UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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
Filed by the
Registrant ☒ Filed by a Party other than the
Registrant ☐
Check the appropriate box:
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to §240.14a-12
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Landauer,
Inc.
(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):
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No fee required.
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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(1)
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Title of each class of securities to which transaction applies:
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(2)
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Aggregate number of securities to which transaction applies:
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(3)
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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):
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(4)
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Proposed maximum aggregate value of transaction:
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(5)
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Total fee paid:
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Fee paid previously with preliminary materials.
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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.
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(1)
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Amount Previously Paid:
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(2)
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Form, Schedule or Registration Statement No.:
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(3)
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Filing Party:
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(4)
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Date Filed:
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January 12, 2017
Dear Landauer Stockholder:
On behalf of Landauer Inc. (the company) we are pleased to invite the stockholders of the company to attend the annual meeting of stockholders of Landauer
Inc. to be held on February 16
th
, 2017, at 9:30 am, local time, at the offices of Sidley Austin LLP, One South Dearborn, Chicago, Illinois.
During the 2016 fiscal year, the companys core businesses delivered solid revenue and earnings growth. The primary drivers of the revenue growth were recurring
revenue service lines which grew globally. The strongest growth segment was imaging physics which grew over 30% vs the prior year. The company currently possesses very modest market share in the estimated $400M imaging physics market.
Recurring revenue growth and cost savings through lean initiatives translated to disproportional bottom line increases. The focus on leaning and improving many of the
core processes led to simplification, lower costs and improved quality across both radiation measurement and physics services. Another key focus was around remediating the accounting weaknesses identified in 2014, and we are pleased to announce that
as of December 2016 we fully remediated all such weaknesses.
Of additional importance, the company strengthened its strategic roadmap and continued to advance the
strategic initiatives which are targeted toward broadening and accelerating growth in the upcoming years. These initiatives include innovating a new Verifii digital dosimetry line, as well as driving efficiencies in physics services and the
divestiture of non-core assets.
The Landauer Board continued to provide strong governance as demonstrated by the addition of new senior leadership, refreshment of
the Board with the additions of 3 new directors on the proxy ballot, and the modification of our governing documents to empower shareholders. Furthermore, the Board strengthened compensation programs to better align with shareholder interests,
assisted in the remediation of accounting weaknesses and helped to transition the new management team. Each of these areas are described in more detail in the recent developments section of the proxy.
With the improvement of financial metrics and advancement of strategic initiatives, we experienced a corresponding gain in the stock price. During the period January 1
st
, 2016 through January 9
th
, 2017 the closing price of the companys common shares as reported on the New York Stock Exchange (NYSE) increased
from $32.92 per share to $50.75, an increase of 54.2%.
Your vote at the annual meeting is very important. Whether or not you plan to attend the meeting, we urge you
to vote either via the internet, by telephone or by signing and returning a proxy card. Please vote as soon as possible so that your shares will be represented.
Thank you for your continued support of Landauer.
Sincerely,
Michael P. Kaminski
President and Chief Executive
Officer
TABLE OF CONTENTS
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 offices of Sidley Austin LLP, One South Dearborn, Chicago,
Illinois, at 9:30 a.m., local time, on February 16, 2017 for the following purposes:
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1.
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To elect the eight director nominees identified in this Proxy Statement to hold office for a term of one year each or until their successors are elected and qualified.
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2.
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To ratify the appointment of BDO USA, LLP as the independent registered public accounting firm of the Company for the fiscal year ending September 30, 2017.
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3.
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To hold a non-binding advisory vote to approve executive compensation.
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4.
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To hold a non-binding advisory vote to approve the frequency of the advisory vote regarding executive compensation.
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5.
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To transact such other business as may properly come before the meeting.
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Only stockholders of record at the close of business on December 23, 2016 are entitled to notice of and to vote at the meeting.
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE MEETING. WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, THE COMPANY STRONGLY URGES YOU TO VOTE VIA THE
INTERNET, TELEPHONE, OR COMPLETING AND RETURNING A PROXY CARD BY MAIL. IF YOU ATTEND THE MEETING AND VOTE IN PERSON, YOUR PROXY WILL NOT BE USED.
DANIEL J. FUJII
Vice President, Chief
Financial Officer and Secretary
January 12, 2017
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REVIEW THE PROXY STATEMENT AND VOTE IN ONE OF FOUR WAYS:
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VIA THE INTERNET
Visit the web site listed on your
proxy card
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BY MAIL
Sign, date and return your
proxy card in the
enclosed envelope
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BY TELEPHONE
Call the telephone number on your
proxy
card
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IN PERSON
Attend the Annual Meeting in Chicago,
Illinois
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Important Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting to Be Held on February 16, 2017.
Our
Proxy Statement and the Landauer, Inc. 2016 Annual Report on Form 10-K are available online at
www.proxyvote.com
or at our investor relations website at
http://www.landauer.com
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PROXY STATEMENT SUMMARY
RECENT DEVELOPMENTS
In recent years the Board has taken numerous steps that
we believe improve our corporate governance and position our Company for long-term success. These steps include:
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Bringing on New Senior Management
. In calendar year 2015, the Board named Mike Kaminski to serve as Chief Executive Officer and Dan Fujii to serve as Chief Financial Officer. The Board and Messrs. Kaminski and
Fujii have overseen the recruitment of several other key managers who we believe strengthen the Companys management, financial, sales and marketing, and research and development teams.
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Refreshing the Board
. Since April 2015, the Board has added three new directors and has nominated a fourth for election by stockholders at the Annual Meeting. In April 2015, the Board elected new director Jeffrey
A. Bailey, an experienced life sciences and healthcare executive. In September 2016, the Board elected new director Teri G. Fontenot, a seasoned healthcare executive with financial experience. These two new independent directors are in addition to
Mr. Kaminski, who joined the Board when he became CEO in October 2015. Additionally, pursuant to the Companys retirement policy set forth in the Companys Governance and Nominating Standards, Stephen C. Mitchell will not be eligible
for
re-nomination
at the Companys 2018 Annual Meeting. We are also pleased to nominate Frank B. Modruson for election as a director at the Annual Meeting. Mr. Modruson, who would be an independent
director, is the former Chief Information Officer of Accenture. The Board believes it has a strong foundation in IT due to the experience of David E. Meador and Michael T. Leatherman; however, the Board has identified that someone with
Mr. Modrusons skills would be very valuable to support the Companys future strategic roadmap. Finally, in January 2017, the Board elected Jeffrey A. Strong to the Board as part of an agreement with Gilead Capital LP, which
beneficially owns 5% of the outstanding stock of Landauer. Mr. Strong is an independent director and brings additional expertise to our Board.
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The average tenure of the Boards current directors is approximately 7.3 years, and if all of our nominees are elected, the average tenure would be
approximately 5.3 years upon their election.
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Empowering Stockholders
. In fiscal 2015 the Board elected, on its own and not as a result of any specific proposal submitted by a stockholder, to adopt majority voting in uncontested director elections and begin
the process to declassify the Board. The Board will be fully declassified at the 2018 shareholder meeting.
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Modifying our Compensation Programs
. In fiscal 2015, the Board and Compensation Committee made numerous changes to our executive officer compensation program. These included modifying our incentive plans to make
all benefits double trigger, clarifying and limiting the circumstances in which we can make adjustments and amendments to performance measures for outstanding performance awards, modifying the treatment of awards upon a termination without cause and
enhancing our compensation disclosure. In early fiscal 2017 we have made additional changes, including increasing our stock ownership requirements for our directors and for our Chief Executive Officer and amending our equity plan to require a
one-year
minimum vesting period for all awards.
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Remediating Control Weaknesses
. In 2014, the Company identified and disclosed several material weaknesses in its internal control over financial reporting. Once identified, the Board removed the CFO and
Controller, replaced the audit firm and assisted in hiring the new accounting team. These steps supported the strengthening of the accounting processes, team, auditors and these material weaknesses have now been fully remediated.
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Successfully transitioned the new management team
. In order to facilitate a successful transition of the management team, Mr. Leatherman, at the request of the Board, was appointed Executive Chairman for
approximately 1 year at the time of Mr. Kaminskis appointment as CEO. As Executive Chairman, Mr. Leatherman played a key role during this period in supporting the new management team. As part of the next phase of our transition plan,
Mr. Leatherman has announced that he will step down from the role of Executive Chairman following the Annual Meeting, and he intends to remain on the Board if elected. Over the past year the Company has significantly improved its financial
performance, divested
non-core
assets and advanced strategic initiatives. The Company believes this positions it for long term success. During the period January 1, 2016 through January 9, 2017, the
closing sale price of the Companys common shares as reported on the New York Stock Exchange (the NYSE) has increased from $32.92 per share to $50.75, an increase of 54.2 percent.
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1
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PROXY STATEMENT
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Proxies and Voting
Information
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ANNUAL MEETING INFORMATION
We are providing this Proxy Statement to you in connection with the solicitation of proxies by the Board of Directors of Landauer, Inc. for the Annual Meeting of
Stockholders and for any adjournment or postponement of the meeting (the Annual Meeting). Our proxy materials are first being made available to stockholders on or about January 12, 2017.
Time and Place:
We are holding the Annual Meeting at 9:30 a.m. Central Standard Time on February 16, 2017, at the offices of Sidley Austin LLP,
One South Dearborn, Chicago, Illinois.
Attendance Requirements:
You may attend the Annual Meeting and vote in person even if you have
returned a proxy in writing, by telephone or through the Internet.
Street-Name Holders:
If you hold shares in a bank or brokerage account
(known as shares held in street name), you must obtain a valid legal proxy, executed in your favor from the holder of record, if you wish to vote these shares at the meeting.
Matters for Stockholder Voting
At this years Annual Meeting, we are asking our stockholders to vote on the following matters:
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Proposal
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Board Recommendation
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Rationale for Board
Recommendation
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1.
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Election of Directors
Jeffrey A. Bailey
William G. Dempsey
Teri G. Fontenot
Michael P. Kaminski
Michael T. Leatherman
David E. Meador
Frank B. Modruson
Jeffrey A. Strong
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Broad mix of backgrounds with operating, financial, strategic, M&A, business
transformation & governance experience
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2.
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Ratification of Auditor
Ratification of appointment of BDO USA, LLP
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Independent, with limited
ancillary services
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3.
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Say-on-pay
Advisory vote to approve the compensation for named executive officers
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Strong linkage of pay and performance
Balanced compensation program aligning
interests with stockholders
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4.
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Say-on-frequency
Advisory vote to approve the frequency of the advisory vote for named executive officers
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Provides highest level of accountability and
communication
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2
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General Information Concerning the
Proxy Solicitation
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PROXY STATEMENT
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APPROXIMATE DATE OF NOTICE: JANUARY 12, 2017
GENERAL INFORMATION CONCERNING THE PROXY SOLICITATION
Purpose, Place, Date and Time
This proxy is solicited by the Board of Directors of Landauer, Inc. (the Company,
we, our, us or Landauer) on behalf of the Company for use at its Annual Meeting of Stockholders (the Annual Meeting) to be held on Thursday, February 16, 2017 at the offices of Sidley
Austin LLP, One South Dearborn, Chicago, Illinois, at 9:30 a.m., local time, or any adjournments or postponements thereof.
On or around January 12, 2017, the
Company will begin making available to its stockholders, other than those who previously requested electronic delivery, proxy materials including the Proxy Statement and 2016 Annual Report on Form
10-K.
The
proxy card included with the materials instructs you as to how you may vote your proxy on the Internet or by telephone.
Householding
The rules of the U.S.
Securities and Exchange Commission (the SEC) permit the Company to deliver a single set of Annual Meeting materials to one address shared by two or more of the Companys stockholders. This delivery method is referred to as
householding and can result in significant cost savings. To take advantage of this opportunity, Landauer has delivered only one set of Annual Meeting materials to multiple stockholders who share an address, unless the Company received
contrary instructions from the impacted stockholders prior to the mailing date. Landauer agrees to deliver promptly, upon written or oral request, a separate copy of the Annual Meeting materials, as requested, to any stockholder at the shared
address to which a single copy of those documents was delivered. If you prefer to receive separate copies of the Annual Meeting materials, contact Broadridge, Householding Department, at 51 Mercedes Way, Edgewood, NY 11717, or by telephone at
800-542-1061.
If you are currently a stockholder sharing an address with another stockholder and wish to receive only one copy of future Annual Meeting materials for your
household, please contact Broadridge at the above phone number or address.
Voting Rights and Proxy Information
Who is entitled to vote?
On December 23, 2016, Landauer had
outstanding 9,622,534 shares of Common Stock, which is its only class of voting stock, held of record by 217 holders. Only stockholders of record at the close of business on December 23, 2016 will be entitled to receive notice of and to vote at
the meeting and any adjournments or postponements thereof. 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.
How are my shares voted, including if I do not indicate how to vote on the proxy card?
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 that has been signed and returned, the shares will be voted FOR the election of each of the Boards nominees for director, FOR the ratification of the appointment of BDO
USA, LLP (BDO) as the independent registered public accounting firm, FOR the approval of our compensation for named executive officers, and 1 YEAR as the frequency of the
non-binding
advisory vote
regarding executive compensation.
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3
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PROXY STATEMENT
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General Information Concerning the Proxy
Solicitation
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The
proxy card also gives authority to the proxies to vote the shares at their discretion on any other matter
presented at the meeting. If stockholders abstain from voting, including brokers, banks, or other agents holding their clients shares of record who cause abstentions to be recorded, these shares will be considered present and entitled to vote
at the Annual Meeting and will be counted towards determining whether or not a quorum is present. An abstention with respect to a proposal has the effect of a vote against a proposal, other than with respect to the proposal to elect directors and
the proposal on the frequency of the
non-bonding
advisory vote regarding executive compensation. Abstentions will have no effect on the proposals to elect directors or determine the frequency of the
non-binding
advisory vote regarding executive compensation.
How do I vote my shares owned through the Landauer, Inc. 401(k)
Retirement Savings Plan?
If you participate in the Landauer, Inc. 401(k) Retirement Savings Plan, your proxy card includes shares that the Plan has
credited to your account. If you do not submit voting instructions for any shares held in the Plan, the Trustee will vote allocated shares for which it receives no instructions in the same proportion as the allocated shares for which voting
instructions have been received. Your voting instructions must be received by the New York Life Trust Company, Trustee, by 8:00 AM Eastern Time on Tuesday, February 14, 2017, to allow sufficient time for processing.
How do I vote if I hold my share through an account at a broker, bank, trust or other nominee?
If you hold your shares in an account at a broker, bank, trust or other nominee, you are considered the beneficial owner of shares held in street
name, and you should have received a
voting instruction card and voting instructions with these proxy materials from that organization rather than from us. To ensure that your vote is counted, follow the directions set forth on the
voting instruction card and the voting instructions that you receive. To vote in person at the Annual Meeting, you must obtain a legal proxy from your broker, bank, trust or other nominee. Follow the instructions from your broker, bank, trust
or other nominee included with these proxy materials, or contact your broker, bank, trust or other nominee, to request a legal proxy.
What are broker
non-votes?
Under the rules of the New York Stock Exchange (NYSE), brokers, banks, trusts or other
nominees holding shares on behalf of a beneficial owner may vote those shares in their discretion on certain routine matters even if they do not receive timely voting instructions from the beneficial owner. With respect to
non-routine matters, the broker, bank, trust or other nominee is not permitted to vote shares for a beneficial owner without timely received voting instructions.
A broker non-vote occurs when a beneficial owner of shares held by a broker, bank, trust or other nominee fails to provide the record holder with specific instructions
concerning how to vote on any non-routine matters brought to a vote at a stockholders meeting. At the Annual Meeting, brokers will have discretionary authority to vote shares on the ratification of the appointment of the independent
registered public accounting firm (Proposal No. 2), which is the only routine matter presented at the Annual Meeting. If brokers exercise this discretionary voting authority on Proposal No. 2, such shares will be considered present at
the Annual Meeting for quorum purposes and broker non-votes will occur as to each of the other proposals presented at the Annual Meeting (Proposal Nos. 1, 3 and 4), which are considered non-routine. Broker non-votes will have no effect
on the proposals.
If you hold your shares in street name, it is critical that you cast your vote by instructing your bank, broker, trust
or other nominee on how to vote if you want your vote to be counted at the Annual Meeting.
How is a quorum determined?
A quorum is necessary for conducting a valid Annual Meeting. A quorum will be present if the holders of a majority of the outstanding shares of stock entitled to vote
at the meeting are present in person or represented by proxy at the Annual Meeting.
Abstentions (shares of the Companys capital stock for which proxies have
been received but for which the holders have abstained from voting) will be included in the calculation of the number of shares of the Companys capital stock represented at the Annual Meeting for purposes of determining whether a quorum has
been achieved.
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4
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General Information Concerning the
Proxy Solicitation
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PROXY STATEMENT
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What is the vote required?
Proposal 1
Each director will be elected by vote of a majority of the votes
cast with respect to that directors election in person or represented by proxy and entitled to vote on the election of directors. Majority of the votes cast means that the number of shares voted FOR a nominee exceeds 50% of the
number of votes cast with respect to that director (with abstentions and broker
non-votes
not counted as a vote cast either FOR or AGAINST that directors election). In the event that an incumbent
director is not
re-elected,
the Companys Governance and Nominating Standards require that director to tender his or her resignation for consideration by the Governance and Nominating Committee. The
Governance and Nominating Committee will recommend to the Board of Directors whether to accept or reject the resignation, or whether other action should be taken. The Board of Directors will act on the resignation and publicly disclose its decision
regarding the resignation and the rationale behind the decision within 90 days following certification of the election results.
Proposals 2 and 3
The affirmative vote of a majority of the shares of stock entitled to vote on the matter present in person or by proxy at the Annual Meeting will be required to approve
the ratification of the appointment of the independent registered public accounting firm (Proposal No. 2) and the advisory resolution approving the compensation of the named executive officers (Proposal No. 3).
Proposal 4
The
non-binding
advisory
vote with respect to the determination as to whether the advisory vote to approve the executive compensation shall occur every one, two or three years shall be decided by a plurality of the votes cast among the three alternatives. This means that
the alternative receiving the most votes will be considered to be the expressed preference of the stockholders, even if those votes do not constitute a majority of the shares of stock entitled to vote on the matter present in person or by proxy at
the Annual Meeting.
What do I need to do to attend the annual meeting?
You should plan to arrive at the offices of Sidley Austin LLP, One South Dearborn, Chicago, Illinois, before the start of the annual meeting on February 16, 2017. Upon
your arrival, please follow the signs to the registration desk where you will register for the meeting. Proof of stock ownership and a photo identification (such as a valid drivers license or passport) will be required for admission to the
annual meeting.
What does it mean if I receive more than one set of proxy materials?
If you receive more than one set of proxy materials, your shares are registered in more than one name or are registered in different accounts. In order to vote all of
the shares that you own, you must either sign and return all of the
proxy cards or follow the instructions for any alternative voting procedure on each of the
proxy cards that you receive.
How do I revoke a proxy?
You may revoke your proxy at any time prior
to it being voted by giving written notice to the Corporate Secretary of Landauer, by submission of a later dated proxy or by voting in person at the meeting. If you hold your shares through a broker, bank, trust or other nominee, you should follow
their instructions as to how you can revoke a proxy. Attendance at the Annual Meeting will not automatically revoke a proxy, but a holder of Common Stock who is in attendance and entitled to vote at the Annual Meeting may request a ballot and vote
in person, which revokes a previously granted proxy.
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5
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PROXY STATEMENT
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General Information Concerning the Proxy
Solicitation
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How are proxies being solicited and who pays solicitation expenses?
Proxies are being solicited by the Board on behalf of the Company. All expenses of the solicitation, including the cost of preparing and mailing this proxy statement,
will be borne by Landauer. Arrangements will also be made with custodians, nominees and fiduciaries for forwarding of proxy solicitation materials to beneficial owners of Common Stock, and we may reimburse these individuals for their reasonable
expenses. The Company also engaged MacKenzie Partners, Inc. to provide advisory, consulting and solicitation services. The Company has agreed to pay MacKenzie $20,000 plus additional agreed-upon fees and reimbursement for reasonable
out-of-pocket
expenses incurred during the solicitation. The Company has also arranged to indemnify MacKenzie against certain liabilities arising from or in connection with
the engagement. In addition to mailed proxy materials and proxy materials available over the Internet, MacKenzie and our directors, officers and employees may also solicit proxies in person, by telephone or by other means of communication.
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6
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Beneficial Ownership of Common
Stock
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PROXY STATEMENT
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BENEFICIAL OWNERSHIP OF COMMON STOCK
The following table provides information as of December 23, 2016 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. Percentage ownership is based on an aggregate 9,622,534 shares of Common Stock
outstanding on December 23, 2016. Unless otherwise noted, the address of each beneficial owner is c/o Landauer, Inc., 2 Science Road, Glenwood, Illinois 60425-1586.
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Name of Beneficial Owner
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Number of Shares
Beneficially
Owned
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Percent
of Class
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BlackRock, Inc.
(1)
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1,268,436
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13.2
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%
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Royce & Associates, LLC
(2)
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1,056,729
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11.0
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%
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The Vanguard Group, Inc.
(3)
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722,655
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7.5
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%
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RidgeWorth Capital Management LLC as Parent Company for
Ceredex Value Advisors LLC
(4)
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680,553
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7.1
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%
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The Killen Group, Inc.
(5)
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493,441
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5.1
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%
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Gilead Capital LP
(6)
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481,415
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5.0
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%
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Robert J. Cronin
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30,909
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*
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Thomas M. White
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20,335
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*
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Stephen C. Mitchell
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19,734
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*
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William G. Dempsey
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17,759
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*
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David E. Meador
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17,680
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*
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Michael T. Leatherman
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12,789
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*
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Michael P. Kaminski
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7,210
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*
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Michael R. Kennedy
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7,220
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*
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G. Douglas King
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7,184
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*
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|
Daniel J. Fujii
|
|
|
5,071
|
|
|
|
*
|
|
Jeffrey A. Bailey
|
|
|
6,683
|
|
|
|
*
|
|
Teri G. Fontenot
|
|
|
1,007
|
|
|
|
*
|
|
Frank B. Modruson
|
|
|
0
|
|
|
|
*
|
|
Jeffrey A. Strong
(7)
|
|
|
481,415
|
|
|
|
5.0
|
%
|
All directors and executive officers as a group (as of
December 23, 2016) (12 persons)
|
|
|
153,581
|
|
|
|
1.6
|
%
|
All directors and executive officers as a group (as of
January 10, 2017) (13 persons)
|
|
|
634,996
|
|
|
|
6.6
|
%
|
(1)
|
As reported in a statement on Schedule 13G filed with the Securities and Exchange Commission on January 8, 2016. This stockholder has sole voting power with respect to 1,244,628 of the shares beneficially owned.
This stockholders address is 55 East 52
nd
Street, New York, NY 10055.
|
(2)
|
As reported in a statement on Schedule 13G/A filed with the Securities and Exchange Commission on January 19, 2016. This stockholders address is 745 Fifth Avenue, New York, NY 10151.
|
(3)
|
As reported in a statement on Schedule 13G/A filed with the Securities and Exchange Commission on February 10, 2016. This stockholder has sole voting power with respect to 21,475 of the shares beneficially owned;
sole dispositive power with respect to 701,680 of the shares beneficially owned; and shared dispositive power with respect to 20,975 shares beneficially owned. Beneficial ownership includes 20,975 shares for which Vanguard Fiduciary Trust Company
(VFTC), a wholly-owned subsidiary of The Vanguard Group, Inc., is the beneficial owner, as a result of serving as investment manager of collective trust accounts. VFTC directs the voting of these shares. Beneficial ownership also
includes 500 shares for which Vanguard Investments Australia, Ltd. (VIA), a wholly-owned subsidiary of The Vanguard Group, Inc., is the beneficial owner as a result of its serving as investment manager of Australian investment offerings.
This stockholders address is 100 Vanguard Boulevard, Malvern, PA 19355.
|
|
|
|
|
|
7
|
|
|
|
|
|
PROXY STATEMENT
|
|
Beneficial Ownership of Common
Stock
|
(4)
|
As reported in a statement on Schedule 13G/A filed with the Securities and Exchange Commission on February 9, 2016. This stockholder has sole voting power with respect to 490,047 of the shares beneficially owned.
This stockholders address is 3333 Piedmont Road NE, Suite 1500, Atlanta, GA 30305.
|
(5)
|
As reported in a statement on Schedule 13G filed with the Securities and Exchange Commission on February 10, 2016. This stockholders address is 1189 Lancaster Ave., Berwyn, PA 19312.
|
(6)
|
As reported in a statement on Schedule 13D filed with the Securities and Exchange Commission on December 19, 2016 by Gilead Capital LP, Gilead Capital GP LLC and Jeffrey A. Strong, which have shared voting and
dispositive power with respect to 481,415 shares. This stockholders address is 157 Columbus Avenue, Suite 403, New York, NY 10023.
|
(7)
|
Mr. Strong was appointed to the Board, effective January 10, 2017, at which time his number of shares beneficially owned included common shares owned directly by Gilead Capital LP, Gilead Capital GP LLC and Jeffrey A.
Strong, which have shared voting and dispositive power with respect to 481,415 shares. Mr. Strong, by virtue of his relationship with Gilead Capital LP and Gilead Capital GP LLC may be deemed the beneficial owner of the 481,415 shares of Common
Stock beneficially owned by Gilead Capital LP. Mr. Strong specifically disclaims beneficial ownership of the securities reported herein that are not directly owned by him, except to the extent of his pecuniary interest therein.
|
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires Landauers officers and directors and persons who beneficially own more than ten percent of
Landauers Common Stock (Reporting Persons) to file reports of beneficial ownership and changes in such ownership with the 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.landauer.com
.
Based solely on a review of the Forms 3, 4 and 5
filings received from, or filed by Landauer on behalf of, Reporting Persons since October 1, 2015, the Company believes that all Section 16(a) filing requirements were met.
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|
|
8
|
|
|
|
|
|
|
|
Election of Directors
|
|
PROXY STATEMENT
|
ELECTION OF DIRECTORS
At the Annual Meeting of Stockholders of the Company held on March 6, 2015, the Companys stockholders approved an amendment to the Certificate of Incorporation of
the Company to declassify the Board of Directors. The terms of eight of the ten current directors expire at the Annual Meeting. As previously disclosed, on September 28, 2016, Robert J. Cronin announced his intention to retire as a director of
the Board, effective at the Annual Meeting. The remaining seven directors with expiring terms, Jeffrey A. Bailey, William G. Dempsey, Teri G. Fontenot, Michael P. Kaminski, Michael T. Leatherman, David E. Meador and Jeffrey A. Strong are, together
with nominee Frank B. Modruson, who is not currently a director, Landauers nominees for election or
re-election,
as applicable, to a
one-year
term each or until
their successors are elected and qualified.
Effective September 28, 2016, the Board of Directors appointed Teri G. Fontenot as an independent director of the
Board. Ms. Fontenot was first identified as a potential nominee by an outside firm with expertise in the healthcare industry, which had been retained by the Governance and Nominating Committee to assist it in identifying possible director
candidates. Frank B. Modruson was first identified as a potential nominee by a director of the Company.
On January 10, 2017, the Company entered into a support
agreement (the Support Agreement) with Gilead Capital LP and certain of its affiliates including Jeffrey A. Strong (the Gilead Group). Pursuant to the terms of the Support Agreement, the Board of Directors of the Company
appointed Mr. Strong as an independent director of the Board, effective as of January 10, 2017, thereby increasing the size of the Board to ten individuals. Also pursuant to the Support Agreement, the Board of Directors agreed to nominate Mr. Strong
for election at the Annual Meeting. Finally, pursuant to the Support Agreement, the Company agreed to reimburse the Gilead Group for its reasonable and documented expenses incurred in connection with the Annual Meeting, but not to exceed $100,000.
Shares represented by executed
proxy cards will be voted, if authority to do so is not withheld, FOR the election of the eight nominees. In the event that
any nominee is unable to serve or for good cause will not serve, such shares will be voted FOR the election of such substitute nominee as the Board may propose. Each nominee has agreed to serve if elected, and management has no reason to believe
that any of the nominees will be unable to serve.
|
|
|
|
|
The Board
of Directors unanimously recommends a vote FOR the election of the eight nominees below as directors of Landauer.
|
Certain information as to the eight nominees for election or
re-election
at the Annual Meeting is
set forth below. Certain individual qualifications, experiences and skills of the directors that contribute to the Board of Directors effectiveness as a whole are also described below.
|
|
|
|
|
9
|
|
|
|
|
|
PROXY STATEMENT
|
|
Election of
Directors
|
LANDAUER BOARD NOMINEES:
Jeffrey A. Bailey
, age 54, has been a director since April 2015. Mr. Bailey currently serves as Chairmen and CEO of Neurovance, Inc. that develops innovative
new Neurology therapies. He has served as Neurovance Chairmen since January 2016 and CEO since November 2016. From January 2013 through September 2015, Mr. Bailey served as President and Chief Executive Officer and a Director of Lantheus
Medical Imaging, Inc., a global leader in providing diagnostic imaging agents, primarily used for the diagnosis of cardiovascular diseases. From August 2011 to December 2012, Mr. Bailey was Chief Operating Officer of Fougera Pharmaceuticals
(formerly Nycomed US), a company that develops, manufactures and markets specialty topical and dermatology medicines. From August 2010 to July 2011, he was Chief Commercial Officer of
King-Pfizer
Pharmaceuticals, a diversified specialty pharmaceutical discovery and clinical development company, and from 2008 to 2010, Mr. Bailey was President and General Manager of a Novartis Operating Unit. From 1984 to 2006, Mr. Bailey held
various executive, commercial and manufacturing roles within the Johnson & Johnson family of companies. Mr. Bailey serves on the Audit and Compensation Committees.
Qualifications:
Mr. Baileys extensive experience in the pharmaceutical industry combined with a broad range of functional leadership experience
provides valuable insight for the Company as to the issues and opportunities created by the Joint Commissions new Diagnostic Imaging Services Requirements associated with the safe delivery of diagnostic imaging services. He also has strong
functional experience in manufacturing, supply chain, operations, financial management, data analytics and sales and marketing.
Current Directorships:
Executive Director of Neurovance, Inc. and Director of ImaginAb Inc.
Former Directorships:
Director of Lantheus Medical Imaging, Inc.
William G. Dempsey
, age 65, has been a director since 2008 and the Lead Director of the Board since October, 2016. Since 2007, Mr. Dempsey retired and has
been serving as Director of numerous public and private companies, serving on Governance, Audit, Compensation, Technology and Quality Committees. From 1982 to 2007, Mr. Dempsey held various senior leadership positions with Abbott Laboratories
including Executive Vice President, Global Pharmaceuticals from 2006 to 2007. At Abbott, Mr. Dempsey had global responsibility for sales, marketing, manufacturing, R&D, regulatory and quality organizations for Pharmaceutical and Medical
Device businesses. Abbott Laboratories is a global, broad-based health care company devoted to discovering new medicines, new technologies and new ways to manage health. From 1977 to 1982, Mr. Dempsey held various positions with Sciaky Bros., a
manufacturer of high-tech electron beam, laser welding and heat treating systems. Mr. Dempsey serves on the Governance and Nominating Committee and is Chairman of the Compensation Committee.
Qualifications:
Mr. Dempseys extensive experience as a senior executive with a global healthcare company provides a wealth of experience in global
healthcare markets including pharmaceuticals, nutrition and medical devices. Mr. Dempseys leadership experience provides expertise in strategy, marketing, international operations, manufacturing and managing research and development
organizations.
Current Directorships:
Director of
Hill-Rom
Holdings, Inc., a NYSE listed company; Director of
Ashland, Inc., a NYSE listed company. Mr. Dempsey is also a member of the Board of Trustees of the Guadalupe Center in Immokalee, Florida.
Former
Directorships:
Director of Hospira, Inc., a NYSE listed company; Director of Nordion, Inc., a NYSE listed company; and Director of TYRX, Inc.
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|
|
10
|
|
|
|
|
|
|
|
Election of Directors
|
|
PROXY STATEMENT
|
Teri G. Fontenot
, age 63, has been a director since September 28, 2016. Since April 1996,
Ms. Fontenot has served as the President and CEO of Womans Hospital, a nationally recognized health system for obstetrics, infant care, gynecology, and womens cancer care. From 1992-1996, Ms. Fontenot served as CFO, COO, and
Executive Vice President of Womans Hospital. From 1988-1991, Ms. Fontenot was CFO of Opelousas General Hospital, and from
1987-1988,
she was the CFO of Southwest Florida Regional Hospital. She
began her healthcare career in Monroe, LA, at St. Francis Medical Center in July 1982. Ms. Fontenot is a
non-practicing
Certified Public Accountant (CPA) and has an MBA. She is a member of the Audit
and Governance and Nominating Committees.
Qualifications
: Ms. Fontenot has a breadth of healthcare and finance senior leadership, including
more than 34 years of experience as an executive in hospital operations and finance. She served two terms as a member of the board of directors of the Sixth District Federal Reserve Bank and chaired its Audit Committee.
Ms. Fontenot is well recognized for her leadership in the healthcare industry, having served for six years on the board of the American Hospital Association, including serving as the chair in 2012. She also possesses additional audit and
corporate governance experience through years of service on other public and private company boards.
Current Directorships
: Amerisafe (NASDAQ: AMSF),
Baton Rouge Water Company (privately held). Ms. Fontenot also serves on the iBERIABANK Advisory Board in Baton Rouge and several
non-profit
boards, some of which include the Louisiana Hospital Association
Board, where she previously served as chair.
Former Directorships
: Federal Reserve Bank of Atlanta, Hibernia/Capital One Mutual Funds
Michael P. Kaminski
, age 56, has been the Companys President and Chief Executive Officer, and a member of the Board of Directors, since October 2015.
Mr. Kaminski joined the Company in April 2013 as President, Radiation Measurement. He was President and Chief Executive Officer of Stereotaxis, Inc., a healthcare technology company specializing in the development of robotic cardiology
instrument navigation systems, since 2009 and held other senior positions there since 2002. Prior to joining Stereotaxis, Mr. Kaminski spent nearly 20 years with
Hill-Rom
Company (Hillenbrand Industries),
where he held several senior level positions. Mr. Kaminski earned a Bachelor of Science in marketing from Indiana University and an MBA from Xavier University.
Qualifications:
Mr. Kaminski has extensive experience as a senior executive with a deep understanding of the Companys business and its customers,
successfully driving innovation and market development and implementing lean processes. His
in-depth
knowledge of our corporate strategy and management team resulting from his leadership position at our
company, along with his management abilities and experience and his extensive knowledge of our industry gained from other senior executive roles, qualify Mr. Kaminski to serve as a member of our Board of Directors.
Current Directorships:
None
Former Directorships:
From 2008 to 2013,
Director of Stereotaxis, Inc.; and Director of two
non-profit
organizations.
|
|
|
|
|
11
|
|
|
|
|
|
PROXY STATEMENT
|
|
Election of
Directors
|
Michael T. Leatherman
, age 63, has been a director since 2008. Mr. Leatherman has served as Executive
Chairman of the Board since October 2015. From December 2014 through September 2015, Mr. Leatherman served as President and Chief Executive Officer of the Company. From September 2014 through December 2014, Mr. Leatherman was the
Companys Interim President and Chief Executive Officer, and from September 2011 through December 2011, he was Interim Chief Financial Officer of the Company. Mr. Leatherman began his career in public accounting, working with various firms
from 1974-1976. In 1977, Mr. Leatherman joined Wallace Business Forms, which later became Wallace Computer Services. In 1984, Mr. Leatherman received a Certified Public Accountant certificate in Illinois, but has not practiced as
such. From 1984 to 1990, Mr. Leatherman was Chief Executive Officer of FSC Paper Corporation, a subsidiary of Smorgon Consolidated Industries. From 1990 to 2000, Mr. Leatherman held various senior leadership positions with Wallace
Computer Services including Executive Vice President, Chief Information Officer and Chief Financial Officer from 1998 to 2000. From 2000 through December 2014 (other than during the period when he served as our Interim Chief Financial Officer), Mr.
Leatherman was an independent consultant, primarily to the Information Technology industry.
Qualifications:
Mr. Leathermans extensive experience
as a senior executive with a wealth of information technology knowledge provides expertise in information systems strategy and project implementation, as well as expertise in general operational and strategic leadership. In addition, he brings
financial acumen to Board discussions by virtue of his background as a Chief Financial Officer.
Current Directorships:
None
Former Directorships:
From 2006 to 2009, Director of Nashua Corporation, which was acquired by Cenveo, Inc., a NYSE listed company; and Director of a
non-profit
organization providing continuous care retirement services.
David E. Meador
, age 59 has been a director since
2008. Mr. Meador is currently Vice Chairman and Chief Administrative Officer for DTE Energy, a diversified energy company involved in developing and managing energy-related businesses nationwide. DTE Energy serves over 2 million customers.
At DTE Energy, Mr. Meador is responsible for all financial and accounting functions, information technology, procurement, fleet operations, warehousing, fleet operations, communications and government and regulatory affairs. From 1997 to 2001,
Mr. Meador was Vice President and Controller and from 2001 to 2014 was Executive Vice President and Chief Financial Officer responsible for accounting, tax, treasury, internal audit, investor relations and finance. From 1983 to 1997,
Mr. Meador served in a variety of financial and accounting positions at Chrysler Corporation. Mr. Meador began his professional career with Coopers and Lybrand, has his MBA and is a Certified Public Accountant.
Qualifications
: Mr. Meadors experience as a senior executive with a very large, diversified energy company provides a unique set of experiences given
DTE Energys focus on growth and shareholder value. While DTE Energy is a large company, Mr. Meador is also involved in its higher growth,
non-utility
segments, including DTEs
start-up
businesses. In addition to his financial, tax, accounting, risk management and investor relations experience, Mr. Meador responsibility in leading DTEs information technology group provides
experience in cutting edge technology, customer channel development and cyber security. Additionally, he has substantial experience in the Nuclear Power Industry, government affairs and corporate communications. As Chairman of the Audit Committee,
he has dedicated significant time and effort in enhancing the Companys financial talent, improving the companys financial and accounting processes, and enhancing the system of internal controls.
Current Directorships
: Director of Amerisure Mutual Holdings, Inc. and the Amerisure Companies (effective January 1, 2017).
|
|
|
12
|
|
|
|
|
|
|
|
Election of Directors
|
|
PROXY STATEMENT
|
Frank B. Modruson
, age 57, served as the Chief Information Officer (CIO) of Accenture from 2003 to
2014, a worldwide leader in management consulting, information technology and systems integration, and business process outsourcing services. Since his retirement from Accenture in 2014, Mr. Modruson has served as an independent consultant advising
leaders of some of the worlds largest companies on their IT strategy and transformation. During his 27 years with Accenture, he was also a technology leadership partner and client partner. As CIO, he was responsible for all the global and
local technology and Accentures information technology strategy, applications and infrastructure, and the organizations to deliver these technologies in support of a global business of 281,000 employees. As CIO, he chaired Accentures
Information Technology Steering Committee and was a member of the Accenture Operating Committee and Global Leadership Council.
Qualifications
:
Mr. Modruson currently advises leaders of some of the worlds largest companies on their IT strategy and transformation. He currently serves on two technology-related board
sub-committees
(Zebra and
Forsythe) and previously served on another (Taleris). As CIO, Mr. Modruson worked with both Accentures leadership team, as well as client CEOs, CIOs and other business leaders, to provide input on enterprise technology strategies for both
Accenture and its clients. A focus at Accenture was transforming Accentures IT using new technologies, at enterprise scale, including single instance Global ERP, self-service IT, migration to the cloud, SaaS, and innovative collaboration
technologies to change the way Accenture professionals work. As CIO, and earlier as a client partner, Mr. Modruson successfully led the delivery of large scale IT applications (custom and package) and infrastructure projects, often in support
of business and IT transformations. Mr. Modruson led IT due diligence and IT implementation of M&A activity as CIO. Mr. Modruson also drove the creation of Accentures CISO position and supported the mobilization of the CISO team.
He has been recognized for his achievements as a CIO, including his election to CIO Magazines CIO Hall of Fame. Mr. Modruson has BS and MS degrees in
Computer Science.
Current Directorships
: Zebra Technologies Corporation (NASDAQ: ZBRA), where he currently serves as Chairman of the IT Committee as well as
a member of the Audit Committee; First Midwest Bancorp, Inc. (NASDAQ: FMBI); Forsythe Technologies (privately held
ESOP), where he currently
co-chairs
the Technology Committee. Mr. Modruson
also serves as a board member of the Lyric Opera of Chicago, the Patrick G. and Shirley W. Ryan Opera Center, and The Glen Ellyn Volunteer Fire Company.
Former
Directorships
: Taleris, a technology-related joint venture between Accenture and GE Aviation focused on developing predictive analytics to serve the airline industry (now solely part of GE Aviation). Member of the Technology Committee.
Jeffrey A. Strong
, age 39, has been a director since January 10, 2017. Mr. Strong has served as Chief Investment Officer and Managing Partner of Gilead Capital
since January 2016 and as the Managing Member of Gilead Capital GP since September 2014. Prior to joining Gilead Capital GP, Mr. Strong was a Partner at QVT Financial LP, a multi-strategy hedge fund, from 2009 until September 2014 and a Senior
Analyst from 2005 to 2009. At QVT, Mr. Strong specialized in active ownership investments and other global special situations. From 2001 to 2005, Mr. Strong served as an Analyst at Shenkman Capital Management, a high-yield bond investment manager,
where he focused on the healthcare, chemical, and telecom industries. Mr. Strong is a CFA
®
charterholder and has an MBA. Mr. Strong serves on the Compensation Committee.
Qualifications:
Mr. Strongs public board experience, focus on corporate governance issues as an investor and a board member, and financial and capital
allocation expertise as an investment professional, make him a qualified candidate for the Board.
Current Directorship
: Director of MCS Holdings Ltd., a
private Cayman Islands based investment entity.
Former Directorships:
From 2010 to 2015, Non-Executive Director of Treveria plc (LSE: TRV); from 2009 to
2012, Member of the Nominating Committee at Fornebu Utvikling ASA (OSE: FBU); and from 2009 to 2012, Director and Chairman of the Compensation and the Nominating and Governance Committees of TPC Group Inc. (NASDAQ: TPCG).
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|
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13
|
|
|
|
|
|
PROXY STATEMENT
|
|
Election of
Directors
|
DIRECTORS CONTINUING IN OFFICE:
Stephen C. Mitchell
, age 73, has been a director since 2005. Since 2001, Mr. Mitchell has served as President, Knight Group, LLC, a privately-held firm
providing services for the
start-up
and management of new ventures. Since 1995, Mr. Mitchell has served as Vice Chairman and Director, Knight Facilities Management, Inc., a company providing outsourcing
of facilities management services for industrial and commercial clients worldwide. Until 2001, Mr. Mitchell was 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 served as the Chair of the City of Chicagos Mayors Council of Technology Advisers and Chair of The Illinois
Coalition, both of which focused on the development needs of the City of Chicago and State of Illinois, as well as technology-based enterprise development. Mr. Mitchell serves on the Compensation Committee and is Chairman of the Governance and
Nominating Committee.
Qualifications:
Mr. Mitchells extensive leadership experience in technology development in various companies and
organizations of diverse industry and size provides experience in operational and strategic leadership. He also has considerable corporate governance experience through years of service on other public and private company boards.
Current Directorships
: None
Former Directorships
: Director of Apogee
Enterprises, Inc., a NASDAQ listed company.
Expiration of Current Term
: 2018
Thomas M. White
, age 59, has been a director since 2004. In January 2015, Mr. White became the Executive Chairman of Cardinal Logistics Holdings, LLC, which
provides dedicated transportation and logistics services. From 2007 until 2014, Mr. White served as an Operating Partner for Apollo Global Management L.P., a private equity firm, serving in a variety of operating and Board roles in Apollo
portfolio companies. From 2002 to 2007, Mr. White served as Chief Financial Officer of Hub Group, Inc., a NASDAQ listed company which provides logistics services. Prior to joining Hub Group, Mr. White was an audit partner with Arthur
Andersen, which he joined in 1979. Mr. White is a
non-practicing
Certified Public Accountant. Mr. White serves on the Audit and Compensation Committees
Qualifications:
Mr. Whites extensive experience as a senior executive of global companies provides
in-depth
knowledge in global operations, finance, international business and strategic planning. In addition, he brings financial acumen to Board discussions by virtue of his background as a Chief Financial Officer.
Current Directorships:
Director of CEVA Group, plc and Cardinal Logistics Holdings, LLC.
Former Directorships:
Director of Quality Distribution, Inc., a prior NASDAQ listed company; Director of EVERTEC, Inc., a NASDAQ listed company and Director of
FTD, Inc., a prior NYSE listed company.
Expiration of Current Term:
2018
There are no family relationships between any director or executive officer and any other director or executive officer of the Company.
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|
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14
|
|
|
|
|
|
|
|
Election of Directors
|
|
PROXY STATEMENT
|
EXECUTIVE OFFICERS
The executive officers of the Company are elected by its Board of Directors. Each serves until a successor is elected and qualified, or until the officers
resignation or removal.
Mr. Kaminskis and Mr. Leathermans biographies can be found in the Director Nominees section under the
Election of Directors. As previously announced, on November 18, 2016, Mr. Leatherman provided notice to the Board of his intention to retire from the position of Executive Chairman of the Board, effective at the Annual Meeting.
Position:
Vice President, Chief Financial Officer and Secretary
Age:
42
Mr. Fujii has served as the Companys Vice President, Chief
Financial Officer and Secretary, as well as its principal financial officer, since April 2015. Prior to this appointment, Mr. Fujii served as Vice President, Corporate Controller and Chief Accounting Officer of the Company since April 2014.
From January 2012 to March 2014, he was corporate controller of Actient Pharmaceuticals, LLC, a private specialty pharmaceuticals company that was acquired by Auxilium Pharmaceuticals, Inc. From October 2007 to January 2012, he was director of
finance and controller for Nanosphere, Inc., a manufacturer of medical diagnostic equipment. Mr. Fujiis experience also includes a financial leadership position at a publicly held organization, Richardson Electronics, Ltd., a provider of
engineered solutions and distributor of electronic components to the electron device marketplace, and he began his career at PricewaterhouseCoopers LLP. He is a Certified Public Accountant and earned a Bachelor of Science in accounting from the
University of Illinois.
Position:
Senior Vice President, Strategic Marketing and Product Development
Age:
58
Mr. Kennedy has served as Senior Vice President, Strategic
Marketing and Product Development since April 2015. He was President of Landauer Medical Physics, a subsidiary of Landauer Inc., and Vice President Global Marketing for Landauer Inc. from August 2011 through April 2015. Mr. Kennedy has over 25
years of healthcare technology innovation and commercial leadership experience in both Fortune 500 and smaller private healthcare companies. Prior to joining Landauer, he held executive positions in strategic marketing, operations, product
development, and general management at Baxter Healthcare, GE, and private healthcare companies. In these roles, he led significant medical device innovations and business transformations in dialysis, blood component therapy, inhaled drug delivery,
and diagnostic imaging lifecycle management services. Mr. Kennedy earned a Bachelor of Science in chemical engineering from the University of Washington and an MBA from J.L. Kellogg Graduate School of Management at Northwestern University.
Position:
Senior Vice President, Administration and Chief Information Officer
Age:
49
Mr. King has served as Senior Vice President, Administration and
Chief Information Officer since April 2015. He was Vice President and Chief Information Officer of the Company since April 2009. Mr. King has over 25 years of experience in both Fortune 500 and smaller private manufacturing and industrial
companies. Prior to Landauer, Mr. King held several Operations leadership roles, including Senior VP and Chief Information Officer of a $1B North American Engineered Construction Products Manufacturer, Senior VP of Sales and Marketing,
Corporate Vice President of Operations, Director of Supply Chain Management, and Program Office Director. Mr. King earned a dual Masters Degree (MBA, MEM) from the J.L. Kellogg Graduate School of Management at Northwestern University, where he
graduated with concentrations in Management & Strategy, Information Technology and Manufacturing Management. He also earned his Bachelor of Arts at Northwestern University.
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15
|
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|
PROXY STATEMENT
|
|
Election of
Directors
|
BOARD OF DIRECTORS AND COMMITTEES
During fiscal 2016, the Board of Directors held a total of 5 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 of Directors on which such director served during the periods that such director served.
The Board of Directors has an Audit Committee, Compensation Committee, and Governance and Nominating 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 to the Board of Directors the appointment of independent public accountants. The Board of Directors has determined that
Jeffrey A. Bailey, Robert J. Cronin, Teri G. Fontenot, David E. Meador and Thomas M. White each qualify as an audit committee financial expert as defined for the purpose of SEC regulation. The Compensation Committee approves all
executive compensation and has responsibility for granting equity awards to eligible members of management and administering the Companys 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 membership of each Committee consists solely of
non-employee
directors who meet the
independence standards established by the New York Stock Exchange (the NYSE). During fiscal 2016, the Audit Committee met 8 times including the meetings required to conduct its quarterly financial reviews, the Compensation Committee met
4 times, and the Governance and Nominating Committee met 5 times.
Each Committee has adopted a formal written charter, approved by the full Board of Directors,
which specifies the scope of the Committees responsibilities and procedures for carrying out such responsibilities. A copy of each charter is available on the Companys website at
http://www.landauer.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 Conduct and Ethics applicable to all directors and employees and a Code of Ethics for Financial Executives
applicable to the principal executive, financial and accounting officers of the Company. Copies of each of these documents are available on the Companys website at
http://www.landauer.com
and printed copies are available from the
Company on request. The Company intends to post on its website any amendments to its Code of Business Conduct and Ethics or Code of Ethics for Financial Executives applicable to such senior officers.
BOARD LEADERSHIP STRUCTURE AND ROLE IN RISK OVERSIGHT
The Board of Directors has determined that having an independent director serve as Lead Director of the Board of Directors is in the best interest of stockholders under
our current governance structure. While Mr. Leatherman has served as an Executive Chairman, this structure has ensured a greater role for the independent directors in the oversight of the Company and active participation of the independent
directors in setting agendas and establishing priorities and procedures for the work of the Board of Directors. No single leadership model is right for all companies at all times, however, so the Board of Directors conducts an annual evaluation in
order to determine whether it and its Committees are functioning effectively and recognizes that, depending on the circumstances, other leadership models might be appropriate. Accordingly, the Board of Directors periodically reviews its leadership
structure.
As previously disclosed, on November 18, 2016, Mr. Leatherman provided notice to the Board of Directors of his intent to retire from the
position of Executive Chairman of the Board, effective at the Annual Meeting. As also previously announced, upon Mr. Leathermans retirement, the Board expects that it will appoint Mr. Dempsey to succeed Mr. Leatherman as
Chairman of the Board, subject to Mr. Dempseys
re-election
as a director at the Annual Meeting, and that Mr. Dempsey will serve as Chairman in a
non-executive
capacity. Accordingly, it is expected that the Board will not appoint a new Lead Director, as the Chairman will be an independent director.
The Board of Directors is actively involved in oversight of risks inherent in the operation of the Companys businesses and the implementation of its strategic
plan. The Board of Directors performs this oversight role by using several different levels of review. In connection with its reviews of the operations of the Companys business segments and corporate functions, the Board of Directors addresses
the primary risks associated with those segments and functions. In addition, the Board of Directors reviews the key risks associated with the Companys strategic plan at an annual strategic planning session and periodically throughout the year
as part of its consideration of the strategic direction of the Company.
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Election of Directors
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PROXY STATEMENT
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The Board of Directors has delegated to the Audit Committee oversight of the Companys risk management process.
The Audit Committee (a) reviews with management the Companys significant risk exposures and policies regarding the assessment and management of risk, (b) serves as an independent and objective body to monitor the Companys
financial reporting process and internal control systems, and (c) assists the Board of Directors in oversight of the Companys compliance with legal and regulatory requirements. Each of the other Committees of the Board of Directors also
oversees the management of Company risks that fall within the Committees areas of responsibility. The Governance and Nominating Committee oversees risks related to the Companys governance structure and processes and the structure of the
Board of Directors and its Committees to ensure appropriate oversight of risk. The Compensation Committee considers risks related to the design of the Companys compensation program and arrangements for the Companys named executive
officers.
COMPENSATION RISK
Management has
periodically undertaken, and the Compensation Committee has reviewed, an evaluation of Landauers compensation policies and procedures as they relate to risk management practices and risk-taking incentives. Based upon that evaluation, the
Company has concluded that its compensation program does not create risks that are reasonably likely to result in a material adverse effect. In reaching this determination, the Company has taken into account the following design elements of
Landauers compensation program and policies and practices: mixture of cash and equity payouts; mixture of performance time horizons; use of financial metrics that are easily capable of audit; avoidance of uncapped rewards; use of required
stock ownership amounts at senior management levels; adherence to a broad clawback policy; anti-hedging and anti-pledging policies; and a rigorous auditing, monitoring and enforcement environment.
INDEPENDENCE OF DIRECTORS
Under the
Companys Governance and Nominating Standards, a majority of the Board of Directors should be composed of Independent Directors as that term is defined in the 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, stockholder or officer of an organization that has a relationship with the Company.
The Board has affirmatively determined that all directors, with the exception of Michael T. Leatherman and Michael P. Kaminski, are considered independent under the
independence standards of the NYSE. In reaching this determination, the Board considered the relationship of one of Mr. Meadors employers facilities as a customer of the Company. The Board also considered that Ms. Fontenot is
President and CEO of Womans Hospital, a customer of the Company. The Board determined that these relationships were not material in fiscal 2016. The Board also considered the terms of the Support Agreement with Mr. Strong. The Board concluded
that no
non-employee
director has any of the disqualifying relationships identified by the NYSE. Consequently, the Board has determined that all
non-employee
directors
are independent within the meaning of the NYSE listing standards. The Companys independent directors are Jeffrey A. Bailey, Robert J. Cronin, William G. Dempsey, Teri G. Fontenot, David E. Meador, Stephen C. Mitchell, Jeffrey A. Strong and
Thomas M. White. In addition, the Board has determined that Frank B. Modruson also is independent within the meaning of the NYSE listing standards. Given their current employment by Landauer, Michael T. Leatherman and Michael P. Kaminski are not at
this time considered independent under the independence standards of the NYSE. The Companys independent directors meet in regularly scheduled executive sessions and at other times, as they deem appropriate. Robert J. Cronin, the Lead Director
of the Board of Directors until September 28, 2016, presided over these sessions during fiscal 2016. William G. Dempsey, the current Lead Director of the Board, presided over executive sessions since September 28, 2016. Upon
Mr. Dempseys
re-election
as a director at the Annual Meeting, and the Boards expectation to appoint Mr. Dempsey as the
non-executive
Chairman of
the Board, it is also expected that Mr. Dempsey will continue to preside over the executive sessions in fiscal 2017.
PROCESS FOR
NOMINATING DIRECTORS
Landauers Governance and Nominating Committee establishes and oversees adherence to the Boards Governance and Nominating
Standards, and establishes policies and procedures for the recruitment and retention of Board members. The
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PROXY STATEMENT
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Election of
Directors
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Governance and Nominating Committee is comprised of four members, William G. Dempsey, Teri G. Fontenot, David E. Meador, and Stephen C. Mitchell, each of whom meets the independence requirements
established by the NYSE with respect to Governance and Nominating Committees.
The Governance and Nominating Committee will consider nominees for the Board of
Directors who 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
Companys
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 of Directors. 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. The Governance and Nominating Committee considers diversity of backgrounds and viewpoints when considering nominees for director but has not established a formal policy regarding
diversity in identifying director nominees.
Pursuant to the Companys retirement policy set forth in the Companys Governance and Nominating Standards,
Stephen C. Mitchell will not be eligible for re-nomination at the Companys 2018 Annual Meeting. Accordingly, the Company anticipates that there will be one vacancy on the Board at the 2018 Annual Meeting. As previously disclosed, pursuant
to the Support Agreement, the Company and Gilead Capital agreed to use reasonable best efforts to mutually select an independent director to the Board to be included on the Companys slate of nominees for the election of directors at the 2018
Annual Meeting.
To date, the Governance and Nominating Committee has identified and evaluated nominees for director positions 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, other than Frank B. Modruson, is an existing director standing for election, in accordance with the Companys amended by-laws, or
re-election.
COMMUNICATIONS WITH THE BOARD OF DIRECTORS BY STOCKHOLDERS AND OTHER INTERESTED PARTIES
The Companys 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 Companys Board of Directors on matters relevant to the Company. Each of the Companys directors is requested to attend the Annual Meeting in person. All of the Companys directors then in
office attended the Companys 2016 Annual Meeting of Stockholders. 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. 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 Companys business or
communications that relate to improper or irrelevant topics.
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Executive Compensation
Compensation Discussion and Analysis
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PROXY STATEMENT
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EXECUTIVE COMPENSATION
COMPENSATION DISCUSSION AND ANALYSIS
NAMED EXECUTIVE OFFICERS
Landauer is required to provide information
regarding the compensation program in place for its Chief Executive Officer (CEO), Chief Financial Officer (CFO) and the three other most highly compensated executive officers as of its last fiscal year end as well as certain
other persons specified in SEC rules. In this Proxy Statement, the Company refers to the individuals as to whom compensation disclosure is required as the Named Executive Officers or NEOs. Our NEOs for the fiscal year ended
September 30, 2016 are as follows:
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Michael T. Leatherman, Executive Chairman of the Board;
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Michael P. Kaminski, President and Chief Executive Officer;
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Daniel J. Fujii, Vice President, Chief Financial Officer and Secretary;
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Michael R. Kennedy, Senior Vice President, Strategic Marketing and Product Development;
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G. Douglas King, Senior Vice President, Administration and Chief Information Officer.
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The following Compensation
Discussion and Analysis (CD&A) describes our fiscal 2016 executive compensation program. This section includes information regarding, among other things, the overall philosophy of the Companys executive compensation program and
each element of compensation that it provides to executives, including our NEOs. Mr. Leathermans compensation for the fiscal year ended September 30, 2016 is described in the section below captioned Compensation for
Mr. Leatherman. Generalized references in the disclosure below to compensation programs for our NEOs should not be read to apply to Mr. Leatherman. This CD&A is intended to be read in conjunction with the tables beginning on page
33, which provide detailed historical compensation information for our NEOs, including Mr. Leatherman.
EXECUTIVE SUMMARY
RECENT CHANGES
The elements of Landauers compensation program for NEOs are: base salary; annual
non-equity
incentive compensation (annual bonus); long-term equity incentive compensation; retirement plans; and post-termination compensation. The Compensation Committee strives to develop a compensation program that adheres to what we believe to
be best practices. For example, we do not
gross-up
for excise taxes, our CEOs equity compensation awards are 100% performance-based, and we have capped payments on all incentive programs. In addition,
our Compensation Committee has regularly made changes to improve our compensation program for named executive officers. In 2014, the Compensation Committee approved the following changes:
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an Amendment to the Companys Incentive Compensation Plan and its Executive Special Severance Plan to provide for double trigger vesting of all future equity grants upon a change in control;
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an Amendment to the Companys Incentive Compensation Plan to provide that upon a termination of employment without cause, annual bonus and stock awards vest on a
pro-rata
basis based on service through the date of termination and in the case of performance-based awards, based on the lesser of actual performance (determined on the last day of the performance period) and target;
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adding a peer group as a supplemental data point to assist with compensation decision-making; and
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clarifying and expanding the Companys anti-hedging policy and adopting an anti-pledging policy.
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During fiscal
2016, the Company further modified its compensation policies and practices as follows:
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The Compensation Committee modified the weighting of the long-term equity incentive compensation opportunities for all other NEOs beyond the CEO, whereby the weighting of long-term equity incentive compensation
opportunities for Messrs. Fujii, Kennedy and King was modified from 70% performance-based vesting and 30% time-based vesting to 85% performance-based vesting and 15% time-based vesting.
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PROXY STATEMENT
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Executive Compensation Compensation
Discussion and Analysis
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The Compensation Committee continued its utilization of a peer group to benchmark NEO compensation using supplemental market data. In addition, the Companys independent compensation consultant also conducted the
Companys biennial survey of Executive Compensation data in fiscal 2016 to ensure alignment with other relevant market data, practices and trends.
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The Compensation Committee modified the Companys annual bonus program, by updating further the Companys policy and limiting the circumstances under which Landauer may make adjustments and amendments to
performance measures for outstanding performance awards. Beginning in fiscal 2016 and going forward, the Committee will consider such adjustments or amendments only if they are greater than or equal to 1.5% of Target Net Income for the given year
(after tax).
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The Compensation Committee approved the use of constant currency for the Companys annual bonus program and thereby eliminated the impact that currency fluctuations would have on payouts. Currency was
frozen for purposes of the program as of October 1, 2015.
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The Compensation Committee updated its Charter in fiscal 2016 to ensure alignment with market practices and relevant trends, as well as the Companys Corporate Delegation of Authority.
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In fiscal 2017, the Compensation Committee has made additional changes. These include:
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Increasing the required stock ownership level for the CEO from three times base salary to five times base salary.
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Increasing the required stock ownership level for our directors from three times their cash compensation to four times their cash compensation.
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Amending the Companys 2016 Incentive Compensation Plan to require that all awards have a minimum vesting period of at least one year.
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Amending the Companys 2016 Incentive Compensation Plan to prohibit the buyout by the Company for cash of underwater stock options.
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In each case, these changes further underscore the Companys commitment to
pay-for-performance
and align the executives interests with those of our stockholders.
FISCAL 2016 DEVELOPMENTS AND COMPENSATION ACTIONS
Landauer performed above expectations in fiscal 2016 and as a result, performance-based compensation was adjusted accordingly as discussed further in this CD&A.
During fiscal 2016, the following compensation actions were taken:
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The annual bonus for fiscal 2016 was paid at 112.5% of target. This amount was determined based on the Companys performance against the revenue and adjusted net income goals used in the annual bonus program for
the year. For more information on our annual bonus plan see Annual
Non-Equity
Incentive Program below.
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During fiscal 2016, the Compensation Committee modified the weighting of the long-term equity incentive compensation opportunities for all other NEOs except the CEO, whereby the weighting of long-term equity incentive
compensation opportunities for Messrs. Fujii, Kennedy and King were modified from 70% performance-based vesting and 30% time-based vesting to 85% performance-based vesting and 15% time-based vesting. The fiscal 2016 long-term equity incentive
opportunities had a weighting of 70% performance-based vesting and 30% time-based vesting. Consistent with the prior year the CEOs long-term equity incentive was weighted 100% toward performance-based vesting. The performance measures for the
fiscal 2016 grant were Return on Invested Capital (ROIC), Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) and Operating Cash Flows (OCF) in order to hold management accountable for the
financial commitments developed in the Companys strategic plans.
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Executive Compensation
Compensation Discussion and Analysis
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PROXY STATEMENT
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LANDAUERS COMPENSATION PHILOSOPHY AND PRINCIPLES
Landauer designs its compensation program to maintain a performance and achievement-oriented environment throughout the Company, while ensuring the program does not
create unnecessary or excessive risk. The goals of the Companys executive compensation program are to:
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Attract and retain highly talented executives capable of delivering long-term success;
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Align the executives interests with the interests of Landauers stockholders; and
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Motivate executives to achieve the Companys short and long-term business objectives via a performance-driven incentive program through legal and ethical means.
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Consistent with these goals, the Board has developed and approved an executive compensation philosophy to provide a framework for the Companys executive
compensation program. The key components of this philosophy are:
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Total compensation will be targeted to be competitive with the marketplace in which executive talent is recruited. Competitive is defined as around the
50
th
percentile using market compensation information. Actual pay can vary from the 50
th
percentile based on specific circumstances;
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The mix of compensation elements is designed to reflect strategic business needs;
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Incentive compensation is tied to short-term goals and long-term strategic plans in a balanced manner so that it supports the Companys efforts to achieve both its short-term and long-term goals;
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The degree of compensation at risk will correlate positively to responsibility level;
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Performance is assessed on both financial and
non-financial
goals using qualitative and quantitative metrics;
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Compensation is differentiated based on factors that are relevant to each form of compensation; and
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The executives interests should be aligned with those of the Companys stockholders through executive stock ownership.
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The executive compensation philosophy results in three major components of executive compensation: a competitive base salary reflective of the individuals role,
responsibilities, experience and capabilities;
non-equity
incentive compensation tied to Company and individual annual performance; and long-term equity incentives tied to Company performance and individual
level of responsibility to impact results over time. The Company determines the appropriate level of these components by using market compensation information as described more fully below.
2016 ANNUAL MEETING EXECUTIVE COMPENSATION ADVISORY VOTE
At the 2016 Annual Meeting, the Companys executive compensation program was approved by 98.7% of the votes cast on the
say-on-pay
proposal, which demonstrated continued stockholder support of the companys executive compensation program. The Compensation Committee did not take any specific actions in response
to the vote at the 2016 Annual Meeting. The Company believes that the year-over-year improvement in the percentage of stockholders voting in favor of the Companys
say-on-pay
proposal reflects changes to the Companys compensation policies that were outlined in the 2014 and 2015 Proxy Statement and subsequently
implemented during both fiscal 2014 and fiscal 2015 (some of which were previously highlighted under the Executive Summary section of the Compensation Discussion and Analysis).
THE COMPENSATION COMMITTEE
The Compensation
Committee assists the Board of Directors in fulfilling the Boards oversight responsibilities to administer the Companys executive compensation program. Each member of the Committee is independent as defined in the corporate governance
listing standards of the NYSE, Landauers director independence standards and applicable law and SEC regulations.
The Committee reports to the Board of
Directors on all compensation matters regarding Landauers executives and other key salaried employees. The Committee reviews annually and approves or recommends to the Board of Directors for
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PROXY STATEMENT
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Executive Compensation Compensation
Discussion and Analysis
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approval, as applicable, the compensation (including annual base salary, annual
non-equity
incentive compensation, long-term equity incentive compensation
and other employee benefits) for the Companys executives and other key salaried employees. Further information about the Committees responsibilities is contained in the Committees Charter, which is available in the Corporate
Governance section on the Investor Relations page of Landauers website at
http://www.landauer.com
.
ROLES OF CONSULTANTS AND EXECUTIVES
During and
after the end of each fiscal year, the CEO provides the Compensation Committee with feedback regarding the performance of the executives and key salaried employees. Annually, and in the cases of executive promotions or hires, the CEO makes
recommendations to the Compensation Committee regarding the compensation package for each of the executives (other than himself). Based on its review of individual performance (taking into account input from the CEO), input and market data from its
independent compensation consultant and other factors, the Compensation Committee approves the compensation for executives, other than the CEO. The Compensation Committee makes recommendations to the Board regarding the compensation for the CEO.
Acting upon the recommendation of the Compensation Committee, the independent members of the Board, meeting in executive session, determine the compensation of the CEO.
To assist the Compensation Committee in discharging its responsibilities, the Committee retains Korn Ferry Hay Group as its independent compensation consultant. Korn
Ferry Hay Group is entirely independent and as such its work for the Compensation Committee does not raise any conflict of interest. Korn Ferry Hay Groups independence is reviewed annually in accordance with the NYSE listing standards. The
consultants role is to advise the Committee on all executive compensation matters. Biennially, Korn Ferry Hay Group presents the Compensation Committee with survey data and information about other relevant market practices and trends, and
makes recommendations to the Compensation Committee regarding target levels for various elements of total compensation for senior executives, which the Compensation Committee reviews and considers in its deliberations. Korn Ferry Hay Group completed
its most recent biennial executive compensation analysis in fiscal 2016.
The Committees independent compensation consultant reports directly to the
Compensation Committee. Periodically the CEO and CFO may work directly with the Committees consultant primarily in the development of offers for new hires and assistance on the development of recommendations on the design of its compensation
program to be presented to the Compensation Committee or the Board of Directors. This interaction between the Committees consultant and management takes place under the approval of the Compensation Committee Chair. During fiscal 2016,
management worked with the compensation consultant on compensation for certain roles in the organization, including external hires.
To ensure that its executive
officer compensation is competitive in the marketplace, the Company uses a formal job evaluation methodology to determine both the internal and external equity of its NEOs total compensation. Internal equity is considered in order to ensure
that members of Landauers executive management are compensated at an appropriate level relative to other members of its executive management, while external equity is a measure of how the Companys compensation of its executive management
compares to compensation for positions with comparable job content at other companies.
Korn Ferry Hay Group reviews each executive position using its proprietary
method of job evaluation to assess the positions relative scope. In this process, Korn Ferry Hay Group considers the breadth of responsibilities, the complexity of the role, and the roles impact on the success of the business. Once each
job is evaluated independently, Korn Ferry Hay Group compares the jobs to determine relative relationships and then relates these job content scopes to pay opportunity levels based on compensation market data from Korn Ferry Hay Groups
Industrial Executive Compensation Report, a proprietary annual executive compensation survey with data on more than 100 executive level positions from over 320 organizations. Given that Landauer competes in a market with limited competitors, the
Compensation Committee has determined that utilizing a broad industry survey with a focus on publicly traded companies and significant survey participation by the manufacturing sector, such as the Korn Ferry Hay Group survey, is an appropriate
method for evaluating the Companys executive compensation practices.
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Executive Compensation
Compensation Discussion and Analysis
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PROXY STATEMENT
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All components of Landauers executive compensation program are aligned around the 50
th
percentile of Korn Ferry Hay Groups survey data for targeted performance. For short-term and long-term incentive compensation, achievement of over performance goals can result in a maximum
award equal to 200% of the target opportunity. Actual pay will vary above or below the 50
th
percentile depending on a number of factors including individual performance, tenure with the
organization and overall Company performance.
With the assistance of the compensation consultant, the Compensation Committee annually reviews relevant compensation
market data, trends and best practices in executive compensation, and executive pay tallies for the Companys NEOs to ensure that the design of its program is consistent with its compensation philosophy and that the amount of compensation is
within appropriate competitive parameters. Based on this review, the Compensation Committee has concluded that the total compensation of each NEO and, in the case of the severance and
change-in-control
scenarios, potential payouts are appropriate and reasonable.
During fiscal 2014, the Compensation Committee worked with Korn Ferry Hay Group to revise its peer group, which historically has been used only to benchmark director
compensation. Since fiscal 2015, this revised peer group has been used to (1) benchmark the Companys director compensation and (2) provide the Committee with supplemental compensation data for NEOs. However, the Compensation
Committee will continue to rely primarily on the aforementioned survey data as its primary benchmarking data source for NEOs.
As part of its peer group review, Korn
Ferry Hay Group developed a set of companies based on Landauers GICS code (3510 Health Care Equipment and Services) and annual revenues comparable to Landauer. This set of companies was then reduced by selecting companies with market
capitalizations comparable to Landauer, and primary business focus on either (1) design and manufacturing of medical devices and/or (2) diagnostic, analytic, imaging and/or testing services in the life sciences and health care markets. The
resulting group of
twenty-one
companies is listed below:
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Abaxis
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Cardiovascular Systems
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Meridian Bioscience
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ABIOMED
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CryoLife
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Natus Medical
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Accuray
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Endologix
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Nxstage Medical
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Affymetrix
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Exactech
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Quidel
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AngioDynamics
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ICU Medical
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RTI Surgical
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Atrion
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LDR Holding
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Spectranetics
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BioTelemetry
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Luminex
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Vascular Solutions
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PROXY STATEMENT
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Executive Compensation Compensation
Discussion and Analysis
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ELEMENTS OF LANDAUERS COMPENSATION PROGRAM
Landauers executive officer compensation package includes a combination of annual cash and long-term incentive compensation. Annual cash compensation for
executive officers is comprised of base salary plus annual
non-equity
incentive bonuses. Long-term incentives consist of a combination of restricted share grants with performance-based and time-based vesting
characteristics.
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Element
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Purpose
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Characteristics
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Base Salary
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Compensate executives for their level of responsibility and sustained individual performance. Also help attract and retain strong talent.
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Fixed component with eligibility for annual merit increases based on sustained individual performance.
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Annual
Non-Equity
Incentive Compensation
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Promote the achievement of Landauers annual financial goals, as well as individual goals.
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Performance-based cash opportunity based on Company and individual results as determined by the Compensation Committee as outlined in the Landauer, Inc. Incentive
Compensation Plan.
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Long-Term Equity Incentive Compensation
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Promote the achievement of Landauers long-term corporate goals, support executive retention and encourage executive stock ownership.
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Performance-based equity and restricted equity grants based upon achievement of strategic priorities and retention with the Company made annually through the Landauer,
Inc. Incentive Compensation Plan.
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Retirement Plans
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Provide an appropriate level of replacement income upon retirement. Also provide an incentive for a long-term career with Landauer, which is a key objective of the
Company.
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Defined contribution retirement plan with Company match and annual profit sharing eligibility with a supplemental deferred compensation contribution available to certain
executives.
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Post-Termination Compensation
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Facilitate the attraction and retention of high caliber executives in a competitive labor market and provide noncompetition and nonsolicitation covenants for the
Companys protection.
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Contingent element; only payable if the executives employment is terminated as specified in the arrangements. Amount of severance benefits varies by level in the
organization.
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In setting total compensation, Landauer applies a consistent approach for all executive officers. Also, the Compensation Committee
exercises appropriate business judgment in how it applies its standard approach to the facts and circumstances associated with each executive. Additional detail about each pay element follows.
We do not have employment agreements in place with our CEO or any NEO other than Mr. Leatherman.
Base Salary:
As discussed above, data on salaries paid to comparable positions in the Korn Ferry Hay Group survey are gathered and reported biennially to
the Compensation Committee by its independent compensation consultant. The Compensation Committee, after receiving input from the compensation consultant, approves the salaries for the CEO, CFO, other NEOs and executives. The CEO provides input for
the salaries for the CFO, other NEOs and other executives. The Compensation Committee seeks generally to establish base salaries for the CEO, CFO and other NEOs around the 50
th
percentile of the
Companys compensation survey data, which is the targeted market position to facilitate the attraction and retention of executive talent, but this approach can vary based on specific circumstances.
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Executive Compensation
Compensation Discussion and Analysis
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PROXY STATEMENT
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Annual
Non-Equity
Incentive Compensation:
Annual
non-equity
incentive awards to the CEO, CFO and other executives are paid relative to the targets established annually by the Compensation Committee under the terms of the Landauer, Inc. Incentive Compensation Plan.
Annual incentive awards for the CEO, CFO and other executives are intended to promote the achievement of Landauers annual financial goals, as well as individual goals. For fiscal 2016, the plan establishes an incentive pool which is related to
aggregate executive officer base salary and performance of Landauer relative to (i) revenue and (ii) adjusted net income. The Committee believes use of these metrics provides alignment with the interests of Landauers stockholders.
Similar to the process for base salary, data for
non-equity
incentives paid to comparable positions in the Korn Ferry Hay
Group survey are gathered and reported biennially to the Compensation Committee by the independent compensation consultant. The Compensation Committee, after receiving input from the compensation consultant, approves or recommends to the Board for
its consideration and approval, as applicable, the
non-equity
incentives for the CEO, CFO, other NEOs and other executives. The target incentive compensation award (ICA), as a percentage of
individual executive officer base salary, is 50% for the Chief Executive Officer and 40% for the CFO and other NEOs. These payout ratios are determined based upon targeting total cash compensation (base salary plus
non-equity
incentive compensation) around the 50
th
percentile as determined by the survey study performed by the Committees independent compensation
consultant. The actual size of the incentive compensation pool available for award varies based upon actual financial performance for revenue and net income.
The
revenue and adjusted net income targets are established as part of the annual operating planning process. The targets are recommended by management, reviewed by the Compensation Committee and approved by the Board. The targets are intended to be
representative of strong financial performance by the Company based upon market conditions. The scales of the payout ratios are intended to compensate management for achieving the targeted performance, and reward management for delivering results
beyond expected levels, consistent with the interests of stockholders.
Based on the Companys fiscal 2015 performance, the Compensation Committee approved
fiscal 2016 revenue goals of $155.4 million, with threshold performance level set at $124.3 million. The Committee also approved adjusted net income performance goals that set target performance at $17.5 million, which was the high
end of fiscal 2016 guidance, with the threshold performance level set at $14.0 million. The Committee felt that requiring this level of revenue and adjusted net income performance before paying out threshold awards or higher aligned management
with stockholder interests. The maximum performance level was set at $186.5 million for revenue, which represents 120% of the fiscal 2016 target of $155.4 million. The adjusted net income maximum performance level was set at
$21.0 million, which represented 120% of the fiscal 2016 target of $17.5 million.
The Company divested its Medical Products division during May 2016. Both
the revenue and adjusted net income targets were originally established without considering the impact of the gain on divestiture of the Medical Products division as well as certain
non-recurring
costs
relating to the early termination of a lease. Upon the divestiture of the Medical Products division, the Compensation Committee approved a $4.5 million reduction in the revenue target to $150.9 million and a $0.5 million reduction in
the adjusted net income target to $17.0 million. The reduction in the revenue and adjusted net income targets represented the budgeted revenue and adjusted net income of the Medical Products division from May 2016 to September 2016.
The final revenue and adjusted net income targets for fiscal 2016, adjusted for the Medical Products divestiture, were established as follows ($ in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive Compensation Plan
|
|
Incentive Performance Levels
|
|
Adjusted Performance Measures
|
|
Threshold
|
|
|
Target
|
|
|
Maximum
|
|
Revenue (weighted 30%)
|
|
$
|
120.7
|
|
|
$
|
150.9
|
|
|
$
|
181.1
|
|
Adjusted Net Income (weighted 70%)
|
|
$
|
13.6
|
|
|
$
|
17.0
|
|
|
$
|
20.4
|
|
|
|
|
|
|
25
|
|
|
|
|
|
PROXY STATEMENT
|
|
Executive Compensation Compensation
Discussion and Analysis
|
The fiscal 2016 plan, adjusted for the reduction in budgeted revenues and adjusted net income resulting from the
Medical Products divestiture, provides for a payout at a ratio of targeted incentive compensation as follows:
|
|
|
Actual Revenue Performance
|
|
Payout Ratio
|
120% Incentive Revenue Achievement ($181.1 million)
|
|
200% of target award
|
100% Incentive Revenue Achievement ($150.9 million)
|
|
100% of target award
|
80% Incentive Revenue Achievement ($120.7 million)
|
|
50% of target award
|
<80% Incentive Revenue Achievement (<$120.7 million)
|
|
0% of target award
|
|
|
|
Actual Adjusted Net Income Performance
|
|
Payout Ratio
|
120% Incentive Adjusted Net Income Achievement ($20.4
million)
|
|
200% of target award
|
100% Incentive Adjusted Net Income Achievement ($17.0
million)
|
|
100% of target award
|
80% Incentive Adjusted Net Income Achievement ($13.6
million)
|
|
50% of target award
|
<80% Incentive Adjusted Net Income Achievement (<$13.6
million)
|
|
0% of target award
|
The range of the scale for revenue and adjusted net income achievement is intended to align management with the expectations of
stockholders on earnings growth. Performance below 80% of planned revenue and adjusted net income would be considered to be below the Companys expectations and, accordingly, results in zero payout of the target award. Similarly, performance at
120% of target is believed to represent performance well beyond the expectations of the business. Awards for performance between 80% and 120% of the performance goals results in payouts ranging from 50% to 200% of targeted award. The overall payout
ratio is intended to maintain alignment with the expectations of stockholders on minimum performance.
The amount of Potential ICA for any executive officer is
determined by multiplying the executives base salary times the actual Target Incentive Award percentage for that officer times the Payout Ratio. Target Incentive Award percentages are 50% for the President and Chief Executive Officer and 40%
for the Chief Financial Officer and other NEOs. The Payout Ratio is determined by the weighted average of the revenue and adjusted net income components in the following ratio:
|
|
|
Revenue
|
|
30%
|
Adjusted Net Income
|
|
70%
|
Two-thirds
of the Potential ICA is payable to the executive officer based solely on financial
performance of the Company. With respect to the
one-third
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 based upon achievement against personal management objectives (PMO). Accordingly, the Total Actual ICA is
calculated as follows:
|
|
|
Potential ICA
|
|
= (Base Salary x Target Incentive Award %) x (Payout Ratio)
|
Total Actual ICA
|
|
= (Potential ICA x 2/3) + (Potential ICA x 1/3 x % PMO achievement)
|
PMOs are established annually and are aligned with the strategic priorities of the Company. PMOs are intended to be challenging but
generally capable of being achieved. In addition to achieving fiscal 2016 revenue and adjusted net income targets, PMOs for the Companys NEOs in fiscal 2016 included:
|
|
|
Execute on Verifii (Digital Dosimetry) product development milestones, including the launch of an ALPHA program
|
|
|
|
Growth of Informatics as a Service (including Patient Dose) to over $3M in Revenue
|
|
|
|
Growth of Imaging Physics Revenue by over 30% and OI growth by over 50% YoY
|
|
|
|
Introduce Culture of Continuous Improvement and implement Lean Processes resulting in over $700k of recurring cost savings
|
|
|
|
Establish multi-year R&D Innovation roadmap
|
|
|
|
26
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|
|
|
|
|
|
|
Executive Compensation
Compensation Discussion and Analysis
|
|
PROXY STATEMENT
|
Any amounts related to PMO achievement not so awarded may, at the discretion of the Committee, be reallocated, in whole
or in part, to any other executive officer based upon the Committees evaluation of the individual performance of the executive officer relative to written objectives and other factors, including the CEOs annual report to the Committee of
the executive officers performance.
The individual and aggregate amounts of incentive compensation awards for the fiscal year, as approved by the Compensation
Committee, are limited to 200% of the targeted awards.
The Companys Incentive Compensation Plan permits the adjustment of performance measures upon the
occurrence of
certain
non-recurring
events, including asset write downs, litigation claims, judgments or settlements,
accruals for reorganization and restructuring programs, objectively determinable legal, integration, or deal related costs in connection therewith or changes in law or accounting principles. Following the 2014 Annual Meeting, the Committee reviewed
the Companys practice and policy concerning adjustments to performance measures and, in addition to reaffirming the circumstances permitting such adjustments, the Committee adopted a written policy clarifying that such events or circumstances
that would make adjustments appropriate will not occur regularly. In addition, the Committee clarified that it intends, as a general matter, to not make adjustments for events or circumstances that are within the control of the Companys
management, as determined by the Committee, unless such adjustments are in the long-term interests of the stockholders. Finally, going forward, the Committee will consider such adjustments or amendments only if they are greater than or equal to 1.5%
of Target Net Income for the given year (after tax).
For fiscal 2016, for purposes of the incentive calculation, reported revenues were not adjusted and reported
net income was adjusted down by approximately $1.5 million, due to the net gain associated with the divestiture of the Companys Medical Products business, partially offset by charges associated with an early lease termination.
Landauers revenue was 98.1% of the target goal and adjusted net income was 104.5% of the target goal resulting in a weighted average payout of 112.5% of target.
After reviewing the results and the development of the various businesses made by management during the year the Compensation Committee recommended and the Board approved the funding at 112.5%. The NEOs averaged 96.3% PMO achievement,
resulting in an actual average payout of 111.3%.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Metric
|
|
Adjusted
Target Goal
($M)
|
|
|
Reported
2016 Actual
GAAP
Results
|
|
|
Adjusted
2016 Actual
Performance
(1)
|
|
|
% of
Target Goal
Achieved
|
|
|
Payout %
|
|
|
Weighting
|
|
|
Weighted
Payout
|
|
Revenue
|
|
$
|
150.9
|
|
|
$
|
149.2
|
|
|
$
|
148.1
|
|
|
|
98.1
|
%
|
|
|
95.0
|
%
|
|
|
30
|
%
|
|
|
28.5
|
%
|
Adjusted Net
Income
|
|
$
|
17.0
|
|
|
$
|
19.7
|
|
|
$
|
17.8
|
|
|
|
104.5
|
%
|
|
|
120.0
|
%
|
|
|
70
|
%
|
|
|
84.0
|
%
|
Total
|
|
|
|
112.5
|
%
|
(1)
|
As noted above, revenue amounts were calculated keeping currency constant.
|
Long-Term Equity Incentive
Compensation:
Long-term incentive awards for the CEO, CFO, other NEOs and other executives are granted in order to promote the achievement of Landauers long-term strategic goals. The Compensation Committee believes that providing
long-term incentive awards in the form of equity awards best achieves the long-term compensation objectives of the organization and aligns the executives interests with the interests of Landauers stockholders, as well as facilitates the
attraction and retention of executive talent.
Each year, the Compensation Committee reviews and approves or makes recommendations to the Board, as applicable, as to
the long-term incentive awards for each of the executives. In determining the total value of the long-term incentive opportunity for each executive, the Compensation Committee reviews the survey data presented by its independent compensation
consultant biennially on a
position-by-position
basis and attempts to provide a benefit at a competitive level, which approximates the 50
th
percentile for each surveyed position, but can vary based on specific circumstances.
Long-term incentives are
provided to Landauers executives under the stockholder approved Landauer, Inc. Incentive Compensation Plan. The Plan permits grants of stock options, stock appreciation rights, restricted shares, restricted share units, performance shares and
performance share units. Current restricted shares are subject to risk of forfeiture and vest in accordance with performance and time restrictions.
|
|
|
|
|
27
|
|
|
|
|
|
PROXY STATEMENT
|
|
Executive Compensation Compensation
Discussion and Analysis
|
Each grant is allocated between performance-based and time-based vesting. For performance shares of restricted stock
that will vest at the end of the restriction period, vesting is based upon the achievement of one or more performance goals. Up to 100% of the performance shares may be forfeited if the performance goals are not achieved. In addition, for certain
financial targets, over-performance shares can be earned for achievement of over-performance goals.
During fiscal 2015, the Compensation Committee of the Board of
Directors modified the weighting of the CEOs long-term equity incentive compensation opportunities from a weighting of 70% performance-based vesting and 30% time-based vesting to 100% performance-based vesting, to focus the CEO on the
Boards strategic and financial objectives for the Company. Similarly, during fiscal 2016, the Compensation Committee of the Board of Directors modified the weighting of the long-term equity incentive compensation opportunities for both the CFO
and other NEOs from a weighting of 70% performance-based vesting and 30% time-based vesting to 85% performance-based vesting and 15% time-based vesting.
This
balance between performance-based and time-based equity grants is aligned with the development of Landauers long-term growth strategy, motivates management for the appropriate balance between short-term and long-term decision making and aligns
managements long-term compensation closely with the interest of Landauers stockholders. Dividend and other distributions will be accrued for the shares subject to performance-based vesting and will be paid if and when such shares vest.
Dividends on time-based grants are paid out at the same rate and time as paid to the Companys stockholders.
The Compensation Committee approved the following
performance goals with respect to the performance-based component of the fiscal 2016 annual equity grant:
|
|
|
Performance Metric for Performance Period October 1, 2015 September 30, 2018
|
|
Weighting of Performance-Based Grant
|
ROIC
|
|
50%
|
EBITDA
|
|
25%
|
Cumulative OCF
|
|
25%
|
The targets were determined by the Compensation Committee based upon the Companys three-year strategic plan, inclusive of the
impact of divestitures completed during fiscal 2015 and subject to certain adjustments approved by the Compensation Committee. Based on its review of the Companys business plan and three-year strategic financial plan, the Compensation
Committee believes that the target and over-performance goals represent a reasonably challenging performance objective.
The extent to which the performance-based
shares will vest depends on the Companys performance over the October 1, 2015-September 30, 2018 performance period. As noted above, performance will be measured against ROIC, EBITDA and OCF goals. The vesting of 50% of the performance
shares will be tied to the ROIC goal, the vesting of 25% of the performance shares will be tied to the EBITDA goal and the vesting of 25% of the performance shares will be tied to the OCF goal. With respect to each of these components, no vesting
will occur unless the Company attains 80% of the relevant performance goal. If performance is below this level on either measure, all performance shares tied to that measure will be forfeited. If performance is at the 80% level with respect to a
measure, the related performance shares will vest at the 50% level. If performance is at the 100% level with respect to a measure, the related performance shares will vest at the 100% level. If performance is at the 120% level with respect to a
measure, the related performance shares will vest at the 200% level. In addition to these requirements, the Committee also determined that with respect to the performance shares related to the ROIC or OCF goal, these shares can vest at levels above
100% only if the Company achieves at least target performance on the EBITDA goal. Vesting levels will be interpolated for achievement levels between
80%-120%.
If threshold EBITDA performance is not achieved
over the fiscal 2017 equity grants performance period, any award payouts related to ROIC or OCF performance are capped at target, even if actual performance exceeds targeted levels. The Committee feels that this emphasis on long-term ROIC
performance reflects stockholders interests in improved balance sheet management as well as increased profitability relative to invested capital.
The chart
below demonstrates how vesting levels relate to performance against the respective performance goals:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Threshold
|
|
|
Target
|
|
|
Maximum
|
|
Achievement Level
|
|
|
80
|
%
|
|
|
100
|
%
|
|
|
120
|
%
|
Vesting Level
|
|
|
50
|
%
|
|
|
100
|
%
|
|
|
200
|
%
|
|
|
|
28
|
|
|
|
|
|
|
|
Executive Compensation
Compensation Discussion and Analysis
|
|
PROXY STATEMENT
|
For the fiscal 2017 annual equity grant, the Committee approved the following performance goals with respect to the
performance-based component of the fiscal 2017 annual equity grant:
|
|
|
Performance Metric for Performance Period October 1, 2016 September 30, 2019
|
|
Weighting of Performance-Based Grant
|
ROIC
|
|
50%
|
EBITDA
|
|
25%
|
Cumulative
3-Year
OCF
|
|
25%
|
The Board has generally followed a practice of making all equity grants to executive officers on a single date each year. Prior to the
relevant Board meeting, the Compensation Committee reviews an overall stock award pool for all participating employees, of which there were 40 in fiscal 2016, and individual grants to executives proposed by the CEO to the Committee. Based on the
proposal from the CEO and recommendation from the Compensation Committee, the Board reviews and approves the overall pool and the individual equity grants to executives.
While most of the Companys equity awards to our NEOs have been made historically pursuant to our regular annual grants, the Compensation Committee and Board retain
the discretion to make additional awards to executives at other times for recruiting or retention purposes. The Company, by policy, explicitly prohibits
off-cycle
awards in coordination with the
release of material
non-public
information.
Retirement Plans:
The NEOs participate in the full range of
benefits and are covered by the same plans, with exceptions noted, on the same terms as provided to all of Landauers U.S. salaried employees. The plans are designed to provide an appropriate level of replacement income upon retirement.
Post-Termination Compensation:
Certain of the Companys NEOs participate in the Executive Severance Plan (the Executive Severance Plan)
and the Executive Special Severance Plan (the Special Severance Plan). These severance plans provide for payments and other benefits if the NEOs employment terminates for a qualifying event or circumstance. The Executive Severance
Plan was adopted on February 13, 2013 by the Compensation Committee and provides for payments and other benefits in the case of a termination without Cause (as such term is defined in the Executive Severance Plan), unless the NEO
would otherwise be eligible for termination benefits pursuant to the Special Severance Plan. The Special Severance Plan provides for payments and other benefits in the case of certain terminations following a change in control, as defined under the
Special Severance Plan. The Special Severance Plan was amended on November 12, 2014 to provide for double trigger vesting of equity awards.
The Compensation
Committee believes that these severance arrangements are an important part of overall compensation for Landauers executives. The Committee believes that these arrangements will help to secure the continued employment and dedication of the
Companys executives prior to or following a change in control, notwithstanding any concern that they might have regarding their own continued employment. The Committee also believes that these arrangements are important as a recruitment tool
and, to a lesser extent, retention device, as many of the companies with which Landauer competes for executive talent have similar arrangements in place for their senior employees. The Committee believes that these benefits are simple to understand,
transparent and fair to Landauers stockholders and each executive.
Compensation for Mr. Leatherman
Mr. Leatherman was compensated during the fiscal year ended September 30, 2016 pursuant to the terms of a letter agreement entered into by the Company and
Mr. Leatherman in August 2015 (the Letter Agreement). In developing the terms of the Letter Agreement, the Company received input from Korn Ferry Hay Group, which had performed an analysis of Executive Chairman compensation for
companies with annual revenues between approximately $50 million and approximately $340 million. Pursuant to the terms of the Letter Agreement, Mr. Leathermans base salary was set at $175,000 and Mr. Leatherman was not
eligible to receive an annual bonus. He remained eligible, however, for a long-term equity incentive award, which was made in the form of performance-based restricted stock. Mr. Leatherman also remained eligible to participate in the
Companys employee benefit plans and programs in which he participated prior to October 1, 2015, provided that he no longer is a participant in the Special Severance Plan and remains ineligible to participate in the Executive Severance
Plan. The Company will make employer contributions on behalf of Mr. Leatherman under the NQ Excess Plan at the rate of 7.5% of the salary paid to Mr. Leatherman annually.
|
|
|
|
|
29
|
|
|
|
|
|
PROXY STATEMENT
|
|
Executive Compensation Compensation
Discussion and Analysis
|
STOCK OWNERSHIP GUIDELINES, ANTI-HEDGING AND ANTI-PLEDGING POLICIES
The Compensation Committee has established stock ownership goals for the Companys executives, including the NEOs, and directors as the Committee believes that
substantial ownership of the Companys stock will further align the executives and directors interests with the interests of Landauers stockholders. Stock counted towards the ownership goal includes Landauer shares owned
outright or beneficially owned (i.e., held directly or indirectly with spouse or minority aged dependent children) and grants of vested and unvested time-based restricted shares. Unexercised stock options and unvested performance-based restricted
shares are not counted in the calculation of an executives ownership goal achievement. Landauers CEO is subject to a stock ownership goal of five times his current annual base salary. Landauers Senior Vice Presidents
(SVPs) are required to own Company shares with a market value equal to two times the SVPs base salary. All other executive officers are required to own Company shares with a market value equal to one times the executive
officers current annual base salary. Directors are required to own Company shares with a market value equal to at least four times the directors annual retainer, not including any additional retainer for chairing a committee or serving
as the Lead Director of the Board of Directors.
Unless the director or executive officer has achieved and maintains the applicable guideline level of stock
ownership, the director or executive officer is required to retain an amount equal to 50% of the net shares received as a result of the exercise, vesting or payment of any Landauer equity awards granted to the director or executive officer.
Net shares are those shares that remain after shares are sold or withheld, as the case may be, to pay any applicable exercise price for the award and satisfy any tax obligations arising in connection with the exercise, vesting or payment
of the award. Upon reaching the applicable ownership goal, the expectation is that the targeted ownership will be maintained by the executive officer.
Compliance
with these stock ownership guidelines will be measured periodically by the Company, and the results of such measurement will be reported to the Compensation Committee at least annually.
The Company has also established anti-hedging and anti-pledging policies for the Companys executives, including each of the NEOs, and directors. Pursuant to the
Companys anti-hedging policy, no director, officer, or employee of the Company or their family members may purchase or sell financial instruments or derivative securities that are designed to hedge or offset any decrease in the market value of
the Companys securities granted to or held by such person, including any incentive plan award. Pursuant to the Companys anti-pledging policy, no director, officer, or employee of the Company or their family members may hold Company
securities in a margin account or pledge Company securities as collateral for a loan or other obligation.
RECOUPMENT AND FORFEITURE
OF INCENTIVE COMPENSATION POLICY
Landauers executive officers may be required to repay previously awarded incentive compensation to the Company in
certain circumstances and to the extent permitted under applicable law.
To the extent the Compensation Committee determines that an executive officer engaged in
conduct that causes significant losses or reputational harm to the Company, the Committee will determine whether, and to what extent, recoupment of incentive awards may be appropriate based on the facts and circumstances involved. If any of the
Companys financial statements are required to be restated, resulting from errors, omissions, or fraud, the Committee may in its discretion, to the extent the Committee determines that an executive officers gross negligence or misconduct
caused or contributed to the need for the financial restatement, direct the Company to recover all or a portion of any incentive award payment (whether in the form of cash or equity) made to any or all of its executive officers with respect to the
36-month
period following first issuance or filing of the financial results required to be restated. In exercising its discretion, the Committee shall consider all facts and circumstances it deems relevant, such as
the degree to which the restatement was material and the degree of an executive officers involvement in the circumstances leading to the restatement.
The
amount to be recovered from any executive officer based on a financial restatement shall be the amount by which the affected incentive award(s) exceeded the amount that would have been paid based on the financial statements as restated, or any
greater or lesser amount (up to and including the entire award) that the Committee may determine. The Committee may determine to recover different amounts from different executive officers on such bases as it shall deem appropriate.
|
|
|
30
|
|
|
|
|
|
|
|
Executive Compensation
Compensation Discussion and Analysis
|
|
PROXY STATEMENT
|
The Committee shall determine, subject to applicable law, whether the Company shall affect such incentive award
recovery (i) by seeking recoupment from the executive officer; (ii) by reducing the amount that would otherwise be payable to the executive officer under any compensatory plan, program, or arrangement maintained by the Company;
(iii) by withholding payment of future increases in compensation (including payment of any discretionary bonus amount) or grants of compensatory awards that would otherwise have been made; or (iv) by any combination of the foregoing.
|
|
|
|
|
31
|
|
|
|
|
|
PROXY STATEMENT
|
|
Executive Compensation Compensation
Committee Report
|
Compensation Committee Report
The Compensation Committee of the Company has reviewed and discussed the CD&A required by Item 402(b) of Regulation
S-K
with
management and, based on such review and discussions, the Compensation Committee recommended to the Board that the CD&A be included in this Proxy Statement and in the Companys 2016 Annual Report on Form
10-K.
Members of the Compensation Committee:
*
William G. Dempsey, Chairman
Jeffrey A.
Bailey
Stephen C. Mitchell
Thomas M. White
*
|
Jeffrey A. Strong was appointed to the Compensation Committee of the Board, effective January 10, 2017. Mr. Strong did not participate in the review, discussions or recommendation with respect to the Compensation
Discussion and Analysis in this proxy statement.
|
|
|
|
32
|
|
|
|
|
|
|
|
Executive
Compensation Tables
|
|
PROXY STATEMENT
|
SUMMARY COMPENSATION TABLE FOR FISCAL YEAR ENDED SEPTEMBER 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name and Principal Position
|
|
Year
|
|
|
Salary
($)
|
|
|
Bonus
($)
|
|
|
Stock
Awards
(4)
($)
|
|
|
Non-Equity
Incentive Plan
Compensation
(5)
($)
|
|
|
All
Other
Compensation
(6)
($)
|
|
|
Total
($)
|
|
Michael T. Leatherman
(1)
|
|
|
2016
|
|
|
|
175,000
|
|
|
|
-
|
|
|
|
350,022
|
|
|
|
-
|
|
|
|
18,425
|
|
|
|
543,447
|
|
Executive Chairman of the Board of Directors
|
|
|
2015
|
|
|
|
716,701
|
|
|
|
-
|
|
|
|
915,002
|
|
|
|
159,621
|
|
|
|
45,750
|
|
|
|
1,837,074
|
|
|
|
|
2014
|
|
|
|
59,815
|
|
|
|
-
|
|
|
|
103,045
|
|
|
|
-
|
|
|
|
42,000
|
|
|
|
204,860
|
|
Michael P. Kaminski
(2)
|
|
|
2016
|
|
|
|
525,000
|
|
|
|
-
|
|
|
|
692,519
|
|
|
|
292,389
|
|
|
|
48,493
|
|
|
|
1,558,400
|
|
President and Chief Executive Officer
|
|
|
2015
|
|
|
|
357,470
|
|
|
|
-
|
|
|
|
150,606
|
|
|
|
97,292
|
|
|
|
43,924
|
|
|
|
649,292
|
|
|
|
|
2014
|
|
|
|
350,000
|
|
|
|
-
|
|
|
|
150,609
|
|
|
|
40,072
|
|
|
|
41,532
|
|
|
|
582,213
|
|
Daniel J. Fujii
(3)
|
|
|
2016
|
|
|
|
329,600
|
|
|
|
-
|
|
|
|
215,011
|
|
|
|
145,873
|
|
|
|
32,359
|
|
|
|
722,842
|
|
Vice President, Chief Financial Officer and
|
|
|
2015
|
|
|
|
257,611
|
|
|
|
-
|
|
|
|
120,029
|
|
|
|
64,883
|
|
|
|
31,205
|
|
|
|
473,728
|
|
Secretary
|
|
|
2014
|
|
|
|
98,404
|
|
|
|
-
|
|
|
|
133,373
|
|
|
|
9,423
|
|
|
|
10,993
|
|
|
|
252,193
|
|
Michael R. Kennedy
|
|
|
2016
|
|
|
|
294,580
|
|
|
|
-
|
|
|
|
215,011
|
|
|
|
130,811
|
|
|
|
34,225
|
|
|
|
674,627
|
|
Senior Vice President, Strategic Marketing and
|
|
|
2015
|
|
|
|
271,380
|
|
|
|
-
|
|
|
|
150,014
|
|
|
|
78,494
|
|
|
|
35,577
|
|
|
|
535,465
|
|
Product Development
|
|
|
2014
|
|
|
|
247,200
|
|
|
|
-
|
|
|
|
130,022
|
|
|
|
26,199
|
|
|
|
34,838
|
|
|
|
438,259
|
|
G. Douglas King
|
|
|
2016
|
|
|
|
294,580
|
|
|
|
-
|
|
|
|
215,011
|
|
|
|
131,249
|
|
|
|
30,177
|
|
|
|
671,017
|
|
Senior Vice President, Administration and
|
|
|
2015
|
|
|
|
262,847
|
|
|
|
-
|
|
|
|
126,042
|
|
|
|
78,756
|
|
|
|
34,794
|
|
|
|
502,439
|
|
Chief Information Officer
|
|
|
2014
|
|
|
|
237,275
|
|
|
|
-
|
|
|
|
95,250
|
|
|
|
27,179
|
|
|
|
32,701
|
|
|
|
392,405
|
|
(1)
|
Amounts for 2016 reflect Mr. Leathermans compensation during fiscal 2016 as our Executive Chairman. Mr. Leatherman served as our President and Chief Executive Officer from September 15,
2014-September 30, 2015 (in an interim capacity from September 15, 2014-December 15, 2014).
|
(2)
|
Mr. Kaminski transitioned from his position as President, Radiation Measurement to the role of Landauers President and Chief Executive Officer, and was appointed to the Companys Board of Directors, each
effective on October 1, 2015.
|
(3)
|
Mr. Fujii was hired by the Company on April 1, 2014 and appointed Vice President, Corporate Controller and Chief Accounting Officer effective May 19, 2014. Mr. Fujii was appointed as the
Companys Vice President, Chief Financial Officer and Secretary effective April 15, 2015.
|
(4)
|
Amounts reported in this column are valued based on the aggregate grant date fair value computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation
Stock Compensation (FASB ASC Topic 718). Amounts are calculated based on the probable satisfaction of performance conditions at target. If the highest level of performance is achieved, the maximum amounts that will be received with
respect to the fiscal 2016 awards are as follows: Mr. Leatherman, $700,000; Mr. Kaminski, $1,385,000; Mr. Fujii, $398,000; Mr. Kennedy, $398,000; and Mr. King, $398,000. See Note 1 to the Notes to Consolidated Financial
Statements of Landauers 2016 Annual Report on Form
10-K
for a discussion of the relevant assumptions used in calculating the amounts.
|
(5)
|
Amounts set forth in this column were earned during each of fiscal 2016, 2015 and 2014 under the Landauer, Inc. Incentive Compensation Plan.
|
(6)
|
Included in this column are Company matching contributions to the Landauer, Incorporated 401(k) Retirement Savings Plan, Company profit sharing contributions to the Landauer, Incorporated its 401(k) Retirement Savings
Plan, and Company deferred compensation contributions under the NQ Excess Plan, respectively, as follows for fiscal 2016: Mr. Leatherman, $0, $5,300, $13,125; Mr. Kaminski, $3,818, $5,300, $39,375; Mr. Fujii, $2,339, $5,300, $24,720;
Mr. Kennedy, $6,832, $5,300, $22,094; Mr. King, $2,784, $5,300, $22,094.
|
|
|
|
|
|
33
|
|
|
|
|
|
PROXY STATEMENT
|
|
Executive Compensation
Tables
|
GRANTS OF PLAN-BASED AWARDS FOR FISCAL YEAR ENDED SEPTEMBER 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated Future Payouts
Under Non-Equity Incentive
Plan Awards
(1)
|
|
|
Estimated Future Payouts
Under Equity Incentive
Plan Awards
(2)
|
|
|
All Other
Stock Awards:
Number of
Shares of
Stock or Units
(#)
|
|
|
Grant Date
Fair Value
of Stock
and Option
Awards
($)
|
|
Name
|
|
Grant
Date
|
|
|
Threshold
($)
|
|
|
Target
($)
|
|
|
Maximum
($)
|
|
|
Threshold
(#)
|
|
|
Target
(#)
|
|
|
Maximum
(#)
|
|
|
|
Michael T. Leatherman
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12/4/2015
|
(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,279
|
|
|
|
8,558
|
|
|
|
17,116
|
|
|
|
|
|
|
|
350,022
|
|
Michael P. Kaminski
|
|
|
-
|
|
|
|
131,250
|
|
|
|
262,500
|
|
|
|
525,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12/4/2015
|
(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,466
|
|
|
|
16,932
|
|
|
|
33,864
|
|
|
|
|
|
|
|
692,519
|
|
|
|
|
12/4/2015
|
(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
-
|
|
|
|
-
|
|
Daniel J. Fujii
|
|
|
-
|
|
|
|
65,920
|
|
|
|
131,840
|
|
|
|
263,680
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12/4/2015
|
(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,234
|
|
|
|
4,468
|
|
|
|
8,936
|
|
|
|
|
|
|
|
182,741
|
|
|
|
|
12/4/2015
|
(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
789
|
|
|
|
32,270
|
|
Michael R. Kennedy
|
|
|
-
|
|
|
|
58,916
|
|
|
|
117,832
|
|
|
|
235,664
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12/4/2015
|
(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,234
|
|
|
|
4,468
|
|
|
|
8,936
|
|
|
|
|
|
|
|
182,741
|
|
|
|
|
12/4/2015
|
(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
789
|
|
|
|
32,270
|
|
G. Douglas King
|
|
|
-
|
|
|
|
58,916
|
|
|
|
117,832
|
|
|
|
235,664
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12/4/2015
|
(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,234
|
|
|
|
4,468
|
|
|
|
8,936
|
|
|
|
|
|
|
|
182,741
|
|
|
|
|
12/4/2015
|
(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
789
|
|
|
|
32,270
|
|
(1)
|
Amounts set forth in these columns reflect the annual cash incentive compensation amounts that potentially could have been earned during fiscal 2016 based upon the achievement of performance goals under the Landauer,
Inc. Incentive Compensation Plan. The amounts earned in fiscal 2016 by Landauers NEOs have been determined and were paid in December 2016. The amounts paid are included in the
Non-Equity
Incentive
Plan Compensation column of the 2016 Summary Compensation Table.
|
(2)
|
The amounts reported in this column are valued based on the aggregate grant date fair value computed in accordance with FASB ASC Topic 718. For awards subject to performance conditions, the amounts included in this
column are calculated based on the probable satisfaction of the performance conditions at target. A discussion of the calculation of the grant date fair value is set forth in Note 1 of the Notes to Consolidated Financial Statements of
Landauers 2016 Annual Report on Form
10-K.
|
(3)
|
These awards represent the performance-based component of the fiscal 2016 annual equity award granted on December 4, 2015 that vests on September 30, 2018 upon the achievement of certain performance milestones
as described above in Compensation Discussion and Analysis. These awards were granted under the Landauer, Inc. Incentive Compensation Plan.
|
(4)
|
These awards represent the time-based component of the fiscal 2016 annual equity award granted on December 4, 2015 that vests on September 30, 2018, subject to forfeiture upon the NEOs earlier
termination of employment. These awards were granted under the Companys Incentive Compensation Plan.
|
|
|
|
34
|
|
|
|
|
|
|
|
Executive Compensation
Tables
|
|
PROXY STATEMENT
|
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END FOR FISCAL YEAR ENDED SEPTEMBER 30,
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Awards
|
|
Name
|
|
Number of
Shares or
Units of
Stock That
Have Not
Vested
(#)
|
|
|
Market
Value of
Shares or
Units of
Stock That
Have
Not
Vested
(1)
($)
|
|
|
Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares,
Units or
Other
Rights that
Have Not
Vested
(#)
|
|
|
Equity
Incentive
Plan Awards:
Market
or
Payout
Value of
Unearned
Shares,
Units or Other
Rights that
Have Not
Vested
(1)
($)
|
|
Michael T. Leatherman
|
|
|
-
|
|
|
|
-
|
|
|
|
18,598
|
(4)
|
|
|
827,222
|
|
|
|
|
|
|
|
|
|
|
|
|
4,279
|
(5)
|
|
|
190,330
|
|
Michael P. Kaminski
|
|
|
1,312
|
(2)
|
|
|
58,358
|
|
|
|
2,143
|
(4)
|
|
|
95,307
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
8,466
|
(5)
|
|
|
376,568
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
Daniel J. Fujii
|
|
|
1,090
|
(6)
|
|
|
48,483
|
|
|
|
569
|
(4)
|
|
|
25,313
|
|
|
|
|
349
|
(2)
|
|
|
15,524
|
|
|
|
1,096
|
(7)
|
|
|
48,759
|
|
|
|
|
672
|
(7)
|
|
|
29,891
|
|
|
|
2,234
|
(5)
|
|
|
99,369
|
|
|
|
|
789
|
(3)
|
|
|
35,095
|
|
|
|
|
|
|
|
|
|
Michael R. Kennedy
|
|
|
1,133
|
(2)
|
|
|
50,396
|
|
|
|
1,849
|
(4)
|
|
|
82,261
|
|
|
|
|
170
|
(8)
|
|
|
7,562
|
|
|
|
277
|
(8)
|
|
|
12,330
|
|
|
|
|
789
|
(3)
|
|
|
35,095
|
|
|
|
2,234
|
(5)
|
|
|
99,369
|
|
G. Douglas King
|
|
|
830
|
(2)
|
|
|
36,918
|
|
|
|
1,355
|
(4)
|
|
|
60,248
|
|
|
|
|
262
|
(9)
|
|
|
11,654
|
|
|
|
427
|
(9)
|
|
|
18,993
|
|
|
|
|
789
|
(3)
|
|
|
35,095
|
|
|
|
2,234
|
(5)
|
|
|
99,369
|
|
(1)
|
Amounts set forth in these columns equal the number of shares of target restricted stock indicated multiplied by the closing price of $44.48 for Landauers common stock on September 30, 2016.
|
(2)
|
These awards vest in full on September 30, 2017.
|
(3)
|
These awards vest in full on September 30, 2018.
|
(4)
|
These awards, which represent the performance-based component of the fiscal 2015 annual equity award, vest on September 30, 2017 based upon achievement of certain performance goals. The amounts disclosed in this
table are not necessarily indicative of the amounts that may be realized by Landauers named executives.
|
(5)
|
These awards, which represent the performance-based component of the fiscal 2016 annual equity award, vest on September 30, 2018 based upon achievement of certain performance goals. The amounts disclosed in this
table are not necessarily indicative of the amounts that may be realized by Landauers named executives.
|
(6)
|
These awards vest in full on April 1, 2017.
|
(7)
|
In connection with his promotion from Vice President, Corporate Controller and Chief Accounting Officer to the Companys Vice President, Chief Financial Officer and Secretary effective April 15, 2015,
Mr. Fujii was granted an additional time-based restricted stock award of 2,238 shares of the Companys common stock with a value of approximately $80,000 as of the grant date, subject to vesting over a three-year period based on the
satisfaction of performance goals related to his employment. These awards vest on April 15, 2018.
|
(8)
|
In connection with his appointment as the Companys Senior Vice President, Strategic Marketing and Product Development effective April 1, 2015, Mr. Kennedy was awarded 566 shares of the Companys
common stock with a value of approximately $20,000 as of the grant date, subject to vesting over a three-year period based on the satisfaction of performance goals related to his employment. These awards vest on April 1, 2018.
|
(9)
|
In connection with his appointment as the Companys Senior Vice President, Administration and Chief Information Officer effective April 1, 2015, Mr. King was awarded 872 shares of the Companys
common stock with a value of approximately $30,800 as of the grant date, subject to vesting over a three-year period based on the satisfaction of performance goals related to his employment. These awards vest on April 1, 2018.
|
|
|
|
|
|
35
|
|
|
|
|
|
PROXY STATEMENT
|
|
Executive Compensation
Tables
|
OPTION EXERCISES AND STOCK VESTED FOR FISCAL YEAR ENDED SEPTEMBER 30, 2016
|
|
|
|
|
|
|
|
|
|
|
Stock Awards
|
|
Name
|
|
Number of
Shares Acquired
on Vesting
(#)
|
|
|
Value Realized
on Vesting
(1)
($)
|
|
Michael T. Leatherman
|
|
|
2,075
|
|
|
|
60,279
|
|
Michael P. Kaminski
|
|
|
4,327
|
|
|
|
171,394
|
|
Daniel J. Fujii
|
|
|
1,690
|
|
|
|
62,909
|
|
Michael R. Kennedy
|
|
|
2,095
|
|
|
|
93,185
|
|
G. Douglas King
|
|
|
1,815
|
|
|
|
78,924
|
|
(1)
|
The value realized on the vesting of restricted stock awards is based on the Companys closing market price of its common stock on the date of vesting.
|
|
|
|
36
|
|
|
|
|
|
|
|
Executive Compensation
Tables
|
|
PROXY STATEMENT
|
NONQUALIFIED DEFERRED COMPENSATION FOR FISCAL YEAR ENDED SEPTEMBER 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Registrant
Contributions
in Last FY
(1)
($)
|
|
|
Aggregate
Earnings (Losses)
in Last FY
($)
|
|
|
Aggregate
Balance
at Last
FYE
(2)
($)
|
|
Michael T.
Leatherman
(3)
|
|
|
13,125
|
|
|
|
78
|
|
|
|
58,953
|
|
Daniel J. Fujii
|
|
|
24,720
|
|
|
|
49
|
|
|
|
52,690
|
|
Michael P. Kaminski
|
|
|
39,375
|
|
|
|
6,840
|
|
|
|
110,861
|
|
Michael R. Kennedy
|
|
|
22,094
|
|
|
|
18,721
|
|
|
|
188,916
|
|
G. Douglas King
|
|
|
22,094
|
|
|
|
15,301
|
|
|
|
169,134
|
|
(1)
|
The amounts in this column represent the annual Company contributions earned during fiscal 2016, which the Company will credit to the executives accounts during fiscal 2017. These amounts are included in the
Summary Compensation Table as All Other Compensation.
|
(2)
|
The aggregate balance at September 30, 2016 includes compensation which was reported for the executives in previous years.
|
(3)
|
Mr. Leatherman became eligible to participate in the Companys NQ Excess Plan effective December 15, 2014 following his appointment as President and Chief Executive Officer.
|
Deferred Compensation Plan
Landauer
established the NQ Excess Plan effective April 1, 2009. Under the NQ Excess Plan, certain employees, including the Companys executive officers, are entitled to (a) receive Company contributions based on a percentage of base pay, and
(b) elect to defer up to 60% of base pay and up to 100% of commissions and bonuses, subject to the authority of the committee that administers the plan (the Plan Committee) to specify a different maximum percentage of compensation
that may be deferred. Bonuses include performance-based compensation contingent upon the satisfaction of
pre-established
organizational or individual performance criteria relating to a performance period of at
least twelve months and fiscal year compensation services performed during a period of one or more consecutive fiscal years of the Company and payable after the period of service has concluded. Participants account balances under the NQ Excess
Plan are adjusted to track the investment returns of mutual funds selected by the participants from a menu of mutual funds selected by the Plan Committee. Participants may change their investment elections as frequently as permitted by the Plan
Committee.
Amounts attributable to Company contributions and voluntary deferrals that are payable under the NQ Excess Plan as a result of death, disability or
separation prior to retirement (defined as separation after the earlier of (i) age 55 and the completion of at least 10 years of service or (ii) age 65) are distributed in the form of a lump sum payment. Amounts attributable to Company
contributions that are payable as a result of retirement are distributed in five annual installments. Amounts attributable to voluntary deferrals that are payable as a result of retirement are distributed in either a lump sum payment or in annual
installments over a period of 2 to 5 years, as elected by the participant. Amounts attributable to voluntary deferrals may also be distributed prior to separation in either a lump sum payment or in annual installments over a period of 2 to 5 years
commencing on a date specified by the participant, which is at least 2 years after the beginning of the applicable deferral period.
Severance Plans
Executive Special
Severance Plan:
The Company maintains the Landauer, Inc. Executive Special Severance Plan, as amended and restated on November 12, 2014 (the Special Severance Plan), in which certain of Landauers executives
participated in as of September 30, 2016, including Mr. Fujii, Mr. Kaminski, Mr. Kennedy and Mr. King. Under the Special Severance Plan, in the event of a change in control if, the executives 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, the executive will receive a lump sum payment equal to three times for Mr. Kaminski and two
times for Mr. Fujii, Mr. Kennedy and Mr. King, the sum of: (i) the highest annual rate of the executives base salary during the
12-month
period immediately prior to his termination
and (ii) the greater of the executives target annual bonus for the year of termination or a bonus calculated based on the average of the prior three fiscal years bonuses as percentages of the
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|
|
|
|
37
|
|
|
|
|
|
PROXY STATEMENT
|
|
Executive Compensation
Tables
|
executives base salary during those prior three fiscal years. The terminated executive also will receive continued medical, dental and life insurance coverage for up to three years for
Mr. Kaminski and two years for Mr. Fujii, Mr. Kennedy and Mr. King, as well as outplacement services. The Special Severance Plan requires the executive to enter into a noncompetition/ nonsolicitation agreement and execute a
general release of claims against Landauer and its affiliates to receive the severance payments and benefits described above.
Additionally, on November 12,
2014, the Committee amended the Special Severance Plan to provide for double trigger vesting. Under the terms of the Special Severance Plan, in the event of a change in control if the executives 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, all of the executives 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 executives termination of employment or the original expiration date of the option.
For purposes of the Special Severance Plan, a change in control generally means (i) certain acquisitions of 30% or more of the then outstanding shares
of the Companys 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, Landauers stockholders receive more than 60% of the stock of the resulting company) or (iv) the consummation of a
plan of complete liquidation or dissolution of Landauer.
Our Special Severance Plan does not provide for any excise tax
gross-up.
Rather, it provides that if benefits and payments provided under the Plan would trigger an excise tax under Section 4999 of the Internal Revenue Code, those benefits will either (i) be
reduced to a level where such excise tax would not apply or (ii) remain unchanged and be subject to the excise tax, depending on which outcome would result in a better
after-tax
result to the participant.
Executive Severance Plan:
On February 20, 2013, the Committee approved the Executive Severance Plan in which certain of Landauers
executives participated in as of September 30, 2016, including Mr. Fujii, Mr. Kaminski, Mr. Kennedy and Mr. King. Under the Executive Severance Plan, if the executives employment is terminated involuntarily without
cause, as defined in the plan, and the executive is not otherwise entitled to termination benefits pursuant to the Special Severance Plan due to a termination within 24 months following a change in control, the executive will receive (i) salary
continuation for a period of 24 months for Mr. Kaminski and 18 months in the case of the other NEOs eligible to participate in the plan, (ii) continued medical coverage for a period of 24 months for Mr. Kaminski and 18 months in the
case of the other NEOs eligible to participate in the plan and (iii) outplacement services. The Executive Severance Plan requires the executive to enter into a noncompetition/nonsolicitation agreement and execute a general release of claims
against Landauer and its affiliates to receive the severance payments and benefits described above.
Incentive Compensation Plan:
Effective
November 12, 2014, the Compensation Committee amended the Landauer, Inc. Incentive Compensation Plan to provide for the following treatment of stock awards and cash performance awards upon a termination without cause:
|
|
|
In the case of time-based restricted stock awards or restricted stock unit awards, the awards will vest on a
pro-rata
basis based on service through the date of termination,
unless such termination occurs within 24 months of a change in control in which case the award will vest in full;
|
|
|
|
In the case of performance stock awards or performance stock unit awards, the target number of shares subject to the award will be
pro-rated
on the termination date, based on
service through the date of termination, and such
pro-rata
performance share award amount will vest based on actual performance on the last day of the performance period, unless such termination occurs within
24 months of a change in control in which case the award will vest in full at the target level; and
|
|
|
|
In the case of cash performance awards, the award will vest on a
pro-rata
basis based on service through the date of termination at the lesser of target or actual performance
measured on the last day of the performance period.
|
The Companys Incentive Compensation Plan provides that upon a termination due to death or
disability, stock awards and performance cash awards will vest in full and any applicable performance measures will be deemed satisfied at the target level. For each of the NEOs, the value of such vesting assuming termination as of
September 30, 2016 would be: Michael T. Leatherman $1,562,404; Michael P. Kaminski, $896,715; Daniel J. Fujii, $324,060; Michael R. Kennedy, $350,654; G. Douglas King, $327,792.
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|
|
38
|
|
|
|
|
|
|
|
Executive Compensation
Tables
|
|
PROXY STATEMENT
|
PAYMENTS UPON TERMINATION WITHOUT CAUSE OR FOR GOOD REASON FOLLOWING A CHANGE IN CONTROL
ASSUMING TERMINATION ON SEPTEMBER 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Severance
Pay
(2)
($)
|
|
|
Stock
Vesting
(3)
($)
|
|
|
Retirement
Plan
Benefits
(4)
($)
|
|
|
Continued
Perquisites
and
Benefits
(5)
($)
|
|
|
Total
($)
|
|
Michael T.
Leatherman
(1)
|
|
|
-
|
|
|
|
-
|
|
|
|
45,750
|
|
|
|
-
|
|
|
|
45,750
|
|
Michael P. Kaminski
|
|
|
2,362,500
|
|
|
|
896,715
|
|
|
|
65,370
|
|
|
|
96,195
|
|
|
|
3,420,780
|
|
Daniel J. Fujii
|
|
|
922,881
|
|
|
|
324,060
|
|
|
|
27,920
|
|
|
|
69,130
|
|
|
|
1,343,991
|
|
Michael R. Kennedy
|
|
|
824,824
|
|
|
|
350,654
|
|
|
|
-
|
|
|
|
69,130
|
|
|
|
1,244,608
|
|
G. Douglas King
|
|
|
824,824
|
|
|
|
327,792
|
|
|
|
-
|
|
|
|
59,465
|
|
|
|
1,212,081
|
|
(1)
|
Mr. Leatherman is not a participant in the Special Severance Plan.
|
(2)
|
Amounts represent
lump-sum
cash payments equal to three times for Mr. Kaminski and two times, for Mr. Fujii, Mr. Kennedy and Mr. King, the sum of the highest
annual rate of the executives base salary during the
12-month
period immediately prior to his termination, and the greater of the executives target annual bonus for the year of termination or a
bonus calculated based on the average of the prior three fiscal years bonuses as percentages of the executives base salary during those prior three fiscal years. Per the terms of the Special Severance Plan, these amounts have been reduced to a
level whereby the excise tax triggered under Section 4999 of the Internal Revenue Code would not apply.
|
(3)
|
Amounts equal the number of shares of restricted stock outstanding at September 30, 2016 multiplied by the closing price of $44.48 for the Companys common stock on September 30, 2016.
|
(4)
|
Amounts represent accumulated unvested Company contributions under the NQ Excess Plan which immediately vest and are paid upon termination following a change in control.
|
(5)
|
Amounts include continued medical, dental and life insurance coverage for up to 3 years for Mr. Kaminski and 2 years for Mr. Fujii, Mr. Kennedy, and Mr. King, as well as outplacement services.
|
|
|
|
|
|
39
|
|
|
|
|
|
PROXY STATEMENT
|
|
Executive Compensation
Tables
|
PAYMENTS UPON TERMINATION WITHOUT CAUSE NOT FOLLOWING A CHANGE IN CONTROL ASSUMING
TERMINATION ON SEPTEMBER 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Salary
Continuation
(2)
($)
|
|
|
Stock
Vesting
(3)
($)
|
|
|
Continued
Perquisites
and
Benefits
(4)
($)
|
|
|
Total
($)
|
|
Michael T.
Leatherman
(1)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
45,750
|
|
Michael P. Kaminski
|
|
|
1,050,000
|
|
|
|
343,741
|
|
|
|
74,130
|
|
|
|
1,467,871
|
|
Daniel J. Fujii
|
|
|
494,400
|
|
|
|
172,093
|
|
|
|
58,098
|
|
|
|
724,591
|
|
Michael R. Kennedy
|
|
|
441,870
|
|
|
|
187,750
|
|
|
|
58,098
|
|
|
|
687,718
|
|
G. Douglas King
|
|
|
441,870
|
|
|
|
168,668
|
|
|
|
50,849
|
|
|
|
661,387
|
|
(1)
|
Mr. Leatherman is not a participant in the Executive Severance Plan.
|
(2)
|
Amounts represent salary continuation payments equal to 24 months for Mr. Kaminski and 18 months for Mr. Fujii, Mr. Kennedy and Mr. King.
|
(3)
|
Amounts equal the number of shares of restricted stock outstanding at September 30, 2016, prorated for a termination on such date, multiplied by the closing price of $44.48 for the Companys common stock on
September 30, 2016.
|
(4)
|
Amounts include continued medical, dental and life insurance coverage for a period of 24 months for Mr. Kaminski and 18 months for Mr. Fujii, Mr. Kennedy, and Mr. King, as well as outplacement
services.
|
Compensation of Directors
During fiscal 2016, each
non-employee
director was paid an annual retainer in the amount of $45,000. The Lead Director of the
Board of Directors received an additional annual retainer of $25,000. The Audit Committee Chair received an additional annual retainer of $18,000. Each of the Compensation and Governance and Nominating Committee Chairs received an additional annual
retainer of $12,000. All retainers are paid quarterly.
Landauer also maintains a long-term incentive plan, as approved by stockholders, under which
non-employee
directors receive annual grants of restricted stock or restricted stock units. During fiscal 2016, the value of the annual equity grant to
non-employee
directors
was $115,000. In February 2016,
non-employee
directors each were awarded grants of 3,959 restricted shares of common stock that vest one year after the grant date. If the director ceases to be a member of the
Board for any reason other than disability, retirement on or after age 70, or death, each share subject to the award that has not vested prior thereto shall be forfeited by the director.
Non-employee
directors
who are appointed to the Board at other than the annual meeting date are granted a prorated award. Pursuant to the Support Agreement, Jeffrey A. Strong has waived any right to receive equity compensation in connection with his service on the Board
until the 2018 Annual Meeting. The Company has established a share ownership goal for directors of four times their annual retainer. For more information including what shares are counted towards the ownership goal, please see Stock Ownership
Guidelines, Anti-Hedging and Anti-Pledging Policies in this Proxy Statement above on page 30 in the CD&A.
The following table provides information
concerning director compensation for the fiscal year ended September 30, 2016:
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|
|
40
|
|
|
|
|
|
|
|
Executive Compensation
Tables
|
|
PROXY STATEMENT
|
DIRECTOR COMPENSATION FOR FISCAL YEAR ENDED SEPTEMBER 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
(1)
|
|
Fees Earned or
Paid In
Cash
($)
|
|
|
Stock
Awards
(3,4)
($)
|
|
|
Total
($)
|
|
Jeffrey A. Bailey
|
|
|
45,000
|
|
|
|
115,000
|
|
|
|
160,000
|
|
Robert J. Cronin
|
|
|
70,000
|
|
|
|
115,000
|
|
|
|
185,000
|
|
William G. Dempsey
|
|
|
57,000
|
|
|
|
115,000
|
|
|
|
172,000
|
|
Teri G.
Fontenot
(2)
|
|
|
247
|
|
|
|
44,530
|
|
|
|
44,777
|
|
David E. Meador
|
|
|
63,000
|
|
|
|
115,000
|
|
|
|
178,000
|
|
Stephen C. Mitchell
|
|
|
57,000
|
|
|
|
115,000
|
|
|
|
172,000
|
|
Thomas M. White
|
|
|
45,000
|
|
|
|
115,000
|
|
|
|
160,000
|
|
(1)
|
Michael T. Leatherman was appointed as the Companys Interim President and Chief Executive Officer effective September 15, 2014, and as President and Chief Executive Officer, removing the Interim designation,
effective December 15, 2014 through September 30, 2015. During his term as President and Chief Executive Officer (including the period August 25, 2014 December 14, 2014), Mr. Leatherman continued to serve as a
director of the Company, but ceased his service as a member of the Audit Committee and Compensation Committee of the Companys Board of Directors, and relinquished all compensation paid to directors. His compensation as an executive officer and
as a Director (prior to his appointment as Interim President and CEO) is reported in the Summary Compensation Table.
|
(2)
|
On September 28, 2016, the Board appointed Teri G. Fontenot as an Independent Director of the Board of Directors. Ms. Fontenot will participate in the current director compensation arrangements applicable to
non-employee
directors. Under the terms of those arrangements, she received a prorated annual retainer of $247 for service on the Companys Board of Directors for fiscal 2016. Pursuant to the Companys
long-term incentive plan, Ms. Fontenot was granted units of 1,007 restricted shares of common stock with a grant date value of $44,530 that vest in February 2017.
|
(3)
|
The amounts reported in this column are valued based on the aggregate grant date fair value computed in accordance with FASB ASC Topic 718. A discussion of the assumptions used in the valuation of equity awards is set
forth in Note 1 of the Notes to Consolidated Financial Statements of Landauers 2016 Annual Report on Form
10-K.
|
(4)
|
Each director listed in the table, except for Ms. Fontenot and Mr. Bailey, had 6,865 shares of restricted stock outstanding as of September 30, 2016. Ms. Fontenot had 1,007 shares of restricted
outstanding as of September 30, 2016, and Mr. Bailey had 6,683 shares of restricted stock outstanding as of September 30, 2016.
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|
|
|
|
|
41
|
|
|
|
|
|
PROXY STATEMENT
|
|
Executive Compensation
Tables
|
EQUITY COMPENSATION PLAN INFORMATION
The following table provides information as of September 30, 2016 regarding the number of shares of Common Stock that may be issued under the Companys equity
compensation plans. All equity compensation plans have been approved by the Companys stockholders.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
|
|
(b)
|
|
|
(c)
|
|
Plan category
|
|
Number of
securities to be
issued upon
exercise
of
outstanding options,
warrants
and rights
(2)
|
|
|
Weighted-average
exercise price
of
outstanding options,
warrants
and rights
|
|
|
Number of securities
remaining available
for future issuance
under equity
compensation plans
(excluding securities
reflected in column
(a))
(1)
|
|
Equity compensation plans approved by security holders
|
|
|
183,876
|
|
|
$
|
-
|
|
|
|
672,208
|
|
Equity compensation plans not approved by security holders
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Total
|
|
|
183,876
|
|
|
$
|
-
|
|
|
|
672,208
|
|
(1)
|
This amount represents shares of Common Stock available for issuance of stock-based awards under the 2016 Landauer, Inc. Incentive Compensation Plan (the 2016 Plan). Any shares reserved for award and unused
under the previous incentive plans were cancelled.
|
(2)
|
This amount represents restricted stock units, including performance-based restricted stock units, issued under the Companys equity plans.
|
|
|
|
42
|
|
|
|
|
|
|
|
Executive Compensation Certain
Relationships and Related Person
Transactions
|
|
PROXY STATEMENT
|
CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS
As a matter of practice, the Board of Directors Audit Committee is responsible for review, approval or ratification of related person transactions for which
disclosure would be required under Item 404(a) of Regulation
S-K.
The Company requires that related person transactions be identified during its annual review process through completion of a directors
and officers questionnaire. If a transaction should occur, management and the Audit Committee would assess the related facts and only allow for transactions that are in the best interest of the stockholders. This includes current or proposed
transactions in which the Company was or is to be a participant, the amount involved exceeds $120,000, and in which any of the Companys executive officers, directors, or greater than five percent stockholders, or any members of their immediate
families has a direct or indirect material interest. There were no such transactions since the beginning of the Companys last fiscal year.
|
|
|
|
|
43
|
|
|
|
|
|
PROXY STATEMENT
|
|
Executive Compensation Audit
Committee Report
|
AUDIT COMMITTEE REPORT
Landauers Audit Committee has reviewed and discussed with management the Companys audited financial statements as of and for the fiscal year ended
September 30, 2016. Additionally, the Audit Committee has reviewed and discussed with management and the independent public accountants the Companys unaudited interim financial statements as of and for the end of each of the first three
fiscal quarters for the year ended September 30, 2016. These discussions occurred prior to the issuance of news releases reporting such quarterly results and prior to the filing of the related Quarterly Reports on Form
10-Q
with the SEC.
The Audit Committee discussed with BDO, the Companys independent registered public accounting firm, the
matters required to be discussed by Public Company Accounting Oversight Board (PCAOB) Auditing Standard No. 16.
The Audit Committee received and reviewed the
written disclosures and the letter from the independent registered public accounting firm required by applicable requirements of the PCAOB regarding the independent accountants communications with the Audit Committee concerning independence,
and discussed with the independent accountant the independent accountants independence. In addition, the Audit Committee considered whether the provision by the independent accounting firm of
non-audit
services is compatible with maintaining the independent accounting firms independence from management and the Company.
Based on the reviews and discussions
referred to above, the Audit Committee recommended to the Board of Directors that the audited financial statements referred to above for the fiscal year ended September 30, 2016 be included in the Companys Annual Report on Form
10-K
filed with the SEC.
Members of the Audit Committee:
David E. Meador, Chairman
Jeffrey A. Bailey
Robert J. Cronin
Teri G. Fontenot
Thomas M. White
|
|
|
44
|
|
|
|
|
|
|
|
Fees Billed by Independent Public
Accountants
|
|
PROXY STATEMENT
|
FEES BILLED BY INDEPENDENT PUBLIC ACCOUNTANTS
The following table presents fees for professional audit services rendered by our independent registered public accounting firm, BDO, for the fiscal years ended
September 30, 2016 and 2015:
|
|
|
|
|
|
|
|
|
|
|
Fiscal 2016
|
|
|
Fiscal 2015
|
|
Audit Fees
|
|
$
|
775,000
|
|
|
$
|
863,000
|
|
Audit-Related Fees
|
|
|
-
|
|
|
|
-
|
|
Tax Fees
|
|
|
-
|
|
|
|
-
|
|
All Other Fees
|
|
|
-
|
|
|
|
-
|
|
Audit Fees.
Audit fees include financial statement audits and reviews under statutory or regulatory requirements and services
that generally only the auditor reasonably can provide, including issuance of comfort letters and consents for debt and equity issuances and other attest services required by statute or regulation. The fiscal 2015 audit fees include a final billing
of $150,000 that was approved by the Audit Committee.
Audit-Related Fees
. Audit-related services consisted principally of audits of other entities related to
the Company and other attest projects. The Company did not incur any audit-related fees for fiscal 2016 or fiscal 2015.
Tax Fees
. Tax fees consist primarily
of tax compliance, tax planning and tax advice services. The Company did not incur any tax fees for fiscal 2016 or 2015.
All Other Fees.
All other fees
primarily reflect accounting research software license costs. The Company did not incur any other fees for fiscal 2016 or fiscal 2015.
Policy for Approval of Audit and Permitted
Non-audit
Services
All audit and
non-audit
services provided by the Companys principal accountants must be
pre-approved
by the Audit Committee. Accordingly, policies and procedures were established whereby the Audit Committee approves performance of all audit and
non-audit
services in advance. The Audit Committee approved 100% of the services described above. The Company believes that none of the time expended on BDOs engagement to audit the Companys financial statements for fiscal 2016 or 2015 was
attributable to work performed by persons other than BDOs full-time, permanent employees.
Change in Independent Auditor
As disclosed in the Current Report on Form
8-K
filed by the Company on June 1, 2015, the Audit Committee of
the Board of Directors appointed BDO to serve as the Companys independent registered public accounting firm for the fiscal year ending September 30, 2015 and dismissed PwC, both effective as of May 28, 2015.
PwCs reports on the consolidated financial statements of the Company and its subsidiaries as of and for the fiscal years ended September 30, 2014 and 2013
did not contain an adverse opinion or a disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope or accounting principles.
During
the fiscal years ended September 30, 2014 and 2013, and the subsequent interim period through May 28, 2015, the date of PwCs dismissal, there were no disagreements with PwC on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedure, which disagreements if not resolved to the satisfaction of PwC would have caused PwC to make reference thereto in their reports for such fiscal years. There were reportable
events (as that term is defined in Item 304(a)(1)(v) of Regulation
S-K),
as disclosed in the Companys Annual Reports on Form
10-K
for the fiscal years ended
September 30, 2014 and September 30, 2013 and Quarterly Reports on Form
10-Q
for the quarters ending March 31, 2014, June 30, 2014, December 31, 2014 and March 31, 2015, related
to the existence of material weaknesses in the Companys internal controls over financial reporting related to the following:
|
|
|
the Company did not maintain a sufficient complement of personnel with an appropriate level of knowledge of accounting, experience and training commensurate with its financial reporting requirements; additionally, the
Company did not consistently establish appropriate authorities and responsibilities in pursuit of financial reporting objectives;
|
|
|
|
|
|
45
|
|
|
|
|
|
PROXY STATEMENT
|
|
Fees Billed by Independent Public
Accountants
|
|
|
|
the Company did not design effective controls over the preparation and review of its Consolidated Statement of Cash Flows. Specifically, controls were not designed to evaluate whether transactions were properly
classified within the Consolidated Statement of Cash Flows, including nonrecurring transactions and adjustments pertaining to purchases of property, plant and equipment;
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the Company did not design and maintain processes and procedures that restrict access to key financial systems and records to appropriate users and evaluate whether appropriate segregation of duties was maintained.
Specifically, certain personnel had access to financial applications, programs and data beyond that needed to perform their individual job responsibilities without independent monitoring;
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the Company did not design and implement effective risk assessment with regard to its processes and procedures commensurate with its financial reporting requirements. Specifically, the Company did not design and
implement controls in response to risks of misstatement of the financial statements;
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the Company did not maintain processes and procedures that were adequately designed, documented and executed to support the accurate and timely reporting of revenue and the related receivables. Specifically, the Company
did not design and maintain effective controls to evaluate whether revenue was recognized in accordance with agreed-upon terms and conditions, including customer order entry, pricing, customer acceptance provisions, and recorded in the proper
period; and
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the Company did not design effective controls to evaluate whether cash and investments held by foreign affiliates were appropriately accounted for and classified.
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PwCs report on the effectiveness of the Companys internal control over financial reporting as of September 30, 2014, which was included in the
Companys 2014 Annual Report on Form
10-K,
contained an adverse opinion thereon. The Audit Committee discussed the material weaknesses in the Companys internal control over financial reporting with
PwC, and authorized PwC to fully respond to the inquiries of BDO, the successor independent registered public accounting firm, concerning such material weaknesses.
The Company furnished a copy of the above disclosures to PwC and requested that PwC provide a letter addressed to the SEC stating whether or not it agrees with the
statements made above. A copy of such letter was filed as Exhibit 16.1 to the Companys Current Report on Form
8-K
filed with the SEC on June 1, 2015.
During the Companys fiscal years ended September 30, 2014 and 2013, and the subsequent interim period through May 28, 2015, the date of BDOs
appointment, neither the Company, nor anyone acting on the Companys behalf, consulted with BDO regarding either (i) the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit
opinion that might be rendered with respect to the Companys consolidated financial statements, and neither were a written report or oral advice provided to the Company by BDO that BDO concluded was an important factor considered by the Company
in reaching a decision as to any accounting, auditing or financial reporting issue; or (ii) any matter that was either the subject of a disagreement (within the meaning of Item 304(a)(1)(iv) of Regulation
S-K
and the related instructions) or a reportable event (as that term is defined in Item 304(a)(1)(v) of Regulation
S-K).
Fiscal 2016 Update
As discussed in Item
9A of the Companys Annual Report on Form
10-K
for the fiscal year ended September 30, 2016, the material weaknesses described above have been remediated as of September 30, 2016 and our
internal control over financial reporting was effective as of September 30, 2016.
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46
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Ratification of Appointment of
Independent Registered Public
Accounting Firm
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PROXY STATEMENT
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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 BDO as the Companys independent registered public
accounting firm for the fiscal year ending September 30, 2017. BDO, 330 North Wabash Avenue, Chicago, Illinois, has served as independent public accountants for Landauer since fiscal 2015, and it will be recommended to the stockholders that
they ratify such appointment. The Audit Committee, comprised of Jeffrey A. Bailey, Robert J. Cronin, Teri G. Fontenot, David E. Meador and Thomas M. White, has approved this appointment. Representatives of BDO 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 BDO as Landauers independent registered public accounting firm for the fiscal year ending September 30, 2017, 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.
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The Board of Directors and the Audit Committee recommend a vote FOR the ratification of the appointment of BDO as the independent registered public accounting firm of Landauer for the
fiscal year ending September 30, 2017.
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47
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PROXY STATEMENT
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Non-Binding Advisory Vote to Approve
Executive Compensation
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NON-BINDING
ADVISORY VOTE TO APPROVE EXECUTIVE
COMPENSATION
As required by Section 14A of the Securities Exchange Act of 1934, the Company asks that you indicate your approval, on a
non-binding
basis, of a resolution relating to the compensation of its named executive officers as disclosed in this Proxy Statement under the heading Executive Compensation (commonly referred to as a
say-on-pay
vote). Since your vote on this resolution is a
non-binding
advisory vote, it will not be binding on the Board of
Directors. However, the Board of Directors and the Compensation Committee will review the voting results and take them into consideration when making future decisions regarding executive compensation. Consistent with the direction of our
stockholders, the
say-on-pay
vote is held on an annual basis until the next
non-binding
stockholder vote on the frequency with
which the
say-on-pay
vote should be held.
As disclosed in the CD&A, Landauer
designs its compensation program to maintain a performance and achievement-oriented environment throughout the Company, while ensuring the program does not create unnecessary or excessive risk. The goals of the Companys executive compensation
program are to:
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Attract and retain highly talented executives capable of delivering long-term success;
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Align the executives interests with the interests of Landauers stockholders; and
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Motivate executives to achieve the Companys short and long-term business objectives via a performance-driven incentive program through legal and ethical means.
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Consistent with these goals and also as disclosed in the CD&A, the Board has developed and approved an executive compensation philosophy to provide a framework for
the Companys executive compensation program. The key components of this philosophy are:
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Total compensation will be targeted to be competitive with the marketplace in which executive talent is recruited. Competitive is defined as around the
50
th
percentile using market compensation information. Actual pay can vary from the 50
th
percentile based on specific circumstances;
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The mix of compensation elements is designed to reflect strategic business needs;
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Incentive compensation is tied to short-term goals and long-term strategic plans in a balanced manner so that it supports the Companys efforts to achieve both its short-term and long-term goals;
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The degree of compensation at risk will positively correlate to responsibility level;
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Performance is assessed on both financial and
non-financial
goals using qualitative and quantitative metrics;
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Compensation is differentiated based on factors that are relevant to each form of compensation; and
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The executives interests should be aligned with those of the Companys stockholders through executive stock ownership.
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If a quorum is present, in order to approve the resolution below, 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 the resolution.
RESOLVED, that the Companys stockholders approve, on an advisory basis, the compensation of the named
executive officers, as disclosed in this Proxy Statement pursuant to the compensation disclosure rules of the Securities and Exchange Commission, which disclosure includes the Compensation Discussion and Analysis, the Summary Compensation Table and
the other related tables and disclosure.
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The Board of Directors recommends a vote FOR the approval of the resolution above relating to the compensation of the Companys named executive officers.
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48
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Non-Binding
Advisory Vote to Approve the Frequency of the Advisory Vote
on Executive Compensation
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PROXY STATEMENT
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NON-BINDING
ADVISORY VOTE TO APPROVE THE
FREQUENCY OF THE ADVISORY VOTE ON EXECUTIVE COMPENSATION
Section 14A of the Securities Exchange Act requires the Company to include in its proxy statement a
non-binding
advisory vote on executive compensation not less frequently than once every three years. Section 14A also requires the Company to include in its proxy statement this year a separate
non-binding
advisory vote regarding whether the
non-binding
advisory vote on executive compensation should be held every year, every two years or every three years.
While the Company will continue to monitor developments in this area, the Board of Directors believes that an annual frequency (1 YEAR) for the advisory vote
on executive compensation is the optimal interval for conducting and responding to an advisory vote on executive compensation. The Board of Directors believes that a 1 YEAR frequency provides the highest level of accountability and communication by
enabling stockholders to provide direct input into the Companys compensation philosophy, policies and practices as disclosed in the Companys proxy statement every year. The Company therefore asks that you indicate your support for the
non-binding
advisory vote on executive compensation to be held every 1 YEAR.
The proxy card provides shareholders with the
opportunity to choose among four options (holding the vote every one, two or three years, or abstaining).
Although this advisory vote on the frequency of the NEO
compensation vote is
non-binding,
the Board and the Compensation Committee will take into account the outcome of the vote when considering the frequency of future advisory votes on executive compensation.
For the reasons discussed above, we are asking our shareholders to vote for a 1 YEAR frequency when voting on this proposal at the 2017 Annual Meeting. This vote is an
advisory vote only, and therefore it will not bind the Corporation or the Board. However, the Board will consider the voting results as appropriate when adopting a policy on the frequency of future advisory votes on executive compensation. The
option of one year, two years or three years that receives the highest number of votes cast by shareholders will be considered by the Board as the shareholders recommendation as to the frequency of future advisory votes on executive
compensation. Nevertheless, the Board may decide that it is in the best interests of our shareholders and the Corporation to hold advisory votes on executive compensation more or less frequently than the option approved by our shareholders.
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The Board of Directors recommends a vote for 1 YEAR as the frequency of the
non-binding
advisory vote regarding executive compensation.
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49
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PROXY STATEMENT
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Stockholder
Proposals
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STOCKHOLDER PROPOSALS
It is currently anticipated that the 2018 Annual Meeting of Shareholders (2018 Annual Meeting) will be held on February 16, 2018. Proposals to be
presented by stockholders at the 2018 Annual Meeting must be received by Landauer not later than September 14, 2017 in order to be considered for inclusion in Landauers Proxy Statement and form of proxy relating to that meeting. Such proposals
may be included in next years Proxy Statement if they comply with certain rules and regulations of the SEC. In addition, under Landauers
by-laws,
nominations for directorships and stockholder
proposals to be acted on at the 2018 Annual Meeting only may be made pursuant to written notice received at Landauers principal office on or after October 19, 2017 and on or before November 18, 2017.
Landauers
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 a director, all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors
pursuant to Regulation 14A under the Securities Exchange Act of 1934, including such persons written consent to being named in the Proxy Statement as a nominee and to serving as a director if elected. Such notice must also set forth, as to the
stockholder making the nomination, (i) the name and record address of such stockholder, (ii) the class and number of shares of capital stock of the corporation that are beneficially owned by such stockholder, and (iii) certain other
descriptions of any agreement or arrangement with respect to the nomination between the stockholder and beneficial owner, if any. 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 Landauer, Inc., 2 Science Road, Glenwood, Illinois 60425-1586; Attention: Corporate Secretary.
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50
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Miscellaneous
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PROXY STATEMENT
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MISCELLANEOUS
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.
DANIEL J. FUJII
Vice President, Chief Financial Officer and Secretary
January 12, 2017
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51
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LANDAUER, INC.
2 SCIENCE ROAD
GLENWOOD, IL 60425-1586
VOTE BY INTERNET -
www.proxyvote.com
Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time, February 15, 2017. Have your
proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.
ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS
If you would
like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via
e-mail
or the Internet.
To sign up for
electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive
or access proxy materials electronically in future years.
VOTE BY PHONE -
1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M.
Eastern Time, February 15, 2017. Have your proxy card in hand when you call and then follow the instructions.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes
Way, Edgewood, NY 11717.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
E15999-TBD
KEEP
THIS PORTION FOR YOUR RECORDS
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
LANDAUER, INC.
The Board of Directors recommends that you vote FOR the election of the nominees for Director listed in Proposal 1, FOR Proposals 2 and 3,
and 1 YEAR for Proposal 4.
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For
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Against
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Abstain
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Nominees:
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1a. Jeffrey A. Bailey
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☐
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☐
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☐
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1b. William G. Dempsey
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☐
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☐
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☐
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1c. Teri G. Fontenot
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☐
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☐
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☐
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1d. Michael P. Kaminski
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☐
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☐
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☐
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1e. Michael T. Leatherman
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☐
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☐
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☐
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1f. David E. Meador
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☐
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☐
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☐
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1g. Frank B. Modruson
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☐
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☐
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☐
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1h. Jeffrey A. Strong
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☐
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☐
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☐
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For
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Against
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Abstain
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2.
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To ratify the appointment of BDO USA, LLP as the independent registered public accounting firm of the Company for the fiscal year ending September 30, 2017.
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☐
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☐
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☐
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3.
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To approve, by
non-binding
advisory vote, executive compensation.
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☐
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☐
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☐
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1 Year
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2 Years
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3 Years
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Abstain
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4.
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To approve, by
non-binding
advisory vote, the frequency of the advisory vote regarding executive compensation.
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☐
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☐
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☐
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☐
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NOTE:
Please sign as your name appears hereon. When shares are registered in the names
of two or more persons, whether as joint tenants, as community property or otherwise, both or all of such persons should sign. When signing as attorney, executor, administrator, trustee, guardian or another fiduciary capacity, please give full title
as such. If a corporation, please sign in full corporate name by President or other authorized person. If a partnership, please sign in partnership name by authorized person.
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Signature [PLEASE SIGN WITHIN BOX]
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Date
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Signature (Joint Owners)
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Date
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V.1.1
PROXY
LANDAUER, INC.
Upon
arrival, please present photo identification at the registration desk.
Shares Owned Through the Landauer, Inc.
401(k) Retirement Savings Plan
If shares of Landauer, Inc. Common Stock are issued to or held for the account of the undersigned under the Landauer, Inc.
401(k) Retirement Savings Plan, the undersigned hereby directs New York Life Trust Company, Trustee, to vote, as directed on this card, the shares of Landauer, Inc. Common Stock which are allocated to the undersigneds account, at the Annual
Meeting of Stockholders and at any adjournments thereof. In its discretion the Trustee is authorized to vote upon any other business that properly may come before the meeting. These instructions shall be held in the strictest confidence by the
Trustee. If no direction is made, the Trustee will vote allocated shares for which it receives no instructions in the same proportion as the allocated shares for which voting instructions have been received.
Your voting instructions must be received by the Trustee by 8:00 AM Eastern Time on Tuesday, February 14, 2017, to allow
sufficient time for processing.
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice and Proxy Statement and Form
10-K
are available at www.proxyvote.com.
E16000-TBD
PROXY
LANDAUER, INC.
ANNUAL
MEETING OF STOCKHOLDERS
Thursday, February 16, 2017
9:30 A.M. Local Time
Sidley Austin
LLP
One South Dearborn
Chicago, IL 60603
THIS PROXY
IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF LANDAUER, INC.
The undersigned hereby appoints William G.
Dempsey and Michael P. Kaminski, and each of them, the attorneys and proxies of the undersigned, with power of substitution to vote all the shares of Landauer, Inc. Common Stock which the undersigned is entitled to vote at the Annual Meeting of
Stockholders to be held on February 16, 2017, and at any adjournments thereof.
This proxy, when properly executed,
will be voted in the manner directed herein by the undersigned. If no direction is made, this proxy will be voted FOR the election of the nominees for Director listed in Proposal 1, FOR Proposals 2 and 3, and 1 YEAR for Proposal 4. Additionally, the
votes entitled to be cast by the undersigned will be cast in the discretion of the proxy holder on any other business as may properly come before the Annual Meeting.
Please complete, sign and date on reverse side and mail in enclosed envelope.
V.1.1
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