EMPLOYMENT AGREEMENT
Exhibit 10.24
This Employment Agreement (this “Agreement”) is entered into as of November 5, 2007 by
and between Xxxxxxx X. Xxxxxxxx (the “Executive”) and Mobile Storage Group, Inc., a
Delaware corporation (the “Company”).
WHEREAS, the Company desires the Executive to serve as its Vice President of Mergers and
Acquisitions, and the Executive desires to serve as the Vice President of Mergers and Acquisitions
of the Company for the term and upon the other conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the agreements and covenants contained herein, the
Executive and the Company hereby agree as follows:
ARTICLE 1
Employment
Employment
Section 1.1. Position; Term; Condition Precedent; Responsibilities. The Company shall
employ the Executive as its Vice President of Mergers and Acquisitions for a term commencing on the
date of this Agreement (the “Commencement Date”) and ending on the date this Agreement is
terminated pursuant to Article 3. The term of employment as prescribed in this Section 1.1
is hereinafter called the “Employment Period.” Subject to the powers, authorities and
responsibilities vested in the Board of Directors (the “Board”) of the Company and in duly
constituted committees of the Board under the Delaware General Corporation Law and the Company’s
Certificate of Incorporation and Bylaws, the Executive shall have the responsibilities assigned to
him by the President and Chief Executive Officer of the Company, including the execution of the
Company’s business plans, and shall report to the President and Chief Executive Officer. The
Executive shall also perform such other executive and administrative duties as the Executive may
reasonably be expected to be capable of performing on behalf of the Company and its subsidiaries,
as may from time to time be authorized or requested by the President. The Executive agrees to be
employed by the Company in all such capacities for the Employment Period, subject to all the
covenants and conditions hereinafter set forth.
Section 1.2. Faithful Performance. During the Employment Period, the Executive shall
perform faithfully the duties assigned to him hereunder to the best of his abilities and devote
substantially all of his business time and attention to the transaction of the business of the
Company and its subsidiaries. The Executive covenants, warrants and represents to the Company that
he shall: (i) devote his best efforts to the fulfillment of his employment obligations; (ii)
exercise the highest degree of loyalty and the highest ethical standards of conduct in the
performance of his duties; and (iii) do nothing which the Executive knows or should know will harm,
in any way, the business or reputation of the Company or any of its subsidiaries.
ARTICLE 2
Compensation
Compensation
Section 2.1. Basic Compensation. As compensation for his services hereunder, the
Company shall pay to the Executive during the Employment Period an annual salary of $170,000 (the
“Base Salary”) and $3,000 (the “Car Allowance”), payable in installments in
accordance with the Company’s normal payment schedule for senior management of the Company and
subject to payroll deductions as may be necessary or customary in respect of the Company’s salaried
employees. The Executive’s annual salary and Car Allowance in effect from time to time under this
Section 2.1 is hereinafter called his “Basic Compensation”. Such Basic
Compensation shall be determined on a pro rata basis for any period described in
Article 3 which is not equal to one year.
Section 2.2. Discretionary Incentive Compensation. For 2007 and thereafter Executive
shall be eligible for bonuses based upon the achievement of certain targeted financial results and
operational and strategic objectives as determined by the Compensation Committee as part of the
2007 annual budget and subsequent budgets. Such targets and objectives shall be established in the
Company’s annual budget process, and any discretionary bonus payable hereunder shall be payable
within 30 days after finalization of the Company’s audited financial statements for the immediately
preceding fiscal year, subject to final Board approval. Any discretionary bonus paid to Executive
hereunder shall be referred to herein as a “Discretionary Bonus.”
Section 2.3. Stock Options. The Executive previously received a grant of stock
options pursuant to that certain Grant of Non-Qualified Stock Options dated August 1, 2006 pursuant
to the MSG WC Holdings Corp. 2006 Stock Incentive Plan.
Section 2.4. Other Employee Benefits. The Executive shall be entitled to participate
in all employee benefit plans, including group health care plans, disability plans and life
insurance plans of the Company, to take up to three weeks of time off for vacation and to receive
all such fringe benefits (including 401(k) savings plan) as are from time to time made generally
available to the senior management of the Company. The Company shall pay all costs of the
participation of Executive and the immediately family of Executive in the group health care, vision
and dental plans of the Company, except for payment of co-payments and deductibles which shall be
paid by Executive.
Section 2.5. Expense Reimbursements. The Company shall reimburse the Executive for
all proper expenses reasonably incurred by him in the performance of his duties hereunder in
accordance with the policies and procedures established by the Board.
ARTICLE 3
Termination of Employment
Termination of Employment
Section 3.1. Events of Termination.
(a) In the event during the Employment Period there should occur any of the following (as
determined by the Board): (i) the “Disability” (as hereinafter defined) of the Executive,
(ii) “Cause” (as hereinafter defined) of the Executive or (iii) the breach by the Executive
of the terms of Article 4 of this Agreement, the Board may elect to terminate the rights and
obligations of the parties hereunder by written notice to the Executive, except as otherwise
provided in this Section 3.1. In the event the Board exercises its election to terminate
the Executive pursuant to this Section 3.1, the Employment Period shall terminate effective
with such notice, and the Executive shall be entitled to receive any accrued but unpaid amounts
under Section 2.1 and any incurred but unreimbursed expenses under Section 2.5, in
each case through the effective date of such termination, less standard withholdings for tax and
social security purposes. Except as set forth in Section 3.1(b) and as otherwise required
under any applicable benefit plan or statute, the Executive shall not be entitled to receive any
other amount under this Agreement.
2
(b) In the case of (i) termination of this Agreement pursuant to Section 3.1(a)(i),
(ii) termination of this Agreement without Cause or (iii) termination pursuant to Section
3.3 for “Good Reason”, the Executive shall be entitled to: (A) participate in the
insurance benefits described in Section 2.4 for a period of 12 months from the date of the
termination of this Agreement (the “Termination Date”); provided, however,
that the Executive’s right to participate in insurance benefits shall terminate in the event the
Executive obtains new employment and has the ability to obtain comparable insurance benefits
through such new employment and (B) receive noncompetition payments equal to the Basic
Compensation, as determined pursuant to Section 2.1, for a period of 12 months after the
Termination Date in consideration for Executive’s compliance with covenants set forth in Section
4.1. In each case such amounts shall be payable in accordance with the Company’s payroll
procedures for senior management and as if the Executive’s employment had continued for such
period.
Section 3.2. Death. In the event of the death of the Executive during the Employment
Period, this Agreement shall be deemed immediately terminated and his Designated Successors shall
be entitled to: (A) receive any accrued and unpaid compensation under Section 2.1, (B)
receive reimbursement for any unreimbursed expenses under Section 2.5, and (C) receive the
Discretionary Bonus, if any, as determined pursuant to Section 2.2, provided that the
amount of such Discretionary Bonus shall be prorated to the date of termination, in each case less
standard withholdings for tax and social security purposes. In each case, such amounts shall be
payable in accordance with the Company’s payroll procedures for senior management and as if the
Executive’s employment had continued for such period. In addition, family members of the Executive
who were participating in any of the insurance benefits described in Section 2.4 on the
date of the termination of this Agreement shall continue to participate in such insurance benefits
for a period commencing as of the termination of this Agreement and ending six months from the
termination of this Agreement.
Section 3.3. Voluntary Termination by Employee. If the Executive chooses to terminate
his employment with the Company, the Executive shall provide written notice to such effect to the
Company’s Board, in which case the Employment Period shall terminate effective with such notice,
and the Executive shall be entitled to receive any accrued but unpaid amounts under Section
2.1 and any incurred but unreimbursed expenses under Section 2.5 less standard
withholdings for tax and social security purposes, in each case through the effective date of such
termination and, except as required under any applicable benefit plan or statute, the Executive
shall not be entitled to receive any other amount under this Agreement. A termination by the
Executive of his employment with the Company will be considered to be for “Good Reason” if
it follows, within a reasonable period of time thereafter, (x) a material breach of the Company’s
obligations under this Agreement, or (y) the President and Chief Executive Officer determines in
his reasonable discretion that the Executive terminated such employment for “Good Reason” under the
circumstances then prevailing.
3
Section 3.4. Definitions of Certain Terms.
(a) “Cause” used in connection with the termination of employment of Executive shall
mean a termination due to a finding by the Board in good faith that such Executive has (i) failed
to substantially perform Executive’s duties (as reasonably imposed by the Company) (other than
failure resulting from Executive’s Disability), persisting for a reasonable period following the
delivery to Executive of written notice specifying the details of any alleged failure to perform;
(ii) violated or failed to comply in any material respect with the Company’s published rules,
regulations or policies, as currently in effect or as may be adopted from time to time; (iii)
breached this Agreement in any material respect; (iv) been convicted of any felony offense or a
misdemeanor offense involving fraud, theft or dishonesty at any time; or (v) been incarcerated
during the term of this Agreement.
(b) “Designated Successors” shall mean such person or persons or the executors,
administrators or other legal representatives of such person or persons (and in such order of
priority) as the Executive may have designated in a written instrument filed with the Secretary of
the Company.
(c) “Disability” shall mean the inability of Executive to substantially render to the
Company the services required by the Company under this Agreement for more than 60 days out of any
consecutive 120 day period because of mental or physical illness or incapacity, as determined in
good faith by the Board. The date of such Disability shall be on the last day of such 60 day
period. Disability shall also mean the development of any illness which is likely to result in
either death or Disability, as determined in good faith by the Board.
ARTICLE 4
Non-Competition; Confidential Information
Non-Competition; Confidential Information
Section 4.1 Non-Competition.
(a) From the date hereof until the termination of the Employment Period (subject to extention
as set forth below, the “Non-Competition Period”), the Executive:
(i) shall not engage, directly or indirectly, in any activities whether as employer,
proprietor, partner, shareholder (other than the holder of less than 5% of the stock of a
corporation, the securities of which are traded on a national securities exchange or in the
over-the-counter market), director, officer, employee or otherwise, in competition within the
United States, England and Canada with the Company or any of its affiliates;
(ii) shall not solicit, directly or indirectly, any person who is a customer or supplier of
the Company, any of its affiliates or Welsh, Carson, Xxxxxxxx & Xxxxx X, L.P. or its affiliates (collectively, “Xxxxx Xxxxxx”) for the purpose of acquiring,
marketing, leasing or selling storage containers, trailers or mobile offices (the “Company
Business”); and
4
(iii) shall not induce or actively attempt to persuade any employee of the Company, any of its
affiliates or Xxxxx Xxxxxx to terminate his employment relationship in order to enter into any
competitive employment.
(b) Except as required by law, the Executive shall not, at any time during the Non-Competition
Period or thereafter, make use of any confidential information of the Company, Xxxxx Xxxxxx or any
of their respective affiliates, nor divulge any trade secrets or proprietary or confidential
information of the Company, Xxxxx Xxxxxx or any of their respective affiliates (including, without
limitation, information relating to customers, suppliers, contracts, business plans and
developments, discoveries, processes, products, systems, know-how, books and records), except to
the extent that such information becomes a matter of public record (other than as a result of
disclosure by the Executive), is published in a newspaper, magazine or other periodical available
to the general public or as Xxxxx Xxxxxx may so authorize in writing. When the Executive shall
cease to be employed by the Company, the Executive shall surrender to the Company or Xxxxx Xxxxxx
all records and other documents obtained by him or entrusted to him during the course of his
employment hereunder (together with all copies thereof) which pertain to the business of the
Company or Xxxxx Xxxxxx or which were paid for by the Company other than the Executive’s
counterparts of this Agreement and employment-related documents referred to herein.
(c) The covenants contained in clauses (i) and (ii) of Section 4.1(a) shall apply
within all territories in which the Company is actively engaged in the conduct of business during
the Non-Competition Period.
(e) It is the desire and intent of the parties that the provisions of Sections 4.1(a)
and 4.1(b) shall be enforced to the fullest extent permissible under the law and public
policies applied in each jurisdiction in which enforcement is sought. Accordingly, if any
particular provision of Sections 4.1(a) or 4.1(b) shall be adjudicated to be
invalid or unenforceable, such provision shall be deemed amended to delete therefrom the portion
thus adjudicated to be invalid or unenforceable, such deletion to apply only with respect to the
operation of such provision in the particular jurisdiction in which such adjudication is made. In
addition, should any court determine that the provisions of Sections 4.1(a) or
4.1(b) shall be unenforceable with respect to scope, duration or geographic area, such
court shall be empowered to substitute, to the extent enforceable, provisions similar hereto or
other provisions so as to provide to the Company and Xxxxx Xxxxxx, to the fullest extent permitted
by applicable law, the benefits intended by Sections 4.1(a) and 4.1(b).
(f) The covenants contained in Section 4.1(b) shall survive the conclusion of the
Executive’s employment by the Company and/or his service as an officer of the Company.
(g) If, at any time, the Executive sells or transfers any securities of the Company to the
Company or to any then-current stockholder of the Company, a subsequent Non-Competition Period
shall begin on the effective date of any such sale or transfer and expire on the first anniversary of such effective date; provided, however, that such subsequent Non-Competition
Periods shall not extend beyond the tenth (10th) anniversary of the date hereof. Each and every
provision of this Agreement applicable to the Executive and the Company during the original
Non-Competition Period shall apply with equal force and effect to the Executive and the Company
during such subsequent Non-Competition Period and any reference in this Agreement to the
“Non-Competition Period” shall be deemed to include such subsequent Non-Competition Period.
5
(h) In the event Executive violates any provision of this Agreement, the running of the time
period of such provisions so violated shall be automatically suspended upon the date of such
violation and shall resume on the date such violation ceases and all appeals, if any, are resolved.
(i) The Executive acknowledges and agrees that the covenants, obligations and agreements of
the Executive contained herein relate to special, unique and extraordinary matters and that a
violation of any of the terms of such covenants, obligations or agreements will cause the Company
and its successors irreparable injury for which adequate remedies are not available at law. In the
event of a breach or threatened breach by Executive of any provision of this Agreement, the Company
and its successors, without proving actual damages, shall be entitled to an injunction (without the
requirement to post bond) restraining Executive from (a) soliciting or interfering with employees,
consultants, independent contractors, customers or suppliers of the Company, its affiliates or
their respective successors, (b) disclosing, in whole or in part, the private, secret and
confidential information described herein, or from rendering any services to any person, firm,
corporation, association or other entity to whom such information has been disclosed, or is
threatened to be disclosed, (c) engaging, participating or otherwise being connected with any
arrangement in competition with the Company’s Business described in Section 4.1 or (d)
otherwise violating the provisions of this Agreement. Nothing herein contained shall be construed
as prohibiting the Company or its successors from pursuing any other remedies available to it or
them for such breach or threatened breach, including, without limitation, the recovery of damages
from Executive.
(j) The Executive acknowledges and agrees that he has and will have a prominent role in the
management, and the development of the goodwill, of the Company and its affiliates and has and will
establish and develop relations and contacts with the principal customers and suppliers of the
Company and its affiliates in the United States and the rest of the world, if any, all of which
constitute valuable goodwill of, and could be used by the Executive to compete unfairly with, the
Company and its affiliates and that (i) the Executive has obtained confidential and proprietary
information and trade secrets concerning the business and operations of the Company and its
affiliates in the United States and the rest of the world that could be used to compete unfairly
with the Company and its affiliates, (ii) the covenants and restrictions contained herein are
intended to protect the legitimate interests of the Company and its affiliates in their respective
goodwill, trade secrets and other confidential and proprietary information and (iii) the Executive
desires to be bound by such covenants and restrictions.
(k) The Executive represents that his economic means and circumstances are such that the
provisions of this Agreement, including the restrictive covenants herein, will not prevent him from
providing for himself and his family on a basis satisfactory to him and them.
6
(l) If the Executive raises any question as to the enforceability of any part or terms of this
Agreement, including, without limitation, the restrictive covenants contained herein, the Executive
agrees that he will comply fully with this Agreement unless and until the entry of an award to the
contrary.
ARTICLE 5
Miscellaneous
Miscellaneous
Section 5.1. Notices. Any notice or request required or permitted to be given
hereunder shall be sufficient if in writing and delivered personally or sent by registered or
certified mail, return receipt requested, as follows: if to the Executive, to his address as set
forth in the records of the Company, and if to the Company, to the Company’s address hereinabove
set forth, or to any other address designated by either party by notice similarly given. Such
notice shall be deemed to have been given upon the personal delivery or such mailing thereof, as
the case may be.
Section 5.2. Authority: No Conflict. The Executive represents and warrants to the
Company that he has full right and authority to execute and deliver this Agreement and to comply
with the terms and provisions hereof and that the execution and delivery of this Agreement and
compliance with the terms and provisions hereof by the Executive will not conflict with or result
in a breach of the terms, conditions or provisions of any agreement, restriction or obligation by
which the Executive is bound.
Section 5.3. Assignment and Succession. The rights and obligations of the Company
under this Agreement shall inure to the benefit of and be binding upon its respective successors
and assigns, and the Executive’s rights and obligations hereunder shall inure to the benefit of and
be binding upon his Designated Successors. The Executive may not assign any obligations or
responsibilities he has under this Agreement.
Section 5.4. Headings. The Article, Section, paragraph and subparagraph headings are
for convenience of reference only and shall not define or limit the provisions hereof.
Section 5.5. Tax Withholding. The Company may withhold from any amounts payable
under this Agreement, including, without limitation, any Discretionary Bonus paid hereunder, all
Federal, state, city or other taxes as may be required pursuant to any law, regulation or ruling.
Section 5.6. Applicable Law. This Agreement shall at all times be governed by and
construed, interpreted and enforced in accordance with the internal laws (as opposed to conflict of
laws provisions) of the State of Illinois.
Section 5.7. Waiver. No waiver of any right or remedy of either party hereto under
this Agreement shall be effective unless in a writing, specifying such waiver, executed by such
party. A waiver by either party hereto of any of its rights or remedies under this Agreement on
any occasion shall not be a bar to the exercise of the same right or remedy on any subsequent
occasion or of any other right or remedy at any time.
7
Section 5.8. Amendment or Modification. This Agreement may be amended, altered, or
modified only by a writing, specifying such amendment, alteration or modification, executed by all
of the parties.
Section 5.9. Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original, but all of which shall constitute one and the same instrument.
Section 5.10. Entire Agreement. This Agreement constitutes the entire Agreement
between the parties regarding the subject matter hereof, and supersedes all prior or
contemporaneous negotiations, understandings or agreements of the parties, whether written or oral,
with respect to such subject matter.
8
IN WITNESS WHEREOF, the Company has caused this Agreement to be signed by its respective duly
authorized officer and the Executive has signed this Agreement as of the day and year first above
written.
| EXECUTIVE | ||||
| Xxxxxxx X. Xxxxxxxx | ||||
| COMPANY | ||||
| By: | ||||
| Xxxxxxx X. Xxxxxxxx | ||||
| President & Chief Executive Officer | ||||
9
