SCHEDULE 14A
                                 Proxy Statement Pursuant to Section 14(a) of the Securities
                    Exchange Act of 1934 (Amendment No.  )
        
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[_]  Preliminary Proxy Statement         

[_]  CONFIDENTIAL, FOR USE(RULE 14A-101)

                    INFORMATION REQUIRED IN PROXY STATEMENT
                            SCHEDULE 14A INFORMATION

          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 

[_]  Definitive Additional Materials 

[_]  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
      Filed by the Registrant /X/
      Filed by a Party other than the Registrant / /

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      / /        Preliminary Proxy Statement
      / /        Confidential, For Use of the Commission Only (as permitted
                 by Rule 14a-6(e)(2))
      /X/        Definitive Proxy Statement
      / /        Definitive Additional Materials
      / /        Soliciting Material Pursuant to Rule 14a-11(c) or
                 Rule 14a-12

                    IRON MOUNTAIN INCORPORATED
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                 (Name of Registrant as Specified In Its Charter)

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                    (Name of Person(s) Filing Proxy Statement,
                           if Other Than the Registrant)
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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.