<PAGE> 1
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
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 Rule 14a-11(c) or Rule 14a-12
LASON, INC.
- -------------------------------------------------------------------------------
(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):
[X] 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:
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(4) Date filed:
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<PAGE> 2
LASON, INC.
NOTICE OF 1997 ANNUAL MEETING OF SHAREHOLDERS
TO THE SHAREHOLDERS:
NOTICE IS HEREBY GIVEN that the 1997 Annual Meeting of Shareholders of
Lason, Inc., a Delaware corporation, will be held at the Northfield
Hilton, Troy, Michigan 48098 on Monday, May 19, 1997, at 10:00 a.m., local
time, for the following purposes:
1. To elect two directors to serve for three years and until
their successors are elected.
2. To transact such other business as may properly come before
the meeting and any adjournment(s) thereof.
Only shareholders of record at the close of business on April 7, 1997
are entitled to notice of and to vote at the Annual Meeting.
All shareholders are cordially invited to attend the meeting in
person. However, to ensure your representation at the meeting, you are urged
to mark, sign and return the enclosed Proxy as promptly as possible in the
postage prepaid envelope enclosed for that purpose. Any shareholder attending
the meeting may vote in person, even though he or she previously has returned a
Proxy.
William J. Rauwerdink
Secretary
Troy, Michigan
April 18, 1997
YOUR VOTE IS IMPORTANT
TO ENSURE YOUR REPRESENTATION AT THE MEETING, YOU ARE
REQUESTED TO COMPLETE, SIGN AND DATE THE ENCLOSED PROXY AS PROMPTLY AS
POSSIBLE AND RETURN IT IN THE ENCLOSED ENVELOPE.
<PAGE> 3
LASON, INC.
1997 PROXY STATEMENT
INFORMATION CONCERNING SOLICITATION AND VOTING
GENERAL
The enclosed Proxy is solicited on behalf of Lason, Inc. (the
"Company") for use at the 1997 Annual Meeting of Shareholders ("Annual
Meeting") to be held on Monday, May 19, 1997, at 10:00 a.m., local time, and at
any adjournment(s) or postponement(s ) thereof, for the purposes set forth
herein and in the accompanying Notice of 1997 Annual Meeting of Shareholders.
The Annual Meeting will be held at the Northfield Hilton, Troy, Michigan 48098.
The Company's principal executive offices are located at 1305 Stephenson
Highway, Troy, Michigan 48083 and its telephone number is (810) 597-5800.
These proxy solicitation materials were mailed on or about April 18, 1997, to
all shareholders entitled to vote at the Annual Meeting.
RECORD DATE AND OUTSTANDING SHARES
Shareholders of record at the close of business on April 7, 1997 (the
"Record Date") are entitled to notice of and to vote at the meeting. At such
Record Date, 8,811,480 shares of the Company's Common Stock, $0.01 par value,
were outstanding. The closing sales price for the Company's Common Stock on
the Record Date, as reported on the Nasdaq National Market System, was $18.50
per share. The Company was aware of the following beneficial owners of more
than 5% of its Common Stock as of the Record Date:(1)
<TABLE>
<CAPTION>
Name and Address Number of Shares Percentage
of Beneficial Owner: Owned of Shares: (2)
------------------- ----- ---------
<S> <C> <C>
Golder, Thoma, Cressey, Rauner
Fund IV, L.P. (3) (4) . . . . . . . . . . . . . . . . 2,500,002 27.4%
6100 Sears Tower
Chicago, Illinois 60606
Allen J. Nesbitt (3) (5) . . . . . . . . . . . . . . . 881,310 9.7%
28400 Schoolcraft
Livonia, Michigan 48150
Robert A. Yanover (3) (6) . . . . . . . . . . . . . . 476,442 5.2%
133 Quayside Drive
Jupiter, Florida 33477
Colin W. L. Armstrong (3) (7) . . . . . . . . . . . . 637,970 7.0%
116 Laurel Court
Pointe Vedra Beach, Florida 32082
</TABLE>
- ---------------
2
<PAGE> 4
(1) This disclosure is based on information obtained from Schedule 13Gs
filed with the Securities and Exchange Commission (the "SEC") on
February 14, 1997.
(2) The percentages shown include shares which may be acquired pursuant
to presently exercisable and outstanding stock options.
(3) Each of these parties has entered into a Voting Agreement providing
for the election of directors (See "Election of Directors" and
"Security Ownership of Management"). Each such party disclaims
beneficial ownership of shares of Common Stock owned by each other
such party.
(4) See "Security Ownership of Management" with respect to certain
principals of Golder, Thoma, Cressey, Rauner Fund IV, L.P. ("GTCR Fund
IV").
(5) The shares are held by the Allen J. Nesbitt Living Trust dated
December 7, 1994.
(6) The shares are held by Yanover Associates Limited Partnership.
(7) Includes 415,185 shares of Common Stock held by the Joseph Jonathan
Yanover and Jennifer D. Yanover Irrevocable Trust dated January 5,
1993 and 210,000 shares of Common Stock held by the Joseph Jonathan
Yanover and Jennifer D. Yanover Irrevocable Trust No. 2 dated August
6, 1996 over which Mr. Armstrong, as Trustee, has investment and voting
control. In addition, Mr. Armstrong has the right to dispose of
12,785 shares of Common Stock.
REVOCABILITY OF PROXIES
Any proxy given pursuant to this solicitation may be revoked by the
person giving it at any time before its use by delivering to the Company a
written notice of revocation or a duly executed proxy bearing a later date or
by attending the meeting and voting in person.
VOTING AND SOLICITATION
The presence, in person or by proxy, of the holders of a majority of
the votes entitled to be cast by the shareholders entitled to vote generally at
the Annual Meeting is necessary to constitute a quorum. Abstentions and broker
"non-votes" are counted as present and entitled to vote for purposes of
determining a quorum. A broker "non-vote" occurs when a 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 largest number of votes will be
elected). Abstentions and broker "non-votes" are not counted for purposes of
the election of Directors.
The affirmative vote by the holders of the majority of the Common
Stock 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 Annual
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
Annual Meeting.
The cost of soliciting proxies will be borne by the Company. Proxies
may be solicited on behalf of the Company by Directors, officers or employees
of the Company, without additional compensation, in person or by telephone,
facsimile transmission, telegram or electronic transmission. The Company
retains Corporate Communications, Inc. to assist in the management of the
Company's investor relations and other shareholder
3
<PAGE> 5
communications issues. As part of its duties, Corporate Communications, Inc.
may assist in the solicitation of proxies.
In accordance with the regulations of the SEC, the Company will also
reimburse brokerage houses and other custodians, nominees and fiduciaries for
their expenses incurred in sending proxies and proxy material to the beneficial
owners of Common Stock.
ADVANCE NOTICE OF PROCEDURES
Under the Company's By-Laws, nominations for Director may be made only
by the Board, or by a shareholder entitled to vote who has delivered notice to
the Company not less than 120 nor more than 150 days prior to the first
anniversary of the annual meeting for the preceding year. For purposes of the
first Annual Meeting, the By-Laws provide that May 19, 1997 is deemed the first
anniversary of the annual meeting for the previous year.
The By-Laws also provide that no business may be brought before an
annual meeting except as specified in the notice of the meeting (which includes
shareholder proposals that the Company is required to set forth in its Proxy
Statement under Securities and Exchange Commission ("SEC") Rule 14a-8) or as
otherwise brought before the meeting by or at the direction of the Board or by a
shareholder entitled to vote who has delivered notice to the Company (containing
certain information specified in the By-Laws) within the time limits described
above for delivering notice of a nomination for the election of a Director.
These requirements are separate and apart from, and in addition to, the SEC's
requirements that a shareholder must meet to have a shareholder proposal
included in the Company's Proxy Statement under SEC Rule 14a-8.
A copy of the full text of the By-Law provisions discussed above may
be obtained by writing to the Secretary of the Company.
SUBMISSION OF SHAREHOLDER PROPOSALS
It is expected that the 1998 Annual Meeting of the Company will be
held in May 1998. Shareholders who intend to present proposals at the 1998
Annual Meeting, and who wish to have such proposals included in the Company's
Proxy Statement for the 1998 Annual Meeting, must ensure that such proposals are
received by the Secretary of the Company at 1305 Stephenson Highway, Troy,
Michigan 48083 not later than January 2, 1998. Such proposals must meet the
requirements set forth in the rules and regulations of the SEC to be eligible
for inclusion in the Company's 1998 Proxy Statement.
4
<PAGE> 6
PROPOSAL I
ELECTION OF DIRECTORS
GENERAL
The Board of Directors is divided into three classes, whose terms
expire at successive annual meetings. The Board currently consists of seven
Directors. Two Directors will be elected at the Annual Meeting to serve for a
term expiring at the Company's Annual Meeting in the year 2000.
The persons named in the enclosed proxy intend to vote such proxy for
the election of each of the two nominees named below, unless the shareholder
indicates on the proxy card that the vote should be withheld from any or all of
such nominees. Each nominee elected as a Director will continue in office until
his successor has been duly elected and qualified, or until his earlier death,
resignation or retirement.
The Company expects each nominee for election as a Director at the
Annual Meeting to be able to accept such nomination. If any nominee is unable
to accept such nomination, proxies will be voted in favor of the remainder of
those nominated and may be voted for substitute nominees. Each nominee
is currently a Director of the Company.
Certain shareholders who own in the aggregate approximately 51.6% of
the outstanding shares have entered into a Voting Agreement which provides for,
among other things, the designation of and voting with respect to the election
of directors to the Board (see "Record Date and Outstanding Shares" and
"Security Ownership of Management").
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE NOMINEES
LISTED BELOW.
NOMINEES
Set forth below is the principal occupation of, and certain other
information regarding, such nominees and other Directors whose terms of office
will continue after the Annual Meeting.
NOMINEES FOR TERMS EXPIRING IN 2000
GARY L. MONROE has served as Chief Executive Officer of the Company
since February 1996 and as a Director of the Company since he joined the
Company in September 1995. From September 1995 to February 1996, Mr. Monroe
served as Executive Vice President of the Company. From May 1992 to September
1995, Mr. Monroe served as President of Kodak Imaging Services, Inc., a
subsidiary of Eastman Kodak Co. From August 1990 to May 1992, Mr. Monroe
served as Director of Finance and Strategic Planning of the Health Sciences
Division of Eastman Kodak Co. Age: 42.
BRUCE V. RAUNER has served as a Director of the Company since January
1995. Mr. Rauner is a principal and has been with Golder, Thoma, Cressey,
Rauner, Inc. ("GTCR"), an affiliate of GTCR Fund IV, since 1981. Mr. Rauner is
also a director of ERO, Inc., COREStaff, Inc. and Polymer Group, Inc. Age: 41.
5
<PAGE> 7
DIRECTORS WHOSE TERMS WILL EXPIRE IN 1998
ALLEN J. NESBITT has served as President and as a Director of the
Company and its predecessor since inception. From 1977 to 1985, Mr. Nesbitt
served as Vice President of 3 P.M., Inc. Age: 50.
JOSEPH P. NOLAN has served as a Director of the Company since July
1996. Mr. Nolan is a principal and has been with GTCR since February 1994.
From May 1990 to January 1994, Mr. Nolan was Vice President Corporate Finance
at Dean Witter Reynolds, Inc. Age: 32.
FARIBORZ GHADAR has served as a Director of the Company since January
1997. Dr. Ghadar has served as the Merrill Lynch William A. Schreyer Chair of
Global Management, Policies and Planning and Director of the Center for Global
Business Study at The Pennsylvania State University Smeal College of Business
Administration since August 1994. From September 1992 to June 1994, Dr. Ghadar
was Professor and Chairman of the International Business Department at The
George Washington School of Business and Public Management. Dr. Ghadar is also
Chairman of the Intrados/International Management Group, a Washington-based
business, offering executive development programs and strategic assessment
services. Age: 50.
DIRECTORS WHOSE TERMS WILL EXPIRE IN 1999
DONALD M. GLEKLEN has served as a Director of the Company since August
1995. Mr. Gleklen has served as the President of Jocard Financial Services,
Inc. since February 1995. From March 1994 to February 1995, Mr. Gleklen served
as special counsel to Robert J. Brobyn & Associates, Attorneys at Law. From
September 1984 to March 1994, Mr. Gleklen served as Senior Vice President -
Corporate Development of Mediq Incorporated, a publicly traded company in the
healthcare industry. Mr. Gleklen is also a director of Gandalf Technologies,
Inc., Nutramax Products, Inc., NewWest Eyeworks, Inc. and Microleage Multimedia,
Inc. Age: 60.
ROBERT A. YANOVER has served as Chairman of the Board and as Director
of the Company and its predecessor since inception. Mr. Yanover also serves as
president of Computer Leasing Company of Michigan, Inc. See "Executive
Compensation - Certain Transactions with Management." Mr. Yanover is founder
and former president of 3 P.M., Inc. Age: 60.
BOARD MEETING AND COMMITTEES
The Board of Directors held a total of 3 meetings during the year
ended December 31, 1996. The Board of Directors has an Audit Committee, a
Compensation Committee and an Option Committee.
The Audit Committee currently consists of Messrs. Gleklen, Nolan and
Yanover. The Audit Committee was formed in October 1996 and held no meetings
in 1996. The Audit Committee selects the Company's independent accountants
and is primarily responsible for approving the services performed by the
Company's
6
<PAGE> 8
independent accountants, and for reviewing and evaluating the Company's
accounting policies and its system of internal accounting controls.
The Compensation Committee currently consists of Messrs. Gleklen and
Rauner. The Compensation Committee was formed in October 1996 and held no
meetings in 1996. The Compensation Committee determines the Company's
executive compensation policies, including the salaries, compensation and
benefits of executive officers and employees of the Company.
The Option Committee currently consists of Messrs. Gleklen, Nolan
and Rauner and held 1 meeting during the year ended December 31, 1996. The
Option Committee is responsible for administering and granting options in
accordance with the Company's 1995 Stock Option Plan.
During the year ended December 31, 1996, each incumbent director
attended at least 75% of the aggregate number of meetings of the Board of
Directors and meetings of the committees of the Board on which he served.
DIRECTOR COMPENSATION
Each Director who is not an employee of the Company receives $1,000
for attendance of each meeting of the Board and for each committee meeting
attended on a day other than a Board meeting. Directors are reimbursed for
out-of-pocket expenses incurred in connection with attending meetings.
Directors may also be awarded options. During the year ended December 31,
1996, in connection with Dr. Ghadar's election to the Board, the Board
granted him an option under the Company's 1995 Stock Option Plan for 5,000
shares of Common Stock at an exercise price equal to the fair market value
on the date of grant ($19.75 per share).
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
For the year ended December 31, 1996, compensation of executive
officers of the Company was determined by the Board, which included Messrs.
Yanover, Monroe and Nesbitt. The 1995 Stock Option Plan is administered by the
Option Committee consisting of Messrs. Gleklen, Nolan and Rauner.
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth the beneficial ownership of shares of
Common Stock of the Company as of the Record Date, by each director, by each of
the executive officers named in the Summary Compensation Table, and by
directors and executive officers as a group. The shares and percentages shown
below include shares which may be acquired by the persons listed pursuant to
presently execisable and outstanding stock options. Except as otherwise
indicated below, each of the persons named in the table has sole voting and
investment power with respect to the securities beneficially owned by him as
set forth opposite his name:
7
<PAGE> 9
<TABLE>
<CAPTION>
Number of Shares Approximate
Name: Beneficially Owned: Percentage Owned:
---- ------------------ ----------------
<S> <C> <C>
Robert A. Yanover (1) (2) . . . . . . 476,442 5.2%
Gary L. Monroe (4) . . . . . . . . . . 170,452 1.9%
Allen J. Nesbitt (1) (3) . . . . . . . 881,310 9.7%
William J. Rauwerdink(4) . . . . . . . 11,000 *
Brian E. Jablonski (4) . . . . . . . . 12,000 *
Donald M. Gleklen (5) . . . . . . . . 7,500 *
Fariborz Ghadar (6) . . . . . . . . . -- *
Bruce V. Rauner (7) . . . . . . . . . 2,500,002 27.4%
Joseph P. Nolan (7) . . . . . . . . . 2,500,502 27.4%
All Executive Officers and
Directors of the Company
as a group (9 persons) . . . . . . . 4,058,706 44.5%
</TABLE>
-------------------------
* Indicates less than 1% of the outstanding shares.
(1) Each of these parties has entered into an agreement providing
for the election of directors. Under that certain Voting
Agreement entered into in October 1996, Mr. Yanover, Mr.
Nesbitt, the Joseph Jonathan Yanover and Jennifer D. Yanover
Irrevocable Trust Dated January 5, 1993, the Joseph Jonathan
Yanover and Jennifer D. Yanover Irrevocable Trust No.2 Dated
August 6, 1996, and the James A. Nesbitt and Jennifer Rebecca
Nesbitt Irrevocable Trust effective as of January 1, 1996 (the
"Group"), and GTCR Fund IV, agree to vote their shares so that
the Board at all times shall consist of two directors
designated by GTCR Fund IV, two directors designated by the
Group, the Company's Chief Executive Officer and two outside
directors jointly designated by GTCR Fund IV and the Group. As
of the Record Date, GTCR Fund IV and the Group hold, in the
aggregate, approximately 51.6% of the Common Stock and are able
to elect all of the members of the Board. Each party to the
Voting Agreement disclaims beneficial ownership of shares of
Common Stock owned by each other party.
(2) Includes 476,442 shares of Common Stock held by Yanover
Associates Limited Partnership.
(3) Includes 881,310 shares of Common Stock held by the Allen J.
Nesbitt Living Trust dated December 7, 1994.
(4) Includes 170,452 shares and 12,000 shares of Common Stock of
Messrs. Monroe and Jablonski, respectively, issuable upon
exercise of exercisable options. The address of Messrs. Monroe
Rauwerdink and Jablonski is 1305 Stephenson Highway, Troy,
Michigan 48083.
(5) Includes 2,500 shares of Common Stock issuable upon exercise
of exercisable options. The address of this holder is 212
Jeffrey Lane, Newton Square, Pennsylvania 19023.
(6) The address of this Director is 555 Orlando Avenue, State
College, Pennsylvania, 16803
(7) Includes 2,500,002 shares of Common Stock held by GTCR Fund
IV, of which GTCR IV, L.P. is the general partner. See
"Record Date and Outstanding Shares" above. Each of Messrs.
Rauner and Nolan is a principal of Golder, Thoma, Cressey,
Rauner, Inc., the general partner of GTCR IV, L.P., and
therefore may be deemed to share investment and voting control
over the shares of Common Stock held by GTCR Fund IV. Each of
Messrs. Rauner and Nolan disclaims beneficial ownership of the
shares of Common Stock owned by GTCR Fund IV. The address of
each of these holders is 6100 Sears Tower, Chicago, Illinois
60606.
8
<PAGE> 10
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table shows, as to the Chief Executive Officer and as to
each of the other four most highly compensated executive officers whose salary
plus bonus exceeded $100,000 during the last fiscal year, information
concerning all compensation paid for services to the Company in all capacities
during the last two fiscal years: (1)
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term Compensation
Annual Compensation
Award(s) Payouts
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Other
Annual Restricted Securities All Other
Compen- Stock Underlying LTIP Compen-
Name and Principal Year Salary (2) Bonus (3) sation Award Options (#) Payouts sation
Position
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Robert A. Yanover 1996 $ 65,000 $ 49,000 -- -- -- -- $334,651(4)
Chairman of the Board 1995 65,000 61,759 -- -- -- -- 5,929
Gary L. Monroe 1996 $175,000 $ 65,945 -- -- 20,000(5) -- $ 3,243(4)
Chief Executive Officer 1995 46,723 -- -- -- 170,452 -- 40,000
Allen J. Nesbitt 1996 $133,279 $ 73,514 -- -- -- -- $338,191(4)
President 1995 130,000 116,071 -- -- -- -- 10,562
William J. Rauwerdink (6) 1996 $ 85,673 $ 11,670 -- -- 70,000(6) -- $ 232(4)
Executive Vice President 1995 -- -- -- -- --
Chief Financial Officer --
Treasurer and Secretary
Brian E. Jablonski (7) 1996 $64,904 -- -- -- 75,000(7) -- $ 50,102(4)
Executive Vice President 1995 -- -- -- -- -- -- --
of Marketing and Sales
</TABLE>
- ---------------
9
<PAGE> 11
(1) The Company was incorporated in Delaware in January 1995.
(2) Salary includes amounts deferred, if any, pursuant to the
Company's 401(k) plan.
(3) Amounts stated include bonus amounts earned in 1996 by the
executive officers.
(4) Represents expenses of $5,791, $2,835 and $9,295 incurred by
the Company in connection with operation of an automobile by
Messrs. Yanover, Monroe and Nesbitt, respectively, a matching
contribution of $3,166 by the Company to each of Messrs.
Yanover's and Nesbitt's 401(k) accounts, a contribution of
$1,123, $408, $1,152, $232 and $102 by the Company for excess
life insurance on Messrs. Yanover, Monroe, Nesbitt, Rauwerdink
and Jablonski, respectively, reimbursed relocation expenses
for 1996 of $50,000 paid under the terms of Mr. Jablonski's
employment agreement and forgiveness of receivables of
$324,571 and $324,578 with respect to Messrs. Yanover and
Nesbitt (See "Certain Transactions with Management").
(5) Awarded on December 17, 1996.
(6) Mr. Rauwerdink became Executive Vice President, Chief
Financial Officer, Treasurer and Secretary on May 6, 1996 at a
base annual salary of $135,000. Options with respect to
55,000 shares were awarded to Mr. Rauwerdink on May 6, 1996
and options with respect to 15,000 shares were awarded on
December 17, 1996.
(7) Mr. Jablonski became Executive Vice President of Marketing and
Sales on June 16, 1996 at a base annual salary of $135,000.
Options with respect to 60,000 Shares were awarded to Mr.
Jablonski on July 1, 1996 and options with respect to 15,000
Shares were awarded on December 17, 1996.
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth certain information regarding grants of
stock options made during the year ended December 31, 1996 to the executive
officers named in the Summary Compensation Table who received such grants:
10
<PAGE> 12
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Individual Grants Potential Realizable Value
at Assumed Annual Rates of
Stock Price Appreciation for
(a) (b) (c) (d) (e) (f)
Option Term(1)
Number of
Securities Percent of Total Market
Underlying Options Granted Exercise Price on
Name Options to Employees in Price per Date of Expiration
Granted(2) Fiscal Year Share(3)(4) Grant(3) Date 0% 5% 10%
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Gary L. Monroe 20,000 5.2% $16.75 $16.75 12/17/03 - $136,379 $ 317,820
William J. Rauwerdink 55,000 14.4% $ 3.20 $10.85 5/6/03 $420,750 $663,687 $ 986,897
15,000 3.9 16.75 16.75 12/17/03 - 102,284 238,365
Brian E. Jablonski 60,000 15.7% $ 3.20 $10.85 7/1/03 $459,600 $724,022 $1,076,615
15,000 3.9 16.75 16.75 12/17/03 - 102,284 238,365
</TABLE>
- ---------------
(1) Potential realizable value is based on the assumption that Common
Stock of the Company appreciates at the annual rate shown (compounded
annually) from the date of grant until the expiration of the option
term (seven years). These numbers are calculated based on the
requirements promulgated by the SEC and do not represent an estimate
by the Company of future stock price growth.
(2) The stock options granted to Messrs. Monroe, Rauwerdink and Jablonski,
with respect to the underlying 20,000, 15,000 and 15,000 shares of
Common Stock, respectively, were granted on December 17, 1996. The
stock option granted to Mr. Rauwerdink, with respect to the underlying
55,000 shares of Common Stock was granted on May 6, 1996. The stock
option granted to Mr. Jablonski, with respect to the underlying 60,000
shares of Common Stock was granted on July 1, 1996. All stock options
granted have seven year terms and become exercisable with respect to
20% of the shares covered thereby beginning one year after the date of
grant and 20% on each anniversary date thereafter, with full vesting
occurring on the fifth anniversary of the date of grant. However, with
respect to the options for the 55,000 shares awarded to Mr. Rauwerdink
and the 60,000 shares awarded to Mr. Jablonski, 20% of such shares
became vested and exercisable on the date of the IPO, and 20% vest on
each anniversary of the IPO.
(3) Options with respect to the December 17, 1996 awards were granted at
an exercise price equal to the fair market value of the Company's
Common Stock, as determined by reference to the closing price
reported on the Nasdaq National Market System on the date of grant.
Options granted prior to the Company's initial public offering ("IPO")
were granted at a price determined by the Board of Directors.
(4) The exercise price and tax withholding obligations may be paid in cash
and, subject to certain conditions or restrictions, by delivery of
already owned shares , or pursuant to a cashless exercise procedure
under which the optionee provides irrevocable instructions to a
brokerage firm to sell the purchased shares and to remit to the
Company, out of the sale proceeds, an amount equal to the exercise
price plus all applicable withholding taxes.
11
<PAGE> 13
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION
VALUES
The following table sets forth, for each of the executive officers
named in the Summary Compensation Table above who holds options, certain
information regarding the exercise of stock options during the year ended
December 31, 1996 and the value of options held at year end:
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e)
Number of Securities Underlying
Shares Unexercised Options at Year-End Value of Unexercised In-the-Money
Acquired on Value Exercisable/Unexercisable Options at Year-End(1)
Name Exercise Realized(1) Exercisable/Unexercisable
<S> <C> <C> <C> <C>
Gary L. Monroe - - 170,452/20,000 $3,426,085/$75,000
William J. Rauwerdink 11,000 $ 190,300 0/59,000 $0/$817,450
Brian E. Jablonski - - 12,000/63,000 $207,600/$886,650
</TABLE>
- ---------------
(1) Market value of underlying securities at exercise date or year end, as
the case may be, minus the exercise price.
EMPLOYMENT CONTRACTS AND CHANGE-IN-CONTROL ARRANGEMENTS
Mr. Monroe. The Company and Mr. Monroe are parties to an employment
agreement dated as of August 7, 1996 (the "Monroe Employment Agreement"), which
has a term of two years. The Monroe Employment Agreement provides that Mr.
Monroe will serve as Chief Executive Officer of the Company at an annual salary
of $175,000 plus a bonus targeted at 50% of his annual salary and will receive
options to purchase 170,452 shares of Common Stock. The Monroe Employment
Agreement also provides that if Mr. Monroe's employment is terminated or his
duties materially reduced, he would be entitled to severance payments at an
annualized rate equal to his base salary plus the greater of his actual bonus
for the preceding year or 50% of his base salary. Such severance payments
shall be paid for the greater of one year or the remaining term of the
agreement.
Mr. Rauwerdink. On April 30, 1996, the Company made a written offer
of employment to Mr. Rauwerdink, which Mr. Rauwerdink accepted. Pursuant to
the offer, the Company named Mr. Rauwerdink as its Chief Financial Officer,
Executive Vice President, Secretary and Treasurer at an annual salary of
$135,000 plus a bonus targeted at 50% of his annual salary, committed to grant
him an option to purchase 55,000 shares of its Common Stock, and agreed to
provide him severance payments equal to 90 days salary and bonus if the
Company were to terminate his employment without cause.
12
<PAGE> 14
Mr. Jablonski. On June 12, 1996, the Company made a written offer of
employment to Mr. Jablonski, which Mr. Jablonski accepted. Pursuant to the
offer, the Company agreed to name Mr. Jablonski as its Vice President of
Marketing and Sales at an annual salary of $135,000 plus a bonus targeted at
50% of his annual salary, committed to grant him an option to purchase 60,000
shares of its Common Stock and agreed to pay certain of his relocation
expenses.
CERTAIN TRANSACTIONS WITH MANAGEMENT
In connection with the acquisition of the predecessor to the Company
in 1995, the Company loaned certain officers, including Mr. Yanover and Mr.
Nesbitt, funds to pay certain of their tax liabilities. During the year ended
December 31, 1996, the largest aggregate amount of indebtedness outstanding of
Messrs. Yanover and Nesbitt (including interest) to the Company, was $649,141
and $649,155, respectively. Of these respective amounts, prior to the end of
1996, Messrs. Yanover and Nesbitt paid 50% to the Company and the Company
forgave the other 50%, so that no indebtedness of Messrs. Yanover and Nesbitt
was outstanding at December 31, 1996.
In connection with and immediately prior to the consummation of the
Company's initial public offering ("IPO") in October 1996, each share of Class A
Common Stock, including the shares of Class A Common Stock held by each of the
officers and directors of the Company, was converted into one share of Common
Stock, and each share of Class B Common Stock, all of which was held by GTCR
Fund IV, was converted into approximately 1.3 shares of Common Stock. Each
share of Common Stock was then split into 2.5 shares of Common Stock. Concurrent
with the consummation of the IPO, the Company used a portion of the proceeds
from the IPO to redeem 692,047 shares of Common Stock owned by GTCR Fund IV at
an aggregate price of approximately $11.8 million. GTCR Fund IV acquired its
interest in the Company in January 1995 for $10.0 million or approximately $3.13
per share of Common Stock.
The Company leases property and a building in Livonia, Michigan, which
includes approximately 27,460 square feet of commercial space, from Mart
Associates, a Michigan general partnership ("Mart"). Mr. Yanover owns 43.34%
of Mart and is its managing partner. Mr. Nesbitt owns 33.33% of Mart and is
one of its partners. For the year ended December 31, 1996, the Company paid
$191,100 in rent for such property and building. In addition, the Company
leases certain equipment from Computer Leasing Company of Michigan, Inc.
("Computer Leasing"). Mr. Yanover owns 50% of Computer Leasing and serves as
its president and Mr. Colin W.L. Armstrong (See "Record Date and Outstanding
Shares") owns the other 50% and serves as its vice president. For the year
ended December 31, 1996, the Company paid $184,390 for such operating leases.
The Company believes that each of the leases is at market terms and rates.
The Company purchases printing services from Hatteras Printing, Inc.
("Hatteras"). Hatteras is owned by the wife of Mr. Nesbitt. For the year
ended December 31, 1996, the Company paid Hatteras $1,425,358 for such printing
services. The Company believes that it paid market prices for such printing
services. In addition, the Company sold copying and graphic art services to
Hatteras in the amount of $76,859 for the year ended December 31, 1996. Such
services were sold at the Company's current prices.
Until August 6, 1996, Laurence B. Deitch served as trustee of the
Joseph Jonathan Yanover and Jennifer D. Yanover Irrevocable Trust dated January
5, 1993, which owns approximately 4.5% of the outstanding shares of Common
Stock. Mr. Deitch is also a shareholder in the law firm of Seyburn, Kahn, Ginn,
13
<PAGE> 15
Bess, Deitch and Serlin, P.C. For the year ended December 31, 1996, the
Company paid Seyburn, Kahn, Ginn, Bess, Deitch and Serlin, P.C. approximately
$363,105 for legal services.
In the future, all material business transactions between the Company
and any executive officer or director of the Company or any member of their
immediate family will be subject to review and approval by a majority of the
Company's disinterested directors. Additional transactions of the nature
described above may take place in the ordinary course of business in the
future.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's officers (as defined in Rule 16a-1(f)), directors, and
persons who own more than ten percent of a registered class of the Company's
equity securities to file reports of ownership and changes in ownership with the
SEC. Such persons are required by SEC regulations to furnish the Company with
copies of all Section 16(a) forms they file. Based solely on its review of the
copies of such forms received by it and written representations from certain
reporting persons that they have complied with the relevant filing requirements,
the Company believes that all filing requirements applicable to its officers,
directors and 10% shareholders were complied with during the year ended December
31, 1996, except for a late filing by Dr. Ghadar of a Form 3 and a late
filing of a Form 4 by Mr. Gleklen.
REPORT OF THE BOARD ON EXECUTIVE COMPENSATION
The following is the Report of the Board of Directors of the Company
describing the compensation policies and rationale applicable to the
Company's executive officers with respect to compensation paid to such
executive officers for the year ended December 31, 1996. The
information contained in the report shall not be deemed to be
"soliciting material" or to be "filed" with the Securities and
Exchange Commission nor shall such information be incorporated by
reference into any future filing under the Securities Act of 1933, as
amended, or the Securities Exchange Act of 1934, as amended, except to
the extent that the Company specifically incorporates it by reference
into such filing.
EXECUTIVE COMPENSATION POLICY
The Company's IPO was consummated, and a Compensation Committee was
appointed, in October 1996. Accordingly, all matters of executive
compensation for the year ended December 31, 1996 were determined by the Board
of Directors of the Company.
The Company's executive compensation program is designed to be aligned
with annual and long-term business plans, corporate performance and enhancement
of shareholder value. To this end, the Company's compensation strategy ties a
significant portion of executive compensation to individual performance and
overall Company success, including enhancement of shareholder value. The
principal objectives of this strategy are (i) to provide a competitive total
compensation package that enables the Company to attract and retain key
executive talent; (ii) integrate incentive compensation programs with the
Company's annual and longer-term strategic planning; (iii) provide variable
compensation opportunities that are linked to the performance of the Company;
and, (iv) link executive reward to shareholder total investment return.
14
<PAGE> 16
COMPONENTS OF EXECUTIVE COMPENSATION
The Company and certain of its executive officers are parties to
employment agreements which generally provide for a base salary, a bonus and
the right to receive stock options. See "Employment Contracts and Change-
In-Control Arrangements." In addition to the base salary, bonus and stock
options provided in the Monroe Employment Agreement, the Chief Executive
Officer of the Company was awarded an option for an additional 20,000 shares in
December 1996 by the Option Committee (together with other officers of the
Company). The option grants are intended to align the interest of management
more closely with those of the shareholders of the Company by increasing stock
ownership by management and tying a meaningful portion of compensation to the
performance of the Company's shares of Common Stock.
In addition, the full compensation package afforded by the Company to
the executive officers generally includes various perks such as an automobile
allowance, insurance and other customary benefits. The Company also maintains
a broad-based employee benefit 401(k) plan, in which the Company's executive
officers may participate on the same terms as other employees who meet
applicable eligibility criteria, subject to legal limitations on the amounts
that may be contributed or the benefits that may be payable under the plan.
The Company may match a portion of each employee's contributions to this plan.
BASE SALARY
It is the Company's intention to compensate its executive officers,
including the Chief Executive Officer, competitively within the industry. Base
salaries for new executive officers of the Company are initially determined by
evaluating the responsibilities of the position held, the experience of the
individual and by reference to the competitive market place for executive
talent. It is anticipated that annual salary adjustments following the
contract terms will be based on overall corporate performance, a comparison of
executive compensation to peer group compensation and a subjective evaluation
of the level of performance of each executive officer.
BONUS
The Company established a Management Bonus Plan for 1996 (the "1996
Bonus Plan"). Participants in the 1996 Bonus Plan were selected by the
Company's Chief Executive Officer. Each participant in the 1996 Bonus Plan was
entitled to receive a bonus payment if the Company as a whole or, in the case
of certain participants, a defined portion of the Company with which such
participant is principally involved, exceeds a predetermined financial target
with respect to a quarter. If 85% or more of the target is obtained for a
quarter, a pro rata portion of the bonus is payable, and if less than 85% of
the target is obtained, no bonus is paid with respect to that quarter. Bonuses
that are not obtained in any quarter are not carried over to any subsequent
quarter. For the year ended, December 31, 1996, Messrs. Yanover, Monroe,
Nesbitt, Rauwerdink and Jablonski were awarded bonuses of: $49,000, $65,945,
$73,514, $11,670 and $0, respectively. Bonuses aggregating $622,973
were awarded to all eligible participants under the 1996 Bonus Plan.
15
<PAGE> 17
STOCK OPTIONS
The Company's 1995 Stock Option Plan serves as a long-term incentive
plan for the executive officers. The objective of the 1995 Stock Option Plan
is to align executive officers' long-range interests with those of all
shareholders. The approach used is designed to enhance the creation of
shareholder value over the long term since the full benefit of the compensation
package cannot be realized unless strong company performance occurs over a
number of years. The Option Committee and, in certain instances the Chief
Executive Officer, is responsible for determining the individuals to whom
grants should be made, the timing of grants and the number of shares subject to
each option.
SUMMARY
The Board of Directors believes that its executive compensation
philosophy of paying its executive officers well by means of competitive base
salaries and annual bonus and long-term incentives, as described in this
report, serves the interests of the Company and the Company's shareholders.
Fariborz Ghadar Gary L. Monroe Bruce V. Rauner
Donald M. Gleklen Allen J. Nesbitt Robert A. Yanover
Joseph P. Nolan
PERFORMANCE GRAPH
Set forth below is a graph comparing the monthly percentage change in
the cumulative return to the shareholders of the Company's Common Stock with
the cumulative return of Nasdaq Composite Index and a Peer Group Index
for the period commencing October 1996 and ending on December 31, 1996. The
information contained in the performance graph shall not be deemed "soliciting
material" or to be 'filed" with the Securities and Exchange Commission, nor
shall such information be incorporated by reference into any future filing
under the Securities Act or Exchange Act, except to the extent that the Company
specifically incorporates it by reference into such filing. The stock price
performance on the following graph is not necessarily indicative of future
stock price performance.
16
<PAGE> 18
COMPARISON OF THREE MONTH CUMULATIVE TOTAL RETURN*
AMONG LASON, INC., NASDAQ COMPOSITE INDEX
AND A PEER GROUP
[CHART GOES HERE]
<TABLE>
<CAPTION>
October 1996 December 1996
<S> <C> <C>
Lason, Inc. $100 $120.59
Nasdaq Composite Index $100 $106.08
Peer Group* $100 $103.63
</TABLE>
- ---------------
*The Peer Group Index consists of Donnelley Enterprise Solutions
Incorporated, F.Y.I. Incorporated, IKON Office Solutions, Inc. and Iron
Mountain Incorporated. The cumulative total returns of each company have been
weighted according to each company's stock market capitalization as of December
31, 1996.
NOTICE OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The Audit Committee of the Board of Directors in January 1997 selected
Coopers & Lybrand, L.L.P., independent accountants, to audit the consolidated
financial statements for the year ended December 31, 1996 and for the current
year ending December 31, 1997. Notwithstanding the election, the Audit
Committee, in its discretion, may direct appointment of new independent
accountants at any time during the year, if the Audit Committee feels that such
a change would be in the best interests of the Company and its shareholders. A
representative of Coopers & Lybrand, L.L.P. is expected to be present at the
meeting with the opportunity to make a statement if such representative desires
to do so and is expected to be available to respond to appropriate questions.
17
<PAGE> 19
OTHER MATTERS
The Company knows of no other matter to be submitted to the Annual
Meeting. If any other matters properly come before the Annual Meeting, it is
the intention of the persons named in the enclosed form of Proxy to vote the
shares they represent in accordance with their best judgment.
THE BOARD OF DIRECTORS
Dated: April 18, 1997
18
<PAGE> 20
LASON, INC.
ANNUAL MEETING OF SHAREHOLDERS - MAY 19, 1997
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints William J. Rauwerdink and Laurence B. Deitch,
and each of them, as attorneys and proxies of the undersigned, with full power
of substitution, for and in the name, place and stead of the undersigned, to
represent the undersigned and to vote, as directed below, all shares of Common
Stock of Lason, Inc. (the "Company") held by the undersigned as of April 7,
1997, at the Company's 1997 Annual Meeting of Shareholders to be held at the
Northfield Hilton, Troy, Michigan 48098 on Monday, May 19, 1997, at 10:00 a.m.,
local time, or at any postponement(s) or adjournment(s) of the meeting.
PROPOSAL 1: Election of Directors
Nominees: Gary L. Monroe and Bruce V. Rauner for a
three year term expiring in 2000.
[_] FOR all nominees listed above
(except as marked to the contrary below)
[_] WITHHOLD AUTHORITY
to vote for all nominees listed above
To withhold authority to vote for any individual nominee(s),
clearly print his name in this space.
______________________________________________________
THIS PROXY WILL BE VOTED AS DIRECTED ABOVE.
UNLESS YOU DIRECT OTHERWISE, THIS PROXY WILL BE VOTED
"FOR" EACH OF THE NOMINEES.
(continued on reverse side)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(continued from reverse side)
In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting, including any continuation of
the meeting caused by any adjournment(s) or any postponement(s) of the meeting.
Please mark, date and sign, and return promptly this proxy in the enclosed
envelope, which requires no postage if mailed in the U.S.A. When signing as
attorney, executor, administrator, trustee or guardian, or in any other
representative capacity, please give your full title as such. Each joint owner
must sign the proxy.
Signature(s) of shareholder(s) _______________________ Date _____________, 1997
