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 LLP, Conference
Center, One South Dearborn Street, Chicago, Illinois, at 2:00 p.m., local
time, on Thursday, February 9, 2006 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 ratify the appointment of
PricewaterhouseCoopers LLP as the independent registered
public accounting firm of the Company for the fiscal year
ending September 30, 2006.
3. To transact such other business as may properly come before
the meeting.
Only stockholders of record at the close of business on December 16,
2005 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 9, 2006
PROXY STATEMENT
Approximate Date of Mailing: JANUARY 9, 2006
INFORMATION CONCERNING THE PROXY SOLICITATION
The enclosed proxy is solicited by the Board of Directors of
Landauer, for use at its annual meeting of stockholders to be held on
Thursday, February 9, 2006 at 2:00 p.m., local time, at the office of
Sidley Austin LLP, Conference Center, One 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 Landauer personally
or by telephone or telegram. Forms of proxies and proxy material may also
be distributed, at the Company's expense, through brokers, custodians and
others to the beneficial owners of Common Stock. The mailing address of
Landauer's principal executive office is 2 Science Road, Glenwood, Illinois
60425.
On December 16, 2005, Landauer had outstanding 9,033,530 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 16, 2005 will be entitled to receive notice of and to
vote at the meeting. With respect to all matters that will come before the
meeting, each stockholder may cast one vote for each share registered in
his or her 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
PricewaterhouseCoopers 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 PricewaterhouseCoopers 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 a proposal has the
effect of a vote against a proposal.
2
BENEFICIAL OWNERSHIP OF COMMON STOCK
The following table provides information as of December 16, 2005
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.
NUMBER BENE- PERCENT
NAME OF BENEFICIAL OWNER FICIALLY OWNED OF CLASS
- ------------------------ -------------- --------
T. Rowe Price Associates 887,100 (1) 9.8%
Eaton Vance Management 601,931 (2) 6.6%
NFJ Investment Group L.P. 589,150 (3) 6.5%
Royce & Associates, LLC 551,400 (4) 6.1%
Robert J. Cronin 12,200 (5) *
Dr. E. Gail de Planque 5,150 (6) *
Dr. Gary D. Eppen 8,981 (7) *
Stephen C. Mitchell 525 *
Richard R. Risk 11,100 (5) *
Thomas M. White 1,200 (8) *
Michael D. Winfield 9,799 (5) *
William E. Saxelby 53,500 (9) *
Robert M. Greaney 41,906 (10) *
James M. O'Connell 55,592 (11) *
Dr. R. Craig Yoder 84,379 (12) *
All directors and
executive officers as a group
(11 persons) 284,332 (13) 3.1%
__________
* Less than one percent.
(1) As reported in a statement on Schedule 13G filed with the
Securities and Exchange Commission on February 14, 2005.
Includes 556,600 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. This
stockholder's address 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 14, 2005.
This stockholder's address is 255 State Street, Boston, MA
02109.
(3) As reported in a statement on Schedule 13G filed with the
Securities and Exchange Commission on February 7, 2005. This
stockholder's address is 2121 San Jacinto Street, Dallas, TX
75201.
(4) As reported in a statement on Schedule 13G filed with the
Securities and Exchange Commission on January 31, 2005. This
stockholder's address is 1414 Avenue of the Americas, New York,
NY 10019.
(5) Includes 8,500 shares subject to options exercisable within
60 days after December 16, 2005.
(6) Includes 4,000 shares subject to options exercisable within
60 days after December 16, 2005.
(7) Includes 3,500 shares subject to options exercisable within
60 days after December 16, 2005.
3
(8) Includes 500 shares subject to options exercisable within
60 days after December 16, 2005.
(9) Includes 50,000 shares subject to options exercisable within
60 days after December 16, 2005.
(10) Includes 28,500 shares subject to options exercisable within
60 days after December 16, 2005.
(11) Includes 33,250 shares subject to options exercisable within
60 days after December 16, 2005.
(12) Includes 58,000 shares subject to options exercisable within
60 days after December 16, 2005.
(13) Includes 203,250 shares subject to options exercisable within
60 days after December 16, 2005.
ELECTION OF DIRECTORS
Members of Landauer's Board of Directors are divided into three
classes serving staggered three-year terms, with a total of nine directors
authorized. Brent A. Latta resigned from the Board of Directors during
2005 concurrently with his retirement as Landauer's President and Chief
Executive Officer. William E. Saxelby, who was elected in September 2005
as Landauer's President and Chief Executive Officer, was appointed to fill
the vacancy resulting from Mr. Latta's resignation. Additionally,
Stephen C. Mitchell was appointed to the Board of Directors during 2005.
The terms of two of the eight current directors expire at the annual
meeting. These two directors, Thomas M. White and Stephen C. Mitchell, are
Landauer's nominees for re-election to a three-year term. There is
currently one vacancy on the Board of Directors, which the Board of
Directors may fill at a later date. 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. Proxies may not be voted for a greater number of persons than the
two named nominees. 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.
4
Expira-
tion
Date of
Current Past Business Experience Director
Name Term and Other Directorships Since
- ---- ------- ------------------------ --------
Robert J. Cronin
(3,4)
Age - 61 2008 Since November 2005, Chairman 1997
and Chief Executive Officer, York
Label, Inc., a supplier of
pressure-sensitive labels and
related systems. Since 2001, partner,
The Open Approach LLC, a provider
of consulting services to the
printing industry. Until January
2000, Chairman of the Board and
Chief Executive Officer of
Wallace Computer Services;
previously President, Chief
Executive Officer and director;
now retired. Mr. Cronin joined
Wallace Computer Services in 1967.
Wallace Computer Services is a
provider of information management
products, services and solutions.
Mr. Cronin is also a director of
various privately held corporations.
Dr. E. Gail
de Planque (2,4)
Age - 60 2007 Since 2000, President, Strategy 2001
Matters, Inc., and, since 1998,
Director, Energy Strategists
Consultancy, Ltd., each providing
consulting services to the energy
and nuclear industries. From 1991
to 1995, Dr. de Planque was a
Commissioner with the U.S. Nuclear
Regulatory Commission. In 1967,
she joined the Health and Safety
Laboratory of the U.S. Atomic
Energy Commission (now the
Environmental Measurements
Laboratory) where she served
as Director from 1987 to 1991
and as Deputy Director from 1982
to 1987. Dr. de Planque is a
Director of Northeast Utilities,
TXU Corp., BNG America, Inc. and
BHP Billiton.
Dr. Gary D. Eppen
(3,4)
Age - 69 2007 Ralph and Dorothy Keller Distinguished1992
Service Professor Emeritus of
Operations Management, Graduate
School of Business, The University
of Chicago. From July 1998 to June
2001 Dr. Eppen was Deputy Dean of
Part-time Programs and Professor
of Industrial Administration.
From 1970 to 1998 he was Professor
of Industrial Administration.
Dr. Eppen is also a director of
Hub Group Inc., Downers Grove,
Illinois, an intermodal transpor-
tation marketing company.
5
Expira-
tion
Date of
Current Past Business Experience Director
Name Term and Other Directorships Since
- ---- ------- ------------------------ --------
* Stephen C.
Mitchell (1,3)
Age - 62 2006 Since 2001, President, Knight 2005
Group LLC, a privately held
firm providing services for
the start-up and management
of new ventures. Since 1995,
Vice Chairman and director,
Knight Facilities Management,
Inc., a company providing
outsourcing of facilities
management services for
industrial and commercial
clients worldwide. Until 2001,
President, Chief Operating
Officer and director, Lester B.
Knight & Associates, Inc., a
company involved in the planning,
design and construction of
advanced technology research and
development and manufacturing
facilities. Mr. Mitchell is also
a director of Apogee Enterprises,
Inc., a manufacturer of glass
products for the automotive,
construction and art framing
markets.
Richard R.
Risk (2,3)
Age - 59 2008 President and Chief Executive 1997
Officer of Advocate Health Care
until April 2002; now retired.
Previously Mr. Risk served as
President and CEO of EHS Health
Care (merged with Advocate
Health Care). Advocate Health
Care specializes in health care
management.
William E.
Saxelby
Age - 49 2008 President and Chief Executive 2005
of Landauer, Inc. since September
2005. Until September 2005,
Mr. Saxelby provided consulting
services to certain private equity
firms. From 1999 to 2003, President
and Chief Executive Officer,
Medical Research Laboratories,
Inc., a manufacturer of portable
defibrillators. From 1996 to
1999, Corporate Vice President,
Allegiance Healthcare, a spin-off
of Baxter International. From
1978 to 1996, Mr. Saxelby held
executive positions with Baxter
International and its American
Hospital Supply subsidiary.
6
Expira-
tion
Date of
Current Past Business Experience Director
Name Term and Other Directorships Since
- ---- ------- ------------------------ --------
* Thomas M.
White (1,2)
Age - 48 2006 Since June 2002, Senior Vice 2004
President, Chief Financial
Officer and Treasurer of
Hub Group, Inc., Downers Grove,
Illinois, an intermodal
transportation marketing
company. From 1999 to 2002
Mr. White was Managing
Partner-Business Process
Outsourcing and from 1995 to
1999 was Managing Partner of
the Kansas City and Omaha
offices of Arthur Andersen
LLP. From 1979 to 1995 held
various audit related positions
with Andersen. Mr. White is
a CPA and a member of the
American Institute of Certified
Public Accountants.
Michael D.
Winfield (1,4)
Age - 66 2007 Director of UOP LLC until January 1994
2003, a general partnership of
Honeywell International, Inc.
and Dow Chemical Company, engaged
in the licensing of technologies
to the oil refining and
petrochemical industries.
Mr. Winfield was President
and Chief Executive Officer
of UOP from February 1992 to
January 2001, and a Vice President
from 1983 to 1992. He is also
a director of Metallurg, Inc.,
a leading supplier of additives
to the metals industry.
Member of the (1) Audit Committee, (2) Compensation Committee, (3)
Governance and Nominating Committee, (4) Technology Committee.
7
BOARD OF DIRECTORS AND COMMITTEES
During fiscal 2005, 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.
The Board of Directors has an Audit Committee, Compensation
Committee, Governance and Nominating Committee and Technology 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. The Company has determined that
Thomas M. White qualifies as an "audit committee financial expert" as
defined in Item 401(h) of Regulation S-K, and that he is "independent" as
the term is used in Item 7(d)(3)(iv) of Schedule 14A under the Securities
Exchange Act. A copy of the Audit Committee's charter is attached to this
Proxy Statement as Exhibit A. The Compensation Committee approves all
executive compensation and has responsibility for granting equity awards to
eligible members of management and administering the Company's equity and
incentive compensation plans. The Governance and Nominating Committee
establishes corporate governance policy and selects nominees for the Board
of Directors. (See "Process for Nominating Directors.") The Technology
Committee provides oversight and counsel with respect to the Company's
development and use of appropriate technologies in its products and
services. The membership of each Committee consists solely of non-employee
directors who meet the independence standards established by the New York
Stock Exchange. During fiscal 2005, the Audit Committee met thirteen times
(including the meetings required to conduct its quarterly financial
reviews), the Compensation Committee met five times, the Governance and
Nominating Committee met eleven times, and the Technology Committee met six
times.
Each Committee has adopted a formal written charter, approved by the
full Board of Directors, that specifies the scope of the Committee's
responsibilities and procedures for carrying out such responsibilities. A
copy of each charter is available on the Company's website at
http://www.landauerinc.com and printed copies are available from the
Company on request. The Board of Directors has also adopted Governance and
Nominating Standards, a Code of Business Ethics applicable to all employees
and a Code of Conduct for Senior Financial Executives applicable to the
principal executive, financial and accounting officers of the Company.
Copies of each of these documents are available on the Company's website at
http://www.landauerinc.com and printed copies are available from the
Company on request. The Company intends to post on its website any
amendments to, or waivers from, its Code of Business Ethics or Code of
Conduct for Senior Financial Executives applicable to such senior officers.
INDEPENDENCE OF DIRECTORS
Under the Company's Governance and Nominating Standards, a
significant majority of the Board should be composed of Independent
Directors as those terms are defined in the New York Stock Exchange
("NYSE") listing standards. A director is independent under the NYSE
listing standards if the Board affirmatively determines that the director
has no material relationship with the Company directly or as a partner,
shareholder or officer of an organization that has a relationship with the
Company. In addition, the NYSE listing standards provide that a director
will not be independent if he or she has any of the following relationships
(each, a "disqualifying relationship"):
. The director is an employee of the Company or has been an employee of
the Company at any time within the preceding three years.
8
. A member of the director's immediate family is an executive officer
of the Company or has been an executive officer of the Company at
any time within the preceding three years.
. The director or an immediate family member of the director received
during any 12-month period within the last three years more than
$100,000 in direct compensation from the Company, other than director
and committee fees and pension or other forms of deferred
compensation for prior service (provided such compensation is not
contingent in any way on continued service).
. The director is a current partner or employee of the Company's
internal or external audit firm, or the director was within the past
three years (but is no longer) a partner or employee of such a firm
and personally worked on the Company's audit within that time.
. A member of the director's immediate family (i) is a current partner
of a firm that is the Company's internal or external auditor, (ii) is
a current employee of such a firm and participates in the firm's
audit, assurance or tax compliance (but not tax planning) practice or
(iii) was within the past three years (but is no longer) a partner or
employee of such a firm and personally worked on the Company's audit
within that time.
. The director is, or within the preceding three years has been,
employed by another company where any of the Company's present
executives at the same time serves or served on that company's
compensation committee.
. A member of the director's immediate family is, or within the
preceding three years has been, employed as an executive officer of
another company where any of the Company's present executives serves
on that company's compensation committee.
. The director is an executive officer or employee of a company that
has made payments to, or received payments from, the Company in an
amount that, in any one of the three most recent fiscal years,
exceeded the greater of $1 million, or 2% of such other company's
consolidated gross revenues.
. A member of the director's immediate family is an executive officer
of a company that has made payments to, or received payments from,
the Company in an amount which, in any one of the three most recent
fiscal years, exceeded the greater of $1 million, or 2% of such other
company's consolidated gross revenues.
The Board has affirmatively determined that no non-employee director
has a material relationship with the Company directly or as a partner,
shareholder or officer of an organization that has a relationship with the
Company. The Board has also concluded that no non-employee director has
any of the disqualifying relationships identified above. Consequently, the
Board has determined that all non-employee directors are independent within
the meaning of the NYSE listing standards and that the Board consists of a
significant majority of independent directors. The Company's independent
directors are Robert J. Cronin, E. Gail de Planque, Gary D. Eppen,
Stephen C. Mitchell, Richard R. Risk, Thomas M. White and Michael D.
Winfield. The Company's independent directors meet in regularly scheduled
executive sessions and at other times, as they deem appropriate. The
Chairman of the Board of Directors presides at these sessions.
9
PROCESS FOR NOMINATING DIRECTORS
Landauer's Governance and Nominating Committee establishes and
oversees adherence to the Board's corporate governance policies and
guidelines and establishes policies and procedures for the recruitment and
retention of Board members. The Governance and Nominating Committee is
comprised of three members, each of whom meets the independence
requirements established by the New York Stock Exchange in respect of
Governance and Nominating Committees.
The Governance and Nominating Committee will consider nominees for
the Board of Directors that have been properly and timely recommended by
stockholders. Any recommendation submitted by a stockholder must include
the same information concerning the candidate and the stockholder as would
be required under Section 1.4 of the Company's by-laws if the stockholder
were nominating that candidate directly. Those information requirements
are summarized in this Proxy Statement under the caption "Stockholder
Proposals." The Governance and Nominating Committee will apply the same
standards in considering director candidates recommended by stockholders as
it applies to other candidates. The Governance and Nominating Committee
has not established any specific, minimum qualification standards for
nominees to the Board. From time to time, the Governance and Nominating
Committee may identify certain skills or attributes (e.g. healthcare
industry experience, technology experience, financial experience) as being
particularly desirable for specific director nominees.
To date, the Governance and Nominating Committee has identified and
evaluated nominees for directors based on several factors, including
referrals from management, existing directors, advisors and representatives
of the Company or other third parties, business and board of director
experience, professional reputation and personal interviews. Each of the
current nominees for director listed under the caption "Election of
Directors" is an existing director standing for re-election. Landauer has
not paid any fee to a third party to identify or evaluate, or assist in
identifying or evaluating, potential nominees. In connection with the 2006
annual meeting, the Governance and Nominating Committee did not receive any
recommendation for a nominee from any stockholder or group of stockholders
owning more than 5% of the Company's Common Stock.
COMMUNICATIONS WITH THE BOARD OF DIRECTORS
BY STOCKHOLDERS AND OTHER INTERESTED PARTIES
The Company's Annual Meeting of Stockholders provides an opportunity
each year for stockholders and other interested parties to ask questions of
or otherwise communicate directly with members of the Company's Board of
Directors on matters relevant to the Company. Each of the Company's
directors is requested to attend the Annual Meeting in person. All of the
Company's directors attended the Company's 2005 Annual Meeting of
Shareholders. In addition, stockholders and other interested parties may,
at any time, communicate in writing with the full Board of Directors, any
individual director or any group of directors, by sending such written
communication to the full Board of Directors, individual director or group
of directors at the following address: Landauer, Inc., 2 Science Road,
Glenwood, Illinois 60425; Attention: Corporate Secretary (fax 708-755-
7011). Copies of written communications received at such address will be
provided to the addressee unless such communications are considered, in the
reasonable judgment of the Corporate Secretary, to be improper for
submission to the intended recipient(s). Examples of such communications
that would be considered improper for submission include, without
limitation, customer complaints, solicitations, communications that do not
relate directly or indirectly to the Company or the Company's business or
communications that relate to improper or irrelevant topics.
10
COMPENSATION OF DIRECTORS
During fiscal 2005, all directors (except Mr. Saxelby) were paid an
annual retainer in the amount of $30,000 each. Additionally, the Board and
Committee chairs were each paid an annual retainer in the amount of $4,000,
and members were paid a fee in the amount of $1,000 per Board or Committee
meeting attended. Additionally, Mr. Cronin was paid $12,000 for twelve
meetings with advisors and candidates related to the succession process.
Such fees are paid quarterly. Landauer maintains a long-term incentive
plan, established in 2005 and approved by shareholders, under which non-
employee directors receive annual grants of restricted stock or restricted
stock units. In February 2005, eligible directors were each awarded grants
of 700 restricted shares of Common Stock that vest in full on the third
anniversary of the award or the date of the third succeeding annual meeting
of stockholders, whichever is earlier. Eligible directors who are
appointed to the Board at other than the annual meeting date are granted a
prorated award. The Company established a stock option plan for its non-
employee directors in 1997 that provided for the automatic grant of options
on the date when a person begins to serve as a non-employee director to
purchase 1,500 shares of Common Stock at the fair market value on the date
of grant, which options vest ratably over three years. Additionally, the
plan provided for the automatic grant of options to each non-employee
director on the date of each annual meeting to purchase 1,500 shares of
Common Stock at the fair market value on the date of grant, which options
vest ratably over three years. Awards under the 1997 plan terminated upon
the approval of the long-term incentive plan by shareholders at the
February 2005 annual meeting.
Landauer formerly maintained a directors' retirement plan that
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 at age 70 after their
retirement. As of September 30, 2005, the aggregate liability for these
benefits amounted to $267,000, which has been accrued in the financial
statements.
11
EXECUTIVE COMPENSATION
The following summary compensation table sets forth the compensation
for services to Landauer for the last three fiscal years of the persons who
served as President and Chief Executive Officer during the last fiscal year
and other executive officers whose salary and bonus exceeded $100,000 in
the last fiscal year (the "Named Executive Officers".)
SUMMARY COMPENSATION TABLE
Long-Term
Annual Compensation
Compensation Awards (1)
---------------- ------------------
Secur-
ities All
Restricted Under- Other
Name and Stock lying Compen-
Principal Fiscal Salary Bonus Awards Options sation
Position Year ($) ($) ($) (#) ($)(2)
- -------------- ------ -------- -------- ---------- ------- ----------
William E.
Saxelby (3)
President &
Chief
Executive
Officer 2005 $ -- $ -- $170,380 50,000 $ --
James M.
O'Connell
Vice President,
Treasurer,
Secretary
& Chief 2005 $201,900 $ 75,200 $ -- 14,000 $ 1,150
Financial 2004 197,925 75,600 -- 14,000 1,150
Officer 2003 191,750 -- -- 7,000 1,150
R. Craig
Yoder
Senior Vice
President - 2005 $217,400 $ 80,900 $ -- 16,000 $ 1,150
Marketing & 2004 213,150 81,400 -- 16,000 1,150
Technology 2003 207,500 -- -- 8,000 1,150
Robert M.
Greaney 2005 $159,425 $ 59,300 $ -- 12,000 $ 1,150
Vice President 2004 156,325 59,700 -- 12,000 1,150
- Operations 2003 152,500 -- -- 6,000 1,150
Brent A.
Latta (4)
President &
Chief Executive 2005 $320,925 $121,000 $ -- 25,000 $1,258,429
Officer 2004 314,650 150,200 -- 25,000 1,150
(Retired) 2003 306,250 -- -- 50,000 1,150
(1) There were no long-term incentive payouts for any of the executive
officers for the last three fiscal years.
12
(2) Represents the Company's contribution to its 401(K) plan on behalf
of each of these employees.
(3) Mr. Saxelby was elected President and Chief Executive Officer
of Landauer effective September 28, 2005. Mr. Saxelby received
no salary or bonus from Landauer in fiscal 2005.
(4) Mr. Latta retired as President and Chief Executive Officer of
Landauer effective September 27, 2005. "All Other Compensation" for
fiscal 2005 includes payments and obligations pursuant to the terms
of his amended employment agreement.
OPTIONS GRANTED IN LAST FISCAL YEAR
Information regarding stock options granted during the last fiscal
year to Landauer's Named Executive Officers is shown below:
% of Potential Realizable
No. of Total Value at Assumed
Shares Options Annual Rates of
Under- Granted Stock Price
lying to Exercise Appreciation for
Options Employees Price Expir- Option Term (3)
Granted in Fiscal ($/share) ation ----------------------
Name (#)(1) Year (2) Date 5% ($) 10% ($)
- ---- ------- --------- --------- ------ ---------- ----------
William E.
Saxelby 50,000 20.7% $ 48.68 (4) $1,530,730 $3,879,169
James M.
O'Connell 14,000 5.8% 46.80 (5) 412,052 1,016,360
R. Craig
Yoder 16,000 6.6% 46.80 (5) 470,932 1,161,554
Robert M.
Greaney 12,000 5.0% 46.80 (5) 353,199 871,165
Brent A.
Latta
(Retired) 25,000 10.4% 46.80 (5) 735,831 1,814,927
(1) The option grant for Mr. Saxelby became exercisable in full on
September 28, 2005. The option grant for the other Named
Executive Officers became exercisable in full on December 3, 2004.
Shares received upon exercise of any of the option grants may not
be sold prior to the third anniversary of the date of grant.
(2) The exercise price is the fair market value on the date of grant.
(3) Potential realizable value is calculated based on an assumption
that the price of Landauer's Common Stock appreciates at the
annual rate shown, compounded annually, from the date of grant
of the option until the expiration date of the option. The value
is net of the exercise price but is not adjusted for the taxes
that are due upon exercise. The 5% and 10% assumed rates of
appreciation are required by the rules of the Securities and
Exchange Commission and do not represent Landauer's estimate
of future price. Actual gains, if any, upon the exercise of
these options will depend on the actual performance of the
Common Stock.
(4) September 28, 2015.
(5) December 3, 2014
13
AGGREGATED OPTION EXERCISES IN LAST YEAR
AND FISCAL YEAR-END OPTION VALUES
Information regarding the exercise of stock options during the last
fiscal year and the holdings of unexercised stock options at September 30,
2005 by Landauer's Named Executive Officers is shown below.
Number of
Shares Value of
Underlying Unexercised
Unexercised In-the-Money
Options Held at Options at
Shares September 30, September 30,
Acquired 2005 (#) 2005 ($) (1)
on Value ---------------- -------------------
Exercise Realized Exer- Unexer- Exer- Unexer-
Name (#) ($) cisable cisable cisable cisable
- ---- -------- -------- ------- ------- -------- --------
William E.
Saxelby -- $ -- 50,000 -- $ 16,000 $ --
James M.
O'Connell -- -- 31,500 3,500 212,870 50,750
R. Craig
Yoder 3,468 180,343 56,000 4,000 694,520 58,000
Robert M.
Greaney -- -- 27,000 3,000 182,460 43,500
Brent A.
Latta
(Retired) 13,648 662,676 25,000 -- 55,000 --
(1) Aggregate market value on September 30, 2005 less aggregate
exercise price.
EQUITY COMPENSATION PLAN INFORMATION
The following table provides information as of September 30, 2005
regarding the number of shares of Common Stock that may be issued under the
Company's equity compensation plans. All equity compensation plans have
been approved by the Company's stockholders.
(a) (b) (c)
--------------- ---------------- ----------------
Number of
securities
Number of remaining
securities available for
to be Weighted- future issuance
issued upon average exercise under equity
exercise of price of compensation
outstanding outstanding plans (excluding
options, options, securities
warrants warrants and reflected in
Plan category and rights rights column (a))
- ------------- ----------- ---------------- ----------------
Equity compensation
plans approved by
security holders 533,875 $ 40.87 437,775
Equity compensation
plans not approved
by security holders -- -- --
------- -------- -------
Total 533,875 $ 40.87 437,775
14
EXECUTIVE EMPLOYMENT AGREEMENTS AND RETIREMENT PLANS
EMPLOYMENT AND COMPENSATION AGREEMENTS. Landauer has entered into
employment agreements with each of the Named Executive Officers 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
(a lump sum payment in the case of Mr. Saxelby) of base salary and average
bonuses determined in accordance with the agreement for a period ranging
from twelve to twenty-four 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 such
severance period but will not be reduced below an amount equal to six
month's base salary and average bonuses, except in the case of Mr. Saxelby
where there is no provision for offset. The benefits payable to Messrs.
Saxelby and O'Connell, Dr. Yoder, and Mr. Greaney under these agreements,
if their employment had been terminated as of September 30, 2005, would
have had an estimated value of approximately $1,050,000, $382,000, $411,000
and $201,000, respectively.
The terms of Mr. Latta's employment agreement were amended at the
time of his retirement. This amendment provided for (i) a lump sum payment
for future salary and incentive compensation in the amount of $1,207,279,
(ii) enhancement in the amount of retirement benefits that Mr. Latta is
entitled to receive at age 65 such that he will be credited with 25 years
of service and (iii) certain expense reimbursements in the amount of
$50,000.
EXECUTIVE SPECIAL SEVERANCE PLAN. On May 22, 2002, Landauer adopted
the Landauer, Inc. Executive Special Severance Plan (the "Severance Plan")
in which certain of Landauer's executives, including Messrs. Saxelby and
O'Connell, Dr. Yoder and Mr. Greaney, participate. Under the Severance
Plan, if (i) the executive's employment is terminated involuntarily without
cause or is terminated by the executive for good reason (as defined in the
plan) within two years following a change in control, or (ii) the executive
elects to terminate employment for any reason during the 30-day period
immediately following the one-year anniversary of a change in control, the
executive will receive a lump sum payment equal to three times (in the case
of Mr. Saxelby) or two times (in the case of the other Named Executive
Officers) the sum of: (i) the highest annual rate of the executive's base
salary during the 12-month period immediately prior to his termination and
(ii) the greater of the executive's target annual bonus and the average
annual bonus received during the three fiscal years prior to termination.
In addition, the terminated executive will become fully vested in his
accrued benefit under the supplemental key executive retirement plan
(described below) and will receive a lump sum payment equal to the
actuarial equivalent of his accrued benefit under that plan. The
terminated executive also will receive continued medical, dental and life
insurance coverage and outplacement services for up to three years (in the
case of Mr. Saxelby) or up to two years (in the case of the other Named
Executive Officers). The Severance Plan conditions receipt of the
foregoing severance payments and benefits upon the executive entering into
a noncompetition/nonsolicitation agreement and executing a general release
of claims against Landauer and its affiliates.
Additionally, the Severance Plan provides that, immediately upon a
change in control, all of the executive's outstanding stock options and
other equity awards become exercisable, or vested, in full, and any
outstanding stock options will remain exercisable until the earlier of the
first anniversary of the executive's termination of employment and the
original expiration date of the option.
15
The Severance Plan also provides that if any payment made under the
Severance Plan or otherwise to a covered executive would be subject to the
excise tax imposed under Section 4999 of the Internal Revenue Code,
Landauer will make an additional payment to the executive such that the
executive receives a net amount equal to the amount he would have received
if Section 4999 did not apply; provided, however, if the net-after tax
benefit to the executive would not exceed by at least 10% the net after-tax
proceeds without such additional payment and with a reduction of the
benefits to an amount such that no excise tax is payable, Landauer will not
make the additional payment and the executive's benefits will be reduced to
such amount.
For purposes of the Severance Plan, a "change in control" generally
means (i) certain acquisitions of 30% or more of the then outstanding
shares of Common Stock, (ii) a change in the Board of Directors resulting
in the incumbent directors ceasing to constitute at least a majority of the
Board of Directors, (iii) the consummation of a reorganization, merger or
consolidation or sale or disposition of all or substantially all of the
assets of Landauer (unless, among other conditions, Landauer's stockholders
receive more than 60% of the stock of the resulting company) or (iv) the
consummation of a liquidation or dissolution of Landauer.
RETIREMENT PLAN AND SUPPLEMENTAL RETIREMENT PLAN. Messrs. Saxelby
and O'Connell, Dr. Yoder, and Mr. Greaney participate in Landauer's
retirement plan, a defined benefit plan under which benefits are based upon
the average of the annual rates of compensation 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. Saxelby and O'Connell, Dr. Yoder, and Mr. Greaney 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
compensation (including incentive compensation) or final year compensation
(including five-year average incentive compensation), whichever is greater.
Such payments continue to a participant's spouse after the participant's
death, but at a percentage of 25%. Benefits are reduced by 2% (1% for
surviving spouses) for each year of service less than 25 years. Pursuant
to the terms of his employment agreement, Mr. Saxelby's benefit accrues at
a rate such that after the first five years of employment (or in the event
of his earlier termination by Landauer without cause or following a change
in control) he will be credited with 20 years of service, subject to
certain limitations.
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 2005 fiscal year compensation, as defined) and
years of service classifications. Benefits under the retirement plan are
computed solely on the base salary of participants. Benefits under the
supplemental key executive retirement plan are inclusive of incentive
compensation. Benefits under the retirement plan that 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.
16
PENSION PLAN TABLE
Earnings
on Which
Combined Estimated Combined Annual Pension Based on
Retirement Years of Service Indicated
Benefits --------------------------------------------------
are Based 20 years 25 years 30 years 35 years 40 years
- ---------- -------- -------- -------- -------- --------
$200,000 $ 80,000 $100,000 $100,000 $109,500 $127,000
250,000 100,000 125,000 125,000 125,000 134,000
300,000 120,000 150,000 150,000 150,000 150,000
350,000 140,000 175,000 175,000 175,000 175,000
400,000 160,000 200,000 200,000 200,000 200,000
450,000 180,000 225,000 225,000 225,000 225,000
500,000 200,000 250,000 250,000 250,000 250,000
550,000 220,000 275,000 275,000 275,000 275,000
Credited years of service at September 30, 2005 were none for Mr.
Saxelby, 15 for Mr. O'Connell, 22 for Dr. Yoder and 29 for Mr. Greaney.
Credited years of service at age 65 would be 20 for Mr. Saxelby, 22 for Mr.
O'Connell, 35 for Dr. Yoder and 42 for Mr. Greaney. Mr. Latta retired from
Landauer effective September 27, 2005. At age 65, Mr. Latta will be
credited with 25 years of service.
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 Named Executive Officers, as well as stock option grants to all
employees. All compensation actions taken by the Committee are reported to
the full Board of Directors. The Committee administers Landauer's 2005
Long-Term Incentive Plan (the "2005 LTI Plan"), its Amended and Restated
1996 Equity Plan (the "Equity Plan") and its 2000 Incentive Compensation
Plan for Executive Officers (the "Executive Officer Plan".) The Equity
Plan was terminated as of the date of adoption of the 2005 LTI Plan. The
Committee, the Board of Directors and stockholders approved each of these
plans.
Landauer believes that equity awards, such as stock options,
restricted stock, restricted stock units, performance shares and
performance share units 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
equity awards previously granted when granting additional equity awards.
Landauer believes that the combination of salary, incentive
compensation and equity awards 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 periodically
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 that 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 peer
group shown under the heading "Performance Graph."
17
The Executive Officer Plan covers executive officers who are elected
by the Board of Directors to such offices and establishes an incentive pool
that 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 factors related to the achievement of
operating income and revenue growth.
The amount of tentative incentive award for any executive officer is
determined by multiplying the executive's base salary by 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 these financial performance measures.
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.
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.
Brent A. Latta, former President and Chief Executive Officer, retired
from the Company on September 27, 2005. During fiscal 2005, Mr. Latta was
paid a base salary in the amount of $320,925. Under the terms of an
amendment to Mr. Latta's employment agreement entered into at the time of
his retirement, he was also awarded an incentive compensation payment in
the amount of $121,000. Additional provisions in the amendment provide for
(i) a lump sum payment for future salary and incentive compensation in the
amount of $1,207,279, (ii) enhancement in the amount of retirement benefits
that Mr. Latta is entitled to receive at age 65 such that he will be
credited with 25 years of service and (iii) certain expense reimbursements
in the amount of $50,000.
William E. Saxelby was elected as Landauer's President and Chief
Executive Officer on September 28, 2005. The recommended base salary and
incentive compensation award for the Chief Executive Officer is determined
each year by the Committee. Mr. Saxelby's base salary for fiscal 2006 was
established at $350,000 and his incentive compensation award for fiscal
2006 will be determined in accordance with the provisions of Executive
Officer Plan with a minimum award of $175,000. On September 28, 2005, Mr.
Saxelby was granted an award of 3,500 restricted shares of Common Stock
(that vest ratably over three years) and was granted an option to purchase
50,000 shares of Common Stock at the fair market value on the date of grant
(that vested in full upon grant, subject to a restriction on sale of any
shares realized from exercise for a period of three years from the date of
grant.) He will also be granted an award of 10,500 performance shares of
Common Stock that vest on September 30, 2008, based upon financial
performance criteria for fiscal 2006, 2007 and 2008 measured in terms of
actual net income compared with planned net income over the three-year
period.
MEMBERS OF THE COMPENSATION COMMITTEE:
Richard R. Risk, Chairman
E. Gail de Planque
Thomas M. White
18
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 New York Stock Exchange
("NYSE") Market Index and in an industry index represented by a group of
testing laboratories during the period from September 30, 2000 through
September 30, 2005. (On January 15, 2002, the listing of Landauer's Common
Stock was changed to the New York Stock Exchange from the American Stock
Exchange.) 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,
------------------------------------
2000 2001 2002 2003 2004 2005
---- ---- ---- ---- ---- ----
Landauer, Inc. $100 $194 $197 $219 $301 $326
NYSE Market Index 100 83 69 85 98 114
Testing Laboratories 100 61 76 93 90 94
19
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, 2005. Additionally, the Committee has reviewed and
discussed with management and the independent auditors the Company's
unaudited interim financial statements as of and for the end of each of the
first three fiscal quarters for the year ended September 30, 2005. These
discussions occur prior to the issuance of news releases reporting such
quarterly results and prior to the filing of the quarterly reports on
Form 10-Q with the Securities and Exchange Commission.
The Committee discussed with PricewaterhouseCoopers LLP, our
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 auditors'
independence. In addition, the Committee considered whether the provision
by the independent auditors of non-audit services is compatible with
maintaining the independent auditors' independence from management and the
Company.
Based on the reviews and discussions referred to above, the Committee
recommended 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, 2005.
MEMBERS OF THE AUDIT COMMITTEE:
Michael D. Winfield, Chairman
Thomas M. White
Stephen C. Mitchell
20
FEES BILLED BY INDEPENDENT AUDITORS
AUDIT FEES. PricewaterhouseCoopers LLP billed fees to the Company of
approximately $643,764 with respect to fiscal 2005 and approximately
$238,550 with respect to fiscal 2004 for professional services rendered for
the audit of the Company's annual financial statements and reviews of the
interim financial statements included in the Company's Quarterly Reports on
Form 10-Q filed during those fiscal years.
AUDIT-RELATED FEES. PricewaterhouseCoopers LLP billed approximately
$16,100 to the Company with respect to fiscal 2004 that were reasonably
related to the performance of the audit or review of the Company's
financial statements and are not included in "Audit Fees" above. These
services included advice on generally accepted accounting principles,
application of new accounting pronouncements, and addressing financial
statement matters at subsidiary companies.
TAX FEES. PricewaterhouseCoopers LLP billed fees to the Company of
approximately $60,000 with respect to fiscal 2005 and approximately
$105,237 with respect to fiscal 2004 for professional services rendered by
PricewaterhouseCoopers LLP for tax compliance, tax advice and tax planning
for the Company and certain of its subsidiaries. These services included
preparation of income tax returns, determination of estimated tax payments,
and advice related to sales and use tax and other tax matters.
ALL OTHER FEES. No other fees were billed to the Company by
PricewaterhouseCoopers LLP for fiscal 2005 and 2004.
As provided in the Sarbanes-Oxley Act of 2002, all audit and non-
audit services provided after May 6, 2003 by the Company's principal
accountants must be pre-approved by the Audit Committee. Accordingly,
policies and procedures were established whereby the Committee approves
performance of all audit and non-audit services in advance. Based in part
on consideration of the non-audit services provided by
PricewaterhouseCoopers LLP during fiscal 2005 and 2004, the Committee
determined that such non-audit services were compatible with maintaining
the independence of PricewaterhouseCoopers LLP. Since May 6, 2003, the
Committee approved 100% of the services described above. The Company
believes that none of the time expended on PricewaterhouseCoopers LLP's
engagement to audit the Company's financial statements for fiscal 2005 and
fiscal 2004 was attributable to work performed by persons other than
PricewaterhouseCoopers LLP's full-time, permanent employees.
21
RATIFICATION OF APPOINTMENT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The stockholders will be asked at the annual meeting to ratify the
appointment by the Audit Committee of Pricewaterhouse Coopers LLP as the
Company's independent registered public accounting firm for the fiscal year
ending September 30, 2006. PricewaterhouseCoopers LLP, One North Wacker,
Chicago, Illinois, has served as auditors for Landauer since fiscal 2002,
and it will be recommended to the stockholders that they ratify such
appointment again. The Audit Committee, comprised of Michael D. Winfield,
Thomas M. White and Stephen C. Mitchell has approved this appointment.
Representatives of PricewaterhouseCoopers LLP will be present at the
meeting, will have the opportunity to make a statement if they desire to do
so, and will be available to respond to appropriate questions.
If a quorum is present, in order to ratify the appointment of
PricewaterhouseCoopers LLP as Landauer's independent registered public
accounting firm for the fiscal year ending September 30, 2006, 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 AND THE AUDIT COMMITTEE RECOMMEND A VOTE FOR
THE RATIFICATION OF THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS THE
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM OF LANDAUER FOR THE FISCAL
YEAR ENDING SEPTEMBER 30, 2006.
22
STOCKHOLDER PROPOSALS
Proposals intended to be presented by security holders at the annual
meeting of stockholders scheduled for February 8, 2007, 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
September 12, 2006. 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. In addition, under Landauer's by-laws,
nominations for directorships and stockholder proposals to be acted on at
the 2007 annual meeting may be made only pursuant to written notice
received at Landauer's principal office on or after November 25, 2006 and
on or before December 19, 2006.
Landauer's by-laws provide that notice of a stockholder nomination
for director must set forth, as to each person whom the stockholder
proposes to nominate for election or re-election as director, (i) the name,
age, business address and residence address of the person, (ii) the
principal occupation or employment of the person, (iii) the class and
number of shares of capital stock of the corporation that are beneficially
owned by the person and (iv) any other information relating to the person
that is required to be disclosed in solicitations for proxies for election
of directors pursuant to Schedule 14A under the Securities Exchange Act of
1934. Such notice must also set forth, as to the stockholder making the
nomination, (i) the name and record address of such stockholder and (ii)
the class and number of shares of capital stock of the corporation that are
beneficially owned by such stockholder. If the chairman of the stockholder
meeting determines that a stockholder nomination was not made in accordance
with the procedure set forth in the bylaws, he shall so declare to the
meeting and the defective nomination shall be disregarded.
Nominations for director and stockholder proposals should be directed
to James M. O'Connell, Secretary, Landauer, Inc., 2 Science Road, Glenwood,
Illinois 60425-1586.
23
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 and Landauer is required to post such reports on its
website, http://www.landauerinc.com.
Based solely on a review of the Form 3, 4 and 5 filings received
from, or filed by Landauer on behalf of, Reporting Persons since the
beginning of fiscal year 2005, Landauer is not aware of any failure to file
on a timely basis any Form 3, 4 or 5 during fiscal year 2005.
MISCELLANEOUS
Landauer's 2005 Annual Report to Stockholders (which includes a copy
of Landauer's Annual Report on Form 10-K for the fiscal year ended
September 30, 2005) accompanies this proxy statement.
The Board of Directors does not know of any business that 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 that the proxies will be voted 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
January 9, 2006
24
EXHIBIT A
LANDAUER, INC.
CHARTER OF THE AUDIT COMMITTEE
OF THE BOARD OF DIRECTORS
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 the integrity of the Company's
financial statements, related disclosures 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, as the ultimate authority to which the independent auditor
(the "Independent Auditor") and the internal auditing function
("Internal Audit") are accountable.
3. Have the ultimate authority and responsibility for the appointment,
compensation, retention, oversight and evaluation of the independence
of the Independent Auditor.
4. Assist the Board in oversight of the Company's compliance with legal
and regulatory requirements.
5. Review the audit efforts and performance of the Independent Auditor
and Internal Audit.
6. Prepare an Audit Committee report to shareholders to be included in
the Company's annual proxy statement in the form prescribed by
Securities and Exchange Commission rules and regulations.
7. Provide an open avenue of communication among the Independent
Auditor, financial and senior management, Internal Audit, and the
Board.
COMPOSITION, EXPERTISE AND SCHEDULE
1. Members of the Audit Committee and its Chair shall meet the
independence, financial literacy and experience requirements as may
be determined from time to time by the New York Stock Exchange and
other market(s), 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, and shall serve until
the earlier of their resignation, death or removal, 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 as required by the duties
enumerated in this Charter, but no fewer than four times per year.
4. At least one member of the Audit Committee shall qualify as an Audit
Committee financial expert as defined by the Securities and Exchange
Commission and determined by the Board.
A - 1
DUTIES AND RESPONSIBILITIES
The Audit Committee shall:
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 and the Independent Auditor the
annual audited and quarterly financial statements including the
Company's disclosures under "Management's Discussion and Analysis of
Financial Condition and Results of Operations." During such annual
and quarterly reviews, or at such other times as the Audit Committee
deems appropriate, discuss earnings press releases and other written
and verbal financial communications with the investment community or
rating agencies including earnings guidance information.
3. Review reports to management prepared by the Independent Auditor or
Internal Audit and any responses to the same by management.
4. Have the sole authority to (i) retain and terminate the Independent
Auditor to audit the books, records and accounts of the Company; (ii)
approve the engagement terms, fees and other compensation of the
Independent Auditor; (iii) approve any significant non-audit
engagements with the Independent Auditor; and (iv) nominate the
Independent Auditor to be proposed for shareholder approval in any
proxy statement.
5. Review and discuss with the Independent Auditor, at least annually,
all significant relationships which the firm and its affiliates have
with the Company and its affiliates in order to determine the
auditor's independence, including: (i) requesting, receiving and
reviewing, at least annually, a formal written statement of the
Independent Auditor delineating all relationships between the
Independent Auditor and the Company and (ii) discussing with the
Independent Auditor any disclosed relationships or services that may
impact the objectivity and independence of the Independent Auditor.
6. Obtain and review a report by the Independent Auditor, at least
annually, that (i) describes the firm's internal quality control
procedures; (ii) discusses any material issues raised in the firm's
most recent internal quality-control or peer review; and (iii)
describes any inquiry or investigation by governmental or
professional authorities that during the preceding five years
involved one or more independent audits carried out by the firm, and
the steps taken by the firm, if any, to deal with the relevant
issues.
7. Meet separately, at least quarterly, with management, with the
Independent Auditors and with those responsible for Internal Audit.
Such discussions should focus on (i) financial reporting processes
and audit controls, both internal and external, based on consultation
with the Independent Auditor and Internal Audit; (ii) the Independent
Auditor's judgment about the quality and appropriateness of
accounting principles as applied in financial reporting; (iii)
significant changes to auditing and accounting principles and
practices (including alternative applications thereof) as may be
suggested by the Independent Auditor, management or Internal Audit;
(iv) 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; (v)
a review with each of management, the Independent Auditor and
Internal Audit any significant difficulties encountered during the
course of each audit; (vi) a review of any significant disagreement
between management and the Independent Auditor or Internal Audit in
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connection with the preparation of the financial statements; and
(vii) a 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.
8. Discuss with management the Company's significant risk exposures
including financial risk, its policies regarding the assessment and
management of risk and steps management has taken to control such
exposures. Determine that management has implemented adequate
measures to respond to such exposures and guidelines to monitor and
control these risks.
9. Establish hiring policies for employees or former employees of the
Independent Auditors to ensure independence.
10. Review and evaluate the lead partner of the independent accountants'
team. Evaluate the qualification, performance and independence of
the independent accountants including considering whether the
accountants' quality controls are adequate and the provision of
permitted non-audit services are compatible with maintaining the
accountants' independence taking into account the opinions of
management and internal auditors. The Committee shall present its
conclusions with respect to the independent accountants to the Board.
Ensure the rotation of the lead (or coordinating) audit partner
having primary responsibility for the audit and the audit team
responsible for reviewing the audit as required by law.
11. Keep a written record of the acts and proceedings of the Audit
Committee and report thereon to the Board periodically or whenever
requested to do so.
12. Review, with the Company's independent legal counsel, accounting or
other advisors any legal, tax compliance or other matters that could
have a significant impact on the organization's financial statements.
In this regard the Audit Committee shall have the sole authority to
retain such advisors to fulfill its duties.
13. The Company shall provide for appropriate funds as determined by the
Committee, for payment of compensation to the independent accountants
for the purpose of rendering or issuing their report and to any
advisors employed by the Committee.
14. Review and assess the Company's processes for administering its code
of ethical conduct.
15. Review procedures for the receipt, retention and treatment of
complaints received by the Company regarding internal accounting
control or auditing matters, and the confidential, anonymous
submission by employees of communications regarding questionable
accounting or auditing matters. Discuss with management and the
independent accountants correspondence with regulators or
governmental agencies and any published reports, which raise material
issues regarding the Company's financial statements or accounting
policies.
16. Conduct an evaluation of its performance annually and provide a
report of the conclusions of the evaluation to the Board.
While the Audit Committee has the responsibilities and powers set forth in
this Charter, the role of the Audit Committee is oversight. 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.
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