<PAGE>
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] 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 (S) 240.14a-11(c) or (S) 240.14a-12
Pierce Leahy Corp.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[_] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------------------------
(3) Filing Party:
-------------------------------------------------------------------------
(4) Date Filed:
-------------------------------------------------------------------------
Notes:
Reg. (S) 240.14a-101.
SEC 1913 (3-99)
<PAGE>
PIERCE LEAHY CORP.
631 Park Avenue
King of Prussia, PA 19406
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
to be held on Friday, May 14, 1999
The Annual Meeting of Shareholders of Pierce Leahy Corp. will be held on
Friday, May 14, 1999, at 10:00 a.m., at the Sheraton Valley Forge Hotel, 1160
First Avenue, King of Prussia, Pennsylvania 19406, for the following purposes:
1. To elect two directors to hold office until the annual meeting of
shareholders in 2002.
2. To ratify the appointment of Arthur Andersen LLP as the Company's
independent public accountants for 1999.
3. To transact such other business as may properly come before the
meeting.
The Board of Directors has fixed the close of business on March 17, 1999 as
the record date for the meeting. Only shareholders of record at that time are
entitled to notice of and to vote at the meeting and any adjournment or
postponement thereof. In the event that the 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 proxy is solicited by the Board of Directors 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 Board of
Directors urges you to sign, date and return the enclosed proxy card promptly.
The return of the enclosed proxy card will not affect your right to vote in
person if you choose to attend the meeting.
Joseph P. Linaugh
Secretary
April 6, 1999
<PAGE>
PIERCE LEAHY CORP.
631 Park Avenue
King of Prussia, PA 19406
----------------
PROXY STATEMENT
for
Annual Meeting of Shareholders
May 14, 1999
----------------
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Pierce Leahy Corp. for use at the
Company's annual meeting of shareholders which will be held on the date, at
the time and place, and for the purposes set forth in the foregoing notice.
This Proxy Statement, the foregoing notice and the enclosed proxy card are
first being sent to shareholders on or about April 6, 1999.
The Board of Directors does not intend to bring any matter before the
meeting except those as specifically indicated in the notice and does not know
of anyone else who intends to do so. If any other matters properly come before
the meeting, however, the persons named in the enclosed proxy card, or their
duly constituted substitutes acting at the meeting, will be authorized 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 revoked at any time prior to its exercise by notifying the
Secretary in writing, by delivering a duly executed proxy bearing a later
date, or by attending the meeting and voting in person.
VOTING SECURITIES AND SECURITY OWNERSHIP
Outstanding Shares and Voting Rights
At the close of business on March 17, 1999, the record date fixed for the
determination of shareholders entitled to notice of and to vote at the
meeting, 17,036,581 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 be entitled to vote. There are no other classes of voting securities
outstanding. The presence at the meeting, in person or by proxy, of holders of
shares entitled to cast at least a majority of the votes that may be cast by
all shares of Common Stock outstanding as of the record date 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.
Abstentions and broker "non-votes" are counted as present and entitled to
vote for purposes of determining whether a quorum is present at the meeting. A
broker "non-vote" occurs when the nominee holding shares for a beneficial
owner does not vote on a particular proposal because the nominee does not have
discretionary voting power with respect to that item and has not received
instructions from the beneficial owner. A plurality of the votes duly cast is
required for the election of directors (i.e., the nominees receiving the
greatest number of votes will be elected). Abstentions or broker "non-votes"
are not counted for purposes of the election of directors. The affirmative
vote by the holders of a majority 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.
<PAGE>
Security Ownership of Principal Shareholders
The following table sets forth certain information with respect to the
beneficial ownership as of March 17, 1999 of each person who was known to the
Company to be the beneficial owner of more than 5% of the Common Stock. Each
of the shareholders named below has sole voting and investment power with
respect to such shares, unless otherwise indicated.
<TABLE>
<CAPTION>
Common Stock
---------------------------
Name and Address of
Beneficial Owner Number of Shares Percent
------------------- ---------------- -------
<S> <C> <C>
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
</TABLE>
- --------
(1) A total of 7,621,345 shares of Common Stock are either held in a Voting
Trust pursuant to a Voting Trust Agreement dated June 24, 1997 (as
amended or restated from time to time, the "Voting Trust") or are subject
to proxies (the "Proxies") granted under such Agreement. Leo W. Pierce,
Sr. and J. Peter Pierce are the Trustees of the Voting Trust and the
persons granted voting rights under the Proxies and, as such, each has
shared 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 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 interests in the
Voting Trust 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 of the foregoing shareholders is c/o Pierce Leahy Corp.,
631 Park Avenue, King of Prussia, PA 19406.
(2) Mr. Leo W. Pierce, Sr. has a direct beneficial interest in the 383,813
shares of Common Stock held in the Voting Trust and 3,000 shares owned
directly by him which are not subject to the Voting Trust, and, as such,
has sole dispositive 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. In such capacity, Mr. Pierce has shared voting
and dispositive power with respect to such shares. Mr. Pierce disclaims
beneficial ownership 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 wife 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
<PAGE>
(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) The information is based on a Schedule 13G, dated January 19, 1999, of
Thomas W. Smith and Thomas N. Tryforos filed with the Securities 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 198,489 shares and
Mr. Tryforos beneficially owns an additional 17,596 shares. The address
of Messrs. Smith and Tryforos is 323 Railroad Avenue, Greenwich, CT
06830.
(10) The information is based on a Schedule 13G, dated January 22, 1999, of
Palisades Capital Management, L.L.C. filed with the Securities and
Exchange Commission. Based on its Schedule 13G, Palisades Capital
Management, L.L.C. beneficially owns 1,166,200 shares 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.
3
<PAGE>
Security Ownership of Management
The following table sets forth certain information with respect to the
beneficial ownership as of March 17, 1999 of (i) each director, (ii) each of
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.
<TABLE>
<CAPTION>
Number of Percent of
Name of Beneficial Owner Shares(1) Class
------------------------ --------- ----------
<S> <C> <C>
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%
</TABLE>
- --------
* 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) Includes 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 owned 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
<PAGE>
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 successors 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:
<TABLE>
<CAPTION>
Director Term
Name Age Since Expires Positions with the Company
---- --- -------- ------- --------------------------
<S> <C> <C> <C> <C>
Class II Directors
Douglas B. Huntley.. 38 1994 1999 Vice President, Chief Financial
Officer and Director
Delbert S. Conner... 69 1990 1999 Director
Class III Directors
Leo W. Pierce, Sr... 80 1957 2000 Chairman of the Board
J. Anthony Hayden... 54 1997 2000 Director
Class I Directors
J. Peter Pierce..... 53 * 2001 President, Chief Executive Officer
and Director
Alan B. Campell..... 47 1994 2001 Director
Thomas A. Decker.... 53 1997 2001 Director
</TABLE>
- --------
* Mr. J. Peter Pierce has served as a director since 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 the President of the Company. From
August 1989 to March 1993, he was 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
<PAGE>
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 officers 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.
6
<PAGE>
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
<PAGE>
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth the cash compensation paid 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's five other
highest paid executive officers (together with the Chief Executive Officer,
the "Named Executives") for services to the Company in 1996, 1997 and 1998:
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation
---------------------------------- --------------
Other Annual All Other
Name and Principal Bonus Compensation Awards/Options Compensation
Position Year Salary ($) ($) ($) (#) ($)
- ------------------ ---- ---------- ------- ------------ -------------- ------------
<S> <C> <C> <C> <C> <C> <C>
J. Peter Pierce......... 1998 250,000 110,000 -- -- 4,059(1)
President and Chief
Executive 1997 250,000 87,760 -- -- 7,122(1)
Officer 1996 251,485 93,400 -- -- 6,967(1)
Ross M. Engelman........ 1998 130,000 60,000 -- -- 2,464(2)
Vice President,
Operations--South 1997 130,000 45,635 -- 31,773 5,403(2)
1996 130,000 65,000 -- 54,014 5,216(2)
J. Michael Gold......... 1998 130,000 60,000 -- -- 2,468(3)
Vice President, 1997 130,000 45,635 -- 31,773 4,092(3)
Operations--
Northeast 1996 130,000 65,000 -- 54,014 3,739(3)
Douglas B. Huntley...... 1998 130,000 60,000 -- -- 2,468(4)
Vice President, Chief
Financial 1997 130,000 45,635 -- 31,773 5,442(4)
Officer 1996 130,000 65,000 -- 54,014 5,231(4)
Joseph A. Nezi.......... 1998 130,000 112,000(5) -- 22,500 1,982(6)
Vice President, Sales
and 1997 130,000 97,635(5) -- -- 6,335(6)
Marketing 1996 130,000 92,370(5) -- 37,068 6,256(6)
Christopher J.
Williams............... 1998 130,000 60,000 -- -- 2,559(7)
Vice President,
Operations--West 1997 130,000 45,635 -- 31,773 5,442(7)
1996 130,000 65,000 -- 54,014 5,339(7)
</TABLE>
- --------
(1) Included in such amounts for 1998, 1997 and 1996, respectively, are
$2,400, $2,250 and $2,268 representing an employer match under the
Company's 401(k) Plan and $1,659, $1,872 and $1,699 in net premiums for a
guaranteed term life insurance policy on behalf of Mr. Pierce. In
addition, included in such amounts for 1997 and 1996, respectively, are
$3,000 and $3,000 representing contributions made by the Company under its
Profit Sharing Plan. The Company anticipates that it will make a
contribution under the Profit Sharing Plan with respect to 1998, but the
amount of such contribution has not yet been determined.
(2) Included in such amounts for 1998, 1997 and 1996, respectively, are
$2,296, $2,245 and $2,249 representing an employer match under the 401(k)
Plan, $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 1997 and 1996, respectively, are $3,000 and $2,809
representing contributions made by the Company under the Profit Sharing
Plan. The Company anticipates that it will make a contribution under the
Profit Sharing Plan with respect to 1998, but the amount of such
contribution has not yet been determined.
(3) Included in such amounts for 1998, 1997 and 1996, respectively, are
$2,302, $900 and $750 representing an employer match under the 401(k)
Plan, $166, $192 and $191 in net premiums for a guaranteed term life
insurance policy on behalf of Mr. Gold. In addition, included in such
amounts for 1997 and 1996, respectively, are $3,000 and $2,798
representing contributions made by the Company under the Profit Sharing
Plan. The Company anticipates that it will make a contribution under the
Profit Sharing Plan with respect to 1998, but the amount of such
contribution has not yet been determined.
8
<PAGE>
(4) Included in such amounts for 1998, 1997 and 1996, respectively, are
$2,302, $2,250 and $2,250 representing an employer match under the 401(k)
Plan, $166, $192 and $191 in net premiums for a guaranteed term life
insurance policy on behalf of Mr. Huntley. In addition, included in such
amounts for 1997 and 1996, respectively, are $3,000 and $2,790
representing contributions made by the Company under the Profit Sharing
Plan. The Company anticipates that it will make a contribution under the
Profit Sharing Plan with respect to 1998, but the amount of such
contribution has not yet been determined.
(5) Includes $52,000, $52,000 and $27,370 paid as commissions in 1998, 1997
and 1996, respectively.
(6) Included in such amounts for 1998, 1997 and 1996, respectively, are $957,
$2,250 and $2,260 representing an employer match under the 401(k) Plan,
$1,025, $1,135 and $996 in net premiums for a guaranteed term life
insurance policy on behalf of Mr. Nezi. In addition, included in such
amounts for 1997 and 1996, respectively, are $3,000 and $3,000
representing contributions made by the Company under the Profit Sharing
Plan. The Company anticipates that it will make a contribution under the
Profit Sharing Plan with respect to 1998, but the amount of such
contribution has not yet been determined.
(7) Included in such amounts for 1998, 1997 and 1996, respectively, are
$2,302, $2,250 and $2,250 representing an employer match under the 401(k)
Plan, $257, $192 and $191 in net premiums for a guaranteed term life
insurance policy on behalf of Mr. Williams. In addition, included in such
amounts for 1997 and 1996, respectively, are $3,000 and $2,898
representing contributions made by the Company under the Profit Sharing
Plan. The Company anticipates that it will make a contribution under the
Profit Sharing Plan with respect to 1998, but the amount of such
contribution has not yet been determined.
Stock Option Grants
The following table contains information concerning grants of stock options
to the Chief Executive Officer and to each of the other Named Executives
during 1998:
Option Grants in 1998
<TABLE>
<CAPTION>
Potential
Realizable
Value at
Assumed Annual
Individual Grants Rates of Stock
------------------------------------------------- Price
Number of Appreciation
Securities % of Total for Option
Underlying Options Granted Exercise Term(2)
Options to Employees in Price Expiration ---------------
Name Granted(#)(1) 1998 ($/Sh) Date 5% 10%
- ---- ------------- --------------- -------- ---------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
J. Peter Pierce......... -- -- -- -- -- --
Ross M. Engelman........ -- -- -- -- -- --
J. Michael Gold......... -- -- -- -- -- --
Douglas B. Huntley...... -- -- -- -- -- --
Joseph A. Nezi.......... 22,500 15.4 20.50 1/1/2008 290,025 735,075
Christopher J.
Williams............... -- -- -- -- -- --
</TABLE>
- --------
(1) The options were granted under the Company's 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
Stock when the options were granted. Assumed rates of appreciation are not
necessarily indicative of future stock performance.
9
<PAGE>
Stock Option Exercises and Holdings
The following table sets forth the value of options held by each of the
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, 1998
<TABLE>
<CAPTION>
Number of Unexercised Value of Unexercised
Options at December 31, In-the-Money Options at
Shares Value 1998 (#) December 31, 1998 ($)(1)
Acquired on Realized ------------------------- -------------------------
Name Exercise (#) ($) Exercisable Unexercisable Exercisable Unexercisable
---- ------------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
J. Peter Pierce......... -- -- -- -- -- --
Ross M. Engelman........ -- -- 107,394 68,417 2,174,735 1,371,077
J. Michael Gold......... -- -- 107,394 68,417 2,174,735 1,371,077
Douglas B. Huntley...... -- -- 107,394 68,417 2,174,735 1,371,077
Joseph A. Nezi.......... -- -- 68,843 80,749 1,393,128 1,283,877
Christopher J.
Williams............... -- -- 107,394 68,417 2,174,735 1,371,077
</TABLE>
- --------
(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 on December 31, 1998 ($25.50) and the exercise
price of the options, multiplied by the number of options.
10
<PAGE>
Stock Performance Graph
The following graph compares the percentage change in the cumulative total
return on the Common Stock during the period from the commencement of public
trading of the Common Stock on July 1, 1997 until December 31, 1998, and the
cumulative total return on the S&P 500 Index and the Russell 2000 Index during
such period. The comparison assumes $100 was invested at the beginning of such
period in Common Stock and in each of the foregoing indices and assumes the
reinvestment of 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 Compensation Committee
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
<PAGE>
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 in the records management industry.
12
<PAGE>
Executive Compensation Tax Deductibility
Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Code"), generally limits the deductible amount of annual compensation paid to
certain individual executive officers to no more than $1 million. The
Committee does not deem Section 162(m) of the Code to be applicable to the
Company at this time. The Committee will continue to review tax consequences
as well as other relevant consideration in connection with compensation
decisions.
Submitted by the Compensation
Committee:
Delbert S. Conner
Thomas A. Decker
Certain Transactions
The Company leases from four separate limited partnerships its corporate
headquarters in King of Prussia, Pennsylvania and its facilities in 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. The lease on the Company's corporate headquarters expires on
April 30, 2003, without any renewal options. 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-
year renewal options. The aggregate rental payments by the Company for such
properties during 1998 was $901,264.
The Company believes that the terms of its leases with the related parties
are as favorable to the Company as those generally available from unaffiliated
third parties. There are no plans by the Company to lease additional
facilities from officers, directors or other affiliated parties.
The Company provides an annual pension in the amount of $96,000 to Leo W.
Pierce, Sr. and to his spouse, if she survives him.
The Company has entered into a tax indemnification agreement with the
shareholders of the Company prior to its initial public offering which
provides for: (i) the distribution to such shareholders of cash equal to the
product of the Company's taxable income for the period from January 1, 1997
until the date the Company's initial public offering was completed and the sum
of 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
<PAGE>
SOLICITATION OF PROXIES
The Company will bear the cost of the solicitation of the Board of
Directors' proxies for the meeting, including the cost of preparing,
assembling and mailing proxy materials, the handling and tabulation of proxies
received, and charges of brokerage houses and other institutions, nominees and
fiduciaries in forwarding such materials to beneficial owners. In addition to
the mailing of the proxy materials, such solicitation may be made in person or
by telephone, telegraph or telecopy by directors, officers or regular
employees of the Company, or by a professional proxy solicitation organization
engaged by the Company.
SHAREHOLDER PROPOSALS
Shareholder proposals intended to be presented at the 2000 Annual Meeting of
Shareholders must be received by the Secretary of the Company at the address
appearing on the first page of this Proxy Statement not later than December 8,
1999 in order to be considered for inclusion in the Company's proxy statement
and form of proxy relating to that meeting.
14
<PAGE>
PCLCM-PS-98
<PAGE>
PIERCE LEAHY CORP.
631 Park Avenue, King of Prussia, Pennsylvania 19406
Annual Meeting of Shareholders -- May 14, 1999
Proxy Solicited on Behalf of the Board of Directors
The undersigned, revoking all prior proxies, hereby appoints J. Peter Pierce and
Joseph P. Linaugh as Proxies, and each of them acting individually, with power
of substitution to each, to vote for and on behalf of the undersigned 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, at 10:00 a.m., and at 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 AS DIRECTED BY THE UNDERSIGNED
SHAREHOLDER(S). IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED "FOR" THE
NOMINEES FOR DIRECTOR LISTED IN PROPOSAL 1 AND "FOR" PROPOSAL 2.
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 books of the Company. Joint
owners should each sign personally. Trustees and other fiduciaries should
indicate the capacity 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?
- -------------------------------------- ------------------------------------
- -------------------------------------- ------------------------------------
- -------------------------------------- ------------------------------------
<PAGE>
X PLEASE MARK HERE
AS IN THIS EXAMPLE
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
- ------------------------ 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 name of the nominee. Your shares will be voted for the remaining
nominee.
CONTROL NUMBER:
RECORD DATE SHARES:
For Against Abstain
2. To ratify the appointment of Arthur Andersen, LLP as
the Company's independent public accountants for 1999. [ ] [ ] [ ]
3. To transact such other business as may properly come before the meeting.
--------------------
Please be sure to sign and date this Proxy. Date
- --------------------------------------------------------------------- Mark box at right if 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 CARD
</TABLE>
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.
