SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
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[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-12
GUNTHER INTERNATIONAL LTD.
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(Name of Registrant as Specified In Its Charter)
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GUNTHER INTERNATIONAL LTD.
One Winnenden Road
Norwich, Connecticut 06360
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD SEPTEMBER 18, 2003
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Notice is hereby given that the 2003 Annual Meeting of Stockholders of
Gunther International Ltd. will be held at the corporate office of the Company,
located at One Winnenden Road, Norwich, Connecticut, on Thursday, September 18,
2003 at 10:30 a.m., local time, for the following purposes:
(1) To elect a Board of six directors to serve until the next
Annual Meeting of Stockholders or until their respective
successors shall be elected and qualified;
(2) To act upon such other matters as may properly come before the
meeting or any postponements or adjournments thereof.
The Board of Directors has fixed the close of business on July 21, 2003
as the record date for the determination of the stockholders entitled to notice
of, and to vote at, the Annual Meeting. For ten days prior to the Annual
Meeting, a complete list of stockholders entitled to vote at the Annual Meeting
will be available for examination by any stockholder for any purpose germane to
the Annual Meeting during ordinary business hours at the Company's principal
executive offices located at One Winnenden Road, Norwich, Connecticut 06360. All
stockholders are invited to attend the Annual Meeting in person.
July 29, 2003 By order of the Board of Directors,
Norwich, Connecticut
John K. Carpenter
Senior Vice President, Chief Financial
Officer,
Treasurer and Secretary
YOUR VOTE IS IMPORTANT!
WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING, PLEASE MARK, SIGN AND
RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN THE ENCLOSED ENVELOPE SO
THAT YOUR STOCK MAY BE REPRESENTED AT THE ANNUAL MEETING.
GUNTHER INTERNATIONAL LTD.
ONE WINNENDEN ROAD
NORWICH, CONNECTICUT 06360
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation
by the Board of Directors and management of Gunther International Ltd., a
Delaware corporation (the "Company"), of proxies for use at the 2003 Annual
Meeting of Stockholders of the Company (the "Annual Meeting") to be held at the
corporate office of the Company located at One Winnenden Road, Norwich,
Connecticut, on Thursday, September 18, 2003 at 10:30 a.m., local time, and at
any and all postponements or adjournments thereof, for the purposes set forth in
the accompanying Notice of Meeting.
This Proxy Statement, Notice of Meeting and accompanying Proxy Card are
first being mailed to stockholders on or about July 29, 2003.
GENERAL
Only Holders of Record of the Company's Common Stock, par value $.001
per share ("Common Stock"), issued and outstanding at the close of business on
July 21, 2003 (the "Record Date") are entitled to notice of, and to vote at, the
Annual Meeting. On the Record Date, 19,428,428 shares of Common Stock were
issued and outstanding. Each holder of shares of Common Stock is entitled to one
vote for each share of Common Stock held as of the Record Date.
The presence, either in person or by properly executed proxy, of the
holders of a majority of the outstanding shares of Common Stock entitled to vote
at the Annual Meeting shall constitute a quorum for the transaction of business.
In the event that there are not sufficient votes for a quorum, the Annual
Meeting may be adjourned from time to time until a quorum is obtained.
Assuming the presence of a quorum, the individuals nominated for
election to the Board of Directors, as described in Item 1 below, will be
elected by the affirmative vote of a plurality of the votes cast at the Annual
Meeting. This means that the candidates receiving the highest number of
affirmative votes of the shares entitled to be voted for them, up to the number
of directors to be elected by those shares, will be elected. Any other matters
presented for consideration at the Annual Meeting each must be approved by the
affirmative vote of a majority of the shares present, either in person or by
properly executed proxy, and entitled to vote thereon, unless a higher vote is
required under the applicable provisions of the Company's Restated Certificate
of Incorporation, its bylaws, the laws of the State of Delaware, under whose
laws the Company is incorporated, or other applicable law.
As more fully described under the heading "Stock Ownership of Certain
Beneficial Owners and Management," Gunther Partners, LLC, the members of which
include two members of the Company's Board of Directors, owns of record
approximately 72% of the Company's outstanding Common Stock and therefore has
the voting power to approve each of the items described in this Proxy Statement.
For purposes of determining the number of affirmative votes cast with
respect to a particular matter, only those votes cast "FOR" the matter are
counted. Abstentions will be treated as shares present and entitled to vote for
purposes of determining the presence of a quorum, but will be counted separately
(as neither a vote for nor a vote against) in the tabulation of the votes cast
on each of the proposals presented to stockholders. Thus, an abstention will
have no effect on the outcome of the election of directors (Item 1). Brokers or
other record holders or nominees ("brokers") holding shares for customers
generally are not entitled to vote on certain matters unless they receive voting
instructions from their customers. If a broker indicates on a proxy that it does
not have authority to vote a customer's shares on a particular matter (so-called
"broker non-votes"), the holder of such shares will still be considered present
and entitled to vote for purposes of determining the presence of a quorum.
However, such shares will not be considered as present and entitled to vote with
respect to any matter for which the broker has not received
voting instructions from the customer. As a result, these so-called "broker
non-votes" will have no effect on the outcome of the voting with respect to any
of the proposals described in the Proxy Statement.
If the accompanying proxy card is properly signed and returned to the
Company and not revoked, it will be voted in accordance with the instructions
contained therein. Unless contrary instructions are given, the persons
designated as proxy holders on the proxy card will vote FOR the slate of
nominees proposed by the Board of Directors and as recommended by the Board of
Directors with regard to all other matters or, if no such recommendation is
given, in their own discretion. Each stockholder may revoke a previously granted
proxy at any time before it is exercised by filing with the Secretary of the
Company a revoking instrument or a duly executed proxy bearing a later date. The
powers of the proxy holders will be suspended if the person executing the proxy
attends the Annual Meeting in person and so requests. Attendance at the Annual
Meeting will not, in itself, constitute the revocation of a previously granted
proxy.
ITEM 1.
ELECTION OF DIRECTORS
Six directors, constituting the entire Board of Directors, are to be
elected at the Annual Meeting to hold office until the next Annual Meeting of
Stockholders or until their respective successors have been elected and
qualified. The Board of Directors' nominees are the six individuals named below.
It is the intention of the persons named in the enclosed proxy to vote the
shares covered by each proxy for the election of all persons nominated for
election by the holders of shares of Common Stock. Although the Board of
Directors does not anticipate that such nominees will be unavailable for
election, in the event of such occurrence, the proxies will be voted for such
substitute, if any, as the Board of Directors may designate. Gerald Newman, who
had served on the Board of Directors since 1993, resigned from the Board
effective October 9, 2002. Kenneth Hickman, who has served on the Board of
Directors since 1994, is retiring from the Board at the Annual Meeting.
The following table sets forth certain information with respect to all
nominees for election as directors of the Company, including those persons who
currently serve in such capacity:
DIRECTOR
NAME AGE PRINCIPAL OCCUPATION SINCE
---- --- -------------------- -----
James A. Cotter, Jr. 63 Managing Member 2001
Capital Market Investment, LLC
Edward F. Hacker 60 Practicing CPA and Partner 2002
Hacker Johnson & Smith, PA
Steven S. Kirkpatrick 48 Senior Vice President 1999
United States Trust Company of New York
Marc I. Perkins 58 President and Chief Executive Officer 1998
Gunther International Ltd.
Robert Spiegel 67 Private Investor 1998
Thomas M. Steinberg 47 President 1998
Tisch Family Interests
- 2 -
JAMES A. COTTER, JR. Mr. Cotter has been a managing member of Capital
Market Investment LLC, a broker/dealer, since June 1999. Prior to that he was a
Vice President of H.C. Wainwright & Co., a broker/dealer, from January 1994
until June 1999.
EDWARD F. HACKER. Mr. Hacker is currently a practicing certified public
accountant, shareholder, and President of the CPA firm Hacker Johnson & Smith,
PA in Tampa, Florida, where he has been employed since 1974.
STEVEN S. KIRKPATRICK. Mr. Kirkpatrick is a Senior Vice President of
the United States Trust Company of New York, where he manages the Real Estate,
Closely Held Business and Oil & Gas Departments. He joined the United States
Trust Company of New York in 1986. Prior to that, he was a Financial Analyst for
Schupak & Company, a merchant banking firm specializing in private placements of
debt and equity securities for the leisure and hospitality industries.
MARC I. PERKINS. Mr. Perkins has been the Chief Executive Officer of
the Company since October 2, 1998 and has been the President of the Company
since April 12, 1999. He was Vice Chairman of the Company from October 1998
until April 1999. Since 1995, he has also served as a registered principal of
PMK Securities and Research, Inc., a securities broker-dealer and a member of
the National Association of Securities Dealers, Inc. He served as the Chairman
and Chief Executive Officer of Perkins Capital Advisers, Inc., a registered
investment adviser, from 1992 to 1998, and the President of Crown Financial
Associates, Inc., a securities broker-dealer, from 1992 to 1995. From 1987-1992,
he was a Vice President and shareholder of Private Capital Management, Inc., a
registered investment adviser.
ROBERT SPIEGEL. Mr. Spiegel has been a private investor since May 1995.
Prior to that, he was the Chairman and President of RJR Drug Distributors, a
retail drug chain, from May 1985 to May 1995. He also served as a director of
Hoenig Group until September, 2002. Mr. Spiegel has served as Chairman of the
Board of the Company since June 2003.
THOMAS M. STEINBERG. Mr. Steinberg is the President of Tisch Family
Interests, a position he has held since 1997. In this capacity, he manages and
supervises investments for members of the Laurence A. Tisch and Preston R. Tisch
families. From 1991 to 1997, he was the Managing Director of Tisch Family
Interests. He is also a Director of Catellus Development Corporation, a Delaware
corporation engaged in investment activities which is listed on the New York
Stock Exchange. Mr. Steinberg served as Chairman of the Board of the Company
from October 1998 until June 2003.
DIRECTORS' REMUNERATION; ATTENDANCE
The Company maintains a policy of reimbursing all directors for any
reasonable travel expenses incurred in connection with their attendance at
meetings.
The Company also maintains the Gunther International Ltd. Directors'
Equity Plan (the "Directors' Equity Plan"), pursuant to which each participating
director receives shares of Common Stock of the Company as compensation for each
quarter in which the director serves on the Board. The number of shares issued
for each quarter has a value equal to $2,500, calculated based on the fair
market value of the Company's Common Stock at the end of such quarter. All
non-employee directors are eligible to participate in the Directors' Equity
Plan. An eligible director may make an irrevocable election not to participate
in the Directors' Equity Plan in any year and instead receive quarterly cash
retainers (currently set at $1,250). Each of the non-management directors during
fiscal 2003 filed an election not to receive shares of the Company's stock under
the Directors' Equity Plan during fiscal 2004. The aggregate number of shares of
Common Stock available for awards under the Directors' Equity Plan is currently
set at 500,000, subject to specified adjustments in the event of changes in the
number of outstanding shares of Common Stock. Commencing with fiscal 2004, in
addition to the $5,000 retainer already received, directors will also receive
$750 for each Board meeting attended and $500 for each Committee meeting
attended (provided that no compensation will be paid in respect of a Committee
meeting held on the same day as a Board meeting).
- 3 -
The Board of Directors met five times during the fiscal year ended
March 31, 2003 and acted by the unanimous written consent of its members on
three occasions. No director attended fewer than 75% of the total number of
meetings of the Board and the Committees on which such director served.
COMMITTEES OF THE BOARD
The standing committees of the Board of Directors are the Executive
Committee, the Audit Committee and the Executive Compensation/Stock Option
Committee.
During fiscal 2003, the Executive Committee consisted of Messrs.
Perkins, Spiegel and Steinberg. Mr. Steinberg served as Chairman of the
Executive Committee. The Executive Committee is vested with all powers and
authorities of the full Board of Directors, except to the extent that the
Delaware General Corporation Law prohibits such powers and authorities from
being delegated to, or exercised by, a committee of the full Board. The
Executive Committee is authorized to act for the full Board in the management of
the business and affairs of the Company. The Executive Committee did not conduct
any meetings during the fiscal year ended March 31, 2003.
During fiscal 2003, the Audit Committee consisted of Messrs. Cotter,
Hickman, Kirkpatrick and Hacker, with Mr. Hickman serving as the Chairman. Upon
the effectiveness of Mr. Hickman's retirement from the Board, another Board
member will be appointed Chairman of the Audit Committee. The functions of the
Audit Committee are set forth in the Committee's Charter, a copy of which is
attached hereto as Appendix A. The primary functions of the Audit Committee are
to oversee the Company's financial reporting process, to select, evaluate, and
determine the terms of engagement of the Company's independent auditors, and to
maintain communications among the Board of Directors, such independent auditors,
and the Company's internal accounting staff with respect to accounting and audit
procedures, the implementation of recommendations by such independent auditors,
the adequacy of the Company's internal controls and related matters. The Audit
Committee also reviews and approves any related-party transactions involving
officers, directors or stockholders beneficially owning more than 10% of any
class of equity security of the Company. During the fiscal year ended March 31,
2003, the Audit Committee met three times.
During fiscal 2003, the Executive Compensation/Stock Option Committee
consisted of Messrs. Kirkpatrick, Newman, Spiegel and Steinberg. Mr. Newman
served on this committee until his retirement from the Company's Board of
Directors on October 9, 2002. Mr. Spiegel served as Chairman of the Executive
Compensation/Stock Option Committee. The function of the Executive
Compensation/Stock Option Committee is to review the performance of and to fix
and determine the compensation of all officers of the Company and all other
employees of the Company whose annual salary level is in excess of $100,000.
During the fiscal year ended March 31, 2003, the Executive Compensation/Stock
Option Committee met once.
- 4 -
REPORT OF THE AUDIT COMMITTEE
ADDRESSING SPECIFIC MATTERS
The role of the Audit Committee is to review, on behalf of the Board of
Directors, the Company's financial statements and financial reporting process,
the systems of internal accounting and financial controls, and the annual
independent audit of the Company's financial statements. Although the Committee
has the responsibility to monitor and oversee these processes, Company
management is responsible for the preparation of the financial statements and
the financial reporting process, and the Company's independent auditors are
responsible for auditing the Company's financial statements and expressing an
opinion on them as to their fairness in conformity with accounting principles
generally accepted in the United States.
On July 17, 2000, the Board of Directors originally adopted a written
charter for the Audit Committee, which was appended to the Company's Proxy
Statement for its 2000 annual meeting of stockholders. In June 2003, the Audit
Committee reexamined and amended, and the Board of Directors approved, the
Committee's Charter, which is attached to this Proxy Statement as Appendix A.
Each member of the Audit Committee is an "independent director" as defined in
the listing standards of the Nasdaq Stock Market, Inc. Each member of the
Committee also satisfies the independence standards of Section 10A(m)(3) of the
Securities Exchange Act of 1934.
In connection with the preparation and filing of the Company's audited
financial statements for the fiscal year ended March 31, 2003 (the "audited
financial statements"), the Audit Committee performed the following functions:
- The Audit Committee reviewed and discussed the audited financial statements
with senior management and Ernst & Young LLP, the Company's independent
auditors;
- The Audit Committee also discussed with Ernst & Young LLP the matters
required to be discussed by law or professional auditing standards,
including, without limitation, Statement on Auditing Standards No. 61
(Communication With Audit Committees);
- The Audit Committee received the written disclosures and the letter from
Ernst & Young LLP required by Independence Standards Board Standard No. 1
(Independence Discussions With Audit Committees), and discussed with Ernst
& Young LLP its independence from the Company; and
- The Audit Committee reviewed and considered whether the non-audit services
provided to the Company by Ernst & Young LLP are compatible with the
auditors' independence.
Based upon the functions performed, the Audit Committee recommended to
the Board of Directors, and the Board approved, that the audited financial
statements be included in the Company's Annual Report on Form 10-KSB for the
fiscal year ended March 31, 2003, for filing with the U.S. Securities and
Exchange Commission.
AUDIT COMMITTEE
J. Kenneth Hickman, Chairman
James A. Cotter
Edward F. Hacker
Steven S. Kirkpatrick
- 5 -
EXECUTIVE OFFICERS
The current Executive Officers of the Company are as follows:
Name Age Position/s with the Company
---- --- ---------------------------
Marc I. Perkins 58 President and Chief Executive Officer
John K. Carpenter 56 Senior Vice President, Chief Financial Officer,
Treasurer and Secretary
A. Evan Haag 54 Senior Vice President, Operations
Theodore J. Langevin 48 Senior Vice President, Design & Manufacturing
Douglas W. Cowles 41 Senior Vice President, Mailing Systems
Per J. Hellsund 39 President, inc.jet, Inc.
For the biography of Mr. Perkins, see the previous section entitled
"Election of Directors."
JOHN K. CARPENTER. Mr. Carpenter has held the positions of Senior Vice
President, Chief Financial Officer, Treasurer and Secretary since July 2002.
Prior to joining Gunther, Mr. Carpenter had been a self-employed financial
consultant since 2001. Prior to that, he had been Vice President--Administration
and Controller of CGI Information Systems & Management Consultants, Inc., the
U.S. outsourcing and software development subsidiary of CGI Group Inc, a
Canadian information technology services firm. He served in that role from
1993-2001. Mr. Carpenter is a certified public accountant.
A. EVAN HAAG. Mr. Haag has held the position of Senior Vice President -
Operations since he joined the Company in February 2000. Prior to that, he was
Director, Strategic Supply Management of Moore Corporation from October 1998 to
February 2000 and Operations Manager of Moore Corporation's Systems Fabrication
Research Venture from May 1996 to September 1998. From 1989 to 1995, he was
Operations Vice President for Metscan, Incorporated, a manufacturer of remote
data acquisition equipment for the natural gas industry.
THEODORE J. LANGEVIN. Mr. Langevin has held the position of Senior Vice
President - Design and Manufacturing since May 2001. Prior to that, he had been
Director of Engineering from July 1999 until May 2001 and an electrical engineer
from May 1999 until July 1999. Prior to joining the Company, Mr. Langevin was
the Manager of Software Engineering at Roll Systems Inc., a manufacturer of pre-
and post-processing systems for commercial laser printers, from January 1994
until May 1999.
DOUGLAS W. COWLES. Mr. Cowles has held the position of Senior Vice
President - Mailing Systems since April 2003. Prior to joining the Company, he
was Vice President of Document Finishing Solutions with Bell & Howell Co. (now
Bowe Bell & Howell) from 1999 to 2003, and Vice President of Marketing and
Business Development with Bell & Howell Financial Services from 1993 through
1999. Prior to joining Bell and Howell, Mr. Cowles was employed by Pitney Bowes
Credit Corp., most recently as manager of Planning and Development, a position
he held for 4 years.
PER J. HELLSUND. Mr. Hellsund has held the position of President of
inc.jet, Inc., a wholly-owned subsidiary of the Company, since March 2001. Prior
to that, he was Vice President - Operations of the Company from September 1999
until March 2001 and Director of Engineering of the Company from 1993 to 1999.
- 6 -
EXECUTIVE COMPENSATION AND OTHER MATTERS
The following Summary Compensation Table sets forth information
concerning compensation for services in all capacities to the Company or
subsidiaries of the Company for the periods indicated of (i) each person who
served as the chief executive officer of the Company during the fiscal year
ended March 31, 2003, and (ii) the other most highly compensated executive
officers of the Company whose total salary and bonus for the fiscal year ended
March 31, 2003 exceeded $100,000, for services in all capacities to the Company
during such fiscal year (collectively, the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
Long-Term Compensation
Awards
------
Annual compensation(1) Restricted Options/
----------------------------- Stock SARs All other
Name and Principal Position Year Salary($) Bonus($) Awards ($) ($) Compensation ($)
--------------------------- ---- --------- -------- ---------- --- ----------------
Marc I. Perkins, President and Chief 2003 $172,000 0 0 0 0
Executive Officer 2002 $172,000 0 0 150,000 0
2001 $172,000 0 0 0 0
A. Evan Haag, Senior Vice President,
Operations 2003 $110,000 0 0 0 0
2002 $110,000 0 0 10,000 0
2001 $110,000 0 0 0 0
Jeremy H. Greshin, Senior Vice - 2003 $130,096 0 0 0 0
President, Sales and Marketing(2) 2002 $135,000 0 0 0 0
2001 $ 9,865 0 0 0 0
Theodore J. Langevin, Senior 2003 $110,000 0 0 0 0
Vice-President, Design and 2002 $108,557 0 0 10,000 0
Manufacturing 2001 $ 87,307 0 0 5,000 0
Per J. Hellsund, 2003 $ 92,160 $ 25,000 0 0 0
President, inc.jet, Inc. 2002 $ 88,950 0 0 8,500 0
2001 $ 86,944 0 0 0 0
(1) Perquisites and other personal benefits are not included because they
do not exceed the lesser of $50,000 or 10% of the total of base salary
and annual bonus for each of the Named Executive Officers.
(2) Mr. Greshin joined the Company in February 2001 and left the Company in
March 2003.
- 7 -
Option Exercises and Fiscal Year-End Values. The following table sets forth
certain information with respect to option exercises in fiscal year 2002 by the
individuals listed and unexercised options to purchase the Company's Common
Stock held by the individuals listed.
AGGREGATED OPTIONS/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END
OPTION/SAR VALUES
Shares Number of Securities Value of Unexercised In-the-
Acquired Underlying Unexercised Money Options/SARs at FY-
on Value Options/SAR at FY-End(#) End($)(1)
Name Exercise(#) Realized($) Exercisable Unexercisable Exercisable Unexercisable
---- ----------- ----------- ----------- ------------- ----------- -------------
Marc I. Perkins 0 0 210,000 120,000 0 0
A. Evan Haag 0 0 8,000 12,000 0 0
Jeremy H. Greshin(2) 0 0 0 0 0 0
Theodore J. Langevin 0 0 8,000 12,000 0 0
Per J. Hellsund 0 0 8,500 8,500 0 0
----------
(1) Represents the difference between the fair market value of the
Common Stock on March 31, 2003 and the exercise price.
(2) Mr. Greshin left the company in March 2003.
OPTIONS/SAR GRANTS IN LAST FISCAL YEAR
Number of % of Total
Securities Options/SARs
Underlying Granted to Exercise or
Options/SARs Employees in Base Price
Name Granted (#) Fiscal Year ($/Sh)(1) Expiration Date(2)
---- ----------- ----------- ---------- -------------------
Marc Perkins 0 0% N/A NA
A. Evan Haag 0 0% N/A NA
Jeremy H. Greshin(3) 0 0% N/A NA
Theodore J. Langevin 0 0% N/A NA
Per J. Hellsund 0 0% N/A NA
----------
(1) The exercise price and tax withholding obligations related to exercise may
be paid by delivery of already owned shares, subject to certain conditions.
(2) The options granted were for a term of 10 years, subject to earlier
termination in certain events related to termination of employment.
(3) Mr. Greshin left the Company in March 2003.
- 8 -
STOCK OPTION PLANS
On December 13, 1993, the Company adopted the Gunther International
Ltd. 1993 Stock Option Plan (the "1993 Stock Option Plan"), which authorizes the
Executive Compensation/Stock Option Committee of the Board of Directors to grant
to key employees and directors of the Company and subsidiaries of the Company
incentive or non-qualified stock options. The 1993 Stock Option Plan also
authorized the grant of non-qualified stock options to certain then-current key
employees of the Company who were designated as "founders" of the Company. These
options expired unexercised in December 1999. Options to purchase up to 310,000
shares of Common Stock may be granted under the 1993 Stock Option Plan. The
Executive Compensation/Stock Option Committee determines the prices and terms at
which options may be granted. Options may be exercisable in installments over
the option period, but no options may be exercised before six months or after
ten years from the date of grant.
The purpose of the 1993 Stock Option Plan is to encourage stock
ownership by persons instrumental to the success of the Company, in order to
give them a greater personal interest in the Company's business. The exercise
price of any incentive stock option granted to an eligible employee may not be
less than 100% of the fair market value of the shares underlying such option on
the date of grant, unless such employee owns more than 10% of the outstanding
Common Stock or stock of any subsidiary or parent of the Company, in which case
the exercise price of any incentive stock option may not be less than 110% of
such fair market value. No option may be exercisable more than ten years after
the date of grant and, in the case of an incentive stock option granted to an
eligible employee owning more than 10% of the Common Stock or stock of any
subsidiary or parent of the Company, no more than five years from its date of
grant. Payment for shares purchased upon exercise of any option may be in cash
or in shares of the Company's Common Stock. Options are not transferable, except
upon the death of the optionee. In general, upon termination of employment of an
optionee, all options granted to such person which are not exercisable on the
date of such termination immediately expire, and any options that are
exercisable expire 30 days following termination of employment, if such
termination is not the result of death or retirement, and one year following
such termination if such termination was because of death or retirement under
the provisions of any retirement plan that may be established by the Company, or
with the consent of the Company. As of March 31, 2003, options covering an
aggregate of 268,500 shares of Common Stock were issued and outstanding under
the 1993 Stock Option Plan. The 1993 Stock Option Plan terminates on December
13, 2003.
On February 5, 2002 the Board of Directors approved the adoption of an
additional equity compensation plan for the Company, the Gunther International
Ltd. 2002 Stock Option Plan (the "2002 Stock Option Plan"). The shareholders
approved the 2002 Stock Option Plan at the annual meeting held on September 12,
2002.
Like the 1993 Stock Option Plan, the purpose of the 2002 Stock Option
Plan is to encourage stock ownership by persons instrumental to the success of
the Company, in order to give them a greater personal interest in the Company's
business. Options to purchase 500,000 shares of Common Stock may be granted
under the 2002 Stock Option Plan. Rules governing the exercisablity of options
granted under the 2002 Plan and the terms of such exercise follow the rules set
forth in the preceding paragraphs describing the 1993 Stock Option Plan. As of
March 31, 2003, options covering an aggregate of 158,500 shares of Common Stock
were issued and outstanding under the 2002 Stock Option Plan. The 2002 Stock
Option Plan terminates on February 5, 2012.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's executive officers, directors and persons who beneficially own more
than 10% of the Company's Common Stock to file initial reports of beneficial
ownership and reports of changes in beneficial ownership with the Securities and
Exchange Commission (the "SEC"). Such persons are required by the SEC
regulations to furnish the Company with copies of all Section 16(a) forms filed
by such persons. Based solely on its copies of forms received by it, or written
representations from certain reporting persons that no Forms 5 were required for
those persons, the Company believes that during the fiscal year ended March 31,
2003, its executive officers, directors, and greater than 10% beneficial owners
complied with all applicable filing requirements except that Forms 5 were not
timely filed for Messrs. Cotter, Hickman, Kirkpatrick, Steinberg, Spiegel and
Hacker to reflect all shares granted during fiscal 2003 with regard to the
quarterly allocations made under the Directors' Equity Plan. All such forms were
subsequently filed.
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On June 25, 2001, the Company entered into a Recapitalization Agreement
with and among the Estate of Harold S. Geneen, a former Chairman of the Board of
the Company, Gunther Partners, LLC, Park Investment Partners, Inc. and two other
stockholders. Gunther Partners, LLC is a Delaware limited liability company
("Gunther Partners"), the members of which include Robert Spiegel and Thomas M.
Steinberg, two of our directors, and a partnership controlled by certain members
of the Tisch family. See "Item 1--Election of Directors" and "Stock Ownership of
Certain Beneficial Owners and Management."
The Recapitalization Agreement provided that the Company would
effectuate a registered public offering ("Rights Offering") of up to 16,000,000
shares of its Common Stock (the "Offered Shares") to its existing stockholders
by subscription right on a pro-rata basis at a subscription price of $0.50 per
share. The Recapitalization Agreement obligated the Company to use the net
proceeds of the offering to: (i) repay senior secured indebtedness in the total
principal amount of $4.5 million owed to Gunther Partners; (ii) repay
subordinated indebtedness in the total principal amount of $500,000 owed to Mr.
Spiegel; (iii) repurchase subordinated indebtedness in the total principal
amount of $1,851,169 originally owned by the Estate of Mr. Geneen (the "Estate")
for an aggregate purchase price of $500,000; and (iv) repurchase 919,569 shares
of our common stock originally owned by the Estate at a purchase price of $.15
per share, or $137,935 in the aggregate. Under the Recapitalization Agreement,
the Estate agreed to sell such debt and equity to the Company for an aggregate
purchase price of $637,935. In order to facilitate the timely purchase of the
debt and equity held by the Estate, Gunther Partners agreed to purchase the debt
and equity for our benefit. This purchase was consummated on July 25, 2001.
The Company consummated the Rights Offering in November 2001. Following
the conclusion of the Rights Offering, Gunther Partners resold the debt and
equity to the Company on the same terms and conditions that were applicable to
the sale from the Estate to Gunther Partners. In connection with these
transactions, the Company recognized an extraordinary gain of $1.4 million on
the extinguishment of debt.
Gunther Partners subscribed for a total of 13,673,904 shares of the
Company's Common Stock in the Rights Offering. As a result of the Rights
Offering and subsequent acquisitions, Gunther Partners owns of record
approximately 72% of the Company's outstanding Common Stock.
In connection with the Company's October 1998 financial restructuring
involving Gunther Partners, the Company granted Gunther Partners a warrant to
purchase up to 35% of the pro forma, fully diluted number of shares of the
Company's Common Stock, determined as of the date of exercise, at any time
through November 2003 at an exercise price of $1.50 a share (2,190,390 shares at
March 31, 2002). The Rights Offering had no effect on the number of shares of
the Company's Common Stock into which the warrants are exercisable. In November
2000, however, the Company agreed to extend the expiration date of the warrant
by one calendar day for each calendar day from and after April 1, 2001 that any
principal or interest owed under debt previously issued to a Company director
remained unpaid. The debt was not repaid until the consummation of the Rights
Offering in November 2001. Thus, the new expiration date of the warrant is May
29, 2004.
During the fiscal year ended March 31, 2003, the Company experienced
several periods of short-term cash flow deficiency. To address these
deficiencies: on July 3, August 7, September 26 and November 19, 2002 the
Company borrowed $700,000, $100,000, $200,000 and $200,000, respectively, from
Robert Spiegel, a shareholder and member of the Board of Directors. These
borrowings were evidenced by 8% notes payable, originally due on or before
December 31, 2002. The Company repaid the $100,000 note on October 10, 2002.
Prior to December 31, 2002, the Company consolidated the remaining notes
aggregating $1,100,000 into a single note with an interest rate of 8% and a due
date of December 31, 2003. On January 31, 2003, Mr. Spiegel assigned this note
to Gunther Partners. Effective June 19, 2003, Gunther Partners extended the
maturity date of this note, so it is currently due and payable on demand at any
time on or after April 1, 2004, and committed to lend the Company an additional
$1,000,000, if necessary, through March 31, 2004. On May 6, 2003, Mr. Spiegel
loaned the Company an additional $500,000 under an 8% note due December 31,
2003. Effective June 19, 2003, Mr. Spiegel agreed to extend the maturity date of
the note, so it is currently due and payable on demand at any time on or after
April 1, 2004. On June 19, 2003, Mr. Spiegel loaned the Company an additional
$200,000 under an 8% note due and payable on demand at
- 10 -
any time on or after April 1, 2004. On June 30, 2003, Gunther Partners loaned
the Company $2,000,000 under an 8% note due and payable on demand at any time on
or after April 1, 2004.
STOCK OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
As of June 1, 2003, with the exception of the persons listed below, no
person was known by the Company to own more than 5% of the outstanding Common
Stock.
Number of Percent
Shares(1)(2) of Class
------------ --------
Gunther Partners, LLC(3) 13,973,904 71.9%
c/o Thomas J. Tisch
667 Madison Avenue
New York, NY 10021
Four-Fourteen Partners, LLC(4) 2,273,880 10.7%
c/o Thomas J. Tisch
667 Madison Avenue
New York, NY 10021
(1) Unless otherwise indicated, the Company believes that all persons named
in the table have sole voting and investment power with respect to all
shares of Common Stock owned by them.
(2) Assumes that shares which the named person or group has a contractual
right to acquire within 60 days have been acquired and are outstanding.
(3) Based on information set forth in Amendment No. 9 to Schedule 13D,
filed on August 16, 2002 ("Amendment No. 9") under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), by Thomas J.
Tisch. Shares shown in the table represent the shares purchased by
Gunther Partners pursuant to the Company's November 2001 Rights
Offering, and exclude the shares beneficially owned by Four Fourteen
Partners, LLC and shares beneficially owned by Messrs. Steinberg and
Spiegel, both of whom are directors of the Company and members of
Gunther Partners.
(4) Based on information set forth in Amendment No. 9. Includes 494,189
shares held directly by Four-Fourteen Partners, LLC and an aggregate of
1,779,691 shares of Common Stock that may be acquired (as of March 31,
2003) upon the exercise of the stock purchase warrants which were
distributed to Four-Fourteen Partners, LLC by Gunther Partners on
November 17, 1998. The shares shown in the table exclude the shares of
Common Stock beneficially owned by Gunther Partners and Messrs.
Steinberg and Spiegel. See note 3 above and "Certain Relationships and
Related Transactions."
- 11 -
STOCK OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
The following table reflects shares of Common Stock beneficially owned
(or deemed to be beneficially owned pursuant to the rules of the Securities and
Exchange Commission) as of June 1, 2003 by each director of the Company, each of
the Named Executive Officers and the current directors and executive officers of
the Company as a group.
Amount of Beneficial
Name(1) Ownership(2)(3) Percentage of Shares
------- ---------------- --------------------
James A. Cotter, Jr.(4) 188,602 *
Edward F. Hacker(5) 31,674 *
J. Kenneth Hickman(6) 118,611 *
Steven S. Kirkpatrick(7) 46,642 *
Marc I. Perkins(8)(9) 639,300 3.25%
Robert Spiegel (10) 582,798 2.93%
Thomas M. Steinberg(11) 95,991 *
A. Evan Haag(8) 8,000 *
Theodore J Langevin(8) 8,000 *
Per J. Hellsund(8) 8,500 *
Jeremy H. Greshin 0 *
All Directors and Executive 1,728,118 8.60%
Officers as a group(12)
* Less than 1%.
(1) The address of each of the directors and executive officers of the
Company is c/o Gunther International Ltd., One Winnenden Road, Norwich,
Connecticut 06360.
(2) Unless otherwise indicated, the Company believes that all persons named
in the table have sole voting and investment power with respect to all
shares of Common Stock owned by them.
(3) Assumes that shares which the named person or group has a contractual
right to acquire within 60 days have been acquired and are outstanding.
(4) Includes 54,858 shares credited to the account of Mr. Cotter under the
Directors' Equity Plan.
(5) Includes 31,674 shares credited to the account of Mr. Hacker under the
Directors' Equity Plan
(6) Includes 68,611 shares credited to the account of Mr. Hickman under the
Directors' Equity Plan.
(7) Represents 46,642 shares credited to the account of Mr. Kirkpatrick
under the Directors' Equity Plan.
(8) Includes the exercisable portion of stock options exercisable within 60
days of June 1, 2003.
(9) Includes 429,300 shares held directly by Mr. Perkins.
(10) The shares shown as beneficially owned by Mr. Spiegel include 327,589
shares of Common Stock that may be acquired pursuant to the exercise of
the stock purchase warrants which have been distributed by Gunther
Partners to Mr. Spiegel, see "Certain Relationships and Related
Transactions." The shares shown in the table also includes 60,000
shares of Common Stock owned directly by Mr. Spiegel, 15,500 shares
owned by an IRA account maintained for Mr. Spiegel's benefit and 68,611
shares credited to the account of Mr. Spiegel under the Directors'
Equity Plan. The shares shown in the table also include: (i) 40,000
shares of Common Stock held by Mr. Spiegel's wife; (ii) 1,500 shares of
Common Stock held in an IRA account maintained for the benefit of Mr.
Spiegel's wife; (iii) 15,000 shares of Common Stock and warrants to
purchase 54,598 shares of Common Stock held by a trust of which Mr.
Spiegel is a trustee. Mr. Spiegel disclaims beneficial ownership as to
each of the shares and warrants described in (i) through (iii) in the
preceding sentence.
(11) The shares shown as beneficially owned by Mr. Steinberg include the
27,380 shares of Common Stock that may be acquired by him pursuant to
the exercise of the stock purchase warrants which have been distributed
by Gunther Partners to Mr. Steinberg. The shares shown in the table
also include 68,611 shares credited to the account of Mr. Steinberg
under the Directors' Equity Plan.
- 12 -
(12) Includes an aggregate of 644,067 shares issuable upon the exercise of
outstanding options, warrants or other similar rights exercisable
within 60 days of June 1, 2003.
EQUITY COMPENSATION PLAN INFORMATION
The following table provides information about the Company's Common
Stock that may be issued upon the exercise of options and rights under all of
the Company's existing equity compensation plans as of March 31, 2003, including
the Gunther International Ltd. 1993 Stock Option Plan, the 1999 Directors'
Equity Plan, the 2002 Stock Option Plan and certain other equity compensation
plans.
(a)
Number of (c)
Securities to be Number of securities
issued upon (b) remaining available for
exercise of Weighted average issuance under equity
outstanding exercise price of compensation plans
Plan Category options, warrants outstanding options, (excluding securities
------------- and rights warrants and rights reflected in column (a))
Equity compensation plans approved by
security holders(1) 766,507 $ .71 543,493
Equity compensation plans not approved
by security holders(2) 150,000 $1.50 N/A
------- ----- ---
Total: 916,507 $ .84 543,493
======= ===== =======
(1) Includes 268,500 shares reserved for issuance under outstanding awards
made previously pursuant to the Gunther International Ltd. 1993 Stock
Option Plan, 168,500 shares reserved for issuance under outstanding
awards previously made pursuant to the Gunther International Ltd 2002
Stock Option Plan, and 339,007 shares previously reserved for issuance
to our directors pursuant to the 1999 Directors' Equity Plan.
(2) Includes 150,000 options previously issued to Marc I. Perkins, the
Company's President and Chief Executive Officer.
- 13 -
APPOINTMENT OF INDEPENDENT AUDITORS
The Company engaged Ernst & Young LLP as its independent auditors on
November 15, 1999. The Audit Committee currently intends to reappoint Ernst &
Young LLP as the Company's independent auditors for the fiscal year ending March
31, 2004, although the Audit Committee at its discretion may direct the
appointment of a different independent auditing firm at any time during the year
if the Audit Committee determines that such a change would be in the best
interests of the Company and its stockholders. A representative of Ernst & Young
LLP will be present at the Annual Meeting to respond to appropriate questions
and to make such statements as such representative may desire.
PRINCIPAL ACCOUNTANT FEES AND SERVICES
Aggregate fees for professional services rendered for the Company by
Ernst & Young LLP in the 2003 and 2002 fiscal years were $136,350 and $171,000,
respectively.
AUDIT FEES
Ernst & Young LLP's aggregate fees for professional services rendered
for the annual audit of the Company's financial statements for the fiscal year
ended March 31, 2003, and for the quarterly reviews of the financial statements
included in the Company's Quarterly Reports on Form 10-QSB for that fiscal year
were $82,500. However, Ernst & Young LLP has proposed to bill the Company an
additional $19,500 for additional time spent related to the annual audit of the
Company's financial statements for the fiscal year ended March 31, 2003 on
matters which Ernst & Young LLP believes were outside its original scope. The
Audit Committee is currently discussing the status of these additional billings
with Ernst & Young LLP. Ernst & Young LLP's aggregate fees for professional
services rendered for the annual audit of the Company's financial statements for
the fiscal year ended March 31, 2002, and for the quarterly reviews of the
financial statements included in the Company's Quarterly Reports on Form 10-QSB
for that fiscal year were $80,000.
AUDIT-RELATED FEES
Fees for the audit of the Company's 401(k) plan charged in fiscal years
2003 and 2002 were $4,500 for each year. In addition, fees related to two
special accounting matters were $7,000 in Fiscal 2003 and fees related to a
registration statement and comfort letter were $50,100 in fiscal 2002.
TAX FEES
Aggregate fees charged for tax-related services in fiscal year 2003
were $42,350. Of this amount, $32,000 related to tax return preparation and
$10,350 related to other tax services. Aggregate fees for tax-related services
in fiscal year 2002 were $36,250. Of this amount, $28,750 related to tax return
preparation and $7,500 related to other tax services.
ALL OTHER FEES
Ernst & Young LLP did not render any other services to the Company
during either of the fiscal years 2003 and 2002.
PRE-APPROVAL POLICIES AND PROCEDURES
During the fiscal year ended March 31, 2003, the Audit Committee
approved all audit and non-audit services provided to the Company by Ernst &
Young LLP. Consistent with SEC rules regarding auditor independence, the
Company's Audit Committee Charter, revised in June 2003, now requires the Audit
Committee to preapprove all audit services and non-audit services permitted by
law and Committee policy (including the fees and terms of such services) to be
performed for the Company by the independent auditors, subject to the "de
minimis" exceptions for non-audit services described in Section 10A(i)(1)(B) of
the Securities Exchange Act of 1934 that are approved by the Committee prior to
the completion of the audit. The Committee may delegate pre-approval authority
to a member of the Committee. The decisions of any Committee member to whom
pre-approval is delegated must be presented to the Committee at its next
scheduled meeting.
- 14 -
ITEM 2.
OTHER MATTERS
As of the date of this Proxy Statement, the Company knows of no
business that will be presented for consideration at the Annual Meeting other
than the items referred to above. Proxies in the enclosed form will be voted in
respect of any other business that is properly brought before the Annual Meeting
in accordance with the judgment of the person or persons voting the proxies.
STOCKHOLDER PROPOSALS FOR THE NEXT ANNUAL MEETING
The Company currently expects to convene the 2004 Annual Meeting of
Stockholders during August or September of 2004 (the "2004 Annual Meeting"),
after the announcement of the financial results for the fiscal year ended March
31, 2004. Any proposal of a stockholder intended to be presented at the 2004
Annual Meeting must be received by the Secretary of the Company, for inclusion
in the Company's proxy, Notice of Meeting and Proxy Statement relating to the
2004 Annual Meeting, on or before March 31, 2004. For any proposal that is not
submitted for inclusion in next year's Proxy Statement, but is instead sought to
be presented directly at the 2004 Annual Meeting of Stockholders, SEC rules
permit management to vote proxies in its discretion if the Company: (1) receives
notice of the proposal before the close of business on June 14, 2004, and
advises share owners in the 2004 Proxy Statement about the nature of the matter
and how management intends to vote on such matter; or (2) does not receive
notice of the proposal prior to the close of business on June 14, 2004. Notices
of intention to present proposals at the 2004 Annual Meeting of Stockholders
should be addressed to John K. Carpenter, Secretary, Gunther International Ltd.,
One Winnenden Road, Norwich, Connecticut 06360.
THE COMPANY'S ANNUAL REPORT ON FORM 10-KSB FOR THE FISCAL YEAR ENDED
MARCH 31, 2003, FILED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION
MAY BE OBTAINED UPON WRITTEN REQUEST TO THE COMPANY'S OFFICES, LOCATED AT ONE
WINNENDEN ROAD, NORWICH, CONNECTICUT 06360; ATTENTION: DAVID S. FOSTER, III.
ADDITIONAL INFORMATION
The cost of soliciting proxies in the enclosed form will be borne by
the Company. Officers and regular employees of the Company may, but without
compensation other than their regular compensation, solicit proxies by further
mailing or personal conversations, or by telephone, telex or facsimile. The
Company will, upon request, reimburse brokerage firms and others for their
reasonable expenses in forwarding solicitation material to the beneficial owners
of stock.
July 29, 2003 By order of the Board of Directors,
Norwich, Connecticut
John K.Carpenter,
Senior Vice President, Chief Financial
Officer,
Treasurer and Secretary
- 15 -
APPENDIX A
AUDIT COMMITTEE CHARTER
OF
GUNTHER INTERNATIONAL LTD.
ORGANIZATION AND COMPOSITION
This charter (the "Charter") governs the operations of the audit
committee (the "Committee") of the Board of Directors (the "Board") of Gunther
International Ltd. (the "Company"). The operation of the Committee shall be
subject to the provisions of the Company's by-laws, as in effect from time to
time. The Committee shall hold meetings as the Chairman or Committee deems
appropriate or at the request of the Company's independent auditors. The
Chairman of the Committee shall arrange with the Corporate Secretary's office
for the completion and filing of an official set of minutes of each Committee
meeting. The Chairman shall report to the Board from time to time and as
requested by the Board.
The Committee shall be comprised of three or more directors as
determined by the Board, each of whom: (a) shall satisfy the independence
requirements of the Nasdaq Stock Market, Inc., the Securities Exchange Act of
1934 ("Exchange Act"), and the rules and regulations of the Securities and
Exchange Commission ("SEC"); and (b) be free from any relationship which, in the
opinion of the Board of Directors, would interfere with the exercise of his or
her independent judgment as a member of the Committee. The members of the
Committee and its Chairman shall be elected annually by and serve at the
discretion of the Board. All members of the Committee must be able to read and
understand fundamental financial statements at the time of their appointment to
the Committee. At least one member of the Committee shall have accounting or
related financial management expertise. To the extent reasonably feasible, at
least one member of the Committee shall qualify as an "audit committee financial
expert" as defined under the rules and regulations of the SEC, as determined by
the Board.
STATEMENT OF POLICY
The Committee shall provide assistance to the Board in fulfilling its
oversight responsibility relating to the Company's financial statements and the
financial reporting process, the systems of internal accounting and financial
controls, and the annual independent audit of the Company's financial
statements. The Committee shall maintain free and open communication among the
Committee, the independent auditors and management of the Company. The Committee
shall have full access to all books, records, facilities, and personnel of the
Company and shall have the authority to retain special legal, accounting or
other consultants and to approve their retention terms. The Company shall
provide appropriate funding, as determined by the Committee, for payment of
compensation to the independent auditors and to any outside consultants employed
by the Committee.
RESPONSIBILITIES AND PROCESSES
The primary responsibility of the Committee is to oversee the Company's
financial reporting process and monitor the integrity of the financial
statements of the Company on behalf of the Board. The Committee should remain
flexible, in order to best react to changing conditions and circumstances. The
Committee should take the appropriate actions to demonstrate the Company's
commitment to quality financial reporting, sound business risk practices, and
ethical behavior.
The following shall be the principal recurring processes of the
Committee. These processes are set forth as a guide with the understanding that
the Committee may supplement them as appropriate.
- The independent auditors shall report directly to the
Committee. The Committee shall have the sole authority and
responsibility to select, evaluate and replace the independent
auditors. The Committee shall be directly responsible for
approving the compensation of the independent auditors and the
oversight of their work (including resolution of disagreements
between management and the independent auditors regarding
financial reporting) for the purpose of preparing or issuing
an audit report or related work.
- The Committee shall annually review and evaluate the
qualifications, performance and independence of the lead
partner of the independent audit firm and assure regular
rotation of the lead audit partner and reviewing partner and
evaluate the appropriateness of rotating the independent audit
firm.
- The Committee shall pre-approve all auditing services and
permitted non-audit services (including the fees and terms
thereof) to be performed for the Company by its independent
auditors, subject to the de minimis exceptions for non-audit
services described in Section 10A(i)(1)(B) of the Exchange Act
which are approved by the Committee prior to the completion of
the audit. The Committee may form and delegate authority to
subcommittees consisting of one or more members, including the
authority to grant pre-approvals of audit and permitted
non-audit services, provided that decisions of such
subcommittee to grant pre-approvals shall be presented to the
Committee at its next scheduled meeting.
- The Committee shall review and discuss with the independent
auditors the overall scope of, and plans for, their audits,
and shall continually review and assess with management and
the independent auditors the adequacy and effectiveness of the
Company's accounting and internal controls over financial
reporting, including the Company's systems to monitor and
manage business risk and legal and ethical compliance matters.
In addition, the Committee shall meet separately with the
independent auditors, with and without management present as
the Committee shall determine, to discuss the results of their
examinations.
- Prior to the filing of the Company's Quarterly Report on Form
10-QSB, the Committee shall review and discuss the interim
financial statements with management and the independent
auditors and discuss with the independent auditors the results
of the quarterly review and any other matters required to be
communicated to the Committee by the independent auditors
under generally accepted auditing standards. A sub-committee
may be appointed to represent the entire Committee for the
purposes of this review.
- The Committee shall review and discuss with the auditors their
independence from management and the Company and the matters
included in the written disclosures required by the
Independence Standards Board and, if appropriate, take
appropriate action to ensure the independence of the auditors.
- The Committee shall review and discuss with management and the
independent auditors the financial statements to be included
in the Company's Annual Report on Form 10-KSB (or the annual
report to stockholders if distributed prior to the filing of
Form 10-KSB), including their judgment about the quality, not
just acceptability, of accounting principles, the
reasonableness of significant judgments, and the clarity of
the disclosures in the financial statements. The Committee
shall also (a) review and discuss with the independent
auditors the results of the annual audit and any other matters
required to be communicated to the Committee by the
independent auditors under Statement of Auditing Standards 61
and generally accepted auditing standards, and (b) review and
discuss with the independent auditors and, to the extent
appropriate, management, any reports of the independent
auditors required by law or professional auditing standards,
including reports on: critical accounting policies and
practices used in preparing the financial statements;
alternative treatments of financial information discussed with
management, ramifications of such alternative disclosures and
treatments, and the treatment preferred by the independent
auditors; and other significant written communications between
the independent auditors and the management of the Company,
such as any management letter issued or proposed to be issued,
and a schedule of unadjusted differences, if any.
- Based upon the reviews and discussions referred to in this
Charter, the Committee shall determine whether to recommend to
the Board that the audited financial statements of the Company
for the last fiscal year be included in the Company's Annual
Report on Form 10-KSB for filing with the SEC.
A-2
- The Committee shall review disclosures, if any, made to the
Committee by the Company's CEO and CFO during their
certification process for the Company's periodic reports
regarding: (a) all significant deficiencies and material
weaknesses in the design or operation of internal controls
over financial reporting which are reasonably likely to
adversely affect the Company's ability to record, process,
summarize and report financial information; and (b) any fraud,
whether or not material, that involves management or other
employees who have a significant role in the Company's
internal controls over financial reporting.
- The Committee shall review attestations or reports by the
independent auditors related to the Company's internal
controls over financial reporting, and obtain from the
independent auditors periodic assurances that they have found
no illegal acts within the scope of Section 10A(b) of the
Exchange Act, which generally requires the independent
auditor, if it detects or becomes aware of any illegal act, to
assure that the Committee is adequately informed and to
provide a report if the independent auditor has reached
specified conclusions related thereto.
- The Committee shall prepare and publish a Committee report for
inclusion in the Company's annual Proxy Statement and provide
any additional disclosures in the proxy statement or the
Company's Annual Report on Form 10-KSB required to be made
under SEC rules and regulations.
- The Committee shall review and approve any "related party
transactions" (as defined in SEC regulations) involving the
Company and officers, directors or stockholders beneficially
owning more than 10% of any class of equity security of the
Company.
- The Committee shall review and reassess the adequacy of this
Charter at least annually and submit the Charter (and any
recommended amendments thereto) to the Board for its approval.
The Committee shall also annually review the Committee's own
performance and present a report to the Board an annual
performance evaluation of the Committee.
RECEIPT AND TREATMENT OF COMPLAINTS
The Committee shall establish procedures for the receipt, retention,
and treatment of complaints received by the Company regarding accounting,
internal accounting controls, auditing, or other matters and for the
confidential, anonymous submission by employees of the Company of concerns
regarding questionable accounting, auditing, or other matters.
LIMITATION OF COMMITTEE'S ROLE
While the Committee has the responsibilities and powers set forth in
this Charter, it is not the duty of the Committee to plan or conduct audits or
to determine that the Company's financial statements and disclosures are
complete and accurate and are in accordance with generally accepted accounting
principles and applicable rules and regulations. Management is responsible for
the financial reporting process, including the system of internal controls, and
for the preparation of consolidated financial statements in accordance with
generally accepted accounting principles. The Company's independent auditors are
responsible for auditing those financial statements and expressing an opinion as
to their fair presentation in conformity with generally accepted accounting
principles. The Committee's responsibility is to oversee and review these
processes. The members of the Committee are not, however, professionally engaged
in the practice of accounting or auditing and do not provide any expert or other
special assurance as to such financial statements concerning compliance with
laws, regulations or generally accepted accounting principles or as to auditor
independence. The members of the Committee rely, without independent
verification, on the information provided to the Committee and on the
representations made by management and the independent auditors.
A-3
GUNTHER INTERNATIONAL LTD.
One Winnenden Road
Norwich, Connecticut 06360
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned holder of shares of common stock, par value $.001 per share
("Common Stock"), of GUNTHER INTERNATIONAL LTD., a Delaware corporation
(hereinafter referred to as the "Company"), does hereby constitute and appoint
MARC I. PERKINS and JOHN K. CARPENTER, or either of them, as proxies, with full
power to act without the other and with full power of substitution, to
represent the undersigned at the Annual Meeting of Stockholders of the Company
to be held on September 18, 2003, at 10:30 a.m., local time at the corporate
office of the Company, One Winnenden Road, Norwich, Connecticut 06360 and at
any adjournments or postponements thereof, and to vote all shares of Common
Stock of the Company which the undersigned is entitled to vote on all matters
coming before said meeting. The undersigned hereby acknowledges receipt of the
Notice of Annual Meeting and the Proxy Statement, dated July 29, 2003, and
instructs its attorneys and proxies to vote as set forth on this Proxy.
PLEASE DATE, SIGN AND MAIL YOUR PROXY CARD BACK AS SOON AS POSSIBLE!
(Continued and to be signed on the reverse side)
ANNUAL MEETING OF STOCKHOLDERS OF
GUNTHER INTERNATIONAL LTD.
SEPTEMBER 18, 2003
Please date, sign and mail
your proxy card in the
envelope provided as soon
as possible.
Please detach along perforated line and mail in the envelope provided.
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[X]
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| THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF DIRECTORS. |
| PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. |
| PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE [X] |
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|
|
1. To elect a Board of six directors to serve | 2. To vote with discretionary authority upon
until the next Annual Meeting of Stockholders | any other business which may properly come
or until their respective successors shall be | before the meeting or any postponements or
elected and qualified: | adjournments thereof.
|
Nominees: | The shares represented by this Proxy will be voted
[ ] FOR ALL NOMINEES [ ] James A. Cotter, Jr. | as specified. IF NO CHOICE IS SPECIFIED, THE PROXY
[ ] Edward F. Hacker | WILL BE VOTED IN FAVOR OF THE SPECIFIED NOMINEES,
[ ] WITHHOLD AUTHORITY [ ] Steven S. Kirkpatrick | AND THE PROXIES ARE GIVEN DISCRETIONARY AUTHORITY TO
FOR ALL NOMINEES [ ] Marc I. Perkins | VOTE ON ANY OTHER MATTERS UPON WHICH THE UNDERSIGNED
[ ] Robert Spiegel | IS ENTITLED TO VOTE AND WHICH MAY PROPERLY COME BEFORE
[ ] FOR ALL EXCEPT [ ] Thomas M. Steinberg | THE ANNUAL MEETING OR ANY ADJOURNMENTS OR POSTPONEMENTS
(See instructions below) | THEREOF. THIS PROXY CARD MUST BE PROPERLY COMPLETED,
| SIGNED, DATED AND RETURNED IN ORDER TO HAVE YOUR SHARES
| VOTED.
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INSTRUCTION: To withhold authority to vote for any |
individual nominee(s), mark "FOR ALL |
EXCEPT" and fill in the circle next to |
each nominee you wish to withhold, as |
shown here: |
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To change the address on your account, please check |
the box at right and indicate your new address in |
the address space above. Please note that changes [ ] |
to the registered name(s) on the account may not |
be submitted via this method. |
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Signature of Stockholder | | Date: | | Signature of Stockholder | | Date: | |
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Note: Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each holder should sign.
When signing as executor, administrator, attorney, trustee or guardian, please give full title as such.
If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such.
If signer is a partnership, please sign in partnership name by authorized person.