<PAGE>
[CADMUS LOGO AND NAME TO COME]
Dear Shareholder:
You are cordially invited to attend the 2000 Annual Meeting of Shareholders
of Cadmus Communications Corporation ("Cadmus" or the "Company"). The meeting
will be held on November 9, 2000, at 11:00 a.m., eastern standard time, in the
Auditorium of the SunTrust 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 9, 2000. 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/ RUSSELL M. ROBINSON, II
Russell M. Robinson, II
Chairman of the Board
October 9, 2000
CADMUS COMMUNICATIONS CORPORATION
1801 Bayberry Court, Suite 200, Richmond, Virginia 23226
<PAGE>
------------------------------------------------------
NOTICE OF 2000 ANNUAL MEETING OF SHAREHOLDERS
------------------------------------------------------
TO BE HELD NOVEMBER 9, 2000
The 2000 Annual Meeting of Shareholders of Cadmus Communications Corporation
will be held on November 9, 2000, at 11:00 a.m., eastern standard time, in the
Auditorium of the SunTrust Center, 919 East Main Street, Richmond, Virginia,
for the following purposes:
1. To elect four Class II directors to serve until the 2003 Annual Meeting
of Shareholders, one Class III director to serve until the 2001 Annual Meeting
of Shareholders and one Class I director 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 22,
2000, 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
President and Chief Executive
Officer
October 9, 2000
Please complete and return the enclosed proxy. If you attend the meeting in
person, you may withdraw your proxy and vote your own shares.
<PAGE>
CADMUS COMMUNICATIONS CORPORATION
1801 Bayberry Court, Suite 200, Richmond, Virginia 23226
------------------------------------------
PROXY STATEMENT
------------------------------------------
2000 ANNUAL MEETING OF SHAREHOLDERS
To Be Held on November 9, 2000
General
The enclosed proxy is solicited by the Board of Directors of Cadmus
Communications Corporation for the 2000 Annual Meeting of Shareholders of
Cadmus to be held November 9, 2000, at the time and place set forth in the
accompanying Notice of 2000 Annual Meeting of Shareholders and for the
following purposes: (i) to elect four Class II directors to serve until the
2003 Annual Meeting of Shareholders, one Class III director to serve until the
2001 Annual Meeting and one Class I director to serve until the 2002 Annual
Meeting (see "Election of Directors" page 5); (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 25); 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 9, 2000.
Voting Rights
Only those shareholders of record at the close of business on September 22,
2000, are entitled to notice of and to vote at the Annual Meeting or any
adjournments thereof. The number of shares of
1
<PAGE>
Common Stock outstanding and entitled to vote as of the record date was
8,937,592. 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, 2000, 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 1,788,333(/2/) 20%
James C. Sheridan
Sheridan Printing Company, Inc.
Alpha, New Jersey 520,000 5.82%
J. & W. Seligman & Co. Inc.
New York, New York 780,800 8.74%
Dimensional Fund Advisors, Inc.
Santa Monica, California 575,300 6.44%
Martina L. Bradford
Washington, D.C. -- --
Frank Daniels, III
Raleigh, North Carolina 33,000(/3/) *
G. Waddy Garrett
Richmond, Virginia 7,600(/4/) *
</TABLE>
2
<PAGE>
<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>
C. Stephenson Gillispie, Jr.
Richmond, Virginia 40,056(/5/) *
Gerard P. Lux, Jr.
Charlotte, North Carolina 27,845(/6/) *
Thomas C. Norris
York, Pennsylvania 2,500 *
John C. Purnell, Jr.
Richmond, Virginia 12,182(/7/) *
Jerry I. Reitman
Chicago, Illinois 3,500(/8/) *
Russell M. Robinson, II
Charlotte, North Carolina 22,272 *
James E. Rogers
Richmond, Virginia 292 *
Robert A. Sadler
Easton, Pennsylvania 2,000 *
Wallace Stettinius
Richmond, Virginia 202,803(/9/) 2.27%
Bruce V. Thomas
Richmond, Virginia 72,963(/10/) *
David G. Wilson, Jr.
Richmond, Virginia 133,785(/11/) 1.50%
All Directors and Executive
Officers as a Group (21 persons) 2,398,846(/12/) 26.84%
</TABLE>
--------
* 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 investment power with
respect to the shares shown. Except as otherwise noted, beneficial
ownership for each non-employee director includes 7,000 shares as to
which each such director
3
<PAGE>
holds presently exercisable options under the 1992 and 1997 Non-
Employee Director Stock Compensation Plans. The beneficial ownership
shown for the two 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, 2000 provided to the Company by Nasdaq OnlineTM.
Mr. Puri, Mr. Sheridan and these institutions have also 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/) Mr. Puri holds 1,000 of his shares in the form of presently exercisable
options.
(/3/) Mr. Daniels holds 5,000 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 3,000 shares held in
the form of presently exercisable options.
(/5/) Includes: 986 shares held in Mr. Gillispie's father's estate of which
he is executor; 10 shares held as custodian; and 599 shares held for
his account in the Cadmus account under the Cadmus Thrift Savings Plan.
(/6/) Mr. Lux holds 19,467 of his shares in the form of presently exercisable
options; and 8,378 shares held for his account in the Cadmus account
under the Cadmus Thrift Savings Plan.
(/7/) Includes: 150 shares held by Mr. Purnell's wife, as to which shares Mr.
Purnell disclaims beneficial ownership.
(/8/) Mr. Reitman holds 3,000 of his shares in the form of presently
exercisable options.
(/9/) Includes: 134,803 shares held in an agency account by Bank of America,
N.A., as to all of which shares Mr. Stettinius is the beneficial owner;
30,000 shares, also held in an agency account by Bank of America, N.A.,
for Mr. Stettinius' wife, as to which shares Mr. Stettinius disclaims
beneficial ownership; 33,000 shares as to which Mr. Stettinius holds
presently exercisable options; and 5,000 shares held in the form of
presently exercisable options.
(/10/) Includes: 68,800 shares as to which Mr. Thomas holds presently
exercisable options and 2,227 shares held for his account in the Cadmus
account under the Cadmus Thrift Savings Plan.
(/11/) Includes: 77,400 shares as to which Mr. Wilson holds presently
exercisable options and 521 shares held for his account in the Cadmus
account under the Cadmus 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, Senior Vice
President and Chief Financial Officer, David J. Hajek, Group
President --Port City Press, Wayne B. Luck, Senior Vice President and
Chief Information Officer, Wayne T. Tennent, Senior Vice President,
Chief Administrative Officer and Secretary, and Bruce G. Willis, Vice
President and Controller.
4
<PAGE>
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. Frank Daniels,
III, Bruce A. Walker, G. Waddy Garrett and Bruce V. Thomas currently serve as
Class II directors. Mr. Walker will not stand for re-election. C. Stephenson
Gillispie, Jr. previously served as a Class II director, but he retired from
the Board of Directors effective June 30, 2000. Mr. Thomas was elected by the
Board of Directors to serve as a Class II director until the Annual Meeting to
fill the vacancy created by Mr. Gillispie's retirement. Messrs. Daniels,
Garrett and Thomas and Mr. Thomas C. Norris will be nominated to serve as
Class II directors for terms of three years expiring at the 2003 Annual
Meeting of Shareholders. Also, John W. Rosenblum, a Class III director, has
resigned from the Board effective November 9, 2000. Ms. Martina L. Bradford
will be nominated to serve as a Class III director for a term expiring at the
2001 Annual Meeting of Shareholders to fill the vacancy created by Mr.
Rosenblum's resignation. In addition, Mr. James E. Rogers will be nominated to
serve as a Class I director for a term expiring at the 2002 Annual Meeting of
Shareholders to fill the vacancy created by the Board's decision to increase
the size of the Board to twelve (12) members.
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 any class
to the number of remaining nominees, if any, for whom the proxies will be
voted.
Certain information concerning the six nominees for election at the Annual
Meeting is set forth below, as well as certain information about the Class I
and Class III directors, who will continue in office after the Annual Meeting
until the 2002 and 2001 annual meetings of shareholders, respectively.
5
<PAGE>
NOMINEES FOR ELECTION AS
CLASS II DIRECTORS
(Serving Until 2003 Annual Meeting)
(Proposal 1)
<TABLE>
<CAPTION>
Principal Occupation During
Director Past Five Years and Directorships
Name and (Age) Since 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 Director of Operations, The
Frank Daniels, III (44) News and Observer Publishing Company.
----------------------------------------------------------------------------
1997 Retired 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
G.Waddy Garrett (59) of Chesterfield, Inc.
----------------------------------------------------------------------------
2000 President and Chief Executive Officer of
Cadmus. Formerly, Senior Vice President
and Chief Operating Officer of Cadmus,
and Senior Vice President and Chief
Bruce V. Thomas (43) Financial Officer of Cadmus.
</TABLE>
--------------------------------------------------------------------------------
6
<PAGE>
NOMINEES FOR ELECTION AS
CLASS II DIRECTORS
(Serving Until 2003 Annual Meeting)
(Proposal 1) (Continued)
<TABLE>
<CAPTION>
Principal Occupation During
Director Past Five Years and Directorships
Name and (Age) Since in Other Public Companies
-------------- -------- ----------------------------------------
<S> <C> <C>
Retired Chairman of the Board of P. H.
Glatfelter Company, headquartered in
York, Pennsylvania, a multi-national
manufacturer of engineered and
specialized printing papers. Formerly,
Chairman, President and CEO of P. H.
Glatfelter Company. Director, the York
Thomas C. Norris (62) Water Company.
</TABLE>
--------------------------------------------------------------------------------
7
<PAGE>
NOMINEE FOR ELECTION AS
CLASS III DIRECTOR
(Serving Until 2001 Annual Meeting)
<TABLE>
<CAPTION>
Principal Occupation During
Director Past Five Years and Directorships
Name and (Age) Since in Other Public Companies
-------------- --------- ----------------------------------------
<S> <C> <C>
Corporate Vice President, Global Public
Affairs of Lucent Technologies, a
global provider of communication
systems, software and services.
Formerly, Corporate Vice President,
Martina L. Bradford (48) Federal Government Affairs for AT&T.
-----------------------------------------------------------------------------
NOMINEE FOR ELECTION AS
CLASS I DIRECTOR
(Serving Until 2002 Annual Meeting)
President of SCI Investors, Inc., a
Richmond, Virginia private equity firm.
Director, Caraustar Industries, Inc.,
Chesapeake Corporation, Owens & Minor
James E. Rogers (54) and Wellman, Inc.
</TABLE>
--------------------------------------------------------------------------------
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR PROPOSAL 1 TO ELECT
THE FOREGOING NOMINEES TO THE BOARD OF DIRECTORS.
8
<PAGE>
CLASS III DIRECTORS
(To Serve Until 2001 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>
1979 Executive Director, Friends Association
for Children, Richmond, Virginia, a
John C. Purnell, Jr. (59) non-profit child welfare organization.
--------------------------------------------------------------------------------
1984 Attorney-at-law, President, Director and
shareholder of Robinson, Bradshaw &
Hinson, P.A., Charlotte, North
Carolina. Director, Caraustar
Industries, Inc. and Duke Energy
Russell M. Robinson, II (68) Corporation.
--------------------------------------------------------------------------------
1998 Vice Chairman and Group President-Cadmus
Professional Communications Group.
Formerly, Chairman and President,
Cadmus Professional Communications
David G. Wilson, Jr. (59) Sector.
</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.
9
<PAGE>
CLASS I DIRECTORS
(Serving Until 2002 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>
1999 Chairman and Controlling Shareholder,
Melton Medes Group and Melham Holdings
Limited, Controlling Shareholder Condor
Structure Limited & Purico (IOM)
Nathu Ram Puri (61) Limited.
----------------------------------------------------------------------------
1997 Vice Chairman, The Callahan Group, a
Chicago-based consulting group
specializing in change management.
Vice-Chairman International Data
Response Corporation and Chairman,
Board of Governors of Children's
Miracle Network. Executive Vice
President and Director, Integrated
Communications (retired) of the Leo
Burnett Company, a Chicago-based
Jerry I. Reitman (62) international advertising agency.
----------------------------------------------------------------------------
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
Wallace Stettinius (67) Corporation.
</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.
10
<PAGE>
Cadmus Board and Committee Meetings and Attendance
The Board of Directors of Cadmus held eight meetings during the fiscal year
ended June 30, 2000. All directors attended at least 75% of all meetings of
the Board and committees on which they served.
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,
2000. Members of the Committee are Messrs. Daniels, Robinson, Stettinius,
Thomas and Wilson.
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, 2000. Members of
the Committee are Messrs. Daniels, Garrett, Reitman (Chairman) and Stettinius.
The primary function of the Audit Committee is to assist the Board in
fulfilling its oversight responsibilities related to corporate accounting,
financial reporting practices, and the quality and integrity of financial
reports. In addition, the Audit Committee has oversight responsibilities
regarding corporate risk management, legal compliance and business ethics
matters. The Audit Committee met six times during the fiscal year ended June
30, 2000. Members of the Committee are Messrs. Garrett, Purnell, Rosenblum
(Chairman)(/1/) 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 five times during the
fiscal year ended June 30, 2000. Members of the ECOC are Messrs. Daniels,
Garrett (Chairman), Reitman and Walker.(/2/)
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 four times during the fiscal year ended
June 30, 2000. Members of the Committee are Messrs. Purnell (Chairman),
Reitman, Walker(/2/) and Wilson.
--------
(/1/) As noted above, Mr. Rosenblum has resigned from the Board effective
November 9, 2000. The Board will appoint a new Chairman of the Audit
Committee effective on that date.
(/2/) As noted above, Mr. Walker's current term expires at the 2000 Annual
Meeting, and he will not stand for re-election.
11
<PAGE>
Compensation Committee Interlocks and Insider Participation
Members of the ECOC are Messrs. Daniels, Garrett (Chairman), Reitman 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.
Russell M. Robinson, II, a Class III director, served as Chairman of the
ECOC until August 12, 1997, and currently serves as Chairman 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 2000. It is anticipated that the
firm will continue to provide legal services to Cadmus during fiscal year
2001.
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. Puri, a Class I director, 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. The $5.8 million in
subordinated notes remain outstanding.
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, 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
Company'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) $500 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
$25,000 for such services. Effective July 1, 2000, Mr. Robinson was elected
Chairman of the Board of Directors and will receive an annual retainer of
$60,000. The position of lead outside director is presently vacant.
12
<PAGE>
In addition, Messrs. Robinson, Garrett and Reitman received $35,000, $15,750
and $8,250, respectively, for their service during fiscal 2000 on a Special
Committee of the Board of Directors.
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 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, 2000, 1999,
and 1998, 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.
13
<PAGE>
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. (58) FY00 $400,000 $ 0 -- -- $ 13,149(/8/)
Chairman, President and FY99 400,000 0 -- 13,000 15,002(/9/)
Chief Executive
Officer(/4/) FY98 332,000 199,200 -- 45,000 16,160(/10/)
David G. Wilson, Jr.
(59) FY00 $337,527 $ 0 -- 12,000 $ 13,812(/11/)
Vice Chairman and Group FY99 326,192 0 -- 8,000 10,552(/12/)
President --
Professional FY98 275,000 138,300 -- 25,000 13,414(/13/)
Communications
Bruce V. Thomas (43) FY00 $297,560 $ 0 -- 25,000 $ 5,353(/14/)
Senior Vice President
and FY99 275,000 0 -- 8,000 4,780(/15/)
Chief Operating
Officer(/5/) FY98 218,000 130,000 -- 19,000 6,237(/16/)
Gerard P. Lux, Jr. (42) FY00 $244,077 $ 35,476 -- 12,000 $ 9,080(/17/)
Group President --
Whitehall FY99 217,387 0 -- 13,567 9,384(/18/)
Group(/6/) FY98 203,846 113,770 -- 7,000 5,412(/19/)
Robert A. Sadler (62) FY00 $222,130 $ 38,500 -- 12,000 $199,923(/20/)
Group President --
CadmusMack(/7/)
</TABLE>
--------
(/1/) Reflects salary before pretax contributions under the Cadmus Thrift
Savings Plan and nonqualified plans.
(/2/) Reflects short-term incentive awards, if any, accrued for each of the
three fiscal years ended June 30, 2000, under the Cadmus Executive
Incentive Plan described in the Report of the Compensation Committee on
Executive Compensation on page 19.
(/3/) For the fiscal years ended June 30, 2000, June 30, 1999 and June 30,
1998, perquisites did not exceed 10% of salary and bonus for any named
executive officer. Therefore, no amounts are reportable as "Other Annual
Compensation" for any named executive officer.
(/4/) Mr. Gillispie retired as Chairman, President and Chief Executive Officer
effective June 30, 2000.
(/5/) Mr. Thomas was elected President and Chief Executive Officer effective
July 1, 2000.
(/6/) Mr. Lux was elected Group President -- Whitehall Group effective May 10,
2000.
(/7/) Mr. Sadler joined the Company on September 20, 1999. Mr. Sadler was
elected Group President -- CadmusMack effective May 10, 2000.
14
<PAGE>
(/8/) Reflects $12,357 contributed or matched by Cadmus or its subsidiaries
for fiscal year 2000 under the Cadmus Thrift Savings Plan and/or
Nonqualified Thrift Plan and the remainder paid by Cadmus for life
insurance premiums.
(/9/) Reflects $ 10,540 contributed or matched by Cadmus or its subsidiaries
for fiscal year 1999 under the Cadmus Thrift Savings Plan and/or
Nonqualified Thrift Plan and the remainder paid by Cadmus for life
insurance premiums.
(/10/) Reflects $11,472 contributed or matched by Cadmus or its subsidiaries
for fiscal year 1998 under the Cadmus Thrift Savings Plan and/or
Nonqualified Thrift Plan and the remainder paid by Cadmus for life
insurance premiums.
(/11/) Reflects $10,524 contributed or matched by Cadmus or its subsidiaries
for fiscal year 2000 under the Cadmus Thrift Savings Plan and/or
Nonqualified Thrift Plan and the remainder paid by Cadmus for life
insurance premiums.
(/12/) Reflects $6,547 contributed or matched by Cadmus or its subsidiaries
for fiscal year 1999 under the Cadmus Thrift Savings Plan and/or
Nonqualified Thrift Plan and the remainder paid by Cadmus for life
insurance premiums.
(/13/) Reflects $10,553 contributed or matched by Cadmus or its subsidiaries
for fiscal year 1998 under the Cadmus Thrift Savings Plan and/or
Nonqualified Thrift Plan and the remainder paid by Cadmus for life
insurance premiums.
(/14/) Reflects $4,958 contributed or matched by Cadmus or its subsidiaries
for fiscal year 2000 under the Cadmus Thrift Savings Plan and/or
Nonqualified Thrift Plan and the remainder paid by Cadmus for life
insurance premiums.
(/15/) Reflects $4,012 contributed or matched by Cadmus or its subsidiaries
for fiscal year 1999 under the Cadmus Thrift Savings Plan and/or
Nonqualified Thrift Plan and the remainder paid by Cadmus for life
insurance premiums.
(/16/) Reflects $5,628 contributed or matched by Cadmus or its subsidiaries
for fiscal year 1998 under the Cadmus Thrift Savings Plan and/or
Nonqualified Thrift Plan and the remainder paid by Cadmus for life
insurance premiums.
(/17/) Reflects $8,772 contributed or matched by Cadmus or its subsidiaries
for fiscal year 2000 under the Cadmus Thrift Savings Plan and/or
Nonqualified Thrift Plan and the remainder paid by Cadmus for life
insurance premiums.
(/18/) Reflects $8,863 contributed or matched by Cadmus or its subsidiaries
for fiscal year 1999 under the Cadmus Thrift Savings Plan and/or
Nonqualified Thrift Plan and the remainder paid by Cadmus for life
insurance premiums.
(/19/) Reflects $5,162 contributed or matched by Cadmus or its subsidiaries
for fiscal year 1998 under the Cadmus Thrift Savings Plan and/or
Nonqualified Thrift Plan and the remainder paid by Cadmus for life
insurance premiums.
(/20/) Reflects $4,443 contributed or matched by Cadmus or its subsidiaries
for fiscal year 2000 under the Cadmus Thrift Savings Plan and/or
Nonqualified Thrift Plan; $70,500 in consulting fees paid prior to his
joining the Company in September 2000; $46,684 in pension payments and
$78,296 in SERP benefits he received from Mack Printing Company.
15
<PAGE>
Stock Options
The following table reflects grants of stock options made during the fiscal
year ended June 30, 2000 to each of the named executive officers.
OPTIONS GRANTED IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Potential
Realizable
Value at
Assumed Annual
Number of Percentage of Rates of Stock
Securities Total Options/ Price Appreciation
Underlying SARs Exercise For Option
Options Granted or Base Term
Granted to Employees Price Expiration ------------------
Name (#) in Fiscal Year ($/SH) Date 5% 10%
---- ---------- -------------- -------- ---------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
C. Stephenson
Gillispie, Jr. 0 -- -- -- -- --
David G. Wilson, Jr. 12,000(/1/) 5.32% $8.8125 5/23/10 $66,506 $168,538
Bruce V. Thomas 10,000(/1/) 4.43% $10.250 9/2/09 $64,462 $163,359
15,000(/1/) 6.65% $8.8125 5/23/10 $83,132 $210,673
Gerard P. Lux, Jr. 12,000(/1/) 5.32% $8.8125 5/23/10 $66,506 $168,538
Robert A. Sadler 12,000(/1/) 5.32% $8.8125 5/23/10 $66,506 $168,538
</TABLE>
--------
(/1/) Grants were made under the Company's 1990 Long Term Incentive Stock Plan
and become exercisable in increments of one-third of the total number of
options on December 31, 2002, 2003, and 2004, subject to earlier vesting
if certain performance criteria are met.
The following table reflects certain information regarding the exercise of
stock options during the fiscal year ended June 30, 2000, as well as
information with respect to unexercised options held at such date by each of
the named executive officers.
16
<PAGE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
Value of Unexercised
Number of Unexercised "In the Money" Options at
Options at Fiscal Year End (#) Fiscal Year End ($)
Exercisable/Unexercisable Exercisable/Unexercisable
------------------------------ -------------------------
<S> <C> <C>
C. Stephenson Gillispie,
Jr. 0/0 0/0
David G. Wilson, Jr. 77,400/35,000 35,075/10,050
Bruce V. Thomas 68,800/37,000 7,000/12,563
Gerard P. Lux, Jr. 19,467/50,400 0/10,050
Robert A. Sadler 0/12,000 0/10,050
</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. As part of his retirement agreement, Mr.
Gillispie received $30,361 in exchange for all of his unexercised stock
options. See "Retirement Agreement," page 18.
Change-in-Control Agreements
Cadmus has entered into agreements with Messrs. Thomas, Wilson, Bosher,
Tennent, Willis, Lux, Hajek, Sadler 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 for
Mr. Thomas and two years for other officers 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 and are subject to certain
minimums and maximums. Under this formula, Mr. Thomas will be entitled to the
maximum severance payment, which will be an amount equal to 2.99 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, 2001, whichever is higher. The total
amount payable to Mr. Thomas may exceed the maximum amount that may be paid
without the imposition of a federal excise tax on Mr. Thomas, and if excise
tax is due, Mr. Thomas will receive an additional payment in an amount
sufficient to pay the excise tax and the additional taxes due with respect to
such additional payment.
17
<PAGE>
Retirement Agreement
Cadmus has entered into a retirement agreement with Mr. Gillispie which
provides for Mr. Gillispie's retirement as Chairman, President and Chief
Executive Officer of Cadmus effective June 30, 2000. Under the terms of the
retirement agreement, in addition to the benefits available to Mr. Gillispie
under Cadmus' Pension Plan, Supplemental Executive Retirement Plan, Thrift
Savings Plan, Deferred Compensation Plan and Non-Qualified Thrift Plan, the
Company has agreed to pay Mr. Gillispie $444,000 per year in "Salary
Continuation Payments" for the three-year period beginning July 1, 2000 and
ending June 30, 2003. The retirement agreement also provides that, during the
period Mr. Gillispie is receiving such "Salary Continuation Payments," Mr.
Gillispie and his eligible family members are permitted to participate in
certain welfare benefit plans of Cadmus on the same basis made available to
eligible active employees of Cadmus. In addition, in the retirement agreement,
the Company has agreed (1) to provide Mr. Gillispie with an enhanced benefit
under Cadmus' Supplemental Executive Retirement Plan, so that the benefit
available to him thereunder, among other actuarially equivalent options,
equals $200,000 per year payable as a single life annuity for his lifetime,
commencing July 1, 2003, and (2) to pay Mr. Gillispie $30,361 in exchange for
all of his unexercised outstanding Cadmus stock options. The retirement
agreement also contains provisions which, among other things, require Mr.
Gillispie to provide certain transition and consulting services to Cadmus and
prevent Mr. Gillispie from competing with Cadmus.
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. A participant
currently earns a retirement benefit expressed as an annuity for life equal to
1.6% of his or her base compensation (exclusive of non-guaranteed commissions,
bonuses, overtime pay and similar payments) for each year of service.
Different benefit formulas applied prior to July 1, 1985, and a special
transition rule applied through December 31, 1991.
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, 2000, 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 $72,276 for Mr. Thomas, $61,252 for Mr.
Wilson and $81,146 for Mr. Lux. Messrs. Gillispie and Sadler are not accruing
a benefit under the Cadmus Pension Plan or the Cadmus SERP. Assuming Mr.
Gillispie elects to begin receiving his retirement benefits under the Pension
Plan on July 1, 2003 (following the termination of his Salary Continuation
Payments under his retirement agreement), his annual benefits under the
Pension Plan will be $35,191.
18
<PAGE>
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 12 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 at age 65. Average compensation
under the SERP includes only the amounts set forth under "Salary" in the
Summary Compensation Table on page 14.
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, 2000 are: Mr. Gillispie -- 23; Mr. Thomas -- 8; Mr. Wilson -- 37; and Mr.
Lux -- 17.
Report of the Compensation Committee on Executive Compensation
The Executive Compensation and Organization Committee (the "Committee"),
composed of four non-employee directors, has responsibility for all aspects of
the compensation program for Cadmus
19
<PAGE>
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.
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 grid based primarily upon operating profits and
earnings improvements for each Cadmus business unit generates a variable
"pool" from which the short-term incentives are paid. As operating profits
increase, the pool grows. No pool is created, and no incentives are earned,
however, until a minimum earnings threshold is achieved.
20
<PAGE>
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 30-60% of base salary.
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. In June 2000, the Board of Directors
amended the 1990 Plan to extend the term of the plan, excluding incentive
stock options, until July 31, 2001.
Certain options issued in 2000, 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 May 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 16 for information concerning specific grants made in
fiscal 2000.)
21
<PAGE>
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. Mr. Gillispie served as the Company's
Chairman and Chief Executive Officer through June 30, 2000, on which date his
retirement from Cadmus became effective. (Effective July 1, 2000, Mr. Thomas
has been appointed as the Company's President and Chief Executive Officer.)
Compensation for the Company's 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 public manufacturing companies deemed comparable to the
Company and based further on the financial performance of the Company during
fiscal 2000, the Committee approved no merit increase over Mr. Gillispie's
previous base salary during fiscal 2000.
The Company has also entered into a retirement agreement with Mr. Gillispie
which provides certain salary continuation payments and other payments and
benefits to him (see "Retirement Agreement" page 18).
EXECUTIVE COMPENSATION AND ORGANIZATION COMMITTEE
G. Waddy Garrett (Chairman)
Frank Daniels, III
Jerry I. Reitman
Bruce A. Walker
22
<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, the Russell 2000 Index and two indexes of peer companies (the
"1999 Peer Group" and the "2000 Peer Group") selected by the Company for the
Company's last five fiscal years. The graph is intended to permit shareholders
to more easily relate executive compensation to company performance based on
the market price of a company's stock. The Graph shows the percentage change
in the market price for the Common Stock from June 30, 1995 to June 30, 2000.
The Graph assumes $100 invested on June 30, 1995 in the Company, the Russell
2000, the 2000 Peer Group, the S&P 500 and the 1999 Peer Group and shows the
total return on such an investment, assuming reinvestment of dividends, as of
June 30, 2000. The 2000 Peer Group, included for the first time this year,
includes Banta Corporation, Quebecor World, Mail-Well, Wallace Computer
Services, Consolidated Graphics, Courier Corporation, Disc Graphics, and R.R.
Donnelley & Sons.
The Company has determined that it would be appropriate to replace the 1999
Peer Group with the 2000 Peer Group for fiscal 2000 reporting. The Company
believes that the 2000 Peer Group includes a more representative group of
comparable companies than the 1999 Peer Group for the following reasons: (1)
the Company's divestiture of its financial printing business during fiscal
1999, (2) the recent merger of two of the companies included in the 1999 Peer
Group, (3) the Company's exit from certain marketing businesses during early
fiscal 2000, and (4) a shift in the Company's sales mix to heavier emphasis on
publications printing. Comparison of the Company against the 2000 Peer Group
should therefore provide a more meaningful measure of the Company's overall
performance. The 1999 Peer Group, included this year for comparative purposes,
consists of Banta Corporation, World Color Press, Quebecor, Merrill
Corporation, Bowne and Company, Mail-Well, Wallace Computer Services, the
Media General Advertising Agencies Index and the Media General Marketing
Services Index.
23
<PAGE>
Comparison of Five-Year Cumulative Total Return Among Cadmus,
the S&P 500 Index, the Russell 2000 Index and Peer Groups
[GRAPH]
<TABLE>
<CAPTION>
1995 1996 1997 1998 1999 2000
---- ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Cadmus 100 65.64 67.08 105.92 60.80 44.10
Russell 2000 Index 100 124.01 144.25 168.03 168.95 190.65
2000 Peer Group 100 119.30 145.68 163.46 150.48 91.28
S&P 500 100 126.00 169.73 220.92 271.19 290.85
1999 Peer Group 100 146.50 177.26 201.12 211.71 203.55
</TABLE>
24
<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, 2000, except that Mr. Wallace Stettinius 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, 2000, and has been selected as independent public
accountants for Cadmus for the fiscal year ending June 30, 2001, 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, 2001.
Shareholder Proposals and Nominations for the 2001 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 2001
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 11, 2001.
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.
25
<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, 2000 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
President and Chief Executive
Officer
26
<PAGE>
PROXY
CADMUS COMMUNICATIONS CORPORATION
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Bruce V. Thomas and David E. Bosher,
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 9, 2000, or any adjournment
thereof.
Please vote by filling in the appropriate boxes below.
(1) Election of four Class II Directors to serve until the 2003 Annual Meeting
of Shareholders, one Class III Director to serve until the 2001 Annual
Meeting and one Class I Director to serve until the 2002 Annual Meeting.
[_] FOR all nominees listed [_] WITHHOLD AUTHORITY to vote for all
nominees listed below
(except as written on the line below)
Nominees: Frank Daniels, III, G. Waddy Garrett, Bruce V. Thomas, Thomas C.
Norris, Martina L. Bradford and James E. Rogers.
(INSTRUCTION: To withhold authority to vote for any individual nominee
listed above, write the nominee's name on the space provided below.)
-------------------------------
(2) Ratification of the designation of Arthur Andersen LLP as independent
accountants for the Company and its subsidiaries for the current fiscal
year.
[_] FOR [_] AGAINST [_] ABSTAIN
<PAGE>
(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: ____________________, 2000
(In signing as Attorney,
Administrator, Executor,
Guardian or Trustee, please add
your title as such.)
