EMPLOYMENT AGREEMENT
Exhibit 10.1
EXECUTION COPY
THIS AGREEMENT (this “Agreement”) is made and entered into as of October 15, 2008, by
and between MOBILE MINI, INC., a Delaware corporation (the “Company”), and XXXX X. XXXX
(the “Executive”). The Company and the Executive are herein collectively referred to as
the “Parties”.
RECITALS
WHEREAS, the Company and the Executive desire to enter into this Agreement to memorialize the
terms and conditions pursuant to which the Company has engaged the Executive to serve in certain
capacities as an officer of the Company commencing November 4, 2008.
NOW, THEREFORE, in consideration of the premises and of the mutual covenants herein contained,
the Parties hereby represent, covenant and agree as follows:
AGREEMENT
1. Employment. The Company hereby agrees to employ the Executive and the Executive
hereby agrees to remain in the employ of the Company upon the terms and conditions herein set
forth.
2. Term. The term of the Executive’s employment under this Agreement shall commence
(and the Company’s obligations, including in respect of payment of salary, benefits and other
amounts, hereunder shall commence) on November 4, 2008 (the “Commencement Date”) and,
subject to termination under Section 5, expiring on December 31, 2009 (the “Employment
Period”). Notwithstanding the previous sentence, this Agreement, the Employment Period and the
employment of the Executive hereunder shall be automatically extended for successive one year
periods upon the terms and conditions set forth herein, with the first such automatic extension
occurring on December 30, 2009, and on each December 30th thereafter, unless either party to this
Agreement gives the other party written notice (in accordance with Section 14) within the ninety
(90) day period prior to December 30, 2009 (or the relevant December 30th thereafter, as
applicable) of such party’s intention that the Employment Period shall expire at the close of
business on the last day of the then current Employment Period, whereupon, unless earlier
terminated in accordance with the provisions of this Agreement, the Employment Period shall expire
and this Agreement shall cease to have any further force or effect in respect of any period
thereafter, except as expressly provided herein. For purposes of this Agreement, any reference to
the “term” of this Agreement shall include the original term and any extension thereof.
3. Duties of the Executive.
(a) During the Employment Period, the Executive shall serve as an executive vice president
and, commencing on the day following the date that the Company’s report on Form 10-Q for the
quarter ended September 30, 2008 is filed with the Securities and Exchange
Commission, the Chief Financial Officer of the Company and the Executive agrees to perform such
duties and responsibilities customarily associated with the position, including without limitation
the duties and responsibilities not inconsistent with such position as may be assigned from time to
time by the Company’s President and/or Chief Executive Officer.
(b) During the Employment Period and subject to vacation and other time off, the Executive
shall devote his normal working time and attention to the business and affairs of the Company, and,
subject to the terms of this Section 3(b) with respect to service on the board of directors of
other entities, will not render services to any other business (other than non-profit and
charitable organizations, if such services do not interfere with his performance of his duties and
responsibilities hereunder) without the prior written approval of the President of the Company.
During his employment hereunder, the Executive shall not, directly or indirectly, engage or
participate in any business that is competitive in any manner with the business of the Company.
Subject to obtaining the prior express consent or approval of the President of the Company, the
Executive may serve as a member of the board of directors of other entities (other than the board
of directors of a business that is competitive with the business of the Company), provided that
such service shall not interfere with the Executive’s performance of his duties hereunder. The
Executive shall request the consent or approval of the Company’s President of his intention to
serve on the board of directors (or similar governing body) of any company or other entity prior to
commencing such service. Nothing in this Agreement shall limit the Executive’s right to own up to
five percent (5%) of the outstanding debt or equity securities of any business organization.
4. Compensation.
(a) Base Salary and Bonus. During the Employment Period, the Company agrees to pay
the Executive a base salary at the rate of $341,250 per annum for fiscal year 2008 and such greater
amount as the Board or the Compensation Committee of the Board (the “Compensation
Committee”) may from time to time determine (hereinafter referred to as the “Base
Salary”). Executive’s Base Salary shall be reviewed periodically in conjunction with the
Compensation Committee’s review of executive officer salaries generally. Such Base Salary shall be
payable in accordance with the Company’s customary practices applicable to its senior executives,
but no less frequently than monthly. In addition to the Base Salary, Executive shall be eligible
for an incentive bonus subject to the terms and conditions of the Company’s incentive bonus plan as
in effect from time to time for senior management and as the Compensation Committee in its
discretion may determine (the “Bonus”). Notwithstanding the foregoing, in respect of the
Company’s fiscal year ending December 31, 2009, subject to the conditions set forth hereinafter,
the Executive shall be paid a bonus (the “2009 Bonus”) in the amount of no less than 25% of
his Base Salary for such year. The 2009 Bonus shall be in lieu of and not in addition to any other
cash bonus payable to the Executive in respect of such fiscal year, except as the Committee in its
absolute discretion may determine. The 2009 Bonus shall be payable only if the Executive is
employed by the Company on December 31, 2009, unless the Executive’s employment was terminated
prior to December 31, 2009 by the Company without Cause or by the Executive for Good Reason, in
which case the 2009 Bonus shall be paid as if the Executive had remained employed through December
31, 2009. The 2009 Bonus, if it is payable, shall be
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paid by the Company to the Executive after December 31, 2009, but on or before January 31, 2010.
(b) Participation in Equity-Based Plans. During the Employment Period, the Executive
shall be entitled to participate in all equity-based employee benefit plans maintained from time to
time during the term of this Agreement (including, without limitation, any such plans as may
hereafter established by the Company) for the purpose of providing compensation and/or benefits to
executives of the Company including, but not limited to, the Company’s 2006 Equity Incentive Plan
(or any successor plan or plans) and other bonus or incentive compensation plans. The parties
anticipate that in respect of fiscal 2009, and subject to action at the discretion of the
Compensation Committee and the Company’s and the Executive’s performance during relevant periods,
the Executive’s level of participation in (and the value of awards to the Executive under) the
Company’s 2006 Equity Incentive Plan shall approximate the level (and value) of his predecessor’s
participation therein in respect of 2008 plus such percentage increase as the Compensation
Committee may approve in respect of overall participation levels by executive officers generally.
(c) Employee Benefits. During the Employment Period, the Executive shall be entitled
to participate in (including coverage for the Executive’s eligible dependents under the Company’s
medical, dental and similar welfare benefit plans as applicable) all employee benefit plans,
practices and programs maintained by the Company and made available to employees generally
including, without limitation, all retirement, profit sharing, savings, 401(k), medical,
hospitalization, disability, dental, life or travel accident insurance benefit plans, as well as
any plans, practices and programs maintained generally for senior management including, without
limitation, any deferred compensation, supplemental medical or life insurance plans. The
Executive’s participation in such plans, practices and programs shall be on the same basis and
terms as are applicable to senior executives of the Company generally.
(d) Other Benefits. The Company shall pay or reimburse the Executive for reasonable
and necessary expenses incurred by the Executive in connection with his duties on behalf of the
Company in accordance with the general policies of the Company.
(e) Vacation and Sick Leave. The Executive shall be entitled to annual vacation in
accordance with the policies as periodically established by the Board for other senior executives
of the Company. The Executive is also entitled to sick leave (without loss of pay) in accordance
with the Company’s policies as in effect from time to time.
(f) Automobile Allowance. During the Employment Period, the Company shall pay the
Executive a car allowance of $600 per month, or such greater amount as is approved from time to
time by the Compensation Committee.
(g) Reimbursement of Moving Costs; Relocation and Commuting Allowances. The Company
shall pay or reimburse the Executive for reasonable and customary expenses of moving actually
incurred by the Executive in connection with his relocation from New York to the Phoenix
metropolitan area, which amount shall be “grossed up” to take into effect any tax liability
incurred by the Executive in connection therewith. Commencing
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November 4, 2008, the Company shall pay the Executive $1,000 per month for six months to offset a
portion of the Executive’s commuting expenses and for three months will pay the Executive a hotel
allowance for lodging in the Phoenix metropolitan area at a standard business hotel as the
Executive shall reasonably select. If the Executive is terminated under Section 5(b) hereof or the
Executive voluntarily resigns from the Company prior to December 31, 2009, he shall promptly
reimburse the Company for amounts (including the moving expenses gross up amount), paid under this
subsection (g).
(h) Restricted Stock Award. On the Commencement Date, the Company shall award the
Executive shares of restricted stock having a fair market value of $750,000 (the “Restricted
Stock”). The Restricted Stock shall be granted under the Mobile Mini, Inc. 2006 Equity
Incentive Plan, as amended to date (the “Plan”), and the Restricted Shares shall be subject
to the terms and provisions of the Plan and the provisions set forth in a Restricted Stock
Agreement substantially in the form of Exhibit C attached hereto; provided, however, that in the
event that there is any conflict between the terms of the Plan and the form of Restricted Stock
Agreement, on the one hand, and the terms of this Agreement, on the other hand, as the same pertain
to the Restricted Shares, the terms set forth in this Agreement shall prevail. The shares of
Restricted Stock shall vest in three equal annual installments on November 4 of each of the years
2009, 2010 and 2011, subject to the Executive being an employee of the Company on each such
scheduled vesting date. As used in this clause (h), the “fair market value” of the Restricted
Stock shall be the closing price of the Company’s common stock on November 4, 2008, as reported by
The NASDAQ Stock Market, Inc. If the number of Restricted Shares would result in the issuance of a
fraction of a share, no fractional share shall be issued and instead the number of Restricted
Shares shall be increased to the next whole number.
5. Termination. In addition to the expiration of the term of this Agreement pursuant
to Section 2, the Executive’s employment hereunder may be terminated under the following
circumstances:
(a) Disability. The Company may terminate the Executive’s employment upon 30 days
written notice after having established the Executive’s Disability; provided that the
Company exercises reasonable efforts to accommodate such disability in accordance with the
Americans with Disabilities Act and any state or local law. For purposes of this Agreement,
“Disability” means a physical or mental infirmity which precludes the Executive from
performing substantially all of his duties for a period of ninety (90) consecutive days. A
determination of Disability shall be made by a physician satisfactory to both the Executive and the
Company, which physician’s determination as to Disability shall be made within ten (10) days of the
request therefor (unless the Executive’s condition precludes such a determination) and shall be
binding on all parties; provided, however, that if the Executive and the Company do not agree on a
physician, the Executive and the Company shall each select a physician and these two together shall
select a third physician, which third physician’s determination as to Disability shall be binding
on all parties. The Executive shall be entitled to the compensation and benefits provided for
under this Agreement for any period during the term of this Agreement and prior to termination in
accordance herewith relating to Executive’s Disability. Notwithstanding anything contained in this
Agreement to the contrary, until the Termination Date specified in a Notice of Termination (as each
term is hereinafter defined) relating to the Executive’s Disability, the
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Executive shall be entitled to return to his position with the Company as set forth in this
Agreement in which event no Disability of the Executive will be deemed to have occurred.
(b) Cause. The Company may terminate the Executive’s employment by written notice for
“Cause.” The Company shall be deemed to have terminated the Executive’s employment for
“Cause” in the event that the Executive’s employment is terminated for any of the following
reasons: (i) the commission of an act of fraud or intentional misrepresentation or an act of
embezzlement, misappropriation or conversion of assets or opportunities of the Company; (ii)
dishonesty or willful misconduct in the performance of duties; or (iii) willful violation of any
law, rule or regulation in connection with the performance of duties (other than traffic violations
or similar minor offenses); provided, that no act or failure to act shall be considered willful
unless done or omitted to be done in bad faith and without reasonable belief that the action or
omission was in the best interests of the Company. Notwithstanding anything contained in this
Agreement to the contrary, no failure to perform by the Executive after the Notice of Termination
is given by the Company shall constitute Cause for purposes of this Agreement.
(c) Good Reason. The Executive may terminate his employment for “Good Reason”,
provided that he gives the Company notice of such Good Reason within a reasonable period (but,
except as provided below, in no event more than 90 days) after he has knowledge of the events
giving rise to the Good Reason. For purposes of this Agreement, “Good Reason” shall mean,
without the Executive’s consent:
(i) a material diminution in Executive’s authority, duties, or responsibilities;
(ii) a material reduction in Executive’s Base Salary (provided, that an “across the
board” reduction in base salary and/or bonus opportunities affecting all of the senior executive
employees of Company (excluding the CEO for this purpose) on a substantially similar basis shall
not constitute “Good Reason”);
(iii) any material breach by the Company of any provision of this Agreement or any other
material written agreement with the Executive;
(iv) any purported termination of the Executive’s employment for Cause by the Company which
does not comply with the terms of Section 5 of this Agreement; or
(v) any material change in the geographic location at which the Executive must perform the
services hereunder outside of the greater Phoenix metropolitan area, which change is made without
the Executive’s consent and which lasts for a period in excess of sixty (60) days.
The Executive’s right to terminate his employment pursuant this Section 5(c) shall not be
affected by his incapacity due to physical or mental illness if such incapacity occurs after the
event or condition giving rise to the Executive’s right to terminate his employment pursuant to
this Section 5(c).
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Notwithstanding anything to the contrary stated above in this Section 5(c) or elsewhere in
this Agreement, the Executive will only be treated as having Good Reason to terminate his
employment if the Company has been given a period of at least thirty (30) days during which it can
remedy any of the conditions set forth above in clauses (i) through (v) and, during such period,
the Company fails to remedy such condition.
(d) Voluntary Termination. The Executive may voluntarily terminate his employment
hereunder at any time upon ninety (90) days prior notice to the Company.
(e) Termination by Company Without Cause. The Company may terminate the Executive’s
employment hereunder at any time and for any reason by a written notice, and such termination shall
be effective at the end of the 90th day following the Company’s giving of such notice.
(f) Change in Control; Accelerated Vesting of Equity-Based Awards. In certain
circumstances, termination may occur following a Change in Control (as contemplated in Section 6
hereof). For purposes of this Agreement, a “Change in Control” shall mean any of the
following events:
(i) an acquisition (other than directly from the Company) of any voting securities of the
Company (the “Voting Securities”) by any “Person” (as the term person is used for
purposes of Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”)), immediately after which such Person has “Beneficial Ownership”
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of thirty-five percent (35%)
or more of the then outstanding Shares of the combined voting power of the Company’s then
outstanding Voting Securities; provided, however, in determining whether a Change in Control has
occurred, Shares or Voting Securities which are acquired in a “Non-Control Acquisition” (as
hereinafter defined) shall not constitute an acquisition which would cause a Change in Control. A
“Non-Control Acquisition” shall mean an acquisition by (A) an employee benefit plan (or a
trust forming a party thereof) maintained by (1) the Company or (2) any corporation or other Person
of which all of its voting power or its voting equity securities or equity interest is owned,
directly or indirectly, by the Company prior to such acquisition (for purposes of this definition,
a “Subsidiary”, (B) the Company or its Subsidiaries, or (C) any Person in connection with a
“Non-Control Transaction” (as hereinafter defined).
(ii) the individuals who, as of the date of this Agreement are members of the Board (the
“Incumbent Board”), cease for any reason to constitute at least two-thirds of the members
of the Board of Directors of the Company; provided, however, that if the election, or nomination
for election by the Company’s common stockholders, of any new director was approved by a vote of at
least two-thirds of the Incumbent Board, such new director shall, for purposes of this Agreement,
be considered as a member of the Incumbent Board; provided, further, however, that no individual
shall be considered a member of the Incumbent Board if such individual initially assumed officer as
a result of either an actual or threatened “Election Contest” (as described in Rule 14a-11
promulgated under the Exchange Act) or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board (a
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“Proxy Contest”) including by reason of any agreement intended to avoid or settle any
Election Contest or Proxy Contest; or
(iii) the consummation of:
(A) a merger, consolidation or reorganization involving the Company, unless such merger,
consolidation or reorganization is a “Non-Control Transaction.” A “Non-Control
Transaction” shall mean a merger consolidation or reorganization of the Company where (1) the
stockholders of the Company, immediately before such merger, consolidation or reorganization, own
directly or indirectly immediately following such merger, consolidation or reorganization, at
least fifty-one percent (51%) of the combined voting power of the outstanding voting securities of
the corporation resulting from such merger or consolidation or reorganization (the “Surviving
Corporation”) in substantially the same proportion as their ownership of the Voting Securities
immediately before such merger, consolidation or reorganization, (2) the individuals who were
members of the Incumbent Board immediately prior to the execution of the agreement providing for
such merger, consolidation or reorganization constitute at least two-thirds of the members of the
board of directors of the Surviving Corporation, or a corporation beneficially directly or
indirectly owning a majority of the Voting Securities of the Surviving Corporation, and (3) no
Person other than (i) the Company, (ii) any Subsidiary, or (iii) any employee benefit plan (or any
trust forming a part thereof) that, immediately prior to such merger, consolidation or
reorganization, was maintained by the Company, or any Subsidiary;
(B) a complete liquidation or dissolution of the Company; or
(C) the sale or disposition of all or substantially all of the assets of the Company to any
Person (other than a transfer to a Subsidiary).
Notwithstanding the foregoing, a Change in Control shall not be deemed to occur (i) solely
because any Person (the “Subject Person”) acquired Beneficial Ownership of more than the
permitted amount of the then outstanding Shares or Voting Securities as a result of the acquisition
of Shares or Voting Securities by the Company which, by reducing the number of Shares or Voting
Securities then outstanding, increases the proportional number of shares Beneficially Owned by the
Subject Persons, provided that if a Change in Control would occur (but for the operation of this
sentence) as a result of the acquisition of Shares or Voting Securities by the Company, and after
such share acquisition by the Company, the Subject Person becomes the Beneficial Owner of any
additional Shares or Voting Securities which increases the percentage of the then outstanding
Shares or Voting Securities Beneficially Owned by the Subject Person, then a Change in Control
shall occur.
Upon a Change in Control, and without regard to whether or not the Executive’s employment
hereunder is terminated in connection therewith, all restrictions on any outstanding equity-based
awards (including, without limitation, restricted stock and performance stock awards) then held by
the Executive shall lapse and all performance targets and goals applicable to such awards in
respect of any past or future period shall be deemed to have been met by the Company and the
Executive, as applicable, for each period relevant to such award and all such
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equity-based awards shall become and be deemed to be fully (100%) vested immediately prior to such
Change in Control, and all stock options and stock appreciation rights granted to the Executive
shall become fully (100%) vested and shall become immediately exercisable. In the event of any
conflict between this subsection and any agreement between the Executive and the Company relating
to any outstanding award (whether now existing or hereafter entered into), the provisions of this
subsection shall prevail
(g) Notice of Termination. Any purported termination by the Company or by the
Executive shall be communicated by a Notice of Termination to the other. For purposes of this
Agreement, a “Notice of Termination” shall mean (i) in the case of voluntary termination by
the Executive pursuant to Section 5(d), the notice referred to in Section 5(d), (ii) in the case of
termination without Cause pursuant to Section 5(e), the written notice referred to in Section 5(e)
and (iii) in all other cases, a written notice which indicates the specific termination provision
in this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Executive’s employment under the provision so
indicated. For purposes of this Agreement, no such purported termination of employment shall be
effective without a Notice of Termination.
(h) Termination Date, Etc. “Termination Date” shall mean in the case of the
Executive’s death, his date of death, or in all other cases, the date specified in the Notice of
Termination subject to the following:
(i) if the Executive’s employment is terminated by the Company due to Disability, the date
specified in the Notice of Termination shall be at least thirty (30) days from the date the Notice
of Termination is given to the Executive, provided that the Executive shall not have returned to
the full-time performance of his duties during such period of at least thirty (30) days; and
(ii) if the Executive’s employment is terminated by the Company for Cause or without Cause,
or by the Executive for Good Reason or voluntarily other than for Good Reason, the date specified
in the Notice of Termination or, if no date is specified, on the date the Notice of Termination is
given to the other party.
6. Compensation Upon Termination. Upon termination of the Executive’s employment
during the term of this Agreement (including any extensions thereof), the Executive shall be
entitled to the following benefits:
(a) Cause, Death or Disability; Voluntary Termination By Executive other than Good Reason If
the Executive’s employment is terminated by the Company for Cause or Disability or by the Executive
(other than for Good Reason), or by reason of the Executive’s death, the Company shall pay the
Executive (or his estate, as applicable) all amounts earned or accrued hereunder through the
Termination Date but not paid as of the Termination Date, including (i) Base Salary, (ii)
reimbursement for any and all monies advanced or expenses incurred in connection with the
Executive’s employment for reasonable and necessary expenses incurred by the Executive on behalf of
the Company for the period ending on the Termination Date, (iii) unused vacation days and paid
holidays as of the Termination Date, (iv) any bonuses
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and incentive compensation which at the time of termination is earned but unpaid under the
terms and provisions of the applicable plan, and (v) any previously earned compensation which the
Executive has deferred (including any interest earned or credited thereon) (collectively,
“Accrued Compensation”). In addition, in connection with the termination of the
Executive’s employment hereunder by the Company for Disability or by reason of the Executive’s
death, the Company shall pay the Executive (or his estate, as applicable), not later than 30 days
following the date of Disability or death, as the case may be, an amount (which shall be in lieu of
any target bonus or other bonus plan amount that might otherwise for any reason be or be deemed to
be payable directly or indirectly in connection with the fiscal year in which such termination
occurred, an amount equal to the product of (I) the average of the cash bonus amounts (if any) paid
by the Company to the Executive in relation to the two fiscal years immediately preceding the year
in which such termination occurs, multiplied by (II) a fraction, the numerator is the number of
days in the year that were elapsed as of the date of the termination of employment and the
denominator is 365, provided that if such thirty (30) day period begins in one calendar year and
ends in another, the Executive and/or his beneficiary shall not have the right to designate the
taxable year of payment. In connection with the termination of the Executive’s employment
hereunder by the Company for Disability or by reason of the Executive’s death, all restrictions on
any outstanding equity-based awards (including, without limitation, restricted stock and
performance stock awards) then held by the Executive shall lapse and all performance targets and
goals applicable to such awards in respect of any past or future period shall be deemed to have
been met by the Company and the Executive, as applicable, for each period relevant to such award
and all such equity-based awards shall become and be deemed to be fully (100%) vested immediately
prior to such termination of employment, and all stock options and stock appreciation rights
granted to the Executive shall become fully (100%) vested and shall become immediately exercisable
and the Company shall permit the Executive (or his estate), to exercise the same at any time during
the 90-day period following such termination. In the event of the Executive’s death, for a period
of twelve (12) months from the date of death, the Company shall pay for COBRA benefits (or the
equivalent) for Executive’s surviving spouse and eligible dependents covered by the Company’s group
health plan at the time of Executive’s death. In the event the Executive’s employment hereunder is
terminated due to Disability, the Company shall pay COBRA benefits (or the equivalent) for the
Executive for a period of twelve (12) months from the date of such termination. The Executive’s
entitlement to any other compensation or benefits shall be determined in accordance with the
Company’s employee benefit plans and other applicable programs and practices then in effect.
(b) Without Cause; For Good Reason. If the Executive’s employment by the Company is
terminated by the Company prior to a Change in Control other than for Cause, death or Disability,
or by the Executive for Good Reason, then the Executive shall be entitled to the benefits provided
below:
(i) the Company shall pay the Executive all Accrued Compensation;
(ii) the Company shall pay the Executive, as severance pay and in lieu of any further salary
for periods subsequent to the Termination Date, in a single payment an amount in cash equal to one
(1) times the sum of (A) the Executive’s Base Salary at the highest rate in effect at any time
prior to the date the Notice of Termination is given and (B) the “Payment
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Amount.” For purposes of this Agreement, the term “Payment Amount” shall mean an amount
which is equal to forty-five percent (45%) of the higher of the Executive’s Base Salary in effect
during the year in which the Termination Date shall occur or 45% of the Executive’s highest Base
Salary in effect during the 12 months prior to the Termination Date;
(iii) except as may otherwise be determined (on a basis consistent in material respects among
all executive officers whose compensation (or the deductibility thereof by the Company) is affected
by Section 162(m) of the Internal Revenue Code or any successor provision thereto) by the
Compensation Committee at the time of grant of such equity-based award, all restrictions on
outstanding equity-based awards (including, without limitation, restricted stock and performance
stock awards) then held by the Executive shall lapse and all performance targets and goals
applicable to such awards in respect of any past or future period shall be deemed to have been met
by the Company and the Executive, as applicable, for each period relevant to such award and all
such equity-based awards shall become and be deemed to be fully (100%) vested immediately prior to
such termination of employment, and all stock options and stock appreciation rights granted to the
Executive shall become fully (100%) vested and shall become immediately exercisable and the Company
shall permit the Executive (or his estate), to exercise the same at any time during the 90-day
period following such termination. the and
(iv) for a period of twelve (12) months following such termination, the Company shall at its
expense continue on behalf of the Executive and his dependents and beneficiaries the life
insurance, disability, medical, dental and hospitalization benefits which were being provided to
the Executive and other members of senior management of the Company at the time Notice of
Termination was given. The benefits provided in this Section 6(b)(iv) shall be no less favorable
to the Executive, in terms of amounts and deductibles and costs to him, than the coverage provided
the Executive under the plans providing such benefits at the time Notice of Termination is given.
The Company’s obligation hereunder with respect to the foregoing benefits shall be limited to the
extent that the Executive obtains any such benefits pursuant to a subsequent employer’s benefit
plans, in which case the Company may reduce the coverage of any benefits it is required to provide
the Executive hereunder as long as the aggregate coverage of the combined benefit plans is no less
favorable to the Executive, in terms of amounts and deductibles and costs to him, than the coverage
required to be provided hereunder. This Subsection (iv) shall not be interpreted so as to limit any
benefits to which the Executive or his dependents may be entitled under any of the Company’s
employee benefit plans, programs or practices following the Executive’s termination of employment,
including, without limitation, retiree medical and life insurance benefits.
(c) Following a Change in Control. If within one year following the occurrence of a Change of
Control the Executive’s employment by the Company is terminated either by the Company other than
for Cause, death or Disability, or by the Executive for any reason, then the Executive shall be
entitled to the benefits provided below:
(i) the Company shall pay the Executive all Accrued Compensation;
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(ii) the Company shall pay the Executive as severance pay and in lieu of any further salary
for periods subsequent to the Termination Date, in a single payment an amount in cash equal to two
(2) times the sum of (A) the Executive’s Base Salary at the highest rate in effect at any time
within the ninety (90) day period ending on the date the Notice of Termination is given or the
Executive’s Base Salary immediately prior to the Change in Control, if greater, and (B) the Payment
Amount; and
(iii) for a period of twenty-four (24) months following such termination, the Company shall at
its expense continue on behalf of the Executive and his dependents and beneficiaries the life
insurance, disability, medical, dental and hospitalization benefits which were being provided to
the Executive at the time Notice of Termination is given (or, if the Executive is terminated
following a Change in Control, the benefits provided to the Executive at the time of the Change in
Control, if greater). The benefits provided in this subsection 6(c)(iii) shall be no less
favorable to the Executive, in terms of amounts and deductibles and costs to him, than the coverage
provided the Executive under the plans providing such benefits at the time Notice of Termination is
given or at the time of the Change in Control if more favorable to the Executive. The Company’s
obligation hereunder with respect to the foregoing benefits shall be limited to the extent that the
Executive obtains any such benefits pursuant to a subsequent employer’s benefit plans, in which
case the Company may reduce the coverage of any benefits it is required to provide the Executive
hereunder as long as the aggregate coverage of the combined benefit plans is no less favorable to
the Executive, in terms of amounts and deductibles and costs to him, than the coverage required to
be provided hereunder. This subsection 6(c)(iii) shall not be interpreted so as to limit any
benefits to which the Executive or his dependents may be entitled under any of the Company’s
employee benefit plans, programs or practices following the Executive’s termination of employment,
including, without limitation, retiree medical and life insurance benefits.
(d) Time of Payment; Adjustment for Taxes.
(i) The amounts provided for in Sections 6(a), 6(b)(i), and 6(c)(i) shall be paid to the
Executive within twenty-eight (28) days after the Executive’s Termination Date, provided that if
such twenty-eight (28) day period begins in one calendar year and ends in another, the Executive
shall not have the right to designate the taxable year of payment.
(ii) The amounts provided for in Section 6(b)(ii) shall be paid to the Executive within
twenty-eight (28) days after the Executive’s Termination Date, provided that if such
twenty-eight (28) day period begins in one calendar year and ends in another, the Executive and/or
his beneficiary shall not have the right to designate the taxable year of payment, and further
provided that (A) no amount shall be paid until Executive has incurred a “separation from
service” from the Company within the meaning of Section 409A (“Section 409A”) of the Internal
Revenue Code (the “Code”), and (B) if (I) the Executive is a “specified employee” within the
meaning of Section 409A of the Code at the time of his termination of employment and (II) the
amount to be paid exceeds the limit imposes by Treasury Regulation Section 1.409A-1(b)(9)(3)(A),
the excess over such limit shall not be paid within twenty-eight days of the “separation from
service” but shall be paid on the date that is six months and one day after such separation from
service (or on the date of Executive’s death, if earlier).
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(iii) The amounts provided for in Section 6(c)(ii) shall be paid to the Executive within
twenty-eight (28) days after the Executive’s Termination Date provided that (A) no amount shall be
paid until Executive has incurred a “separation from service” from the Company within the meaning
of Section 409A and (B) if the Executive is a “specified employee” within the meaning of Section
409A at the time of his termination of employment, no amount shall be paid until the date that is
six months and one day after such separation from service (or on the date of Executive’s death, if
earlier).
(iv) In the event the Executive’s severance benefits provided for in this Section 6
constitute “parachute payments” within the meaning of Section 280G of the Code and, but for this
subsection, would be subject to the excise tax imposed by Section 4999 of the Code, then the
Executive’s severance benefits under this Section 6 will be payable either in full or in such
lesser amount as would result, after taking into account the applicable federal, state and local
income taxes and the excise tax imposed by Section 4999, in the Executive’s receipt on an after-tax
basis of the greatest amount of severance and other benefits.
(e) No Duty to Mitigate. The Executive shall not be required to mitigate the amount of any
payment, benefit or other Company obligation provided for in this Agreement by seeking other
employment or otherwise and no such payment, benefit or other Company obligation shall be offset or
reduced by the amount of any compensation or benefits provided to the Executive in any subsequent
employment.
(f) Clawback. The Company shall have no obligation to make any payment to the Executive
pursuant to any provision of this Section 6 if the Executive shall be in default of his obligations
under Section 13 hereof (Covenant Not To Compete).
7. Post-Termination Assistance; Non-Disparagement. The Executive agrees that after
his employment with the Company has terminated he will provide to the Company, upon reasonable
notice from the Company, such information and assistance in the nature of testifying and the
preparation therefore as may reasonably be requested by the Company in connection with any
litigation, administrative or agency proceeding, or other legal proceeding in which it or any of
its affiliates is or may become a party; provided, however, that the Company agrees to reimburse
the Executive for any reasonably, related expenses, including travel expense, and shall pay the
Executive a daily per diem comparable to his Base Salary under this Agreement at time of
termination (determined for this purpose on a per diem basis by dividing such Base Salary by 230).
The Parties agree that they will not disparage or knowingly make false or defamatory comments about
the other party as to all matters. This is a material term of this Agreement. Nothing in this
section shall prohibit either Party from making legally-required comments of statements.
8. Unauthorized Disclosure. The Executive shall not make any Unauthorized Disclosure.
For purposes of this Agreement, “Unauthorized Disclosure” shall mean disclosure by the
Executive without the consent of the Board to any person, other than an employee of the Company or
a person to whom disclosure is reasonably necessary or appropriate in connection with the
performance by the Executive of his duties as an executive of the Company or as may be legally
required, of any confidential information obtained by the Executive while in the
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employ of the Company (including, but not limited to, any confidential information with respect to
any of the Company’s customers or methods of distribution) the disclosure of which he knows or has
reason to believe will be materially injurious to the Company; provided, however, that such term
shall not include the use or disclosure by the Executive, without consent, of any information known
generally to the public (other than as a result of disclosure by him in violation of this Section
8) or any information not otherwise considered confidential by a reasonable person engaged in the
same business as that conducted by the Company.
9. Indemnification. Simultaneously with the execution and delivery of this Agreement,
the Company shall execute and deliver to the Executive an indemnification agreement in the form of
Exhibit A attached hereto. If for any reason the Company and the Executive have not heretofore
executed and delivered such an indemnification agreement, the terms and provisions of Exhibit A are
hereby incorporated herein by reference.
10. Successors and Assigns.
(a) This Agreement shall be binding upon and shall inure to the benefit of the Company and its
successors and the Company shall require any successor to expressly assume and agree to perform
this Agreement in the same manner and to the same extent that the Company would be required to
perform it if no such succession or assignment had taken place (and the Company (without giving
effect to the following sentence) shall thereafter remain secondarily liable for all obligations
under this Agreement), but this Agreement will not otherwise be assignable, transferable or
delegable by the Company. The term “the Company” as used herein shall include such successors.
(b) Neither this Agreement nor any right or interest hereunder shall be assignable or
transferable by the Executive, his beneficiaries or legal representatives, except by will or by the
laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable
by the Executive’s legal personal representatives, beneficiaries, designees, executors,
administrators, heirs, distributees, devisees and legatees.
11. Fees and Expenses. The Company shall pay all reasonable legal fees and related
expenses incurred by the Executive as they become due as a result of the Company and the Executive
entering into this Agreement.
12. Assignment of Inventions.
(a) General Assignment. The Executive agrees to assign and hereby does assign to the
Company all right, title and interest in and to any inventions, designs and copyrights made during
employment by Company which relate directly to the business of the Company.
(b) Further Assurances. The Executive shall acknowledge and deliver promptly to the
Company without charge to the Company but at its expense such written instruments and do such other
acts, as may be necessary in the opinion of the Company to obtain, maintain, extend, reissue and
enforce United States and/or foreign letters patent and copyrights relating to the inventions,
designs an copyrights and to vest the entire right and title thereto in the
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Company or its nominee. The Executive acknowledges and agrees that any copyright developed or
conceived of by the Executive during them term of the Executive’s employment which is related to
the business of the Company shall be a “work for hire” under the copyright law of the United States
and other applicable jurisdictions.
(c) Excepted Inventions. As a matter of record the Executive has identified on
Exhibit B attached hereto all inventions or improvements relevant to the subject matter of his
engagement by the Company which have been made or conceived or first reduced to practice by the
Executive alone or jointly with others prior to his engagement by the Company, and the Executive
covenants that such list is complete. If there is no such list on Exhibit B, the Executive
represents that he had made no such inventions and improvements as of the time of signing this
Agreement.
13. Covenant Not to Compete.
(a) The Executive agrees that during the term of this Agreement and for two (2) years
subsequent to termination of Executive’s employment with the Company for any reason (the
“Non-Compete Term”) the Executive shall not:
(i) Either directly or indirectly, for himself or on behalf of or in conjunction with any
other person, persons, company, firm, partnership, corporation, business, group or other entity
(each, a “Person”), engage in any business or activity, whether as an employee, consultant,
partner, principal, agent, representative, stockholder or other individual, corporate, or
representative capacity, or render any services or provide any advice or substantial assistance to
any business, person or entity, if such business, person or entity, directly or indirectly will in
any way compete with the Company (a “Competing Business”). Without limiting the generality
of the foregoing, for purposes of this Section 13, it is understood that Competing Businesses shall
include any business that is in direct competition with the Company; provided, however, that
notwithstanding the foregoing, the Executive may make passive investments in up to four percent
(4%) of the outstanding publicly traded common stock of an entity which operates a Competing
Business.
(ii) Either directly or indirectly, for himself or on behalf of or in conjunction with any
other Person, solicit any Person who is, or who is, at the time of termination of the Executive’s
employment, or has been within six (6) months prior to the time of termination of Executive’s
employment, an employee of the Company or any of its subsidiaries for the purpose or with the
intent of enticing such employee away from the employ of the Company or any of its subsidiaries.
(iii) Either directly or indirectly, for himself or on behalf of or in conjunction with any
other Person, solicit any Person who is, or who is, at the time of termination of the Executive’s
employment, or has been within six (6) months prior to the time of termination of Executive’s
employment, a customer or supplier of the Company or any of its subsidiaries for the purpose or
with the intent of (A) inducing or attempting to induce such Person to cease doing business with
the Company or (B) in any way interfering with the relationship between such Person and the
Company.
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(b) Specific Performance; Repayment of Certain Termination Payment Amounts. The
Executive hereby acknowledges that the services to be rendered to the Company hereunder by the
Executive are of a unique, special and extraordinary character which would be difficult or
impossible for the Company to replace or protect, and by reason thereof, the Executive hereby
agrees that in the event he violates any of the provisions of subsection 13(a) hereof, the Company
shall, in addition to any other rights and remedies available to it, at law or otherwise, be
entitled to an injunction or restraining order to be issued by any court of competent jurisdiction
in any state enjoining and restraining the Executive from committing any violation of said
subsection 13(a).
The Executive agrees that, if he breaches subsection 13(a) of this Agreement, he shall have
forfeited all right to receive any amounts payable to him pursuant to subsection 6(b)(ii) and (iii)
or subsection 6(c)(ii) and (iii), as the case may be, and he shall promptly repay to the Company
the entire amount theretofore paid to him or to his order by reason of any of said subsections.
(c) The covenants in this Section 13 are severable and separate, and the unenforceability of
any specific covenant shall not affect the provisions of any other covenant. Moreover, in the event
any court of competent jurisdiction shall determine that the scope, time or territorial
restrictions set forth herein are unreasonable, then it is the intention of the parties that such
restrictions be enforced to the fullest extent that such court deems reasonable, and the Agreement
shall thereby be reformed to reflect the same.
(d) All of the covenants in this Section 13 shall be construed as an agreement independent of
any other provision in this Agreement, and the existence of any claim or cause of action of the
Executive against the Company whether predicated on this Agreement or otherwise shall not
constitute a defense to the enforcement by the Company of such covenants. It is specifically agreed
that the period following the termination of the Executive’s employment with the Company during
which the agreements and covenants of the Executive made in this Section 13 shall be effective,
shall be computed by excluding from such computation any time during which the Executive is in
violation of any provision of this Section 13.
(e) Notwithstanding any of the foregoing, if any applicable law, judicial ruling or order
shall reduce the time period during which the Executive shall be prohibited from engaging in any
competitive activity described in Section 13 hereof, the period of time for which the Executive
shall be prohibited pursuant to Section 13 hereof shall be the maximum time permitted by law.
14. Notice. For the purposes of this Agreement, notices and all other communications
provided for in the Agreement (including the Notice of Termination) shall be in writing and shall
be deemed to have been duly given when personally delivered or sent by certified mail, return
receipt requested, postage prepaid, addressed to the respective addresses last given by each party
to the other, provided that all notices to the Company shall be directed to the attention of the
President with a copy to the Lead Director of the Board. All notices and communications shall be
deemed to have been received on the date of delivery thereof or on the third business day after the
mailing thereof, except that notice of change of address shall be effective only upon receipt.
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15. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or limit the
Executive’s continuing or future participation in any benefit, bonus, incentive or other plan or
program provided by the Company or any of its subsidiaries and for which the Executive may qualify,
nor shall anything herein limit or reduce such rights as the Executive may have under any other
agreements with the Company or any of its subsidiaries. Amounts which are vested benefits or which
the Executive is otherwise entitled to receive under any plan or program of the Company or any of
its subsidiaries shall be payable in accordance with such plan or program, except as explicitly
modified by this Agreement.
16. Settlement of Claims. The Company’s obligation to make the payments provided for
in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any
circumstances, including, without limitation, any set-off, counterclaim, recoupment, defense or
other right which the Company may have against the Executive or others.
17. Survival. The agreements and obligations of the Company and the Executive made in
Sections 6, 8, 9, 11, 13, 16, 17 and 18 of this Agreement shall survive the expiration or
termination of this Agreement.
18. Federal Income Tax Withholding. The Company may withhold from any compensation and
other amounts payable under this Agreement all federal, state, city or other taxes as shall be
required pursuant to any law or governmental regulation or ruling.
19. Governing Law. This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Arizona, without giving effect to the conflict of law
principles thereof.
20. Severability. The provisions of this Agreement shall be deemed severable and the
invalidity or unenforceability of any provision shall not affect the validity or enforceability of
the other provisions hereof.
21. Miscellaneous. No provisions of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in writing and signed by the
Executive and the Company. No waiver by either party hereto at any time of any breach by the other
party hereto or compliance with any condition or provision of this Agreement to be performed by
such other party will be deemed a waiver of similar or dissimilar provisions or conditions at the
same or at any prior or subsequent time. Unless otherwise noted, references to “Sections” are to
sections of this Agreement. The captions used in this Agreement are designed for convenient
reference only and are not to be used for the purpose of interpreting any provision of this
Agreement.
22. Entire Agreement. This Agreement (together with the Exhibits hereto and the
Executive’s indemnification agreement with the Company) constitutes the entire agreement between
the Parties and supersedes all prior agreements, understandings and arrangements, oral or written,
between the parties hereto with respect to the subject matter hereof.
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23. Counterparts. This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original and all of which together will constitute one and the same
agreement.
24. Section 409A.
(a) To the extent applicable, it is intended that this Agreement comply with the provisions of
Section 409A of the Code. This Agreement will be administered and interpreted in a manner
consistent with this intent. The Company agrees to take all reasonable steps to ensure that
Executive shall not be subject to any penalties with respect to any payments received hereunder.
In the event that any guidance is issued by the Internal Revenue Service, or if a judicial decision
is rendered, to the effect that arrangements similar to this Agreement do not satisfy the
requirements of Section 409A, the Company and Executive agree to take whatever reasonable actions
may be necessary at such time in order to ensure that (i) the payments under this Agreement shall
be in compliance with Section 409A and (ii) the Executive shall not be subject to any penalty under
Section 409A with respect to his receipt of such payments.
(b) Notwithstanding anything contained herein to the contrary, any payments on account of a
termination of employment that are subject to Section 409A shall not be made until Executive would
be considered to have incurred a “separation from service” from the Company within the meaning of
Section 409A. To the extent required in order to avoid accelerated taxation and/or tax penalties
under Section 409A, amounts that would otherwise be payable and benefits that would otherwise be
provided pursuant to this Agreement during the six-month period immediately following Executive’s
termination of employment shall, if Executive is a “specified employee” within the meaning of
Section 409A at the time of his termination of employment, instead be paid on the first business
day after the date that is six months following Executive’s termination of employment (or
Executive’s death, if earlier).
(c) For purposes of this Agreement, each amount to be paid or benefit to be provided to
Executive pursuant to this Agreement shall be construed as a separate identified payment for
purposes of Section 409A.
(d) With respect to expenses eligible for reimbursement under the terms of the Agreement, (i)
the amount of such expenses eligible for reimbursement in any taxable year shall not affect the
expenses eligible for reimbursement in another taxable year and (ii) any reimbursements of such
expenses shall be made no later than the end of the calendar year following the calendar year in
which the related expenses were incurred, except, in each case, to the extent that the right to
reimbursement does not provide for a “deferral of compensation” within the meaning of Section 409A;
provided, however that with respect to any reimbursements for any taxes to which Executive becomes
entitled under the terms of this Agreement, the payment of such reimbursements shall be made by the
Company no later than the end of the calendar year following the calendar year in which Executive
remits the related taxes.
[Signature Page follows; remainder of this page is blank.]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year
first above written.
| ATTEST: | MOBILE MINI, INC. | |||||||||
By:
|
/s/ Xxxxxxxxxxx X. Xxxxx
|
By: | /s/ Xxxxxx X. Xxxxxx
|
|||||||
| Its: | President and Chief Executive Officer | |||||||||
| Xxxx X. Xxxx | ||||||||||
| /s/ Xxxx X. Xxxx | ||||||||||
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