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 stockholders of
Landauer, Inc., will be held at the office of Sidley & Austin, 55th Floor
Conference Center, Bank One Plaza, 10 South Dearborn Street, Chicago,
Illinois, at 4:00 p.m., local time, on Wednesday, February 7, 2001 for the
following purposes:
1. To elect two 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 our auditors for the fiscal year ending
September 30, 2001.
3. To transact such other business as may properly come before the
meeting.
Only stockholders of record at the close of business on December 8,
2000 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.
/s/ James M. O'Connell
------------------------------------
James M. O'Connell
Vice President, Treasurer, Secretary
and Chief Financial Officer
December 29, 2000
1<PAGE>
PROXY STATEMENT
Approximate Date of Mailing: DECEMBER 29, 2000
INFORMATION CONCERNING THE PROXY SOLICITATION
The enclosed proxy is solicited by the board of directors of
Landauer, for use at our annual meeting of stockholders to be held on
Wednesday, February 7, 2001 at 4:00 p.m., local time, at the office of
Sidley & Austin, 55th Floor Conference Center, Bank One Plaza, 10 South
Dearborn Street, Chicago, Illinois, or any adjournments or postponements
thereof. You may revoke your proxy at any time prior to it being voted by
giving written notice to the Secretary of Landauer, 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 Landauer. Solicitations
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 our expense, through
brokers, custodians and others to the beneficial owners of the Common
Stock. We have retained American Stock Transfer Company, 40 Wall Street,
New York, New York. The mailing address of Landauer's principal executive
office is 2 Science Road, Glenwood, Illinois 60425.
On December 8, 2000, Landauer had outstanding 8,660,748 shares of
Common Stock, 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 8, 2000 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. 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 a proposal has the effect of a vote against a proposal.
2<PAGE>
BENEFICIAL OWNERSHIP OF COMMON STOCK
The following table provides information as of December 8, 2000
concerning beneficial ownership of common stock by each person known by
Landauer to own beneficially more than 5% of the outstanding shares of
common stock, each director, each director nominee, each executive officer
named under the caption "Executive Compensation" and all directors and
executive officers 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.
Amount
Beneficially Percent
Name of Beneficial Owner Owned of Class
------------------------ ------------ --------
T. Rowe Price Associates 729,500 (1) 8.2%
David L. Babson & Co., Inc. 574,100 (2) 6.5%
Kayne Anderson Investment
Management, LLC 1,082,066 (3) 12.2%
Robert J. Cronin 5,000 (4) *
Dr. Gary D. Eppen 3,400 (4) *
Thomas M. Fulton 225,356 (5) 2.5%
Richard R. Risk 5,000 (4) *
Paul B. Rosenberg 84,570 (4, 6) 1.0%
Michael D. Winfield 2,458 (4) *
Brent A. Latta 70,359 (7) *
James M. O'Connell 64,000 (8) *
Dr. R. Craig Yoder 57,518 (9) *
Joseph M. Zlotinicki 17,500 (10) *
All directors and executive officers
as a group (10 persons) 517,661 (11) 5.8%
__________
* Less than one percent.
(1) As reported in a statement on Schedule 13G filed with the
Securities and Exchange Commission on February 14, 2000. Includes 549,300
shares owned by the T. Rowe Price Small Cap Value Fund, Inc. T. Rowe 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 a statement on Schedule 13G filed with the
Securities and Exchange Commission on February 7, 2000. The address of
this stockholder is One Memorial Drive, Cambridge, MA, 02142-1300.
(3) As reported in a statement on Schedule 13G filed with the
Securities and Exchange Commission on February 1, 2000. The address of the
stockholder is 1800 Avenue of the Stars, Los Angeles, CA 90067.
(4) Includes 2,000 shares subject to options exercisable within 60
days after December 8, 2000.
(5) Includes 1,000 shares subject to options exercisable within 60
days after December 8, 2000.
(6) Includes 22,960 shares owned by Mr. Rosenberg's wife to which
he disclaims beneficial ownership.
(7) Includes 55,000 shares subject to options exercisable within 60
days after December 8, 2000.
(8) Includes 60,000 shares subject to options exercisable within 60
days after December 8, 2000.
(9) Includes 45,000 shares subject to options exercisable within 60
days after December 8, 2000.
(10) Includes 17,500 shares subject to options exercisable within 60
days after December 8, 2000
(11) Includes 188,500 shares subject to options exercisable within
60 days after December 8, 2000.
3<PAGE>
ELECTION OF DIRECTORS
Members of Landauer's board of directors are divided into three
classes serving staggered three-year terms. The terms of two of the seven
current directors (Gary D. Eppen and Michael D. Winfield) expire at the
annual meeting. They are Landauer's nominees for re-election to a three-
year term. Our by-laws provide that nominations for directorships by
stockholders may be made only pursuant to written notice received at our
principal office not less than 50 nor more than 75 days prior to the
meeting. No such nominations were received for the 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 two 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 LANDAUER.
The following table contains certain information as to the two
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.
Has Been a
Director of
Expira- Landauer or
tion its Pre-
Date of Business Experience decessor
Current During Past Five Years Tech/Ops,
Name Term and Other Directorships Inc. Since
---- ------- ------------------------------- ------------
Robert J.
Cronin (2)(3)
Age - 55 2002 Chairman of the Board and Chief
Executive Officer of Wallace
Computer Services until January,
2000; previously President,
Chief Executive Officer and
director. Mr. Cronin joined
Wallace Computer Services in
1967, initially holding various
sales management positions.
Wallace Computer Services is a
provider of information
management products, services
and solutions. 1997
*Dr. Gary D.
Eppen (1)(4)
Age - 64 2001 Since July, 1998 Deputy Dean of
Part-time Programs and Ralph
and Dorothy Keller Distinguished
Service Professor of Operations
Management, Graduate School of
Business, The University of
Chicago. Professor of Industrial
Administration since 1970.
Dr. Eppen is also a director of
The Hub Group Inc., Lombard,
Illinois, an intermodal
transportation marketing company. 1992
4<PAGE>
Has Been a
Director of
Expira- Landauer or
tion its Pre-
Date of Business Experience decessor
Current During Past Five Years Tech/Ops,
Name Term and Other Directorships Inc. Since
---- ------- ------------------------------- ------------
Thomas M.
Fulton (4)
Age - 67 2003 President and Chief Executive
Officer of Landauer from
January 1988 until December
1998; previously General
Manager of the personnel
dosimetry division of Tech/Ops,
Inc., Landauer's predecessor.
Mr. Fulton is a Director of
Great Lakes Chemical Corpora-
tion, a diversified producer
of chemicals, and Octel
Corporation, a fuel additives
and specialty chemicals
company. 1988
Brent A.
Latta (1)
Age - 57 2002 President and Chief Executive
Officer of Landauer since
December, 1998. Mr. Latta
joined Landauer in 1987 as
Vice President - Marketing
until 1997 when he was elected
Executive Vice President. 1998
Richard R.
Risk (2)(3)
Age - 54 2002 President and Chief 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. 1997
Paul B.
Rosenberg (2)
Age - 68 2003 Mr. Rosenberg is President
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. 1988
*Michael D.
Winfield (1)(3)(4)
Age - 60 2001 Since February 1992, President
and Chief Executive Officer
(prior to that date since 1983,
a Vice President) of UOP, a
general partnership of
Honeywell International, Inc.
and Union Carbide Corporation,
engaged in the licensing of
technologies to the oil refining
and petrochemical industries. 1994
5<PAGE>
(1) Member of the executive committee.
(2) Member of the audit committee.
(3) Member of the compensation committee.
(4) Member of the governance committee.
The board of directors has an audit committee, a compensation
committee, an executive committee and a governance committee. The audit
committee assists the board of directors in fulfilling its oversight
responsibilities with respect to financial reports and other financial
information and recommends the appointment of independent public
accountants to the board of directors. Each of the audit committee's three
members meets the independence requirements established by the American
Stock Exchange. The full text of the audit committee charter that was
adopted by the audit committee and the board of directors earlier in fiscal
2000 is shown in Exhibit A beginning on page A-1. The compensation
committee approves all executive compensation and has responsibility for
granting stock options to eligible members of management and administering
our 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 "Stockholder's
Proposals." The membership of each committee other than the executive
committee consists exclusively of non-employee directors. During fiscal
2000, the audit committee met three times and the compensation and the
governance committees each met once. The executive committee did not meet.
During fiscal 2000, the board of directors held a total of six
meetings. 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. Risk, the chairman of the audit committee, Mr. Michael D.
Winfield, then chairman of the compensation committee, and Dr. Gary D.
Eppen, the chairman of the governance committee, were paid $23,000 each in
fiscal 2000 for their services as directors. The other directors (except
Mr. Latta) were paid $22,000 each. Landauer 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 stockholders at the 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. An additional grant of options to Thomas Fulton
for 5,000 shares at an option price of $26.06 was made on November 11,
1999. Landauer 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, 2000, the aggregate liability for these
benefits amounted to $340,000, which has been accrued in the financial
statements.
6<PAGE>
<TABLE>
EXECUTIVE COMPENSATION
The following summary compensation table sets forth the compensation for services to Landauer for the last
three fiscal years of our President and Chief Executive Officer and all other executive officers.
<CAPTION>
Long-Term
Compensation
Awards
------------
Annual Compensation Securities All Other
Name and Fiscal ------------------------ Underlying Compensa-
Principal Position Year Salary($) Bonus($) Options (#) tion ($)(1)
------------------ ------ --------- -------- ------------ -----------
<S> <C> <C> <C> <C> <C>
Brent A. Latta (2)
President &
Chief Executive Officer 2000 $262,500 $113,000 -- $ 1,150
1999 241,250 60,000 50,000 1,150
1998 196,250 60,000 -- 1,150
James M. O'Connell
Vice President,
Treasurer, Secretary &
Chief Financial Officer 2000 $166,500 $ 58,000 -- $1,150
1999 160,250 45,000 20,000 1,150
1998 152,750 35,000 -- 1,150
R. Craig Yoder
Vice President - Operations 2000 $170,250 $ 60,000 -- $1,150
1999 162,500 50,000 30,000 1,150
1998 151,500 50,000 -- 1,150
Joseph M. Zlotnicki (3)
Vice President-International 2000 $105,750 $ 40,000 -- $ --
Thomas M. Fulton (4)
President and Chief Executive
Officer (Retired) 1999 $ 94,403 $ -- -- $ --
1998 295,500 90,000 -- 1,150
<FN>
(1) Represents the Company's contribution to its 401(k) plan on behalf of each of these employees.
(2) Mr. Latta was elected as President and Chief Executive Officer effective on December 1, 1998.
(3) Mr. Zlotnicki was elected as Vice President on June 28, 2000.
(4) Mr. Fulton retired as President and Chief Executive Officer effective December 1, 1998.
</TABLE>
7<PAGE>
OPTIONS GRANTS IN LAST FISCAL YEAR
There were no stock options granted in the year ended September 30,
2000 to the Company's executive officers.
AGGREGATED OPTION EXERCISES IN LAST YEAR
AND FISCAL YEAR-END OPTION VALUES
Shown below is information regarding holdings of unexercised stock
options at September 30, 2000 by Landauer's executive officers. There were
no exercises of stock options during fiscal 2000 by executive officers.
No. of Shares
Underlying Unexercised Value of Unexercised
Options Held at In-the-Money Options at
September 30, 2000 September 30, 2000 ($)(1)
----------------------- -------------------------
Exercis- Unexer- Exercis- Unexer-
Name able cisable able cisable
---- -------- -------- -------- --------
Brent A. Latta 42,500 27,500 $103,000 $ --
James M. O'Connell 55,000 15,000 129,688 --
R. Craig Yoder 37,500 22,500 103,000 --
Joseph M Zlotnicki 13,750 11,250 23,500 --
(1) Aggregate market value on September 30, 2000 less aggregate exercise
price.
EMPLOYMENT AND COMPENSATION AGREEMENTS. Landauer has entered into
employment agreements with Messrs. Latta and O'Connell and Dr. Yoder
providing for their employment in their respective capacities indefinitely.
The agreements provide that, in the event of termination of employment
under certain circumstances by Landauer 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 Landauer 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, 2000
would have had an estimated value of $556,000, $337,000 and $378,000,
respectively.
RETIREMENT PLAN AND SUPPLEMENTAL RETIREMENT PLAN. Messrs. Latta,
O'Connell, Zlotnicki and Fulton and Dr. Yoder participate in Landauer'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.
8<PAGE>
Messrs. Latta and O'Connell, Zlotnicki and Dr. Yoder also participate
in Landauer's supplemental key executive retirement plan, under which a
participant is entitled to such payments 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. Mr. Fulton had been a participant in the supplemental plan
until November, 1998, when he agreed to exchange any interest in such plan
for a commitment by Landauer to fund a split-dollar insurance arrangement.
Under the terms of the insurance arrangement, the present value of the
insurance premium commitments, net of refunds thereof, is approximately
equal to the lump sum value of Mr. Fulton's supplemental benefit.
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 1999 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.
PENSION PLAN TABLE
Earnings on Estimated Combined Annual Pension
Which Combined Based on 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, 2000 were 13 for Mr.
Latta, 10 for Mr. O'Connell, 17 for Dr. Yoder, and 10 for Mr. Zlotnicki.
Credited years of service at age 65 would be 21 for Mr. Latta, 22 for Mr.
O'Connell, 35 for Dr. Yoder and 31 for Mr. Zlotnicki. Mr. Fulton retired
effective December 1, 1998 and receives an annual pension of $53,685.
9<PAGE>
COMPENSATION COMMITTEE REPORT
Landauer'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 three independent outside directors who are not
employees of Landauer. The Committee regularly reviews and approves
generally all of Landauer's compensation and fringe benefit programs 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 Landauer's 1996 Equity Plan (the "Equity Plan")
and 2000 Incentive Compensation Plan for Executive Officers (the "Executive
Officer Plan"); each of which was approved by the Committee, the board of
directors and stockholders.
Landauer believes that stock options are an important incentive to
motivate executive officers and other key employees for improved long-term
performance of Landauer. Landauer considers stock ownership, options
currently held and options previously granted when granting options
although there are no required specific levels of ownership.
Landauer believes that the combination of salary, incentive
compensation and the award of stock options 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. Landauer reviews these salaries annually
and measures them against compensation data obtained from published
compensation surveys and surveys that the Committee makes of peer
companies. The peer companies are generally of about the same size as
Landauer in terms of market capitalization and profitability and are in
technical or service, rather than consumer or distribution fields.
Landauer believes that its competitors for executive talent are not
necessarily companies which engage in the same business as Landauer and,
therefore, the companies used for comparative compensation purposes
generally differ from the companies included in the testing laboratory
group.
The Executive Officer Plan covers executive officers who are elected
by the board of directors to such offices and establishes an incentive pool
which is related to aggregate executive officer base salary and performance
of Landauer relative to (i) budgeted operating income and (ii) achievement
of budgeted revenues. The target incentive compensation award, as a
percentage of individual executive officer base salary, is 50% for the
Chief Executive Officer and 40% for Vice Presidents. The actual size of
the incentive compensation pool available for award varies based upon
actual financial performance for operating income and revenue achievement.
OPERATING INCOME COMPONENT. At 100% actual-to-budget operating
income the aggregate executive officer incentive compensation pool is equal
to 100% of the sum of the target awards for each executive officer. At 90%
actual-to-budget operating income the pool available for incentive
compensation is zero. At 110% actual-to-budget operating income the
aggregate executive officer incentive compensation pool is equal to 150% of
the sum of the target awards for each executive officer.
10<PAGE>
REVENUE ACHIEVEMENT COMPONENT. Revenue achievement, as measured by
percent actual-to-budget revenues, serves to modify the award based upon
operating income. At revenue achievement levels above 98% and below 102%
no adjustment is required. At 96% revenue achievement the aggregate amount
of the executive officer incentive compensation pool determined on the
basis of operating income is reduced by 20%. At 94% revenue achievement
the reduction is 40%. The sole increase in the aggregate amount of the
pool occurs where revenue achievement is above 102% at which level the
percent of target bonus to be paid is increased by 20 percentage points.
The amount of tentative incentive award for any executive officer is
determined by multiplying the executive's base salary times the actual
incentive award percentage. The actual incentive award percentage is the
target award percentage (50% or 40%) multiplied by the percentage of target
award determined by the operating income and revenue achievement
components. Two-thirds of the tentative incentive award is payable to the
executive officer based solely on financial performance. With respect to
the balance remaining in the pool for the fiscal year, the compensation
committee will have the discretion to award any executive officer an amount
ranging from zero to one-third of the award such executive officer would
otherwise receive. Any amounts not so awarded may, at the discretion of
the committee, be reallocated to any other executive officer based upon the
committee's evaluation of the individual performance of the executive
officer relative to written objectives and other factors.
The aggregate amount of incentive compensation awards for any fiscal
year under the Executive Officer Plan and other incentive compensation
plans is limited to 6% of Landauer's operating income for such fiscal year.
Recognizing that extraordinary positive or negative non-operating events
can and do occur, the Committee may elect to make adjustments to the
incentive compensation calculations to reflect the impact of those events.
During fiscal 2000 no such adjustments were considered in its decision to
award incentive compensation for executive officers.
The recommended base salary and incentive compensation award for the
President is determined each year by the Committee based upon overall
financial performance of Landauer and the performance of the President
relative to corporate objectives and other factors under the terms of the
Executive Officer Plan. Mr. Latta's base salary and incentive compensation
for fiscal 2000 was determined at $375,500. The increase in Mr. Latta'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. Latta was determined based on actual financial
performance relative to planned operating income, and individual
performance relative to stated objectives under the terms of the Executive
Officer Plan. Mr. Latta achieved substantially all of the personal
objectives established by the board of directors during fiscal 2000.
MEMBERS OF THE COMPENSATION COMMITTEE:
Robert J. Cronin, Chairman
Richard R. Risk
Michael D. Winfield
11<PAGE>
AUDIT COMMITTEE REPORT
Landauer's Audit Committee has reviewed and discussed with management
the Company's audited financial statements as of and for the fiscal year
ended September 30, 2000. Additionally, the committee has reviewed and
discussed with management the Company's unaudited interim financial
statements as of and for the end of each fiscal quarter. Prior to the
adoption of the committee's charter, such reviews and discussions generally
occurred in meetings of the Company's board of directors. Since the
adoption of the committee's charter such discussions with management and
the independent auditors have occurred prior to the issuance of news
releases reporting quarterly results.
The committee discussed with the independent auditors the matters
required to be discussed by the Statement on Auditing Standards No. 61,
COMMUNICATION WITH AUDIT COMMITTEES, as amended, of the Auditing Standards
Board of the American Institute of Certified Public Accountants.
The committee received and reviewed the written disclosures and the
letter from the independent auditors required by Independence Standard
No. 1, INDEPENDENCE DISCUSSIONS WITH AUDIT COMMITTEES, as amended, of the
Independence Standards Board, and discussed with the auditors the auditor's
independence.
Based on the reviews and discussions referred to above, the committee
recommends to the Board of Directors that the audited fiscal year-end
financial statements referred to above be included in the Company's Annual
Report on Form 10-K for the fiscal year ended September 30, 2000.
MEMBERS OF THE AUDIT COMMITTEE:
Richard R. Risk, Chairman
Robert J. Cronin
Paul B. Rosenberg
12<PAGE>
PERFORMANCE GRAPH
The following graph reflects a comparison of the cumulative total
return (change in stock price plus reinvested dividends) assuming $100
invested in Landauer's common stock, in the American Stock Exchange
("AMEX") Index, and in an industry index represented by a group of testing
laboratories during the period from September 30, 1995 through
September 30, 2000. The comparisons in the following table are historical
and are not intended to forecast or be indicative of possible future
performance of Landauer's common stock.
VALUE OF INVESTMENT AT SEPTEMBER 30,
------------------------------------
1995 1996 1997 1998 1999 2000
---- ---- ---- ---- ---- ----
Landauer, Inc. $ 100 $ 110 $ 146 $ 158 $ 164 $122
AMEX Index 100 105 132 119 153 188
Industry Index 100 133 105 68 81 156
13<PAGE>
SELECTION OF AUDITORS
The stockholders will be asked at the annual meeting to approve the
selection of auditors for the fiscal year ending September 30, 2001.
Arthur Andersen LLP, 33 West Monroe Street, Chicago, Illinois, has served
as auditors for Landauer 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, comprised of Richard R. Risk,
Paul B. Rosenberg, and Robert Cronin, 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 Landauer's auditors for the fiscal year ending
September 30, 2001, 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 LANDAUER FOR THE FISCAL YEAR ENDING
SEPTEMBER 30, 2001.
STOCKHOLDER PROPOSALS
Proposals intended to be presented by security holders at the annual
meeting of stockholders scheduled for February 6, 2002 must be received by
Landauer in order to be considered for inclusion in Landauer's proxy
statement and form of proxy relating to that meeting not later than
August 31, 2001. 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 Landauer's by-laws, nominations for directorships to be acted
on at the 2002 annual meeting may be made only pursuant to written notice
received at Landauer's principal office on or after November 23, 2001 and
on or before December 18, 2001. In addition, at the 2002 annual meeting
the proxy holders appointed by Landauer may exercise discretionary
authority when voting on a stockholder proposal other than a nomination for
directorship if (1) the proposal is received by Landauer after November 11,
2001, (2) the proposal is properly presented at the 2002 annual meeting and
(3) the proposal is not included in Landauer's proxy statement for the 2002
annual meeting. If (1) a stockholder proposal other than a nomination for
directorship is received by Landauer on or prior to November 11, 2001, (2)
the proposal is properly presented at the 2002 annual meeting and (3) the
proposal is not included in Landauer's proxy statement for the 2002
meeting, then the proxy holders appointed by Landauer may exercise
discretionary authority to vote on the proposal if in the proxy statement
for the 2002 meeting Landauer advises stockholders on the nature of the
proposal and how the proxy holders appointed by Landauer intend to vote on
the proposal, unless the stockholder submitting the proposal satisfies
certain requirements of the Securities and Exchange Commission, including
the mailing of a separate proxy statement to stockholders.
All stockholder proposals should be directed to the Secretary of
Landauer.
14<PAGE>
SECTION 16 BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires
Landauer's officers and directors and persons who beneficially own more
than ten percent of Landauer's common stock ("Reporting Persons") to file
reports of beneficial ownership and changes in such ownership with the
Securities and Exchange Commission ("SEC"). Reporting Persons are required
by SEC regulation to furnish Landauer 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 Landauer on behalf of, directors and executive officers
since the beginning of fiscal year 2000, Landauer is not aware of any
failure to file on a timely basis any Form 3, 4 or 5 during fiscal year
2000.
MISCELLANEOUS
Landauer's 2000 Annual Report to Stockholders (which includes a copy
of Landauer's Annual Report on Form 10-K for the fiscal year ended
September 30, 2000) 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.
/s/ James M. O'Connell
------------------------------------
James M. O'Connell
Vice President, Treasurer, Secretary
and Chief Financial Officer
December 29, 2000
15<PAGE>
EXHIBIT A
---------
CHARTER OF THE AUDIT COMMITTEE
OF THE BOARD OF DIRECTORS
OF LANDAUER, INC.
I. PURPOSE
The primary purpose of the Audit Committee is to assist the Board of
Directors (the "Board") of Landauer, Inc. (the "Company") in fulfilling its
oversight responsibilities with respect to financial reports and other
financial information. In this regard, the Audit Committee is to:
1. Serve as an independent and objective body to monitor the
Company's financial reporting process and internal control systems;
2. Serve, together with the Board, as the ultimate authority to
which the independent auditor (the "Independent Auditor") and the internal
auditing department ("Internal Audit") are accountable, and have, together
with the Board, the ultimate authority and responsibility to select,
evaluate and, where appropriate, replace the Independent Auditor and to
nominate the Independent Auditor to be proposed for shareholder approval in
any proxy statement;
3. Review the audit efforts of the Independent Auditor and
Internal Audit; and
4. Provide an open avenue of communication among the Independent
Auditor, financial and senior management, Internal Audit, and the Board.
II. COMPOSITION, EXPERTISE AND SCHEDULE
1. Members of the Audit Committee shall meet the independence and
experience requirements of the American Stock Exchange and other market or
markets, if any, on which the securities of the Company or any of its
subsidiaries are traded. Determinations as to whether a particular
director satisfies the requirements for membership on the Audit Committee
will be made by the Board.
2. The members of the Audit Committee shall be elected by the
Board at the annual organizational meeting of the Board or until their
successors shall have been duly elected and qualified.
3. The Audit Committee shall be composed of at least three, but
not more than five, members and shall meet at least two times per year.
III. DUTIES AND RESPONSIBILITIES
The Audit Committee shall:
DOCUMENTS/REPORTS REVIEW
------------------------
1. Review the adequacy of this Charter at least annually and at
such other intervals as the Audit Committee or the Board determines.
2. Review and discuss with management the annual audited and
quarterly financial statements.
3. Review reports to management prepared by the Independent
Auditor or Internal Audit and any responses to the same by management.
A-1<PAGE>
INDEPENDENT AUDITOR
-------------------
4. Review and recommend to the Board: (i) the selection of the
Independent Auditor to audit the books, records and accounts of the
Company, and (ii) the approval of the fees and other compensation of the
Independent Auditor.
5. Review and discuss with the Independent Auditor all significant
relationships which the auditor and its affiliates have with the Company
and its affiliates in order to determine the auditor's independence,
including: (i) requesting, receiving and reviewing, on a periodic basis, a
formal written statement delineating all relationships between them which
may reasonably be thought to bear on the independence of the Independent
Auditor with respect to the Company; (ii) discussing with the Independent
Auditor any disclosed relationships or services that may impact the
objectivity and independence of the Independent Auditor; and (iii)
recommending that the Board take appropriate action in response to the
Independent Auditor's report to oversee the independence of the Independent
Auditor.
FINANCIAL REPORTING PROCESS
---------------------------
6. Review the financial reporting processes and audit controls,
both internal and external, based on consultation with the Independent
Auditor and Internal Audit.
7. Review the Independent Auditor's judgment about the quality and
appropriateness of accounting principles as applied in financial reporting.
8. Consider and, if appropriate, recommend to the Board
significant changes to auditing and accounting principles and practices as
suggested by the Independent Auditor, management or Internal Audit.
PROCESS IMPROVEMENT
-------------------
9. Review reports to the Audit Committee by each of management,
the Independent Auditor and Internal Audit regarding any significant
judgments made in management's preparation of financial statements and the
view of each as to the appropriateness of such judgments.
10. Review with each of management, the Independent Auditor and
Internal Audit any significant difficulties encountered during the course
of each audit.
11. Review any significant disagreement among management, the
Independent Auditor and Internal Audit in connection with the preparation
of the financial statements.
12. Review with the Independent Auditor, Internal Audit and
management the extent to which changes or improvements in financial or
accounting practices and internal controls, as approved by the Audit
Committee, have been implemented.
A-2<PAGE>
OTHER
-----
13. Annually prepare a report to shareholders as required by the
Securities and Exchange Commission.
14. Keep a record of the acts and proceedings of the Audit
Committee and report thereon to the Board periodically or whenever
requested to do so.
15. Review, with the Company's counsel, legal and tax compliance
matters or any legal matter that could have a significant impact on the
organization's financial statements.
16. Review and assess the Company's processes for administering its
code of ethical conduct.
17. Perform such other activities, consistent with this Charter,
the Company's Articles of Incorporation, By-laws and governing law, as the
Audit Committee or the Board deems necessary or appropriate.
18. While the Audit Committee has the responsibilities and powers
set forth in this Charter, it is not the duty of the Audit Committee to
plan or conduct audits or to determine that the Company's financial
statements are complete and accurate and are in accordance with generally
accepted accounting principles. This is the responsibility of management
and the Independent Auditor. Nor is it the duty of the Audit Committee to
conduct investigations, to resolve disagreements, if any, among management,
the Independent Auditor or Internal Audit or to assure compliance with laws
and regulations.
A-3<PAGE>
