOCK COMPENSATION PLAN. Under the 1997 Non-Employee
Director Stock Compensation Plan, a portion of the anticipated future increases
in the annual retainer is paid in stock options. Each Director who is not an
employee of Cadmus or its subsidiaries will receive an option grant covering
1,000 shares of Common Stock on November 15 of each year during the term of the
Plan, with the first grant having been made under the Plan on November 15, 1998.
The options granted under the Plan are not exercisable for six months from date
of grant except in the case of death or disability. Options that are not
exercisable at the time a director's service on the Board terminates for
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any reason other than death, disability or retirement in accordance with Cadmus'
policy will be forfeited. The 1997 Plan continues the form of stock compensation
previously provided under the 1992 Plan which expired August 15, 1997.
CERTAIN RELATIONSHIPS AND OTHER TRANSACTIONS WITH MANAGEMENT
See "Compensation Committee Interlocks and Insider Participation" for
information relating to Messrs. Robinson's and Puri's relationship to the
Company.
From time to time, Cadmus and its subsidiaries may purchase products from
or utilize services of, other corporations of which a Cadmus director is a
director, officer or employee. Such transactions occur in the ordinary course of
business and are not deemed material.
EXECUTIVE COMPENSATION
The following table shows, for the fiscal years ended June 30, 1999, 1998,
and 1997, all compensation paid or accrued by Cadmus and its subsidiaries to the
Company's Chief Executive Officer and its four other most highly compensated
executive officers.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
---------------------------------------------------- ------------------------------
OTHER SECURITIES
ANNUAL UNDERLYING ALL OTHER
NAME (AGE) AND COMPENSA- OPTIONS/ COMPEN-
PRINCIPAL POSITION YEAR SALARY ($)(1) BONUS ($)(2) TION ($)(3) SARS (#S) SATION ($)
- ----------------------------------- ------ --------------- ------------------ ----------------- ------------ -----------------
<S> <C> <C> <C> <C> <C> <C>
C. Stephenson Gillispie, Jr. (57) FY99 $ 400,000 $ 0 -- 13,000 $ 15,002(7)
Chairman, President and FY98 332,000 199,200 -- 45,000 16,160(8)
Chief Executive Officer FY97 322,000 0 -- 20,000 19,347(9)
Steven R. Isaac (51) FY99 $ 327,600 $ 0 -- 7,500 $ 9,037(10)
Executive Vice President FY98 315,000 137,800 -- 20,000 14,611(11)
FY97 305,000 50,000 -- 25,000 5,520(12)
David G. Wilson, Jr. (58) FY99 $ 326,192 $ 0 -- 8,000 $ 10,552(13)
Executive Vice President FY98 275,000 138,300 -- 25,000 13,414(14)
FY97 248,000 50,000 -- 25,000 14,681(15)
Joseph J. Ward (52) FY99 $ 300,000 $100,000(4) $67,754(6) 18,500 $ 4,538(16)
Executive Vice President
Bruce V. Thomas (42) FY99 $ 275,000 $ 0 -- 8,000 $ 4,780(17)
Senior Vice President and FY98 218,000 130,000 -- 19,000 6,237(18)
Chief Financial Officer FY97 198,000 50,000(5) -- 15,000 4,899(19)
</TABLE>
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(1)Reflects salary before pretax contributions under the Cadmus Thrift Savings
Plans.
(2)Reflects short-term incentive awards, if any, accrued for each of the three
fiscal years ended June 30, 1999, under the Cadmus Executive Incentive Plan
described in the Report of the Compensation Committee on Executive
Compensation on pages .
(3)For the fiscal year ended June 30, 1999, perquisites did not exceed 10% of
salary and bonus for any named executive officer, except Mr. Ward, thus no
amounts are reportable as "Other Annual Compensation" for any named
executive officer, except Mr. Ward.
(4)Reflects a required bonus pursuant to the terms of Mr. Ward's employment
agreement dated July 16, 1998.
(5)Reflects a short-term incentive award paid with respect to the fiscal year
ended June 30, 1997, but not included in the Summary Compensation Table in
1997 because it was not awarded until after release of the 1997 Proxy
Statement.
(6)Reflects $60,000 related to Mr. Ward's relocation and the remaining $7,754
represents an automobile allowance.
(7)Reflects $ 10,540 contributed or matched by Cadmus or its subsidiaries for
fiscal year 1999 under the Cadmus Thrift Savings Plans and the remainder
paid by Cadmus for life insurance premiums.
(8)Reflects $11,472 contributed or matched by Cadmus or its subsidiaries for
fiscal year 1998 under the Cadmus Thrift Savings Plans and the remainder
paid by Cadmus for life insurance premiums.
(9)Reflects $16,452 contributed or matched by Cadmus or its subsidiaries for
fiscal year 1997 under the Cadmus Thrift Savings Plans and the remainder
paid by Cadmus for life insurance premiums.
(10)Reflects $6,467 contributed or matched by Cadmus or its subsidiaries for
fiscal year 1999 under the Cadmus Thrift Savings Plans and the remainder
paid by Cadmus for life insurance premiums.
(11)Reflects $11,409 contributed or matched by Cadmus or its subsidiaries for
fiscal year 1998 under the Cadmus Thrift Savings Plans and the remainder
paid by Cadmus for life insurance premiums.
(12)Reflects $4,883 contributed or matched by Cadmus or its subsidiaries for
fiscal year 1997 under the Cadmus Thrift Savings Plans and the remainder
paid by Cadmus for life insurance premiums.
(13)Reflects $6,547 contributed or matched by Cadmus or its subsidiaries for
fiscal year 1999 under the Cadmus Thrift Savings Plans and the remainder
paid by Cadmus for life insurance premiums.
(14)Reflects $10,553 contributed or matched by Cadmus or its subsidiaries for
fiscal year 1998 under the Cadmus Thrift Savings Plans and the remainder
paid by Cadmus for life insurance premiums.
(15)Reflects $12,525 contributed or matched by Cadmus or its subsidiaries for
fiscal year 1997 under the Cadmus Thrift Savings Plans and the remainder
paid by Cadmus for life insurance premiums.
(16)Reflects $2,500 contributed or matched by Cadmus or its subsidiaries for
fiscal year 1999 under the Cadmus Thrift Savings Plans and the remainder
paid by Cadmus for life insurance premiums.
13
<PAGE>
(17)Reflects $4,012 contributed or matched by Cadmus or its subsidiaries for
fiscal year 1999 under the Cadmus Thrift Savings Plans and the remainder
paid by Cadmus for life insurance premiums.
(18)Reflects $5,628 contributed or matched by Cadmus or its subsidiaries for
fiscal year 1998 under the Cadmus Thrift Savings Plans and the remainder
paid by Cadmus for life insurance premiums.
(19)Reflects $4,347 contributed or matched by Cadmus or its subsidiaries for
fiscal year 1997 under the Cadmus Thrift Savings Plans and the remainder
paid by Cadmus for life insurance premiums.
STOCK OPTIONS
The following table reflects grants of stock options made during the fiscal
year ended June 30, 1999 to each of the named executive officers.
OPTIONS GRANTED IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE
VALUE AT
ASSUMED ANNUAL
NUMBER OF PERCENTAGE OF RATES OF STOCK
SECURITIES TOTAL OPTIONS/ PRICE APPRECIATION
UNDERLYING SARS EXERCISE FOR OPTION
OPTIONS GRANTED OR BASE TERM (3)
GRANTED TO EMPLOYEES PRICE EXPIRATION ---------------------
NAME (#) IN FISCAL YEAR ($/SH) DATE 5% 10%
- ------------------------------- --------------- ---------------- ----------- ----------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
C. Stephenson Gillispie, Jr. 13,000(1) 4 12.875 6/1/09 105,261 266,753
Stephen R. Isaac 7,500(1) 2 12.875 6/1/09 60,728 153,896
David G. Wilson, Jr. 8,000(1) 3 12.875 6/1/09 64,776 164,155
Joseph J. Ward 10,000(2) 3 20.625 8/11/08 129,710 328,709
8,500(1) 3 12.875 6/1/09 68,825 174,415
Bruce V. Thomas 8,000(1) 3 12.875 6/1/09 64,776 164,155
</TABLE>
- ----------
(1) Grants were made under the Company's 1990 Long Term Incentive Stock Plan and
become exercisable in increments of one-third of the total number of shares
subject to option each on December 31, 2001, 2002, 2003, subject to earlier
vesting if certain performance criteria are met.
(2) Grants were made under the Company's 1990 Long Term Incentive Stock Plan and
become exercisable in increments of one-third of the total number of shares
subject to option each on December 31, 2000, 2001 and 2002, subject to
earlier vesting if certain performance criteria are met.
The following table reflects certain information regarding the exercise of
stock options during the fiscal year ended June 30, 1999, as well as information
with respect to unexercised options held at such date by each of the named
executive officers.
14
<PAGE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED "IN THE MONEY" OPTIONS AT
OPTIONS AT FISCAL YEAR END (#) FISCAL YEAR END ($)
EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
-------------------------------- --------------------------
<S> <C> <C>
C. Stephenson Gillispie, Jr. 204,200/43,000 534,250/16,250
Stephen R. Isaac 30,000/22,500 0/9,375
David G. Wilson, Jr. 79,900/23,000 180,063/10,000
Joseph J. Ward 0/18,500 0/10,625
Bruce V. Thomas 58,800/22,000 96,500/10,000
</TABLE>
The Columns "Number of Shares Acquired Upon Exercise" and "Value Realized"
have been omitted because no options were exercised by the named executive
officers during the last fiscal year.
CHANGE-IN-CONTROL AGREEMENTS
Cadmus has entered into agreements with Messrs. Gillispie, Isaac, Wilson,
Ward, Thomas, Phillips, Bosher, Fernstrom and five other managers that provide
for severance payments and certain other benefits if their employment terminates
after "a change in control" (as defined therein) of Cadmus. Payments and
benefits will be paid under these agreements only if, within three years
following a change in control (or such shorter period from the date of any
change in control to normal retirement), the employee (i) is terminated
involuntarily without "cause" (as defined therein) and not as a result of death,
disability or normal retirement, or (ii) terminates his employment voluntarily
for "good reason" (as defined therein). "Change in control" is defined generally
to include (i) an acquisition of 20% or more of Cadmus' voting stock, (ii)
certain changes in the composition of the Cadmus Board of Directors, (iii)
shareholder approval of certain business combinations or asset sales in which
Cadmus' historic shareholders hold less than 60% of the resulting or purchasing
company or (iv) shareholder approval of the liquidation or dissolution of
Cadmus.
In the event of such termination following a change in control, the
employee will be entitled to receive a lump sum severance payment, certain other
payments and a continuation of employee welfare benefits. Severance payments
under these agreements are determined by a formula that takes into account base
salary, annual bonus and years of employment. Under this formula, Mr. Gillispie
will be entitled to the maximum severance payment, which will be an amount equal
to three times the sum of his base salary and annual bonus for the year in which
termination occurs, or for the fiscal year ended June 30, 1998, whichever is
higher. The total amount payable to Mr. Gillispie may not exceed the maximum
amount that may be paid without the imposition of a federal excise tax on Mr.
Gillispie, except that the amount payable will not be reduced unless his net
after-tax benefit would be greater than that without the reduction.
15
<PAGE>
RETIREMENT BENEFITS
PENSION PLAN. Substantially all employees of Cadmus and its participating
subsidiaries who are 21 years of age or older and who are credited with at least
one year of service with Cadmus or a participating subsidiary are covered by the
Cadmus Pension Plan (the "Pension Plan"). The Pension Plan is a non-contributory
defined benefit pension plan under which retirement benefits are generally based
on periods of active participation. For the period July 1, 1979 through June 30,
1985, a participant earned a retirement benefit expressed as an annuity for life
equal to 2% of his or her base compensation (exclusive of non-guaranteed
commissions, bonuses, overtime pay and similar payments) for each year of
service. For periods after June 30, 1985, a participant earns a retirement
benefit generally equal to 1.6% of his or her base compensation each year
(limited to the inflation adjusted compensation cap each year starting July 1,
1989). Under a special rule, employees who were participants on June 30, 1985
generally accrued further benefits after June 30, 1985 and before January 1,
1992 at no less than the amount of accrual for the fiscal year ended June 30,
1985. This special rule ceased to apply effective for accruals after December
31, 1991. Prior to July 1, 1979, several different benefit formulas applied, and
employees who were participants before July 1, 1979 will retain their accrued
past service benefit for service before July 1, 1979 based on the benefit
formulas then in effect.
Because retirement benefits under the Pension Plan are based on career
average compensation, a table showing annual retirement benefits based upon
final average compensation and years of service is inappropriate and has been
omitted. Based on the benefit formula in effect on and after July 1, 1985, and
on the assumption that the individuals named will continue to receive, until
normal retirement age, covered compensation in the same amounts paid for the
fiscal year ended June 30, 1999, the estimated annual benefits (which are not
subject to any deduction for Social Security or other offset amount) payable for
the named executive officers are $65,770 for Mr. Gillispie, $42,026 for Mr.
Isaac, $61,252 for Mr. Wilson, for Mr. Thomas and $0 for Mr. Ward.
CADMUS SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN. Cadmus maintains the Cadmus
Supplemental Executive Retirement Plan (the "SERP") to provide supplemental
retirement benefits for certain key employees of Cadmus and its participating
subsidiaries who are credited with at least five years of service and who are
selected by the Board of Directors of Cadmus for participation in the SERP. The
Board may waive all or any part of the five year service requirement. The SERP
is a non-qualified unfunded plan which covers 16 active key employees of Cadmus
and its participating subsidiaries. The retirement or death benefit payable
under the SERP is a 15-year term certain annuity equal to 30% of the
participant's final average (highest three years out of last ten) base
compensation (exclusive of non-guaranteed commissions, bonuses, overtime pay or
similar payments) generally commencing at the participant's normal retirement
age (which is age 65 for employees last hired prior to age 60 or otherwise is
the fifth anniversary of commencement of participation). Benefits are not
subject to any reduction for Social Security or other offset amount.
The following table shows the estimated annual retirement benefits payable
to SERP participants in the following average final compensation and years of
service classifications assuming retirement
16
<PAGE>
at age 65. Average compensation under the SERP includes only the amounts set
forth under "Salary" in the Summary Compensation Table on page .
SUPPLEMENTAL EXECUTIVE
RETIREMENT PLAN TABLE
<TABLE>
<CAPTION>
HIGHEST 3-YEAR
AVERAGE COMPENSATION 5 10 15 20 AND OVER
- ---------------------- --------- -------- --------- ------------
<S> <C> <C> <C> <C>
100,000 $7,500 15,000 22,500 $ 30,000
125,000 9,125 18,750 28,125 37,500
150,000 11,250 22,500 33,750 45,000
175,000 13,125 26,250 39,375 52,500
200,000 15,000 30,000 45,000 60,000
225,000 16,875 33,750 50,625 67,500
250,000 18,750 37,500 56,250 75,000
300,000 22,500 45,000 67,500 90,000
350,000 26,250 52,500 78,750 105,000
400,000 30,000 60,000 90,000 120,000
450,000 33,750 67,500 101,250 135,000
500,000 37,500 75,000 112,500 150,000
</TABLE>
Credited years of service under the SERP as of the fiscal year ended June
30, 1999 are: Mr. Gillispie -- 22; Mr. Isaac -- 3; Mr. Wilson -- 36; Mr. Thomas
- -- 7; and Mr. Ward -- 0.
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The Executive Compensation and Organization Committee (the "Committee"),
composed of two non-employee directors, has responsibility for all aspects of
the compensation program for Cadmus executive officers. Working in collaboration
with Cadmus senior management and outside consultants, the Committee administers
this executive compensation program to fulfill the objectives outlined below.
PRINCIPAL OBJECTIVES. As set forth in the Company's Executive Compensation
Policy and Philosophy Statement, the principal objectives of the executive
compensation program are: (i) to attract and retain a highly-qualified
management team; (ii) to motivate this team to achieve corporate objectives and
to control and justify the costs of executive incentives; (iii) to ensure that
executive compensation is integral to, and supportive of, other Cadmus
management benefits, systems and processes; and (iv) to link pay with
performance in a number of respects, most notably linking executive compensation
and shareholder value so that increases in executive compensation are directly
related to the creation of value for the Company's shareholders.
17
<PAGE>
The primary components of the Company's executive compensation program are
base salaries, short-term incentive payments, long-term incentive awards,
historically in the form of stock options, and the Supplemental Executive
Retirement Plan.
The Committee considered the deductibility of executive compensation under
Section 162(m) of the Internal Revenue Code which was enacted in 1993. Under
this provision, beginning in 1994 a publicly held corporation would not be
permitted to deduct compensation in excess of one million dollars per year paid
to the chief executive officer or any one of the other named executive officers
except to the extent the compensation was paid under compensation plans meeting
certain tax code requirements. The Committee noted that the Company does not
currently face the loss of this deduction for compensation. The Committee
nevertheless determined that, in reviewing the design of and administering the
executive compensation program, the Committee will continue in the future to
preserve the Company's tax deductions for executive compensation unless this
goal conflicts with the primary objectives of the Company's compensation
program.
SALARIES. Salaries for Cadmus executive officers are established and
administered by means of salary grades and salary ranges. All Cadmus executive
officers are assigned a base salary grade which is reviewed annually. With
outside consultants, senior management prepares a schedule of salary ranges by
grade, which is reviewed annually. At the beginning of each fiscal year, the
Committee reviews management's recommendations concerning adjustments in grade
designation and base salaries for each executive officer. Based on this review,
the Committee makes such salary adjustments as it deems appropriate. Base
salaries are generally competitive with the market based on peer group
comparisons provided by outside consultants.
SHORT-TERM INCENTIVE PAYMENTS. The Company utilizes an Executive Incentive
Plan under which its executive officers may earn annual incentive payments based
on their business unit's performance as well as the overall financial
performance of Cadmus. A formula that focuses primarily upon "return on capital
employed" ("ROC") establishes at each Cadmus business unit "curves" that
generate a "pool" from which the short-term incentives are paid. As ROC improves
and operating profits increase, the pool grows. No pool is created, and no
incentives are earned, however, until a minimum earnings threshold is achieved.
At the beginning of each fiscal year, senior management presents for
consideration and approval by the Committee the recommended short-term incentive
curves for Cadmus and each Cadmus business unit. At the conclusion of the fiscal
year, senior management recommends to the Committee specific short-term awards
for each executive officer. Those recommendations are based, among other
factors, on that executive's individual performance, as well as the performance
and profitability of that executive's business unit. A portion of each
executive's incentive award also is determined by the financial performance of
Cadmus. The Committee then considers and approves, to the extent it believes
appropriate, the incentive pools generated by the incentive curves and the
incentive award recommendations of senior management. At budgeted performance
levels, the Executive Incentive Plan generally should have the potential to
generate awards in the range of 10-60% of base salary. The Plan also
18
<PAGE>
contains a midyear payment feature equal to 25% of the anticipated bonus. This
feature is designed to motivate executives and managers to meet or exceed
interim financial goals.
LONG-TERM INCENTIVE AWARDS. The long-term incentive component of executive
compensation for Cadmus executive officers is provided under the 1984 Stock
Option Plan and the 1990 Long Term Incentive Stock Plan. The 1984 Plan, under
which no additional shares are available for grant, provides solely for the
award of stock options and tandem SARs. The 1990 Plan, an omnibus plan, provides
for awards of incentive and non-qualified stock options, SARs, restricted stock
grants, performance units or shares, as well as "other stock-unit" awards. In
practice, however, stock options have been the only form of awards made under
the 1990 Plan to date.
Certain options issued in 1999 and 1998 are exercisable over a period of 3
years with earlier vesting if the Company's performance exceeds specific
standards established by the Compensation Committee. Other options issued in
1999 and 1998, primarily to executives and managers who are not executive
officers of the Company, are immediately vested. Options issued prior to 1998
are exercisable over 5 years with accelerated performance vesting criteria.
Options generally have a ten-year term subject to early termination under
certain circumstances and typically have an option exercise price equal to the
market value of the Common Stock at the date of grant. Thus, the Common Stock
must appreciate before an executive officer receives any benefit from an option
grant.
At the beginning of each year, determination is made as to the number of
shares that the Company can reasonably issue for that year (typically 2% of
outstanding shares per year). Contemporaneously, senior management, working
periodically with outside consultants, makes recommendations concerning awards
to specific executives. These awards generally are recommended only for those
relatively few executives who are in a position and have the ability to
influence materially the financial performance of Cadmus. These recommendations
are acted upon by the Committee at its August meeting. Although the Committee
has no specific target equity ownership in mind for Cadmus executives, an
overall guideline is that the long-term incentive potential should equal
short-term incentive amounts and should be directed at creating a meaningful
equity position for top management. (See "Executive Compensation -- Stock
Options," page for information concerning specific grants made in fiscal
1999.)
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN. Supplemental executive retirement
benefits are provided under the Cadmus Supplemental Executive Retirement Plan.
Under this plan, executives earn an additional retirement benefit equal to 30%
of the executive's final average base compensation generally commencing at the
participant's normal retirement age payable as a 15-year term certain annuity.
The Committee may waive all or part of the five year service requirement. See
"Retirement Benefits -- Cadmus Supplemental Executive Retirement Plan."
CHIEF EXECUTIVE OFFICER COMPENSATION. Compensation for the Company's
Chairman and Chief Executive Officer is established in accordance with the
principles and objectives outlined above. Based upon external information and
data, including a survey of chief executive officer compensation at other
19
<PAGE>
public manufacturing companies deemed comparable to the Company and based
further on the financial performance of the Company during fiscal 1999, the
Committee approved no merit increase over last year's base salary for Mr.
Gillispie.
In determining the short-term and long-term incentive portions of Mr.
Gillispie's compensation for fiscal year 1999, the Committee considered both the
operating performance and the strategic progress of the Company. From an
operating perspective, the following aspects of the Company's performance were
considered: the Company fell short of its budget as integration issues at the
Company's point of purchase division continued and as soft capital markets
activity reduced profitability at the Company's financial communications
division. At the same time, the Company's packaging and promotional printing,
graphic solutions, and CadmusCom-Atlanta divisions all posted record or
dramatically improved operating results. From a strategic prospective, the
following aspects of the Company's performance were considered: the Company
continued to make progress toward the establishment of strong, defensible
positions in attractive niche markets. With its acquisition of Mack Printing
Group, the Company further expanded its world leadership position in the journal
market. In addition, the Company continued to invest in its rapidly growing
packaging and graphic solution divisions, providing state of the art
capabilities in both print and finishing. Furthermore, the Company continued its
efforts to narrow its focus to attractive niche markets, divesting its financial
communications and custom publishing businesses, on attractive terms. Finally,
the Company entered into a new senior credit facility and placed $125 million in
senior subordinated notes to position the Company for further growth and
development. Based on the foregoing, no short-term incentive was authorized or
paid to Mr. Gillispie. The Committee did, however, authorize an annual stock
option grant of 13,000 shares for fiscal 1999.
EXECUTIVE COMPENSATION AND ORGANIZATION COMMITTEE
G. Waddy Garrett (Chairman)
John D. Munford, II
Bruce A. Walker
20
<PAGE>
PERFORMANCE GRAPH
The following graph compares the cumulative total return for the Company's
Common Stock to the cumulative total return for the Standard & Poor's 500
Composite Index and an index of peer companies (the "Peer Group") selected by
the Company for the Company's last five fiscal years. Companies in the Peer
Group are as follows: Banta Corporation, World Color Press, Quebecor, Merrill
Corporation, Bowne and Company, Mail-Well, Wallace Computer Services and the
Media General Advertising Agencies Index and the Media General Marketing
Services Index. The graph assumes an investment of $100 in the Company's Common
Stock and in each index as of June 30, 1994, and that all dividends were
reinvested.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
AMONG CADMUS, THE S&P 500 INDEX AND PEER GROUP
[BAR CHART APPEARS HERE]
<TABLE>
<CAPTION>
1994 1995 1996 1997 1998 1999
------ ----------- ---------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
Cadmus 100 134.67 88.39 90.33 142.64 81.87
S&P 500 100 126.07 158.85 213.97 278.51 341.89
Peer Group 100 117.67 158.88 188.01 226.67 231.75
</TABLE>
21
<PAGE>
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based on a review of the reports of changes in beneficial ownership of
Common Stock and written representations furnished to Cadmus, Cadmus believes
that its officers and directors filed on a timely basis the reports required to
be filed under Section 16(a) of the Securities Exchange Act of 1934 during the
fiscal year ended June 30, 1999, except that Messrs. Puri, Bosher and Walker
each had one late report on Form 4.
RATIFICATION OF THE SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS (PROPOSAL 2)
Arthur Andersen LLP served as the Company's independent accountants for the
fiscal year ended June 30, 1999, and has been selected as independent public
accountants for Cadmus for the fiscal year ending June 30, 2000, subject to
ratification by the shareholders.
If not otherwise specified, proxies will be voted in favor of ratification
of the appointment. Representatives of Arthur Andersen LLP are expected to be
present at the Annual Meeting, will have an opportunity to make a statement if
they so desire, and are expected to be available to respond to appropriate
questions.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR PROPOSAL 2 TO RATIFY
THE APPOINTMENT OF ARTHUR ANDERSEN LLP TO SERVE AS INDEPENDENT PUBLIC
ACCOUNTANTS FOR THE FISCAL YEAR ENDING JUNE 30, 2000.
SHAREHOLDER PROPOSALS AND NOMINATIONS FOR THE 2000 ANNUAL MEETING
Under applicable law, the Board of Directors need not include an otherwise
appropriate shareholder proposal (including any shareholder nominations for
director candidates) in its proxy statement or form of proxy for the 2000 annual
meeting of shareholders unless the proposal is received by the Secretary of
Cadmus at the Company's principal place of business on or before June 10, 2000.
In addition, the Company's Bylaws prescribe certain procedures which must
be followed, including certain advance notice requirements, in order for a
proposal to be properly before a shareholder meeting. Notice that a shareholder
intends to bring any matter before a meeting must be received by the Company not
less than 60 days before the anniversary date of the meeting notice given by the
Company for the previous year's annual meeting. Any shareholder desiring a copy
of the Cadmus Bylaws will be furnished one without charge upon written request
to the Secretary.
Other Matters
As of the date of this Proxy Statement, management of Cadmus has no
knowledge of any matters to be presented for consideration at the Annual Meeting
other than those referred to above. If any other matter properly comes before
the Annual Meeting, the persons named in the accompanying proxy intend to vote
such proxy, to the extent entitled, in accordance with their best judgment.
22
<PAGE>
ANNUAL REPORT ON FORM 10-K
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION FOR THE YEAR ENDED JUNE 30, 1999 CAN BE
OBTAINED WITHOUT CHARGE BY WRITING TO THE CORPORATE SECRETARY AT P.O. BOX 27367,
RICHMOND, VIRGINIA 23261.
By Order of the Board of Directors
/s/ Bruce V. Thomas
-------------------
SENIOR VICE PRESIDENT AND
CHIEF FINANCIAL OFFICER
23
<PAGE>
PROXY
CADMUS COMMUNICATIONS CORPORATION
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints C. Stephenson Gillispie, Jr. and Bruce
V. Thomas jointly and severally, proxies, with full power to act alone, and with
full power of substitution, to represent the undersigned and to vote, as
designated below and upon any and all other matters which may properly be
brought before such meeting, all shares of Common Stock which the undersigned
would be entitled to vote at the Annual Meeting of Shareholders of Cadmus
Communications Corporation to be held on November 18, 1999, or any adjournment
thereof.
1. Election of Class I Directors to serve until 2002 Annual Meeting of
Shareholders.
[ ] FOR all nominees listed [ ] WITHHOLD AUTHORITY to vote
(except as written on the line below) for all nominees listed below
Nominees: Nathu R. Puri, Jerry I. Reitman and Wallace Stettinius
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE LISTED
ABOVE, WRITE THAT NOMINEE'S NAME ON THE SPACE PROVIDED BELOW.)
- --------------------------------------------------------------------------------
2. Ratification of the designation of Arthur Andersen LLP as independent
accountants for the Corporation and its subsidiaries for the current fiscal
year.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. In their discretion, the proxies are authorized to vote upon any other
business that may come before the meeting or any adjournment thereof.
UNLESS OTHERWISE SPECIFIED IN THE SQUARES PROVIDED, THE UNDERSIGNED'S VOTE WILL
BE CAST FOR ITEMS 1 AND 2. IF, AT OR BEFORE THE TIME OF THE MEETING, ANY OF THE
NOMINEES LISTED ABOVE HAS BECOME UNAVAILABLE FOR ANY REASON, THE PROXIES HAVE
THE DISCRETION TO VOTE FOR A SUBSTITUTE NOMINEE OR NOMINEES. THIS PROXY MAY BE
REVOKED AT ANY TIME PRIOR TO ITS EXERCISE.
___________________________________________________
Signature
___________________________________________________
Signature
Dated: __________________________________, 1999
(IN SIGNING AS ATTORNEY, ADMINISTRATOR, EXECUTOR, GUARDIAN OR TRUSTEE, PLEASE
ADD YOUR TITLE AS SUCH.)
