SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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Check the appropriate box:
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PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2)SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
[X] Definitive Proxy Statement
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[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
Pierce Leahy Corp.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if
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Rule 14a-12
IRON MOUNTAIN INCORPORATED
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Reg. (S) 240.14a-101.
SEC 1913 (3-99)
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PIERCE LEAHY CORP.
631 Park Avenue
King of Prussia, PA 19406IRON MOUNTAIN INCORPORATED
745 ATLANTIC AVENUE
BOSTON, MASSACHUSETTS 02111
NOTICE OF 2000 ANNUAL MEETING OF SHAREHOLDERS
to be held on Friday, May 14, 1999
TheTO BE HELD ON JUNE 1, 2000
To the Shareholders of
IRON MOUNTAIN INCORPORATED:
Iron Mountain Incorporated will hold its 2000 Annual Meeting of Shareholders
at the offices of Pierce Leahy Corp. will be heldSullivan & Worcester LLP, One Post Office Square, 23rd Floor,
Boston, Massachusetts, on Friday, May 14, 1999,June 1, 2000 at 10:00 a.m., at the Sheraton Valley Forge Hotel, 1160
First Avenue, King of Prussia, Pennsylvania 19406, local time for the
following purposes:
1. To elect two directors to hold officefour Class III Directors for a three-year term or until the annual meeting of
shareholders in 2002.their
successors are elected and qualified;
2. To ratify the appointmentselection by the Board of Directors of Arthur Andersen LLP
as the Company'sour independent public accountants for 1999.the year ending December 31,
2000; and
3. To transact such other business as may properly come before the meeting.
Attached to this notice is a Proxy Statement relating to the proposals to be
considered at the meeting. The Board of Directors has fixed the close of
business on March 17, 199923, 2000 as the record date for the meeting. Onlydetermination of
shareholders of record at that time are
entitled to receive notice of and to vote at the meeting andor any
adjournment or postponement thereof. In the event that the meetingAnnual Meeting is
adjourned for one or
more periods aggregating at least 15 days due to the absence of a quorum, those
shareholders entitled to vote who attend the adjourned meeting, although
otherwise less than a quorum, shall constitute a quorum for the purpose of
acting upon any matter set forth in this notice.
The enclosed proxyYour vote is solicited by the Board of Directorsimportant regardless of the Company.
Reference is made to the attached Proxy Statement for further information with
respect to the business to be transacted at the meeting.
You are cordially invited to attend the meeting in person. The Boardnumber of Directors urgesshares you toown. We
request that you complete, sign, date and return the enclosed proxy card promptly.
The return ofwithout
delay in the enclosed proxy card will not affect your right to vote in
personpostage-paid return envelope, even if you choosenow plan to
attend the meeting. Joseph P. Linaugh
SecretaryYou may revoke your proxy at any time prior to its exercise
or by attending the meeting and voting in person.
All shareholders are cordially invited to attend the meeting.
By order of the Board of Directors,
GARRY B. WATZKE, SECRETARY
Boston, Massachusetts
April 6, 199928, 2000
PIERCE LEAHY CORP.
631 Park Avenue
King of Prussia, PA 19406
----------------IRON MOUNTAIN INCORPORATED
745 ATLANTIC AVENUE
BOSTON, MASSACHUSETTS 02111
PROXY STATEMENT
for
Annual Meeting of Shareholders
May 14, 1999
----------------FOR THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 1, 2000
GENERAL INFORMATION
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Pierce Leahy Corp.Iron Mountain Incorporated for use at the
Company's annual meetingAnnual Meeting of shareholders which willShareholders to be held on the date,June 1, 2000 or at the time and place, andany adjournment
or postponement thereof.
Our Annual Report to Shareholders for the purposes set forth inyear ended December 31, 1999 is
being mailed to shareholders with the foregoing notice.
Thismailing of this Proxy Statement the foregoing notice and the enclosed proxy card are
first being sent to shareholders on or
about April 6, 1999.
The28, 2000.
We will bear all costs of solicitation of proxies. In addition to
solicitations by mail, our Directors, officers and regular employees, without
additional remuneration, may solicit proxies by telephone, telecopy and personal
interviews. Brokers, banks, custodians and other fiduciaries will be requested
to forward proxy soliciting material to the beneficial owners of shares held of
record by such persons, and we will reimburse them for their reasonable
out-of-pocket expenses incurred in connection with the distribution of such
proxy materials.
EXPLANATORY NOTE
On February 1, 2000, Iron Mountain Incorporated, a Delaware corporation
("Old Iron Mountain"), acquired Pierce Leahy Corp., a Pennsylvania corporation
("Pierce Leahy"). Because the transaction was structured as a reverse merger,
Old Iron Mountain merged with and into Pierce Leahy, and Pierce Leahy survived
the merger. Immediately after the merger, Pierce Leahy changed its name from
Pierce Leahy Corp. to Iron Mountain Incorporated ("Iron Mountain," the "Company"
or "we"). Based on the number of shares of Old Iron Mountain and Pierce Leahy
common stock outstanding, immediately after the merger former stockholders of
Old Iron Mountain owned approximately 65% of the Company's common stock, $.01
par value per share ("Common Stock"). Because of this share ownership, Old Iron
Mountain is considered the acquiring entity for accounting purposes, and the
Company adopted Old Iron Mountain's financial statements as its own upon the
completion of the merger. In connection with the merger, Old Iron Mountain's
Board of Directors does not intendand top executive officers became the Board of Directors and
executive officers of the Company, except that J. Peter Pierce and Howard D.
Ross were also elected Directors, J. Peter Pierce became the President of the
Company and David S. Wendell became the Senior Vice President of the Company. In
order to bring any matter before the
meeting except those as specifically indicatedprovide comprehensive disclosure, items in the noticethis Proxy Statement
containing historical information include disclosures for both Old Iron Mountain
and does not know
of anyone else who intends to do so. If any other matters properly come before
the meeting, however, the persons namedPierce Leahy.
REVOCABILITY OF PROXIES
Any shareholder giving a proxy in the enclosed proxy card, or their
duly constituted substitutes acting atform has the meeting, will be authorizedpower to vote
or otherwise act thereon in accordance with their judgment on such matters.
When your proxy card is returned properly signed prior to voting at the
meeting, the shares represented thereby will be voted in accordance with the
instructions marked thereon. If your proxy card is signed and returned without
specifying choices, the shares will be voted as recommended by the directors.
Any proxy may be revokedrevoke
it at any time priorbefore it is exercised. You may revoke your proxy by delivering
to its exercise by notifying the Secretary in writing, by deliveringof the Company at the address given
1
above a written notice of revocation or another duly executed proxy bearing a
later date, ordate. You may also revoke your proxy by attending the meetingAnnual Meeting and
voting in person.
RECORD DATE, VOTING SECURITIES AND SECURITYSHARE OWNERSHIP
Outstanding SharesOur Common Stock is the only class of voting securities outstanding and
Voting Rights
Atentitled to vote at the close of business onAnnual Meeting. On March 17, 1999,23, 2000, the record date fixed for
the determination of shareholders entitled to notice of and to vote at the
meeting, 17,036,581Annual Meeting (the "Record Date"), 54,385,639 shares of the Company's Common Stock were
outstanding and entitled to vote. Only the record holders of the Common Stock on the record
date will beEach share is entitled to vote. There are no other classes of voting securities
outstanding.one vote on each
matter.
The presence at the meeting,Annual Meeting, in person or by proxy, of holders of
sharesshareholders
entitled to cast at least a majority of the votes that may beall shareholders are
entitled to cast by
all shares of Common Stock outstanding as ofat the record dateAnnual Meeting will constitute a quorum. Each share of Common Stock is entitled to one vote; there are no
cumulative voting rights with respect to the election of directors.
AbstentionsShares
represented by a properly signed and broker "non-votes" are countedreturned proxy will be treated as present
and entitled to
voteat the Annual Meeting for purposes of determining whether a quorum, without regard to
whether the proxy is marked as casting a vote or abstaining. Shares represented
by "broker non-votes" will not be treated as present at the meeting.for purposes of determining
a quorum. A broker "non-vote"non-vote occurs on an item when a broker identified as the
nominee holdingrecord holder of shares for a beneficial
owner doesis not permitted to vote on a particular proposal because the nominee does not have
discretionary voting power with respect to that item and has not received
instructionswithout
instruction from the beneficial owner. A pluralityowner of the votes duly castshares and no instruction is requiredgiven.
A proxy in the enclosed form, if received in time for voting and not
revoked, will be voted at the Annual Meeting in accordance with the instructions
contained therein. Where a choice is not so specified, the shares represented by
the proxy will be counted "For" the election of directors (i.e., the nominees receivingfor Director listed
herein and in favor of the greatest numberother matters set forth in the Notice of votes will be elected).Annual
Meeting accompanying this Proxy Statement. Abstentions orand broker "non-votes"
arenon-votes do
not counted for purposes ofaffect the election of directors. The affirmative
vote by the holders of a majorityDirectors or the ratification of the shares present in person or
represented by proxy and entitled to vote on the matter is required to approve
any other matter to be acted upon at the meeting. An abstention is counted as
a vote against and a broker non-vote is not counted for purposes of approving
other matters to be acted upon at the meeting.accountants.
2
Security Ownership of Principal ShareholdersSECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information known to us with respect
to the
beneficial ownership as of March 17, 1999 ofCommon Stock by (i) each person who was known toDirector, (ii) the Chief
Executive Officer and the other four most highly compensated executive officers
in the Company, (iii) all Directors and executive officers of the Company as a
group and (iv) each shareholder known by us to be the beneficial owner of more
than 5%five percent of the Common Stock. EachSuch information is presented as of
March 1, 2000, except as otherwise indicated.
AMOUNT OF BENEFICIAL
OWNERSHIP(1)
--------------------------
NAME SHARES PERCENT OWNED
- ---- ---------- -------------
DIRECTORS AND EXECUTIVE OFFICERS
C. Richard Reese(2)......................................... 1,690,729 3.1%
J. Peter Pierce(3).......................................... 7,283,894 13.4%
John F. Kenny, Jr.(4)....................................... 191,667 *
David S. Wendell(5)......................................... 275,166 *
Harold E. Ebbighausen(6).................................... 19,399 *
Clarke H. Bailey(7)......................................... 56,926 *
Constantin R. Boden(8)...................................... 33,775 *
Kent P. Dauten(9)........................................... 1,411,682 2.6%
Eugene B. Doggett(10)....................................... 14,955 *
B. Thomas Golisano(11)...................................... 1,523,095 2.8%
Arthur D. Little(12)........................................ 41,220 *
Howard D. Ross(13).......................................... 0 *
Vincent J. Ryan(14)......................................... 5,043,080 9.3%
All Directors and executive officers as a group (13
persons)(15).............................................. 17,585,588 32.4%
FIVE PERCENT SHAREHOLDERS
Leo W. Pierce, Sr.(16)...................................... 7,422,756 13.7%
Schooner Capital LLC(17).................................... 2,736,076 5.0%
Thomas W. Smith(18)......................................... 3,850,130 7.1%
Thomas N. Tryforos(19)...................................... 3,107,393 5.7%
Wellington Management Company, LLP(20)...................... 3,557,400 6.6%
- ------------------------
*Less than 1%
(1) Except as otherwise indicated, the shareholderspersons named below hasin the table above have
sole voting and investment power with respect to such shares, unless otherwise indicated.
Common Stock
---------------------------
Name and Address of
Beneficial Owner Number of Shares Percent
------------------- ---------------- -------
Leo W. Pierce, Sr. .............................. 7,710,225(1)(2) 45.3%
J. Peter Pierce.................................. 7,637,845(1)(3) 44.8
Leo W. Pierce, Jr. .............................. 998,937(1)(4) 5.9
Michael J. Pierce................................ 886,708(1)(5) 5.2
Mary E. Pierce................................... 1,391,953(1)(6) 8.2
Barbara P. Quinn................................. 1,044,558(1)(7) 6.1
Constance P. Buckley............................. 933,781(1)(8) 5.5
Thomas W. Smith.................................. 2,114,700(9) 12.4
Thomas N. Tryforos............................... 1,770,596(9) 10.4
Palisades Capital Management, L.L.C. ............ 1,166,200(10) 6.9
- --------
(1) A total of 7,621,345all shares of Common Stock
are eithershown as beneficially owned by them.
(2) Mr. Reese is a Director, Chairman of the Board and Chief Executive Officer
of the Company. Includes 22,825 shares of Common Stock held in trusts for
the benefit of Mr. Reese's children, as to which Mr. Reese disclaims
beneficial ownership. Also includes 874,249 shares of Common Stock as to
which Mr. Reese shares beneficial ownership with Schooner Capital LLC
("Schooner") as a result of a 1988 deferred compensation arrangement, as
amended, between Schooner and Mr. Reese relating to Mr. Reese's former
services as President of the predecessor corporation to Schooner. Pursuant
to such arrangement, upon the earlier to occur of (i) Schooner's sale or
exchange of substantially all of the shares of Common Stock held by Schooner
or (ii) the cessation of Mr. Reese's employment with the Company, Schooner
is required to transfer such shares of Common Stock to Mr. Reese or remit to
3
Mr. Reese cash in an amount equal to the then current fair market value of
such shares of Common Stock. Schooner has agreed to vote the shares of
Common Stock subject to such arrangement at the direction of Mr. Reese.
(3) Mr. Pierce is a Director and President of the Company. Includes 7,265,744
shares held in a Voting
Trustvoting trust pursuant to a Voting Trust Agreement dated
June 24, 1997 (as amended or restated from time to time, the "Voting
Trust") or, some of which are also subject to proxies (the "Proxies") granted
under such Voting Trust Agreement. Mr. Pierce and Leo W. Pierce, Sr. and J. Peter Pierce are the Trustees, as
co-trustees of the Voting Trust (the "Trustees") and the persons granted
voting rights under the Proxies, and, as such, each has
sharedshare power to vote the shares held in the
Voting Trust or subject to the Proxies. In the event that the two Trustees
disagree as to how to vote the shares held subject to the Voting Trust or
the Proxies, one-half of the shares subject to the Voting Trust and/or the
Proxies will be voted at the direction of each Trustee. With the exception of 85,880 shares
beneficially owned by Leo W. Pierce, Sr. which are discussed in Note (2)
below, all of the shares beneficially owned by Leo W. Pierce, Sr., J.
Peter Pierce, Leo W. Pierce, Jr., Michael J. Pierce, Mary E. Pierce,
Barbara P. Quinn, and Constance P. Buckley are held in the Voting Trust
or are subject to Proxies. The beneficial
owners of the interests in the Voting Trust and/or the shares subject to the Proxies
have the right to dispose of the shares to which they have beneficial
interests.
The
address of each(4) Mr. Kenny is the Executive Vice President and Chief Financial Officer and a
Director of the foregoing shareholdersCompany. Includes 179,520 shares that Mr. Kenny has the
right to acquire pursuant to currently exercisable options.
(5) Mr. Wendell is c/o Pierce Leahy Corp.,
631 Park Avenue, Kinga Senior Vice President of Prussia, PA 19406.
(2)the Company. Includes 268,049
shares that Mr. Leo W. Pierce, Sr.Wendell has the right to acquire pursuant to currently
exercisable options.
(6) Mr. Ebbighausen is the President of Arcus Data Security, Inc. Includes
18,764 shares that Mr. Ebbighausen has the right to acquire pursuant to
currently exercisable options.
(7) Mr. Bailey is a directDirector of the Company. Includes 2,455 shares that
Mr. Bailey has the right to acquire pursuant to currently exercisable
options.
(8) Mr. Boden is a Director of the Company. Includes 2,455 shares that
Mr. Boden has the right to acquire pursuant to currently exercisable
options.
(9) Mr. Dauten is a Director of the Company. Includes 2,455 shares that
Mr. Dauten has the right to acquire pursuant to currently exercisable
options.
(10) Mr. Doggett is a Director of the Company. Includes 2,455 shares that
Mr. Doggett has the right to acquire pursuant to currently exercisable
options.
(11) Mr. Golisano is a Director of the Company. Includes 7,882 shares that
Mr. Golisano has the right to acquire pursuant to currently exercisable
options.
(12) Mr. Little is a Director of the Company. Includes 37,500 shares held by The
Little Family Trust, as to which Mr. Little disclaims beneficial interest inownership,
as well as 2,455 shares that Mr. Little has the 383,813right to acquire pursuant to
currently exercisable options.
(13) Mr. Ross is a Director of the Company.
(14) Mr. Ryan is a Director of the Company. Includes 2,455 shares that Mr. Ryan
has the right to acquire pursuant to currently exercisable options. Also
includes 2,736,076 shares of Common Stock held by Schooner, as to which
Mr. Ryan has sole voting power and investment power as the Chairman of the
Board of Schooner and the principal stockholder of Schooner Capital Trust,
the sole member of Schooner. Mr. Ryan's address is c/o Schooner Capital LLC,
745 Atlantic Avenue, Boston, Massachusetts 02111. See footnote
(17) regarding shares held by Schooner.
4
(15) Includes 488,945 shares that Directors and executive officers have the
right to acquire pursuant to currently exercisable options.
(16) Includes 153,712 shares held in the Pierce Family Foundation, of which
Mr. Pierce is a co-trustee, and 7,265,744 shares held in the Voting Trust
described in footnote (3). Mr. Pierce's address is 443 Silver Moss Drive,
John's Island, Vero Beach, Florida 32963.
(17) Mr. Ryan is the Chairman of the Board of Schooner and 3,000 shares owned
directly by him which are not subject to the Votingprincipal
stockholder of Schooner Capital Trust, the sole member of Schooner, and,
as such,accordingly, has sole dispositivevoting and investment power with respect to such shares. Mr. Pierce is
also a co-trustee of the Pierce Family Foundation, which owns 85,880 shares
of Common Stock. InStock held by Schooner. Includes 874,249 shares of Common Stock as
to which Schooner shares beneficial ownership with Mr. Reese as described in
footnote (2). Schooner has agreed to vote the shares of Common Stock subject
to such capacity,arrangements at the direction of Mr. PierceReese. The address of Schooner
Capital LLC is 745 Atlantic Avenue, Boston, Massachusetts 02111.
(18) This information is presented as of December 31, 1999, and is based solely
on a Schedule 13G filed with the Securities and Exchange Commission (the
"SEC") on March 15, 2000. Mr. Smith has sole voting and dispositive power
over 766,490 shares and has shared voting and dispositive power over
3,083,640 shares with respect to such shares. Mr. Pierce disclaims
beneficial ownershipTryforos. The address of the shares held by the Foundation.
(3) Mr. J. Peter Pierce has a direct beneficial interest in the 756,197
shares of Common Stock and, as such, has sole dispositive power with
respect to such shares. He also has a beneficial interest in 180,047
shares of Common Stock as custodian for the benefit of his child. In
addition, Mr. Pierce beneficially owns 435,290 shares of Common Stock as
co-trustee of a trust. All of such shares are subject to Proxies.
Mr. Pierce disclaims beneficial ownership of the shares held by the
trust.
(4) Mr. Leo W. Pierce, Jr. has a direct beneficial interest in 482,840 shares
of Common Stock. He also has a beneficial interest in an aggregate of
200,169 shares as custodian for the benefit of his children and an
aggregate of 30,186 shares in which his wifeSmith is custodian for the benefit
of his children. In addition, Mr. Pierce beneficially owns 285,742 shares
as trustee of a trust. All of such shares are held in the Voting Trust.
Mr. Pierce disclaims beneficial ownership of the shares held by the
trust.
(5) Mr. Michael J. Pierce has a direct beneficial interest in 780,798 shares
of Common Stock. He also has a beneficial interest in an aggregate of
105,910 shares as custodian for the benefit of his child. All of such
shares are held in the Voting Trust or are subject to Proxies.
2
(6) Ms. Pierce has a direct beneficial interest in 1,391,953 shares of Common
Stock held in the Voting Trust.
(7) Ms. Quinn has a direct beneficial interest in 196,138 shares of Common
Stock. She also has a beneficial interest in an aggregate of 564,500
shares as custodian for the benefit of her children. In addition,
Ms. Quinn beneficially owns 148,356 shares as trustee of a trust and an
aggregate of 135,564 shares as co-trustee of three separate trusts. All
of such shares are held in the Voting Trust or are subject to Proxies.
Ms. Quinn disclaims beneficial ownership of all shares held by the
trusts.
(8) Ms. Buckley has a direct beneficial interest in 477,139 shares of Common
Stock. She also has a beneficial interest in an aggregate of 152,512
shares as custodian for the benefit of her children and an aggregate of
8,472 shares in which her husband is custodian for the benefit of her
children. In addition, Ms. Buckley beneficially owns 173,155 shares as
trustee of a trust and an aggregate of 122,503 shares as co-trustee of
four separate trusts. All of such shares are held in the Voting Trust or
are subject to Proxies. Ms. Buckley disclaims beneficial ownership of all
shares held by the trusts.
(9) The323 Railroad
Avenue, Greenwich, Connecticut 06830.
(19) This information is presented as of December 31, 1999, and is based solely
on a Schedule 13G dated January 19, 1999, of
Thomas W. Smith and Thomas N. Tryforos filed with the SecuritiesSEC on March 15, 2000. Mr. Tryforos has
sole voting and Exchange Commission. Based on their Schedule 13G, Messrs. Smith and
Tryforos beneficially own an aggregate of 1,916,211 shares of Common
Stock in their capacity as investment managers for certain managed
accounts. Mr. Smith beneficially owns an additional 198,489dispositive power over 23,753 shares and has shared voting
and dispositive power over 3,083,640 shares with Mr. Tryforos beneficially owns an additional 17,596 shares.Smith. The address of
Messrs. Smith andMr. Tryforos is 323 Railroad Avenue, Greenwich, CTConnecticut 06830.
(10)(20) This information is presented as of December 31, 1999, and is based solely
on a Schedule 13G/A filed with the SEC on February 11, 2000. Wellington
Management Company, LLP has shared voting power over 2,538,600 shares and
shared dispositive power over 3,557,400 shares. The address of Wellington
Management Company, LLP is 75 State Street, Boston, Massachusetts 02109.
5
ITEM 1
ELECTION OF DIRECTORS
The Board of Directors currently consists of eleven Directors. There are
three classes of Directors who serve for a three-year term and are elected on a
staggered basis, one class of Directors standing for election each year. The
term of the Class III Directors, Kent P. Dauten, Arthur D. Little, J. Peter
Pierce and C. Richard Reese, will expire at the Annual Meeting; the term of the
Class I Directors, Clarke H. Bailey, Constantin R. Boden and Eugene B. Doggett,
will expire at the 2001 Annual Meeting of Shareholders; and the term of the
Class II Directors, B. Thomas Golisano, John F. Kenny, Jr., Howard D. Ross and
Vincent J. Ryan, will expire at the 2002 Annual Meeting of Shareholders.
Directors of each class hold office until the third annual meeting of the
shareholders of the Company following their election or until their successors
are elected and qualified.
At the Annual Meeting, the four Class III Directors are to be elected to
serve until our 2003 Annual Meeting of Shareholders, or until their successors
are elected and qualified. The Board of Directors has selected as nominees the
current Class III Directors of the Company, Kent P. Dauten, Arthur D. Little,
J. Peter Pierce and C. Richard Reese. Each has agreed to serve if elected, and
management has no reason to believe that any of the nominees will be unavailable
to serve. In connection with the merger of Old Iron Mountain and Pierce Leahy,
certain members of the Pierce family and related trusts entered into a voting
agreement that limits their ability to transfer their shares of the Company's
stock for a period after the merger. These restrictions expire automatically on
the fifth anniversary of the closing of the merger, or sooner if (i) the shares
subject to the voting agreement represent less than five percent of the
Company's outstanding stock or (ii) J. Peter Pierce no longer serves as a
Director of the Company, other than if he resigns or refuses to accept the
nomination of the Company's Board of Directors.
Our executive officers were last elected on February 1, 2000, upon the
completion of the merger of Old Iron Mountain and Pierce Leahy. At a meeting to
be held immediately following the Annual Meeting, the Board of Directors
currently intends to reelect the current executive officers of the Company. All
executive officers hold office at the discretion of the Board of Directors until
the first meeting of the Board of Directors following the next annual meeting of
shareholders and until their successors are chosen and qualified. Except for T.
Anthony Ryan, the Company's Vice President, Real Estate, and Vincent J. Ryan, a
Class II Director, who are brothers, there are no family relationships between
or among any of our officers or Directors.
REQUIRED VOTE
The affirmative vote of holders of a plurality of the votes properly cast at
the Annual Meeting is required to elect each Class III Director. For purposes of
determining which nominees receive a plurality, only those cast "For" or
"Against" are included, and any abstentions or broker non-votes will not count
in making that determination.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE ELECTION OF EACH OF
THE NOMINEES LISTED BELOW TO SERVE AS CLASS III DIRECTORS OF IRON MOUNTAIN UNTIL
THE 2003 ANNUAL MEETING OF SHAREHOLDERS, OR UNTIL THEIR SUCCESSORS ARE ELECTED
AND QUALIFIED.
Set forth below are the name and age of each Class III Director, his
principal occupation and business experience during the past five years and the
names of certain other companies of which he served as a Director, as of
March 30, 2000.
6
PRINCIPAL OCCUPATIONS AND BUSINESS EXPERIENCE
NOMINEE DURING THE PAST FIVE YEARS
- ------- ------------------------------------------------------------
Kent P. Dauten Mr. Dauten is a Class III Director of the Company, a
Age 44 position he has held since February 2000. Prior to the
merger of Old Iron Mountain and Pierce Leahy, he had been a
Director of Old Iron Mountain since November 1997. He also
serves as President of Keystone Capital, Inc., a management
and consulting advisory service firm, a position he has held
since March 1994. In February 1995, Mr. Dauten founded
HIMSCORP, Inc. (d/b/a Record Masters) and served as its
President until its acquisition by Old Iron Mountain in
November 1997. Mr. Dauten currently serves as a Director of
Health Management Associates, Inc., a hospital management
firm, and is a Trustee of ElderTrust, a health care real
estate investment trust. Mr. Dauten holds a Master of
Business Administration degree from Harvard Business School.
Arthur D. Little Mr. Little is a Class III Director of the Company, a
Age 56 position he has held since February 2000. Prior to the
merger, he had been a Director of Old Iron Mountain since
November 1995. Mr. Little is a principal of The Little
Investment Company, which he founded in 1992. Prior to that,
he was Managing Director of and also a partner in
Narragansett Capital, Inc., a private investment firm. He
holds a Bachelor of Arts degree in history from Stanford
University.
J. Peter Pierce J. Peter Pierce is a Class III Director and the President of
Age 54 the Company, positions he has held since February 2000.
Prior to the merger, Mr. Pierce had been the President and
Chief Executive Officer of Pierce Leahy since 1995 and a
Director of Pierce Leahy since the early 1970s. From 1984 to
1995, Mr. Pierce was the President and Chief Operating
Officer of Pierce Leahy. Prior to 1984, he served in various
other capacities with Pierce Leahy, including as Vice
President of Operations, General Manager of Connecticut, New
York and New Jersey, and Sales Executive. Mr. Pierce
attended the University of Pennsylvania and served in the
United States Marine Corps.
C. Richard Reese Mr. Reese is a Class III Director, Chairman of the Board and
Age 54 Chief Executive Officer of the Company, positions he has
held since February 2000. Prior to the merger, Mr. Reese had
been the Chairman of the Old Iron Mountain Board of
Directors since November 1995, a Director of Old Iron
Mountain since 1990 and the Chief Executive Officer of Old
Iron Mountain since 1981. Mr. Reese was also the President
of Old Iron Mountain from 1981 until November 1995. Mr.
Reese is a member of the investment committee of Schooner.
Prior to joining Old Iron Mountain, Mr. Reese lectured at
Harvard Business School in "Entrepreneurship" and provided
consulting services to small- and medium-sized emerging
enterprises. Mr. Reese has also served as the President and
a Director of Professional Records and Information Services
("PRISM"), a trade group of approximately 530 members. He
holds a Master of Business Administration degree from
Harvard Business School.
7
Set forth below are the name and age of each other Director and executive
officer of the Company, his principal occupation and business experience during
the past five years and the names of certain other companies of which he served
as a Director, as of March 30, 2000.
PRINCIPAL OCCUPATIONS AND BUSINESS EXPERIENCE
NAME DURING THE PAST FIVE YEARS
- ---- ------------------------------------------------------------
Clarke H. Bailey Mr. Bailey is a Class I Director of the Company, a position
Age 45 he has held since February 2000. Prior to the merger, he had
been a Director of Old Iron Mountain since January 1998. He
is Co-Chairman and Director of Highgate Capital LLC, a
private equity firm, and Chairman, Chief Executive Officer
and a Director of National Fulfillment, Inc., a private
company. Mr. Bailey was the Chairman and Chief Executive
Officer of each of Arcus Group, United Acquisition Company
and Arcus Technology Services, Inc. from 1995 until their
acquisition by Old Iron Mountain in January 1998. He is a
Director of Connectivity Technologies Inc., Swiss Army
Brands, Inc. and SWWT, Inc. (formerly known as Sweetwater,
Inc.). Mr. Bailey also serves as Chairman and a Director of
Glenayre Technologies, Inc. (formerly N-W Group, Inc.), a
manufacturing company in the telecommunications industry. He
holds a Master of Business Administration degree from The
Wharton School, University of Pennsylvania.
Constantin R. Boden Mr. Boden is a Class I Director of the Company, a position
Age 63 he has held since February 2000. Prior to the merger, Mr.
Boden had been a Director of Old Iron Mountain since
December 1990. Mr. Boden is the principal of Boden Partners
LLC and chairman of the advisory board of Boston Capital
Ventures, a risk capital concern. For 34 years, until
January 1995, Mr. Boden was employed by The First National
Bank of Boston, most recently as Executive Vice President,
International Banking. He holds a Master of Business
Administration degree from Harvard Business School.
Eugene B. Dogget Mr. Doggett is a Class I Director of the Company, a position
Age 63 he has held since February 2000. Prior to the merger, Mr.
Doggett had been a Director of Old Iron Mountain since 1990.
From 1987 until May 1997, Mr. Doggett was the Chief
Financial Officer of Old Iron Mountain, and from 1990 until
May 1998, Mr. Doggett was an Executive Vice President of Old
Iron Mountain. Mr. Doggett is also a Director of Mac-Gray
Corporation, a publicly held supplier of card and
coin-operated laundry services in multiple housing
facilities. Prior to joining Old Iron Mountain, he had
extensive experience in commercial and investment banking,
as well as financial and general management experience at
senior levels. He holds a Master of Business Administration
degree from Harvard Business School.
8
PRINCIPAL OCCUPATIONS AND BUSINESS EXPERIENCE
NAME DURING THE PAST FIVE YEARS
- ---- ------------------------------------------------------------
B. Thomas Golisano Mr. Golisano is a Class II Director of the Company, a
Age 58 position he has held since February 2000. Prior to the
merger, Mr. Golisano had been a Director of Old Iron
Mountain since June 1997. Mr. Golisano was Chairman of
Safesite Records Management Corporation until its
acquisition by Old Iron Mountain in June 1997. He founded
Paychex Inc., a publicly held, national payroll service
company, in 1971 and serves as its Chairman, President and
Chief Executive Officer. Mr. Golisano serves on the Board of
Trustees of Rochester Institute of Technology and on the
boards of several privately held companies. He has also
served on the boards of numerous non-profit organizations
and is the founder of the B. Thomas Golisano Foundation.
John F. Kenny, Jr. Mr. Kenny is a Class II Director, a position he has held
Age 42 since March 1, 2000, when he was appointed to fill the
vacancy created by the resignation of Mr. Wendell. He is
also the Executive Vice President and Chief Financial
Officer of the Company, positions he has held since February
2000. Prior to the merger, he had been the Executive Vice
President and Chief Financial Officer of Old Iron Mountain
since May 1997. Mr. Kenny joined Old Iron Mountain in 1991
and held a number of operating positions before assuming the
position of Vice President of Corporate Development in 1995.
Prior to 1991, Mr. Kenny was a Vice President of CS First
Boston Merchant Bank, New York, with responsibility for risk
capital investments. Mr. Kenny has also served as a Director
and the Treasurer of PRISM. He holds a Master of Business
Administration degree from Harvard Business School.
Howard D. Ross Howard D. Ross is a Class II Director of the Company, a
Age 48 position he has held since February 2000. In 1999, Mr. Ross
was involved in the formation, and is currently a partner,
of LLR Equity Partners, L.P., a venture capital fund. From
1984 to October 1999, he was a partner at Arthur Andersen
LLP. He is also a Director of Premier Research Worldwide,
Ltd., a provider of clinical testing and software services
primarily to the pharmaceutical industry. Mr. Ross holds a
Bachelor of Science degree in economics from The Wharton
School, University of Pennsylvania, and is a Certified
Public Accountant.
Vincent J. Ryan Mr. Ryan is a Class II Director of the Company, a position
Age 64 he has held since February 2000. Prior to the merger, Mr.
Ryan was a Director of Old Iron Mountain for over ten years.
Mr. Ryan is the founder of Schooner and has served as the
Chairman and Chief Executive Officer of Schooner since 1971.
Prior to November 1995, Mr. Ryan served as Chairman of the
Old Iron Mountain Board of Directors.
9
PRINCIPAL OCCUPATIONS AND BUSINESS EXPERIENCE
NAME DURING THE PAST FIVE YEARS
- ---- ------------------------------------------------------------
Harold E. Ebbighausen Mr. Ebbighausen is the President of Arcus Data Security,
Age 45 Inc., a subsidiary of the Company, a position he has held
since July 1998. Mr. Ebbighausen was an Executive Vice
President of Old Iron Mountain from July 1997 until July
1998 and a Vice President of Data Security Services of Old
Iron Mountain from September 1996 through June 1997. Prior
to joining Old Iron Mountain, Mr. Ebbighausen was Vice
President of Data Management Services with INSCI
Corporation, a software provider for computer output and
data storage solutions to optical and CD technology.
Previously, he held a number of field management positions
with Anacomp, Inc., a service bureau provider in the
micrographics industry.
David S. Wendell Mr. Wendell is a Senior Vice President of the Company, a
Age 46 position he has held since February 2000. He was also a
Director of the Company from the date of the merger until
his resignation on February 28, 2000. Prior to the merger,
he had been the President and Chief Operating Officer and a
Director of Old Iron Mountain since November 1995. After
practicing law with Brown & Wood, Mr. Wendell joined Old
Iron Mountain in 1984, where he served in a variety of
positions. Prior to November 1995, he was Executive Vice
President, Atlantic Area and prior to 1991, he was Vice
President, New England Region. He holds a Master of Business
Administration degree from Harvard Business School and a
Juris Doctor degree from the University of Virginia.
BOARD AND COMMITTEE MEETINGS
During the fiscal year ended December 31, 1999, the Board of Directors of
Old Iron Mountain held four regular meetings and five special meetings, and took
one action by written consent. Each incumbent Director who was then in office
attended at least 75% of the aggregate number of meetings of the Board of
Directors of Old Iron Mountain and all committees thereof on which such Director
served. The Board of Directors of the Company has a standing Audit Committee,
Executive Committee and Compensation Committee, and a Stock Incentive Plan
Subcommittee of the Compensation Committee (the "Option Plan Subcommittee"). Old
Iron Mountain did not and we will not have a nominating committee. During the
fiscal year ended December 31, 1999, the Audit Committee of Old Iron Mountain
held six meetings, the Executive Committee of Old Iron Mountain held one meeting
and took three actions by written consent, the Compensation Committee of Old
Iron Mountain held one meeting and the Option Plan Subcommittee of Old Iron
Mountain held one meeting and took two actions by written consent.
The Audit Committee consists of Messrs. Boden (Chairman), Little and Dauten.
The Audit Committee consults with our independent public accountants regarding
the plan for our annual audit, reviews with the public accountants their audit
report and related management letter, reviews the performance of the independent
public accountants and their fees, reviews our internal accounting control
policies and procedures and considers and recommends the selection of our
independent public accountants.
The Executive Committee consists of Messrs. Ryan (Chairman), Reese, Pierce
and Bailey. Between meetings of the Board of Directors, the Executive Committee
exercises all the powers of the Board of Directors in the management and
direction of the business and affairs of the Company to the extent not otherwise
prohibited by law, the Board of Directors or our Amended and Restated Bylaws or
Amended
10
and Restated Articles of Incorporation. The vote of three of the four members of
the Executive Committee is required for the Executive Committee to take action.
The Compensation Committee consists of Messrs. Little (Chairman), Boden,
Ryan and Bailey. The Compensation Committee provides recommendations to the
Board regarding our compensation policies and programs and is also responsible
for establishing and modifying the compensation for all of our executive
officers.
The Option Plan Subcommittee consists of Messrs. Little (Chairman) and
Boden, both of whom are "outside" and "non-employee" directors within the
meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Code"), and Rule 16b-3 under Section 16 of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), respectively. The Option Plan Subcommittee
administers the Iron Mountain Incorporated 1995 Stock Incentive Plan (the "Stock
Incentive Plan"), including the grant of stock options thereunder to all
employees, including executive officers, the Iron Mountain/ATSI 1995 Stock
Option Plan, the Iron Mountain Incorporated 1998 Employee Stock Purchase Plan
(the "Employee Stock Purchase Plan"), the Nonqualified Stock Option Plan of
Pierce Leahy Corp. and the Pierce Leahy Corp. 1997 Stock Option Plan, and
recommends the adoption of, and any amendments to, all stock incentive plans.
The Option Plan Subcommittee also administers the Iron Mountain Incorporated
Executive Deferred Compensation Plan, a nonqualified deferred compensation plan
(the "Executive Deferred Compensation Plan").
IRON MOUNTAIN DIRECTOR COMPENSATION
Directors who are employees of the Company do not receive additional
compensation for serving as Directors. Each Director who is not an employee of
the Company receives an annual retainer fee of $5,000 as compensation for his or
her services as a member of our Board of Directors and $500 for attendance at
committee meetings. In addition, we have a program by which we grant our
nonemployee Directors options to purchase $100,000 of our Common Stock every
three years. Each option is granted under the Stock Incentive Plan, has an
exercise price equal to fair market value (as defined in the Stock Incentive
Plan) as of the date of grant, vests in equal quarterly amounts over a period of
three years and has a ten year term. All Directors are reimbursed for
out-of-pocket expenses incurred in attending meetings of our Board of Directors
or committees thereof, and for other expenses incurred in their capacities as
Directors.
Old Iron Mountain paid a total of $34,000 in cash for Directors fees in
respect of services for 1999.
11
EXECUTIVE COMPENSATION
OLD IRON MOUNTAIN
The following table provides certain information concerning compensation
earned by the Chief Executive Officer and the other four most highly compensated
executive officers of Old Iron Mountain measured as of December 31, 1999 (the
"Old Iron Mountain Named Executive Officers").
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION LONG-TERM COMPENSATION
------------------- ----------------------------
NUMBER OF
SHARES
UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS COMPENSATION(1)
- --------------------------- -------- -------- -------- ---------- ---------------
C. Richard Reese......................... 1999 $358,000 $250,000 0 $3,200
Chairman of the Board and 1998 $308,538 $190,000 0 $4,000
Chief Executive Officer 1997 $298,381 $200,000 0 $4,000
David S. Wendell(2)...................... 1999 $243,800 $171,000 0 $3,200
President and Chief Operating Officer 1998 $224,981 $138,588 0 $4,000
1997 $221,723 $150,000 47,244 $4,000
John F. Kenny, Jr........................ 1999 $218,300 $153,000 26,765 $3,200
Executive Vice President and 1998 $192,788 $135,000 0 $2,400
Chief Financial Officer 1997 $166,723 $150,000 158,268 $2,400
Harold E. Ebbighausen.................... 1999 $193,300 $ 80,000 35,690 $3,200
President of Arcus Data Security, Inc. 1998 $148,269 $ 10,000 0 $2,400
1997 $128,213 $ 49,365 16,536 $ 0
Robert P. Swift(3)....................... 1999 $160,268 $ 64,107 11,895 $2,870
Executive Vice President of Iron 1998 $150,750 $ 30,150 0 $5,000
Mountain Records Management, Inc. 1997 $145,542 $ 54,991 0 $4,000
- ------------------------
(1) Reflects Old Iron Mountain's matching contribution to The Iron Mountain
Companies 401(k) Plan for each individual. Amounts shown for 1999 are
estimated maximum contributions; the actual contributions have not yet been
calculated.
(2) Mr. Wendell is currently the Senior Vice President.
(3) Following the merger of Old Iron Mountain and Pierce Leahy, Mr. Swift is no
longer classified as an executive officer of the Company.
12
The following table sets forth certain information concerning the grant of
options to purchase Old Iron Mountain common stock to the Old Iron Mountain
Named Executive Officers during the year ended December 31, 1999.
OPTION GRANTS IN 1999
POTENTIAL REALIZABLE
PERCENT OF VALUE AT ASSUMED
NUMBER OF TOTAL OPTIONS ANNUAL RATES
SECURITIES GRANTED TO OF STOCK APPRECIATION
UNDERLYING EMPLOYEES IN FOR OPTION TERM(1)
OPTIONS FISCAL YEAR EXERCISE EXPIRATION ---------------------
NAME AND PRINCIPAL POSITION GRANTED 1999 PRICE ($/SH) DATE 5% 10%
- --------------------------- ---------- ------------- ------------ ---------- -------- ----------
John F. Kenny, Jr. ............... 26,765 6.18% $33.625 9/12/2009 $565,988 $1,434,325
Executive Vice President and
Chief Financial Officer
Harold E. Ebbighausen............. 35,690 8.24% $33.625 9/12/2009 $754,722 $1,912,612
President of Arcus Data
Security, Inc.
Robert P. Swift(2)................ 11,895 2.75% $33.625 9/12/2009 $251,539 $ 637,448
Executive Vice President of
Iron Mountain Records
Management, Inc.
- ------------------------
(1) Potential Realizable Value is based on the assumed growth rates for an
assumed ten-year option term. Five percent annual growth results in a Schedule 13G, dated January 22, 1999,common
stock price per share of Palisades Capital Management, L.L.C. filed with$54.77, and ten percent annual growth results in a
common stock price per share of $87.21, respectively, for such term. The
actual value, if any, an executive may realize will depend on the Securitiesexcess of
the market price of the common stock over the exercise price on the date the
option is exercised. There is no assurance that the value realized by an
executive will be at or near the amounts reflected in this table.
(2) Following the merger of Old Iron Mountain and Exchange Commission. Based on its Schedule 13G, Palisades Capital
Management, L.L.C. beneficially owns 1,166,200 sharesPierce Leahy, Mr. Swift is no
longer classified as an executive officer of Common Stock in
its capacity as investment manager for certain managed accounts. The
address of Palisades Capital Management, L.L.C. is One Bridge Plaza,
Suite 695, Fort Lee, NJ 07024.
3the Company.
13
Security Ownership of Management
The following table sets forth certain information with respect to stock
options during the beneficial ownership as of March 17,year ended December 31, 1999 of (i) each director, (ii) each ofexercised by, and the
Named Executives (as hereinafter defined) and (iii) all the directors and
executive officers as a group. Each of the shareholders named below has sole
voting and investment power with respect to such shares, unless otherwise
indicated.
Number of Percent of
Name of Beneficial Owner Shares(1) Class
------------------------ --------- ----------
Leo W. Pierce, Sr. ............................. 7,710,225(2) 45.3%
J. Peter Pierce................................. 7,637,845(3) 44.8
Douglas B. Huntley.............................. 137,402(4) *
Alan B. Campell................................. 21,500(7) *
Delbert S. Conner............................... 1,500(7) *
Thomas A Decker................................. 1,500(7) *
J. Anthony Hayden............................... 80,500(5)(7) *
Ross M. Engelman................................ 136,552(4) *
J. Michael Gold................................. 136,202(4) *
Joseph A. Nezi.................................. 98,762(6) *
Christopher J. Williams......................... 140,202(4) *
All executive officers and directors as a group
(13 persons)................................... 8,610,694(8) 50.5%
- --------
* Less than 1 percent.
(1) With respect to each shareholder, includes any shares issuable upon
exercise of any options held by such shareholder that are or will become
exercisable within sixty days of the record date.
(2) See Notes (1) and (2) to previous table.
(3) See Notes (1) and (3) to previous table.
(4) Includesunexercised options to purchase 136,202 shares of Common Stock.
(5) Includes 55,000 shares of Common Stock beneficially owned through an IRA
and 10,000 shares of Common Stock ownedOld Iron Mountain common stock held by, Hayden Real Estate, Inc.
(6) Includes of options to purchase 98,762 shares of Common Stock.
(7) Includes options to purchase 500 shares of Common Stock.
(8) Includes options to purchase an aggregate of 775,418 shares of Common
Stock.
4
ELECTION OF DIRECTORS
(Item 1 on Proxy Card)
At the meeting, the shareholders will elect two Class II Directors to hold
office until the annual meeting of shareholders in 2002 and until their
respective successorsOld
Iron Mountain Named Executive Officers. Mr. Reese does not have been duly elected and qualified. The Board of
Directors is divided into three classes serving staggered three-year terms,
the term of one class of directors to expire each year. The term of the Class
II Directors expires at the 1999 annual meeting of shareholders. The Board has
nominated Messrs. Douglas B. Huntley and Delbert S. Conner to serve as
directors. Each is currently serving as a Class II Director and has indicated
a willingness to continue serving as a director. Unless contrary instructions
are given, the shares represented by a properly executed proxy will be voted
"For" the election of Messrs. Huntley and Conner. Should either of the
nominees become unavailable to accept election as a director, the persons
named in the enclosed proxy will vote the shares which they represent for the
election of such other person as the Board of Directors may recommend.
The current members of the Board of Directors, including the nominees for
Class II Director, together with certain information about them, are set forth
below:any options.
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION VALUES
Director Term
Name Age Since Expires Positions with the Company
---- ---NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS AT
SHARES DECEMBER 31, 1999 DECEMBER 31, 1999(1)
ACQUIRED VALUE --------------------------- ---------------------------
NAME AND PRINCIPAL POSITION ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- --------------------------- ----------- -------- ------- ------------------------------------- ------------- ----------- -------------
Class II Directors
Douglas B. Huntley.. 38 1994 1999
David S. Wendell(2)....... 1,200 $24,825 211,444 73,631 $6,536,461 $1,766,883
President and Chief
Operating Officer
John F. Kenny, Jr. ....... 0 $ 0 155,453 155,693 $3,885,510 $2,766,105
Executive Vice President
and Chief Financial
Officer
and Director
Delbert S. Conner... 69 1990 1999 Director
Class III Directors
Leo W. Pierce, Sr... 80 1957 2000 ChairmanHarold E. Ebbighausen..... 0 $ 0 18,764 53,712 $ 338,139 $ 498,831
President of the Board
J. Anthony Hayden... 54 1997 2000 Director
Class I Directors
J. Peter Pierce..... 53 * 2001Arcus Data
Security, Inc.
Robert P. Swift(3)........ 0 $ 0 49,700 25,753 $1,576,424 $ 449,462
Executive Vice President
Chief Executive Officer
and Director
Alan B. Campell..... 47 1994 2001 Director
Thomas A. Decker.... 53 1997 2001 Directorof Iron Mountain Records
Management, Inc.
- --------
*------------------------
(1) Based on a year-end value of $38.59375 per share, less the exercise price.
(2) Mr. J. Peter Pierce has served as a director sinceWendell is currently the early 1970s.
Mr. Douglas B. Huntley has served as Chief Financial Officer since January
1994 and as a director of the Company since 1994. From May 1993 until December
1993, Mr. Huntley served as Assistant to theSenior Vice President of the Company.
From
August 1989 to March 1993, he was(3) Following the merger of Old Iron Mountain and Pierce Leahy, Mr. Swift is no
longer classified as an Executive Advisor and a Project Manager
of Rockwell International in connection with a multi-billion dollar NASA
contract. Prior thereto, Mr. Huntley was an accountant for Deloitte Haskin &
Sells. Mr. Huntley holds a B.S. degree from Bucknell University and an M.B.A.
from the University of Pennsylvania, Wharton School of Business and is a
Certified Public Accountant.
Mr. Delbert S. Conner has served as a director of the Company since 1990.
Since May 1995, Mr. Conner has served as Vice Chairman of USCO Distribution
Services, Inc. on a semi-retired basis. From January 1994 through April 1995,
he was the Vice Chairman of USCO on a full-time basis and its President and
Chief Executive Officer from February 1983 to December 1993. Mr. Conner holds
a B.S. degree from Bryant College.
Mr. Leo W. Pierce, Sr. has served as Chairman of the Board of the Company
since its formation in 1957. Mr. Pierce served as the Chief Executive Officer
of the Company from its formation to January 1995 and as President from its
formation to January 1984. Prior to forming the Company, Mr. Pierce was a
sales representative for Lefebure Corporation and an accountant for Price
Waterhouse. Mr. Pierce holds a B.A. degree from St. John's University. Leo W.
Pierce, Sr. is the father of J. Peter Pierce.
5
Mr. J. Anthony Hayden has served as a director of the Company since 1997.
Since March 1996, Mr. Hayden has served as President and Chief Executive
Officer of Hayden Real Estate, Inc. From 1975 until March 1996, Mr. Hayden
served in various capacities with Cushman and Wakefield Commercial Real Estate
Company, including Executive Vice President of the Mid-Atlantic/Mid-West
Region. Mr. Hayden holds a B.S. degree from LaSalle University. Mr. Hayden is
also a director of Liberty Property Trust.
Mr. J. Peter Pierce has served as President and Chief Executive Officer of
the Company since January 1995 and has been a director since the early 1970s.
Mr. Pierce served as President and Chief Operating Officer of the Company from
January 1984 to January 1995, prior to which he served in various other
capacities with the Company, including as Vice President of Operations,
General Manager of Connecticut, New York and New Jersey and Sales Executive.
Mr. Pierce attended the University of Pennsylvania and served in the United
States Marine Corps.
Mr. Alan B. Campell has served as a director of the Company since 1994.
Since 1997, Mr. Campell has been President of Campell Consulting. From 1986
until 1997, Mr. Campell was a Managing Director of Campell Vanderslice Furman,
an investment banking firm. Prior thereto, Mr. Campell was a Vice President at
Chase Manhattan Bank, N.A. Mr. Campell holds a B.A. degree from Brown
University and an M.A. from the University of Southern California.
Mr. Thomas A. Decker has served as a director of the Company since 1997.
Since January 1997, Mr. Decker has served as Senior Vice President, General
Counsel and Secretary, of Unisource Worldwide, Inc. From 1994 until January
1997, Mr. Decker was Executive Vice President, Chief Operating Officer and
General Counsel of Saint Gobain Corporation, and from 1994 until 1996, Mr.
Decker was Executive Vice President and General Counsel of Saint-Gobain
Corporation. During the period 1994 through 1997, he was responsible for all
corporate staff activities including Law, Human Resources, Finance and
Information Systems at Saint-Gobain Corporation and its three principal
subsidiaries. Mr. Decker was Vice President, General Counsel and Secretary of
Saint Gobain Corporation from 1991 through 1994. From 1974 to 1991, Mr. Decker
was Vice President, General Counsel and Secretary of Certainteed Corporation.
Mr. Decker holds a B.A. degree from the University of Pennsylvania and a J.D.
degree from the University of Virginia School of Law.
Meetings and Committees of the Board of Directors
During 1998, the Board of Directors held six formal meetings. The Board has
an Executive Committee, a Compensation Committee and an Audit Committee. The
Executive Committee and the Compensation Committee each held one formal
meeting in 1998, and the Audit Committee held two formal meetings in 1998. The
Executive Committee is empowered to approve acquisitions and other
transactions up to specified dollar amounts. Messrs. Leo W. Pierce, Sr., J.
Peter Pierce, Alan B. Campell and Douglas B. Huntley are currently the members
of the Executive Committee. The Compensation Committee considers and
recommends to the Board both salary levels and bonuses for the officersexecutive officer of the Company.
The Compensation Committee also reviews and makes recommendations
with respect to the Company's existing and proposed compensation plans, and it
serves as the committee responsible for administering the Company's stock
option plans. Messrs. Decker and Conner are currently the members of the
Compensation Committee. The Audit Committee reviews the Company's internal
accounting controls and handles matters relating to the Company's independent
public accountants. Messrs. Campell, Conner and Hayden are currently members
of the Audit Committee.
During 1998, each director attended more than 75% of the aggregate of the
total number of meetings of the Board of Directors and meetings held by all
committees of the Board of Directors on which he served.
Compensation of Directors
All directors receive reimbursement of reasonable out-of-pocket expenses
incurred in connection with meetings of the Board of Directors. All non-
employee directors also receive $3,500 for each meeting of the Board of
Directors attended. In addition, each nonemployee director was granted in
January 1998 an option to purchase 2,500 shares of Common Stock at the fair
market value on the date of grant. The options vest in five equal annual
installments beginning on the first anniversary of the date of grant.
614
RATIFICATION OF THE APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
(Item 2 on Proxy Card)
Subject to shareholder ratification, the Board of Directors, upon
recommendation of the Audit Committee, has reappointed Arthur Andersen LLP to
serve as the Company's independent public accountants for the current fiscal
year. If the shareholders do not ratify this appointment by the affirmative
vote of a majority of the votes cast at the meeting, other independent public
accountants will be considered by the Board upon recommendation of the Audit
Committee.
A representative of Arthur Andersen is expected to be present at the
meeting. Such representative will have the opportunity to make a statement if
he desires to do so and will be available to respond to appropriate questions.
The affirmative vote of a majority of votes cast at the meeting in person or
by proxy is required to ratify the reappointment of Arthur Andersen. The Board
of Directors recommends voting "FOR" ratification of the reappointment of
Arthur Andersen.
7
EXECUTIVE COMPENSATION
Summary Compensation TablePIERCE LEAHY
The following table sets forth the cashprovides certain information concerning compensation
paidearned by the Company as
well as certain other compensation paid or accrued during fiscal 1996, 1997
and 1998 to the Company's Chief Executive Officer and the Company'sother five other
highest paidmost highly compensated
executive officers (together with the Chiefof Pierce Leahy measured as of December 31, 1999 (the "Pierce
Leahy Named Executive Officer,
the "Named Executives"Officers") for services to the Company in 1996, 1997 and 1998:.
SUMMARY COMPENSATION TABLE
Long-Term
Annual Compensation Compensation
---------------------------------- --------------
Other Annual All Other
Name and Principal Bonus Compensation Awards/Options Compensation
Position Year Salary ($) ($) ($) (#) ($)ANNUAL COMPENSATION LONG-TERM COMPENSATION
----------------------- -----------------------------
NUMBER OF
SHARES
UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS COMPENSATION
- ------------------ ------------------------------- -------- -------- -------- ---------- ------- ------------ -------------- ------------
J. Peter Pierce......... 1998 250,000 110,000 -- -- 4,059(1)Pierce.................. 1999 $267,981 $192,500 0 $2,587(1)
President and 1998 $250,000 $ 110,00 0 $5,744(1)
Chief Executive Officer 1997 250,000$250,000 $ 87,760 -- -- 7,122(1)
Officer 1996 251,485 93,400 -- -- 6,967(1)0 $7,122(1)
Ross M. Engelman........ 1998 130,000 60,000 -- -- 2,464(2)Engelman................. 1999 $144,385 $ 82,500 5,500 $2,074(2)
Vice President Operations--South1998 $130,000 $ 60,000 0 $4,149(2)
Operations-South 1997 130,000$130,000 $ 45,635 -- 31,773 5,403(2)
1996 130,000 65,000 -- 54,014 5,216(2)34,750 $5,212(2)
J. Michael Gold......... 1998 130,000 60,000 -- -- 2,468(3)Gold.................. 1999 $144,385 $ 82,500 5,500 $2,086(3)
Vice President 1998 $130,000 $ 60,000 0 $4,153(3)
Operations-Northeast 1997 130,000$130,000 $ 45,635 -- 31,773 4,092(3)
Operations--
Northeast 1996 130,000 65,000 -- 54,014 3,739(3)34,750 $3,890(3)
Douglas B. Huntley...... 1998 130,000 60,000 -- -- 2,468(4)Huntley............... 1999 $144,385 $ 82,500 5,500 $2,074(4)
Vice President and 1998 $130,000 $ 60,000 0 $4,153(4)
Chief Financial Officer 1997 130,000$130,000 $ 45,635 -- 31,773 5,442(4)
Officer 1996 130,000 65,000 -- 54,014 5,231(4)34,750 $5,442(4)
Joseph A. Nezi.......... 1998 130,000 112,000(5) -- 22,500 1,982(6)Nezi................... 1999 $144,385 $134,500(5) 5,500 $2,529(6)
Vice President 1998 $130,000 $112,000(5) 24,750 $3,667(6)
Sales and& Marketing 1997 130,000$130,000 $ 97,635(5) -- -- 6,335(6)
Marketing 1996 130,000 92,370(5) -- 37,068 6,256(6)0 $6,385(6)
Christopher J. Williams............... 1998 130,000 60,000 -- -- 2,559(7)Williams.......... 1999 $144,385 $ 82,500 5,500 $2,086(7)
Vice President Operations--West1998 $130,000 $ 60,000 0 $4,244(7)
Operations-West 1997 130,000$130,000 $ 45,635 -- 31,773 5,442(7)
1996 130,000 65,000 -- 54,014 5,339(7)34,750 $5,442(7)
- --------------------------------
(1) Included in such amounts for 1999, 1998 1997 and 1996,1997, respectively, are $1,966,
$2,400 $2,250 and $2,268$2,250 representing an employer match under the Company's Pierce Leahy
Corp. Profit Sharing/401(k) Plan (the "Pierce Leahy 401(k) Plan"), and $621,
$1,659 $1,872 and $1,699$1,872 in net premiums for a guaranteed term life insurance
policy on behalf of Mr. Pierce. In addition, included in such amounts for
19971998 and 1996,1997, respectively, are $3,000$1,685 and $3,000 representing profit
sharing contributions made by Pierce Leahy to the Company under its
Profit SharingPierce Leahy 401(k) Plan.
The Company anticipates that it will makeWe anticipate making a profit sharing contribution underto the Profit SharingPierce Leahy
401(k) Plan with respect to 1998,1999, but the amount of such contribution has
not yet been determined.
(2) Included in such amounts for 1999, 1998 1997 and 1996,1997, respectively, are $1,966,
$2,296 $2,245 and $2,249$2,245 representing an employer match under the Pierce Leahy
401(k) Plan, and $108, $168 $158 and $158 in net premiums for a guaranteed term
life insurance policy on behalf of Mr. Engelman. In addition, included in
such amounts for 19971998 and 1996,1997, respectively, are $3,000$1,685 and $2,809
representing profit
15
sharing contributions made by Pierce Leahy to the Company under the Profit SharingPierce Leahy 401(k) Plan.
The Company anticipates that it will makeWe anticipate making a profit sharing contribution under the
Profit Sharing Plan with respect to 1998,1999, but
the amount of such contribution has not yet been determined.
(3) Included in such amounts for 1999, 1998 1997 and 1996,1997, respectively, are $1,966,
$2,302 $900 and $750$900 representing an employer match under the Pierce Leahy 401(k)
Plan, and $120, $166 $192 and $191$192 in net premiums for a guaranteed term life
insurance policy on behalf of Mr. Gold. In addition, included in such
amounts for 19971998 and 1996,1997, respectively, are $3,000$1,685 and $2,798 representing
profit sharing contributions made by Pierce Leahy to the Company under the Profit SharingPierce Leahy 401(k)
Plan. The Company anticipates that it will makeWe anticipate making a profit sharing contribution under the
Profit Sharing Plan with respect to
1998,1999, but the amount of such contribution has not yet been determined.
8
(4) Included in such amounts for 1999, 1998 1997 and 1996,1997, respectively, are $1,966,
$2,302 $2,250 and $2,250 representing an employer match under the Pierce Leahy
401(k) Plan, and $108, $166 $192 and $191$192 in net premiums for a guaranteed term
life insurance policy on behalf of Mr. Huntley. In addition, included in
such amounts for 19971998 and 1996,1997, respectively, are $1,685 and $3,000
and $2,790
representing profit sharing contributions made by Pierce Leahy to the Company under the Profit SharingPierce
Leahy 401(k) Plan. The Company anticipates that it will makeWe anticipate making a profit sharing contribution under the
Profit Sharing Plan with
respect to 1998,1999, but the amount of such contribution has not yet been
determined.
(5) Includes $52,000, $52,000 and $27,370$52,000 paid as commissions in 1999, 1998 1997
and
1996,1997, respectively.
(6) Included in such amounts for 1999, 1998 1997 and 1996,1997, respectively, are $1,966,
$957 $2,250 and $2,260$2,250 representing an employer match under the Pierce Leahy 401(k)
Plan, and $563, $1,025 $1,135 and $996$1,135 in net premiums for a guaranteed term life
insurance policy on behalf of Mr. Nezi. In addition, included in such
amounts for 19971998 and 1996,1997, respectively, are $3,000$1,685 and $3,000 representing
profit sharing contributions made by Pierce Leahy to the Company under the Profit SharingPierce Leahy 401(k)
Plan. The Company anticipates that it will makeWe anticipate making a profit sharing contribution under the
Profit Sharing Plan with respect to
1998,1999, but the amount of such contribution has not yet been determined.
(7) Included in such amounts for 1999, 1998 1997 and 1996,1997, respectively, are $1,966,
$2,302 $2,250 and $2,250 representing an employer match under the Pierce Leahy
401(k) Plan, and $120, $257 $192 and $191$192 in net premiums for a guaranteed term
life insurance policy on behalf of Mr. Williams. In addition, included in
such amounts for 19971998 and 1996,1997, respectively, are $1,685 and $3,000
and $2,898
representing profit sharing contributions made by Pierce Leahy to the Company under the Profit SharingPierce
Leahy 401(k) Plan. The Company anticipates that it will makeWe anticipate making a profit sharing contribution under the
Profit Sharing Plan with
respect to 1998,1999, but the amount of such contribution has not yet been
determined.
Stock Option Grants16
The following table containssets forth certain information concerning grantsthe grant of stock
options to purchase Pierce Leahy common stock to the ChiefPierce Leahy Named
Executive Officer and to each ofOfficers during the other Named Executives
during 1998:
Option Grants in 1998year ended December 31, 1999.
OPTION GRANTS IN 1999
Potential
Realizable
Value at
Assumed Annual
Individual Grants Rates of Stock
------------------------------------------------- Price
Number of Appreciation
Securities % of Total for Option
Underlying Options Granted Exercise Term(2)
Options to Employees in Price Expiration ---------------
Name Granted(#)(1) 1998POTENTIAL REALIZABLE
PERCENT OF VALUE AT ASSUMED
NUMBER OF TOTAL OPTIONS ANNUAL RATES
SECURITIES GRANTED TO OF STOCK APPRECIATION
UNDERLYING EMPLOYEES IN FOR OPTION TERM(1)
OPTIONS FISCAL YEAR EXERCISE EXPIRATION ---------------------
NAME AND PRINCIPAL POSITION GRANTED 1999 PRICE ($/Sh) DateSH) DATE 5% 10%
- ------------------------------- ---------- ------------- --------------- -------------------- ---------- ------- ---------------- ---------
J. Peter Pierce......... -- -- -- -- -- --
Ross M. Engelman........ -- -- -- -- -- --Engelman..................... 5,500 3.3% $23.18 1/1/2009 $80,178 $203,186
Vice President Operations-South
J. Michael Gold......... -- -- -- -- -- --Gold...................... 5,500 3.3% $23.18 1/1/2009 $80,178 $203,186
Vice President Operations-Northeast
Douglas B. Huntley...... -- -- -- -- -- --Huntley................... 5,500 3.3% $23.18 1/1/2009 $80,178 $203,186
Vice President and Chief Financial
Officer
Joseph A. Nezi.......... 22,500 15.4 20.50Nezi....................... 5,500 3.3% $23.18 1/1/2008 290,025 735,0752009 $80,178 $203,186
Vice President Sales & Marketing
Christopher J. Williams............... -- -- -- -- -- --Williams.............. 5,500 3.3% $23.18 1/1/2009 $80,178 $203,186
Vice President Operations-West
- --------------------------------
(1) The options were granted under the Company'sPierce Leahy Corp. 1997 Stock Option Plan
and vest in five equal annual installments beginning on the first
anniversary of the date of grant.
(2) Illustrates the value that might be received upon exercise of options
immediately prior to the assumed expiration of their term at the specified
compounded rates of appreciation based on the market price for the Common
StockPierce Leahy
common stock when the options were granted. Assumed rates of appreciation
are not necessarily indicative of future stock performance.
917
Stock Option Exercises and Holdings
The following table sets forth certain information with respect to the
valueexercise of stock options heldduring the year ended December 31, 1999 by, eachand the
unexercised options to purchase Pierce Leahy common stock of, the Pierce Leahy
Named Executives at December 31, 1998. None of the Named Executives exercised
any options during 1998.
Aggregated Option Exercises in 1998 and Option Values at December 31, 1998Executive Officers.
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION VALUES
Number of Unexercised Value of Unexercised
Options at DecemberNUMBER OF UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS AT
SHARES DECEMBER 31, In-the-Money Options at
Shares Value 1998 (#) December1999 DECEMBER 31, 1998 ($)(1)
Acquired on Realized ------------------------- -------------------------
Name Exercise (#) ($) Exercisable Unexercisable Exercisable Unexercisable
---- -------------1999(1)
ACQUIRED VALUE --------------------------- ---------------------------
NAME AND PRINCIPAL POSITION ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- --------------------------- ----------- -------- ----------- ------------- ----------- -------------
J. Peter Pierce......... -- -- -- -- -- --
Ross M. Engelman........ -- -- 107,394 68,417 2,174,735 1,371,077Engelman.............. 0 $ 0 149,821 49,071 $5,171,587 $1,583,567
Vice President
Operations-South
J. Michael Gold......... -- -- 107,394 68,417 2,174,735 1,371,077Gold............... 0 $ 0 149,821 49,071 $5,171,587 $1,583,567
Vice President
Operations-Northeast
Douglas B. Huntley...... -- -- 107,394 68,417 2,174,735 1,371,077Huntley............ 5,500 $101,700 144,321 49,071 $4,980,823 $1,583,567
Vice President and
Chief Financial Officer
Joseph A. Nezi.......... -- -- 68,843 80,749 1,393,128 1,283,877Nezi................ 0 $ 0 108,636 61,415 $3,681,343 $1,739,489
Vice President
Sales & Marketing
Christopher J. Williams............... -- -- 107,394 68,417 2,174,735 1,371,077Williams....... 0 $ 0 149,821 49,071 $5,171,587 $1,583,567
Vice President
Operations-West
- --------------------------------
(1) The value of unexercised in-the-money options is based on the difference
between the last sale price of a share of Common Stock as reported by the
New York Stock Exchange (the "NYSE") on December 31, 19981999 ($25.50)39.32, as
adjusted for the one-for-ten stock dividend paid on January 14, 2000) and
the exercise price of the options, multiplied by the number of options.
10In connection with the merger of Old Iron Mountain and Pierce Leahy, all
options granted to Messrs. Engelman, Gold, Huntley, Nezi and Williams under the
Nonqualified Stock Option Plan of Pierce Leahy Corp. that had not vested prior
to the merger vested upon the completion of the merger. The numbers of shares
subject to the options accelerated were 11,883, 11,883, 11,883, 8,155 and
11,833, respectively.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
OLD IRON MOUNTAIN
The Compensation Committee of Old Iron Mountain consisted entirely of
Directors who were not employees of Old Iron Mountain. It was the Compensation
Committee's responsibility to review, recommend and approve Old Iron Mountain's
compensation policies and programs, including all compensation
18
for the Chief Executive Officer and the other executive officers of Old Iron
Mountain for the fiscal year ended December 31, 1999.
The Option Plan Subcommittee consisted entirely of directors who were both
"non-employee" directors within the meaning of Rule 16b-3 under Section 16 of
the Exchange Act and "outside" directors within the meaning of Section 162(m) of
the Code and the regulations thereunder, so that grants of options under the
Stock Performance GraphIncentive Plan to executive officers were exempt under Rule 16b-3 and
eligible for the "performance-based" exception of Section 162(m) of the Code.
The following graph comparesOption Plan Subcommittee administered the percentage changeStock Incentive Plan and in
exercise of that function determined what grants of stock options, restricted
stock and stock appreciation rights thereunder were to be made to the Chief
Executive Officer and the other executive officers of Old Iron Mountain. The
Option Plan Subcommittee also administered the Iron Mountain/ATSI 1995 Stock
Option Plan, although no additional grants were made under that plan, the
Employee Stock Purchase Plan and the Executive Deferred Compensation Plan.
The purpose of the Stock Incentive Plan is to encourage key employees,
Directors and consultants of the Company who render services of special
importance to, and who contribute materially to the success of, the Company to
continue their association with the Company by providing favorable opportunities
for them to participate in the cumulative total
return on the Common Stock during the period from the commencement of public
tradingownership of the Company and in its future
growth. The Option Plan Subcommittee of Old Iron Mountain made stock option
grants to Messrs. Kenny, Ebbighausen and Swift in 1999.
The purpose of the Employee Stock Purchase Plan is to provide employees of
the Company with the opportunity to acquire a proprietary interest in the
Company by providing favorable terms for them to purchase the Company's Common
Stock on July 1, 1997 until December 31, 1998,Stock.
The Executive Deferred Compensation Plan is maintained for the purpose of
providing deferred compensation to a select group of management and highly
compensated employees of the Company. This plan is expected to encourage the
continued employment of the participating employees whose management and
individual performance are largely responsible for the success of the Company
and to facilitate the recruiting of key management and highly compensated
employees required for the continued growth and profitability of the Company.
The Compensation Committee of Old Iron Mountain determined the salary levels
of Old Iron Mountain's executive officers, including the Chief Executive
Officer, for fiscal year 1999, and the cumulative total return onCompensation Committee of the S&P 500 IndexCompany
determined the amounts of bonuses paid in 2000 for performance in fiscal year
1999. The compensation policies implemented by the Compensation Committee, which
combine base salary and incentive compensation in the Russellform of cash bonuses and
long-term stock options, are designed to achieve the operating and acquisition
strategies and goals of the Company. In particular, in determining bonuses paid
in 2000 Index duringin respect of 1999 and salary levels for fiscal year 1999, the
Compensation Committee took into account the past or expected future
contributions of each executive officer to the Company's strategic goals,
especially the efforts of each such period. The comparison assumes $100 was investedofficer in connection with (1) pursuing and
effecting the offering and sale of 5,750,000 shares of Old Iron Mountain's
common stock and $150,000,000 in principal amount of 8 1/4% Senior Subordinated
Notes due 2011 of Old Iron Mountain to augment available funding for Old Iron
Mountain's growth strategy, (2) pursuing and entering into an Agreement and Plan
of Merger with Pierce Leahy and (3) increasing Old Iron Mountain's growth rate
by successfully identifying, acquiring and integrating other records management
businesses, while at the beginning of such
period in Common Stock and in eachsame time maintaining Old Iron Mountain's internal
growth.
19
Section 162(m) of the foregoing indices and assumesCode generally disallows an income tax deduction to
public companies for compensation in excess of $1,000,000 paid in any year to
the reinvestment ofchief executive officer or any dividends. Since July 1, 1997, the Common Stock has been
traded under the symbol PLH on the New York Stock Exchange.
COMPARE CUMULATIVE TOTAL RETURN
AMONG PIERCE LEAHY CORP.,
S&P 500 INDEX AND RUSSELL 2000 INDEX
07/01/97 12/31/97 12/31/98
PIERCE LEAHY 100.00 113.89 141.67
RUSSELL 2000 INDEX 100.00 111.02 107.90
S&P 500 INDEX 100.00 110.58 142.18
Report of the four most highly compensated other
executive officers, to the extent that this compensation is not "performance-
based" within the meaning of Section 162(m). Although the Compensation Committee
has not adopted any specific rules with respect to this issue, its general
policy, subject to all then prevailing relevant circumstances, is to attempt to
structure the compensation arrangements of the Company to maximize deductions
for federal income tax purposes.
COMPENSATION COMMITTEE
ARTHUR D. LITTLE, CHAIRMAN
CONSTANTIN R. BODEN
VINCENT J. RYAN
CLARKE H. BAILEY
CHANGE OF CONTROL ARRANGEMENT
The Stock Incentive Plan provides for acceleration of the vesting of options
and stock appreciation rights if the Company or any wholly owned subsidiary of
the Company is a party to a merger or consolidation (whether or not the Company
is the surviving corporation) in any transaction or series of related
transactions and there is a "Limited Change of Control" of the Company. A
Limited Change of Control occurs if after the merger or consolidation
(1) individuals who immediately prior to the merger or consolidation served as
members of the Board of Directors of the Company no longer constitute a majority
of the Company Directors or the board of directors of the surviving corporation
and (2) the voting securities of the Company outstanding immediately prior to
the merger or consolidation do not represent (either by remaining outstanding or
upon conversion into securities of the surviving corporation) more than 50% of
the voting power of the securities of the Company or the surviving corporation
immediately after the merger or consolidation. The merger of Old Iron Mountain
and Pierce Leahy did not constitute a Limited Change of Control.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of the Board of Directors which is composed of
two non-employee directors, is responsible for the oversight and
administration of executive compensation. More specifically, the Committee is
charged with determining the salary and other compensation of the Company's
President and Chief Executive Officer as well as the Company's other executive
officers. The Committee consults with the President and Chief Executive
Officer regarding the compensation for the other executive officers.
Compensation of executive officers is primarily comprised of salary, cash
bonuses and stock option grants.
For 1998, compensation for each of the executive officers was comprised of a
base salary and a cash bonus plus, in the case of one executive officer, stock
options. Salaries were based on historical levels and, the
11
Committee believes, are relatively conservative for corporations in similar
industries or with performance similar to the Company (primarily based on
revenue and EBITDA (earnings before interest, taxes, deprecation, amortization
and certain other charges)).
Bonuses for 1998 were based on an EBITDA target, with each executive officer
entitled to achieve up to 70% of base salary. Based on the Company's
performance for 1998, the Compensation Committee awarded each executive
officer, including the President and Chief Executive Officer, a bonus equal to
approximately 45% of base salary.
The Committee believes that options are an important and effective means of
compensating and incentivizing the Company's management. Providing management
an increased stake in the Company helps to align their interests to those of
the Company's shareholders. With the exception of the Company's President and
one other executive officer, the executive officers received substantial
option grants in 1997 and, accordingly, were not granted options in 1998. The
one executive officer other than the President who did not receive an option
grant in 1997 was granted options in 1998.
Base Salaries
The Committee plans to review base salaries annually and adjust them based
on Company performance as well as a review of compensation programs in other
companies in similar industries with similar capitalization and revenues. In
determining base salaries, the Committee considers the executive's overall
level of responsibility, other comparable labor markets in which the Company
competes for employees, and the compensation of similarly situated individuals
in the records management industry, to the extent this information is
available.
Bonuses
The Committee believes that bonuses are an important part of an executive's
compensation because it places a portion of the executive's performance at
risk and encourages sustained high performance each year. The Committee sets a
bonus target each year for the President and Chief Executive Officer and the
other executive officers. For 1998, the target was based on the achievement of
a an EBITDA target. The Committee believes that bonuses primarily based on
EBITDA targets are appropriate since EBITDA is the benchmark used by many of
the financial covenants in the Company's financing agreements and is a
criterion customarily used to evaluate records management companies. Other
measures of Company performance expected may also be used in the future, such
as exceeding sales targets, controlling capital budgets, and other objective
and subjective measures which increase the long-term value of the Company.
Stock Options
Stock options are the third element of compensation. Stock options serve to
align management with the interests of the Company's shareholders and to
incentivize them to manage with a view towards long-term growth rather than
focusing solely on short-term goals. Given the substantial level of the stock
ownership of the President and Chief Executive Officer, to date the Committee
has not granted options to the President when it granted options to other
executives. As the Company's outstanding shares increase, the Committee
believes that over the long-term it will be appropriate to grant stock options
to the President and Chief Executive Officer along with the other executive
officers. Going forward, the Committee expects that executive officers will
receive option grants either annually or bi-annually.
Summary
The Committee believes that the compensation program described above
effectively links executive and shareholder interests and provides incentives
that are consistent with the long-term goals and strategies of the Company to
continue to succeed inconsists
of Mr. Little, who is the records management industry.
12
Executive Compensation Tax Deductibility
Section 162(m)Chairman, and Messrs. Boden, Ryan and Bailey.
Mr. Reese is a member of the Internal Revenue Codeinvestment committee of 1986, as amended (the
"Code"), generally limitsSchooner and a Trustee of
Schooner Capital Trust, the deductible amountsole member of annual compensation paid to
certain individual executive officers to no more than $1 million. The
Committee does not deem Section 162(m)Schooner. Mr. Ryan is the Chairman of
the Code to be applicable toBoard and principal stockholder of Schooner Capital Trust.
CERTAIN TRANSACTIONS
REAL ESTATE TRANSACTIONS
Iron Mountain Records Management, Inc., a subsidiary of the Company
at this time.("IMRM"), was the tenant under a lease dated January 1, 1991 for a 31,500
square-foot building in Houston, Texas. The Committeeowner of the building was IM Houston
(CR) Limited Partnership, a Texas limited partnership, of which Mountain
Realty, Inc., a Massachusetts corporation whose sole shareholder is Mr. Ryan,
was the sole general partner, and the limited partners of which were
Messrs. Reese and Doggett. IMRM paid annual rent of approximately $99,326 for
the year ended December 31, 1998. As tenant, IMRM was responsible for taxes,
insurance and maintenance. Iron Mountain Statutory Trust-1998 ("IMST"), a
non-affiliated entity formed
20
to acquire and lease records storage properties to IMRM, purchased the property
from IM Houston (CR) Limited Partnership in January 1999 for a purchase price of
approximately $930,000. The purchase price was determined through an independent
appraisal of the property. IMRM leases the space from IMST and will continue to
review tax consequencesuse the space as well as other relevanta records management facility. The prior lease and the
acquisition of the property by IMST were, in the opinion of management, on
commercially reasonable terms and no less favorable to IMRM than could have been
obtained from an unaffiliated party at the time of the transactions.
Schooner leases space from us at our corporate headquarters. Such lease is a
tenancy-at-will and may be terminated by either us or by Schooner at any time.
As consideration for such lease, Schooner pays rent to us based on its pro rata
share of all expenses related to the use and occupancy of the premises. The rent
paid by Schooner to Old Iron Mountain under such lease was approximately $93,930
in connectionthe year ended December 31, 1999, and Schooner currently pays annual rent of
approximately $98,182. We believe that the terms of this lease are no less
favorable to us than would have been negotiated with compensation
decisions.
Submitted by the Compensation
Committee:
Delbert S. Conner
Thomas A. Decker
Certain Transactions
The Companyan unrelated third party.
IMRM leases from four separate limited partnerships its corporatethe headquarters of our
paper records storage operations in King of Prussia, Pennsylvania and its facilitiesone
facility in each of Suffield, Connecticut, Orlando, Florida and Charlotte, North
Carolina. J. Peter Pierce, the Company's President, and Chief Executive Officer, is the general partner of
three of the limited partnerships and members of the Pierce family and certain
other officers and directors of the Company and their
affiliates own substantial limited partnership interests in each of the four
limited partnerships. TheIMRM's lease onfor the Company's corporate headquarters of our paper records
storage operations expires on April 30, 2003, without any renewal options.options;
however, a purchase and sale agreement for the building has been signed, and the
lease is expected to be terminated on April 30, 2000. The leases for the
Suffield, Orlando and Charlotte facilities terminate on December 31, 2005,
October 31, 2004 and August 31, 2001, respectively. Each of such leases contains
two five-
yearfive-year renewal options. The aggregate rental payments by the CompanyPierce Leahy for
such properties during 19981999 was $901,264.
The Company believesapproximately $902,000. We believe that the
terms of itsthese leases with the related parties
are asno less favorable to us than would have been
negotiated with unrelated third parties.
OTHER TRANSACTIONS
Old Iron Mountain paid compensation of approximately $186,110 for the year
ended December 31, 1999 to Mr. T. Anthony Ryan. Mr. Ryan is Vice President, Real
Estate, of the Company as those generally available from unaffiliated
third parties. Thereand is the brother of Mr. Vincent J. Ryan, a Director of
the Company. We believe that the terms of Mr. Ryan's employment are no plans by the Companyless
favorable to lease additional
facilities from officers, directors or other affiliated parties.
The Company providesus than would be negotiable with an unrelated third party.
Pierce Leahy provided an annual pension in the amount of $96,000 to Leo W.
Pierce, Sr., the Chairman Emeritus of the Board of Directors of the Company and
the beneficial owner of approximately 13.7% of our Common Stock, for the year
ended December 31, 1999. We will continue to provide a pension to Mr. Pierce, or
his spouse, if she survives him.him, in 2000.
21
PERFORMANCE GRAPH
OLD IRON MOUNTAIN
The Company has entered into a tax indemnification agreement withfollowing graph compares the shareholderspercentage change in the cumulative total
return on Old Iron Mountain's common stock to the cumulative total returns of
the Company prior to its initial public offering which
provides for: (i)S&P 500 Index, the distribution to such shareholdersNasdaq Stock Market (U.S.) Index and the S&P Small Cap
600 Index for fiscal years 1999, 1998, 1997 and for the portion of cash equal1996 that Old
Iron Mountain's common stock was traded on The Nasdaq Stock Market's National
Market. Old Iron Mountain traded on the Nasdaq National Market through
April 20, 1999 and began trading on the NYSE on April 21, 1999. SEC rules
require the inclusion of both the old equity market index (the Nasdaq Stock
Market (U.S.) Index) and the new equity market index (the S&P 500 Index) for the
transition year. This comparison assumes an investment of $100 on February 1,
1996 and the reinvestment of any dividends.
COMPARISON OF 47 MONTH CUMULATIVE TOTAL RETURN*
OLD IRON MOUNTAIN INCORPORATED,
THE NASDAQ STOCK MARKET (U.S.) INDEX, THE S&P 500 INDEX
AND THE S&P SMALL CAP 600 INDEX
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
2/1/96 DEC-96 DEC-97 DEC-98 DEC-99
OLD IRON MOUNTAIN INCORPORATED 100 189.06 224.99 338.08 368.55
NASDAQ STOCK MARKET (U.S.) 100 122.42 150.01 211.38 381.88
S & P 500 100 118.91 158.59 203.90 246.81
S & P SMALLCAP 600 100 121.06 152.03 156.18 175.55
DOLLARS
*ASSUMES $100 INVESTED ON FEBRUARY 1, 1996.
ASSUMES DIVIDENDS REINVESTED.
FISCAL YEAR ENDED DECEMBER 31, 1999.
22
PIERCE LEAHY
The following graph compares the percentage change in the cumulative total
return on Pierce Leahy's common stock to the productcumulative total returns of the Company's taxable incomeS&P
500 Index and the Russell 2000 Index for fiscal years 1999 and 1998 and for the
period from Januaryportion of 1997 that Pierce Leahy's common stock was traded on the NYSE. This
comparison assumes an investment of $100 on July 1, 1997 until the date the Company's initial public offering was completed and the sumreinvestment of
any dividends.
COMPARISON OF 30 MONTH CUMULATIVE TOTAL RETURN*
AMONG PIERCE LEAHY, THE S&P 500 INDEX
AND THE RUSSELL 2000 INDEX
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
7/2/97 DEC-97 DEC-98 DEC-99
PIERCE LEAHY CORP. 100 83.67 104.08 176.53
S & P 500 100 110.74 142.39 172.35
RUSSELL 2000 100 114.99 107.57 105.97
DOLLARS
*ASSUMES $100 INVESTED ON JULY 2, 1997.
ASSUMES DIVIDENDS REINVESTED.
FISCAL YEAR ENDED DECEMBER 31, 1999.
23
ITEM 2
RATIFICATION OF SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
Subject to ratification by the highest effective federal and state income tax rate applicable to any
current shareholder (or in the case of shareholders, that are trusts, any
beneficiaries), less any prior distributions to such shareholders to pay taxes
for such period, and (ii) an indemnification of such shareholders for any
losses or liabilities with respect to any additional taxes (including
interest, penalties and legal fees) resulting from the Company's operations
during the period in which it was a Subchapter S corporation.
Prior to 1998, the Company made a loan to J. Michael Gold, the Company's
Vice President, Operations--Northeast. During 1998, the highest aggregate
amount of indebtedness outstanding on the loan was $215,657. As of December
31, 1998, $23,893 was outstanding. Interest accrues on the loan at the rate of
8.875% per annum.
During 1998, Campell Vanderslice Furman, a company of which Alan B. Campell
was a principal, received $310,000 in connection with the Company's 1998 notes
offering.
13
SOLICITATION OF PROXIES
The Company will bear the cost of the solicitation of the Board of Directors' proxiesDirectors has
selected the firm of Arthur Andersen LLP as our independent public accountants
for the meeting, includingcurrent year. Arthur Andersen LLP served as the costindependent public
accountants for Old Iron Mountain from 1988 through 1999.
Representatives of preparing,
assemblingArthur Andersen LLP are expected to be present at the
Annual Meeting. They will have the opportunity to make a statement if they
desire to do so and mailing proxy materials,will also be available to respond to appropriate questions
from shareholders.
If the handlingshareholders do not ratify the selection of Arthur Andersen LLP as
our independent public accountants, the selection of accountants will be
reconsidered by the Board of Directors.
REQUIRED VOTE
The affirmative vote of holders of a majority of the votes properly cast at
the Annual Meeting is required to ratify the selection of Arthur Andersen LLP to
serve as our independent public accountants for the current fiscal year. For
purposes of determining the number of votes cast, only those cast "For" or
"Against" are included, and tabulationany abstentions or broker non-votes will not count
in making that determination.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE RATIFICATION OF THE
SELECTION OF ARTHUR ANDERSEN LLP.
ADDITIONAL INFORMATION
OTHER MATTERS
The Board of proxies
received, and chargesDirectors does not know of brokerage houses andany other institutions, nominees and
fiduciaries in forwarding such materials to beneficial owners. In additionmatters that may come
before the Annual Meeting. However, if any other matters are properly presented
to the mailingmeeting, it is the intention of the persons named in the accompanying
proxy materials,to vote, or otherwise act, in accordance with their best judgment on such
solicitation may be made in person or
by telephone, telegraph or telecopy by directors, officers or regular
employeesmatters.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Company,Exchange Act requires that our executive officers and
Directors, and persons who own more than ten percent of a registered class of
our equity securities file reports of ownership on Form 3 and changes in
ownership on Form 4 or 5 with the SEC. Such executive officers, Directors and
ten percent shareholders are also required by SEC rules to furnish to us copies
of all Section 16(a) reports that they file. Based solely on our review of the
copies of such forms received by us, or written representations from certain
reporting persons that they were not required to file Form 5s, we believe that,
during the fiscal year ended December 31, 1999, the executive officers,
Directors and ten percent shareholders of both Old Iron Mountain and Pierce
Leahy complied with all Section 16(a) filing requirements applicable to such
persons.
PROPOSALS OF SHAREHOLDERS
We expect to hold our 2001 Annual Meeting on May 24, 2001. A shareholder who
intends to present a professional proxy solicitation organization
engaged by the Company.
SHAREHOLDER PROPOSALS
Shareholder proposals intended to be presentedproposal at the 20002001 Annual Meeting of Shareholders and who
intends to conduct his or her own proxy
24
solicitation must be received bysubmit the Secretary of the Company at the address
appearing on the first page of this Proxy Statementproposal to us not later than December 8,
1999 in orderFebruary 27, 2001 and
not earlier than January 29, 2001.
A shareholder who intends to be considered for inclusion inpresent a proposal at the Company's proxy statement
and form of proxy relating to that meeting.
14
PCLCM-PS-98
PIERCE LEAHY CORP.
631 Park Avenue, King of Prussia, Pennsylvania 194062001 Annual Meeting
of Shareholders -- May 14, 1999
Proxy Solicited on Behalffor inclusion in our 2001 proxy statement and proxy card
relating to that meeting must submit the proposal by December 29, 2000. In order
for the proposal to be included in the proxy statement, the shareholder
submitting the proposal must meet certain eligibility standards and comply with
certain procedures established by the SEC, and the proposal must comply with the
requirements as to form and substance established by applicable laws and
regulations. The proposal must be mailed to our principal executive office, at
the address stated herein, and should be directed to the attention of the Chief
Financial Officer.
By Order of the Board of Directors,
GARRY B. WATZKE, SECRETARY
April 28, 2000
25
DETACH HERE
PROXY
IRON MOUNTAIN INCORPORATED
745 ATLANTIC AVENUE
BOSTON, MASSACHUSETTS 02111
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned revoking all prior proxies, hereby appoints C. RICHARD REESE, J. Peter PiercePETER PIERCE and
Joseph P. Linaugh as Proxies,JOHN F. KENNY, JR., and each of them, acting individually, with power
of substitution to each, to vote for and on behalfas proxies of the undersigned, each
with the power to appoint his substitute, and hereby authorizes a majority of
them, or any one if only one be present, to represent and to vote, as
designated on the reverse hereof, all the Common Stock, $.01 par value per
share, of Iron Mountain Incorporated held of record by the undersigned or
with respect to which the undersigned is entitled to vote or act at the
1999
Annual Meeting of Shareholders of PIERCE LEAHY CORP. to be held at the
Sheraton Valley Forge Hotel, 1160 First Avenue, King of Prussia, Pennsylvania
19406, on Friday, May 14, 1999,June 1, 2000 at 10:00 a.m.,
and atlocal time, or any adjournment or postponement thereof. The undersigned hereby directs the said proxies to vote in
accordance with their judgment on any matters which may properly come before the
Annual Meeting, all as indicated in the Notice of Annual Meeting, receipt of
which is hereby acknowledged, and to act on the following matters set forth in
such notice as specified by the undersigned.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED ASIN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER(S).SHAREHOLDER. IF NO DIRECTION IS GIVEN,MADE, THIS PROXY
WILL BE VOTED "FOR"FOR ALL OF THE NOMINEES FOR DIRECTORDIRECTORS LISTED IN PROPOSAL 1 AND "FOR"FOR PROPOSAL
2.
- --------------------- --------------------
SEE REVERSE CONTINUED AND TO BE SIGNED SEE REVERSE
SIDE ON REVERSE SIDE SIDE
- --------------------- --------------------
[LOGO OF IRON MOUNTAIN INCORPORATED]
Dear Shareholder April 28, 2000
It is a pleasure to invite you to the Company's 2000 Annual Meeting in
Boston, Massachusetts on Thursday, June 1, 2000, at 10:00 a.m., local time,
at the offices of Sullivan & Worcester LLP, One Post Office Square, 23rd
Floor, Boston, Massachusetts.
The Annual Report to Shareholders, Notice of Meeting, proxy statement
and form of proxy are included herein. The matters listed in the Notice of
Meeting are described in detail in the proxy statement.
The vote of every shareholder is important. Mailing your completed proxy
will not prevent you from voting in person at the meeting if you wish to do
so.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY IN THE ENCLOSED
ENVELOPE.
Please sign exactly as your name(s) appear(s) on the booksMAIL YOUR PROXY. YOUR COOPERATION WILL BE
GREATLY APPRECIATED.
Your Board of Directors and management look forward to greeting those
shareholders who are able to attend.
Sincerely,
C. RICHARD REESE
Chairman of the Company. Joint
owners should each sign personally. TrusteesBoard and
other fiduciaries should
indicate the capacityChief Executive Officer
DETACH HERE
/X/ Please mark
votes as in
which they sign, and where more than one name appears,
a majority must sign. If a corporation, this signature should be that of an
authorized officer who should state his or her title.
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
- -------------------------------------- ------------------------------------
- -------------------------------------- ------------------------------------
- -------------------------------------- ------------------------------------
X PLEASE MARK HERE
AS IN THIS EXAMPLEexample.
- ------------------------ 1. To elect two directors to hold office until the For All With- For All
PIERCE LEAHY CORP. annual meeting of shareholders in 2002. Nominees hold Except
- ------------------------
Douglas B. Huntley [ ] [ ] [ ]
Delbert S. Conner
NOTE: If you do not wish your shares voted "For" a particular nominee, mark the "For All Except"
box and strike a line through the nameElection of the nominee. Your shares will be voted forfollowing Directors: 2. Ratification of the remaining
nominee.
CONTROL NUMBER:
RECORD DATE SHARES:
For Against Abstain
2. To ratifyselection by the appointmentFOR AGAINST ABSTAIN
Board of Directors of Arthur / / / / / /
NOMINEES: (01) Kent P. Dauten, Andersen LLP as the Company's independent
(02) Arthur D. Little, public accountants for 1999. [ ] [ ] [ ]2000.
(03) J. Peter Pierce and
(04) C. Richard Reese 3. To transactIn their discretion, the Proxies
are authorized to vote upon such other
FOR WITHHOLD business as may properly come before the meeting.
--------------------/ / / /
/ / ___________________________________ MARK HERE IF YOU PLAN TO ATTEND THE MEETING / /
For all nominees except as
noted above MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT / /
Note: Please be sure to sign and date this Proxy. Date
- --------------------------------------------------------------------- Mark box at rightexactly as your name appears hereon.
Joint owners should each sign. When signing as attorney,
executor, administrator, trustee or guardian, please give
full title as such. If a corporation, please sign in full
corporate name by an authorized officer or if a partnership,
please sign in full partnership name by an address change or comment has [ ]
been noted on the reverse side of this card.
- ---------------------------------- --------------------------------
Shareholder sign here Co-owner sign here
DETACH CARD DETACH CARDauthorized
person.
Signature: ____________________ Date: ______________ Signature ___________________ Date: _________
PIERCE LEAHY CORP.
Dear Shareholder,
Please take note of the important information enclosed with this Proxy Ballot.
There are a number of issues related to the management and operation of your
Corporation that require your immediate attention and approval. These are
discussed in detail in the enclosed proxy materials.
Your vote counts, and you are strongly encouraged to exercise your right to vote
your shares.
Please mark the boxes on this proxy card to indicate how your shares will be
voted. Then sign the card, detach it and return your proxy vote in the enclosed
postage paid envelope.
Your vote must be received prior to the Annual Meeting of Shareholders, May 14,
1999.
Thank you in advance for your prompt consideration of these matters.
Sincerely,
Pierce Leahy Corp.