SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, For Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
IRON MOUNTAIN INCORPORATED
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
/X/ No Fee Required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
IRON MOUNTAIN INCORPORATED
745 ATLANTIC AVENUE
BOSTON, MASSACHUSETTS 02111
NOTICE OF 2001 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 24, 2001
To the Shareholders of
IRON MOUNTAIN INCORPORATED:
Iron Mountain Incorporated will hold its 2001 Annual Meeting of Shareholders
at the offices of Sullivan & Worcester LLP, One Post Office Square, 23rd Floor,
Boston, Massachusetts, on May 24, 2001 at 10:00 a.m. local time for the
following purposes:
1. To elect three Class I Directors for a three-year term or until their
successors are elected and qualified;
2. To ratify the selection by the Board of Directors of Arthur Andersen LLP
as the Company's independent public accountants for the year ending
December 31, 2001; and
3. To transact such other business as may properly come before the meeting.
Attached to this notice is a Proxy Statement relating to the proposals to be
considered at the Annual Meeting. The Board of Directors has fixed the close of
business on April 6, 2001 as the record date for the determination of
shareholders entitled to receive notice of and to vote at the Annual Meeting or
any adjournment or postponement thereof. In the event that the Annual Meeting is
adjourned for at least 15 days due to the absence of a quorum, those
shareholders entitled to vote who attend the adjourned meeting, although
otherwise less than a quorum, shall constitute a quorum for the purpose of
acting upon any matter set forth in this notice.
Your vote is important regardless of the number of shares you own. The
Company requests that you complete, sign, date and return the enclosed proxy
card without delay in the enclosed postage-paid return envelope, even if you now
plan to attend the Annual Meeting. You may revoke your proxy at any time prior
to its exercise or by attending the Annual Meeting and voting in person.
All shareholders are cordially invited to attend the meeting.
By order of the Board of Directors,
GARRY B. WATZKE, SECRETARY
Boston, Massachusetts
April 24, 2001
IRON MOUNTAIN INCORPORATED
745 ATLANTIC AVENUE
BOSTON, MASSACHUSETTS 02111
PROXY STATEMENT
FOR THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 24, 2001
GENERAL INFORMATION
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Iron Mountain Incorporated for use at the
Annual Meeting of Shareholders to be held on May 24, 2001 or at any adjournment
or postponement thereof.
The Company's Annual Report to Shareholders for the year ended December 31,
2000 is being mailed to shareholders with the mailing of this Proxy Statement on
or about April 24, 2001.
Iron Mountain will bear all costs of solicitation of proxies. In addition to
solicitations by mail, the Company's Directors, officers and regular employees,
without additional remuneration, may solicit proxies by telephone, telecopier
and personal interviews. Brokers, banks, custodians and other fiduciaries will
be requested to forward proxy soliciting material to the beneficial owners of
shares held of record by such persons, and the Company will reimburse them for
their reasonable out-of-pocket expenses incurred in connection with the
distribution of such proxy materials.
REVOCABILITY OF PROXIES
Any shareholder giving a proxy in the enclosed form has the power to revoke
it at any time before it is exercised. You may revoke your proxy by delivering
to the Secretary of the Company at the address given above a written notice of
revocation or another duly executed proxy bearing a later date. You may also
revoke your proxy by attending the Annual Meeting and voting in person.
RECORD DATE, VOTING AND SHARE OWNERSHIP
Iron Mountain's Common Stock is the only class of voting securities
outstanding and entitled to vote at the Annual Meeting. On April 6, 2001, the
record date for the determination of shareholders entitled to notice of and to
vote at the Annual Meeting, 55,560,196 shares of Common Stock were outstanding
and entitled to vote. Each share is entitled to one vote on each matter.
The presence at the Annual Meeting, in person or by proxy, of shareholders
entitled to cast at least a majority of the votes that all shareholders are
entitled to cast at the Annual Meeting will constitute a quorum. Shares
represented by a properly signed and returned proxy will be treated as present
at the Annual Meeting for purposes of determining a quorum, without regard to
whether the proxy is marked as casting a vote or abstaining. Shares represented
by "broker non-votes" will not be treated as present for purposes of determining
a quorum. A broker non-vote occurs on an item when a broker identified as the
record holder of shares is not permitted to vote on that item without
instruction from the beneficial owner of the shares and no instruction has been
received.
A proxy in the enclosed form, if received in time for voting and not
revoked, will be voted at the Annual Meeting in accordance with the instructions
contained therein. Where a choice is not so specified, the shares represented by
the proxy will be counted "For" the election of the nominees for Director listed
herein and in favor of the other matters set forth in the Notice of Annual
Meeting accompanying this Proxy Statement. Abstentions and broker non-votes do
not affect the election of the Directors or the ratification of the accountants.
EXPLANATORY NOTE
On February 1, 2000, Iron Mountain Incorporated, a Delaware corporation,
acquired Pierce Leahy Corp., a Pennsylvania corporation. The acquisition was
structured as a reverse merger with Pierce Leahy surviving and immediately
changing its name to Iron Mountain Incorporated. Immediately after the merger
former stockholders of Iron Mountain owned approximately 65% of the Company's
Common Stock. Because of this share ownership, Iron Mountain is considered the
acquiring entity for accounting purposes. The terms "Iron Mountain" or the
"Company" used herein refer to both Iron Mountain Incorporated, prior to the
merger, and the combined company after the merger.
2
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information known to the Company with
respect to beneficial ownership of Common Stock by (i) each Director, (ii) the
Chief Executive Officer and the other four most highly compensated executive
officers in the Company (the "Named Executive Officers"), (iii) all Directors
and Named Executive Officers as a group and (iv) each other shareholder known by
the Company to be the beneficial owner of more than five percent of the Common
Stock. Such information is presented as of March 1, 2001, except as otherwise
indicated.
AMOUNT OF BENEFICIAL
OWNERSHIP(1)
--------------------------
NAME SHARES PERCENT OWNED
- ---- ---------- -------------
DIRECTORS AND EXECUTIVE OFFICERS
C. Richard Reese(2)......................................... 1,689,458 3.0%
John F. Kenny, Jr.(3)....................................... 238,670 *
Harold E. Ebbighausen(4).................................... 34,386 *
Robert G. Miller(5)......................................... 51,514 *
Clarke H. Bailey(6)......................................... 60,371 *
Constantin R. Boden(7)...................................... 37,220 *
Kent P. Dauten(8)........................................... 1,265,127 2.3%
Eugene B. Doggett(9)........................................ 18,400 *
B. Thomas Golisano(10)...................................... 1,243,440 2.2%
J. Peter Pierce(11)......................................... 5,805,611 10.5%
Arthur D. Little(12)........................................ 44,665 *
Howard D. Ross(13).......................................... 2,200 *
Vincent J. Ryan(14)......................................... 5,102,025 9.2%
All Directors and executive officers as a group (13
persons)(15).............................................. 14,718,838 26.5%
FIVE PERCENT SHAREHOLDERS
Thomas W. Smith(16)......................................... 3,858,673 7.0%
Thomas N. Tryforos(17)...................................... 3,105,391 5.6%
T. Rowe Price Associates, Inc.(18).......................... 3,924,220 7.1%
- ------------------------
* Less than 1%
(1) Except as otherwise indicated, the persons named in the table above have
sole voting and investment power with respect to all shares of Common Stock
shown as beneficially owned by them.
(2) Mr. Reese is a Director and the Chairman of the Board, Chief Executive
Officer and President of the Company. Includes 25,164 shares of Common Stock
held in trusts for the benefit of Mr. Reese's children, as to which
Mr. Reese disclaims beneficial ownership. Also includes 874,249 shares of
Common Stock as to which Mr. Reese shares beneficial ownership with Schooner
Capital LLC ("Schooner") as a result of a 1988 deferred compensation
arrangement, as amended, between Schooner and Mr. Reese relating to
Mr. Reese's former services as President of the predecessor corporation to
Schooner. Pursuant to such arrangement, upon the earlier to occur of
(i) Schooner's sale or exchange of substantially all of the shares of Common
Stock held by Schooner or (ii) the cessation of Mr. Reese's employment with
the Company, Schooner is required to transfer such shares of Common Stock to
Mr. Reese or remit to Mr. Reese cash in an amount equal to the then current
3
fair market value of such shares of Common Stock. Schooner has agreed to
vote the shares of Common Stock subject to such arrangement at the direction
of Mr. Reese.
(3) Mr. Kenny is the Executive Vice President, Chief Financial Officer and a
Director of the Company. Includes 226,427 shares that Mr. Kenny has the
right to acquire pursuant to currently exercisable options.
(4) Mr. Ebbighausen is the President of Arcus Data Security, Inc. Includes
33,260 shares that Mr. Ebbighausen has the right to acquire pursuant to
currently exercisable options.
(5) Mr. Miller is the President of Iron Mountain Records Management, Inc. All
51,514 shares are shares that Mr. Miller has the right to acquire pursuant
to currently exercisable options.
(6) Mr. Bailey is a Director of the Company. Includes 5,900 shares that
Mr. Bailey has the right to acquire pursuant to currently exercisable
options.
(7) Mr. Boden is a Director of the Company. Includes 5,900 shares that
Mr. Boden has the right to acquire pursuant to currently exercisable
options.
(8) Mr. Dauten is a Director of the Company. Includes 5,900 shares that
Mr. Dauten has the right to acquire pursuant to currently exercisable
options.
(9) Mr. Doggett is a Director of the Company. Includes 5,900 shares that
Mr. Doggett has the right to acquire pursuant to currently exercisable
options.
(10) Mr. Golisano is a Director of the Company. Includes 11,327 shares that
Mr. Golisano has the right to acquire pursuant to currently exercisable
options.
(11) The information is presented as of December 31, 2000, and is based on a
Schedule 13G filed with the Securities and Exchange Commission (the
"Commission") on February 14, 2001. Mr. Pierce is a Director of the Company.
Includes 1,435 shares that Mr. Pierce has the right to acquire pursuant to
currently exercisable options. Also includes 5,786,026 shares held in a
voting trust pursuant to a Voting Trust Agreement dated June 24, 1997 (as
amended or restated from time to time, the "Voting Trust"). Mr. Pierce, as
sole trustee of the Voting Trust, holds the power to vote the shares held in
the Voting Trust. The beneficial owners of the interests in the Voting Trust
have the right to dispose of the shares to which they have beneficial
interests. In addition to the 928,401 shares owned directly by Mr. Pierce
that are held in the Voting Trust, Mr. Pierce directly owns 18,150 shares
that are not subject to the Voting Trust. Mr. Pierce's address is 209 West
Lancaster Avenue, Suite 101, Paoli, Pennsylvania 19301.
(12) Mr. Little is a Director of the Company. Includes 37,500 shares held by The
Little Family Trust, as to which Mr. Little disclaims beneficial ownership,
as well as 5,900 shares that Mr. Little has the right to acquire pursuant to
currently exercisable options.
(13) Mr. Ross is a Director of the Company. All 2,200 shares are shares that
Mr. Ross has the right to acquire pursuant to currently exercisable options.
(14) Mr. Ryan is a Director of the Company. Includes 5,900 shares that Mr. Ryan
has the right to acquire pursuant to currently exercisable options. Also
includes (i) 2,736,076 shares of Common Stock held by Schooner, as to which
Mr. Ryan has sole voting power and investment power as the Chairman of the
Board of Schooner and the principal stockholder of Schooner Capital Trust,
the sole member of Schooner; (ii) 6,000 shares held in a trust for the
benefit of Mr. Ryan's heirs, as to which Mr. Ryan
4
disclaims beneficial ownership except to the extent of his pecuniary
interest therein; and (iii) 55,500 shares held by The Schooner Foundation as
to which Mr. Ryan disclaims beneficial ownership. Mr. Ryan's address is c/o
Schooner Capital LLC, 745 Atlantic Avenue, Boston, Massachusetts 02111.
(15) Includes 361,563 shares that Directors and executive officers have the
right to acquire pursuant to currently exercisable options.
(16) This information is presented as of December 31, 2000, and is based solely
on a Schedule 13G filed with the Commission on February 14, 2001. Mr. Smith
has sole voting and dispositive power over 777,033 shares and has shared
voting and dispositive power over 3,081,640 shares with Mr. Tryforos. The
address of Mr. Smith is 323 Railroad Avenue, Greenwich, Connecticut 06830.
(17) This information is presented as of December 31, 2000, and is based solely
on a Schedule 13G filed with the Commission on February 14, 2001.
Mr. Tryforos has sole voting and dispositive power over 23,751 shares and
has shared voting and dispositive power over 3,081,640 shares with
Mr. Smith. The address of Mr. Tryforos is 323 Railroad Avenue, Greenwich,
Connecticut 06830.
(18) This information is presented as of December 31, 2000, and is based solely
on a Schedule 13G filed with the Commission on February 8, 2001. These
securities are owned by various individual and institutional investors for
which T. Rowe Price Associates, Inc. ("Price Associates") serves as
independent advisor with power to direct investments and/or sole power to
vote the securities. Price Associates has sole voting power over 781,500
shares and sole dispositive power over 3,924,220 shares, but disclaims
beneficial ownership as to all of these shares. The address of T. Rowe Price
Associates, Inc. is 100 E. Pratt Street, Baltimore, Maryland 21202.
5
ITEM 1
ELECTION OF DIRECTORS
The Board of Directors currently consists of eleven Directors. There are
three classes of Directors who serve for a three-year term and are elected on a
staggered basis, one class of Directors standing for election each year. The
term of the Class I Directors, Clarke H. Bailey, Constantin R. Boden and Eugene
B. Doggett, will expire at the Annual Meeting; the term of the Class II
Directors, B. Thomas Golisano, John F. Kenny, Jr., Howard D. Ross and Vincent J.
Ryan, will expire at the 2002 Annual Meeting of Shareholders; and the term of
the Class III Directors, Kent P. Dauten, Arthur D. Little, J. Peter Pierce and
C. Richard Reese, will expire at the 2003 Annual Meeting of Shareholders.
Directors of each class hold office until the third annual meeting of the
shareholders of the Company following their election or until their successors
are elected and qualified.
At the Annual Meeting, the three Class I Directors are to be elected to
serve until the Company's 2004 Annual Meeting of Shareholders, or until their
successors are elected and qualified. The Board of Directors has selected as
nominees the current Class I Directors of the Company, Clarke H. Bailey,
Constantin R. Boden and Eugene B. Doggett. Each has agreed to serve if elected,
and management has no reason to believe that any of the nominees will be
unavailable to serve.
The Company's executive officers were last elected on June 1, 2000. At a
meeting to be held immediately following the Annual Meeting, the Board of
Directors currently intends to elect executive officers of the Company. All
executive officers hold office at the discretion of the Board of Directors until
the first meeting of the Board of Directors following the next annual meeting of
shareholders or until their successors are chosen and qualified. Except for T.
Anthony Ryan, the Company's Vice President, Real Estate, and Vincent J. Ryan, a
Class II Director, who are brothers, there are no family relationships between
or among any of the Company's officers or Directors.
REQUIRED VOTE
The affirmative vote of holders of a plurality of the votes properly cast at
the Annual Meeting is required to elect each Class I Director. For purposes of
determining which nominees receive a plurality, only those cast "For" or
"Against" are included, and any abstentions or broker non-votes will not count
in making that determination.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE ELECTION OF EACH OF
THE NOMINEES LISTED BELOW TO SERVE AS CLASS I DIRECTORS OF IRON MOUNTAIN UNTIL
THE 2004 ANNUAL MEETING OF SHAREHOLDERS, OR UNTIL THEIR SUCCESSORS ARE ELECTED
AND QUALIFIED.
6
Set forth below are the name and age of each Class I Director, his principal
occupation and business experience during the past five years and the names of
certain other companies of which he served as a Director, as of March 12, 2001.
PRINCIPAL OCCUPATIONS AND BUSINESS EXPERIENCE
NOMINEE DURING THE PAST FIVE YEARS
- ------- ------------------------------------------------------------
Clarke H. Bailey Mr. Bailey is a Class I Director of the Company, a position
Age 46 he has held since January 1998. He is Co-Chairman and
Director of Highgate Capital LLC, a private equity firm, and
Chairman, Chief Executive Officer and a Director of
ShipXact.com, Inc., a private fulfillment and distribution
company. Mr. Bailey also serves as Chairman and a Director
of Glenayre Technologies, Inc., a manufacturing company in
the wireless communications industry. Mr. Bailey was the
Chairman and Chief Executive Officer of each of Arcus Group,
Inc., United Acquisition Company and Arcus Technology
Services, Inc. from 1995 until their acquisition by Iron
Mountain in January 1998. He is also a Director of
Connectivity Technologies Inc., Swiss Army Brands, Inc. and
SWWT, Inc. (formerly known as Sweetwater, Inc.). He holds a
Master of Business Administration degree from The Wharton
School, University of Pennsylvania.
Constantin R. Boden Mr. Boden is a Class I Director of the Company, a position
Age 64 he has held since December 1990. Mr. Boden is the principal
of Boden Partners LLC and chairman of the advisory board of
Boston Capital Ventures, a risk capital concern. For 34
years, until January 1995, Mr. Boden was employed by The
First National Bank of Boston, most recently as Executive
Vice President, International Banking. He holds a Master of
Business Administration degree from Harvard Business School.
Eugene B. Doggett Mr. Doggett is a Class I Director of the Company, a position
Age 64 he has held since 1990. From 1987 until May 1997, Mr.
Doggett was the Chief Financial Officer of Iron Mountain,
and from 1990 until May 1998, Mr. Doggett was an Executive
Vice President of Iron Mountain. Mr. Doggett is also a
Director of Mac-Gray Corporation, a publicly held supplier
of card and coin-operated laundry services in multiple
housing facilities. Prior to joining Iron Mountain, he had
extensive experience in commercial and investment banking,
as well as financial and general management experience at
senior levels. He holds a Master of Business Administration
degree from Harvard Business School.
7
Set forth below are the name and age of each other Director and executive
officer of the Company, his principal occupation and business experience during
the past five years and the names of certain other companies of which he served
as a Director, as of March 12, 2001.
PRINCIPAL OCCUPATIONS AND BUSINESS EXPERIENCE
NAME DURING THE PAST FIVE YEARS
- ---- ------------------------------------------------------------
B. Thomas Golisano Mr. Golisano is a Class II Director of the Company, a
Age 59 position he has held since June 1997. Mr. Golisano was
Chairman of Safesite Records Management Corporation until
its acquisition by Iron Mountain in June 1997. He founded
Paychex Inc., a publicly held, national payroll service
company, in 1971 and serves as its Chairman, President and
Chief Executive Officer. Mr. Golisano serves on the Board of
Trustees of Rochester Institute of Technology and on the
boards of several privately held companies. He has also
served on the boards of numerous non-profit organizations
and is the founder of the B. Thomas Golisano Foundation.
John F. Kenny, Jr. Mr. Kenny is a Class II Director, a position he has held
Age 43 since March 1, 2000. He is also the Executive Vice President
and Chief Financial Officer of the Company, positions he has
held since May 1997. Mr. Kenny joined Iron Mountain in 1991
and held a number of operating positions before assuming the
position of Vice President of Corporate Development in 1995.
Prior to 1991, Mr. Kenny was a Vice President of CS First
Boston Merchant Bank, New York, with responsibility for risk
capital investments. Mr. Kenny has also served as a Director
and the Treasurer of Professional Records and Information
Services ("PRISM"), a trade group of approximately 530
members. He holds a Master of Business Administration degree
from Harvard Business School.
Howard D. Ross Howard D. Ross is a Class II Director of the Company, a
Age 49 position he has held since February 2000. In 1999, Mr. Ross
was involved in the formation, and is currently a partner,
of LLR Equity Partners, L.P., a venture capital fund. From
1984 to October 1999, he was a partner at Arthur Andersen
LLP. He is also a Director of PRWW, Ltd., a provider of
clinical testing and software services primarily to the
pharmaceutical industry, and of VerticalNet, Inc., a
provider of e-commerce solutions to businesses in various
vertical markets. Mr. Ross holds a Bachelor of Science
degree in economics from The Wharton School, University of
Pennsylvania, and is a Certified Public Accountant.
8
PRINCIPAL OCCUPATIONS AND BUSINESS EXPERIENCE
NAME DURING THE PAST FIVE YEARS
- ---- ------------------------------------------------------------
Vincent J. Ryan Mr. Ryan is a Class II Director of the Company, a position
Age 65 he has held for over ten years. Mr. Ryan is the founder of
Schooner Capital LLC ("Schooner") and its predecessor,
Schooner Capital Corporation. Mr. Ryan has served as the
Chairman and Chief Executive Officer of Schooner since 1971,
and as its President from 1971 to 1985 and from 1996 to
1999. Prior to November 1995, Mr. Ryan served as Chairman of
Iron Mountain's Board of Directors.
Kent P. Dauten Mr. Dauten is a Class III Director of the Company, a
Age 45 position he has held since November 1997. He also serves as
President of Keystone Capital, Inc., a management and
consulting advisory service firm, a position he has held
since March 1994. In February 1995, Mr. Dauten founded
HIMSCORP, Inc. (d/b/a Records Masters) and served as its
President until its acquisition by Iron Mountain in November
1997. Mr. Dauten currently serves as a Director of Health
Management Associates, Inc., a hospital management firm. Mr.
Dauten holds a Master of Business Administration degree from
Harvard Business School.
Arthur D. Little Mr. Little is a Class III Director of the Company, a
Age 57 position he has held since November 1995. Mr. Little is a
principal of A & J Acquisition Company, Inc., which he
founded in 1996. Prior to that, he was Managing Director of
and also a partner in Narragansett Capital, Inc., a private
investment firm. He holds a Bachelor of Arts degree in
history from Stanford University.
J. Peter Pierce J. Peter Pierce is a Class III Director of the Company, a
Age 55 position he has held since February 2000. From February 1,
2000 until his resignation in June, 2000, he was also the
President of the Company. Prior to the merger with Pierce
Leahy, Mr. Pierce had been the President and Chief Executive
Officer of Pierce Leahy since 1995, and a Director of Pierce
Leahy since the early 1970s. Mr. Pierce is the Chairman and
Chief Executive Officer of Telespectrum Worldwide, Inc., a
publicly traded teleservices company. Mr. Pierce is also
founder and principal partner in Pioneer Capital, L.P., a
venture capital company. Mr. Pierce attended the University
of Pennsylvania and served in the United States Marine
Corps.
9
PRINCIPAL OCCUPATIONS AND BUSINESS EXPERIENCE
NAME DURING THE PAST FIVE YEARS
- ---- ------------------------------------------------------------
C. Richard Reese Mr. Reese is a Class III Director, Chairman of the Board, a
Age 55 position he has held since November 1995, and the Chief
Executive Officer of the Company, a position he has held
since 1981, and has been a Director of the Company since
1990. He is also President of the Company, a position he has
held since J. Peter Pierce's resignation in June 2000 and
previously held from 1981 until November 1985. Mr. Reese is
a member of the investment committee of Schooner, a
shareholder in the Company. Prior to joining Iron Mountain,
Mr. Reese lectured at Harvard Business School in
"Entrepreneurship" and provided consulting services to
small- and medium-sized emerging enterprises. Mr. Reese has
also served as the President and a Director of PRISM. He
holds a Master of Business Administration degree from
Harvard Business School.
Harold E. Ebbighausen Mr. Ebbighausen is an Executive Vice President of the
Age 46 Company and the President of Arcus Data Security, Inc., a
subsidiary of the Company. Mr. Ebbighausen has been an
Executive Vice President of the Company since May 1998 and
has been the President of Arcus Data Security, Inc. since
July 1998. Mr. Ebbighausen was a Vice President of Data
Security Services of Iron Mountain from September 1996
through June 1997. Prior to joining Iron Mountain, Mr.
Ebbighausen was Vice President of Data Management Services
with INSCI Corporation, a software provider for computer
output and data storage solutions to optical and CD
technology. Previously, he held a number of field management
positions with Anacomp, Inc., a service bureau provider in
the micrographics industry.
Robert G. Miller Mr. Miller was appointed the President of Iron Mountain
Age 44 Records Management, Inc., a subsidiary of the Company, on
March 12, 2001 and had served as the Senior Vice President
and Chief Operating Officer of Iron Mountain Records
Management, Inc. from July 2000 until his appointment as
President. Prior to July 2000 Mr. Miller was an Executive
Vice President of Iron Mountain Records Management, Inc., a
position that he had held since December 1996. Mr. Miller
joined Iron Mountain in 1988 and held various positions,
including District Manager from 1988 through 1991 and
Regional Vice President from 1991 through 1996. Prior to
1988, Mr. Miller was employed as a District Manager at Bell
& Howell Records Management Company.
10
BOARD OF DIRECTORS AND COMMITTEE MEETINGS
During the fiscal year ended December 31, 2000, the Board of Directors of
the Company held three regular meetings, and took two actions by written
consent. Each incumbent Director who was then in office (other than
Mr. Golisano who was unable to attend two of the three Board meetings), attended
at least 75% of the aggregate number of meetings of the Board of Directors and
all committees thereof on which such Director served. The Board of Directors of
the Company has a standing Audit Committee, Executive Committee and Compensation
Committee, and a Stock Incentive Plan Subcommittee of the Compensation Committee
(the "Option Plan Subcommittee"). The Company does not have a nominating
committee. During the fiscal year ended December 31, 2000, the Audit Committee
held nine meetings, the Executive Committee held one meeting and took one action
by written consent, the Compensation Committee held four meetings and the Option
Plan Subcommittee held two meetings.
The Audit Committee consists of three members, Messrs. Boden (Chairman),
Little and Dauten, each of whom is independent as defined by applicable New York
Stock Exchange listing standards. The Committee selects and evaluates the
Company's independent auditors, reviews the audited financial statements and
discusses the adequacy of the Company's internal controls with management and
the auditors, among other actions taken to meet its responsibilities as set
forth in its charter. The Audit Committee operates under a written charter
adopted by the Board of Directors, a copy of which is included as Appendix A to
this Proxy Statement.
The Executive Committee consists of Messrs. Ryan (Chairman), Reese and
Bailey. Between meetings of the Board of Directors, the Executive Committee
exercises all the powers of the Board of Directors in the management and
direction of the business and affairs of the Company to the extent not otherwise
prohibited by law, the Board of Directors, the Company's Amended and Restated
Bylaws or Amended and Restated Articles of Incorporation.
The Compensation Committee consists of Messrs. Little (Chairman), Boden,
Ryan and Bailey. The Compensation Committee provides recommendations to the
Board of Directors regarding Iron Mountain's compensation policies and programs
and is also responsible for establishing and modifying the compensation for all
of the Company's executive officers.
The Option Plan Subcommittee consists of Messrs. Little (Chairman) and
Boden, both of whom are "outside" and "non-employee" directors within the
meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Code"), and Rule 16b-3 under Section 16 of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), respectively. The Option Plan Subcommittee
administers the Iron Mountain Incorporated 1995 Stock Incentive Plan (the "1995
Plan") and the Iron Mountain Incorporated 1997 Stock Option Plan (the "1997
Plan"), including the grant of stock options under the 1995 Plan and 1997 Plan
to all employees, including executive officers, the Iron Mountain/ATSI 1995
Stock Option Plan, the Iron Mountain Incorporated 1998 Employee Stock Purchase
Plan (the "Employee Stock Purchase Plan") and the Nonqualified Stock Option Plan
of Pierce Leahy Corp. and recommends the adoption of, and any amendments to, all
stock incentive plans. The Option Plan Subcommittee also administers the Iron
Mountain Incorporated Executive Deferred Compensation Plan, a nonqualified
deferred compensation plan (the "Executive Deferred Compensation Plan").
11
DIRECTOR COMPENSATION
Directors who are employees of the Company do not receive additional
compensation for serving as Directors. Each Director who is not an employee of
the Company receives an annual retainer fee of $12,000 as compensation for his
or her services as a member of the Board of Directors and $500 for attendance at
committee meetings ($1,000 per meeting for the Chairman of the committee). In
addition, the Company has a program by which it grants its nonemployee Directors
options to purchase $200,000 of the Company's Common Stock every three years.
Each option is granted under either the 1995 Plan or the 1997 Plan, has an
exercise price equal to fair market value (as defined in the relevant Plan) on
the date of grant, vests in equal amounts over a period of three years and has a
ten year term. All Directors are reimbursed for out-of-pocket expenses incurred
in attending meetings of the Board of Directors or committees thereof, and for
other expenses incurred in their capacities as Directors.
The Company paid a total of $96,000 in cash for Directors fees in respect of
services for 2000.
12
EXECUTIVE COMPENSATION
The following table provides certain information concerning compensation
earned by the Chief Executive Officer the other four most highly compensated
executive officers of the Company measured as of December 31, 2000 (the "Named
Executive Officers").
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION LONG-TERM COMPENSATION
--------------------------------------------- ----------------------------
NUMBER OF
SHARES
OTHER ANNUAL UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION OPTIONS COMPENSATION(1)
- --------------------------- -------- -------- -------- ------------ ---------- ---------------
C. Richard Reese............................. 2000 $428,366 $428,000 0 0 $ 3,400
Chairman of the Board and 1999 $358,000 $250,000 0 0 $ 3,200
Chief Executive Officer 1998 $308,538 $190,000 0 0 $ 4,000
John F. Kenny, Jr............................ 2000 $257,019 $231,000 0 0 $ 3,400
Executive Vice President and 1999 $218,300 $153,000 0 26,765 $ 3,200
Chief Financial Officer 1998 $192,788 $135,000 0 0 $ 2,400
Harold E. Ebbighausen........................ 2000 $210,385 $ 82,000 0 0 $ 3,199
President of Arcus Data Security, Inc. 1999 $193,300 $ 80,000 0 35,690 $ 3,200
1998 $148,269 $110,000 0 0 $ 2,400
Robert G. Miller............................. 2000 $209,423 $165,000 $74,897 38,663 $ 3,051
President of Iron Mountain 1999 $153,500 $ 61,400 0 11,150 $ 2,983
Records Management, Inc. 1998 $137,846 $ 27,570 0 0 $ 3,446
J. Peter Pierce(2)........................... 2000 $137,500 -- 0 5,740 $1,291,763(3)
President 1999 -- -- -- -- --
1998 -- -- -- -- --
- --------------------------
(1) Reflects the Company's matching contribution to The Iron Mountain Companies
401(k) Plan and The Iron Mountain Profit Sharing/401(k) Plan for each
individual. Amounts shown for 2000 are estimated maximum contributions; the
final contributions have not yet been calculated.
(2) Mr. Pierce, who became an employee and President of the Company following
the merger of Iron Mountain and Pierce Leahy in February 2000, resigned from
that office effective June 30, 2000, and is no longer an executive officer
of the Company.
(3) Includes the estimated matching contribution of $2,180 and the severance
payment of $1,289,583 based on Mr. Pierce's employment agreement.
13
The following table sets forth certain information concerning the grant of
options to purchase Company Common Stock to the Named Executive Officers during
the year ended December 31, 2000.
OPTION GRANTS IN 2000
POTENTIAL REALIZABLE
PERCENT OF VALUE AT ASSUMED
NUMBER OF TOTAL OPTIONS ANNUAL RATES
SECURITIES GRANTED TO OF STOCK APPRECIATION
UNDERLYING EMPLOYEES IN FOR OPTION TERM(1)
OPTIONS FISCAL YEAR EXERCISE EXPIRATION -----------------------
NAME AND PRINCIPAL POSITION GRANTED 2000 PRICE ($/SH) DATE 5% 10%
- --------------------------- ---------- ------------- ------------ ---------- ---------- ----------
Robert G. Miller.......................... 23,682 4.23% $33.781 4/24/2010 $1,303,126 $2,075,017
President of Iron Mountain 14,981 2.67% $33.375 11/15/2010 $ 814,427 $1,296,845
Records Management, Inc.
J. Peter Pierce(2)........................ 5,740 1.02% $33.875 7/2/2010 $ 316,727 $ 504,334
President
- --------------------------
(1) Potential Realizable Value is based on the assumed growth rates for an
assumed ten-year option term. Five percent annual growth results in a Common
Stock price per share of $55.026, $54.364 and $55.179, and ten percent
annual growth results in a Common Stock price per share of $87.620, $86.566
and $87.863, respectively, for such term. The actual value, if any, an
executive may realize will depend on the excess of the market price of the
Common Stock over the exercise price on the date the option is exercised.
There is no assurance that the value realized by an executive will be at or
near the amounts reflected in this table.
(2) Mr. Pierce, who became President of the Company following the merger of Iron
Mountain and Pierce Leahy, resigned from that office effective June 30,
2000, and is no longer an executive officer of the Company.
The following table sets forth certain information with respect to stock
options during the year ended December 31, 2000 exercised by, and the
unexercised options to purchase Common Stock held by, the Named Executive
Officers. Mr. Reese does not have any options.
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION VALUES
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS AT
SHARES DECEMBER 31, 2000 DECEMBER 31, 2000(1)
ACQUIRED VALUE --------------------------- ---------------------------
NAME AND PRINCIPAL POSITION ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- --------------------------- ----------- -------- ----------- ------------- ----------- -------------
John F. Kenny, Jr............................ 0 0 214,213 96,932 $4,715,378 $1,381,993
Executive Vice President
and Chief Financial Officer
Harold E. Ebbighausen........................ 0 0 33,259 39,216 $ 446,287 $ 261,575
President of Arcus Data Security, Inc.
Robert G. Miller............................. 0 0 39,736 54,624 $1,046,893 $ 338,227
President of Iron Mountain
Records Management, Inc.
J. Peter Pierce(2)........................... 0 0 478 5,262 $ 1,404 $ 15,457
President
- --------------------------
(1) Based on a year-end value of $36.8125 per share, less the exercise price.
(2) Mr. Pierce, who became President of the Company following the merger of Iron
Mountain and Pierce Leahy, resigned from that office effective June 30, 2000
and is no longer an executive officer of the Company.
14
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee consisted entirely of Directors who were not
employees of the Company. It was the Compensation Committee's responsibility to
review, recommend and approve the Company's compensation policies and programs,
including all compensation for the Chief Executive Officer and the other
executive officers of the Company for the fiscal year ended December 31, 2000.
The Option Plan Subcommittee consisted entirely of directors who were both
"non-employee" directors within the meaning of Rule 16b-3 under Section 16 of
the Exchange Act and "outside" directors within the meaning of Section 162(m) of
the Code and the regulations thereunder, so that grants of options under the
1995 Plan and the 1997 Plan to executive officers were exempt under Rule 16b-3
and eligible for the "performance-based" exception of Section 162(m) of the
Code. The Option Plan Subcommittee administered the 1995 Plan and the 1997 Plan
and in exercise of that function determined what grants of stock options,
restricted stock and stock appreciation rights thereunder were to be made to the
Chief Executive Officer and the other executive officers of the Company. The
Option Plan Subcommittee also administered the Iron Mountain/ATSI 1995 Stock
Option Plan and the Nonqualified Stock Option Plan of Pierce Leahy Corp.
(although no additional grants were made under those plans), the Employee Stock
Purchase Plan and the Executive Deferred Compensation Plan.
The purpose of the 1995 Plan and the 1997 Plan and the other stock option
plans administered by the Option Plan Subcommittee is to encourage key
employees, Directors and consultants of the Company who render services of
special importance to, and who contribute materially to the success of, the
Company to continue their association with the Company by providing favorable
opportunities for them to participate in the ownership of the Company and in its
future growth. The Option Plan Subcommittee made stock option grants to
Messrs. Miller and Pierce in 2000.
The purpose of the Employee Stock Purchase Plan is to provide employees of
the Company with the opportunity to acquire a proprietary interest in the
Company by providing favorable terms for them to purchase the Company's Common
Stock.
The Executive Deferred Compensation Plan is maintained for the purpose of
providing deferred compensation to a select group of management and highly
compensated employees of the Company. This plan is expected to encourage the
continued employment of the participating employees whose management and
individual performance are largely responsible for the success of the Company
and to facilitate the recruiting of key management and highly compensated
employees required for the continued growth and profitability of the Company.
The Compensation Committee determined the salary levels of the Company's
executive officers, including the Chief Executive Officer, for fiscal year 2000,
and the amounts of bonuses paid in 2001 for performance in fiscal year 2000. The
compensation policies implemented by the Compensation Committee, which combine
base salary and incentive compensation in the form of cash bonuses and long-term
stock options, are designed to achieve the operating and acquisition strategies
and goals of the Company. In particular, in determining bonuses paid in 2001 in
respect of 2000 and salary levels for fiscal year 2000, the Compensation
Committee took into account the past or expected future contributions of each
executive officer to the Company's strategic goals, especially the efforts of
each such officer in connection with the successful integration of the
businesses of Iron Mountain and Pierce Leahy.
Section 162(m) of the Code generally disallows an income tax deduction to
public companies for compensation in excess of $1,000,000 paid in any year to
the chief executive officer or any of the four most highly compensated other
executive officers, to the extent that this compensation is not "performance-
based" within the meaning of Section 162(m). Although the Compensation Committee
has not adopted
15
any specific rules with respect to this issue, its general policy, subject to
all then prevailing relevant circumstances, is to attempt to structure the
compensation arrangements of the Company to maximize deductions for federal
income tax purposes.
COMPENSATION COMMITTEE
ARTHUR D. LITTLE, CHAIRMAN
CONSTANTIN R. BODEN
VINCENT J. RYAN
CLARKE H. BAILEY
EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT AND CHANGE OF CONTROL
ARRANGEMENT
The 1995 Plan provides for acceleration of the vesting of options and stock
appreciation rights if the Company or any wholly owned subsidiary of the Company
is a party to a merger or consolidation (whether or not the Company is the
surviving corporation) in any transaction or series of related transactions and
there is a "Limited Change of Control" of the Company. A Limited Change of
Control occurs if after the merger or consolidation (a) individuals who
immediately prior to the merger or consolidation served as members of the Board
of Directors no longer constitute a majority of the Board of Directors or the
board of directors of the surviving corporation and (b) the voting securities of
the Company outstanding immediately prior to the merger or consolidation do not
represent (either by remaining outstanding or upon conversion into securities of
the surviving corporation) more than 50% of the voting power of the securities
of the Company or the surviving corporation immediately after the merger or
consolidation.
As part of the merger with Pierce Leahy, Iron Mountain entered into a four
year employment agreement with J. Peter Pierce. Under the agreement, Mr. Pierce
was to serve as the Company's President. In connection with Mr. Pierce's
resignation as President, Iron Mountain and Mr. Pierce amended the employment
agreement and, in lieu of the payments and benefits provided for in the
employment agreement, Mr. Pierce received severance pay at the annual rate of
$325,000 through December 31, 2000 and a payment of $1,127,083. All payments
owed to Mr. Pierce pursuant to the employment agreement, as amended, have been
paid in full. Mr. Pierce is subject to customary confidentiality and
noncompetition agreements as part of the employment agreement.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of the Board of Directors consists of
Mr. Little, who is the Chairman, and Messrs. Boden, Ryan and Bailey. Mr. Ryan is
the Chairman of the Board and principal shareholder of Schooner Capital Trust.
AUDIT COMMITTEE REPORT
In the course of its oversight of the Company's financial reporting process,
the Audit Committee of the Board of Directors has (i) reviewed and discussed
with management the Company's audited financial statements for the fiscal year
ended December 31, 2000, (ii) discussed with Arthur Andersen LLP, the Company's
independent auditors, the matters required to be discussed by Statement on
Accounting Standards No. 61, COMMUNICATION WITH AUDIT COMMITTEES, and
(iii) received the written disclosures and the letter from the auditors required
by Independence Standards Board Standard No. 1, INDEPENDENCE DISCUSSIONS WITH
AUDIT COMMITTEES, discussed with the auditors their independence, and considered
whether the provision of nonaudit services by the auditors is compatible with
maintaining their independence.
16
Based on the foregoing review and discussions, the Committee recommended to
the Board of Directors that the financial statements prepared by management and
audited by Arthur Andersen LLP be included in the Company's Annual Report on
Form 10-K for the year ended December 31, 2000 for filing with the Securities
and Exchange Commission (the "Commission").
AUDIT COMMITTEE
CONSTANTIN R. BODEN, CHAIRMAN
ARTHUR D. LITTLE
KENT P. DAUTEN
CERTAIN TRANSACTIONS
REAL ESTATE TRANSACTIONS
Schooner leases space from the Company at the Company's corporate
headquarters. Vincent J. Ryan, a Director of the Company, is the Chairman and
Chief Executive Officer of Schooner. Such lease is a tenancy-at-will and may be
terminated by either the Company or by Schooner at any time. As consideration
for such lease, Schooner pays rent to the Company based on its pro rata share of
all expenses related to the use and occupancy of the premises. The rent paid by
Schooner to the Company under such lease was approximately $96,000 in the year
ended December 31, 2000, and Schooner currently pays annual rent of
approximately $101,000. The Company believes that the terms of this lease are no
less favorable to it than would have been negotiated with an unrelated third
party.
The Company leases from three separate limited partnerships certain of its
facilities in Suffield, Connecticut, Orlando, Florida and Charlotte, North
Carolina. J. Peter Pierce, a Director of the Company, is the general partner of
the limited partnerships and members of the Pierce family and their affiliates
own substantial limited partnership interests in each of the limited
partnerships. The leases for the Suffield, Orlando and Charlotte facilities
terminate on December 31, 2005, October 31, 2004 and August 31, 2001,
respectively. Each of such leases contains two five-year renewal options. The
aggregate rental payment by the Company for such properties during 2000 was
$1,684,000. The Company believes that the terms of these leases are no less
favorable to the Company than would have been negotiated with unrelated third
parties.
OTHER TRANSACTIONS
The Company paid compensation of approximately $212,000 for the year ended
December 31, 2000 to Mr. T. Anthony Ryan. Mr. Ryan is Vice President, Real
Estate, of the Company and is the brother of Mr. Vincent J. Ryan, a Director of
the Company. The Company believes that the terms of Mr. Ryan's employment are no
less favorable to it than would be negotiable with an unrelated third party.
The Company provided an annual pension in the amount of $96,000 to Leo W.
Pierce, Sr., for the year ended December 31, 2000. Mr. Pierce formerly served as
Chairman Emeritus of the Company and is the father of J. Peter Pierce, a
Director of the Company. The Company will continue to provide a pension to
Mr. Pierce, or his spouse, if she survives him, in 2001.
17
PERFORMANCE GRAPH
In order to provide comprehensive disclosure, the performance graphs for
both Iron Mountain and Pierce Leahy prior to the merger are shown below, in
addition to a performance graph for the combined company after the merger.
IRON MOUNTAIN--PRE-MERGER
The following graph compares the percentage change in the cumulative total
return on the Common Stock of Iron Mountain prior to the merger to the
cumulative total returns of the S&P 500 Index and the S&P Small Cap 600 Index
for fiscal years 1999, 1998, 1997 and for the portion of 1996 that Iron
Mountain's Common Stock was registered under Section 12 of the Exchange Act.
This comparison assumes an investment of $100 on February 1, 1996 and the
reinvestment of any dividends.
COMPARISON OF 47 MONTH CUMULATIVE TOTAL RETURN*
AMONG IRON MOUNTAIN INCORPORATED, PRIOR TO THE MERGER,
THE S&P 500 INDEX AND THE S&P SMALL CAP 600 INDEX
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
CUMULATIVE TOTAL RETURN
----------------------------------------------------
2/1/96 12/96 12/97 12/98 12/99
-------- -------- -------- -------- --------
IRON MOUNTAIN INCORPORATED.......................... 100.00 189.06 224.99 338.08 368.55
S & P 500........................................... 100.00 118.91 158.59 203.9 246.81
S & P SMALLCAP 600.................................. 100.00 121.06 152.03 156.18 175.55
* ASSUMES $100 INVESTED ON 2/1/96 IN STOCK OR ON 1/31/96
IN INDEX--INCLUDING REINVESTMENT OF DIVIDENDS.
FISCAL YEAR ENDED DECEMBER 31, 1999.
18
PIERCE LEAHY
The following graph compares the percentage change in the cumulative total
return on Pierce Leahy's common stock to the cumulative total returns of the S&P
500 Index and the Russell 2000 Index for fiscal years 1999 and 1998 and for the
portion of 1997 that Pierce Leahy's common stock was registered under
Section 12 of the Exchange Act. This comparison assumes an investment of $100 on
July 1, 1997 and the reinvestment of any dividends.
COMPARISON OF 30 MONTH CUMULATIVE TOTAL RETURN*
AMONG PIERCE LEAHY CORP., THE S&P 500 INDEX
AND THE RUSSELL 2000 INDEX
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
CUMULATIVE TOTAL RETURN
-----------------------------------------
7/2/1997 12/97 12/98 12/99
-------- -------- -------- --------
PIERCE LEAHY CORP........................................... 100.00 83.67 104.08 176.53
S & P 500................................................... 100.00 110.74 142.39 172.35
RUSSELL 2000................................................ 100.00 114.99 107.57 105.97
* ASSUMES $100 INVESTED ON 7/2/97 IN STOCK
OR INDEX--INCLUDING REINVESTMENT OF DIVIDENDS.
FISCAL YEAR ENDED DECEMBER 31, 1999.
19
IRON MOUNTAIN--POST-MERGER
The following graph compares the percentage change in the cumulative total
return on the Common Stock of the combined Company after the merger of Iron
Mountain and Pierce Leahy on February 1, 2000 to the cumulative total returns of
the S&P 500 Index, the Russell 2000 Index and the Russell 1000 Index for fiscal
year 2000. The Commission's rules require the inclusion of both the old market
capitalization index (the Russell 2000 Index) and the new market capitalization
index (the Russell 1000 Index) for the transition year. This comparison assumes
an investment of $100 on February 1, 2000 and the reinvestment of any dividends.
COMPARISON OF 11 MONTH CUMULATIVE TOTAL RETURN*
AMONG IRON MOUNTAIN INCORPORATED,
THE S&P 500 INDEX, THE RUSSELL 2000 INDEX AND
THE RUSSELL 1000 INDEX
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
CUMULATIVE TOTAL
RETURN
---------------------
2/1/2000 12/31/2000
-------- ----------
IRON MOUNTAIN INCORPORATED.................................. 100.00 114.01
S & P 500................................................... 100.00 95.7
RUSSELL 1000................................................ 100.00 96.15
RUSSELL 2000................................................ 100.00 98.56
* ASSUMES $100 INVESTED ON 2/1/00 IN STOCK OR ON 1/31/00
IN INDEX--INCLUDING REINVESTMENT OF DIVIDENDS.
FISCAL YEAR ENDED DECEMBER 31, 2000.
20
ITEM 2
RATIFICATION OF SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
Subject to ratification by the shareholders, the Board of Directors has
selected the firm of Arthur Andersen LLP as the Company's independent public
accountants for the current year. Arthur Andersen LLP has served as the
independent public accountants for the Company from 1988 through 2000.
The fees for services provided by Arthur Andersen LLP to the Company for the
fiscal year ended December 31, 2000 were as follows:
Audit Fees.................................................. $1,241,900
Financial Information Systems Design and Implementation
Fees...................................................... $2,556,000
All Other Fees.............................................. $2,330,900
Representatives of Arthur Andersen LLP are expected to be present at the
Annual Meeting. They will have the opportunity to make a statement if they
desire to do so and will also be available to respond to appropriate questions
from shareholders.
If the shareholders do not ratify the selection of Arthur Andersen LLP as
the Company's independent public accountants, the selection of accountants will
be reconsidered by the Board of Directors.
REQUIRED VOTE
The affirmative vote of holders of a majority of the votes properly cast at
the Annual Meeting is required to ratify the selection of Arthur Andersen LLP to
serve as the Company's independent public accountants for the current fiscal
year. For purposes of determining the number of votes cast, only those cast
"For" or "Against" are included, and any abstentions or broker non-votes will
not count in making that determination.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE RATIFICATION OF THE
SELECTION OF ARTHUR ANDERSEN LLP.
ADDITIONAL INFORMATION
OTHER MATTERS
The Board of Directors does not know of any other matters that may come
before the Annual Meeting. However, if any other matters are properly presented
to the meeting, it is the intention of the persons named in the accompanying
proxy to vote, or otherwise act, in accordance with their best judgment on such
matters.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires that the Company's executive
officers, Directors, and persons who own more than ten percent of a registered
class of the Company's equity securities file reports of ownership on Form 3 and
changes in ownership on Form 4 or 5 with the Commission. Such executive
officers, Directors and ten percent shareholders are also required by Commission
rules to furnish to the Company copies of all Section 16(a) reports that they
file. Based solely on its review of the copies of such forms received by it, or
written representations from certain reporting persons that they were not
required to file a Form 5, the Company believes that, during the fiscal year
ended December 31, 2000, the executive
21
officers, Directors and ten percent shareholders of the Company complied with
all Section 16(a) filing requirements applicable to such persons.
PROPOSALS OF SHAREHOLDERS
The Company expects to hold the 2002 Annual Meeting on May 23, 2002.
A shareholder who intends to present a proposal at the 2002 Annual Meeting
of Shareholders for inclusion in the Company's 2002 proxy statement and proxy
card relating to that meeting must submit the proposal by December 26, 2001. In
order for the proposal to be included in the proxy statement, the shareholder
submitting the proposal must meet certain eligibility standards and comply with
certain procedures established by the Commission, and the proposal must comply
with the requirements as to form and substance established by applicable laws
and regulations. The proposal must be mailed to the Company's principal
executive office, at the address stated herein, and should be directed to the
attention of the Chief Financial Officer.
A shareholder who intends to present a proposal at the 2002 Annual Meeting
of Shareholders and who intends to conduct his or her own proxy solicitation
must submit the proposal to the Company not earlier than January 24, 2002 and
not later than February 25, 2002.
By Order of the Board of Directors,
GARRY B. WATZKE, SECRETARY
April 24, 2001
22
APPENDIX A
AUDIT COMMITTEE CHARTER
The Audit Committee (the "Committee") is a committee of the Board of
Directors (the "Board) of Iron Mountain Incorporated (the "Company"). Its
primary function is to assist the Board in fulfilling its oversight
responsibilities by reviewing the financial information that will be provided to
the shareholders and others, the systems of internal controls that management
has established and the internal and external audit processes.
This Charter shall be reviewed for adequacy on an annual basis by the
Committee.
In meeting its responsibilities, the Committee is expected to:
1. Provide an open avenue of communication among senior management, the
internal auditors, the independent public accountants and the Board.
2. Select and recommend to the Board the independent public accountants to be
nominated, review the performance of the independent public accountants and
their fees, and review and, where appropriate, approve the discharge of the
independent public accountants. As selected by the Committee, the
independent public accountants are ultimately accountable to the Board and
the Committee, as representatives of the shareholders.
3. Review and concur in the appointment, replacement, reassignment or dismissal
of the Company's Director of Internal Audit.
4. Confirm and assure the independence of the Company's independent public
accountants, including a review of all economic engagements performed by the
independent public accountants. Request from the independent public
accountants annually, a formal written statement delineating all
relationships between the public accountants and the Company consistent with
the Independence Standards Board Standard Number 1, discuss with the
independent public accountants any such relationships and their impact on
the public accountants independence, and take or recommend that the Board
take appropriate action in response to the independent public accountants
report to satisfy itself of the auditor's independence.
5. Inquire of management, the Director of Internal Audit and the independent
public accountants about significant risks or exposures and assess the steps
management has taken or is planning on taking to minimize such risks to the
company.
6. Consider, in consultation with the independent public accountants and the
Director of Internal Audit, the audit scope and plan of the internal
auditors and independent public accountants.
7. Consider with management and the independent public accountants the
rationale for employing audit firms other than the principal independent
public accountants in the performance of material engagements.
8. Review with the independent public accountants and the Director of Internal
Audit the coordination of audit effort to assure completeness of coverage,
reduction of redundant efforts and the effective use of audit resources.
A-1
9. Consider and review with the independent public accountants and the Director
of Internal Audit:
a. The adequacy of the Company's internal controls, including computerized
information system controls and security.
b. The Company's significant auditing and accounting principles and
practices.
c. Any related significant findings and recommendations of the independent
public accountants and the Internal Audit Department together with
management's responses thereto.
10. Review with management, Internal Audit Department, and the independent
public accountants at the completion of the annual examination:
a. The Company's annual financial statements and related footnotes.
b. The independent public accountant's audit of the financial statements
and their report thereon.
c. Any significant changes required in the independent public accountant's
audit plan.
d. Any audit comments made by the independent public accountants to
management based on the annual examination and management's responses.
e. Any other matter related to the audit which management or the
independent public accountants feel the Audit Committee needs to know.
11. As a whole, or through the Committee chair, review with management and the
independent public accountants the Company's quarterly financial statements
prior to filing its Form 10-Q with the Securities and Exchange Commission.
12. Review and consider with the independent public accountants the matters
required to be discussed by Statement of Auditing Standards ("SAS")
No. 61.
13. Review activities of the Company's Internal Audit Department as follows:
a. Significant findings during the year and management's responses thereto.
b. Any difficulties encountered in the course of its audits, including any
restrictions on the scope of its work or access to required information.
c. Any changes required in the planned scope of its audit plan.
d. The Internal Audit Department budget and staffing.
e. The Internal Audit Department's charter.
f. The Internal Audit Department's compliance with the IIA's STANDARDS FOR
THE PROFESSIONAL PRACTICE OF INTERNAL AUDITING.
14. Meet with the Director of Internal Audit, the independent public
accountants and management in separate executive sessions to discuss any
matters that the Committee or these groups believe should be discussed
privately with the Audit Committee.
15. Report Committee actions to the Board with such recommendations, as the
Committee may deem appropriate.
A-2
16. Prepare a communication for inclusion in the proxy statement for the annual
meeting of the Board that describes the Committee's composition and
responsibilities and how they were discharged.
17. Conduct or authorize investigations into any matters within the Committee's
responsibilities with full access to the books, records, facilities and
personnel of the Company, including retaining independent counsel, auditors
or others to assist it in the conduct of any investigation.
18. Meet quarterly or more frequently as circumstances require. The Committee
may ask members of management or others to attend the meetings and provide
pertinent information, as necessary.
19. Perform other functions as assigned by law, the Company's articles of
incorporation or bylaws, or the Board.
The Committee shall consist of at least three members of the Board and shall
be designated annually by, and shall serve at the pleasure of the full Board.
The Committee's composition will meet the independence and experience
requirements of the Audit Committee Policy of the New York Stock Exchange
(NYSE). Accordingly, all of the members will be directors:
1. Who have no relationship to the Company that may interfere with the
exercise of their independence from management and the Company; and
2. Who are financially literate within a reasonable period of time after
appointment to the Committee
In addition, at least one member of the Committee will have accounting or
related financial management expertise.
The duties and responsibilities of a member of the Committee are in addition
to those duties set out for a member of the Board.
While the Committee has the responsibilities and powers set forth in this
Charter, it is not the duty of the Committee to prepare the Company's financial
statements, to plan or conduct audits of those financial statements, or to
determine that those financial statements are complete and accurate and in
accordance with generally accepted accounting principles. This is the
responsibility of the Company's management and the independent public
accountants. Nor is it the duty of the Committee to conduct investigations, to
resolve disagreements, if any, between management and the independent public
accountants or to assure compliance with applicable laws and regulations.
A-3
DETACH HERE
PROXY
IRON MOUNTAIN INCORPORATED
745 ATLANTIC AVENUE
BOSTON, MASSACHUSETTS 02111
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints C. RICHARD REESE and JOHN F. KENNY, JR.,
and each of them, as proxies of the undersigned, each with the power to
appoint his substitute, and hereby authorizes a majority of them, or any one
if only one be present, to represent and to vote, as designated on the
reverse hereof, all the Common Stock, $.01 par value per share, of Iron
Mountain Incorporated held of record by the undersigned or with respect to
which the undersigned is entitled to vote or act at the Annual Meeting of
Shareholders to be held on May 24, 2001 at 10:00 a.m., local time, or any
adjournment or postponement thereof.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED FOR ALL OF THE DIRECTORS LISTED IN PROPOSAL 1 AND FOR PROPOSAL
2.
- ----------- -----------
SEE REVERSE SEE REVERSE
SIDE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SIDE
- ----------- -----------
[LOGO OF IRON MOUNTAIN INCORPORATED]
April 24, 2001
Dear Shareholder:
It is a pleasure to invite you to the Company's 2001 Annual Meeting in
Boston, Massachusetts on Thursday, May 24, 2001, at 10:00 a.m., local time,
at the offices of Sullivan & Worcester LLP, One Post Office Square, 23rd
Floor, Boston, Massachusetts.
The Annual Report to Shareholders, Notice of Meeting, proxy statement
and form of proxy are included herein. The matters listed in the Notice of
Meeting are described in detail in the proxy statement.
The vote of every shareholder is important. Mailing your completed proxy
will not prevent you from voting in person at the meeting if you wish to do
so.
Please sign, date and promptly mail your proxy. Your cooperation will be
greatly appreciated.
Your Board of Directors and management look forward to greeting those
shareholders who are able to attend.
Sincerely,
C. RICHARD REESE
Chairman of the Board and
Chief Executive Officer
DETACH HERE
PLEASE MARK
/X/ VOTES AS IN
THIS EXAMPLE
1. Election of the following Directors: 2. Ratification of the selection by the Board of Directors of Arthur Andersen
LLP as independent public accountants for 2001.
Nominees: (01) Clarke H. Bailey,
(02) Constantin R. Boden and FOR AGAINST ABSTAIN
(03) Eugene B. Doggett. / / / / / /
FOR WITHHOLD 3. In their discretion, the Proxies are authorized to vote upon such other
/ / / / business as may properly come before the meeting.
/ / ________________________________________ MARK HERE IF YOU PLAN TO ATTEND THE MEETING / /
For all nominees except as noted above
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT / /
NOTE: PLEASE SIGN EXACTLY AS YOUR NAME APPEARS HEREON. JOINT OWNERS SHOULD
EACH SIGN. WHEN SIGNING AS ATTORNEY, EXECUTOR, ADMINISTRATOR, TRUSTEE OR
GUARDIAN, PLEASE GIVE FULL TITLE AS SUCH. IF A CORPORATION, PLEASE SIGN IN
FULL CORPORATE NAME BY AN AUTHORIZED OFFICER OR IF A PARTNERSHIP, PLEASE
SIGN IN FULL PARTNERSHIP NAME BY AN AUTHORIZED PERSON.
Signature:_____________________Date:________ Signature:_____________________Date:________