LANDAUER, INC.
2 SCIENCE ROAD, GLENWOOD, ILLINOIS 60425-1586
TELEPHONE (708) 755-7000
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
Notice is hereby given that the annual meeting of the stockholders of
Landauer, Inc., a Delaware corporation, will be held at the DuPage Club,
1901 Meyers Road, Oakbrook Terrace, Illinois, at 4:00 p.m., local time, on
Wednesday, February 4, 1998 for the following purposes:
1. To elect three directors to hold office for a term of three
years each.
2. To vote on the proposal to approve the selection of Arthur
Andersen LLP as the auditors of the Company for the fiscal year ending
September 30, 1998.
3. To transact such other business as may properly come before the
meeting.
Only stockholders of record at the close of business on December 11,
1997 are entitled to notice of and to vote at the meeting.
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE MEETING. THEREFORE,
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE SIGN AND DATE YOUR
PROXY AND RETURN IT IN THE ENCLOSED ENVELOPE, WHICH REQUIRES NO POSTAGE IF
MAILED IN THE UNITED STATES. IF YOU ATTEND THE MEETING AND VOTE IN PERSON,
YOUR PROXY WILL NOT BE USED.
JAMES M. O'CONNELL
VICE PRESIDENT, TREASURER, SECRETARY
AND CHIEF FINANCIAL OFFICER
January 5, 1998
<PAGE>
PROXY STATEMENT
APPROXIMATE DATE OF MAILING: JANUARY 6, 1998
INFORMATION CONCERNING THE PROXY SOLICITATION
The enclosed proxy is solicited by and on behalf of the Board of
Directors of Landauer, Inc. (the "Company") for use at the annual meeting
of stockholders of the Company to be held on Wednesday, February 4, 1998 at
4:00 p.m., local time, at the DuPage Club, 1901 South Meyers Road, Oakbrook
Terrace, Illinois, or any adjournments or postponements thereof. It is
subject to revocation at any time prior to the exercise thereof by giving
written notice to the Secretary of the Company, by submission of a later
dated proxy or by voting in person at the meeting. The costs of
solicitation, including the preparation, assembly and mailing of proxy
statements, notices and proxies, will be paid by the Company. Such
solicitation will be made by mail and in addition may be made by the
officers and employees of the Company personally or by telephone or
telegram. Forms of proxies and proxy material may also be distributed, at
the expense of the Company, through brokers, custodians and other similar
parties to the beneficial owners of the Common Stock. The Company has
retained American Stock Transfer Company, 40 Wall Street, New York, New
York.
On December 11, 1997, the Company had outstanding 8,504,091 shares of
Common Stock, $.10 par value, which is its only class of voting stock, held
of record by approximately 600 holders. Only stockholders of record at the
close of business on December 11, 1997 will be entitled to receive notice
of and to vote at the meeting. With respect to all matters which will come
before the meeting, each stockholder may cast one vote for each share
registered in his name on the record date. A stockholder may, with regard
to the election of directors (i) vote for the election of all named
director nominees, (ii) withhold authority to vote for all named director
nominees or (iii) vote for the election of all named director nominees
other than any nominee with respect to whom the stockholder withholds
authority to vote by so indicating in the appropriate space on the proxy.
A stockholder may, with respect to the proposal to approve the selection of
Arthur Andersen LLP as auditors (i) vote FOR such proposal, (ii) vote
AGAINST such proposal or (iii) ABSTAIN from voting on such proposal. The
shares represented by every proxy received will be voted, and where a
choice has been specified, the shares will be voted in accordance with the
specification so made. If no choice has been specified on the proxy, the
shares will be voted FOR the election of the nominees as directors and FOR
approval of Arthur Andersen LLP as auditors. The proxy also gives
authority to the proxies to vote the shares in their discretion on any
other matter presented at the meeting. If a proxy indicates that all or a
portion of the shares represented by such proxy are not being voted with
respect to a particular proposal, such non-voted shares will not be
considered present and entitled to vote on such proposal, although such
shares may be considered present and entitled to vote on other proposals
and will count for the purpose of determining the presence of a quorum. An
abstention with respect to the proposal to approve the selection of Arthur
Andersen LLP as auditors has the effect of a vote against such proposal.
BENEFICIAL OWNERSHIP OF CERTAIN VOTING SECURITIES
The following table provides information as of December 11, 1997
concerning beneficial ownership of Common Stock by each person known by the
Company to own beneficially more than 5% of the outstanding shares of
Common Stock, each director, each director nominee, each executive officer
of the Company named under the caption "Executive Compensation" and all
directors and executive officers of the Company as a group. Unless
otherwise noted, the listed persons have sole voting and dispositive powers
with respect to shares held in their names, subject to community property
laws if applicable.
<PAGE>
AMOUNT
BENEFICIALLY PERCENT
Name of Beneficial Owner OWNED OF CLASS
------------------------ ------------ ---------
T. Rowe Price Associates 721,500 (1) 8.2%
Dr. Marvin G. Schorr 608,556 6.9%
Putnam Investments, Inc. 438,700 (2) 5.0%
Dr. Gary D. Eppen 1,100 *
Thomas M. Fulton 244,234 (3) 2.8%
Richard R. Risk 500 *
Paul B. Rosenberg 84,610 (4) 1.0%
Herbert Roth, Jr. 9,000 *
Michael D. Winfield 350 *
Brent A. Latta 65,000 (5) *
James M. O'Connell 49,000 (6) *
Dr. R. Craig Yoder 47,434 (7) *
All directors and executive
officers as a group (9 persons) 1,157,550 13.1%
__________
*Less than one percent.
(1) As reported in Statement on Schedule 13G filed with the Securities
and Exchange Commission on February 14, 1997. Includes 650,000 shares
owned by the T. Rowe Price Small Cap Value Fund, Inc. Price Associates
expressly disclaims that it is the beneficial owner of such securities.
The address of this stockholder is 100 East Pratt Street, Baltimore, MD
21201.
(2) As reported in Amendment No. 2 to Statement on Schedule 13G filed
with the Securities and Exchange Commission on January 15, 1996. This
ownership by certain Putnam investment managers (together with their parent
corporations, Putnam Investments, Inc. and Marsh & McLennan Companies,
Inc.) is considered "beneficial ownership" of the Company's voting common
stock, which shares were acquired for investment purposes by such
investment managers for certain of their advisory clients. The address of
this stockholder is One Post Office Square, Boston, MA 02109.
(3) Includes 62,720 shares subject to options exercisable within 60
days following the record date for the annual meeting.
(4) Includes 25,000 shares owned by Mr. Rosenberg's wife to which he
disclaims beneficial ownership.
(5) Includes 65,000 shares subject to options exercisable within 60
days following the record date for the annual meeting.
(6) Includes 45,000 shares subject to options exercisable within 60
days following the record date for the annual meeting.
(7) Includes 40,000 shares subject to options exercisable within 60
days following the record date for the annual meeting.
<PAGE>
ELECTION OF DIRECTORS
Members of the Company's Board of Directors are divided into three
classes serving staggered three-year terms. The terms of three of the
Company's eight current directors (Gary D. Eppen, Marvin G. Schorr, and
Michael D. Winfield) expire at the annual meeting. They are the Company's
nominees for re-election to a three-year term by the stockholders at the
annual meeting. The Company's by-laws provide that nominations for
directorships by stockholders may be made only pursuant to written notice
received at the Company's principal office not less than 50 nor more than
75 days prior to the meeting. No such nominations have been received for
the 1998 annual meeting. Directors are elected by a plurality of the votes
present in person or represented by proxy at the meeting and entitled to
vote on the election of directors. Thus, assuming a quorum is present, the
three persons receiving the greatest number of votes will be elected to
serve as directors. Accordingly, withholding authority to vote for a
director and non-votes with respect to the election of directors will not
affect the outcome of the election of directors. If a nominee should
become unavailable for election, the persons voting the accompanying proxy
may in their discretion vote for a substitute.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ELECTION OF THE NAMED
NOMINEES AS DIRECTORS OF THE COMPANY.
The following table contains certain information as to the three
nominees for election at the annual meeting and each other person whose
term of office as a director will continue after the meeting. The nominees
for election at the meeting are indicated by an asterisk.
Expira- Has Been a
tion Business Experience Director of
Date of During Past Five the Company or
Current Years and Other its Predecessor
Name Term Directorships Tech/Ops, Since
---- ------- ------------------ ---------------
Robert J. Cronin(2)(3) 1999 Since November, 1992, 1997
Age - 52 President, Chief
Executive Officer
and director of
Wallace Computer
Services; previously
President and COO.
Mr. Cronin joined
Wallace Computer Services
in 1967, initially holding
various sales management
positions. Wallace
Computer Services is
provider of information
management products,
services and solutions.
*Dr. Gary D. Eppen(2)(3) 1998 Since July, 1997, Ralph 1992
Age - 61 and Dorothy Keller
Distinguished Service
Professor of Operations
Management, Graduate
School of Business, The
University of Chicago.
Professor of Industrial
Administration since
1970 (1989 - 1994 also
Director of The Executive
Program),. Dr. Eppen is
also a director of The
Hub Group Inc., Lombard,
Illinois, an intermodal
transportation marketing
company.
<PAGE>
Expira- Has Been a
tion Business Experience Director of
Date of During Past Five the Company or
Current Years and Other its Predecessor
Name Term Directorships Tech/Ops, Since
---- ------- ------------------ ---------------
Thomas M. Fulton 2000 President and Chief 1988
Age - 64 Executive Officer of the
Company since January
1988; previously General
Manager of the personnel
dosimetry division of
Tech/Ops, Inc., the
Company's predecessor. Mr.
Fulton is a Director of
Great Lakes Chemical Corp-
oration, a diversified
producer of chemicals.
Richard R. Risk(1)(2) 1999 President and Chief 1997
Age - 51 Executive Officer of
Advocate Health Care since
1995; previously Mr. Risk
served as President and CEO
of EHS Health Care (which
merged into Advocate Health
Care), a company specializing
in health care management.
Paul B. Rosenberg(1)(2) 2000 Mr. Rosenberg is President 1988
Age - 65 and Chief Executive Officer
of Tech/Ops Corporation,
Boston, Mass., a consulting
firm, and is a director of
Tech/Ops Sevcon, Inc., Boston,
Mass., a manufacturer of
electronic controllers.
Herbert Roth, Jr. 2000 Until June 1985, Chief 1971
(1)(2)(3) Age - 69 Executive Officer of LFE
Corporation, Waltham, Mass.,
manufacturer of equipment
and systems for traffic and
industrial process control.
Mr. Roth is a director of
Boston Edison Company,
Boston, Mass., a public
utility; Tech/Ops Sevcon,
Inc., Boston, Mass., a manu-
facturer of electronic
controllers; Phoenix Life
Insurance Company; Phoenix
Total Return Fund, Inc., a
mutual fund; and Mark IV
Industries, Inc., a diver-
sified manufacturing concern;
and a trustee of Phoenix
Series Fund, Phoenix Multi-
Portfolio Fund and Big
Edge Services Fund, all
mutual funds.
<PAGE>
Expira- Has Been a
tion Business Experience Director of
Date of During Past Five the Company or
Current Years and Other its Predecessor
Name Term Directorships Tech/Ops, Since
---- ------- ------------------ ---------------
*Dr. Marvin G. Schorr(3) 1998 Chairman of the Company's 1951
Age - 72 Board of Directors since
January 1988. Dr. Schorr is
Chairman of the Board of
Directors of Tech/Ops Sevcon,
Inc., Boston, Mass., a
manufacturer of electronic
controllers; Chairman of
the Board of Directors of
Helix Technology Corporation,
Waltham, Mass., manufacturer of
cryogenic equipment; and
Chairman of the Board of
Directors of Tech/Ops Corpo-
ration, Boston, Mass., a
consulting firm.
*Michael D. Winfield 1998 Since February 1992, 1994
(1)(2) Age - 58 President and Chief
Executive Officer (prior to
that date since 1983, a
Vice President) of UOP, a
general partnership of
Allied-Signal, Inc. and
Union Carbide Corporation,
engaged in the licensing of
technologies to the oil
refining and petro-chemical
industries.
(1) Member of the Audit Committee.
(2) Member of the Compensation Committee.
(3) Member of the Governance Committee.
The Board of Directors has an Audit Committee, a Compensation
Committee, and a Governance Committee. The Audit Committee reviews the
results and scope of the audit and other services provided by the Company's
independent public accountants and recommends the appointment of
independent public accountants to the Board of Directors. The Compensation
Committee approves all executive compensation and has responsibility for
granting stock options to eligible members of management and administering
the Company's stock option and incentive plans. The Governance Committee
establishes corporate governance policy and selects nominees for the Board
of Directors. The Governance Committee will consider nominees that have
been properly and timely recommended by stockholders. See "Proposals of
and Nominations by Security Holders for 1999 Annual Meeting." The
membership of each committee consists of non-employee directors. During
the fiscal year ended September 30, 1997, the Audit Committee, Compensation
Committee and the Governance Committee each met twice.
During the fiscal year ended September 30, 1997, the Board of
Directors held a total of five meetings. During such year, no director
attended fewer than 75 percent of the aggregate of the total number of
meetings of the Board of Directors and the total number of meetings held by
all committees of the Board on which such director served.
Mr. Roth, the Chairman of the Audit Committee, Mr. Michael D.
Winfield, the Chairman of the Compensation Committee, and Dr. Gary D.
Eppen, the Chairman of the Governance Committee, were paid $21,000 each in
fiscal 1997 for their services as directors. The other directors (except
Mr. Fulton) were paid $20,000 each. The Company maintains a stock option
plan for its non-employee directors which provides an option for each
eligible director to purchase 5,000 shares of common stock at the fair
market value on the date of grant and vests ratably over 10 years. The
plan, approved by the Company's shareholders at its 1997 annual meeting,
granted options to seven directors for a total of 35,000 shares at an
option price of $22.31 per share on January 29, 1997. The Company formerly
maintained a Directors' Retirement Plan which provides certain retirement
benefits for non-employee directors. This plan was terminated in January,
1997. Benefits accrued under the retirement plan are frozen and will be
payable to directors upon their retirement at age 70. As of September 30,
1997, the aggregate liability for these benefits amounted to $377,000,
which has been accrued in the financial statements.
<PAGE>
<TABLE>
EXECUTIVE COMPENSATION
The following summary compensation table sets forth the compensation for services to the Company for the
last three fiscal years of the Company's executive officers.
SUMMARY COMPENSATION TABLE
<CAPTION>
Long-Term
Compensation
Awards
------------
Securities All Other
Name and Fiscal Annual Compensation Underlying Compensation
Principal Position Year Salary ($) Bonus ($) Options (#) ($)(1)
__________________ ______ __________ ____________ ____________ ____________
<S> <C> <C> <C> <C> <C>
Thomas M. Fulton 1997 $ 279,000 $100,000 -- $ 1,150
President & 1996 267,500 75,000 -- 1,150
Chief Executive Officer 1995 256,250 100,000 -- 1,150
Brent A. Latta 1997 $ 183,000 $ 65,000 -- $ 1,150
Vice President-Executive 1996 175,250 43,000 -- 1,150
1995 168,000 65,000 20,000 1,150
James M. O'Connell 1997 $ 144,500 $ 44,000 -- $ 1,150
Vice President, 1996 138,750 45,000 -- 1,150
Treasurer, Secretary 1995 133,750 60,000 20,000 1,150
& Chief Financial
Officer
R. Craig Yoder 1997 $ 139,500 $ 50,000 -- $ 1,150
Vice President-Operations 1996 133,750 38,000 -- 1,150
1995 126,250 50,000 20,000 1,150
<FN>
(1) Represents the Company's contribution to its 401(k) plan on behalf of each of these employees.
OPTIONS GRANTS IN LAST FISCAL YEAR
There were no stock options granted in the year ended September 30, 1997 to the Company's executive officers.
</TABLE>
<PAGE>
FISCAL YEAR-END OPTION VALUES
Shown below is information regarding holdings of unexercised stock
options at September 30, 1997 by the Company's executive officers.
NO. OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS HELD AT IN-THE-MONEY OPTIONS
SEPTEMBER 30, 1997 AT SEPTEMBER 30, 1997 ($)(1)
------------------------- ----------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ------------- ----------- -------------
Thomas M. Fulton 152,720 47,280 $ 2,625,378 $ 685,560
Brent A. Latta 60,000 10,000 893,438 85,000
James M. O'Connell 40,000 10,000 352,188 85,000
R. Craig Yoder 35,000 10,000 481,641 85,000
(1) Aggregate market value on September 30, 1997 less aggregate exercise
price.
Dr. Yoder exercised options on 4,000 shares during the last fiscal
year.
EMPLOYMENT AND COMPENSATION AGREEMENTS. The Company has entered into
an Employment and Compensation Agreement with Mr. Fulton providing for his
employment in that capacity through December 31, 1998. Under the
Agreement, a non-statutory stock option to purchase 100,000 shares at a
price of $10.50 per share was granted to Mr. Fulton, which may become
exercisable for up to 10,000 shares a year on each December 1 from 1989
through 1998 under a formula reflecting average return on stockholders'
investment and earnings per share over successive three-year periods. At
December 1, 1997 the option had become exercisable for a total of 62,720
shares. The Agreement also provides that, in the event of termination of
employment under certain circumstances, within two years following a Change
in Control in the Company (as defined) not approved by the Company's Board
of Directors, by the Company other than for cause, disability or
retirement, or by Mr. Fulton for Good Reason (which includes a good faith
determination by him that due to the Change in Control he is not or
believes he will not be able effectively to discharge his duties), Mr.
Fulton will become entitled to base salary and average bonuses determined
in accordance with the Agreement, and certain other benefits, over the
balance of the term of the Agreement. The benefits payable to Mr. Fulton
under the Agreement if his employment had terminated as of September 30,
1997 due to a Change in Control would have had an estimated value of
$503,000.
The Company has entered into Employment Agreements with Messrs. Latta
and O'Connell and Dr. Yoder providing for their employment in their
respective capacities indefinitely. The Agreement provides that, in the
event of termination of employment under certain circumstances by the
Company other than for cause, death, disability or voluntary termination,
or by the executive for Good Reason (which includes a good faith
determination by the executive that he believes that he will not be able to
effectively discharge his duties or where the Company fails to obtain an
assumption in writing of its obligations under the Agreement by a
successor, as defined) the executive will become entitled to continuation
of base salary and average bonuses determined in accordance with the
Agreement for a period of eighteen months and certain other benefits. The
amounts otherwise payable to the executive will be offset by any
compensation earned by the executive from employment with a new employer
during the eighteen-month period but will not be reduced below an amount
equal to six month's base salary and average bonuses. The benefits payable
to Messrs. Latta and O'Connell and Dr. Yoder under these Agreements if
their employment had been terminated as of September 30, 1997 would have
had an estimated value of $398,000, $315,000 and $312,000, respectively.
<PAGE>
RETIREMENT PLAN AND SUPPLEMENTAL RETIREMENT PLAN. Messrs. Fulton,
Latta, and O'Connell, and Dr. Yoder participate in the Company's Retirement
Plan, a defined benefit plan under which benefits are based upon the
average of the annual rates of base salary in effect as of October 1 of
each year for the period of five consecutive years which produces the
highest such average and also based on years of service as set forth below.
U.S. tax law places limitations on the annual compensation eligible for
benefit consideration and on the aggregate annual amount payable to an
individual under qualified retirement plans.
Messrs. Fulton, Latta, and O'Connell, and Dr. Yoder also participate in
the Company's Supplemental Key Executive Retirement Plan, under which a
participant is entitled to such payments from the Company during his life
after retirement at age 65 as may be necessary, when added to his benefits
under other Company-funded retirement or profit sharing plans, to provide a
minimum annual benefit equal to 50% of his highest five-year average or
final base salary, whichever is greater. Such payments continue to a
participant's spouse after the participant's death, but at a decreased
percentage of 25%. Benefits are reduced by 2% (1% for spouses) for each
year of service less than 25 years.
The following table sets forth information concerning the combined
annual benefits payable pursuant to the Retirement Plan on a straight-life
annuity basis and the Supplemental Retirement Plan on a 50% joint-and-
survivor basis upon retirement at age 65 for specified compensation levels
(assuming continuation of 1997 fiscal year base salary) and years of
service classifications. Benefits under the Retirement Plan and the
Supplemental Retirement Plan are computed solely on the base salary of
participants, exclusive of bonuses, incentive and other compensation.
Benefits under the Retirement Plan which are reduced on account of Social
Security entitlement on the basis of the Internal Revenue Service permitted
disparity rules may be reinstated under the Supplemental Retirement Plan.
<PAGE>
PENSION PLAN TABLE
EARNINGS ON ESTIMATED COMBINED ANNUAL PENSION BASED ON
WHICH COMBINED YEARS OF SERVICE INDICATED
RETIREMENT -------------------------
BENEFITS ARE BASED 20 YEARS 25 YEARS 30 YEARS 35 YEARS
__________________ ________ ________ ________ ________
$ 125,000 $ 50,000 $ 62,500 $ 62,500 $ 70,200
150,000 60,000 75,000 75,000 85,500
175,000 70,000 87,500 87,500 87,500
200,000 80,000 100,000 100,000 100,000
225,000 90,000 112,500 112,500 112,500
250,000 100,000 125,000 125,000 125,000
275,000 110,000 137,500 137,500 137,500
300,000 120,000 150,000 150,000 150,000
Credited years of service at September 30, 1997 were 20 for Mr.
Fulton, 10 for Mr. Latta, 7 for Mr. O'Connell, and 14 for Dr. Yoder.
Credited years of service at age 65 would be 21 for Mr. Fulton, 21 for Mr.
Latta, 22 for Mr. O'Connell and 35 for Dr. Yoder.
COMPENSATION COMMITTEE REPORT
The Company's compensation program is designed to motivate and retain
employees by encouraging and rewarding performance. The program is
administered by the Compensation Committee of the Board of Directors (the
"Committee"), consisting of six independent outside directors who are not
employees of the Company. The Committee regularly reviews and approves
generally all compensation and fringe benefit programs of the Company, and
also reviews and determines the base salary, and incentive compensation of
the executive officers named above, as well as stock option grants to all
employees. All compensation actions taken by the Committee are reported to
the full Board of Directors, who, excluding employee directors, approve the
actions of the Committee. The Committee also reviews and makes
recommendations to the Board on policies and programs for the development
of management personnel, as well as management structure and organization.
The Committee administers the Company's 1996 Equity Plan (the "Equity
Plan") and Incentive Compensation Plan for Executive Officers (the
"Executive Officer Plan"); each of which was approved by the Compensation
Committee, the Board of Directors and the Company's shareholders.
The Company believes that stock options are an important incentive to
motivate executive officers and other key employees for improved long-term
performance of the Company. The Company considers stock ownership, options
currently held and options previously granted when granting options
although there are no specific levels of ownership for such grants.
The Company believes that the combination of salary and incentive
compensation is the best tool for compensating its executive officers and
senior managers to promote uniform excellence, long-term commitment and
team performance. Management salaries are determined as a result of
individual performance, level of responsibility and experience. The
Company reviews these salaries annually and measures them against
compensation data obtained from published compensation surveys and surveys
that the Committee makes of a group of peer companies. The peer companies
are generally of about the same size as the Company and are in technical,
rather than consumer or distribution fields. The peer companies may
include some of the companies in the testing laboratory group used in the
Performance Graph. The Company believes that its competitors for executive
talent are not necessarily companies which engage in the same business as
the Company and, therefore, the companies used for comparative compensation
purposes differ from the companies included in the testing laboratory
group.
The Executive Officer Plan covers executive officers of the Company
who are elected by the Board of Directors to such offices and establishes
incentive pools which are related to aggregate executive officer base
salary and performance of the Company relative to (i) budgeted operating
income ("Operating Income Pool"), (ii) growth in earnings per share ("EPS
Pool"), and (iii) the AMEX Market Value Index ("Stockholder Return Pool").
The target percentages of aggregate executive officer base salary for the
Operating Income, EPS, and Stockholder Return Pools are 15%, 7.5%, and
7.5%, respectively. The actual size of each pool varies as a result of
actual performance compared with the performance measure for each pool.
OPERATING INCOME POOL. At 100% actual-to-budget operating income,
the Operating Income Pool is 15% of aggregate executive officer base
salary; at 80% actual-to-budget, the pool is 7.5% of base salary; and at
120% actual-to-budget, the pool is 25.5% of base salary. If actual-to-
budget is less than 60%, the Operating Income Pool is zero.
EPS POOL. At average three-year growth in earnings per share of 10%,
the EPS Pool is 7.5% of aggregate executive officer base salary; at average
growth in earnings per share of 8%, the pool is 3.75% of base salary; and
at average growth in earnings per share of 12% the pool is 12.75% of base
salary. If average growth in earnings per share is 6% or lower, the EPS
Pool is zero.
STOCKHOLDER RETURN POOL. Where the three-year total return to
stockholders is equal to or exceeds the total return of the AMEX Market
Value Index, the Stockholder Return Pool is 7.5% of aggregate executive
officer base salary. In all other cases, the Stockholder Return Pool is
zero.
One-half of the Operating Income Pool is awarded to executive
officers, as a percentage of their base salaries, if the actual-to-budget
operating income is at least 90%. One-half of the EPS Pool is awarded to
executive officers, as a percentage of their base salaries, if the average
growth in earnings per share is at least 9%. One-half of the Stockholder
Return Pool is awarded to executive officers, as a percentage of their base
salaries, if the total return to stockholders of the Company exceeds the
total return of the AMEX Market Value Index. With respect to the balance
of each of the pools, The Compensation Committee has the discretion to
award to any participant an amount relating to each of the Operating Income
Pool, EPS Pool, and/or the Stockholder Return Pool ranging in value from
zero to one-half of the award such participant would otherwise receive.
Any amounts not so awarded may, at the discretion of the Committee, be
reallocated to any other participant based upon the Committee's evaluation
of the participant's individual performance relative to written objectives
and other factors.
If the actual-to-budget operating income is at least 60%, but less
than 90%, the Committee has the discretion to award to any participant an
amount relating to the Operating Income Pool ranging in value from zero to
the full amount of the award such participant would otherwise receive. If
the average growth in earnings per share is at least 6%, but less than 9%,
the Committee has the discretion to reduce an award to any participant an
amount relating to the EPS Pool ranging in value from zero to the full
amount of the award such participant would otherwise receive.
The aggregate amount of incentive compensation awards for any fiscal
year under the Executive Officer Plan and other incentive compensation
plans is limited to 5% of the Company's operating income for such fiscal
year.
The recommended base salary and incentive compensation award for the
President is determined each year by the Committee based upon overall
financial performance of the Company and the performance of the President
relative to corporate objectives and other factors under the terms of the
Executive Officer Plan.
Mr. Fulton's base salary and incentive compensation during fiscal
1997 increased 11% to $382,000 from fiscal 1996. The increase in Mr.
Fulton's base salary related to the level of responsibility and
accountability of the Chief Executive Officer, as well as external factors
such as inflation and base salary levels in comparable companies. The
amount of incentive compensation awarded to Mr. Fulton was determined based
on performance relative to budgeted operating income, growth in earnings
per share, the total return to shareholders of the Company relative to the
Amex Market Value Index and individual performance relative to stated
objectives under the terms of the Executive Officer Plan. Each of these
financial measures was met or exceeded, and Mr. Fulton achieved
substantially all of the personal objectives established by the Board of
Directors during fiscal 1997.
In 1993, the tax laws were amended to limit the deduction a publicly-
held company is allowed for compensation paid to the chief executive
officer and the four most highly compensated executive officers other than
the chief executive officer. Generally, amounts paid in excess of $1
million to a covered executive, other than performance-based compensation,
cannot be deducted. In order to constitute performance-based compensation,
the performance measures must be approved by stockholders. No executive
officer of the Company has earned over $1 million in any fiscal year of the
Company.
MEMBERS OF THE COMPENSATION COMMITTEE:
Herbert Roth, Jr., Gary D. Eppen, Paul B. Rosenberg
Richard R. Risk, Robert J. Cronin, Michael D. Winfield, Chairman
PERFORMANCE GRAPH
The following graph reflects a comparison of the cumulative total
return (change in stock price plus reinvested dividends) assuming $100
invested in the Common Stock of the Company, in the American Stock Exchange
("AMEX") Index, and in the group of testing laboratories during the period
from September 30, 1992 through September 30, 1997. The comparisons in the
following table are historical and are not intended to forecast or be
indicative of possible future performance of the Common Stock of the
Company.
Value of Investment at September 30,
------------------------------------
1992 1993 1994 1995 1996 1997
---- ---- ---- ---- ---- ----
Landauer, Inc. $ 100 $ 102 $ 108 $ 134 $ 148 $ 196
AMEX Index 100 117 120 144 150 182
Industry Index 100 69 59 79 106 83
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company has entered into a consulting agreement, which expires on
December 31, 1998, with Tech/Ops Corporation, a company owned by Paul B.
Rosenberg and Dr. Marvin G. Schorr, two of the Company's directors. Under
the terms of the agreement, the annual cost of these services will not
exceed $30,000 plus reimbursement for certain expenses.
In connection with the 1988 transfer of the personnel dosimetry
business, the Company has entered into a Liability Assumption and Sharing
Agreement with Tech/Ops, Inc. (Tech/Ops) providing for, among other things,
(i) assumption by the Company of all determinable and contingent
liabilities and obligations of Tech/Ops relating to the personnel dosimetry
and radon detection business, (ii) assumption by the other former
subsidiary of Tech/Ops of all determinable and contingent liabilities and
obligations of Tech/Ops relating to its electronic controller business,
(iii) joint and several assumption by the Company and the other former
subsidiary of all contingent liabilities of Tech/Ops and (iv) the
allocation of other liabilities jointly and severally assumed to the
business in which they relate or, if they relate to neither business, in
ratios reflective of relative profit contributions of the respective
businesses for the five years ended September 30, 1987. Under the terms of
this agreement, no expense was charged to operations of the Company for the
fiscal year ended September 30, 1997.
SELECTION OF AUDITORS
The stockholders of the Company will be asked at the annual meeting
to approve the selection of auditors for the fiscal year ending September
30, 1998. Arthur Andersen LLP, 33 West Monroe Street, Chicago, Illinois,
has served as auditors for the Company and its predecessor Tech/Ops, Inc.
since the latter was formed, and it will be recommended to the stockholders
that such firm be selected again. The Audit Committee of the Board of
Directors comprised of Richard R. Risk, Paul B. Rosenberg, Herbert Roth,
Jr. and Michael D. Winfield, has approved this recommendation.
Representatives of Arthur Andersen LLP are expected to be present at the
meeting with an opportunity to make a statement if they desire to do so,
and are expected to be available to respond to appropriate questions.
If a quorum is present, in order to approve the selection of Arthur
Andersen LLP as the Company's auditors for the fiscal year ending September
30, 1998, a majority of the shares present in person or by proxy at the
annual meeting and entitled to vote on such proposal must vote in favor of
it. Accordingly, abstentions will have the same effect as votes against
and non-votes will reduce the number of shares considered present and
entitled to vote on the proposal.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE SELECTION OF ARTHUR
ANDERSEN LLP AS AUDITORS OF THE COMPANY FOR THE FISCAL YEAR ENDED SEPTEMBER
30, 1998.
<PAGE>
PROPOSALS OF AND NOMINATIONS BY SECURITY HOLDERS FOR
1999 ANNUAL MEETING
Proposals intended to be presented by security holders at the annual
meeting of the Company's stockholders scheduled for February 3, 1999 must
be received by the Company in order to be considered for inclusion in its
proxy statement and form of proxy relating to that meeting not later than
August 31, 1998. Such proposals may be included in next year's proxy
statement if they comply with certain rules and regulations of the
Securities and Exchange Commission.
Under the Company's by-laws, nominations for directorships to be
acted on at the 1999 annual meeting may be made only pursuant to written
notice received at the Company's principal office not less than 50 nor more
than 75 days prior to the meeting.
COMPLIANCE WITH SECTION 16 OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's officers and directors and persons who own more than ten percent
of a registered class of the Company's equity securities ("Reporting
Persons") to file reports of ownership and changes in ownership with the
Securities and Exchange Commission ("SEC"). Reporting persons are required
by SEC regulation to furnish the Company with copies of all Section 16(a)
reports they file.
Based solely on a review of the Form 3, 4, and 5 filings received
from, or filed by the Company on behalf of, directors and executive
officers of the Company since the beginning of fiscal year 1997, the
Company is not aware of any failure to file on a timely basis any Form 3, 4
or 5 during fiscal year 1997 except (i) one Form 5 for each non-employee
director reporting the initial grant of stock options to such directors
under the Company's 1997 Non-Employee Directors Stock Option Plan was filed
late, (ii) a Form 4 reporting the exercise of options by Dr. Yoder was
filed late, (iii) three Form 4's by Dr. Eppen reporting the purchase of
shares were filed late and (iv) one Form 4 by Mr. Risk reporting the
purchase of shares was filed late.
MISCELLANEOUS
The Company's 1997 Annual Report to Stockholders (which includes a
copy of Company's Annual Report on Form 10-K for the fiscal year ended
September 30, 1997) accompanies this Proxy Statement.
The Board of Directors does not know of any business which will come
before the meeting except the matters described in the notice. If other
business is properly presented for consideration at the meeting, it is
intended that the proxies will be voted by the persons named therein in
accordance with their judgment on such matters.
In the event that a quorum is not present when the meeting is
convened, it is intended to vote the proxies in favor of adjourning the
meeting from time-to-time until a quorum is obtained.
JAMES M. O'CONNELL
VICE PRESIDENT, TREASURER, SECRETARY
AND CHIEF FINANCIAL OFFICER
Dated January 5, 1998
