SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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
/X/ Definitive Proxy Statement
/_/ Definitive Additional Materials
/_/ Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
IMAGEMAX, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
________________________________________________________________________________
(Name of Person(s) Filing Proxy Statement if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No Fee Required.
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:*
_____________________________________________________________________________
4) Proposed maximum aggregate value of transaction:
_____________________________________________________________________________
/_/ 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 No. ______________________________________
3) Filing party: ___________________________________________________________
4) Date filed: _____________________________________________________________
___________
*Set forth the amount on which the filing fee is calculated and state how it was
determined.
<PAGE>
IMAGEMAX, INC.
1100 EAST HECTOR STREET
SUITE 396
CONSHOHOCKEN, PA 19428
DEAR SHAREHOLDER:
You are cordially invited to attend the annual meeting of shareholders (the
"Annual Meeting") of ImageMax, Inc. (the "Company") to be held on Monday, June
15, 1998 at 9:00 a.m, local time, at The Philadelphia Marriott West Hotel, 111
Crawford Street, West Conshohocken, Pennsylvania.
The proposals for the Annual Meeting relate to: (i) the election of three
(3) directors; and (ii) the ratification of the Board of Directors' appointment
of Arthur Andersen LLP, independent public accountants, as auditors for the
Company for the fiscal year ending December 31, 1998. Our Annual Report on Form
10-K for the fiscal year ended December 31, 1997 accompanies this Proxy
Statement.
We look forward to seeing you at the Annual Meeting. Whether or not you are
planning to attend, we urge you to return the enclosed proxy at your earliest
convenience.
Sincerely,
/s/ Bruce M. Gillis
--------------------------------------
Bruce M. Gillis
Chairman of the Board of Directors and
Chief Executive Officer
<PAGE>
IMAGEMAX, INC.
1100 EAST HECTOR STREET
SUITE 396
CONSHOHOCKEN, PA 19428
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 15, 1998
------------------------
To the Shareholders of
ImageMax, Inc.:
The Annual Meeting of Shareholders (the "Annual Meeting") of ImageMax, Inc.
(the "Company") will be held at The Philadelphia Marriott West Hotel, 111
Crawford Street, West Conshohocken, Pennsylvania on Monday, June 15, 1998 at
9:00 a.m., local time, for the following purposes:
1. To elect three directors for the ensuing year;
2. To ratify the selection of Arthur Andersen LLP as the Company's
independent public accountants for the year ending December 31,
1998; and
3. To transact any other business as may properly be brought before
the Annual Meeting.
Any action may be taken on the foregoing matters at the Annual Meeting on
the date specified above, or on any date or dates to which the Annual Meeting
may be adjourned.
The Board of Directors has fixed the close of business on April 23, 1998 as
the record date for determining the shareholders entitled to notice of and to
vote at the Annual Meeting and at any adjournments or postponements thereof.
Only shareholders of record of the Company's Common Stock at the close of
business on that date will be entitled to notice of and to vote at the Annual
Meeting and at any adjournments or postponements thereof.
Your attention is directed to the accompanying Proxy Statement for
information regarding each proposal to be made at the Annual Meeting. A copy of
the Company's Annual Report on Form 10-K for the year ended December 31, 1997 is
enclosed herewith.
All shareholders are cordially invited to attend the Annual Meeting.
Whether or not you plan to attend the Annual Meeting, all holders of shares of
the Company's Common Stock are urged to complete and sign the enclosed proxy,
and return it promptly to the Company. At any time prior to their being voted,
proxies are revocable by delivering written notice to the Company in accordance
with the instructions set forth in the Proxy Statement or by voting at the
Annual Meeting in person.
SHAREHOLDERS UNABLE TO ATTEND THE ANNUAL MEETING IN PERSON ARE ASKED TO VOTE,
SIGN, DATE AND RETURN PROMPTLY THE ENCLOSED PROXY IN THE ENCLOSED SELF-ADDRESSED
ENVELOPE, WHICH DOES NOT REQUIRE ANY POSTAGE IF MAILED IN THE UNITED STATES.
By order of the Board of Directors
/s/ Andrew R. Bacas
--------------------------------------
Andrew R. Bacas
Secretary
April 30, 1998
Conshohocken, Pennsylvania
<PAGE>
IMAGEMAX, INC.
1100 EAST HECTOR STREET
SUITE 396
CONSHOHOCKEN, PA 19428
------------------------
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 15, 1998
------------------------
PROXY STATEMENT
This Proxy Statement (the "Proxy Statement") has been prepared and is being
distributed in connection with the solicitation by the Board of Directors of
ImageMax, Inc. (the "Company") of Proxies (the "Proxies") in the enclosed form
for use at the Annual Meeting of Shareholders of the Company (the "Annual
Meeting") to be held on Monday, June 15, 1998, at 9:00 a.m., local time, at The
Philadelphia Marriott West Hotel, 111 Crawford Street, West Conshohocken,
Pennsylvania, and any adjournment(s) or postponement(s) thereof.
VOTING AND REVOCABILITY OF PROXIES
Shareholders of record as of the close of business on April 23, 1998 (the
"Record Date") will be entitled to vote at the Annual Meeting and any
adjournment thereof. As of the Record Date, 5,552,775 shares of common stock, no
par value per share of the Company (the "Common Stock") were outstanding and
entitled to one vote each. Execution of a Proxy will not in any way affect a
shareholder's right to attend the Annual Meeting and vote in person. Any
shareholder submitting a Proxy has the right to revoke it at any time before it
is exercised by another instrument or transmission revoking it or by filing a
properly created proxy bearing a later date with the Secretary of the Company.
Shares represented by properly executed Proxies for which no instructions
are received will be voted for all the nominees identified below under "Proposal
No. 1 -- Election of Class I Directors," and for the ratification of accountants
identified below under "Proposal No. 2 -- Appointment of Accountants." The
persons named as proxies are either officers or directors of the Company.
The presence, in person or by Proxy, of shareholders entitled to cast at
least a majority of the votes that all shareholders are entitled to cast on a
particular matter to be acted upon at the Annual Meeting, shall constitute a
quorum for the purposes of consideration and action on such matter. Abstentions
and broker non-votes are each included in the number of shares present at the
Annual Meeting for purposes of establishing a quorum. The three nominees
receiving the three highest numbers of votes cast at the Annual Meeting will be
elected Class I Directors. For all other proposals, the affirmative vote of the
holders of a majority of shares of Common Stock voted, in person or by Proxy, at
the Annual Meeting is required. If any other matter should be presented at the
Annual Meeting upon which it is proper to take a vote, shares represented by all
Proxies received will be voted with respect thereto in accordance with the
judgment of the persons named as proxies.
This Proxy Statement and the accompanying materials were first sent to the
shareholders on or about April 30, 1998.
<PAGE>
STOCK OWNERSHIP OF PRINCIPAL SHAREHOLDERS AND MANAGEMENT
The following table sets forth, as of April 22, 1998, certain information
with regard to beneficial ownership (as determined in accordance with Rule 13d-3
promulgated under the Securities Exchange Act of 1934, as amended) of
outstanding shares of the Company's Common Stock by (i) each person known by the
Company to beneficially own five percent (5%) or more of the outstanding shares
of the Company's Common Stock, (ii) each director, director nominee and Named
Executive Officer individually, and (iii) all executive officers and directors
of the Company as a group:
<TABLE>
<CAPTION>
TOTAL NUMBER OF SHARES PERCENTAGE OF CLASS
NAME AND ADDRESS OF OF COMMON STOCK OF COMMON STOCK
BENEFICIAL OWNER BENEFICIALLY OWNED(1) BENEFICIALLY OWNED(1)
- ------------------- ---------------------- ---------------------
<S> <C> <C>
William Blair & Company, L.L.C.................... 382,802(2) 6.9%
222 West Adams Street
Chicago, IL 60606
Bruce M. Gillis................................... 295,448(3) 5.3%
c/o ImageMax, Inc.
1100 E. Hector Street
Conshohocken, PA 19428
Gary D. Blackwelder............................... 283,333 5.1%
c/o ImageMax, Inc.
3000 DeSoto Street
P.O. Box 8033
Monroe, LA 71211-8033
Andrew R. Bacas................................... 223,526(4) 4.0%
c/o ImageMax, Inc.
1100 E. Hector Street
Conshohocken, PA 19428
Rex Lamb.......................................... 207,188 3.7%
c/o ImageMax, Inc.
5001 Rentworth Court
Lincoln, NE 68516
Mitchell J. Taube................................. 199,904 3.6%
c/o ImageMax, Inc.
5 Schuman Road
Millwood, NY 10546
David C. Utz, Jr.................................. 162,532 2.9%
c/o ImageMax, Inc.
1040 Wabash Avenue
Chesterton, IN 46304
John E. Semasko................................... 148,654 2.7%
c/o ImageMax, Inc.
1790 West 11th Avenue
Eugene, OR 97402
S. David Model.................................... 60,288(4) 1.1%
c/o ImageMax, Inc.
1100 E. Hector Street
Conshohocken, PA 19428
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
TOTAL NUMBER OF SHARES PERCENTAGE OF CLASS
NAME AND ADDRESS OF OF COMMON STOCK OF COMMON STOCK
BENEFICIAL OWNER BENEFICIALLY OWNED(1) BENEFICIALLY OWNED(1)
- ------------------- ---------------------- ---------------------
<S> <C> <C>
James D. Brown.................................... 49,145(4) *
c/o ImageMax, Inc.
1100 E. Hector Street
Conshohocken, PA 19428
Dr. Steven N. Kaplan.............................. 20,492(5) *
c/o The University of Chicago
Graduate School of Business
1101 East 58th Street
Chicago, IL 60637
Lennox K. Black................................... 17,000(5) *
c/o Teleflex Incorporated
630 West Germantown Pike
Suite 461
Plymouth Meeting, PA 19462
Lewis E. Hatch, Jr................................ 7,000(5) *
1008 Sea Palms West Drive
St. Simon's Island, GA 31522
David C. Carney................................... 7,000(5) *
c/o Jefferson Health System
259 Radnor-Chester Road
Suite 290
Radnor, PA 19087
All Executive Officers and Directors as a Group
(12 persons).................................... 1,224,715(6) 22.1%
</TABLE>
- ------------------
* Less than 1% of the outstanding Common Stock.
(1) As used in this table, "beneficial ownership" means the sole or shared power
to vote or direct the voting of a security, or the sole or shared investment
power with respect to a security (i.e., the power to dispose, or direct the
disposition, of a security). A person is deemed as of any date to have
beneficial ownership of any security that such person has the right to
acquire within 60 days after such date. Percentage ownership is based upon
5,552,775 shares of Common Stock outstanding as of April 22, 1998.
(2) Includes 319,340 shares over which William Blair & Company, L.L.C. has
dispositive power only.
(3) Excludes 100,000 shares issuable upon the exercise of stock options granted
on December 9, 1997 which are not exercisable within 60 days of April 22,
1998.
(4) Excludes 62,500 shares issuable upon the exercise of stock options granted
on December 9, 1997 which are not exercisable within 60 days of April 22,
1998.
(5) Excludes 20,000 shares issuable upon exercise of stock options granted on
December 31, 1997 which are not exercisable within 60 days of April 22,
1998.
(6) Excludes 417,500 shares issuable upon exercise of stock options granted
which are not exercisable within 60 days of April 22, 1998.
3
<PAGE>
PROPOSAL NO. 1 -- ELECTION OF CLASS I DIRECTORS
The Board of Directors is divided into three classes of directors with each
director serving a three-year term. Each year, only one class of directors is
subject to a shareholder vote. Three Class I directors will be elected each to a
three-year term at the Annual Meeting. Class I members presently are: Bruce M.
Gillis, David C. Utz, Jr., and David C. Carney; Class II members are Andrew R.
Bacas, John E. Semasko and Lewis E. Hatch, Jr.; and Class III members are Rex
Lamb, Steven N. Kaplan and Lennox K. Black. Members of Class II and Class III of
the Board of Directors are not standing for election and their terms expire in
1999 and 2000, respectively.
Bruce M. Gillis, Mitchell J. Taube and David C. Carney are the nominees for
election to the Board of Directors at the Annual Meeting, each to serve until
the annual meeting in 2001 and until his or her successor shall have been
elected and qualified. The affirmative vote of a plurality of shares of the
Common Stock present or represented at the Annual Meeting and entitled to vote
is required for the election of the Class I nominees. In case any of the
nominees should become unavailable for election, for any reason not presently
known or contemplated, the persons named on the Proxy will have discretionary
authority to vote pursuant to the Proxy for a substitute.
The following table sets forth the name, age and principal occupation of
each director, including the nominees.
<TABLE>
<CAPTION>
NAME AGE SINCE PRINCIPAL OCCUPATION
- ---- --- ----- --------------------
<S> <C> <C> <C>
Bruce M. Gillis...................... 41 1996 Chief Executive Officer and Chairman of
the Board of Directors(1)
Andrew R. Bacas...................... 39 1996 Senior Vice President -- Corporate
Development, Secretary and Director
Mitchell J. Taube.................... 41 N/A Business Unit Manager and Director
Nominee(1)
Rex Lamb............................. 39 1997 Business Unit Manager and Director
John E. Semasko...................... 52 1997 Business Unit Manager and Director(2)
David C. Utz, Jr..................... 42 1996 Business Unit Manager and Director
Lennox K. Black...................... 67 1997 Director(3)
David C. Carney...................... 60 1997 Director(1)(2)
Lewis E. Hatch, Jr................... 71 1997 Director(2)
Steven N. Kaplan..................... 37 1997 Director(3)
</TABLE>
- ------------------
(1) Class I director nominee.
(2) Member of the Audit Committee.
(3) Member of the Compensation Committee.
BRUCE M. GILLIS is a founder of the Company and has been the Company's
Chief Executive Officer and Chairman of the Board of Directors since its
inception in November 1996. Since September 1996, Mr. Gillis has been President
of GBL Capital Corporation, a management company formed to develop the concept
that ultimately became the Company. Mr. Gillis ceased day-to-day activity with
GBL Capital Corporation when he became a full-time employee of the Company in
August 1997. Since December 1994, Mr. Gillis has been President of Villanova
Investment Corp. a strategy and investment management consulting company. From
1989 to 1994, Mr. Gillis served as a Senior Vice President of Cedar Point
Partners LP, an equity investment firm engaged in management buyouts. During
that period, he was actively involved in the management of Liebhardt Mills,
Inc., a national bedding manufacturer, of which he was Vice President --
Finance. Mr. Gillis has served as a director of Liebhardt Mills, Inc. since
1989. From 1980 to 1983 and 1985 to 1988, Mr. Gillis served as a consultant with
McKinsey & Co., Inc., a global strategy consulting firm. Mr. Gillis has an
undergraduate degree in Economics from Yale University and an MBA from Stanford
University.
4
<PAGE>
ANDREW R. BACAS is a founder of the Company and has been a director since
its inception in November 1996. Mr. Bacas joined GBL Capital Corporation in May
1997 and has served as the Company's Senior Vice President -- Corporate
Development since August 1997. From 1992 to May 1997, Mr. Bacas was an associate
and later a Vice President -- Corporate Finance of Simmons & Company
International, an investment bank to the international oil service and equipment
industry. From 1991 to 1992, Mr. Bacas was a financial analyst for the Upstream
Business Unit at Exxon Company, USA. From 1984 to 1991, Mr. Bacas was a Naval
Flight Officer in the United States Navy. Mr. Bacas has an undergraduate degree
in Engineering from Yale University and an MBA from the Wharton School of the
University of Pennsylvania.
MITCHELL J. TAUBE co-founded International Data Services in 1989 and served
as its President from inception until its acquisition by the Company in December
1997. Since December 1997, Mr. Taube has managed the Company's Millwood, New
York business unit. Mr. Taube is a Director of Briarcliff Manor Education
Foundation and currently serves on the Service Company Executive Committee of
the Association for Information and Image Management International. Mr. Taube
has an undergraduate degree and an MBA from Hofstra University.
REX LAMB became a director of the Company in December 1997. Mr. Lamb
founded DocuTech, Inc., a document management services company, in 1991 and
served as its President from inception until its acquisition by the Company in
December 1997. Mr. Lamb co-founded DocuTech Data Systems, Inc., a provider of
open-architecture document-scanning software products, in 1994 and served as its
President since inception until its acquisition by the Company in December 1997.
Since December 1997, Mr. Lamb has managed the Company's Lincoln, Nebraska
business unit. Mr. Lamb has an undergraduate degree in Education from the
University of Nebraska.
JOHN E. SEMASKO became a director of the Company in December 1997. Mr.
Semasko acquired Oregon Mico-Imaging, Inc., a document management services
company, in 1975 and served as its President from its inception until its
acquisition by the Company in December 1997. Since December 1997, Mr. Semasko
has managed the Company's Oregon business units located in Eugene and Portland.
Mr. Semasko has an undergraduate degree in Forestry from Rutgers University.
LENNOX K. BLACK became a director of the Company in December 1997. Mr.
Black has been the Chairman of Teleflex Incorporated, a diversified manufacturer
of automotive, marine, industrial, aerospace and medical products, since 1982
and served as its Chief Executive Officer from 1982 to 1995. Mr. Black currently
serves as a director of Quaker Chemical Corporation, Pep Boys and the Penn
Virginia Corporation. Mr. Black has an undergraduate degree in Economics from
McGill University.
DAVID C. CARNEY became a director of the Company in December 1997. Mr.
Carney has been an Executive Vice President of Jefferson Health System, a health
care organization, since 1996. From 1991 to 1995, Mr. Carney served as the Chief
Financial Officer of CoreStates Financial Corporation. From 1980 to 1991 he
served as an area managing partner of Ernst & Young. Mr. Carney currently serves
as a director of CMAC Investment Corporation, AAA Mid-Atlantic & Keystone
Insurance Companies and the World Affairs Council. Mr. Carney has an
undergraduate degree from Temple University and is a graduate of the Advanced
Management Program at the Harvard Business School.
LEWIS E. HATCH, JR. became a director of the Company in December 1997. Mr.
Hatch is the retired former Chairman and Chief Operating Officer of Rusch
International, an international medical device manufacturer. Mr. Hatch is a
director of Teleflex Incorporated and Park-Ohio Industries, Inc. Mr. Hatch has
an undergraduate degree from Ursinus College.
STEVEN N. KAPLAN became a director of the Company in December 1997. Dr.
Kaplan is the Leon Carroll Marshall Professor of Finance at the University of
Chicago Graduate School of Business. Dr. Kaplan joined the faculty of the
University of Chicago originally in 1988 as an Assistant Professor. Previously,
Dr. Kaplan was an associate at Booz Allen Hamilton, Inc. and an analyst with
Kidder
5
<PAGE>
Peabody and Company. Dr. Kaplan holds an A.B. degree in Applied Mathematics, an
A.M. and Ph.D. in Business Economics from Harvard University.
During 1997, there were six meetings of the Board of Directors and no
incumbent attended fewer than 75% of such meetings.
COMMITTEES OF THE BOARD
The Board of Directors established its Compensation Committee and Audit
Committee in 1998.
The Compensation Committee of the Board of Directors, subject to the
approval of the Board of Directors, determines the compensation of the Company's
executive officers and oversees the administration of executive compensation
programs. The Compensation Committee is composed of two independent, nonemployee
directors.
The Audit Committee recommends outside accountants, reviews the results and
scope of the annual audit, the services provided by the Company's independent
auditors and the recommendations of the auditors with respect to the Company's
accounting systems and controls. The Audit Committee is composed of one employee
director and two independent, nonemployee directors. Representatives of the
Company's independent auditing firm Arthur Andersen LLP met with the Audit
Committee on April 24, 1998 and reviewed their examination of the Company's
financial statements for the year ended December 31, 1997.
COMPENSATION OF DIRECTORS
Directors are reimbursed for travel expenses incurred for each board and
committee meeting attended in person. Pursuant to the Company's 1997 Incentive
Plan, the nonemployee directors of the Company were each granted nonqualified
stock options to purchase 20,000 shares of Common Stock at the initial public
offering price of $12.00. The grants vest in equal installments over three
years.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE ENTIRE SLATE OF
NOMINEES IN PROPOSAL NO. 1
6
<PAGE>
PROPOSAL NO. 2 -- APPOINTMENT OF ACCOUNTANTS
Subject to shareholder ratification, the Board of Directors intends to
appoint the firm of Arthur Andersen LLP, which served as the Company's
independent auditors for the last fiscal year, as its independent auditors for
the year ending December 31, 1998.
One or more representatives of Arthur Andersen LLP are expected to be
present at the Annual Meeting, who will have the opportunity to make a statement
if so desired and will be available to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE
"FOR" PROPOSAL NO. 2
7
<PAGE>
EXECUTIVE COMPENSATION
The Company incorporated in November 1996 and neither conducted operations
nor paid any compensation in that year. The following Summary Compensation Table
summarizes the compensation of the Chief Executive Officer and the three other
executive officers of the Company for 1997 (the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION
------------------------------ ---------------------------------
AWARDS PAYOUTS
----------------------- -------
RESTRICTED SECURITIES LTIP
NAME AND PRINCIPAL OTHER ANNUAL STOCK UNDERLYING PAYOUTS ALL OTHER
POSITION YEAR SALARY BONUS COMPENSATION AWARD(S) OPTIONS(#) ($) COMPENSATION
- ------------------ ---- ------- ----- ------------ ---------- ---------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Bruce M. Gillis...... 1997(1) $83,333 -- -- -- 100,000 -- --
Chairman and Chief
Executive Officer
S. David Model....... 1997(2) $56,250 -- -- -- 62,500 -- --
President and Chief
Operating Officer
Andrew R. Bacas...... 1997(1) $54,167 -- -- -- 62,500 -- --
SVP -- Corporate
Development
James D. Brown....... 1997(2) $48,750 -- -- -- 62,500 -- --
SVP -- Chief
Financial Officer
</TABLE>
- ------------------
(1) For the period August 1, 1997 to December 31, 1997.
(2) For the period August 18, 1997 to December 31, 1997.
8
<PAGE>
STOCK OPTION GRANTS
Pursuant to the 1997 Incentive Plan, nonqualified stock options (options
that are not incentive stock options) for 287,500 shares of Common Stock were
granted to the Named Executive Officers of the Company. These grants vest in
equal annual installments over three years, but become fully exercisable in the
event of a change in control, as defined in the 1997 Incentive Plan. The table
below shows option grants in 1997 to the Named Executive Officers of the
Company.
OPTIONS GRANTED IN THE LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE
AT ASSUMED ANNUAL RATES
NUMBER OF % OF TOTAL OF STOCK PRICE
SECURITIES OPTIONS APPRECIATION FOR OPTION
UNDERLYING GRANTED TO EXERCISE TERM (5 YEARS)(1)
OPTIONS EMPLOYEES IN PRICE EXPIRATION ---------------------------
NAME GRANTED FISCAL YEAR ($/SHARE) DATE 5% 10%
---- ---------- ------------ --------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Bruce M. Gillis.......... 100,000 34.78% $12.00 12/08/2002 $331,538 $732,612
Chairman and Chief
Executive Officer
S. David Model........... 62,500 21.74% 12.00 12/08/2002 207,211 457,883
President and Chief
Operating Officer
Andrew R. Bacas.......... 62,500 21.74% 12.00 12/08/2002 207,211 457,883
SVP -- Corporate
Development
James D. Brown........... 62,500 21.74% 12.00 12/08/2002 207,211 457,883
SVP -- Chief Financial
Officer
</TABLE>
- ------------------
(1) "Potential Realizable Value" of each grant is calculated assuming that the
market price of the underlying security appreciates from the initial public
offering price of $12.00 per share at annualized rates of 5% and 10% over
the five-year term of the option. The result of these calculations are based
on rates set forth by the Securities and Exchange Commission (the "SEC") and
are not necessarily intended to forecast possible future appreciation of the
price of the Company's Common Stock.
9
<PAGE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
The table below shows option exercises by the Named Executive Officers in
1997 and year-end amounts of shares of Common Stock underlying outstanding
options.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS AT FY-END(#) AT FY-END($)(1)
SHARES ACQUIRED VALUE ---------------------- --------------------
NAME ON EXERCISE(#) REALIZED($) UNEXERCISABLE UNEXERCISABLE
- ---- --------------- ----------- ---------------------- --------------------
<S> <C> <C> <C> <C>
Bruce M. Gillis............. -- -- 100,000 $ --
Chairman and Chief
Executive Officer
S. David Model.............. -- -- 62,500 --
President and Chief
Operating Officer
Andrew R. Bacas............. -- -- 62,500 --
SVP -- Corporate
Development
James D. Brown.............. -- -- 62,500 --
SVP -- Chief Financial
Officer
</TABLE>
- ------------------
(1) Based on the closing price of $10 1/8 on the Nasdaq National Market on
December 31, 1997.
All of the options granted to the Named Executive Officers first become
exercisable on December 9, 1998 and, therefore, are unexercisable at December
31, 1997. All options were granted at an exercise price equal to the Company's
initial offering price of $12.00. Based on a closing price of $10 1/8 on the
Nasdaq National Market on December 31, 1997, there is no value ascribed to the
unexercisable options at that date.
EMPLOYMENT AGREEMENTS
The Company entered into employment agreements with the Named Executive
Officers in August 1997, the initial terms of which expire on December 31, 2000,
except for Mr. Gillis' agreement which expires on December 31, 2002. Mr. Gillis
serves as Chief Executive Officer at a base annual salary of $200,000. Mr. Model
serves as President and Chief Operating Officer at a base annual salary of
$150,000. Mr. Bacas serves as Senior Vice President -- Corporate Development at
a base annual salary of $130,000. Mr. Brown serves as Senior Vice President --
Chief Financial Officer at a base annual salary of $130,000. The base annual
salary of each of the officers is subject to increases periodically at the
discretion of the Board of Directors, and each such officer may receive an
annual bonus as determined by the Board of Directors. Each of the employment
agreements provides for customary benefits including life, health and disability
insurance, 401(k) plan participation and a car allowance. Each of the employment
agreements further provides that if the employee is terminated without cause, he
is entitled to severance pay of between six months' and one year's base salary
and benefits. In the event the employee is terminated in connection with a
change of control (as defined therein), he is entitled to receive 18 months'
base salary and benefits.
10
<PAGE>
COMPENSATION COMMITTEE REPORT
The Compensation Committee of the Board of Directors (the "Compensation
Committee"), subject to the approval of the Board of Directors, determines the
compensation of the Company's executive officers and oversees the administration
of executive compensation programs. The Compensation Committee is composed of
two independent, nonemployee directors.
EXECUTIVE COMPENSATION POLICIES AND PROGRAMS
The Company's executive compensation programs are designed to attract and
retain highly qualified executives and to motivate them to maximize shareholder
returns by achieving aggressive goals. The programs link each executive's
compensation directly to performance. A significant portion of each executive's
compensation is dependent upon the appreciation of the Common Stock and meeting
financial goals and other individual performance objectives.
There are three basic components to this "pay for performance" system: base
pay; annual incentive bonus; and long-term, equity-based incentive compensation
(primarily stock and/or stock options). Each component is evaluated in the
context of competitive conditions. In determining competitive compensation
levels, the Company considers information from several sources, including
compensation for comparably sized companies and companies in a similar stage of
development. Since the Company's market for executive talent extends beyond the
document management industry, the Compensation Committee considers data for
companies in other industries.
Base pay. Base pay is designed to be competitive within 20% above or below
median salary levels at other similarly situated companies for equivalent
positions. The executive's actual salary, relative to this competitive
framework, varies based on individual performance and the executive's skills,
experience and background.
Annual incentive bonus. Given the limited operating history of the Company
in 1997, no incentive bonuses were awarded. For 1998, award levels, like the
base salary levels, will be set with reference to competitive conditions and are
intended to motivate the Company's executives by providing substantial bonus
payments for the achievement of aggressive goals. The actual amounts paid will
be determined by performance based on two factors: the Company's financial
performance, measured against objectives established for net income, cash flow,
productivity increases, revenue growth and shareholder returns; and the
individual executive's performance against other specific management objectives,
such as building operational systems and developing organizational capability.
Financial and management objectives are given equal weight in determining bonus
payments. The types and relative importance of specific financial and other
business objectives varied among the Company's executives depending on their
positions and the particular operations or functions for which they were
responsible.
Long-term equity-based incentive compensation. The long-term equity-based
compensation program is tied directly to shareholder return. The executive is
rewarded if the shareholders receive the benefit of appreciation in the price of
the Common Stock. To date under the program, long-term incentive compensation
consists of stock option grants, which vest over a three-year period. It is
anticipated the Company will periodically grant new awards to provide continuing
incentives for future performance, without regard to the number of outstanding
awards.
The principal purpose of the long-term incentive compensation program is to
encourage the Company's executives to enhance the value of the Company, and
hence, the price of the Common Stock and the shareholders' return. This
component of the compensation system (through extended vesting) also is designed
to create an incentive for the individual to remain with the Company.
Policy with respect to Internal Revenue Code Section 162(m). In 1993, the
Internal Revenue Code of 1986 (the "Code") was amended to add Section 162(m).
Section 162(m) and the regulations thereunder place a limit of $1,000,000 on the
amount of compensation that may be deducted by the Company in any year with
respect to certain of the Company's most highly compensated officers. Section
162(m) does not, however, disallow a deduction for qualified "performance-based
11
<PAGE>
compensation," the material terms of which are disclosed to and approved by
shareholders. The Company intends, to the extent practicable, to preserve the
deductibility under the Code of compensation paid to its executive officers
while maintaining compensation programs to attract and retain highly qualified
executives in a competitive environment. Accordingly, compensation paid under
the Company's 1997 Incentive Plan is generally deductible, although certain
compensation paid to some executives may not be deductible.
ANNUAL REVIEWS
It is anticipated that each year, the Compensation Committee will review
the executive compensation policies with respect to the linkage between
executive compensation and the creation of shareholder value, as well as the
competitiveness of the programs. The Compensation Committee will determine what
changes, if any, are appropriate in the compensation programs. In conducting
these annual reviews, the Compensation Committee will consider information
provided by the Company's Chief Executive Officer and may use surveys and
reports prepared by independent compensation consultants. The Compensation
Committee will also periodically review the levels of ownership in shares and
share-equivalents of the Common Stock for executive officers to assure that they
maintain ownership positions that properly motivate performance.
The Compensation Committee will annually review, with the Company's Chief
Executive Officer, the individual performance of the other executive officers
and the Chief Executive Officer's recommendations with respect to the
appropriate compensation awards. Subject to the authorization of the Board of
Directors, the Compensation Committee approves salary actions and determines the
amount of annual bonus and the number of long-term, equity-based awards for each
executive officer. The Compensation Committee also reviews with the Chief
Executive Officer, the financial and other objectives for the senior executives
and other officers for the upcoming year.
In 1997, awards to executive officers as a group reflected, on one hand,
the limited operating history of the Company and, on the other, the need to
attract and properly motivate appropriate executives in the initial stages of
the Company's development.
CHIEF EXECUTIVE OFFICER
Mr. Gillis currently serves as the Company's Chief Executive Officer and
has served in such capacity since the Company's inception in November 1996. The
Company and Mr. Gillis entered into an employment agreement in August, 1997,
expiring on December 31, 2002, pursuant to which Mr. Gillis would receive a
minimum annual base salary of $200,000 (subject to increases periodically at the
discretion of the Board of Directors) and the grant of options, among other
things. Prior to the Company's initial public offering and prior to the creation
of the Compensation Committee, the Board of Directors granted Mr. Gillis 100,000
stock options which will vest ratably over a three year period. This grant was
made to provide a stock-based incentive to Mr. Gillis for future performance. No
other incentive compensation was awarded to Mr. Gillis.
Members of the Compensation Committee:
Lennox K. Black, Chairman
Steven N. Kaplan
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
ORGANIZATION OF THE COMPANY
Since inception (November 1996) and prior to its initial public offering
(December 4, 1997), the Company issued Common Stock and Series A Preferred Stock
(1,154,259 shares of Common Stock on an as-converted basis) for an aggregate
purchase price of approximately $1.8 million, including 727,340 shares of Common
Stock (on an as-converted basis) issued to persons who are officers or directors
of the Company as follows: Bruce M. Gillis, Chief Executive Officer and Chairman
of the Board of Directors, purchased an aggregate of 295,448 shares (including
31,025 shares of Common Stock underlying Series A Preferred Stock) for an
aggregate purchase price of $81,041; S. David Model, President and Chief
Operating Officer, purchased an aggregate of 68,750 shares (including 26,442
shares of Common Stock underlying Series A Preferred Stock) for an aggregate
purchase price of $225,000; James D. Brown, Senior Vice President -- Finance,
Chief Financial Officer and Treasurer, purchased an aggregate of 33,846 shares
(including 8,461 shares of Common Stock underlying Series A Preferred Stock) for
an aggregate purchase price of $100,000; Andrew R. Bacas, Senior Vice President
- -- Corporate Development, Secretary and Director, purchased an aggregate of
223,526 shares (including 35,257 shares of Common Stock underlying Series A
Preferred Stock) for an aggregate purchase price of $70,292; David C. Utz, Jr.,
a director, purchased an aggregate of 84,616 shares (including 42,308 shares of
Common Stock underlying Series A Preferred Stock), for an aggregate purchase
price of $25,000; and John E. Semasko, a director, purchased an aggregate of
21,154 shares of Common Stock underlying Series A Preferred Stock for an
aggregate purchase price of $100,000. As members of the initial executive
management group involved in founding and organizing the Company, Messrs.
Gillis, Model, Brown and Bacas are promoters of the Company.
ACQUISITION TRANSACTIONS
In connection with the acquisition of 14 document management services
businesses (the "Founding Companies") simultaneously with the closing of its
initial public offering, and as consideration for their interests in these
companies, certain directors and a director-nominee of the Company received,
directly or indirectly, cash and shares of Common Stock of the Company as
follows: Mr. Utz -- $903,000 and 77,917 shares of Common Stock; Mr. Lamb --
$5,316,000 and 312,813 shares of Common Stock; Mr. Semasko -- $1,449,000 and
127,500 shares of Common Stock; and Mr. Taube -- $1,745,000 and 178,750 shares
of Common Stock. Additionally, the Company repaid approximately $4,435,000 of
indebtedness of the Founding Companies, of which approximately $2,559,000
directly or indirectly benefited Mr. Utz (who was previously either a direct
obligor or a guarantor of such indebtedness).
COMMISSIONS; EQUITY OFFERING
In December 1997, the Company paid approximately $2.6 million for
underwriting discounts and commissions in connection with its initial public
offering, a portion of which was paid to William Blair & Company, L.L.C. as a
managing underwriter. In addition, certain persons associated with William Blair
& Company, L.L.C. purchased an aggregate of 63,462 shares of the Company's
Common Stock in connection with the Company's September 1997 private equity
financing.
MANAGEMENT CONTRACT
The Company entered into a management contract with GBL Capital Corporation
("GBL") in November 1996, whereby GBL managed the operations of the Company for
an initial payment of $5,000 and a monthly fee ranging from $10,000 to $25,000
(aggregating $121,500 through July 31, 1997), plus expenses. The monthly fee
payments under the management contract were terminated on July 31, 1997.
Pursuant to the management contract, upon the completion of its initial public
offering, the Company paid a fee of $500,000 to GBL. Messrs. Gillis and Bacas
are both owners and controlling persons of GBL and are promoters of the Company.
13
<PAGE>
FUTURE TRANSACTIONS
The Company has adopted a policy that it will not enter into any material
transaction in which a Company director or officer has a direct or indirect
financial interest, unless the transaction is determined by the Company's Board
of Directors to be fair as to the Company or is approved by a majority of the
Company's disinterested directors or by the Company's shareholders, as provided
for under Pennsylvania law.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers and directors and persons who own more than ten percent (10%)
of the Company's Common Stock to file initial reports of ownership and reports
of change of ownership with the SEC. Executive officers and directors are
required by SEC regulations to furnish the Company with copies of all Section
16(a) forms they file. Based solely on a review of the copies of such forms
furnished to it, the Company believes that, during the preceding year, the
executive officers and directors and persons who own more than ten percent (10%)
of the Company's Common Stock then subject to Section 16(a) complied with all
Section 16(a) filing requirements.
SHAREHOLDER PROPOSALS FOR 1999 ANNUAL MEETING
Any shareholder proposal intended to be presented at the Company's 1999
annual meeting of shareholders must be received by the Company at its office in
Conshohocken, Pennsylvania on or before December 31, 1998 in order to be
considered for inclusion in the Company's proxy statement and form of proxy
relating to such annual meeting.
14
<PAGE>
OTHER MATTERS
The Board of Directors does not intend to bring any matters before the
Annual Meeting, other than as stated in this Proxy Statement, and is not aware
that any other matters will be presented for action at the Annual Meeting. If
any other matters come before the Annual Meeting, the persons named in the
enclosed Proxy will vote the Proxy with respect thereto, in accordance with
their best judgment, pursuant to the discretionary authority granted by the
Proxy.
The cost of preparing, assembling, mailing and soliciting the Proxies will
be borne by the Company. In addition to the use of the mails, Proxies may be
solicited by regular employees of the Company, either personally or by
telephone. The Company does not expect to pay any compensation for the
solicitation of Proxies, but may reimburse brokers and other persons holding
shares in their names or in the names of nominees for expenses in sending proxy
materials to beneficial owners and obtaining Proxies from such owners.
The Company will furnish without charge to any shareholder, upon written or
oral request, a copy of the Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1997 and other documents filed pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934. Requests for
such documents should be addressed to James D. Brown, Senior Vice President --
Chief Financial Officer of ImageMax, Inc., 1100 East Hector Street, Suite 396,
Conshohocken, PA 19428, telephone number (610) 832-2111.
All properly executed Proxies delivered pursuant to this solicitation and
not revoked will be voted at the Annual Meeting in accordance with the
directions given. In voting by Proxy in regard to the election of Class I
directors to serve until the 2001 Annual Meeting of Shareholders, shareholders
may vote in favor of all nominees or withhold their votes as to all nominees or
withhold their votes as to specific nominees. With respect to other items to be
voted upon, shareholders may vote in favor of the item or against the item or
may abstain from voting. Shareholders should specify their choices on the
enclosed Proxy. If no specific instructions are given with respect to the
matters to be acted upon, and the Proxy is returned properly executed, then the
shares represented by the Proxy will be voted FOR the election of all Class I
nominees, and FOR the proposal to ratify the appointment of the independent
accountants.
PLEASE DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT IN THE ENCLOSED ENVELOPE.
NO POSTAGE IS REQUIRED IF IT IS MAILED IN THE UNITED STATES.
IMAGEMAX, INC.
/s/ Andrew R. Bacas
---------------------------------
Andrew R. Bacas
Secretary
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<PAGE>
IMAGEMAX, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned, revoking all previous proxies, hereby appoints Andrew R.
Bacas and James D. Brown, or any of them acting individually, as the proxy of
the undersigned, with full power of substitution, to vote, as indicated below
and in their discretion upon such other matters as may properly come before the
meeting, all shares which the undersigned would be entitled to vote at the
Annual Meeting of the Company to be held at 9:00 A.M., Eastern Daylight time,
June 15, 1998 at the Philadelphia Marriott West, 111 Crawford Avenue, West
Conshohocken, Pennsylvania 19428, and at any adjournment or postponement
thereof.
1. ELECTION OF DIRECTORS
<TABLE>
<S> <C>
/ / WITHHOLD AUTHORITY to vote for all nominees listed
/ / FOR all nominees listed below below
</TABLE>
<TABLE>
<S> <C>
Nominees: For a three-year term expiring at the 2001 Annual Meeting of
Shareholders:
Bruce M. Gillis, David C. Carney and Mitchell J. Taube.
(INSTRUCTION: To withhold authority to vote for any nominee(s), write the
name(s) of such nominee(s) on the line below.)
</TABLE>
- --------------------------------------------------------------------------------
2. RATIFICATION OF APPOINTMENT OF ARTHUR ANDERSEN LLP AS INDEPENDENT ACCOUNTANTS
FOR THE FISCAL YEAR ENDING DECEMBER 31, 1998:
/ / FOR / / AGAINST / / ABSTAIN
(Please date and sign your Proxy on the reverse side and return it promptly)
<PAGE>
This Proxy is solicited on behalf of the Board of Directors. Unless
otherwise specified, the shares will be voted "FOR" the election of all nominees
for director listed on the reverse side hereof and "FOR" ratification of
appointment of Arthur Andersen LLP as the Company's independent public
accountants. This Proxy also delegates discretionary authority with respect to
any other business which may properly come before the meeting or any adjournment
or postponement thereof.
The undersigned hereby acknowledges receipt of the notice of Annual Meeting
and Proxy Statement.
Date: ______________________ , 1998
___________________________________
Signature of Shareholder
___________________________________
Signature of Shareholder
NOTE: PLEASE SIGN THIS PROXY
EXACTLY AS NAME(S) APPEAR ON YOUR
STOCK CERTIFICATE. WHEN SIGNING AS
ATTORNEY-IN-FACT, EXECUTOR,
ADMINISTRATOR, TRUSTEE OR GUARDIAN,
PLEASE ADD YOUR TITLE AS SUCH, AND
IF SIGNER IS A CORPORATION, PLEASE
SIGN WITH FULL CORPORATE NAME BY A
DULY AUTHORIZED OFFICER OR OFFICERS
AND AFFIX THE CORPORATE SEAL. WHERE
STOCK IS ISSUED IN THE NAME OF TWO
(2) OR MORE PERSONS, ALL SUCH
PERSONS SHOULD SIGN.
