<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)(1) 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:
- --------------------------------------------------------------------------------
<PAGE> 2
LASON, INC.
NOTICE OF 1999
ANNUAL MEETING OF SHAREHOLDERS
AND
PROXY STATEMENT
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<S> <C>
1999 Proxy Statement..............................................................................................1
The Three Proposals On Which You Are Voting.......................................................................3
Information about Nominees and Incumbent Directors................................................................7
Nominees for Terms Expiring in 2002...............................................................................7
Incumbent Directors -- Terms Expiring in 2001.....................................................................7
Incumbent Directors -- Terms Expiring in 2000.....................................................................8
Committees and Meetings of Directors .............................................................................8
Compensation Committee Interlocks and Insider Participation ......................................................9
Compensation of Directors ........................................................................................9
Certain Legal Proceedings .......................................................................................9
Security Ownership of Certain Beneficial Owners ..................................................................9
Security Ownership of Management ...............................................................................10
Section 16(a) Beneficial Ownership Reporting Compliance .........................................................11
Certain Transactions With Management ............................................................................11
Executive Compensation ..........................................................................................12
Summary Compensation Table ......................................................................................12
Option Grants in last Fiscal Year ...............................................................................13
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option Values ...............................14
Employment Contracts and Change in Control Arrangements..........................................................14
Report of the Board on Executive Compensation....................................................................15
Performance Graph ...............................................................................................16
Notice of Appointment of Independent Accountants ................................................................17
Other Matters ...................................................................................................17
Appendix A
</TABLE>
<PAGE> 4
[LASON, INC. LETTERHEAD]
April 29, 1999
Dear Shareholder,
You are cordially invited to attend our Annual Meeting of Shareholders at 10:00
a.m., Eastern Daylight Savings Time, on Thursday, May 27, 1999 at the Northfield
Hilton, 5500 Crooks Road, Troy, Michigan 48098.
The Annual Report, which is enclosed, summarizes Lason's major developments
during 1998 and includes the 1998 financial statements.
Whether or not you plan to attend the meeting, please complete and mail the
enclosed proxy card promptly so that your shares will be voted as you desire. IF
YOU WISH TO VOTE IN THE MANNER THE BOARD OF DIRECTORS RECOMMENDS, IT IS NOT
NECESSARY TO SPECIFY YOUR CHOICES ON THE PROXY CARD. SIMPLY SIGN, DATE AND
RETURN THE PROXY CARD IN THE ENCLOSED ENVELOPE.
Sincerely,
Gary L. Monroe
Chairman and Chief Executive Officer
<PAGE> 5
LASON, INC.
NOTICE OF 1999 ANNUAL MEETING OF SHAREHOLDERS
Date: May 27, 1999
Time: 10:00 a.m., Eastern Daylight Savings Time
Place: Northfield Hilton
Troy, Michigan 48098
We invite you to attend the Lason, Inc. Annual Meeting of Shareholders to:
1. Elect two Directors for three-year terms expiring in 2002 or
upon the election and qualification of their successors.
2. Approve an amendment to Lason's Amended and Restated
Certificate of Incorporation to increase the number of shares
of common stock which Lason is authorized to issue from
20,000,000 to 100,000,000.
3. Approve an amendment to Lason's 1998 Equity Participation Plan
to increase the number of shares reserved for issuance by
500,000 shares of common stock to an aggregate of 1,400,000
shares.
4. Transact any other business that is properly submitted before
the Annual Meeting or any adjournments of the Meeting.
The record date for the meeting is April 19, 1999 (the "Record Date"). Only
shareholders of record at the close of business on that date can vote at the
Annual Meeting. Lason mailed this Notice of Annual Meeting to those
shareholders.
A proxy statement, proxy card and annual report are enclosed with this Notice.
Whether or not you plan to attend the meeting and whether you own a few or many
shares of stock, the Board of Directors urges you to vote promptly. You may vote
by signing, dating and returning the enclosed proxy card.
A list of shareholders who can vote at the Annual Meeting will be available for
inspection by shareholders at the meeting and for ten days prior to the meeting
during regular business hours at Lason's offices at 1305 Stephenson Highway,
Troy, Michigan 48083.
Whether or not you plan to attend the meeting, the Board of Directors urges you
to vote promptly.
By Order of the Board of Directors,
William J. Rauwerdink
Executive Vice President and
Secretary
April 29, 1999
<PAGE> 6
LASON, INC.
1305 STEPHENSON HIGHWAY
TROY, MICHIGAN 48083
1999 PROXY STATEMENT
QUESTIONS AND ANSWERS
1. Q: WHAT IS A PROXY?
A: A proxy is a document, also referred to as a proxy card (which
is enclosed), by which you authorize someone else to cast your
vote. Lason's Board of Directors is soliciting this proxy. You
may also abstain from voting, if you so choose.
2. Q: WHAT IS A PROXY STATEMENT?
A: A proxy statement is the document the United States Securities
and Exchange Commission (the "SEC") requires to explain the
matters on which you are asked to vote. The proxy statement
and proxy card were mailed on or about April 29, 1999 to all
shareholders entitled to vote at the Annual Meeting.
3. Q: WHO CAN VOTE?
A: Only holders of shares of Lason's common stock at the close of
business on April 19, 1999 can vote at the Annual Meeting.
Each shareholder of record has one vote for each share of
common stock on each matter presented for a vote at the
meeting.
4. Q: WHAT WILL I VOTE ON AT THE MEETING?
A: At the Annual Meeting, shareholders will vote to:
1. Elect two Directors for three-year terms expiring in
2002 or upon the election and qualification of their
successors.
2. Approve an amendment to Lason's Amended and Restated
Certificate of Incorporation to increase the number
of shares of common stock which Lason is authorized
to issue from 20,000,000 to 100,000,000.
3. Approve an amendment to Lason's 1998 Equity
Participation Plan to increase the number of shares
reserved for issuance by 500,000 shares of common
stock to an aggregate of 1,400,000 shares.
4. Transact any other business that is properly
submitted before the Annual Meeting or any
adjournments of the meeting.
5. Q: HOW DOES THE BOARD OF DIRECTORS RECOMMEND I VOTE ON THE
PROPOSALS?
A: The Board of Directors recommends a vote FOR each of the
proposals.
6. Q: HOW CAN I VOTE?
A: You can vote in person or by proxy. To vote by proxy, sign,
date and return the enclosed proxy card. If you returned your
signed proxy card to Lason before the Annual Meeting, the
persons named as proxies on the card will vote your shares as
you directed. You may revoke a proxy at any time before the
proxy is voted by:
1
<PAGE> 7
1. Giving written notice of revocation to the Secretary
of Lason at the address listed in the fourth
paragraph of the Notice of 1999 Annual Meeting of
Shareholders;
2. Submitting another proxy that is properly signed and
later dated; or
3. Voting in person at the meeting (but only if the
shares are registered in Lason's records in the name
of the shareholder and not in the name of a broker,
dealer, bank or other third party).
7. Q: IS MY VOTE CONFIDENTIAL?
A: Yes, your vote is confidential. Only the inspectors of
election and certain employees associated with processing
proxy cards and counting the vote have access to your proxy
card. All comments you direct to management (whether written
on the proxy card or elsewhere) will remain confidential
unless you ask that your name be disclosed.
8. Q: WHAT IS A QUORUM?
A: There were 15,518,147 shares of Lason's common stock
outstanding on the Record Date. A majority of the outstanding
shares, or 7,759,074 shares, present or represented by proxy,
constitutes a quorum. A quorum must exist to conduct business
at the Annual Meeting.
9. Q: HOW DOES VOTING WORK?
A: If a quorum exists, nominees receiving the largest number of
votes cast, excluding abstentions and broker non-votes, will
be elected. A broker non-vote is a proxy a broker submits that
does not indicate a vote for some or all of the proposals
because the broker does not have discretionary voting
authority and the broker did not receive instructions as to
how to vote on those proposals. The amendment to the Amended
and Restated Certificate of Incorporation must receive the
favorable vote of a majority of the outstanding shares (with
an abstention counted as a vote against and a broker non-vote
not counted). The increase to the number of shares reserved
for The 1998 Equity Participation Plan must receive the
favorable vote of a majority of the shares voted (with an
abstention counted as a vote against and a broker non-vote not
counted).
Lason will vote properly executed proxies it receives prior to
the meeting in the way you have directed. If you do not
specify instructions, the shares represented by proxies will
be voted FOR the nominees for Directors, FOR the amendment to
Lason's Certificate of Incorporation and FOR the increase to
the number of shares reserved for The 1998 Equity
Participation Plan. No other proposals are currently scheduled
to be presented at the meeting.
10. Q: WHO PAYS FOR THE COSTS OF THE MEETING?
A: Lason pays the cost of preparing and printing the proxy
statement and soliciting proxies. Lason will solicit proxies
primarily by mail, but also may solicit proxies personally and
by telephone, facsimile or other means. Officers and regular
employees of Lason and its subsidiaries also may solicit
proxies, but will receive no additional compensation for
soliciting proxies, nor will their efforts result in more than
a minimal cost to Lason. Lason also will reimburse banks,
brokerage houses and other custodians, nominees and
fiduciaries for their out-of-pocket expenses for forwarding
solicitation material to beneficial owners of Lason's common
stock. Lason retains Corporate Communications, Inc. to assist
in Lason's investor relations and other shareholder
communication matters. As part of its duties, Corporate
Communications, Inc. may assist in the solicitation of
proxies.
2
<PAGE> 8
11. Q: WHEN ARE THE SHAREHOLDER PROPOSALS FOR THE 2000 ANNUAL MEETING
DUE?
A: All shareholder proposals to be considered for inclusion in
next year's proxy statement must be submitted in writing to
the Secretary, 1305 Stephen Highway, Troy, Michigan 48083 by
December 28, 1999.
Additionally, under Lason's bylaws, shareholders of Lason must
provide advance notice to Lason if they wish to nominate
persons for election as directors or propose items of business
at an annual meeting of Lason's shareholders. The shareholder
must deliver this notice not less than 120 nor more than 150
days prior to the first anniversary of the annual meeting of
the preceding year. These notice 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 Lason's proxy statement under SEC Rule 14a-8.
THE THREE PROPOSALS ON WHICH YOU ARE VOTING:
PROPOSAL 1: ELECTION OF DIRECTORS
Lason's Board of Directors is divided into three classes with each class of
directors elected to a three-year term of office. At each annual meeting of
shareholders, shareholders elect one class of directors for a three-year term to
succeed the class of directors whose term of office expires at that meeting.
This year you are voting on two candidates for directors. Lason's Board of
Directors has nominated Robert A. Yanover and William J. Rauwerdink. Mr. Yanover
currently serves as a Director. Mr. Rauwerdink is currently the Executive Vice
President, Chief Financial Officer, Treasurer and Secretary of Lason. Each of
the nominees has consented to his nomination and has agreed to serve as a
director of Lason, if elected.
If any director is unable to stand for nomination, Lason may vote the shares to
elect a substitute nominee or the number of directors to be elected at the
Annual Meeting may be reduced.
For more information on Lason's Board of Directors and these nominees, please
refer to pages 7, 8 and 9 of this Proxy Statement.
Lason's Board of Directors recommends a vote FOR these directors.
PROPOSAL 2: PROPOSAL TO AMEND LASON'S AMENDED AND RESTATED CERTIFICATE OF
INCORPORATION
OVERVIEW: On April 20, 1999, the Board of Directors approved a proposal to amend
Lason's Amended and Restated Certificate of Incorporation to increase the number
of shares of common stock which Lason is authorized to issue from 20,000,000 to
100,000,000. If adopted by the shareholders at this Annual Meeting, Lason will
file the amendment on the next business day after the Annual Meeting.
Appendix A to this Proxy Statement contains the text of the proposed amendment
to the Amended and Restated Certificate of Incorporation. The amendment will not
affect the number of authorized shares of preferred stock, which is 5,000,000
shares.
REASON FOR INCREASE IN NUMBER OF AUTHORIZED SHARES: Lason requires the increase
in authorized shares of common stock to enable Lason to maintain a number of
shares sufficient for its corporate purposes, including the issuance of shares
in connection with corporate business combinations, business acquisitions,
employee benefit programs and potential stock splits. As announced on March 25,
1999, Lason reached agreement to merge with M-R Group plc, a leading United
Kingdom based document and data management company. The agreement is subject to
a number of conditions including M-R Group shareholder approval and approval of
the High Court of Justice, Chancery Division, Companies Court in the United
Kingdom. In connection with the merger, M-R Group shareholders would receive
approximately 2,695,000 shares of Lason
3
<PAGE> 9
common stock. While Lason has sufficient authorized shares to cover this
conditional issuance, such issuance would leave Lason with an insufficient
number of authorized shares for future corporate purposes.
Although the issuance of shares of common stock in certain instances may have
the effect of forestalling a hostile takeover, Lason's Board of Directors does
not intend or view the increase in authorized common stock as an anti-takeover
measure. Lason is not aware of any proposed or contemplated transaction of this
type, and Lason's Board of Directors is not recommending this amendment to the
Amended and Restated Certificate of Incorporation in response to any specific
effort to obtain control of Lason. The authorized shares of common stock in
excess of those presently authorized and issued will be available for issuance
at such times and for such purposes as the Board of Directors may deem
advisable, subject to any action required by applicable laws or regulations.
The proposed amendment would increase the number of shares of common stock which
Lason is authorized to issue from 20,000,000 to 100,000,000. The additional
80,000,000 shares would be a part of the existing class of common stock and, if
and when issued, would have the same rights and privileges as the shares of
common stock presently issued and outstanding. The holders of common stock of
Lason are not entitled to preemptive rights or cumulative voting.
The Board of Directors recommends a vote FOR this proposal.
PROPOSAL 3: PROPOSAL TO AMEND THE 1998 EQUITY PARTICIPATION PLAN
OVERVIEW: On February 1, 1999, the Board of Directors approved a proposal to
amend Lason's 1998 Equity Participation Plan by increasing the number of shares
reserved for issuance thereunder by 500,000 shares of common stock to an
aggregate of 1,400,000 shares. The 1998 Equity Participation Plan was adopted by
the Board of Directors on January 27, 1998 and approved by shareholders on May
29, 1998.
As of March 31, 1999, 124,100 shares of common stock were available for issuance
under The 1998 Equity Participation Plan, options to purchase 775,900 shares
were outstanding, no options have been exercised, and no restricted stock has
been awarded. As of March 31, 1999, the current executive officers have been
granted options under The 1998 Equity Participation Plan to purchase 495,000
shares (63.8% of the total options granted to all executive officers and
employees). No non-employee director has been granted options under The 1998
Equity Participation Plan. See "Option Grants in Last Fiscal Year."
The 1998 Equity Participation Plan authorizes the Option Committee or the Board
of Directors (the "Committee") to grant incentive and non-statutory stock
options as well as restricted stock. The provisions of these options and
restricted stock rights are outlined below. The Board of Directors believes the
remaining shares under The 1998 Equity Participation Plan are insufficient to
accomplish the purposes of the Plan. Accordingly, the Board of Directors is
proposing the increase to the shares reserved under The 1998 Equity
Participation Plan. The essential features of The 1998 Equity Participation Plan
are outlined below.
PURPOSE: The purpose of The 1998 Equity Participation Plan is (i) to provide an
incentive for employees, consultants and non-employee directors to further the
growth and financial success of Lason by personally benefitting through the
ownership of shares of common stock; and (ii) to obtain and retain the services
of employees, consultants and non-employee directors considered essential to the
long-range success of Lason, by making available stock options and/or shares of
restricted stock.
ADMINISTRATION: The 1998 Equity Participation Plan is administered by the
Committee. Among other things, the Committee has the power to interpret The 1998
Equity Participation Plan, the stock option agreements issued thereunder and the
agreements pursuant to which restricted stock awards are granted. The Committee
may adopt such rules for the administration, interpretation and application of
The 1998 Equity Participation Plan as are consistent with The 1998 Equity
Participation Plan, and to interpret, amend or revoke any such rules.
4
<PAGE> 10
ELIGIBILITY: Officers, consultants and other employees (including employee
directors) of Lason and its subsidiaries and affiliates whom the Committee
believes have the potential to contribute to the future success of Lason, and
those non-employee directors who the Board of Directors believes have the
potential to contribute to the future success of Lason, shall be eligible to
receive awards under The 1998 Equity Participation Plan.
AWARD: The maximum number of shares of common stock which may be subject to a
stock option award and a restricted stock award under The 1998 Equity
Participation Plan to any individual in any calendar year shall not exceed
250,000 shares of common stock.
STOCK OPTIONS: The 1998 Equity Participation Plan permits the granting of stock
options that are either intended to qualify as incentive stock options or not
intended to so qualify and are non-statutory stock options. The Committee
determines whether stock options are to be incentive stock options or
non-statutory stock options and whether such stock options are to qualify as
performance-based compensation as described in Section 162(m)(4)(C) (see
reference below) of the Internal Revenue Code of 1986. The option exercise price
for each share covered by the option may be less than the fair market value of a
share of common stock on the date of grant; however, in the case of incentive
stock options or in the case of a grant to the chief executive officer and the
four other highest compensated executive officers, the price shall be no less
than 100% of the fair market value of a share of common stock at the time such
option is granted. The term of an option shall be determined by the Committee
provided, however, that in the case of incentive stock options, the term shall
not be more than 10 years from the date the incentive stock option is granted.
The period during which the right to exercise an option in whole or in part
vests will be set by the Committee. Each option is evidenced by a written stock
option agreement executed by the optionee. Upon exercise of an option, the
optionee makes full cash payment to Lason or another acceptable form of payment.
RESTRICTED STOCK: Restricted stock may be awarded to any participant whom the
Committee determines should receive such an award. The Committee may determine
the purchase price, if any, and other terms and conditions applicable to the
restricted stock. The purchase price may be no less than the par value of the
common stock ($0.01) unless otherwise permitted under Delaware state law. The
Committee may impose such conditions on the issuance of the restricted stock as
deemed appropriate. The Committee shall determine whether such stock options are
to qualify as performance-based compensation as described in Section
162(m)(4)(C) of the Internal Revenue Code. Restricted stock shall be issued only
pursuant to a written restricted stock agreement and shall contain such terms
and conditions as the Committee shall determine consistent with The 1998 Equity
Participation Plan. The shares of restricted stock may be placed into escrow by
the Committee or the Board of Directors, as applicable, and held until all the
restrictions imposed under the restricted stock agreement have been satisfied or
removed.
SECTION 162(M) OF THE INTERNAL REVENUE CODE: This Section precludes a public
corporation from taking a tax deduction for individual compensation in excess of
$1 Million dollars for its chief executive officer and its four other
highest-paid officers. This Section also provides for certain exemptions to this
limitation, specifically compensation that is performance based within the
meaning of Section 162(m). The Committee, however, reserves the right to award
compensation to its executives in the future that may not qualify under Section
162(m) as tax deductible compensation.
ADJUSTMENTS FOR STOCK DIVIDENDS, MERGERS, AND CHANGES IN CONTROL: In the event
of a stock dividend, stock split, reorganization, merger, or similar corporate
transaction (other than a change in control), the Committee is authorized to
make appropriate adjustments to prevent dilution or enlargement of the benefits
or potential benefits intended to be made available under The 1998 Equity
Participation Plan or with respect to an outstanding award. In the event of a
change in control as defined in The 1998 Equity Participation Plan (which
includes any person becoming the beneficial owner of a majority of the combined
voting power of Lason or over a period of 24 months or less, the then current
members of the Board of Directors ceasing for any reason to constitute a
majority of the Board of Directors), each option granted shall become
exercisable as to all shares covered thereby immediately prior to the
consummation of such change in control and the restrictions included in any
restricted stock granted shall be deemed rescinded and terminated.
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AMENDMENT OR TERMINATION OF THE 1998 EQUITY PARTICIPATION PLAN: The 1998 Equity
Participation Plan may be wholly or partially amended or modified, suspended or
terminated at any time from time to time by the Committee. However, without
approval of Lason's shareholders given within 12 months before or after the
action by the Committee, no action of the Committee may, except as otherwise
provided in The 1998 Equity Participation Plan, increase the limits of the
maximum number of shares which may be issued under The 1998 Equity Participation
Plan to any individual and no action of the Committee may be taken that would
otherwise require shareholder approval as a matter of law, regulation or rule.
No amendment, suspension, or termination of The 1998 Equity Participation Plan
shall, without the consent of the participants, alter or impair any rights or
obligations under any award theretofore granted, unless the award itself
expressly so provides.
FEDERAL INCOME TAX INFORMATION: The following is only a brief summary of the
effect of federal income taxation upon the recipient and Lason under The 1998
Equity Participation Plan based upon the Internal Revenue Code. This summary
does not purport to be complete and does not discuss the income tax laws of any
municipality, state or country outside of the United States in which a
participant may reside.
If any option granted under The 1998 Equity Participation Plan is an incentive
stock option, the optionee will recognize no income upon grant of the incentive
stock option and will incur no tax liability due to the exercise unless the
optionee is subject to the alternative minimum tax. Lason will not be allowed a
deduction for federal income tax purposes as a result of the exercise of an
incentive stock option regardless of the applicability of the alternative
minimum tax. Upon the sale or exchange of the shares at least two years after
the date of grant and at least one year after exercise of the option, any gain
(or loss) will be treated as a capital gain (or loss). If these holding periods
are not satisfied, the optionee will recognize ordinary income equal to the
difference between the exercise price and the lower of the fair market value of
the stock at the date of the option exercise or the sale price of the stock. A
different rule may operate to postpone the recognition date of ordinary income
upon such premature disposition if the optionee is subject to Section 16 of the
Securities Exchange Act of 1934. Lason will be entitled to a tax deduction in
the same amount as the ordinary income recognized by the optionee.
Options which do not qualify as incentive stock options are taxed as
non-statutory stock options. An optionee will not recognize any taxable income
at the time he or she is granted a non-statutory stock option. However, upon the
exercise of a non-statutory stock option, the optionee will recognize ordinary
income measured by the excess of the then fair market value of the shares over
the exercise price. In certain circumstances, where the shares are subject to a
substantial risk of forfeiture when acquired or where the optionee is subject to
Section 16 of the Securities Exchange Act of 1934, the date of taxation may be
deferred unless the optionee files an election with the Internal Revenue Service
under Section 83(b) of the Internal Revenue Code. The income recognized by an
optionee who is also an employee of Lason will be subject to tax withholding by
Lason by payment in cash or out of the current earnings paid to the optionee.
Upon sale of such shares by the optionee, any difference between the sales price
and the exercise price, to the extent not recognized as ordinary income as
outlined above, will be treated as capital gain (or loss). Lason will be
entitled to a tax deduction in the same amount as the ordinary income recognized
by the optionee with respect to shares acquired upon exercise of a non-statutory
stock option.
The grant of restricted stock will generally be subject to the tax consequences
discussed above for non-statutory stock options. At such times as the
restrictions on the stock lapses or the stock is sold, such shareholders will
recognize ordinary income to the extent of the fair market value of such stock
less the amount , if any, which is paid for the stock. The income recognized by
a shareholder who is an employee will be subject to tax withholding by Lason by
payment in cash or out of the current earnings paid to the employee. Lason will
be entitled to a tax deduction in the same amount as the ordinary income
recognized by the shareholder.
The Board of Directors recommends a vote FOR this proposal.
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<PAGE> 12
INFORMATION ABOUT NOMINEES AND INCUMBENT DIRECTORS
The following tables provide information about each nominee for election as a
Director and for each of the Directors whose term of office will continue after
the meeting.
NOMINEES FOR DIRECTORS -- TERMS EXPIRING IN 2002
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE DIRECTOR
NOMINEES AGE DURING PAST 5 YEARS AND OTHER DIRECTORSHIPS SINCE
<S> <C> <C> <C>
Robert A. Yanover 62 Private Investor; Chairman of the 1995
Board of Lason and its predecessor
(from its inception in 1985 to April
1998); President of Computer Leasing
Company of Michigan, Inc. See
"Certain Transactions with
Management," Founder and former
president of 3PM, Inc.
William J. Rauwerdink 49 Executive Vice President, Chief --
Financial Officer, Treasurer and
Secretary (since May 1996); Executive
Vice President, Chief Financial
Officer and Treasurer of The MEDSTAT
Group, Inc., a publicly traded
company in the healthcare information
industry (February 1993 to April
1995); partner, Detroit office of the
international accounting and
consulting firm of Deloitte & Touche
(1983 to 1993); Director of Mercy
Health Services, Inc., a non-profit
multi-state health care services
organization (since 1998). See
"Certain Legal Proceedings."
</TABLE>
INCUMBENT DIRECTORS -- TERMS EXPIRING IN 2001
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE DIRECTOR
NOMINEES AGE DURING PAST 5 YEARS AND OTHER DIRECTORSHIPS SINCE
<S> <C> <C> <C>
Allen J. Nesbitt 52 Private Investor; President of Lason 1995
and its predecessor (from its
inception in 1985 until April 1997);
Vice President of 3PM, Inc. (1977 to
1985)
Joseph P. Nolan 34 Principal of GTCR Golder Rauner, LLC 1995
(since 1998); Principal Golder,
Thoma, Cressey, Rauner, Inc. (since
February 1994); Vice President
Corporate Finance at Dean Witter
Reynolds, Inc. (May 1990 to January
1994); Director of Province
Healthcare Company, a publicly traded
company which owns and operates
acute-care hospitals (since 1996) and
Esquire Communications ltd., a
publicly traded company focused on
the consolidation of the court
reporting industry (since 1996)
Fariborz Ghadar 52 Merrill Lynch William A. Shreyer 1997
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);
Professor and Chairman of the
International Business Department at
The George Washington School of
Business and Public Management
(September 1992 to June 1994);
Chairman of the
Intrados/International Management
Group, a Washington-based business
offering executive development
programs and strategic assessment
services.
</TABLE>
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INCUMBENT DIRECTORS -- TERMS EXPIRING IN 2000
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE DIRECTOR
NOMINEES AGE DURING PAST 5 YEARS AND OTHER DIRECTORSHIPS SINCE
<S> <C> <C> <C>
Gary L. Monroe 44 Chairman of the Board (since April 1995
1998); Chief Executive Officer (since
February 1996); President (April 1997
to January 1999); Executive Vice
President (September 1995 to February
1996); President of Kodak Imaging
Services, Inc., a subsidiary of
Eastman Kodak Co. (May 1992 to
September 1995); Director of Finance
and Strategic Planning of the Health
Sciences Division of Eastman Kodak
Co. (August 1990 to May 1992);
Director of Esquire Communications
Ltd. (since 1998).
Bruce V. Rauner 43 Managing principal of GTCR Golder, 1995
Rauner, LLC (since 1998); Principal
of Golder, Thoma, Cressy, Rauner,
Inc. (since February 1981); Director
of Coinmach Laundry Corporation
(since 1995); Polymer Group, Inc., a
publicly traded company which is a
manufacturer and marketer of nonwoven
and oriented polyoletin products
(since 1992); Province Healthcare
Company (since 1996); and Esquire
Communications, Ltd. (since 1996).
</TABLE>
COMMITTEES AND MEETINGS OF DIRECTORS
Lason's Board of Directors has several committees, as set forth in the following
chart.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
MEMBERSHIP ROSTER
- ---------------------------------------------------------------------------------------------------------------
EXECUTIVE AUDIT COMPENSATION OPTION
NAME COMMITTEE COMMITTEE COMMITTEE COMMITTEE
- -------------------------------------- --------------- ------------- ----------------- ------------------------
<S> <C> <C> <C> <C>
Gary L. Monroe X
- -------------------------------------- --------------- ------------- ----------------- ------------------------
William J. Rauwerdink* X
- -------------------------------------- --------------- ------------- ----------------- ------------------------
Fariborz Ghadar** X X X
- -------------------------------------- --------------- ------------- ----------------- ------------------------
Donald M. Gleklen** X X X
- -------------------------------------- --------------- ------------- ----------------- ------------------------
Allen J. Nesbitt
- -------------------------------------- --------------- ------------- ----------------- ------------------------
Joseph P. Nolan X X
- -------------------------------------- --------------- ------------- ----------------- ------------------------
Bruce V. Rauner X X X
- -------------------------------------- --------------- ------------- ----------------- ------------------------
Robert A. Yanover X X
- -------------------------------------- --------------- ------------- ----------------- ------------------------
</TABLE>
*Nominated subject to election at the Annual Meeting
**After the election of Directors at the annual meeting, Mr. Gleklen's term as a
Director will have ended. His replacement on the committees will be Dr. Ghadar.
8
<PAGE> 14
EXECUTIVE COMMITTEE. This committee can exercise the authority, powers and
duties of the Board of Directors in managing the business and affairs of Lason
between meetings of the board, if necessary. The Executive Committee was formed
in February 1999.
AUDIT COMMITTEE. This committee selects Lason's independent accountants and is
primarily responsible for approving the services performed by Lason's
independent accountants, and for reviewing and evaluating Lason's accounting
policies and its system of internal accounting controls. The Audit Committee met
twice in 1998.
COMPENSATION COMMITTEE. This committee or the full Board of Directors determines
Lason's executive compensation policies, including the salaries, compensation
and benefits of executive officers and employees of Lason. The Compensation
Committee did not meet in 1998, but did act through written consents.
Option Committee. This committee is generally responsible for administering and
granting options in accordance with Lason's 1995 Stock Option Plan and The 1998
Equity Participation Plan, with authority to establish and administer
performance goals and to certify that such goals are attained. The Option
Committee did not meet in 1998, but did act through written consents.
BOARD AND COMMITTEE MEETINGS. There were four regular meetings and three special
meetings of the Board of Directors. All incumbent directors, except for Bruce V.
Rauner, attended at least seventy-five percent of the aggregate number of
meetings held by the Board of Directors and by all the committees of the board
on which the respective directors served.
COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
For the year ended December 31, 1998, compensation of executive officers of
Lason was determined by the Board of Directors, which included Mr. Monroe, who
abstained on voting with respect to compensation for himself. The 1995 Stock
Option Plan and The 1998 Equity Participation Plan are administered by the
Option Committee currently comprised of Messrs. Gleklen, Nolan and Rauner.
COMPENSATION OF DIRECTORS
FEES. Each director who is not an employee of Lason receives $1,000 for
attendance at 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 pursuant to the 1995 Stock Option Plan and the 1998 Equity
Participation Plan.
CERTAIN LEGAL PROCEEDINGS
On December 11, 1995, Mr. Rauwerdink consented to the entry of an order
enjoining him from violating certain antifraud and tender offer provisions of
the federal securities laws. The order required him to give up profits and pay
penalties and interest totaling approximately $225,000. He neither admitted nor
denied the allegations made in the proceeding.
The proceeding involved the rollover of certain funds from a former employer's
profit sharing plan. The investment directions made in connection with the
rollover into Mr. Rauwerdink's 401(k) account at his new employer specified that
the investment of such funds be made 50% in the stock of his employer and 50% in
other investments (which was identical to the allocation he made at the time he
began his employment with respect to other investments in his 401(k) account)
and resulted in the purchase of shares of common stock of the new employer at a
time when it was alleged that the employer was engaged in merger negotiations.
The shares purchased in the rollover transaction constituted approximately 8% of
Mr. Rauwerdink's total holdings in his new employer's common stock.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The SEC requires that Lason provide information on any shareholder who
beneficially owns more than 5% of Lason's common stock. The following table
provides the required information, as of February 9, 1999, by the only
shareholder known to Lason to be the beneficial owner of more than 5% of Lason's
common stock. Lason relied solely on information furnished to Lason by the
shareholder to provide this information.
9
<PAGE> 15
AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP
<TABLE>
<CAPTION>
NAME AND ADDRESS AMOUNT AND NATURE OF PERCENT
OF BENEFICIAL OWNER OF BENEFICIAL OWNERSHIP (1) OF CLASS (2)
- ------------------- ------------------------------- ------------
<S> <C> <C>
Putnam Investment Management, Inc. 1,744,755 11.3%
Putnam Advisory Company, Inc.
One Post Office Square
Boston, MA 02109
</TABLE>
- -------------------
(1) This number includes 1,401,276 shares beneficially owned by Putnam
Investment Management, Inc., and 343,479 shares beneficially owned by
The Putnam Advisory Company, Inc. Of the 1,401,276 shares, Putnam New
Opportunities Fund beneficially held 709,300 shares. Putnam Investment
Management, Inc. and Putnam Advisory Company, Inc. are registered
investment advisers and are wholly-owned subsidiaries of Putnam
Investments, Inc. Putnam Investments, Inc. is a wholly-owned subsidiary
of Marsh & McLennan Companies, Inc. Both Putnam Investments, Inc. and
Marsh & McLennan Companies, Inc. have disclaimed beneficial ownership
of such shares.
(2) As of February 9, 1999.
SECURITY OWNERSHIP OF MANAGEMENT
The following table contains information about the number of shares of Lason's
common stock beneficially owned by incumbent directors, nominees and the
executive officers named in the Summary Compensation Table presented on page 12
of this Proxy Statement, and by all incumbent directors, nominees and executive
officers as a group. The number of shares beneficially owned by each individual
includes shares over which the person shares voting power or investment power
and also any shares which the individual can acquire by June 19, 1999, (60 days
after the Record Date) through the exercise of any stock option or other right.
Unless indicated otherwise, each individual has sole investment and voting power
(or shares those powers with his or her spouse) with respect to the shares
listed in the table. For information on shareholders who beneficially own more
than 5% of Lason's common stock, please refer to "Security Ownership of Certain
Beneficial Owners."
<TABLE>
<CAPTION>
AMOUNT AND NATURE PERCENT
NAME OF BENEFICIAL OWNER OF BENEFICIAL OWNERSHIP OF CLASS
<S> <C> <C>
Gary L. Monroe 140,362(1) *
John R. Messinger 50,634(1) *
William J. Rauwerdink 40,210(1) *
Brian E. Jablonski 32,000(1) *
Cary W. Newman 50,000(1) *
Fariborz Ghadar 2,000(2) *
Donald M. Gleklen 17,500(3) *
Allen J. Nesbitt 337,790(4) 2.1%
Joseph P. Nolan 39,514(5) *
Bruce V. Rauner 36,959(5) *
Robert A. Yanover 251,083(6) 1.6%
Directors, nominees and
executive officers as a group (11 961,093(7) 6.1%
people)
</TABLE>
- -------------------------------
* Represents holdings of less than one percent.
10
<PAGE> 16
(1) Includes 140,362, 20,500, 39,335, 32,000 and 45,000 shares of Messrs.
Monroe, Messinger, Rauwerdink, Jablonski and Newman, respectively,
issuable upon exercise of options. The address of Messrs. Monroe,
Messinger, Rauwerdink, Jablonski and Newman is 1305 Stephenson Highway,
Troy, Michigan 48083.
(2) Includes 2,000 shares of common stock issuable upon the exercise of
options. The address of this holder is 555 Orlando Avenue, State
College, Pennsylvania 16803.
(3) Includes 12,500 shares of common stock issuable upon the exercise of
options. The address of this director is 212 Jeffrey Lane, Newtown
Square, Pennsylvania 19073.
(4) Includes 337,790 shares of common stock held by the Allen J. Nesbitt
Living Trust dated December 7, 1994. The address of this holder is
48847 Meadowcourt, Plymouth, Michigan 48170.
(5) Includes 36,959 shares of common stock held by Golder, Thoma, Cressey,
Rauner Fund IV, L.P. Each of Messrs. Rauner and Nolan is a principal of
Golder, Thoma, Cressey, Rauner, Inc., the general partner of Golder,
Thoma, Cressey, Rauner Fund IV, L.P., and therefore may be deemed to
share investment and voting control over the shares of common stock
held by Golder, Thoma, Cressey, Rauner Fund IV, L.P. Each of Messrs.
Rauner and Nolan disclaims beneficial ownership of the shares of common
stock owned by Golder, Thoma, Cressey, Rauner Fund IV, L.P. The address
of each of these holders is 6100 Sears Tower, Chicago, Illinois 60606.
(6) Includes 126,480 shares of common stock owned by Yanover Associates
Limited Partnership and 124,603 shares of common stock owned by the
Robert A. Yanover Charitable Remainder Unit Trust.
(7) Includes the shares of common stock described in footnotes (1), (2),
(3), (4), (5) and (6) above.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), requires that Lason's directors, executive officers and persons who own
more than ten percent of a registered class of Lason's equity securities file
reports of stock ownership and any subsequent changes in stock ownership with
the SEC not later than specified deadlines. During 1998, all of the required
reports were filed by the specified deadlines except with respect to one late
filing by Mr. Messinger relating to a single transaction. In making this
disclosure, Lason relied on the directors and executive officers' written
representations and a review of copies of the reports filed with the SEC.
CERTAIN TRANSACTIONS
WITH MANAGEMENT
Lason 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. Mr. Yanover owns 33.3% of Mart and is its managing
partner. Mr. Nesbitt owns 33.3% of Mart and is one of its partners. For the
years ended December 31, 1998, 1997 and 1996, Lason paid $163,800, $150,150 and
$191,100 respectively in rent for such property and building. In addition, Lason
leases certain equipment from Computer Leasing Company of Michigan, Inc. Mr.
Yanover owns 50.0% of Computer Leasing and serves as its president. For the
years ended December 31, 1998, 1997, and 1996, Lason paid $120,300, $116,500 and
$184,390, respectively, in rent for such operating leases. Lason believes that
each of the leases is at market terms and rates.
Lason purchases printing services from Hatteras Printing, Inc. Hatteras is owned
by the wife and children of Mr. Nesbitt. For the years ended December 31, 1998,
1997 and 1996, Lason paid Hatteras approximately $2,700,000, $1,700,000 and
$1,400,000, respectively, for such printing services. Lason believes that it
paid market prices for such printing services. Also effective December 1, 1997,
Lason sold certain assets to Hatteras at their fair market value, as determined
by management, for $570,412, payable $350,000 at closing, with the balance of
$220,412 to be paid (together with interest at 8.0% per annum), $125,000 on
December 31, 1998 and $95,412 on December 31, 1999. Lason purchased the assets
in July 1996 for approximately $387,000.
Lason contracts temporary employment serves from Unlimited Staffing Solutions,
Inc., a company which is owned by the wife of Mr. Newman. Lason paid $173,648,
$797,000 and $735,670 for the years ended December 31, 1998, 1997 and 1996,
respectively, for such services.
11
<PAGE> 17
Messrs. Monroe, Rauwerdink, Messinger, Newman and Jablonski, executive officers
of Lason, are indebted to Lason in principal amounts of $650,000, $325,000,
$227,500, $130,000 and $130,000, respectively, pursuant to the terms of ten-year
secured promissory notes dated June 5, 1998, which provide for extensions of
credit up to maximum principal amounts of $2,600,000, $1,300,000, $910,000,
$520,000 and $520,000, respectively. The notes provide that funds may be
advanced under the notes on the date of execution and on each of the three
anniversary dates thereafter and/or upon the occurrence of a "change in control"
of Lason, as defined in Lason's 1998 Equity Participation Plan, which occurs
prior to the fourth anniversary of the notes; provided that the price per share
of Lason's common stock at all such times that credit is extended under the
notes exceeds $27.50 per share. The notes are secured by each executive
officer's unexercised stock options granted on May 29, 1998, and any of Lason's
common stock acquired upon exercise of such options; provided that some of such
collateral may be released under certain circumstances if the notes are
adequately secured after such release of collateral, and all of such collateral
is to be released, in any event, upon the fourth anniversary of each note if it
is not in default and has not matured. All advances under a note will be
forgiven in the event of a change in control of Lason; provided that the note is
not in default and has not matured prior to such change in control event.
Interest accrues under each note at the applicable federal rate, as in effect on
June 5, 1998, and as it may change on each anniversary of the note. Interest
accrued on the loans during 1998 was forgiven. See "Executive Compensation --
Summary Compensation Table."
As additional consideration for the purchase of Mr. Messinger's shares in Image
Conversion Systems in July 1997, Mr. Messinger earned $1,327,500 payable in cash
and common stock of Lason for the achievement by Image Conversion Systems of
certain financial goals in 1997 and 1998.
All material business transactions between Lason and any executive officer or
director of Lason or any member of their immediate family will be subject to
review and approval by a majority of Lason's disinterested directors. Additional
transactions of the nature described above may take place in the ordinary course
of business.
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 Lason in all capacities during the last
three fiscal years:
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long Term Compensation
Annual Compensation Award(s) Payouts
a) (b) (c) (d) (e) (f) (g) (h) (i)
Other
Annual Securities All Other
Compen- Restricted Underlying LTIP Compensation(3)
Name and Principal Position Year Salary (1) Bonus (2) sation Stock Award Options (#) Payouts
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Gary L. Monroe 1998 $207,385 $ 25,000 -- -- 200,000 -- $ 25,711
Chairman of the Board 1997 190,866 21,875 -- -- -- -- 11,866
and Chief Executive 1996 175,000 65,945 -- -- 20,000 -- 3,243
Officer
John R. Messinger (4) 1998 $156,545 $ 32,941 -- -- 105,000 -- $ 24,366
President and Chief
Operating Officer
William J. Rauwerdink 1998 $155,843 $ 18,563 -- -- 110,000 -- $ 13,555
Executive Vice President, 1997 139,049 16,875 -- -- -- -- 2,437
Chief Financial Officer, 1996 85,673 11,670 -- -- 70,000(5) -- 232
Treasurer and Secretary -- --
</TABLE>
12
<PAGE> 18
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Brian E. Jablonski 1998 $153,940 $ 18,563 -- -- 40,000 -- $ 7,697
Executive Vice President of 1997 139,049 16,875 -- -- -- -- 2,309
Strategic Marketing and 1996 64,904 -- -- -- 75,000 -- 50,102
Sales
Cary W. Newman (4) 1998 $139,039 $ 14,375 -- -- 40,000 -- $ 6,218
Executive Vice
President-Business
Development
</TABLE>
- ---------------------------------------------------------
(1) Salary includes amounts deferred, if any, pursuant to Lason's 401(k)
plan.
(2) Includes bonus amounts earned in the prior fiscal year by the executive
officers.
(3) Includes interest forgiven on loans as follows: Mr. Monroe $19,013; Mr.
Messinger $6,654; Mr. Rauwerdink $9,506; Mr. Jablonski $3,803 and Mr.
Newman $3,803. Lason also has agreed to pay Mr. Messinger $3.94 for
each of his options (up to 15,000) that vests. See "Certain
Transactions with Management."
(4) Became executive officer in 1998.
OPTION GRANTS IN LAST FISCAL YEAR
The following table provides information on stock options granted in 1998 to the
named executive officers.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
POTENTIAL REALIZABLE VALUE
INDIVIDUAL GRANTS AT ASSUMED ANNUAL RATES
OF STOCK PRICE APPRECIATION
FOR OPTION TERM
- ------------------------------------------------------------------------------------------------------------------------
Percent of
Number of Total Options
Securities Granted to Exercise
Underlying Employees or Base
Options in Fiscal Price Expiration
Name Granted Year ($/Sh) Date 5% ($) 10% ($)
- ------------------ ----------- -------------- ------- ---------- ---------- ---------
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Gary L. Monroe 200,000 23.4% 40.50 5-29-05 3,867,389 9,263,069
- ----------------------------------------------------------------------------------------------------------------------
John R. Messinger 70,000 8.2% 40.50 5-29-05 1,353,586 3,242,074
- ----------------------------------------------------------------------------------------------------------------------
35,000 4.1% 49.125 12-3-05 1,081,306 2,740,241
- ----------------------------------------------------------------------------------------------------------------------
William J. Rauwerdink 100,000 11.7% 40.50 5-29-05 1,933,695 4,631,535
- ----------------------------------------------------------------------------------------------------------------------
10,000 1.2% 49.125 12-3-05 308,940 782,926
- ----------------------------------------------------------------------------------------------------------------------
Brian E. Jablonski 40,000 4.7% 40.50 5-29-05 773,478 1,852,614
- ----------------------------------------------------------------------------------------------------------------------
Cary W. Newman 40,000 4.7% 40.50 5-29-05 773,478 1,852,614
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
13
<PAGE> 19
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
The following table provides information concerning the exercise of stock
options by the named executive officers during the last fiscal year and the
value of unexercised options at December 31, 1998.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT FISCAL IN-THE-MONEY OPTIONS AT
YEAR-END FISCAL YEAR-END
SHARES ACQUIRED
ON EXERCISE VALUE (#) (#) ($) ($)
NAME # REALIZED ($)(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---------------- ------------ ----------- ------------- ----------- -------------
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Gary L. Monroe 50,000 1,902,000 90,362 212,000 5,091,155 4,034,855
John R. Messinger -- -- 3,000 117,000 93,000 1,927,365
William J. Rauwerdink 21,000 937,710 14,335 133,665 747,603 3,038,771
Brian E. Jablonski 23,200 944,560 22,000 65,000 1,128,436 1,960,270
Cary W. Newman -- -- 35,000 49,000 1,924,480 1,080,462
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Market value of underlying securities at exercise date or year end, as
the case may be, minus the exercise price and commissions, as
applicable.
EMPLOYMENT CONTRACTS AND CHANGE IN CONTROL ARRANGEMENTS
Mr. Monroe. Lason and Mr. Monroe are parties to an employment agreement which
expires August 7, 1999. The employment agreement provides that Mr. Monroe will
serve as Chief Executive Officer of Lason 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. In June 1997, Mr. Monroe's annual salary was
increased to $200,000. Commencing August 7, 1998, Mr. Monroe's annual salary was
increased to $220,000. The employment agreement also provides that if Mr.
Monroe's employment is terminated or his duties are 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 payable for the greater of one year or
the remaining term of the agreement.
Mr. Messinger. On April 27, 1999, Lason entered into an employment agreement
with Mr. Messinger which terminates on February 1, 2001. The agreement provides
that Mr. Messinger will serve as the President and Chief Operating Officer of
Lason at an annual base salary of $175,000, plus an annual bonus of a minimum of
50% of his base salary based on Lason's performance as determined by the
Chairman of the Board. The agreement also provides that in the event that Mr.
Messinger is terminated with or without cause or in the event that Mr. Messinger
resigns because of a material change in the scope of his duties, he shall be
entitled to receive, for the greater of the unexpired term of the agreement or
twelve (12) months, severance pay in an amount equal to his base salary, plus
the greater of his actual bonus for the preceding year or an average of all
bonuses paid to him during the preceding years of his employment. In addition,
if Mr. Messinger is terminated without cause, he is entitled to reimbursement of
his club initiation fees. The agreement also provides that while Mr. Messinger
is employed and for the two year period following employment, he shall not,
directly or indirectly, compete with Lason.
Mr. Rauwerdink. On April 30, 1996, Lason made a written offer of employment to
Mr. Rauwerdink, which Mr. Rauwerdink accepted. Pursuant to the offer, Lason
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 Lason were to terminate his employment without
cause. In October 1997, Mr. Rauwerdink's salary was increased to $148,500. In
August 1998, Mr. Rauwerdink's salary was increased to $160,000.
Mr. Jablonski. On June 12, 1996, Lason made a written offer of employment to Mr.
Jablonski, which Mr. Jablonski accepted. Pursuant to the offer, Lason 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 and
committed to grant him an option to purchase 60,000 shares of its common stock.
In October 1997, Mr. Jablonski's salary was increased to $148,500. In August
1998, Mr. Jablonski's salary was increased to $160,000.
Each of the option agreements between Lason and the named executive officers
provides that upon the occurrence of a change in control, the options shall
become exercisable if the named executive officers are respectively employed by
Lason at the time of such occurrence.
14
<PAGE> 20
REPORT OF THE BOARD ON EXECUTIVE COMPENSATION
The following is the Report of the Board of Directors of Lason
describing the compensation policies and rationale applicable to
Lason's executive officers with respect to compensation paid to such
executive officers for the year ended December 31, 1998. The
information contained in the report shall not be deemed to be
"soliciting material" or to be "filed" with the SEC nor shall such
information be incorporated by reference into any future filing under
the Securities Act of 1933 or the Securities Exchange Act of 1934
except to the extent that Lason specifically incorporates it by
reference into such filing.
EXECUTIVE COMPENSATION POLICY
All matters of executive compensation for the year ended December 31,
1998 were determined by the Board of Directors of Lason.
Lason'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, Lason's compensation strategy ties a significant
portion of executive compensation to individual performance and overall success,
including enhancement of shareholder value. The principal objectives of this
strategy are (i) to provide a competitive total compensation package that
enables Lason to attract and retain key executive talent; (ii) integrate
incentive compensation programs with Lason's annual and longer-term
strategic planning; (iii) provide variable compensation opportunities that are
linked to the performance of Lason; and, (iv) link executive reward to
shareholder total investment return.
COMPONENTS OF EXECUTIVE COMPENSATION
Lason 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 stock options provided under the employment
agreements, executive officers have been awarded stock options under the 1995
Stock Option Plan and The 1998 Equity Participation Plan. Lason believes that
its executive officers' base salaries and total cash compensation (base salary
and bonus) are below median, based on an analysis of publicly traded peer
companies (industry consolidators and business services companies) selected on
criteria including size, market capitalization, the nature of business
conducted, and historical and anticipated growth. Lason intends through its
long-term incentive program (the 1995 Stock Option Plan and The 1998 Equity
Participation Plan) to position executive officers' compensation higher than 75%
of such group of selected companies if Lason's shares perform accordingly. The
option grants and/or restricted stock grants under The 1995 Stock Option Plan
and The 1998 Equity Participation Plan are intended to align the interest of
management more closely with those of the shareholders of Lason by increasing
stock ownership by management and tying a meaningful and significant portion of
compensation to the performance of Lason's shares of common stock.
In addition, the full compensation package afforded by Lason to the
executive officers generally includes various perks such as an automobile
allowance, insurance and other customary benefits. Lason also maintains a
broad-based employee benefit 401(k) plan, in which Lason'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. Lason may match
a portion of each employee's contributions to this plan.
BASE SALARY
It is Lason's intention to compensate its executive officers, including
the Chief Executive Officer, competitively within the industry. Base salaries
for new executive officers of Lason 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
Lason established a Management Bonus Plan for 1998. Participants in the
Management Bonus Plan were selected by Lason's Chief Executive Officer. Each
participant in the Management Bonus Plan was entitled to receive a bonus payment
if Lason as a whole or, in the case of certain participants, a defined portion
of Lason with which such participant is principally involved, exceeds a
predetermined financial target with respect to a quarter. Bonuses that are not
obtained in any quarter are not carried over to any subsequent quarter. For the
year ended, December 31, 1998, Messrs. Monroe, Messinger, Rauwerdink, Jablonski
and Newman were awarded bonuses of: $25,000, $32,941, $18,563, $18,563 and
$14,375, respectively. Bonuses aggregating $213,663 were awarded to all eligible
participants under the 1998 Bonus Plan.
15
<PAGE> 21
STOCK OPTIONS
Lason's 1995 Stock Option Plan and The 1998 Equity Participation Plan
serve as a long-term incentive plan for the executive officers. The objective of
the 1995 Stock Option Plan and The 1998 Equity Participation 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. Generally, the
Option Committee 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. Lason believes that stock options provide Lason's executive officers
with the opportunity to purchase and maintain an equity interest in Lason and to
share in the appreciation of the value of the stock. The Option Committee
believes that stock options directly motivate an executive to maximize long-term
stockholder value. The options also utilize vesting periods in order to
encourage key employees to continue in the employ of Lason. Option grants are
determined subjectively, considering factors such as the individual performance
of the executive officers and competitive compensation packages in the industry.
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 Lason and Lason's shareholders.
Fanborz 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 showing changes in the value of $100
invested in Lason's common stock, Nasdaq Composite Index and a Peer Group Index
for the period commencing on October 31, 1996 and ending with the last quarter
of 1998. The information contained in the performance graph shall not be deemed
"soliciting material" or to be "filed" with the SEC, nor shall such information
be incorporated by reference into any future filing under the Securities Act of
1933 or Securities Exchange Act of 1934, except to the extent that Lason
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.
COMPARISON OF QUARTERLY CUMULATIVE TOTAL RETURN*
AMONG, LASON, INC., THE NASDAQ COMPOSITE INDEX AND A PEER GROUP
[CHART]
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------
4TH 1ST 2ND 3RD 4TH 1ST 2ND 3RD 4TH
QTR. QTR. QTR. QTR. QTR. QTR. QTR. QTR. QTR.
10-31-96 1996 1997 1997 1997 1997 1998 1998 1998 1998
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Lason, Inc. 100 $115 $113 $158 $116 $150 $213 $307 $289 $328
- -------------------------------------------------------------------------------------------------------------------------
Nasdaq Composite Index 100 $106 $100 $118 $138 $129 $150 $155 $139 $180
- -------------------------------------------------------------------------------------------------------------------------
Peer Group* 100 $110 $108 $ 86 $ 90 $ 97 $117 $ 66 $ 42 $ 52
- -------------------------------------------------------------------------------------------------------------------------
</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, 1998.
Donnelley Enterprise Solutions Incorporated stopped trading in mid-1998.
16
<PAGE> 22
NOTICE OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The Audit Committee of the Board of Directors on July 29, 1998 selected
PricewaterhouseCoopers LLP, independent accountants, to audit the consolidated
financial statements for the year ended December 31, 1998. A representative of
PricewaterhouseCoopers LLP is expected to be present at the Annual 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.
OTHER MATTERS
Lason knows of no other matters 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 proxy card to vote the shares they represent
in accordance with their best judgment.
By Order of the Board of Directors
William J. Rauwerdink
Secretary
April 29, 1999
17
<PAGE> 23
APPENDIX A
STATE OF DELAWARE
CERTIFICATE OF AMENDMENT OF AMENDED AND
RESTATED CERTIFICATE OF INCORPORATION
OF LASON, INC.
Gary L. Monroe and William J. Rauwerdink, being the Chief Executive Officer and
Secretary, respectively, of Lason, Inc., a corporation duly organized and
existing under and by virtue of the Delaware General Corporation Law (the
"Corporation"), DO HEREBY CERTIFY as follows:
- - FIRST: That at a meeting of the Board of Directors of the Corporation,
resolutions were duly adopted setting forth a proposed amendment to the
Amended and Restated Certificate of Incorporation of the Corporation,
declaring said amendment to be advisable and calling a meeting of the
shareholders of said corporation for consideration thereof. The resolution
setting forth the proposed amendment is as follows:
RESOLVED, that the Amended and Restated Amended and Certificate of
Incorporation of the Corporation be amended by changing Section 1.
of Article Four so that, as amended, said Section 1. shall be and
read as follows:
"The aggregate number of shares of stock
which the Corporation has authority to
issue is 105,000,000, consisting of
5,000,000 shares of Series Preferred
Stock, par value $0.01 per share (the
"Series preferred Stock"), and
100,000,000 shares of Common Stock, par
value $0.01 per share (the "Common
Stock"). All of such shares shall be
issued as fully paid and non-assessable
shares, and the holder thereof shall not
be liable for any further payments in
respect thereof."
- - SECOND: That thereafter, pursuant to resolution of its Board of Directors, a
meeting of the shareholders of the Corporation was duly called and held, upon
notice in accordance with Section 222 of the Delaware General Corporation Law
at which meeting the necessary number of shares as required by statute were
voted in favor of the amendment.
<PAGE> 24
- - THIRD: That said amendment was duly adopted in accordance with the provisions
of Section 242 of the Delaware General Corporation Law.
IN WITNESS WHEREOF, the undersigned, being the Chief Executive Officer and
Secretary, for the purpose of amending the Amended and Restated Certificate of
Incorporation of the Corporation pursuant to the Delaware General Corporation
Law, under penalties of perjury, do each hereby declare and certify that this is
the act and deed of the Corporation and the facts stated herein are true, and
accordingly have hereto signed this Certificate of Amendment of Amended and
Restated Certificate of Incorporation this day of May 1999.
LASON, INC
By:
---------------------------
Gary L. Monroe
Chief Executive Officer
ATTEST
LASON, INC.
By.
----------------------------------
William J. Rauwerdink, Secretary
<PAGE> 25
LASON, INC.
ANNUAL MEETING OF SHAREHOLDERS - MAY 27, 1999
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Maureen M. Giammara 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 to vote, as directed hereon, all shares of Common
Stock of Lason, Inc. held by the undersigned as of April 19, 1999, at Lason's
1999 Annual Meeting of Shareholders to be held at the Northfield Hilton, 5500
Crooks Road, Troy, Michigan 48098 on Thursday, May 27, 1999, at 10:00 a.m.,
local time, or at any postponement(s) or adjournment(s) of the meeting.
(continued on reverse side)
- --------------------------------------------------------------------------------
-FOLD AND DETACH HERE-
<PAGE> 26
<TABLE>
<S><C>
/X/ Please mark your
Votes as in this
example.
THIS PROXY WILL BE VOTED AS DIRECTED BELOW. UNLESS YOU DIRECT OTHERWISE, THIS PROXY WILL BE VOTED "FOR" EACH OF THE NOMINEES, "FOR"
THE INCREASE IN THE NUMBER OF AUTHORIZED SHARES, AND "FOR" THE INCREASE IN THE NUMBER OF SHARES RESERVED FOR ISSUANCE UNDER THE 1998
EQUITY PARTICIPATION PLAN.
FOR all nominees WITHHOLD
listed (except as AUTHORITY to
marked to the vote for all
contrary) nominees listed FOR AGAINST ABSTAIN
1. Election of / / / / Nominees: William J. 2. Amendment to Amended and Restated / / / / / /
Directors Rauwerdink and Robert Certificate of Incorporation
A. Yanover for a three increasing the authorized shares of
year term expiring in common stock to 100,000,000
2002.
For, except withheld from the
following nominee(s):
-----------------------------------------------------
3. Amendment to The 1998 Equity Participation FOR AGAINST ABSTAIN
Plan increasing aggregate number of shares of common / / / / / /
stock reserved for issuance to 1,400,000
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 an
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) DATE
- ------------------------------------------------------------------------------------------------------------------------------------
-FOLD AND DETACH HERE-
</TABLE>
