UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
(Mark One)
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the Quarterly Period Ended June 30, 1997
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the Transition Period from __________ to __________
Commission file number 0-27584
IRON MOUNTAIN INCORPORATED
(Exact Name of Registrant as Specified in its Charter)
Delaware 04-3107342
-------- ----------
(State or Other Jurisdiction of (IRS Employer Identification No.)
Incorporation or Organization)
745 Atlantic Avenue, Boston, MA 02111
-------------------------------------
(Address of Principal Executive Offices, Including Zip Code)
(617) 357-4455
--------------
(Registrant's Telephone Number, Including Area Code)
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
--- ---
As of August 5, 1997, there were 11,505,293 shares of the Registrant's Common
Stock, par value $0.01 per share, and 454,590 shares of the Registrant's
Nonvoting Common Stock, par value $0.01 per share, outstanding.
<PAGE>
IRON MOUNTAIN INCORPORATED
INDEX
Page
----
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
Condensed Consolidated Balance Sheets at December 31,
1996 and June 30, 1997 (Unaudited) 3
Condensed Consolidated Statements of Operations for the
Three Months Ended June 30, 1996 and 1997 (Unaudited) 4
Condensed Consolidated Statements of Operations for the
Six Months Ended June 30, 1996 and 1997 (Unaudited) 5
Condensed Consolidated Statements of Cash Flows for the
Six Months Ended June 30, 1996 and 1997 (Unaudited) 6
Notes to Condensed Consolidated Financial Statements
(Unaudited) 7-9
Item 2 - Management's Discussion and Analysis of Financial
Condition and Results of Operations 10-14
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings 15
Item 2 - Changes in Securities 15
Item 4 - Submission of Matters to a Vote of Security-Holders 15-16
Item 5 - Other Information 17
Item 6 - Exhibits and Reports on Form 8-K 17
Signatures 18
2
<PAGE>
IRON MOUNTAIN INCORPORATED
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)
(Unaudited)
December 31, June 30,
1996 1997
------------ --------
ASSETS
CURRENT ASSETS:
Cash and Cash Equivalents $ 3,453 $ 585
Accounts Receivable (less allowances
of $1,061 and $1,098, respectively) 24,136 29,602
Inventories 767 920
Deferred Income Taxes 3,378 3,378
Prepaid Expenses and Other Current Assets 3,054 5,040
--------- --------
Total Current Assets 34,788 39,525
PROPERTY, PLANT AND EQUIPMENT:
Property, Plant and Equipment at Cost 163,495 193,428
Less: Accumulated Depreciation (45,146) (53,032)
--------- --------
Property, Plant and Equipment, net 118,349 140,396
OTHER ASSETS:
Goodwill, net 109,363 193,114
Customer Acquisition Costs, net 6,334 6,274
Deferred Financing Costs, net 7,358 7,075
Other 5,607 9,263
--------- --------
Total Other Assets 128,662 215,726
--------- --------
Total Assets $ 281,799 $ 395,647
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current Portion of Long-term Debt $ 396 $ 375
Accounts Payable 3,750 7,329
Accrued Expenses 17,275 20,038
Deferred Income 4,995 4,000
Other Current Liabilities 414 414
--------- ---------
Total Current Liabilities 26,830 32,156
LONG-TERM DEBT, NET OF CURRENT PORTION 184,337 241,592
DEFERRED RENT 7,651 8,216
DEFERRED INCOME TAXES 4,021 2,693
OTHER LONG-TERM LIABILITIES 6,576 6,568
COMMITMENTS AND CONTINGENCIES (SEE NOTE 4)
STOCKHOLDERS' EQUITY:
Common Stock 96 114
Common Stock - Nonvoting 5 5
Additional Paid-in Capital 62,135 115,640
Accumulated Deficit (9,852) (11,337)
--------- --------
Total Stockholders' Equity 52,384 104,422
--------- --------
Total Liabilities and Stockholders' Equity $ 281,799 $ 395,647
========= =========
The accompanying notes are an integral part of these
consolidated financial statements.
3
<PAGE>
IRON MOUNTAIN INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in Thousands except Per Share Data)
(Unaudited)
Three Months Ended June 30,
-----------------------------
1996 1997
------------- -----------
REVENUES:
Storage $20,209 $ 27,987
Service and Storage Material Sales 12,713 18,598
------- --------
Total Revenues 32,922 46,585
OPERATING EXPENSES:
Cost of Sales (Excluding Depreciation) 16,715 24,108
Selling, General and Administrative 8,260 11,296
Depreciation and Amortization 3,922 6,243
------- --------
Total Operating Expenses 28,897 41,647
------- --------
OPERATING INCOME 4,025 4,938
INTEREST EXPENSE 3,091 5,940
------- --------
Income (Loss) Before Provision
(Credit) for Income Taxes 934 (1,002)
PROVISION (CREDIT) FOR INCOME TAXES 523 (33)
------- --------
Net Income (Loss) $ 411 $ (969)
======= ========
NET INCOME (LOSS) PER COMMON AND
COMMON EQUIVALENT SHARE $ 0.04 $ (0.09)
======= ========
WEIGHTED AVERAGE COMMON AND
COMMON EQUIVALENT SHARES OUTSTANDING 10,336 10,511
======= ========
The accompanying notes are an integral part of these
consolidated financial statements.
4
<PAGE>
IRON MOUNTAIN INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in Thousands except Per Share Data)
(Unaudited)
Six Months Ended June 30,
--------------------------
1996 1997
--------- ---------
REVENUES:
Storage $39,363 $53,810
Service and Storage Material Sales 24,587 34,929
------- -------
Total Revenues 63,950 88,739
OPERATING EXPENSES:
Cost of Sales (Excluding Depreciation) 32,383 45,872
Selling, General and Administrative 16,067 21,503
Depreciation and Amortization 7,530 11,965
------- -------
Total Operating Expenses 55,980 79,340
------- -------
OPERATING INCOME 7,970 9,399
INTEREST EXPENSE 6,385 11,080
------- -------
Income (Loss) Before Provision
(Credit) for Income Taxes 1,585 (1,681)
PROVISION (CREDIT) FOR INCOME TAXES 888 (196)
------- -------
Net Income (Loss) 697 (1,485)
ACCRETION OF REDEEMABLE PUT WARRANT 280 --
------- -------
Net Income (Loss) Applicable
to Common Stockholders $ 417 $(1,485)
======= =======
NET INCOME (LOSS) PER COMMON AND COMMON
EQUIVALENT SHARE $ 0.04 $(0.14)
======= =======
WEIGHTED AVERAGE COMMON AND COMMON
EQUIVALENT SHARES OUTSTANDING 9,899 10,326
======= =======
The accompanying notes are an integral part of these
consolidated financial statements.
5
<PAGE>
IRON MOUNTAIN INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
(Unaudited)
Six Months Ended June 30,
------------------------
1996 1997
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (Loss) $ 697 $ (1,485)
Adjustments to Reconcile Net Income (Loss) to Cash
Flows Provided by Operating Activities:
Depreciation and Amortization 7,530 11,965
Amortization of Financing Costs 429 457
Other -- 31
Changes in Assets and Liabilities
(Exclusive of Acquisitions):
Accounts Receivable (2,194) (1,273)
Inventories 174 (68)
Deferred Income Taxes 492 (1,328)
Prepaid Expenses and Other Current Assets 444 (1,759)
Other Assets 674 180
Accounts Payable 1,545 2,772
Accrued Expenses (279) 674
Deferred Income (865) (1,729)
Other Current Liabilities (474) (2,123)
Deferred Rent (86) 565
Other Long-term Liabilities -- (8)
-------- --------
Cash Flows Provided by Operating Activities 8,087 6,871
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash Paid for Acquisitions (19,187) (52,774)
Capital Expenditures (11,162) (12,958)
Additions to Customer Acquisition Costs (717) (282)
Other (25) --
-------- --------
Cash Flows Used in Investing Activities (31,091) (66,014)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of Debt (29,515) (5,829)
Proceeds from Borrowings 26,500 62,400
Financing Costs (24) (174)
Proceeds from Exercise of Stock Options -- 44
Stock Issuance Costs -- (166)
Net Proceeds from Initial Public Offering 33,302 --
Retirement of Redeemable Put Warrant (6,612) --
-------- --------
Cash Flows Provided by Financing Activities 23,651 56,275
-------- --------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 647 (2,868)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 1,585 3,453
-------- --------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 2,232 $ 585
======== ========
The accompanying notes are an integral part of these
consolidated financial statements.
6
<PAGE>
IRON MOUNTAIN INCORPORATED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in Thousands except Per Share Data)
(Unaudited)
(1) GENERAL
The interim condensed consolidated financial statements presented herein
have been prepared by Iron Mountain Incorporated ("Iron Mountain" or the
"Company") without audit and, in the opinion of management, reflect all
adjustments of a normal recurring nature necessary for a fair presentation.
Interim results are not necessarily indicative of results for a full year.
The consolidated balance sheet presented as of December 31, 1996, has been
derived from the consolidated financial statements that have been audited
by the Company's independent public accountants. The unaudited condensed
consolidated financial statements have been prepared pursuant to the rules
and regulations of the Securities and Exchange Commission. Certain
information and footnote disclosures normally included in the annual
financial statements prepared in accordance with generally accepted
accounting principles have been omitted pursuant to those rules and
regulations, but the Company believes that the disclosures are adequate to
make the information presented not misleading. The condensed consolidated
financial statements and notes included herein should be read in
conjunction with the consolidated financial statements and notes included
in the Company's Annual Report on Form 10-K for the year ended December 31,
1996.
(2) ACQUISITIONS
During the six months ended June 30, 1997, the Company purchased
substantially all of the assets, and assumed certain liabilities, of six
records management businesses and acquired all of the outstanding capital
stock of three records management businesses. In connection with certain
acquisitions related real estate was also purchased. Each of these
acquisitions was accounted for using the purchase method of accounting, and
accordingly, the results of operations for each acquisition have been
included in the consolidated results of the Company from the respective
acquisition dates. The purchase price for the 1997 acquisitions exceeded
the underlying fair value of the net assets acquired by $86,775 which has
been assigned to goodwill and is being amortized over 25 to 30 years. The
purchase price allocation is preliminary and subject to adjustment. To
finance the 1997 acquisitions, the Company issued approximately 1,770
shares of its common stock, issued options to purchase approximately 109
shares of its common stock and paid approximately $52,774 in cash, which
was provided through the Company's revolving credit facility.
A summary of the total consideration and the preliminary allocation of the
purchase price, as of the acquisition dates, is as follows:
Fair Value of Common Stock Issued $ 51,322
Fair Value of Options Issued 2,281
Cash Paid 52,774
---------
Total Consideration 106,377
---------
Fair Value of Assets Acquired During 1997 26,029
Liabilities Assumed (6,427)
---------
Fair Value of Net Assets Acquired 19,602
---------
Recorded Goodwill $ 86,775
=========
7
<PAGE>
IRON MOUNTAIN INCORPORATED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in Thousands except Per Share Data)
(Unaudited)
(Continued)
The following unaudited pro forma combined information shows the results of
the Company's operations for the year ended December 31, 1996 and the six
months ended June 30, 1997, as though each of the acquisitions had occurred
as of the beginning of the respective year:
<TABLE>
<CAPTION>
Year Ended Six Months Ended
December 31, June 30,
1996 1997
--------------- ----------------
<S> <C> <C>
Revenues $186,397 $ 101,343
Net Loss (2,435) (1,642)
Accretion of Redeemable Put Warrant 280 --
--------- ----------
Net Loss Applicable to Stockholders $ (2,715) $ (1,642)
========= ==========
Net Loss Per Share $ (0.23) $ (0.14)
========= ==========
</TABLE>
The pro forma results have been prepared for comparative purposes only and
are not necessarily indicative of the actual results of operations had the
acquisitions taken place as of the beginning of each year or the results
that may occur in the future. Furthermore, the pro forma results do not
give effect to all cost savings or incremental costs which may occur as a
result of the integration and consolidation of the companies. Certain
acquisitions, representing annual revenues of approximately $2,800, were
not included in the pro forma results as their effect was immaterial.
(3) LONG-TERM DEBT
Long-term debt consists of the following:
<TABLE>
<CAPTION>
December 31, June 30,
1996 1997
------------ ---------
<S> <C> <C>
10-1/8% Senior Subordinated Notes (the "Notes") $ 165,000 $ 165,000
$150,000 Revolving Credit Facility 9,000 66,400
Real Estate Mortgages 10,733 10,498
Other -- 69
--------- ---------
Total Long-term Debt 184,733 241,967
Less--Current Portion (396) (375)
--------- ---------
Long-term Debt, Net of Current Portion $ 184,337 $ 241,592
========= =========
</TABLE>
8
<PAGE>
IRON MOUNTAIN INCORPORATED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in Thousands except Per Share Data)
(Unaudited)
(Continued)
(4) COMMITMENTS AND CONTINGENCIES
Litigation
Iron Mountain is presently involved as a defendant in various litigation
which has occurred in the normal course of business. Management believes it
has meritorious defenses in all such actions, and in any event, the amount
of damages, if such matters were decided adversely, would not have a
material adverse effect on Iron Mountain's financial condition or results
of operations.
Facility Fire
In March 1997, Iron Mountain experienced three fires that resulted in
extensive damage to two of its records management facilities in South
Brunswick, New Jersey. The affected facilities represented less than three
percent of revenues and less than two percent of EBITDA for 1996. The
results of the second quarter do not include any gain or loss resulting
from the fires. The Company is in the process of filing several insurance
claims, including a significant claim under its business interruption
insurance policy. Currently, the Company expects to realize a gain from
proceeds under its business interruption insurance. The claims process is
lengthy and its outcome cannot be predicted with certainty. Based on its
present assessment of the situation, management does not believe that the
fires will have a material adverse effect on Iron Mountain's financial
condition or results of operations, although there can be no assurance in
this regard. At June 30, 1997, the Company had a receivable of
approximately $1,900 related to various claims filed under its property and
casualty insurance policies.
(5) EARNINGS PER SHARE
In February 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards ("SFAS") No. 128, "Earnings Per Share".
The Company is required to adopt the new standard in its 1997 year end
financial statements. Pursuant to the requirements of SFAS No. 128, all
prior period Earnings Per Share ("EPS"), information will be restated at
that time. The new statement cannot be adopted early. Had the Company
calculated EPS as prescribed by SFAS No. 128, there would have been no
change in the reported EPS amounts for any of the periods shown.
(6) SUBSEQUENT EVENTS
During the period from July 1, 1997 through August 5, 1997, the Company
acquired four records management businesses and certain related real estate
for approximately $17,800 in transactions that were accounted for as
purchases. In July 1997, the Company signed a stock purchase and sale
agreement to acquire an additional records management business for
approximately $8,500, subject to certain purchase price adjustments.
9
<PAGE>
IRON MOUNTAIN INCORPORATED
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of the Company's financial condition and
results of operations for the three and six month periods ended June 30, 1996
and 1997 should be read in conjunction with the consolidated financial
statements and footnotes for the three and six month periods ended June 30,
1997, included herein, and the year ended December 31, 1996, included in the
Company's Annual Report filed on Form 10-K.
Overview
During the second quarter of 1997, the Company completed the acquisition of
Safesite Records Management Corporation ("Safesite") and four other records
management businesses. Consideration for Safesite included (i) approximately
1.8 million shares of the Company's Common Stock, (ii) options to acquire
approximately 109,000 shares of its Common Stock and (iii) cash of approximately
$16.2 million. The aggregate puchase price for the other four acquisitions was
approximately $18.2 million in cash. These acquisitions represent in the
aggregate total annual revenues of approximately $27 million. Safesite, the
largest of the acquired businesses, with 1996 revenues of approximately $19
million, was acquired on June 12, 1997 and, accordingly, its impact on the
Company's results in the second quarter was modest. In addition, the Company
acquired four businesses in July and August 1997 with aggregate total annual
revenues of approximately $6 million. As consideration for the acquisition of
these businesses, the Company issued approximately 35,000 shares of Common Stock
and paid approximately $16.7 million in cash.
As a result of these acquisitions, Iron Mountain commenced operations in six new
markets and bolstered its presence in 12 existing markets. As of August 5, 1997,
the Company operated 155 records centers in 42 markets nationwide. The Company
serves more than 31,000 customer accounts, including more than half of the
Fortune 500 companies.
In March 1997, Iron Mountain experienced three fires that resulted in extensive
damage to two of its records management facilities in South Brunswick, New
Jersey. The affected facilities represented less than three percent of revenues
and less than two percent of EBITDA for 1996. The results of the second quarter
do not include any gain or loss resulting from the fires. The Company is in the
process of filing several insurance claims, including a significant claim under
its business interruption insurance policy. Currently, the Company expects to
realize a gain from proceeds under its business interruption insurance. The
claims process is lengthy and its outcome cannot be predicted with certainty.
Based on its present assessment of the situation, management does not believe
that the fires will have a material adverse effect on Iron Mountain's financial
condition or results of operations, although there can be no assurance in this
regard. At June 30, 1997, the Company had a receivable of approximately $1,900
related to various claims filed under its property and casualty insurance
policies.
The Company's total revenues increased $13.7 million, or 41.5%, to $46.6 million
for the second quarter of 1997 from $32.9 million for the second quarter of
1996. Of the 41.5% revenue growth, 34.7 percentage points were attributable to
25 acquisitions completed by the Company in 1996 and the first six months of
1997 and 6.8 percentage points were attributable to internal growth. The
internal growth percentage includes the loss of revenues resulting from the
fires in South Brunswick, NJ in March 1997. Excluding the Company's South
10
<PAGE>
IRON MOUNTAIN INCORPORATED
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
Brunswick operations for both years, internal growth for the quarter was 9.3%.
Results of Operations
Three Months Ended June 30, 1997 Compared to Three Months Ended June 30, 1996
Storage revenues increased $7.8 million, or 38.5%, to $28.0 million for the
second quarter of 1997 from $20.2 million for the second quarter of 1996. Twenty
five acquisitions completed by the Company in 1996 and the first six months of
1997 accounted for $6.4 million, or 82.8%, of such increase. The balance of the
storage revenues growth resulted primarily from net increases in Cartons stored
by existing customers and from sales to new customers. The term "Carton" is
defined as a measurement of volume equal to a single standard storage carton,
approximately 1.2 cubic feet.
Service and storage material sales revenues increased $5.9 million, or 46.3%, to
$18.6 million for the second quarter of 1997 from $12.7 million for the second
quarter of 1996. Acquisitions accounted for $5.1 million, or 87.4%, of such
increase. The balance of such increase resulted from increases in service and
storage material sales to existing customers and the addition of new customer
accounts. The greater percentage increase in service and storage material sales
revenues, as compared to storage revenues, for the second quarter of 1997, over
the same period in 1996, is primarily attributable to certain businesses
acquired in 1997 that have a higher component of service and storage material
sales revenues, compared to storage revenues, than the rest of the Company.
For the reasons discussed above, total revenues increased $13.7 million, or
41.5%, to $46.6 million for the second quarter of 1997 from $32.9 million for
the second quarter of 1996. Of such increase, $11.6 million, or 84.8%, was
attributable to acquisitions completed by the Company in 1996 and the first six
months of 1997.
Cost of sales (excluding depreciation) increased $7.4 million, or 44.2%, to
$24.1 million (51.8% of revenues) for the second quarter of 1997 from $16.7
million (50.8% of revenues) for the second quarter of 1996. The increase was
primarily attributable to the increase in Cartons stored and expenses related to
certain facility relocations. The increase as a percentage of revenues was
primarily attributable to recent acquisitions, which initially have lower gross
margins than the rest of the Company.
Selling, general and administrative expenses increased $3.0 million, or 36.8%,
to $11.3 million (24.2% of revenues) for the second quarter of 1997 from $8.3
million (25.1% of revenues) for the second quarter of 1996. The dollar increase
was primarily attributable to increased personnel, office and overhead costs
needed to support the Company's growth. The decrease as a percentage of revenues
is primarily attributable to revenues growing at a higher rate than overhead
expenses.
Depreciation and amortization increased $2.3 million, or 59.2%, to $6.2 million
(13.4% of revenues) for the second quarter of 1997 from $3.9 million (11.9% of
revenues) for the second quarter of 1996. The increase was primarily
attributable to the additional depreciation and amortization related to the
aforementioned acquisitions and capital expenditures including racking systems,
information systems and improvements to existing facilities.
11
<PAGE>
IRON MOUNTAIN INCORPORATED
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
As a result of the foregoing factors, operating income increased $0.9 million,
or 22.7%, to $4.9 million (10.6% of revenues) for the second quarter of 1997
from $4.0 million (12.2% of revenues) for the second quarter of 1996.
Interest expense increased $2.8 million, or 92.2%, to $5.9 million for the
second quarter of 1997 from $3.1 million for the second quarter of 1996. The
increase was primarily attributable to increased indebtedness related to the
financing of acquisitions and capital expenditures. Such increase was partially
offset by lower effective interest rates for the second quarter of 1997 as
compared to the same period for 1996.
As a result of the foregoing factors, income (loss) before provision (credit)
for income taxes decreased $1.9 million to a loss of $1.0 million (2.2% of
revenues) for the second quarter of 1997 from income of $0.9 million (2.8% of
revenues) for the second quarter of 1996. Provision (credit) for income taxes
was a credit of less than $0.1 million for the second quarter of 1997 compared
to a provision of $0.5 million for the second quarter of 1996. The Company's
effective tax rate is less favorable than statutory rates primarily due to the
amortization of the non-deductible portion of goodwill associated with certain
acquisitions (the tax laws generally permit deduction of such expenses for asset
purchases, but not for acquisitions of stock). In the second quarter of 1997,
the Company recorded approximately $63.4 million in non-deductible goodwill,
primarily related to the acquisition of Safesite.
Net income (loss) decreased $1.4 million to a net loss of $1.0 million (2.1% of
revenues) for the second quarter of 1997 from net income of $0.4 million (1.2%
of revenues) for the second quarter of 1996.
As a result of the foregoing factors, earnings before interest, taxes,
depreciation, amortization and extraordinary charges ("EBITDA"), increased $3.2
million, or 40.7%, to $11.2 million (24.0% of revenues) for the second quarter
of 1997 from $7.9 million (24.1% of revenues) for the second quarter of 1996.
Six Months Ended June 30, 1997 Compared to Six Months Ended June 30, 1996
Storage revenues increased $14.4 million, or 36.7%, to $53.8 million for the
first six months of 1997 from $39.4 million for the first six months of 1996.
Twenty five acquisitions completed by the Company in 1996 and the first six
months of 1997 accounted for $11.4 million, or 78.8%, of such increase. The
balance of the storage revenues growth resulted primarily from net increases in
Cartons stored by existing customers and from sales to new customers.
Service and storage material sales revenues increased $10.3 million, or 42.1%,
to $34.9 million for the first six months of 1997 from $24.6 million for the
first six months of 1996. Acquisitions accounted for $8.7 million, or 84.4%, of
such increase. The balance of such increase resulted from increases in service
and storage material sales to existing customers and the addition of new
customer accounts. The greater percentage increase in service and storage
material sales revenues, as compared to storage revenues, for the first six
months of 1997, over the same period in 1996, is primarily attributable to
certain businesses acquired in 1997 that have a higher component of service and
storage material sales revenues, compared to storage revenues, than the rest of
the Company.
For the reasons discussed above, total revenues increased $24.8 million, or
38.8%, to $88.7 million for the first six months of 1997 from $64.0 million for
the first six months of 1996. Of such increase, $20.1 million, or 81.1%, was
attributable to acquisitions completed by the Company in 1996 and the first six
months of 1997.
12
<PAGE>
IRON MOUNTAIN INCORPORATED
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
Cost of sales (excluding depreciation) increased $13.5 million, or 41.7%, to
$45.9 million (51.7% of revenues) for the first six months of 1997 from $32.4
million (50.6% of revenues) for the first six months of 1996. The increase was
primarily attributable to the increase in Cartons stored and expenses related to
certain facility relocations. The increase as a percentage of revenues was
primarily attributable to recent acquisitions, which initially have lower gross
margins than the rest of the Company.
Selling, general and administrative expenses increased $5.4 million, or 33.8%,
to $21.5 million (24.2% of revenues) for the first six months of 1997 from $16.1
million (25.1% of revenues) for the first six months of 1996. The dollar
increase was primarily attributable to increased personnel, office and overhead
costs needed to support the Company's growth. The decrease as a percentage of
revenues is primarily attributable to revenues growing at a higher rate than
overhead expenses.
Depreciation and amortization increased $4.4 million, or 58.9%, to $12.0 million
(13.5% of revenues) for the first six months of 1997 from $7.5 million (11.8% of
revenues) for the first six months of 1996. The increase was primarily
attributable to the additional depreciation and amortization related to the
aforementioned acquisitions and capital expenditures including racking systems,
information systems and improvements to existing facilities.
As a result of the foregoing factors, operating income increased $1.4 million,
or 17.9%, to $9.4 million (10.6% of revenues) for the first six months of 1997
from $8.0 million (12.5% of revenues) for the first six months of 1996.
Interest expense increased $4.7 million, or 73.5%, to $11.1 million for the
first six months of 1997 from $6.4 million for the first six months of 1996. The
increase was primarily attributable to increased indebtedness related to the
financing of acquisitions and capital expenditures. Such increase was partially
offset by lower effective interest rates for the first six months of 1997 as
compared to the same period for 1996.
As a result of the foregoing factors, income (loss) before provision (credit)
for income taxes decreased $3.3 million to a loss of $1.7 million (1.9% of
revenues) for the first six months of 1997 from income of $1.6 million (2.5% of
revenues) for the first six months of 1996. Provision (credit) for income taxes
was a credit of $0.2 million for the first six months of 1997 compared with a
provision of $0.9 million for the first six months of 1996. The Company's
effective tax rate is less favorable than statutory rates primarily due to the
amortization of the non-deductible portion of goodwill associated with certain
acquisitions (the tax laws generally permit deduction of such expenses for asset
purchases, but not for acquisitions of stock). In the first six months of 1997,
the Company recorded approximately $63.4 million in non-deductible goodwill,
primarily related to the acquisition of Safesite.
Net income (loss) decreased $2.2 million to a net loss of $1.5 million (1.7% of
revenues) for the first six months of 1997 from net income of $0.7 million (1.1%
of revenues) for the second quarter of 1996. Net income (loss) applicable to
common stockholders decreased $1.9 million to a net loss of $1.5 million (1.7%
of revenues) for the first six months of 1997 from net income of $0.4 million
(0.7% of revenues) after accretion of $0.3 million related to a redeemable put
warrant for the first six months of 1996. The put warrant was redeemed in full
in February 1996, with a portion of the proceeds from the Company's initial
public offering of common stock. As a result of such redemption, there will be
no future charges for such accretion.
13
<PAGE>
IRON MOUNTAIN INCORPORATED
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
As a result of the foregoing factors, EBITDA increased $5.9 million, or 37.8%,
to $21.4 million (24.1% of revenues) for the first six months of 1997 from $15.5
million (24.2% of revenues) for the first six months of 1996.
Financial Condition and Liquidity
As the Company has sought to increase its EBITDA, it has made significant
capital investments, consisting primarily of acquisitions; growth-related
capital expenditures, including racking systems, information systems and
improvements to existing facilities; and customer acquisition costs. Cash paid
for these investments during the first six months of 1997 amounted to
$52.8 million, $13.0 million and $0.3 million, respectively. These investments
have been primarily funded through cash flows from operations and borrowings
under the Company's revolving credit facility.
Net cash provided by operations was $6.9 million for the first six months of
1997 compared to $8.1 million for the same period in 1996. The decrease resulted
from the increase in EBITDA being more than offset by the increase in interest
payments, the $1.9 million insurance receivable related to the South Brunswick
fires and other changes in asset and liability accounts.
Net cash provided by financing activities was $56.3 million for the six months
ended June 30, 1997, consisting primarily of the proceeds from borrowings under
the Company's revolving credit facility of $62.4 million, partially offset by
repayments of debt of $5.8 million. As of June 30, 1997 the Company had $83.6
million available under its $150.0 million revolving credit facility. Subsequent
to June 30, 1997, the Company had borrowings of approximately $18.9 million
under the revolving credit facility to fund, among other things, the cash
portion of the purchase price of four records management businesses.
The Company has historically financed its acquisitions with borrowings under its
credit agreements in conjunction with cash flows provided by operations and,
more recently, with a portion of the proceeds from the Company's initial public
offering and the sale of the Notes. However, for the Safesite acquisition, which
closed during the second quarter of 1997, the Company issued approximately 1.8
million shares of its common stock, valued at approximately $51.3 million, as
part of the total consideration. The balance of the purchase price was comprised
of options to acquire Iron Mountain common stock, valued at approximately $2.3
million, and cash. During July 1997, the Company issued approximately 35,000
shares of its common stock as partial consideration for one of the four records
management businesses it acquired subsequent to June 30, 1997.
The Company expects to incur costs during the next two to three years as it
addresses the impact of the so-called Year 2000 problem on its information
systems. The Year 2000 Problem, which is common to most corporations, concerns
the inability of certain information systems, primarily computer software
programs, to properly recognize and process date sensitive information as the
year 2000 approaches. The Company is beginning to assess its systems and is in
the process of addressing this issue. Accordingly, management has not yet
estimated the costs of this effort.
14
<PAGE>
IRON MOUNTAIN INCORPORATED
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings
The Company is presently involved as a defendant in various litigation which has
occurred in the normal course of business. Management believes that it has
meritorious defenses in all such actions, and in any event, the amount of
damages, if such matters were decided adversely, would not have a material
adverse effect on the Company's financial condition or results of operations.
Item 2 - Changes in Securities
During the three months ended June 30, 1997, the Company issued the following
shares of Common Stock pursuant to an employee stock award in reliance on Rule
701 promulgated under the Securities Act of 1933, as amended:
Number of Shares Aggregate
Date of Issuance Issued Price Paid
-------------------- --------------------- -----------------
April 3, 1997 350 $ --
Item 4 - Submission of Matters to a Vote of Security-Holders
Following are the results of all matters submitted to a vote of security-holders
during the second quarter ended June 30, 1997. These matters were voted on at
the 1997 Annual Meeting of Stockholders held on May 29, 1997:
Item 1: Election of Class B Directors - Vote to elect two (2) Class B
directors to serve until the Company's Year 2000 Annual Meeting of
Stockholders, or until their successors are elected and qualified.
Total Vote For Total Vote Withheld
Each Director From Each Director
------------- ------------------
C. Richard Reese 7,743,865 147,980
Arthur D. Little 7,743,865 147,980
The following directors' terms continued after the 1997 Annual Meeting: David S.
Wendell, Eugene B. Doggett, Constantin R. Boden and Vincent J. Ryan.
15
<PAGE>
IRON MOUNTAIN INCORPORATED
Item 2: Increase the Authorized Shares of Common Stock - Amendment to the first
sentence of Article FOURTH of the Restated Certificate to increase the
number of shares of Common Stock that the Company is authorized to issue
from 13,000,000 to 20,000,000 shares.
For Against Abstain Broker Non-Vote
------------ ----------- --------- ----------------
7,860,800 20,015 11,030 --
Item 3: Increase the Authorized Shares of Common Stock for Issuance Under the
1995 Stock Incentive Plan - Amendment to the Company's 1995 Stock
Incentive Plan to increase the number of shares of Common Stock
authorized for issuance thereunder from 1,000,000 to 1,400,000.
For Against Abstain Broker Non-Vote
------------- ----------- --------- ---------------
6,992,448 728,827 13,630 156,940
Item 4: Accelerate Vesting and Conversion of Options and Stock Appreciation
Rights Issued Under the 1995 Stock Incentive Plan - Amendment to the
Company's 1995 Stock Incentive Plan to accelerate the vesting and
conversion of options and stock appreciation rights in the event of
certain mergers or consolidations.
For Against Abstain Broker Non-Vote
------------- ----------- --------- ---------------
7,051,023 661,303 9,630 169,889
Item 5: Ratification of Selection of Independent Public Accountants -
Ratification of the selection by the Board of Directors of the firm of
Arthur Andersen LLP as the Company's independent public accountants for
the current year.
For Against Abstain Broker Non-Vote
------------- ----------- --------- ---------------
7,883,025 6,690 2,130 --
16
<PAGE>
IRON MOUNTAIN INCORPORATED
Item 5 - Other Information
As a result of the acquisition of Safesite, B. Thomas Golisano, formerly the
Chairman of the Board of Safesite, was appointed as a Class A Director of the
Company.
Item 6 - Exhibits and Reports on Form 8-K
(a) Exhibit Description
------- ------------------------------------------------------------
3.1 Certificate of Incorporation of Iron Mountain Incorporated,
as amended
3.2 By-laws of Iron Mountain Incorporated, as amended
10.1 Amended and Restated Registration Rights Agreement
10.2 Iron Mountain Incorporated 1995 Stock Incentive Plan, as
amended
11 Statement re: computation of earnings per share
27 Financial Data Schedule
(b) Reports on Form 8-K
The Company filed a Current Report on Form 8-K on June 25, 1997 announcing
that its wholly owned subsidiary, Iron Mountain/Safesite, Inc., had
completed the acquisition of Safesite Records Management Corporation. In
addition, wholly owned subsidiaries of the Company also acquired certain
real property from a trust for the benefit of the controlling stockholders
of Safesite. The acquisition was reported under Item 2 of Form 8-K. In
accordance with Item 7(a)(4) of Form 8-K, the required financial statements
will be filed, by amendment to the Form 8-K, on or before August 26, 1997.
17
<PAGE>
IRON MOUNTAIN INCORPORATED
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
IRON MOUNTAIN INCORPORATED
August 14, 1997 By: /s/ Jean A. Bua
- --------------- ---------------------------------------
(date) Jean A. Bua
Vice President and Corporate Controller
(Principal Accounting Officer)
18
EXHIBIT 3.1
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
IRON MOUNTAIN INCORPORATED
(as amended as of June 3, 1997)
-----------------------------------
Iron Mountain Incorporated, a Delaware corporation (the "Corporation"),
hereby certifies as follows:
A. The name of the Corporation is Iron Mountain Incorporated, and the
name under which the Corporation was originally incorporated was Iron Mountain
Information Services, Inc.
B. The date of filing of the Corporation's original Certificate of
Incorporation with the Secretary of State was November 15, 1990; and the date of
filing of its first Restated Certificate of Incorporation with the Secretary of
State was December 13, 1990.
C. This Restated Certificate of Incorporation restates, integrates and
further amends the provisions of the first Restated Certificate of Incorporation
of the Corporation, as heretofore amended.
D. This Restated Certificate of Incorporation was duly adopted in
accordance with Sections 242 and 245 of the Delaware General Corporation Law.
E. The first Restated Certificate of Incorporation of the Corporation,
as heretofore amended, is hereby amended and restated effective at 9:00 a.m. on
February 6, 1996 to read in its entirety as follows:
FIRST: The name of the Corporation is Iron Mountain Incorporated.
SECOND: The address of the Corporation's registered office in the State
of Delaware is The Prentice-Hall Corporation System, Inc., 1013 Centre Road,
City of Wilmington, County of New Castle. The name of the Corporation's
registered agent at such address is The Prentice-Hall Corporation System, Inc.
THIRD: The nature of the business or purposes to be conducted or
promoted by the Corporation are to engage in any lawful act or activity for
which corporations may be organized under the Delaware General Corporation Law.
<PAGE>
-2-
FOURTH: The total number shares of all classes of capital stock that
Corporation shall have authority to issue is Twenty Three Million
(23,000,000)(1) shares, of which:
(i) Twenty Million (20,000,000) shall be Common Stock, par value
$.01 per share (the "Common Stock"),(2)
(ii) One Million (1,000,000) shall be Nonvoting Common Stock, par
value $.01 per share (the "Nonvoting Common Stock" and together
with the Common Stock, the "Common Shares"), and
(iii) Two Million (2,000,000) shall be Preferred Stock, par value $.01
per share (the "Preferred Stock" ).
A. CERTAIN DEFINITIONS.
--------------------
For purposes of this Certificate of Incorporation, unless the context
otherwise requires, the following terms (or any variant in the form thereof)
have the following respective meanings. Terms defined in the singular shall have
a comparable meaning when used in the plural, and vice versa, and the reference
to any gender shall be deemed to include all genders.
The term "Applicable Law" shall mean any Law of any Authority,
whether domestic or foreign, including without limitation all federal
and state Laws, to which the Person in question is subject or by which
it or any of its business or operations is subject or any of its
property is bound.
The term "Authority" shall mean any governmental or
quasi-governmental authority, whether administrative, executive,
judicial, legislative or other, or any combination thereof, including
without limitation any federal, state, territorial, county, municipal
or other government or governmental or quasi-governmental agency,
authority, board, body, branch, bureau, central bank or comparable
agency or Entity, commission, court, department, instrumentality or
other political unit or subdivision or other Entity of any of the
foregoing, whether domestic or foreign.
The term "Certificate of Incorporation" means this Restated
Certificate of Incorporation of the Corporation and any other document
which pursuant to the Delaware General Corporation Law constitutes a
part of the Corporation's Certificate of Incorporation, including any
amendment to or restatement hereof and any certificate of designation
in respect of any particular class or series of Preferred Stock from
time to time in effect.
The term "Entity" shall mean any corporation, firm, limited
liability company, unincorporated organization, association,
partnership, trust, business trust, joint stock
- ------------------
(1) Amended June 3, 1997.
(2) Amended June 3, 1997.
<PAGE>
-3-
company, joint venture or other organization, entity or business,
whether acting in an individual, fiduciary or other capacity, or any
governmental or quasi-governmental authority, whether domestic or
foreign and whether administrative, executive, judicial, legislative or
other, or any combination thereof.
The term "Law" shall mean any administrative, judicial,
legislative or other action, code, consent decree, constitution,
decree, directive, enactment, finding, guideline, law, injunction,
interpretation, judgment, order, ordinance, policy statement,
proclamation, promulgation, regulation, requirement, rule, rule of law,
rule of public policy, settlement agreement, statute, or writ, or the
common law, or any particular section, part or provision thereof, or
any interpretation, directive, guideline or request (having the force
of law), of any Authority.
The term "Person" shall mean any natural individual or any
Entity.
B. GENERAL.
--------
Any and all shares of any class or series issued for which the full
consideration has been paid or delivered, shall be deemed fully paid stock and
the holders of such shares shall not be liable for any further call or
assessment or any other payment thereon.
No holder of any of the shares of stock of the Corporation, whether now
or hereafter authorized or issued, shall be entitled as of right to purchase or
subscribe for (i) any unissued stock of any class, or (ii) any additional shares
of any class to be issued by reason of any increase of the authorized stock of
the Corporation of any class, or (iii) bonds, certificates of indebtedness,
debentures or other securities convertible into or exchangeable, or carrying any
right to purchase or otherwise acquire, stock of any class of the Corporation.
The Board of Directors of the Corporation may from time to time
authorize by resolution the issuance of any or all shares of the Common Stock
and the Preferred Stock herein authorized or any class or series of capital
stock hereafter authorized, together with any additional shares of any class or
series to be issued by reason of any increase of the authorized stock of the
Corporation of any class or series, or bonds, certificates of indebtedness,
debentures or other securities convertible into or exchangeable for, or carrying
any right to purchase or otherwise acquire, stock of any class or series of the
Corporation, for such purposes, in such amounts, to such Persons, for such
consideration and, in the case of the Preferred Stock, in one or more series or
classes, all as the Board of Directors in its sole and absolute discretion may
from time to time determine and without any vote, approval, consent or other
action by the stockholders, except as otherwise required by Applicable Law.
C. COMMON SHARES.
--------------
Subject to all the rights which may be granted to holders of the
Preferred Stock and except as otherwise required by Applicable Law, the relative
voting, dividend, liquidation and other rights, preferences and limitations or
restrictions of the Common Stock and the Nonvoting Common Stock are as follows:
<PAGE>
-4-
1. The Common Stock and the Nonvoting Common Stock shall have identical
rights and privileges in every respect, except as expressly set forth in the
following paragraphs of this Section C.
2. Voting Rights. Except as otherwise required by Applicable Law or
this Certificate of Incorporation, on all matters to be voted on by stockholders
of the Corporation, each holder of Common Stock shall have one vote in respect
of each share of Common Stock held of record by such holder on the books of the
Corporation. The holders of Nonvoting Common Stock shall not be entitled to vote
on any matters submitted to the stockholders of the Corporation except as
otherwise required by Applicable Law, in which case (and irrespective of any
class vote relating to increases or decreases in the authorized shares of
Nonvoting Common Stock such holders would otherwise be entitled to under Section
242(b) of the Delaware General Corporation Law) holders of Nonvoting Common
Stock shall vote (at the rate of one vote for each share of Nonvoting Common
Stock held of record by such holder on the books of the Corporation) together
with holders of Common Stock and, if applicable, Preferred Stock, as a single
class on such matter unless otherwise required by Applicable Law (other than any
class vote required by Section 242(b) of the Delaware General Corporation Law).
Except as otherwise required by Applicable Law or provided herein or determined
by the Board of Directors pursuant to Section D below, holders of Common Stock
shall vote together with holders of Preferred Stock having voting rights, as a
single class on all matters submitted to the stockholders for a vote, including
any amendment to increase or decrease the number of authorized shares of Common
Stock (irrespective of Section 242(b) of the Delaware General Corporation Law),
subject to any special or preferential voting rights of any series of Preferred
Stock from time to time outstanding.
3. Dividends. At any time shares of Common Stock are outstanding, as
and when dividends or other distributions payable in either cash, capital stock
of the Corporation (other than Common Stock or Nonvoting Common Stock) or other
property of the Corporation may be declared by the Board of Directors, the
amount of any such dividend payable on each share of Common Stock shall in all
cases be equal to the amount of such dividend payable on each share of Nonvoting
Common Stock, and the amount of any such dividend payable on each share of
Nonvoting Common Stock shall in all cases be equal to the amount of the dividend
payable on each share of Common Stock. Dividends and distributions payable in
shares of Common Stock may not be made on or to shares of any class of the
Corporation's capital stock other than the Common Stock, and dividends payable
in shares of Nonvoting Common Stock may not be made on or to shares of any class
of the Corporation's capital stock other than the Nonvoting Common Stock. If a
dividend or distribution payable in shares of Common Stock shall be made on the
shares of Common Stock, a dividend or distribution payable in shares of
Nonvoting Common Stock shall be made simultaneously on the shares of Nonvoting
Common Stock, and the number of shares of Nonvoting Common Stock payable on each
share of Nonvoting Common Stock pursuant to such dividend or distribution shall
be equal to the number of shares of Common Stock payable on each share of Common
Stock pursuant to such dividend or distribution. If a dividend or distribution
payable in shares of Nonvoting Common Stock shall be made on the shares of
Nonvoting Common Stock, a dividend or distribution payable in shares of Common
Stock shall be made simultaneously on the shares of Common Stock, and the number
of shares of Common Stock payable on each share of Common Stock pursuant to such
dividend or distribution shall be equal to the number of shares of Nonvoting
<PAGE>
-5-
Common Stock payable on each share of Nonvoting Common Stock pursuant to such
dividend or distribution.
4. Consideration on Merger, Consolidation, etc.; Distribution of Assets
Upon Liquidation. In any merger, consolidation or business combination, the
consideration to be received per share by the holders of shares of Common Stock
and shares of Nonvoting Common Stock shall be distributed ratably to each share
of Common Stock and Nonvoting Common Stock in accordance with the number of
shares thereof and without regard to class, except that in any such transaction
in which shares of capital stock and/or other securities (including debt
securities) (including without limitation those of a surviving Entity, or the
direct or indirect parent Entity thereof, whether or not such surviving Entity
is the Corporation) are to be distributed, such shares (or other securities) may
differ only as to voting rights to the extent that the voting rights of the
Common Stock and the Nonvoting Common Stock differ immediately prior to such
merger, consolidation or business combination.
In the event the Corporation shall be liquidated, dissolved or wound
up, whether voluntarily or involuntarily, after there shall have been paid or
set aside for the holders of all shares of the Preferred Stock then outstanding
the full preferential amounts to which they may be entitled, if any, under the
resolutions authorizing the issuance of such Preferred Stock, the net assets of
the Corporation remaining thereafter shall be distributed ratably to each share
of Common Stock and Nonvoting Common Stock in accordance with the number of
shares thereof and without regard to class. For the purposes of this paragraph,
neither the merger, consolidation or business combination of the Corporation
with or into any other Entity in which the stockholders of the Corporation
receive capital stock and/or other securities (including debt securities) of the
surviving Entity (or of the direct or indirect parent Entity thereof), nor the
sale, lease or transfer by the Corporation of all or any part of its business
and assets, nor the reduction of the capital stock of the Corporation, shall be
deemed to be a voluntary or involuntary liquidation, dissolution or winding up
of the Corporation.
5. Subdivision or Combination of Common Shares. The shares of Common
Stock or Nonvoting Common Stock, as the case may be, shall not be split up or
subdivided into a greater number of shares or combined into a smaller number of
shares, whether by stock distribution, reclassification, recapitalization or
otherwise, unless at the same time the shares of the other class of Common
Shares are split up, subdivided or combined so that the number of shares thereof
outstanding shall be proportionately adjusted.
6. Conversion of Nonvoting Common Stock into Common Stock. In
connection with any public offering or public sale of Common Stock (including a
registered offering or a sale pursuant to Rule 144 promulgated under the
Securities Act of 1933, as amended, or any similar rule then in force), each
holder of Nonvoting Common Stock shall be entitled to convert any or all of such
holder's shares of Nonvoting Common Stock being actually distributed to the
public or sold to an underwriter, broker-dealer or market maker for actual sale
to the public into an equal number of shares of Common Stock (subject to
equitable adjustment to reflect stock splits, stock dividends, stock
combinations, recapitalizations and like occurrences).
Each share of Nonvoting Common Stock shall be convertible into one
share of Common Stock, at any time and from time to time, (i) if the holder
thereof is not a "bank holding company"
<PAGE>
-6-
or an affiliate of a "bank holding company" under the Bank Holding Company Act
of 1956, as amended (the "BHC Act"), then at the option of the holder thereof,
or (ii) if the holder thereof is a "bank holding company" or an affiliate of a
"bank holding company" under the BHC Act, then upon delivery to the Corporation
of a certificate signed by or on behalf of such holder or holders to the effect
that such holder and its affiliates would hold less than 5% of the outstanding
Common Stock (or such greater amount as shall be permitted by Applicable Law,
including, without limitation, the BHC Act) after giving effect to such
conversion, assuming the conversion by such holder and its affiliates of all
securities convertible into Common Stock owned by them and the exercise by the
holder and its affiliates of all warrants, options and rights to acquire Common
Stock and without giving effect to the exercise of such convertible securities,
options, warrants or rights by any other party, in form and substance reasonably
acceptable to the Corporation.
Such conversion right may be exercised as to any portion of Nonvoting
Common Stock held by a holder by delivering to the Corporation during regular
business hours, at the office of the Corporation or any transfer agent of the
Corporation for the Common Shares as may be designated by the Corporation, the
certificate or certificates for the shares to be converted, duly endorsed or
assigned in blank or to the Corporation (if required by it), accompanied by
written notice stating that such holder elects to convert such shares into
Common Stock, specifying the number of shares of Common Stock to be issued and
stating the name or names (with address) in which the certificate or
certificates for such shares of Common Stock are to be issued. Conversion shall
be deemed to have been effected on the date when the aforesaid delivery is made.
As promptly as is practicable thereafter, the Corporation shall issue and
deliver to such holder, or upon the written order of such holder to the place
designated by such holder, a certificate or certificates representing that
number of shares of Common Stock to which such holder is entitled; provided,
however, that, upon reasonable request by the Corporation, as a condition to
such issuance and delivery of shares of Common Stock to any person other than
such holder, such holder shall have provided to the Corporation evidence
reasonably satisfactory to the Corporation that such transfer shall have been
consummated in accordance with Applicable Law. The person in whose name the
certificate or certificates representing Common Stock are to be issued shall be
deemed to have become a Common Stock holder of record on the applicable
conversion date unless the transfer books of the Corporation are closed on that
date, in which event such holder shall be deemed to have become a Common Stock
holder of record on the next succeeding date on which the transfer books are
open. Upon conversion of only a portion of the number of shares covered by a
certificate representing shares of Nonvoting Common Stock surrendered for
conversion, the Corporation shall issue and deliver to such holder, at the
expense of the Corporation, a new certificate covering the number of shares of
the Nonvoting Common Stock representing the unconverted portion of the
certificate so surrendered.
D. PREFERRED STOCK.
----------------
Authority is hereby expressly granted to the Board of Directors from
time to time to issue the Preferred Stock in one or more classes or series and,
in connection with the creation of any such class or series, to fix by the
resolution or resolutions providing for the issue of shares thereof the
designation, voting powers, preferences, and relative, participating, optional,
or other special rights of such class or series, and the qualifications,
limitations, or restrictions thereof. Such authority of the Board of Directors
with respect to each such class or series shall include, but not be limited to,
the determination of the following:
<PAGE>
-7-
(a) The distinctive designation of, and the number of shares
comprising, such class or series, which number may be increased (except where
otherwise provided by the Board of Directors in creating such class or series)
or decreased (but not below the number of shares thereof then outstanding) from
time to time by like action of the Board of Directors without stockholder
approval (including the holders of such class or series of Preferred Stock);
(b) The dividend rate or amount for such class or series, the
conditions and dates upon which such dividends shall be payable, the form in
which such dividends shall be payable, the relation which such dividends shall
bear to the dividends payable on any other class or classes or any other series
of the same or any other class or classes of stock, and whether or not such
dividends shall be cumulative, and if so, from which date or dates for such
class or series;
(c) Whether or not the shares of such class or series shall be subject
to redemption by the Corporation or the holders thereof and the times, prices,
and other terms and conditions of such redemption;
(d) Whether or not the shares of such series shall be subject to the
operation of a sinking fund or purchase fund to be applied to the redemption or
purchase of such shares and if such a fund be established, the amount thereof
and the terms and provisions relative to the application thereof;
(e) Whether or not the shares of such series shall be convertible into
or exchangeable for shares of any other class or classes, or of any other series
of any class or classes, of stock of the Corporation or any other Entity and if
provision be made for conversion or exchange, the times, prices, rates,
adjustments, and other terms and conditions of such conversion or exchange;
(f) Whether or not the shares of such class or series shall have voting
rights, in addition to the voting rights provided by Law, and if they are to
have such additional voting rights, the extent thereof;
(g) The rights of the shares of such class or series in the event of
any voluntary or involuntary liquidation, dissolution, or winding up of the
Corporation or upon any distribution of its assets, and the relative rights of
priority, if any, of payment of such shares; and
(h) Any other powers, preferences, and relative, participating,
optional, or other special rights of the shares of such class or series, and the
qualifications, limitations, or restrictions thereof, to the full extent now or
hereafter permitted by Applicable Law and not inconsistent with the rights or
provisions of any other class or series of Common Shares or Preferred Stock of
the Corporation.
<PAGE>
-8-
FIFTH: For the management of the business and for the conduct of the
affairs of the Corporation, and in further definition, limitation and regulation
of the powers of the Corporation and of its directors and stockholders, it is
further provided that:
1. Powers of the Board of Directors. The business and affairs of the
Corporation shall be managed by or under the direction of the Board of
Directors. In addition to the powers and authorities herein or by statute
expressly conferred upon it, the Board of Directors may exercise all such powers
and do all such acts and things as may be exercised or done by the Corporation,
subject, nevertheless, to the provisions of the laws of the State of Delaware,
this Certificate of Incorporation and the By-Laws of the Corporation. Except as
otherwise provided by the Delaware General Corporation Law, any committee of the
Board of Directors shall have and may exercise, to the extent provided in the
By-Laws of the Corporation or by the resolutions of the Board of Directors, all
of the powers and authority of the Board of Directors of the Corporation in the
management of the business and affairs of the Corporation.
2. Number and Terms of Directors. Subject to the rights of the holders
of shares of any class or series of Preferred Stock to elect additional
Directors under specified circumstances, the number of Directors of the
Corporation shall be fixed by the Board of Directors of the Corporation and may
be increased or decreased from time to time in such a manner as may be
prescribed by the By-Laws.
The Directors shall be divided into three classes, as nearly equal in
number as possible. One class of Directors has been initially elected for a term
expiring at the annual meeting of stockholders to be held in 1996, another class
has been initially elected for a term expiring at the annual meeting of
stockholders to be held in 1997, and another class has been initially elected
for a term expiring at the annual meeting of stockholders to be held in 1998,
with members of each class to hold office until their successors are elected and
qualified. At each succeeding annual meeting of the stockholders of the
Corporation, the successors of the class of Directors whose term expires at that
meeting shall be elected by plurality vote of all votes cast at such meeting to
hold office for a term expiring at the annual meeting of stockholders held in
the third year following the year of their election.
3. Newly Created Directorships and Vacancies. Newly created
directorships resulting from any increase in the authorized number of directors
or any vacancy in the Board of Directors resulting from death, resignation,
retirement, disqualification, removal from office or otherwise shall be filled
only by a majority vote of the directors then in office, though less than a
quorum, or by a sole remaining director, or, if no directors remain, then by the
stockholders of the Corporation, and directors so chosen shall hold office for a
term expiring at the next election of the class for which such Director has been
chosen. No decrease in the authorized number of directors shall shorten the term
of any incumbent director.
4. Election and Nominations of Directors. Unless and except to the
extent that the By-Laws of the Corporation shall so require, the election of
directors of the Corporation need not be by written ballot. Directors need not
be stockholders. Advance notice of stockholder nominations for the election of
Directors and advance notice of business to be brought by stockholders before an
annual meeting shall be given in the manner provided in the By-Laws of the
Corporation.
<PAGE>
-9-
5. Removal of Directors. Subject to the rights of the holders of shares
of any class or series of Preferred Stock, any Director may be removed from
office by the stockholders in the manner provided in this Section 5 of Article
FIFTH. At any annual meeting of the stockholders of the Corporation or at any
special meeting of the stockholders of the Corporation, the notice of which
shall state that the removal of a Director or Directors is among the purposes of
the meeting, the affirmative vote of the holders of at least 80 percent of the
combined voting power of the stock of the Corporation entitled to vote in the
election of Directors generally, voting together as a single class, may remove
such Director or Directors only for cause.
6. No Action By Written Consent of Stockholders. Subject to the rights
of the holders of shares of any class or series of Preferred Stock in respect of
actions to be taken by the holders of such shares, any action required or
permitted to be taken by the stockholders of the Corporation must be effected at
a duly called annual or special meeting of stockholders of the Corporation and
may not be effected by any consent in writing by the stockholders.
7. Stockholders' Meetings. Subject to the rights of the holders of
shares of any class or series of Preferred Stock in respect of meetings of the
holders of such shares, meetings of stockholders of the Corporation may be
called only by the Chairman of the Board of Directors, if any, or the Board of
Directors pursuant to a resolution adopted by majority vote of the Board of
Directors.
8. Rights of Preferred Stock. Notwithstanding the foregoing, whenever
the holders of any class or series of Preferred Stock shall have the right,
voting separately by class or series, to elect directors at an annual or special
meeting of stockholders, the election, term of office, filling of vacancies and
other features of such directorships shall be governed by the terms of this
Certificate of Incorporation specifically applicable thereto.
Notwithstanding anything contained in this Certificate of Incorporation
to the contrary, the affirmative vote of at least 80 percent of the voting power
of the stock of the Corporation entitled to vote in the election of Directors
generally, voting together as a single class, shall be required to amend, repeal
or adopt any provision inconsistent with this Article FIFTH.
SIXTH:
1. Indemnification Other than Actions by or on Behalf of the
Corporation. The Corporation shall indemnify and hold harmless to the fullest
extent permitted by Applicable Law, as it presently exists or may hereafter be
amended, any person who was or is a party or is threatened to be made a party to
any threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or in the
right of the Corporation), by reason of the fact that he or she is or was a
director, trustee, officer, employee or agent of the Corporation, or is or was
serving at the request of the Corporation as a director, partner, trustee,
officer, employee or agent of another Entity against all liability, losses,
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him or her in connection with
such action, suit or proceeding if he or she acted in good faith and in a manner
he or she reasonably believed to be in or not opposed to the best interests of
the
<PAGE>
-10-
Corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his or her conduct was unlawful. The termination of
any action, suit or proceeding by judgment, order, settlement, conviction or
upon a plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which he
or she reasonably believed to be in or not opposed to the best interest of the
Corporation, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his or her conduct was unlawful.
2. Indemnification in Actions by or on Behalf of the Corporation. The
Corporation shall indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed action or suit by or in
the right of the Corporation to procure a judgment in its favor by reason of the
fact that he or she is or was a director, trustee, officer, employee or agent of
the Corporation, or is or was serving at the request of the Corporation as a
director, partner, trustee, officer, employee or agent of another Entity against
expenses (including attorneys' fees) actually and reasonably incurred by him or
her in connection with the defense or settlement of such action or suit if he or
she acted in good faith and in a manner he or she reasonably believed to be in
or not opposed to the best interests of the Corporation and except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the Corporation
unless and only to the extent that the Court of Chancery of the State of
Delaware or the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the Court of Chancery of the State of Delaware
or such other court shall deem proper.
3. Additional Indemnification as to Expenses. Without intending to
limit the generality of the indemnification provided in Sections 1 and 2 of
Article SIXTH and in addition thereto, to the extent that any person referred to
in Sections 1 and 2 of this Article SIXTH has been successful on the merits or
otherwise in defense of any action, suit or proceeding referred to therein, or
in defense of any claim, issue or matter therein, he or she shall be indemnified
against expenses (including attorneys' fees) actually and reasonably incurred by
him or her in connection therewith.
4. Authorization. Any indemnification under Sections 1 and 2 of this
Article SIXTH (unless ordered by a court) shall be made by the Corporation only
as authorized in the specific case upon a determination that indemnification of
the director, trustee, partner, officer, employee or agent is proper in the
circumstances because he or she has met the applicable standard of conduct set
forth in such Sections 1 and 2 of this Article SIXTH. Such determination shall
be made (i) by a majority vote of the directors who are not parties to such
action, suit or proceeding, even though less than a quorum, (ii) if there are no
such directors, or if such directors so direct, by independent legal counsel in
a written opinion, or (iii) by the stockholders.
5. Expense Advance. Expenses (including attorneys' fees) incurred by an
officer or director of the Corporation in defending any civil, criminal,
administrative or investigative action, suit or proceeding shall be paid by the
Corporation in advance of the final disposition of such action, suit or
proceeding upon receipt of an undertaking by or on behalf of such director or
officer to repay such amount if it shall ultimately be determined that he or she
is not entitled to be indemnified by the Corporation as authorized in this
Article SIXTH. Such expenses (including attorneys' fees)
<PAGE>
-11-
incurred by other persons referred to in Sections 1 and 2 of this Article SIXTH
may be so paid upon such terms and conditions, if any, as the Board of Directors
deems appropriate.
6. Nonexclusivity. The indemnification and advancement of expenses
provided by, or granted pursuant to, the other paragraphs of this Article SIXTH
shall not be deemed exclusive of any other rights to which those seeking
indemnification or advancement of expenses may be entitled under any statute,
by-law, agreement, vote of stockholders or disinterested directors or otherwise,
both as to action in his or her official capacity and as to action in another
capacity while holding such office.
7. Insurance. The Corporation shall have the power to purchase and
maintain insurance on behalf of any person who is or was a director, trustee,
officer, employee or agent of the Corporation, or is or was serving at the
request of the Corporation as a director, trustee, partner, officer, employee or
agent of another corporation, partnership, limited liability company, joint
venture, trust or other enterprise against any liability asserted against him or
her and incurred by him or her in any such capacity, or arising out of his or
her status as such, whether or not the Corporation would have the power to
indemnify such person against such liability under the provisions of this
Article SIXTH.
8. "The Corporation". For purposes of this Article SIXTH, references to
"the Corporation" include, in addition to the resulting Corporation, any
constituent corporation (including any constituent of a constituent) absorbed in
a consolidation or merger which, if its separate existence had continued, would
have had power and authority to indemnify its directors, officers, trustees,
employees or agents so that any person who is or was a director, officer,
trustee, employee or agent of such constituent corporation, or is or was serving
at the request of such constituent corporation as a director, trustee, partner,
officer, employee or agent of another Entity shall stand in the same position
under the provisions of this Article SIXTH with respect to the resulting or
surviving corporation as he or she would have with respect to such constituent
corporation if its separate existence had continued.
9. "Other Enterprises". For purposes of this Article SIXTH, references
to "other enterprises" or "entities" shall include employee benefit plans;
references to "fines" shall include any excise taxes assessed on a person with
respect to an employee benefit plan; and references to "serving at the request
of the Corporation" shall include any service as a director, trustee, officer,
employee or agent of the Corporation which imposes duties on, or involves
services by, such director, trustee, officer, employee, or agent with respect to
an employee benefit plan, its participants, or beneficiaries; and a person who
acted in good faith and in a manner he or she reasonably believed to be in the
interest of the participants and beneficiaries of an employee benefit plan shall
be deemed to have acted in a manner "not opposed to the best interests of the
Corporation" as referred to in this Article SIXTH.
10. Continuation of Indemnification. The indemnification and
advancement of expenses provided by, or granted pursuant to, this Article SIXTH
shall, unless otherwise provided when authorized or ratified, continue as to a
person who has ceased to be a director, officer, partner, trustee, employee or
agent and shall inure to the benefit of the heirs, executors and administrators
of such a person.
<PAGE>
-12-
11. Other Indemnification. The Corporation's obligation, if any, to
indemnify any person who was or is serving at its request as a director,
trustee, partner, officer, employee or agent of another Entity shall be reduced
by any amount such person collects as indemnification from such other
corporation, partnership, limited liability company, joint venture, trust or
other enterprise or from insurance.
12. No Amendment. No amendment or repeal of the provisions of this
Article SIXTH shall adversely affect any right or protection hereunder of any
person in respect of any act or omission occurring prior to the time of such
amendment or repeal.
SEVENTH: A director of the Corporation shall not be liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except to the extent that exculpation from liability is not
permitted under the General Corporation Law of Delaware as in effect when such
breach occurred. Neither the amendment or repeal of this Article SEVENTH, nor
the adoption of any provision of this Certificate of Incorporation inconsistent
with this Article SEVENTH, shall eliminate, reduce or adversely affect the
effect of this Article SEVENTH in respect of any act or omission occurring, or
any cause of action, suit or claim that, but for this Article SEVENTH, would
accrue or arise, prior to such amendment, repeal or adoption of an inconsistent
provision.
EIGHTH: In furtherance and not in limitation of the powers conferred by
the Laws of the State of Delaware, the Board of Directors is expressly
authorized and empowered to amend, alter, change and repeal the By-Laws. The
By-Laws of the Corporation may be amended, altered, changed or repealed, and a
provision or provisions inconsistent with the provisions of the By-Laws as they
exist from time to time may be adopted, only by the majority of the entire Board
of Directors or with the approval of the holders of not less than sixty-six and
two-thirds percent (66-2/3%) of the voting power of all outstanding shares of
capital stock of the Corporation entitled to vote generally in the election of
directors (except that the affirmative vote of at least 80% of the voting power
of the capital stock of the Corporation entitled to vote in the election of
Directors generally, voting together as a single class, shall be required to
amend, repeal or adopt any provision inconsistent with the provisions of the
By-Laws establishing classes of directors, limiting the rights of the
stockholders to remove or nominate directors or bring business before annual
meetings of stockholders, filling vacancies of the Board of Directors and
providing for limitations on calling special meetings of the stockholders).
NINTH: Except for the provisions in Articles FOURTH, SIXTH, SEVENTH,
AND EIGHTH, and this Article NINTH, none of which provisions or authorization
shall be amended, altered, changed or repealed except with the approval of the
holders of not less than sixty-six and two-thirds percent (66-2/3%) of the
voting power of all outstanding shares of capital stock of the Corporation
entitled to vote generally in the election of directors, voting together as a
single class, and any other provisions contained in this Certificate of
Incorporation that by their terms require a higher vote, the Corporation
reserves the right at any time and from time to time to amend, alter, change or
repeal any provision contained in this Certificate of Incorporation (including
provisions as may hereafter be added or inserted in this Certificate of
Incorporation as authorized by the Laws of the State of Delaware) in the manner
now or hereafter prescribed by Delaware General
<PAGE>
-13-
Corporation Law. All rights, preferences and privileges of whatsoever nature
conferred upon stockholders, directors or any other person whomsoever by and
pursuant to this Certificate of Incorporation in its present form or as
hereafter amended are granted subject to the rights reserved in this Article
NINTH.
IN WITNESS WHEREOF, the Corporation has caused this Certificate to be
executed by its Chairman of the Board and Chief Executive Officer and attested
by its Assistant Secretary this 2nd day of February, 1996.
IRON MOUNTAIN INCORPORATED
By: /s/ C. Richard Reese
--------------------------------
Name: C. Richard Reese
Title: Chairman of the Board and
Chief Executive Officer
ATTEST:
By: /s/ Garry B. Watzke
--------------------------------
Name: Garry B. Watzke
Title: Assistant Secretary
EXHIBIT 3.2
================================================================================
AMENDED AND RESTATED
BY-LAWS
of
Iron Mountain Incorporated
(a Delaware corporation)
================================================================================
as amended as of June 12, 1997
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<S> <C>
ARTICLE I OFFICES..............................................................................................1
SECTION 1. Registered Office...........................................................1
SECTION 2. Other Offices...............................................................1
ARTICLE II MEETING OF STOCKHOLDERS.............................................................................1
SECTION 1. Place of Meeting............................................................1
SECTION 2. Annual Meetings.............................................................1
SECTION 3. Special Meetings............................................................1
SECTION 4. Introduction of Business At a Meeting of Stockholders.......................1
SECTION 5. Notice......................................................................2
SECTION 6. Quorum and Adjournments.....................................................3
SECTION 7. Votes; Proxies..............................................................3
SECTION 8. Organization................................................................4
ARTICLE III DIRECTORS..........................................................................................4
SECTION 1. Number......................................................................4
SECTION 2. Nomination of Directors.....................................................5
SECTION 3. Removal.....................................................................6
SECTION 4. Vacancies...................................................................6
SECTION 5. Meetings....................................................................6
SECTION 6. Votes.......................................................................7
SECTION 7. Quorum and Adjournment......................................................7
SECTION 8. Compensation................................................................7
SECTION 9. Action By Consent of Directors..............................................7
ARTICLE IV COMMITTEES OF DIRECTORS.............................................................................7
SECTION 1. Executive Committee.........................................................7
SECTION 2. Audit Committee.............................................................8
SECTION 3. Other Committees............................................................9
SECTION 4. Term of Office..............................................................9
ARTICLE V OFFICERS.............................................................................................9
SECTION 1. Officers....................................................................9
SECTION 2. Vacancies..................................................................10
SECTION 3. Chairman of the Board......................................................10
SECTION 4. President..................................................................10
SECTION 5. Executive Vice Presidents, Senior Vice Presidents and
Vice Presidents............................................................10
SECTION 6. Secretary..................................................................10
SECTION 7. Assistant Secretaries......................................................10
SECTION 8. Treasurer..................................................................11
SECTION 9. Assistant Treasurers.......................................................11
SECTION 10. Controller.................................................................11
SECTION 11. Assistant Controllers......................................................11
SECTION 12. Subordinate Officers.......................................................11
SECTION 13. Compensation...............................................................11
<PAGE>
SECTION 14. Removal....................................................................11
SECTION 15. Bonds......................................................................11
ARTICLE VI CERTIFICATES OF STOCK..............................................................................12
SECTION 1. Form and Execution of Certificates.........................................12
SECTION 2. Transfer of Shares.........................................................12
SECTION 3. Closing of Transfer Books..................................................13
SECTION 4. Fixing Date for Determination of Stockholders of Record....................13
SECTION 5. Lost or Destroyed Certificates.............................................13
SECTION 6. Uncertificated Shares......................................................14
SECTION 7. Transfer Agents and Registrars; Further Regulations........................14
ARTICLE VII EXECUTION OF DOCUMENTS............................................................................15
SECTION 1. Execution of Checks, Notes, etc............................................15
SECTION 2. Execution of Contracts, Assignments, etc...................................15
SECTION 3. Execution of Proxies.......................................................15
ARTICLE VIII INSPECTION OF BOOKS................................................................................15
ARTICLE IX FISCAL YEAR........................................................................................16
ARTICLE X SEAL...............................................................................................16
ARTICLE XI AMENDMENTS.........................................................................................16
ARTICLE XII RESTRICTIONS ON TRANSFER OF CERTAIN SHARES
OF CAPITAL STOCK OF THE CORPORATION............................................................16
SECTION 1. Restrictions on Transfer.....................................................16
SECTION 2. Legend on Stock Certificates.................................................17
SECTION 3. Termination of Restrictions on Transfers.....................................17
</TABLE>
<PAGE>
Iron Mountain Incorporated
(a Delaware corporation)
-----------------
BY-LAWS
-----------------
ARTICLE I OFFICES
-----------------
SECTION 1. Registered Office. The registered office of the Corporation
shall be located in Dover, County of Kent, State of Delaware, and the name of
the resident agent in charge thereof shall be The Prentice-Hall Corporation
System, Inc.
SECTION 2. Other Offices. The Corporation may also have offices at such
other places, within or without the State of Delaware, as the Board of Directors
may from time to time appoint or the business of the Corporation may require.
ARTICLE II MEETING OF STOCKHOLDERS
-------------------------------------
SECTION 1. Place of Meeting. Meetings of the stockholders shall be held
either within or without the State of Delaware at such place as the Board of
Directors may fix from time to time.
SECTION 2. Annual Meetings. The annual meeting of stockholders shall be
held for the election of directors on such date and at such time as the Board of
Directors may fix from time to time. Any other proper business may be transacted
at the annual meeting.
SECTION 3. Special Meetings. Special meetings of the stockholders for
any purpose or purposes may be called only by the Chairman of the Board, if any,
or the Board of Directors pursuant to a resolution adopted by a majority vote of
the Board of Directors.
SECTION 4. Introduction of Business At a Meeting of Stockholders. At an
annual or special meeting of stockholders, only such business shall be
conducted, and only such proposals shall be acted upon, as shall have been
properly brought before such annual or special meeting of stockholders. To be
properly brought before an annual or special meeting of stockholders, business
must be (i) in the case of a special meeting, specified in the notice of the
special meeting (or any supplement thereto) given by or at the direction of the
Board of Directors or otherwise properly brought before the meeting by the Board
of Directors, or (ii) in the case of an annual meeting, properly brought before
the meeting by or at the direction of the Board of Directors, or otherwise
properly brought before the annual meeting by a stockholder. For business to be
properly brought before an annual meeting of stockholders by a stockholder, the
stockholder must have given timely notice thereof in writing to the Secretary of
the Corporation. To be timely, a stockholder's notice
<PAGE>
By-Laws of Iron Mountain Incorporated
A Delaware Corporation
Page 2
must be delivered to or mailed and received at the principal executive offices
of the Corporation not less than 45 days(1) prior to the date of the annual
meeting; provided, however, that if less than 55 days' written notice or prior
public disclosure of the date of the annual meeting is given or made to
stockholders or to the stockholder proposing a matter, notice by the stockholder
to be timely must be so delivered or received not later than the close of
business on the 10th day following the earlier of (i) the day on which such
notice of the date of the meeting was mailed to such stockholder or the
stockholders generally or (ii) the day on which such public disclosure was made.
A stockholder's notice to the Secretary shall set forth as to each
matter the stockholder proposes to bring before an annual meeting of
stockholders (i) a brief description of the business desired to be brought
before the annual meeting and the reasons for conducting such business at the
annual meeting, (ii) the name and address, as they appear on the Corporation's
books, of the stockholder proposing such business and any other stockholders
known by such stockholder to be supporting such proposal, (iii) the class and
number of shares of the Corporation which are beneficially owned by such
stockholder on the date of such stockholder's notice and by any other
stockholders known by such stockholder to be supporting such proposal on the
date of such stockholder's notice, and (iv) any material interest of the
stockholder in such proposal.
Notwithstanding anything in these By-Laws to the contrary, no business
shall be conducted at a meeting of stockholders except in accordance with the
procedures set forth in this Section 4. The Chairman of the meeting shall, if
the facts warrant, determine and declare to the meeting that the business was
not properly brought before the meeting in accordance with the procedures
prescribed by these By-Laws, and if he should so determine, he shall so declare
to the meeting and any such business not properly brought before the meeting
shall not be transacted.
The foregoing requirements shall be in addition to any other
requirements imposed by applicable law or regulation.
SECTION 5. Notice. Written or printed notice of every meeting of
stockholders, annual or special, stating the hour, date and place thereof, and
the purpose or purposes in general terms for which the meeting is called shall,
not less than ten (10) days, or such longer period as shall be provided by law,
the Certificate of Incorporation, these By-Laws, or otherwise, and not more than
sixty (60) days before such meeting, be served upon or mailed to each
stockholder entitled to vote thereat, at the address of such stockholder as it
appears upon the stock records of the Corporation or, if such stockholder shall
have filed with the Secretary of the Corporation a written request that notices
be mailed to some other address, then to the address designated in such request.
Notice of the hour, date, place and purpose of any meeting of
stockholders may be dispensed with if every stockholder entitled to vote thereat
shall attend either in person or by proxy and shall not, at the beginning of the
meeting, object to the holding of such meeting because the meeting has not been
lawfully called or convened, or if every absent stockholder entitled to such
notice shall in
- ---------------------
(1) Amended 5/1/96.
<PAGE>
By-Laws of Iron Mountain Incorporated
A Delaware Corporation
Page 3
writing, filed with the records of the meeting, either before or after the
holding thereof, waive such notice.
SECTION 6. Quorum and Adjournments. Except as otherwise provided by law
or by the Certificate of Incorporation, the presence in person or by proxy at
any meeting of stockholders of the holders of a majority of the voting power of
the shares of the capital stock of the Corporation issued, outstanding and
entitled to vote thereat, shall be requisite and shall constitute a quorum. If
two or more classes of stock are entitled to vote as separate classes upon any
question, then, in the case of each such class, a quorum for the consideration
of such question shall, except as otherwise provided by law or by the
Certificate of Incorporation, consist of a majority of the voting power of all
stock of that class issued, outstanding and entitled to vote. If a majority of
the voting power of shares of capital stock of the Corporation issued and
outstanding and entitled to vote thereat or, where a larger quorum is required,
such quorum, shall not be represented at any meeting of the stockholders
regularly called, the holders of a majority of the voting power of the shares
present or represented by proxy and entitled to vote thereat shall have power to
adjourn the meeting to another time, or to another time and place, without
notice other than announcement of adjournment at the meeting, and there may be
successive adjournments for like cause and in like manner until the requisite
amount of shares entitled to vote at such meeting shall be represented;
provided, however, that if the adjournment is for more than thirty (30) days,
notice of the hour, date and place of the adjourned meeting shall be given to
each stockholder entitled to vote thereat. Subject to the requirements of law
and the Certificate of Incorporation, on any issue on which two or more classes
of stock are entitled to vote separately, no adjournment shall be taken with
respect to any class for which a quorum is present unless the Chairman of the
meeting otherwise directs. At any meeting held to consider matters which were
subject to adjournment for want of a quorum at which the requisite amount of
shares entitled to vote thereat shall be represented, any business may be
transacted which might have been transacted at the meeting as originally
noticed.
SECTION 7. Votes; Proxies. Except as otherwise provided in the
Certificate of Incorporation, at each meeting of stockholders, every stockholder
of record at the closing of the transfer books, if closed, or on the date set by
the Board of Directors for the determination of stockholders entitled to vote at
such meeting, shall have one vote for each share of stock entitled to vote which
is registered in such stockholder's name on the books of the Corporation.
At each such meeting every stockholder entitled to vote shall be
entitled to do so in person, or by proxy appointed by an instrument in writing
or as otherwise permitted by law subscribed by such stockholder and bearing a
date not more than three (3) years prior to the meeting in question, unless said
instrument provides for a longer period during which it is to remain in force. A
duly executed proxy shall be irrevocable if it states that it is irrevocable and
if, and only as long as, it is coupled with an interest sufficient in law to
support an irrevocable power. A proxy may be made irrevocable regardless of
whether the interest with which it is coupled is an interest in the stock itself
or any interest in the Corporation generally. A stockholder may revoke any proxy
which is not irrevocable by attending the meeting and voting in person or by
filing with the Secretary of the Corporation an instrument in writing or as
otherwise permitted by law revoking the proxy or another duly executed proxy
bearing a later date.
<PAGE>
By-Laws of Iron Mountain Incorporated
A Delaware Corporation
Page 4
Voting at meetings of stockholders need not be by written ballot and,
except as otherwise provided by law, need not be conducted by inspectors of
election unless so determined by the Chairman of the meeting or by the holders
of shares of stock having a majority of the votes which could be cast by the
holders of all outstanding shares of stock entitled to vote thereon which are
present in person or represented by proxy at such meeting. If it is required or
determined that inspectors of election be appointed, the Chairman shall appoint
two or more inspectors of election, who shall first take and subscribe an oath
or affirmation faithfully to execute the duties of inspectors at such meeting
with strict impartiality and according to the best of their ability. The
inspectors so appointed shall take charge of the polls and, after the balloting,
shall make a certificate of the result of the vote taken. No director or
candidate for the office of director shall be appointed as such inspector.
At any meeting at which a quorum is present, a plurality of the votes
properly cast for election to fill any vacancy on the Board of Directors shall
be sufficient to elect a candidate to fill such vacancy, and a majority of the
votes properly cast upon any other question shall decide the question, except in
any case where a larger vote is required by law, the Certificate of
Incorporation, these By-Laws, or otherwise.
SECTION 8. Organization. The Chairman of the Board, if there be one, or
in his or her absence the Vice Chairman, or in the absence of a Vice Chairman,
the President, or in the absence of the President, a Vice President, shall call
meetings of the stockholders to order and shall act as chairman thereof. The
Secretary of the Corporation, if present, shall act as secretary of all meetings
of stockholders, and, in his or her absence, the presiding officer may appoint a
secretary.
ARTICLE III DIRECTORS
---------------------
SECTION 1. Number. The business and affairs of the Corporation shall be
conducted and managed by a Board of Directors, none of whom needs to be a
stockholder. The number of directors for each year shall be fixed by the Board
of Directors (and not by the stockholders) from time to time, but shall not be
less than three nor more than fifteen persons. If the number is not so fixed,
the number shall remain as it stood immediately prior to such meeting.
The directors, other than those who may be elected by the holders of
any class or series of stock having a preference over the Common Stock as to
dividends or upon liquidation, shall be divided, with respect to the time for
which they severally hold office, into three classes, as nearly equal in number
as possible, as determined by the Board of Directors. One class shall hold
office initially for a term expiring at the annual meeting of stockholders to be
held in 1996, another class to hold office initially for a term expiring at the
annual meeting of stockholders in 1997, and another class to hold office
initially for a term expiring at the annual meeting of stockholders to be held
in 1998, with each member of each class to hold office until his or her
successor is elected and qualified, or until his or her earlier death,
resignation or removal. At each succeeding annual meeting of the stockholders of
the Corporation, the successors of the class of directors whose term expires at
that meeting shall be elected by plurality vote to hold office for a term
expiring at the annual meeting for stockholders held in the third year following
the year of their election.
<PAGE>
By-Laws of Iron Mountain Incorporated
A Delaware Corporation
Page 5
At any time during any year, except as otherwise provided by law, the
Certificate of Incorporation or these By-Laws, the number of directors may be
increased or reduced, in each case by vote of a majority of the directors in
office at the time of such increase or decrease, regardless of whether such
majority constitutes a quorum, provided that no such decrease shall affect the
term of any director then in office.
SECTION 2. Nomination of Directors. Only persons nominated in
accordance with the procedures set forth in this Section 2 shall be eligible for
election as directors. Nominations of persons for election to the Board of
Directors may be made at a meeting of stockholders (i) by or at the direction of
the Board of Directors, or (ii) by any stockholder of the Corporation entitled
to vote for the election of directors at such meeting who complies with the
notice procedures set forth in this Section 2. Such nominations, other than
those made by or at the direction of the Board, shall be made pursuant to timely
notice in writing to the Secretary of the Corporation. To be timely, a
stockholder's notice must be delivered to or mailed and received at the
principal executive offices of the Corporation not less than 45 days(2) prior to
the date of a meeting; provided, however, that if fewer than 55 days' written
notice or prior public disclosure of the date of the meeting is given or made to
stockholders or to the stockholder proposing a director or directors for
election, notice by the stockholder to be timely must be so delivered or
received not later than the close of business on the 10th day following the
earlier of (i) the day on which such notice of the date of such meeting was
mailed to such stockholder or stockholders generally or (ii) the day on which
such public disclosure was made.
A stockholder's notice to the Secretary shall set forth (i) as to each
person whom the stockholder proposes to nominate for election or reelection as a
director (a) the name, age, business address and residence address of such
person, (b) the principal occupation or employment of such person, (c) the class
and number of shares of the Corporation which are beneficially owned by such
person on the date of such stockholder's notice and (d) any other information
relating to such person that is required to be disclosed in solicitations of
proxies for election of directors, or is otherwise required, in each case
pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended
(including without limitation such person's written consent to being named in
the proxy statement as a nominee and to serving as a director if elected), and
(ii) as to the stockholder giving the notice, (a) the name and address, as they
appear on the Corporation's books, of such stockholder and any other
stockholders known by such stockholder to be supporting such nominees and (b)
the class and number of shares of the Corporation which are beneficially owned
by such stockholder on the date of such stockholder's notice and by any other
stockholders known by such stockholder to be supporting such nominees on the
date of such stockholder's notice.
No person shall be eligible for election as a director of the
Corporation unless nominated in accordance with the procedures set forth in this
Section 2. The Chairman of the meeting shall, if the facts warrant, determine
and declare to the meeting that a nomination was not made in accordance with the
procedures prescribed by the By-Laws, and if he should so determine, he shall so
declare to the meeting and the defective nomination shall be disregarded.
- ------------------
(2) Amended 5/1/96.
<PAGE>
By-Laws of Iron Mountain Incorporated
A Delaware Corporation
Page 6
The foregoing requirements shall be in addition to any other
requirements imposed by applicable law or regulation.
SECTION 3. Removal. Subject to the rights of the holders of any class
or series of stock having a preference over the Common Stock as to dividends or
upon liquidation to elect additional directors under specified circumstances,
any director may be removed from office by the stockholders in the manner
provided in this Section 3 of Article III. At any annual meeting of the
stockholders of the Corporation or at any special meeting of the stockholders of
the Corporation, the notice of which shall state that the removal of a director
or directors is among the purposes of the meeting, the affirmative vote of the
holders of at least 80 percent of the combined voting power of the outstanding
shares of capital stock of the Corporation entitled to vote in the election of
directors generally, voting together as a single class, may remove such director
or directors only for cause.
SECTION 4. Vacancies. If any vacancy shall occur among the directors,
or if the number of directors shall at any time be increased, such vacancy shall
be filled only by the directors then in office, although less than a quorum, by
a majority vote of the directors then in office or by the sole remaining
director, or, if no directors then remain, by the stockholders of the
Corporation.
SECTION 5. Meetings. Meetings of the Board of Directors shall be held
at such place, within or without the State of Delaware, as may from time to time
be fixed by resolution of the Board of Directors or by the Chairman of the
Board, if there be one, or by the President, and as may be specified in the
notice or waiver of notice of any meeting. Meetings may be held at any time upon
the call of the Chairman of the Board, if there be one, or the President or any
two (2) of the directors in office by oral, telegraphic, telex, telecopy or
other form of electronic transmission, or written notice, duly served or sent or
mailed to each director not less than twenty-four (24) hours before such
meeting, except that, if mailed, not less than seventy-two (72) hours before
such meeting.
Meetings may be held at any time and place without notice if all the
directors are present and do not object to the holding of such meeting for lack
of proper notice or if those not present shall, in writing or by telegram,
telex, telecopy or other form of electronic transmission, waive notice thereof
before or after the meeting. A regular meeting of the Board may be held without
notice immediately following the annual meeting of stockholders at the place
where such meeting is held. Regular meetings of the Board may also be held
without notice at such time and place as shall from time to time be determined
by resolution of the Board. Except as otherwise provided by law, the Certificate
of Incorporation or otherwise, neither the business to be transacted at, nor the
purpose of, any regular or special meeting of the Board of Directors or any
committee thereof need be specified in any written waiver of notice.
Members of the Board of Directors or any committee thereof may
participate in a meeting of such Board or committee by means of conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other and participation in a meeting
pursuant to the foregoing provisions shall constitute presence in person at the
meeting.
<PAGE>
By-Laws of Iron Mountain Incorporated
A Delaware Corporation
Page 7
SECTION 6. Votes. Except as otherwise provided by law, the Certificate
of Incorporation or these By-Laws, the vote of the majority of the directors
present at a meeting at which a quorum is present shall be the act of the Board
of Directors.
SECTION 7. Quorum and Adjournment. Except as otherwise provided by law,
the Certificate of Incorporation or these By-Laws, a majority of the directors
shall constitute a quorum for the transaction of business. If at any meeting of
the Board there shall be less than a quorum present, a majority of those present
may adjourn the meeting from time to time without notice other than announcement
of the adjournment at the meeting, and at such adjourned meeting at which a
quorum is present any business may be transacted which might have been
transacted at the meeting as originally noticed.
SECTION 8. Compensation. Directors may receive compensation for their
services, as such, and for service on any committee of the Board of Directors,
as fixed by resolution of the Board of Directors and for expenses of attendance
at each regular or special meeting of the Board or any Committee thereof.
Nothing in this Section shall be construed to preclude a director from serving
the Corporation in any other capacity and receiving compensation therefor.
SECTION 9. Action By Consent of Directors. Any action required or
permitted to be taken at any meeting of the Board of Directors or of any
committee thereof may be taken without a meeting if all members of the Board or
committee, as the case may be, consent thereto in writing, and the writing or
writings are filed with the minutes of proceedings of the Board or committee.
Such consent shall be treated as a vote adopted at a meeting for all purposes.
Such consents may be executed in one or more counterparts and not every Director
or committee member need sign the same counterpart.
ARTICLE IV COMMITTEES OF DIRECTORS
-----------------------------------
SECTION 1. Executive Committee. The Board of Directors may, by
resolution passed by a majority of the whole Board, appoint an Executive
Committee of two (2) or more members, to serve during the pleasure of the Board,
to consist of such directors as the Board may from time to time designate. The
Board of Directors shall designate the Chairman of the Executive Committee.
a. Procedure. The Executive Committee shall, by a vote of a
majority of its members, fix its own times and places of
meeting, determine the number of its members constituting a
quorum for the transaction of business, and prescribe its own
rules of procedure, no change in which shall be made save by a
majority vote of its members.
b. Responsibilities. During the intervals between the meetings of
the Board of Directors, except as otherwise provided by the
Board of Directors in establishing such Committee or
otherwise, the Executive Committee shall possess and may
exercise all the powers of the Board in the management and
direction of the business and affairs of the Corporation;
provided, however, that the Executive Committee shall not,
except to the extent otherwise provided in the Certificate of
Incorporation
<PAGE>
By-Laws of Iron Mountain Incorporated
A Delaware Corporation
Page 8
or a resolution providing for the issuance of shares of stock
adopted by the Board of Directors as provided in Section
151(a) of the Delaware General Business Corporation Law, have
the power:
(1) to amend or authorize the amendment of the
Certificate of Incorporation or these By-Laws;
(2) to authorize the issuance of stock;
(3) to authorize the payment of any dividend;
(4) to adopt an agreement of merger or consolidation of
the Corporation or to recommend to the stockholders
the sale, lease or exchange of all or substantially
all the property and business of the Corporation;
(5) to recommend to the stockholders a dissolution, or a
revocation of a dissolution, of the Corporation ; or
(6) to adopt a certificate of ownership and merger
pursuant to Section 253 of the Delaware Business
Corporation Law.
c. Reports. The Executive Committee shall keep regular minutes of
its proceedings, and all action by the Executive Committee
shall be reported promptly to the Board of Directors. Such
action shall be subject to review, amendment and repeal by the
Board, provided that no rights of third parties shall be
adversely affected by such review, amendment or repeal.
SECTION 2. Audit Committee. The Board of Directors may, by resolution
passed by a majority of the whole Board, appoint an Audit Committee of two (2)
or more members who shall not be officers (the Chairman of the Board and the
Vice Chairman of the Board, if any, not being deemed officers for this purpose)
or employees of the Corporation to serve during the pleasure of the Board. The
Board of Directors shall designate the Chairman of the Audit Committee.
a. Procedure. The Audit Committee, by a vote of a majority of its
members, shall fix its own times and places of meeting, shall
determine the number of its members constituting a quorum for
the transaction of business, and shall prescribe its own rules
of procedure, no change in which shall be made save by a
majority vote of its members.
b. Responsibilities. The Audit Committee shall review the annual
financial statements of the Corporation prior to their
submission to the Board of Directors, shall consult with the
Corporation's independent auditors, and may examine and
consider such other matters in relation to the internal and
external audit of the Corporation's accounts and in relation
to the financial affairs of the Corporation and its accounts,
<PAGE>
By-Laws of Iron Mountain Incorporated
A Delaware Corporation
Page 9
including the selection and retention of independent auditors,
as the Audit Committee may, in its discretion, determine to be
desirable.
c. Reports. The Audit Committee shall keep regular minutes of its
proceedings, and all action by the Audit Committee shall, from
time to time, be reported to the Board of Directors as it
shall direct. Such action shall be subject to review,
amendment and repeal by the Board, provided that no rights of
third parties shall be adversely affected by such review,
amendment or repeal.
SECTION 3. Other Committees. The Board of Directors may, by resolution
passed by a majority of the whole Board, at any time appoint one or more other
committees from its own number. Every such committee must include at least one
member of the Board of Directors. The Board may from time to time designate or
alter, within the limits permitted by law, the Certificate of Incorporation and
this Article, if applicable, the duties, powers and number of members of such
other committees or change their membership, and may at any time abolish such
other committees or any of them.
a. Procedure. Each committee appointed pursuant to this Section
shall, by a vote of a majority of its members, fix its own
times and places of meeting, determine the number of its
members constituting a quorum for the transaction of business,
and prescribe its own rules of procedure, no change in which
shall be made save by a majority vote of its members.
b. Responsibilities. Each committee appointed pursuant to this
Section shall exercise the powers assigned to it by the Board
of Directors in its discretion.
c. Reports. Each committee appointed pursuant to this Section
shall keep regular minutes of proceedings, and all action by
each such committee shall, from time to time, be reported to
the Board of Directors as it shall direct. Such action shall
be subject to review, amendment and repeal by the Board,
provided that no rights of third parties shall be adversely
affected by such review, amendment or repeal.
SECTION 4. Term of Office. Each member of a committee shall hold office
until the first meeting of the Board of Directors following the annual meeting
of stockholders (or until such other time as the Board of Directors may
determine, either in the vote establishing the committee or at the election of
such member or otherwise) and until his or her successor is elected and
qualified, or until he or she sooner dies, resigns, is removed, is replaced by
change of membership or becomes disqualified by ceasing to be a director (where
membership on the Board is required), or until the committee is sooner abolished
by the Board of Directors.
ARTICLE V OFFICERS
---------------------
SECTION 1. Officers. The Board of Directors shall elect a President, a
Secretary and a Treasurer, and, in their discretion, may elect a Chairman of the
Board, a Vice Chairman of the
<PAGE>
By-Laws of Iron Mountain Incorporated
A Delaware Corporation
Page 10
Board, a Controller, and one or more Executive Vice Presidents, Senior Vice
Presidents, Vice Presidents, Assistant Secretaries, Assistant Treasurers and
Assistant Controllers and such other officers as deemed necessary or
appropriate. Such officers shall be elected annually by the Board of Directors
at its first meeting following the annual meeting of stockholders (or at such
other meeting as the Board of Directors determines), and each shall hold office
for the term provided by the vote of the Board, except that each will be subject
to removal from office in the discretion of the Board as provided herein. The
powers and duties of more than one office may be exercised and performed by the
same person.
SECTION 2. Vacancies. Any vacancy in any office may be filled for the
unexpired portion of the term by the Board of Directors at any regular or
special meeting.
SECTION 3. Chairman of the Board. The Chairman of the Board of
Directors, if any, shall be the chief executive officer of the Corporation, and,
subject to the direction of the Board of Directors, shall have general charge of
the management and direction of the business, affairs and property of the
Corporation, and general supervision over its other officers and agents, and,
when present, shall preside at all meetings of the stockholders and the Board of
Directors. The Chairman of the Board of Directors shall perform such other
duties and have such other powers as the Board of Directors shall designate from
time to time.
SECTION 4. President. The President shall be the chief operating
officer of the Corporation. In general, he shall perform all duties incident to
the office of President and chief operating officer and shall see that all
orders and resolutions of the Board of Directors are carried into effect and
shall perform such other executive, supervisory and management functions and
duties as may be assigned to him from time to time by the Board of Directors or
the Chairman of the Board.
SECTION 5. Executive Vice Presidents, Senior Vice Presidents and Vice
Presidents. Each Executive Vice President, Senior Vice President and Vice
President shall have and exercise such powers and shall perform such duties as
from time to time may be assigned to him or to her by the Board of Directors or
the President.
SECTION 6. Secretary. The Secretary shall keep the minutes of all
meetings of the stockholders and of the Board of Directors in books provided for
the purpose; shall see that all notices are duly given in accordance with the
provisions of law and these By-Laws; the Secretary shall be custodian of the
records and of the corporate seal or seals of the Corporation; shall see that
the corporate seal is affixed to all documents the execution of which, on behalf
of the Corporation under its seal, is duly authorized, and, when the seal is so
affixed, he or she may attest the same; and, in general, the Secretary shall
perform all duties incident to the office of secretary of a corporation, and
such other duties as from time to time may be assigned to him or her by the
Board of Directors.
SECTION 7. Assistant Secretaries. The Assistant Secretaries in order of
their seniority shall, in the absence or disability of the Secretary, perform
the duties and exercise the powers of the Secretary and shall perform such other
duties as the Board of Directors shall prescribe or as from time to time may be
assigned by the Secretary.
<PAGE>
By-Laws of Iron Mountain Incorporated
A Delaware Corporation
Page 11
SECTION 8. Treasurer. The Treasurer shall have charge of and be
responsible for all funds, securities, receipts and disbursements of the
Corporation, and shall deposit, or cause to be deposited, in the name of the
Corporation, all monies or other valuable effects in such banks, trust companies
or other depositaries as shall, from time to time, be selected by the Board of
Directors; may endorse for collection on behalf of the Corporation checks, notes
and other obligations; may sign receipts and vouchers for payments made to the
Corporation; may sign checks of the Corporation, singly or jointly with another
person as the Board of Directors may authorize, and pay out and dispose of the
proceeds under the direction of the Board; the Treasurer shall render to the
President and to the Board of Directors, whenever requested, an account of the
financial condition of the Corporation; and in general, shall perform all the
duties incident to the office of treasurer of a corporation, and such other
duties as from time to time may be assigned by the Board of Directors.
SECTION 9. Assistant Treasurers. The Assistant Treasurers in order of
their seniority shall, in the absence or disability of the Treasurer, perform
the duties and exercise the powers of the Treasurer and shall perform such other
duties as the Board of Directors shall prescribe or as from time to time may be
assigned by the Treasurer.
SECTION 10. Controller. The Controller, if elected, shall be the chief
accounting officer of the Corporation and shall perform all duties incident to
the office of a controller of a corporation, and, in the absence of or
disability of the Treasurer or any Assistant Treasurer, perform the duties and
exercise the powers of the Treasurer and shall perform such other duties as the
Board of Directors shall prescribe or as from time to time may be assigned by
the Chairman of the Board, if any, the President or the Treasurer.
SECTION 11. Assistant Controllers. The Assistant Controllers in order
of their seniority shall, in the absence or disability of the Controller,
perform the duties and exercise the powers of the Controller and shall perform
such other duties as the Board of Directors shall prescribe or as from time to
time may be assigned by the Controller.
SECTION 12. Subordinate Officers. The Board of Directors may appoint
such subordinate officers as it may deem desirable. Each such officer shall hold
office for such period, have such authority and perform such duties as the Board
of Directors may prescribe. The Board of Directors may, from time to time,
authorize any officer to appoint and remove subordinate officers and to
prescribe the powers and duties thereof.
SECTION 13. Compensation. The Board of Directors shall fix the
compensation of all officers of the Corporation. It may authorize any officer,
upon whom the power of appointing subordinate officers may have been conferred,
to fix the compensation of such subordinate officers.
SECTION 14. Removal. Any officer of the Corporation may be removed,
with or without cause, by action of the Board of Directors.
SECTION 15. Bonds. The Board of Directors may require any officer of
the Corporation to give a bond to the Corporation, conditional upon the faithful
performance of his or her duties, with one or more sureties and in such amount
as may be satisfactory to the Board of Directors.
<PAGE>
By-Laws of Iron Mountain Incorporated
A Delaware Corporation
Page 12
ARTICLE VI CERTIFICATES OF STOCK
-----------------------------------
SECTION 1. Form and Execution of Certificates. The interest of each
stockholder of the Corporation shall be evidenced by a certificate or
certificates for shares of stock in such form as the Board of Directors may from
time to time prescribe. The certificates of stock of each class shall be
consecutively numbered and signed by the Chairman or Vice Chairman of the Board,
if any, the President, an Executive Vice President, Senior Vice President or a
Vice President and by the Secretary, an Assistant Secretary, the Treasurer or an
Assistant Treasurer of the Corporation, and may be countersigned and registered
in such manner as the Board of Directors may by resolution prescribe, and shall
bear the corporate seal or a printed or engraved facsimile thereof. Where any
such certificate is signed by a transfer agent or transfer clerk acting on
behalf of the Corporation, the signatures of any such Chairman, Vice Chairman,
President, Executive Vice President, Senior Vice President, Vice President,
Treasurer, Assistant Treasurer, Secretary or Assistant Secretary may be
facsimiles, engraved or printed. In case any officer or officers, who shall have
signed, or whose facsimile signature or signatures shall have been used on, any
such certificate or certificates, shall cease to be such officer or officers,
whether because of death, resignation or otherwise, before such certificate or
certificates shall have been delivered by the Corporation, such certificate or
certificates may nevertheless be issued and delivered by the Corporation as
though the person or persons who signed such certificate or certificates or
whose facsimile signature or signatures shall have been used thereon had not
ceased to be such officer or officers.
In case the corporate seal which has been affixed to, impressed on, or
reproduced in any such certificate or certificates shall cease to be the seal of
the Corporation before such certificate or certificates have been delivered by
the Corporation, such certificate or certificates may nevertheless be issued and
delivered by the Corporation as though the seal affixed thereto, impressed
thereon or reproduced therein had not ceased to be the seal of the Corporation.
Every certificate for shares of stock which are subject to any
restriction on transfer pursuant to law, the Certificate of Incorporation, these
By-Laws, or any agreement to which the Corporation is a party, shall have the
restriction noted conspicuously on the certificate, and shall also set forth, on
the face or back, either the full text of the restriction or a statement of the
existence of such restriction and (except if such restriction is imposed by law)
a statement that the Corporation will furnish a copy thereof to the holder of
such certificate upon written request and without charge.
Every certificate issued when the Corporation is authorized to issue
more than one class or series of stock shall set forth on its face or back
either the full text of the preferences, voting powers, qualifications, and
special and relative rights of the shares of each class and series authorized to
be issued, or a statement of the existence of such preferences, powers,
qualifications and rights, and a statement that the Corporation will furnish a
copy thereof to the holder of such certificate upon written request and without
charge.
SECTION 2. Transfer of Shares. The shares of the stock of the
Corporation shall be transferred on the books of the Corporation by the holder
thereof in person or by his or her attorney
<PAGE>
By-Laws of Iron Mountain Incorporated
A Delaware Corporation
Page 13
lawfully constituted, upon surrender for cancellation of certificates for the
same number of shares, with an assignment and power of transfer endorsed thereon
or attached thereto, duly executed, with such proof or guaranty of the
authenticity of the signature as the Corporation or its agents may reasonably
require. The Corporation shall be entitled to treat the holder of record of any
share or shares of stock as the holder in fact thereof and accordingly shall not
be bound to recognize any equitable or other claim to or interest in such share
or shares on the part of any other person whether or not it shall have express
or other notice thereof, save as expressly provided by law, by the Certificate
of Incorporation or these By-Laws. It shall be the duty of each stockholder to
notify the Corporation of his or her post office address.
SECTION 3. Closing of Transfer Books. The stock transfer books of the
Corporation may, if deemed appropriate by the Board of Directors, be closed for
such length of time not exceeding fifty (50) days as the Board of Directors (but
not the stockholders) may determine, preceding the date of any meeting of
stockholders or the date for the payment of any dividend or the date for the
allotment of rights or the date when any issuance, change, conversion or
exchange of capital stock shall go into effect, during which time no transfer of
stock on the books of the Corporation may be made.
SECTION 4. Fixing Date for Determination of Stockholders of Record. In
order that the Corporation may determine the stockholders entitled to notice of
or to vote at any meeting of stockholders or any adjournment thereof, or
entitled to receive payment of any dividend or other distribution or allotment
of any rights, or entitled to exercise any rights in respect of any change,
conversion or exchange of stock or for the purpose of any other lawful action,
the Board of Directors (but not the stockholders) may fix a record date, which
record date shall not precede the date upon which the resolution fixing the
record date is adopted by the Board of Directors and which record date: (a) in
the case of determination of stockholders entitled to vote at any meeting of
stockholders or adjournment thereof, shall, unless otherwise required by law,
the Certificate of Incorporation or these By-Laws, not be more than sixty (60)
nor less than ten (10) days before the date of such meeting; and (b) in the case
of any other action, shall not be more than sixty (60) days prior to such other
action. If no record date is fixed: (a) the record date for determining
stockholders entitled to notice of or to vote at a meeting of stockholders shall
be at the close of business on the day next preceding the day on which notice is
given, or, if notice is waived, at the close of business on the day next
preceding the day on which the meeting is held; and (b) the record date for
determining stockholders for any other purpose shall be at the close of business
on the day on which the Board of Directors adopts the resolution relating
thereto. A determination of stockholders of record entitled to notice of or to
vote at a meeting of stockholders shall apply to any adjournment of the meeting;
provided, however, that the Board of Directors (but not the stockholders) may
fix a new record date for the adjourned meeting.
SECTION 5. Lost or Destroyed Certificates. In case of the loss or
destruction of any certificate of stock, a new certificate may be issued under
the following conditions:
a. The owner of said certificate shall file with the Secretary or
any Assistant Secretary of the Corporation an affidavit giving
the facts in relation to the ownership, and in relation to the
loss or destruction of said certificate, stating its number
and the
<PAGE>
By-Laws of Iron Mountain Incorporated
A Delaware Corporation
Page 14
number of shares represented thereby; such affidavit shall be
in such form and contain such statements as shall satisfy the
Chairman or Vice Chairman of the Board, if any, the President,
any Executive Vice President, any Senior Vice President, any
Vice President, the Secretary, any Assistant Secretary, the
Treasurer or any Assistant Treasurer, that said certificate
has been accidentally destroyed or lost, and that a new
certificate ought to be issued in lieu thereof. Upon being so
satisfied, any such officer may require such owner to furnish
the Corporation a bond in such sum and in such form as he or
she may deem advisable, and with a surety or sureties approved
by him or her, to indemnify and save harmless the Corporation
from any claim, loss, damage or liability which may be
occasioned by the issuance of a new certificate in lieu
thereof. Upon such bond being so filed, if so required, a new
certificate for the same number of shares shall be issued to
the owner of the certificate so lost or destroyed; and the
transfer agent and registrar, if any, of stock shall
countersign and register such new certificate upon receipt of
a written order signed by any such officer, and thereupon the
Corporation may save harmless said transfer agent and
registrar in the premises. In case of the surrender of the
original certificate, in lieu of which a new certificate has
been issued, or the surrender of such new certificate, for
cancellation, the bond of indemnity given as a condition of
the issue of such new certificate may be surrendered; or
b. The Board of Directors of the Corporation may by resolution
authorize and direct any transfer agent or registrar of stock
of the Corporation to issue and register respectively from
time to time without further action or approval by or on
behalf of the Corporation new certificates of stock to replace
certificates reported lost, stolen or destroyed upon receipt
of an affidavit of loss and bond of indemnity in form and
amount and with surety satisfactory to such transfer agent or
registrar in each instance or upon such terms and conditions
as the Board of Directors may determine.
SECTION 6. Uncertificated Shares. The Board of Directors of the
Corporation may by resolution provide that one or more of any or all classes or
series of the stock of the Corporation shall be uncertificated shares, subject
to the provisions of Section 158 of the Delaware General Corporation Law.
SECTION 7. Transfer Agents and Registrars; Further Regulations. The
Board of Directors may appoint one or more banks, trust companies or
corporations doing a corporate trust business, in good standing under the laws
of the United States or any state therein, to act as the Corporation's transfer
agent and/or registrar for shares of one or more classes or series of its stock,
and the Board may make such other and further regulations, not inconsistent with
applicable law, as it may deem expedient concerning the issue, transfer and
registration of the Corporation's stock and stock certificates.
<PAGE>
By-Laws of Iron Mountain Incorporated
A Delaware Corporation
Page 15
ARTICLE VII EXECUTION OF DOCUMENTS
-------------------------------------
SECTION 1. Execution of Checks, Notes, etc. All checks and drafts on
the Corporation's bank accounts and all bills of exchange and promissory notes,
and all acceptances, obligations and other instruments for the payment of money,
shall be signed by such officer or officers, or agent or agents, as shall be
thereunto authorized from time to time by the Board of Directors, which may in
its discretion authorize any such signatures to be facsimile.
SECTION 2. Execution of Contracts, Assignments, etc. Unless the Board
of Directors shall have otherwise provided generally or in a specific instance,
all contracts, agreements, endorsements, assignments, transfers, stock powers,
or other instruments shall be signed by the Chairman or Vice Chairman of the
Board, if any, the President, any Executive Vice President, any Senior Vice
President, any Vice President, the Secretary, any Assistant Secretary, the
Treasurer or any Assistant Treasurer. The Board of Directors may, however, in
its discretion, require any or all such instruments to be signed by any two or
more of such officers, or may permit any or all of such instruments to be signed
by such other officer or officers, agent or agents, as it shall thereunto
authorize from time to time.
SECTION 3. Execution of Proxies. The Chairman or Vice Chairman of the
Board, if any, the President, any Executive Vice President, any Senior Vice
President or any Vice President, and the Secretary, the Treasurer, any Assistant
Secretary or any Assistant Treasurer, or any other officer designated by the
Board of Directors, may sign on behalf of the Corporation proxies to vote upon
shares of stock of other companies standing in the name of the Corporation.
ARTICLE VIII INSPECTION OF BOOKS
--------------------------------
The Board of Directors shall determine from time to time whether, and
if allowed, to what extent and at what time and places and under what conditions
and regulations, the accounts and books of the Corporation (except such as may
by law be specifically open to inspection) or any of them, shall be open to the
inspection of the stockholders, and no stockholder shall have any right to
inspect any account or book or document of the Corporation, except as conferred
by the laws of the State of Delaware, unless and until authorized so to do by
resolution of the Board of Directors or of the stockholders of the Corporation.
<PAGE>
By-Laws of Iron Mountain Incorporated
A Delaware Corporation
Page 16
ARTICLE IX FISCAL YEAR
-----------------------
The fiscal year of the Corporation shall be determined from time to
time by vote of the Board of Directors.
ARTICLE X SEAL
-----------------
The seal of the Corporation shall, subject to alteration by the Board
of Directors, consist of a flat-faced circular die with the word "Delaware",
together with the name of the Corporation and the year of incorporation, cut or
engraved thereon.
ARTICLE XI AMENDMENTS
-----------------------
These By-Laws may be altered, amended, changed or repealed and new
By-Laws adopted by the stockholders or by the Board of Directors in accordance
with the provisions set forth in the Certificate of Incorporation, in either
case at any meeting called for that purpose at which a quorum shall be present.
Any By-Law, whether made, altered, amended, changed or repealed by the
stockholders or the Board of Directors may be repealed, amended, changed,
further amended, changed, repealed or reinstated, as the case may be, either by
the stockholders or by the Board of Directors as above provided.
ARTICLE XII RESTRICTIONS ON TRANSFER OF
CERTAIN SHARES OF CAPITAL STOCK OF THE CORPORATION(3)
--------------------
SECTION 1. Restrictions on Transfer. Any Person who receives any shares
of Common Stock of the Corporation (the "Merger Securities") issued pursuant to
the Agreement and Plan of Merger, dated as of February 19, 1997, by and among
the Corporation, IM-1 Acquisition Corp. and Safesite Records Management
Corporation, as amended (the "Merger Agreement"), shall not Transfer (as defined
herein), and the Corporation shall not be required to register the Transfer of,
the number of shares, rounded upward to the nearest whole share (the "Subject
Shares"), of the Merger Securities equal to the product of (1) the quotient
obtained by dividing (x) the "Lock-up Value" by (y) the product of (A) the
Common Stock Amount and (B) the lesser of the Closing Price and the
Determination Price multiplied by (2) the Stock Merger Consideration received by
such Person in connection with the Merger, until the first anniversary date of
the effective date of the Merger Agreement (the "Effective Time"), except as
otherwise allowed by the Board of Directors of the Corporation in its sole
discretion. The "Lock-up Value" shall mean one half (1/2) of the sum of (x) the
product of the Common Stock Amount and the lesser of the Closing Price and the
Determination Price plus (y) the Cash Amount. The "Closing Price" shall mean the
closing price
- --------------------
(3) Adopted July 12, 1997.
<PAGE>
By-Laws of Iron Mountain Incorporated
A Delaware Corporation
Page 17
per share of Acquiror Stock for the trading day immediately prior to the
Effective Time. The closing price for such trading day shall be the last quoted
sale price or, if not so quoted, the average of the low bid and high asked
prices on the Nasdaq National Market System. Capitalized terms used herein and
not otherwise defined shall have the meanings prescribed therefor in the Merger
Agreement. The term "Transfer" means any indirect or direct transfer, offer to
sell, sale, assignment, grant of an option to acquire, pledge, or other
disposition.
SECTION 2. Legend on Stock Certificates. The Corporation shall note on
the certificates for the Subject Shares of Merger Securities issued upon
transfer that the shares represented by such certificates are subject to the
restrictions on transfer and registration of transfer imposed in this Article
XII.
SECTION 3. Termination of Restrictions on Transfers. The provisions of
this Article XII shall terminate in their entirety on the first anniversary of
the Effective Time.
EXHIBIT 10.1
AMENDED AND RESTATED
REGISTRATION RIGHTS AGREEMENT
AMONG
IRON MOUNTAIN INCORPORATED
and
THE STOCKHOLDERS NAMED HEREIN
JUNE 12, 1997
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
Section 1. Registration of Securities............................................................................1
(a) Registration by the Company.........................................................................1
(b) Registration at Stockholders' Request...............................................................2
(c) Registration Generally..............................................................................5
(d) Restrictions on Registration.......................................................................10
Section 2. Conditions to Registration...........................................................................11
Section 3. Indemnification......................................................................................12
(a) Indemnification by the Company.....................................................................12
(b) Indemnification by Holders of Registrable Securities...............................................12
(c) Procedure..........................................................................................13
(d) Contribution.......................................................................................14
Section 4. Exchange Act Registration............................................................................15
Section 5. Termination of Registration Obligations..............................................................16
Section 6. Limitation on Registration Rights of Others..........................................................17
Section 7. Lock-Up Agreement....................................................................................17
Section 8. Definitions..........................................................................................17
Section 9. Miscellaneous........................................................................................22
(a) Assignment; Successors and Assigns.................................................................22
(b) Specific Performance; Other Rights and Remedies...................................................22
(c) Expenses...........................................................................................22
(d) Entire Agreement...................................................................................23
(e) Waivers; Amendments................................................................................23
(f) Notices............................................................................................23
(g) Severability.......................................................................................24
(h) Counterparts.......................................................................................24
(i) Section Headings...................................................................................24
(j) Governing Law......................................................................................24
(k) Further Acts.......................................................................................24
</TABLE>
<PAGE>
AMENDED AND RESTATED
REGISTRATION RIGHTS AGREEMENT
-----------------------------
This Amended and Restated Registration Rights Agreement (this
"Agreement") is made and entered into as of June 12, 1997 by and among Iron
Mountain Incorporated, a Delaware corporation (the "Company"), and the
undersigned Persons which have heretofore acquired Registrable Securities
(individually a "Stockholder" and collectively the "Stockholders" which term is
further defined in Section 9(a)).
WHEREAS, the Company and certain of the Stockholders entered into that
certain Registration Rights Agreement dated as of December 14, 1990 (the
"Original Agreement"); and
WHEREAS, the Company and the Stockholders desire to amend and restate
in its entirety the Original Agreement and admit additional Stockholders as set
forth herein.
NOW, THEREFORE, in consideration of the recitals, the mutual covenants
and agreements herein contained, and other valuable consideration, the receipt,
adequacy and sufficiency of which are hereby acknowledged, the parties hereto,
intending to be legally bound, do hereby covenant and agree as follows:
Section 1. Registration of Securities.
(a) Registration by the Company. If at any time or from time
to time the Company shall propose to file on its behalf or on behalf of any of
its security holders (including without limitation pursuant to Section 1(b)) a
registration statement under the Securities Act with respect to any class of
Common Stock, except in connection with (i) an offering relating solely to
dividend reinvestment plans or stock option or other employee benefit plans,
(ii) any merger, consolidation or acquisition, (iii) any exchange or tender
offer, whether with existing security holders of the Company or any other
Person, or (iv) an offering relating solely to convertible securities or units
consisting of securities senior to Common Stock and warrants, options and rights
to acquire Common Stock, the Company shall, except to the extent not required to
do so pursuant to the provisions of Section 1(d), in each case:
(i) promptly give written notice to each Stockholder at
least twenty (20) days (or such shorter period as the Company deems
reasonable under the circumstances) before the anticipated filing date.
Such notice shall include the anticipated offering price or range
thereof and the plan of distribution;
(ii) include in such registration (and any related
qualification under blue sky or other state securities laws), and, at
the request of a Stockholder, in any underwriting involved therein, all
Registrable Securities specified in a written request or requests, made
within ten (10) days after such written notice from the Company, by any
Stockholder; and
<PAGE>
-2-
(iii) use commercially reasonable efforts to cause the
managing underwriter or underwriters of any proposed underwritten
offering of any class of Common Stock to permit the Registrable
Securities requested to be included in the Registration Statement for
such offering on the same terms and conditions as the Common Stock of
the Company included therein. Notwithstanding the foregoing, if the
managing underwriters of such offering deliver a written opinion to the
holders of such Registrable Securities that marketing considerations
(including, without limitation, pricing) require a limitation on the
Registrable Securities included in any Registration Statement filed
under this Section 1(a), then, subject to the advice of said managing
underwriter or underwriters as to the size and composition of the
offering, and subject to the provisions of Section 1(d), such
limitation will be imposed pro rata (based upon the relative proposed
public offering price of the Registrable Securities proposed to be
included) among all holders of Registrable Securities who requested
inclusion in the registration pursuant to this Section 1(a) (except as
otherwise provided in Section 1(b)).
Except as set forth in the last sentence of this paragraph, the Company
will bear all Registration Expenses in connection with any registration pursuant
to the provisions of this Section 1(a). Without limiting the generality of the
foregoing (but subject to the last sentence of this paragraph), in connection
with each Registration Statement required hereunder, the Company will reimburse
the holders of Registrable Securities being registered pursuant to such
Registration Statement for the reasonable fees and disbursements of not more
than one counsel (or more than one counsel if a conflict exists among such
selling holders in the exercise of the reasonable judgment of counsel for the
selling holders and counsel for the Company, provided that such selling holders
shall use commercially reasonable efforts to minimize conflicts of counsel)
chosen by the holders of not less than a majority in value (based on the
proposed public offering price) of the Registrable Securities being sold.
Notwithstanding the foregoing, in connection with any registration of
Registrable Securities pursuant to this Section 1(a) on behalf of a Registered
Stockholder, the Company shall not be responsible for the fees and disbursements
of counsel to such Registered Stockholder and such Registered Stockholder shall
reimburse the Company promptly upon request therefor for the registration filing
fees paid by the Company to the Commission in respect of the Registrable
Securities registered on behalf of such Registered Stockholder.
If any Stockholder desires to have Registrable Securities registered
under this Section 1(a), it shall be required so to advise the Company in
writing within ten (10) days after the date of the Company's notice, setting
forth the number or amount of Registrable Securities for which registration is
so requested. Neither the delivery of the notice by the Company nor of the
request by any Stockholders shall in any way obligate the Company to file a
Registration Statement and, notwithstanding such filing, the Company may, at any
time prior to the effective date thereof, determine not to offer the securities
to which the registration statement relates without liability to any of the
Stockholders. No registration of Registrable Securities effected under this
Section 1(a) shall relieve the Company of its obligation to effect registration
of Registrable Securities upon any request made pursuant to the provisions of
Section 1(b).
(b) Registration at Stockholders' Request. Subject to the
second paragraph of this Section 1(b), upon the written request of any
Significant Stockholder (or group of Significant Stockholders) requesting that
the Company effect the registration under the Securities Act of all
<PAGE>
-3-
or part of the Registrable Securities held by such Stockholder, specifying the
intended method or methods of disposition of such Registrable Securities, the
Company shall, except to the extent not required to do so pursuant to the
provisions of this Section 1(b) or Section 1(d), promptly give written notice of
such requested registration to all holders of Registrable Securities and
thereupon will expeditiously prepare and, within ninety (90) days, file a
registration statement with respect to, and use commercially reasonable efforts
to effect the registration, under the Securities Act, of:
(i) the Registrable Securities which the Company has been
so requested to register by such Stockholders, for disposition in
accordance with the intended method of disposition stated in such
request, and
(ii) all other Registrable Securities which the Company has
been requested to register by the holders of Registrable Securities by
written request delivered to the Company within ten (10) days after the
giving of such notice by the Company (which request shall specify the
intended method of disposition of such Registrable Securities).
Each registration requested pursuant to this Section 1(b) shall be
effected by the filing of a Registration Statement on Form S-1 (or such other
form as the Commission may from time to time require or permit in order to
effectuate a public offering of common stock of a company such as the Company
and in a method of disposition such as that proposed), unless the use of a
different form has been agreed upon in writing by holders of not less than a
majority in value (based upon the proposed public offering price) of the
Registrable Securities as to which registration has so been requested.
Notwithstanding the preceding sentence, the Company need not so cause a
Registration Statement so filed pursuant to the provisions of this Section 1(b)
to become effective under the Securities Act on (a) with respect to BankAmerica
and their permitted assignees, more than one occasion (except that if the
Company is then eligible for the use of Form S-3 (or any successor form),
BankAmerica shall have the right to request an additional registration on Form
S-3 (or such successor form) under this Section 1(b)), (b) with respect to C.
Richard Reese and his permitted assigns, more than one occasion (except that if
the Company is then eligible for the use of Form S-3 (or any successor form), C.
Richard Reese shall have the right to request an additional registration on Form
S-3 (or such successor form) under this Section 1(b)), (c) with respect to
Schooner, Vincent J. Ryan and their permitted assignees, more than one occasion
(except that if the Company is then eligible for the use of Form S-3 (or any
successor form), such Persons shall have the right to request an additional
registration on Form S-3 (or such successor form) under this Section 1(c)), (d)
with respect to the Safesite Stockholders, more than two occasions, and (e) with
respect to any other Significant Stockholder or group of Significant
Stockholders, more than the number of occasions determined by the Company in
respect of such Significant Stockholder or group thereof (which amount shall be
set forth in the instrument pursuant to which such Significant Stockholder or
group thereof becomes party to this Agreement); provided, however, that any
registration of Registrable Securities requested by one or more Significant
Stockholders pursuant to this Section 1(b) which shall not have become effective
and remained effective in accordance with the provisions of Section 1(c) shall
not be deemed to be a registration for purposes of this Section 1(b).
Except as set forth in the last sentence of this paragraph, the Company
will pay all Registration Expenses in connection with each registration pursuant
to the provisions of this
<PAGE>
-4-
Section 1(b). Without limiting the generality of the foregoing (but subject to
the last sentence of this paragraph), in connection with each Registration
Statement required hereunder, the Company will reimburse the holders of
Registrable Securities being registered pursuant to such Registration Statement
for the reasonable fees and disbursements of not more than one counsel (or more
than one counsel if a conflict exists among such selling holders in the exercise
of the reasonable judgment of counsel for the selling holders and counsel for
the Company, provided that such selling holders shall use commercially
reasonable efforts to minimize conflicts of counsel) chosen by the holders of
not less than a majority in value (based on the proposed public offering price)
of the Registrable Securities being sold. Notwithstanding the foregoing, in
connection with any registration of Registrable Securities pursuant to this
Section 1(b) on behalf of a Registered Stockholder, the Company shall not be
responsible for the fees and disbursements of counsel to such Registered
Stockholder and such Registered Stockholder shall reimburse the Company promptly
upon request therefor for the registration filing fees paid by the Company to
the Commission in respect of the shares of Registrable Securities registered on
behalf of such Registered Stockholder and for all reasonable out-of-pocket
Registration Expenses incurred in satisfying any such registration (other than
Registration Expenses set forth in paragraph (j) of the definition thereof).
The Company shall not grant to any Person the right to request the
Company to register, nor shall the Company include in any registration pursuant
to this Section 1(b), any securities other than Registrable Securities or any
shares of Common Stock to be registered on behalf of the Company, without the
written consent of holders of not less than a majority in value (based upon the
proposed public offering price) of the Registrable Securities as to which
registration has been so requested.
Whenever registration requested by one or more Stockholders pursuant to
this Section 1(b) is for an underwritten offering, only Registrable Securities
which are to be distributed by the underwriters designated by the Company
(subject to the consent of the Stockholder(s) making such request, which consent
shall not be unreasonably withheld) may be included in such registration,
without the written consent of holders of not less than a majority in value
(based upon the proposed public offering price) of the Registrable Securities as
to which registration has been so requested. If Stockholders holding not less
than a majority in value of the Registrable Securities (based upon the proposed
public offering price) to be included in such registration shall determine that
the number or amount of shares of Common Stock to be included in such
registration should be limited due to market conditions or otherwise, then the
number of shares of Common Stock proposed to be included shall be included in
the following order: (i) first, the Registrable Securities pro rata among the
holders of Registrable Securities based on the value (based upon the proposed
public offering price) of the respective numbers or amount of Registrable
Securities as to which registration has been requested by such Stockholders and
(ii) second, the shares of Common Stock to be issued by the Company. For
purposes of determining the number of available requests for registration of
Registrable Securities pursuant to the second paragraph of this Section 1(b),
the Significant Stockholder (or group of related Significant Stockholders)
having the greatest number of shares of Common Stock registered and effectively
sold under any registration initiated pursuant to this Section 1(b) shall be
deemed to be the party which exercised its demand registration rights pursuant
to this Section 1(b) with respect to such registration and such registration
shall not be considered a
<PAGE>
-5-
registration initiated by the Significant Stockholder (or group of related
Significant Stockholders) which actually initiated such registration.
(c) Registration Generally. If and when the Company shall be
required by the provisions of Sections 1(a) or 1(b) to effect the registration
of Registrable Securities under the Securities Act, the Company will use
commercially reasonable efforts to effect such registration to permit the sale
of such Registrable Securities in accordance with the intended method or methods
of disposition thereof, and pursuant thereto it will, as expeditiously as
possible:
(i) use commercially reasonable efforts to cause a
Registration Statement that registers such Registrable Securities to
become and remain effective for a period of ninety (90) days or, if
earlier, until all of such Registrable Securities have been disposed
of;
(ii) before filing a Registration Statement or Prospectus
or any amendments or supplements thereto, furnish to the holders of the
Registrable Securities covered by such Registration Statement and the
managing underwriters, if any, copies of all such documents proposed to
be filed, which documents will be made available, on a timely basis,
for review by such holders and underwriters, and their respective
counsel;
(iii) prepare and file with the Commission such amendments
and post-effective amendments to any Registration Statement, and such
supplements to the Prospectus, as may be required by the rules,
regulations or instructions applicable to the registration form
utilized by the Company or by the Securities Act, the Exchange Act or
otherwise necessary to keep such Registration Statement effective for
the applicable period and cause the Prospectus as so supplemented to be
filed pursuant to Rule 424 under the Securities Act; and comply with
the provisions of the Securities Act with respect to the disposition of
all Registrable Securities covered by such Registration Statement
during the applicable period in accordance with the intended method or
methods of disposition by the holders of such Registrable Securities
set forth in such Registration Statement or Prospectus as so
supplemented;
(iv) notify the selling holders of Registrable Securities
and the managing underwriters, if any, promptly, and (if requested by
any such Person) confirm such advice in writing,
A. when the Prospectus or any supplement thereto or
amendment or post-effective amendment to the Registration
Statement has been filed, and, with respect to the
Registration Statement or any post-effective amendment, when
the same has become effective,
B. of the receipt by the Company of any notification
with respect to any comments by the Commission with respect to
such Registration Statement or Prospectus or of any request by
the Commission for amendments or post-effective amendments to
the Registration Statement or supplements to the Prospectus or
for additional information,
<PAGE>
-6-
C. of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration
Statement or the initiation or threatening of any proceedings
for that purpose,
D. if at any time the representations and warranties
of the Company contemplated by paragraph (xv) below cease to
be true and correct in all material respects,
E. of the receipt by the Company of any notification
with respect to the suspension of the qualification of the
Registrable Securities for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose,
and
F. of the existence of any event which results in the
Registration Statement, the Prospectus or any document
incorporated therein by reference containing an untrue
statement of material fact or omitting to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading;
(v) use commercially reasonable efforts to obtain the
withdrawal of any order suspending the effectiveness of the
Registration Statement or any qualification referred to in paragraph
(iv) E. at the earliest possible moment;
(vi) if requested by the managing underwriters or a holder
of Registrable Securities being sold in connection with an underwritten
offering, immediately incorporate in a Prospectus supplement or
post-effective amendment to the Registration Statement such information
as the managing underwriters or the holders of not less than a majority
in value (based upon the proposed public offering price) of the
Registrable Securities being sold reasonably request to have included
therein relating to the plan of distribution with respect to such
Registrable Securities, including, without limitation, information with
respect to the amount of other Registrable Securities being sold to
such underwriters, the purchase price being paid therefor by such
underwriters and with respect to any other terms of the underwritten
(or best efforts underwritten) offering of the Registrable Securities
to be sold in such offering; and make all required filings of such
Prospectus supplement or post-effective amendment promptly after being
notified of the matters to be incorporated in such Prospectus
supplement or post-effective amendment;
(vii) at the request of any selling holder of Registrable
Securities, furnish to such selling holder of Registrable Securities
and each managing underwriter, if any, without charge, at least one
signed copy of the Registration Statement and any post-effective
amendment thereto, including financial statements and schedules, all
documents incorporated therein by reference and all exhibits (including
those incorporated by reference);
(viii) deliver to each selling holder of Registrable
Securities and the underwriters, if any, without charge, as many copies
of the Registration Statement, each
<PAGE>
-7-
Prospectus (including each preliminary prospectus) and any amendment or
supplement thereto (in each case including all exhibits, except that
the Company shall not be obligated to furnish any such selling holder
with more than two copies of such exhibits other than incorporation
documents), as such Persons may reasonably request, together with such
documents incorporated by reference in such Registration Statement or
Prospectus, and such other documents as such selling holder or
underwriter may reasonably request in order to facilitate the
disposition of the Registrable Securities covered by such registration
statement; the Company consents to the use of each Prospectus or any
supplement thereto by each selling holder of Registrable Securities and
the underwriters, if any, in connection with the offering and sale of
the Registrable Securities covered by each Registration Statement or
any amendment thereto;
(ix) prior to any public offering of Registrable
Securities, use commercially reasonable efforts to register or qualify
or cooperate with the selling holders of Registrable Securities, the
underwriters, if any, and their respective counsel in connection with
the registration or qualification of such Registrable Securities for
offer and sale under the securities or blue sky laws of such
jurisdictions as any selling holder or underwriter reasonably requests
in writing and do any and all other acts or things necessary or
advisable to enable the disposition in such jurisdictions of the
Registrable Securities covered by the Registration Statement; provided,
however, that the Company will not be required to (A) take such action
in any jurisdiction in which officers, directors or major stockholders
would be required to escrow shares or agree not to sell any securities
in the Company or (B) qualify generally to do business in any
jurisdiction where it is not then so qualified or to take any action
which would subject it to general service of process or general
taxation in any such jurisdiction where it is not then so subject;
(x) cooperate with the selling holders of Registrable
Securities and the underwriters, if any, to facilitate the timely
preparation and delivery of certificates representing Registrable
Securities to be sold and not bearing any restrictive legends; and
enable such Registrable Securities to be in such denominations and
registered in such names as the underwriters may reasonably request at
least two (2) business days prior to any sale of Registrable Securities
to the underwriters;
(xi) use commercially reasonable efforts to cause the
Registrable Securities covered by the Registration Statement to be
registered with or approved by such other governmental agencies or
authorities as may be necessary or advisable to enable the sellers
thereof or the underwriters, if any, to consummate the disposition of
such Registrable Securities in the United States;
(xii) if any event contemplated by paragraph (iv) F. above
shall exist, immediately upon becoming aware thereof notify each holder
on whose behalf Registrable Securities have been registered and prepare
and furnish to such holders a post-effective amendment to the
Registration Statement or supplement to the Prospectus or any document
incorporated therein by reference or file any other required document
so that, as thereafter delivered to the purchasers of the Registrable
Securities, the Prospectus will not contain an untrue statement of a
material fact or omit to state any
<PAGE>
-8-
material fact required to be stated therein or necessary to make the
statements therein not misleading;
(xiii) cause all Registrable Securities covered by the
Registration Statement to be listed on each securities exchange on
which securities of the same class are then listed;
(xiv) not later than the effective date of the Registration
Statement, provide a CUSIP number for all Registrable Securities and
provide the applicable transfer agent(s) with printed certificates or
instruments for the Registrable Securities which are in a form eligible
for deposit with Depositary Trust Company and otherwise meeting the
requirements of any securities exchange on which such Registrable
Securities are listed;
(xv) enter into agreements (including underwriting
agreements) and take all other appropriate actions in order to expedite
or facilitate the disposition of such Registrable Securities and in
such connection, whether or not an underwriting agreement is entered
into and whether or not the offer and sale of the Registrable
Securities is an underwritten offering:
A. make such representations and warranties to the
holders of such Registrable Securities and the underwriters,
if any, in form, substance and scope, reasonably satisfactory
to such holders and underwriters, as are customarily made by
issuers to underwriters in primary underwritten offerings;
B. use commercially reasonable efforts to obtain
opinions and updates thereof of counsel which opinions (in
form, scope and substance) shall be reasonably satisfactory to
the underwriters, if any, and the holders of not less than a
majority in value (based on the proposed public offering
price) of the Registrable Securities being sold, addressed to
each selling holder and the underwriters, if any, covering the
matters customarily covered in opinions requested in
underwritten offerings and such other matters as may be
reasonably requested by such holders and underwriters;
C. use commercially reasonable efforts to obtain
so-called "cold comfort" letters and updates thereof from the
Company's independent public accountants addressed to the
selling holders of Registrable Securities and the
underwriters, if any, such letters to be in customary form and
covering matters of the type customarily covered in "cold
comfort" letters to underwriters in connection with primary
underwritten offerings and such other matters as may be
reasonably requested by such holders and underwriters;
D. if an underwriting agreement is entered into,
cause the same to set forth in full the indemnification
provisions and procedures of Section 3 (or such other
substantially similar provisions and procedures as the
underwriters shall reasonably request) with respect to all
parties to be indemnified pursuant to said Section; and
<PAGE>
-9-
E. deliver such documents and certificates as may be
reasonably requested by the holders of not less than a
majority in value (based on the proposed public offering
price) of the Registrable Securities being sold or the
underwriters, if any, to evidence compliance with the
provisions of this Section 1(c) and with any customary
conditions contained in the underwriting agreement or other
agreement entered into by the Company.
The above shall be done at the effectiveness of such Registration
Statement, each closing under any underwriting or similar agreement as
and to the extent required thereunder and from time to time as may
reasonably be requested by any selling holder of Registrable Securities
in connection with the disposition of Registrable Securities pursuant
to such Registration Statement, all in a manner consistent with
customary industry practice;
(xvi) make available to (A) each Stockholder that is
selling in excess of $10,000,000 of Registrable Securities in such
offering (based upon the proposed public offering price of the
Registrable Securities proposed to be included), (B) a representative
of the holders of not less than a majority in value (based on the
proposed public offering price) of the Registrable Securities
(excluding any holder specified in clause (A) above), (C) any
underwriter participating in any disposition pursuant to such
Registration Statement, and (D) any attorney or accountant retained by
such holders or underwriter, all pertinent financial, corporate and
other records and documents of the Company, and cause the Company's
officers, directors and employees to supply all information reasonably
requested by any such holder, representative, underwriter, attorney or
accountant, in each case as shall be reasonably necessary to enable the
selling holders of Registrable Securities and any underwriter to
exercise their due diligence responsibilities in connection with the
registration, with respect to each at such time or times as the person
requesting such information shall reasonably determine; provided,
however, that any records, information or documents that are designated
by the Company in writing as confidential shall be kept confidential by
such persons unless disclosure of such records, information or
documents is required by court or administrative order or applicable
law or otherwise becomes public without breach of the provisions of
this paragraph;
(xvii) otherwise use commercially reasonable efforts to comply
with the Securities Act, the Exchange Act, all applicable rules and
regulations of the Commission and all applicable state blue sky and
other securities laws, rules and regulations, and make generally
available to its security holders, earnings statements satisfying the
provisions of Section 11(a) of the Securities Act, no later than ninety
(90) days if the end of any 12-month period of the Company (A)
commencing at the end of any month in which Registrable Securities are
sold to underwriters in an underwritten offering, or, if not sold to
underwriters in such an offering, (B) beginning with the first month
commencing after the effective date of the Registration Statement,
which statements shall cover said 12-month periods;
(xviii) cooperate and assist in any filings required to be
made with the NASD and in the performance of any due diligence
investigation by any underwriter
<PAGE>
-10-
(including any "qualified independent underwriter" that is required to
be retained in accordance with the rules and regulations of the NASD);
and
(xix) promptly prior to the filing of any document which is
to be incorporated by reference into the Registration Statement or the
Prospectus (after the initial filing of the Registration Statement)
provide copies of such document to the selling holders of Registrable
Securities, the underwriters, if any, and their respective counsel make
the Company's representatives available for discussion of such document
with such persons and make such changes in such document prior to the
filing thereof as any such persons may reasonably request.
(d) Restrictions on Registration. Anything in Section 1 to the
contrary notwithstanding, the Company shall not be required to register
Registrable Securities on behalf of any Stockholder to the following extent and
subject to the following conditions: in the case of any registration initially
proposed to be filed solely on behalf of the Company if in the opinion of the
managing underwriters of the proposed public offering (a copy of which opinion
shall have been furnished to any Stockholder requesting registration (or each
such holder if the Company has elected not to notify the holders of Registrable
Securities pursuant to the provisions of Section 1(a) because it is not required
to include any Registrable Securities in such registration pursuant to the
provisions of this Section 1(d))), such registration (or such portion thereof as
may be specified in such opinion) would adversely affect the proposed public
offering price or the plan of distribution contemplated by the proposed Company
offering, in which event the Company shall (unless in the opinion of such
managing underwriters (a copy of which shall be similarly furnished) to do so
would materially and adversely affect the proposed public offering price or such
plan of distribution) cause such Registration Statement to remain in effect and
to be phrased in such a manner so that the Stockholders requesting registration
thereunder may, during a period commencing not less than sixty (60) days or more
than ninety (90) days (or such other period as such managing underwriters may
approve as not so adversely affecting the proposed public offering price or such
plan of distribution) after the closing of the sale to the underwriters pursuant
to the original distribution thereunder, offer and sell under such Registration
Statement the Registrable Securities referred to in the request of registration
pursuant to this Section 1. In addition, (i) the Company shall not be obligated
to file and cause to become effective a Registration Statement pursuant to
Section 1(b) during any period in which any other Registration Statement (other
than a registration statement as to which Stockholders do not have the right to
participate in accordance with Section 1(a) hereof) pursuant to which shares of
Common Stock are or were to be sold on behalf of the Company has been filed and
not withdrawn or has been declared effective within the prior ninety (90) days;
and (ii) the Company may delay the filing or effectiveness of any Registration
Statement for a period of up to one hundred and twenty (120) days after the date
of a request pursuant to Section 1(b) hereof if at the time of such request (A)
the Company is engaged, or has plans to engage, within ninety (90) days of the
time of such request, in a firm commitment underwritten public offering of
shares of Common Stock in which Stockholders may include Registrable Securities
pursuant to Section 1(a) or (B) the Company is engaged in negotiations regarding
a material transaction.
<PAGE>
-11-
Section 2. Conditions to Registration.
Each Stockholder's right to have Registrable Securities included in any
Registration Statement filed by the Company in accordance with the provisions of
Section 1 shall be subject to the following conditions:
(a) The holders on whose behalf such Registrable Securities are to be
included shall be required to furnish the Company in a timely manner with all
information required by the applicable rules and regulations of the Commission
concerning the proposed method of sale or other disposition of such Registrable
Securities, the identity of and compensation to be paid to any proposed
underwriters to be employed in connection therewith, and such other information
as may be reasonably requested by the Company or its counsel properly to prepare
and file such Registration Statement in accordance with applicable provisions of
the Securities Act;
(b) The holders on whose behalf such Registrable Securities are to be
included shall execute and deliver to the Company such written undertakings as
the Company and its counsel may reasonably request in order to assure full
compliance with applicable provisions of the Securities Act and the Exchange
Act;
(c) In the case of any registration requested pursuant to the
provisions of Section 1(a), the offering price for any Registrable Securities to
be so registered shall be no less than for any securities of the same class then
to be registered for sale for the account of the Company;
(d) Upon receipt of any notice from the Company of the existence of any
event of the nature referred to in paragraph (xii) of Section 1(c), such holder
will forthwith discontinue disposition of Registrable Securities until such
holders receipt of the copies of the supplemented or amended Prospectus
contemplated by such paragraph, or until it is advised in writing by the Company
that the use of the Prospectus may be resumed, and has received copies of any
additional or supplemental filings which are incorporated by reference in the
Prospectus, and, if so directed by the Company, such holder will deliver to the
Company (at its expense) all copies, other than permanent file copies then in
such holder's possession, of the Prospectus covering such Registrable Securities
current at the time of receipt of such notice; and
(e) Such other conditions as the Company may impose on a Stockholder
that becomes party to this Agreement after the date hereof (which conditions
shall be set forth in the instrument pursuant to which such Stockholder becomes
party to this Agreement).
In addition, it shall be a condition to a Safesite Stockholder's right to
request that the Company effect the registration under the Securities Act
pursuant to Section 1(b) that such Safesite Stockholder, or both Safesite
Stockholders, request the registration of shares of Registrable Securities
having a proposed public offering price of at least $10,000,000.
<PAGE>
-12-
Section 3. Indemnification.
(a) Indemnification by the Company. In the event of the
registration of any Registrable Securities under the Securities Act pursuant to
the provisions hereof, the Company will, to the extent permitted by law,
indemnify and hold harmless each Stockholder on whose behalf such Registrable
Securities shall have been registered, its partners, trustees, advisory
committee members, directors, officers, employees, representatives and agents,
each underwriter, broker and dealer, if any, who participates in the offering or
sale of such Registrable Securities, and each other Person, if any, who controls
such seller or any such underwriter, broker or dealer within the meaning of the
Securities Act or the Exchange Act (each such person being hereinafter sometimes
referred to as an "indemnified person"), from and against any Claims, joint or
several, to which such indemnified person may become subject, including without
limitation under the Securities Act, the Exchange Act or any state securities or
blue sky law, insofar as such Claims arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained or
incorporated by reference in any Registration Statement or Prospectus or any
amendment or supplement thereto or in any preliminary prospectus, or any
document incorporated by reference therein, or arise out of or based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
with respect to any Prospectus, necessary to make the statements therein in
light of the circumstances under which they were made not misleading, and will
reimburse each such indemnified person for any legal or any other expenses
reasonably incurred by such indemnified person in connection with investigating
or defending any such Claim; provided, however, that the Company will not be
liable in any such case (i) to the extent that any such Claim arises out of or
is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made or incorporated by reference in the Registration
Statement, Prospectus, amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by such indemnified
person specifically stating that it is for use in preparation thereof or (ii) if
such untrue statement or omission was corrected in an amendment or supplement to
the Registration Statement and such amendment or supplement was delivered to
such indemnified person prior to such person's use of the Prospectus related to
such Registration Statement. Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf of such indemnified
person and shall survive the transfer of such Registrable Securities by such
seller.
(b) Indemnification by Holders of Registrable Securities. In
the event of the registration of any Registrable Securities under the Securities
Act pursuant to the provisions hereof, each Stockholder on whose behalf such
Registrable Securities shall have been registered will, to the extent permitted
by law, severally and not jointly indemnify and hold harmless, the Company, each
director of the Company, each officer of the Company who signs the registration
statement, each underwriter, broker and dealer, if any, who participates in the
offering and sale of such Registrable Securities and each other Person, if any,
who controls the Company or any such underwriter, broker or dealer within the
meaning of the Securities Act or the Exchange Act (each such person including
without limitation the Company being hereinafter sometimes referred to as an
"indemnified person"), against any Claims, joint or several, to which such
indemnified person may become subject, including without limitation under the
Securities Act, the Exchange Act or any state securities or blue sky law,
insofar as such Claims arise out of or are based upon any untrue statement or
alleged untrue statement of a material fact contained or incorporated by
<PAGE>
-13-
reference in any Registration Statement or Prospectus or any amendment or
supplement thereto or any document incorporated by reference therein, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, or with respect to any Prospectus, necessary to make the
statements therein in light of the circumstances under which they were made not
misleading, but only to the extent that such untrue statement or alleged untrue
statement or omission or alleged omission has been made or incorporated therein
in reliance upon and in conformity with written information furnished to the
Company by such Stockholder specifically stating that it is for use in
preparation thereof, and will reimburse each such indemnified person for any
legal or any other expenses reasonably incurred by the Company or such
indemnified person in connection with investigating or defending any such Claim.
Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of such indemnified person and shall survive
the transfer of such Registrable Securities by such seller. In no event shall
the liability of any selling holder of Registrable Securities hereunder be
greater in amount than the dollar amount of the net proceeds received by such
holder upon the sale of the Registrable Securities giving rise to such
indemnification obligation.
(c) Procedure. Promptly after receipt by an indemnified party
of notice of the commencement of any action (including any governmental
investigation or inquiry), such indemnified party will, if a claim in respect
thereof is to be made against an indemnifying party, give written notice to such
indemnifying party of the commencement thereof, but the omission so to notify
the indemnifying party will not relieve it from any liability which it may have
to any indemnified party otherwise than pursuant to the provisions of this
Section. In case any such action is brought against any indemnified party, and
it notifies an indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate in, and to the extent that it may wish,
jointly with any other indemnifying party similarly notified, to assume the
defense thereof, with counsel reasonably satisfactory to such indemnified party,
and after notice from the indemnifying party to such indemnified party of its
election to so assume the defense thereof, the indemnifying party shall not,
except as hereinafter provided, be responsible for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof, other than reasonable cost of investigation. No indemnifying party will
consent to entry of any judgment or enter into any settlement which does not
include as an unconditional term thereof the giving by the claimant or plaintiff
to such indemnified party of a release from all liability in respect to such
Claim.
Such indemnified party shall have the right to employ separate
counsel in any such action and to participate in the defense thereof, but the
fees and expenses of such counsel shall be the expense of such indemnified party
unless (i) the indemnifying party has agreed to pay such fees and expenses or
(ii) the indemnifying party shall have failed to assume the defense of such
action or proceeding or has failed to employ counsel reasonably satisfactory to
such indemnified party in any such action or proceeding or (iii) the named
parties to any such action or proceeding (including any impleaded parties)
include both such indemnified party and the indemnifying party, and such
indemnified party shall have reasonably concluded upon written advice of counsel
that representation of both parties by the same counsel would be inappropriate
due to actual or potential material differing interests between them (in which
case, if such indemnified party notifies the indemnifying party in writing that
it elects to employ separate counsel at the expense of the indemnifying party,
the indemnifying party shall not have the right to assume the
<PAGE>
-14-
defense of such action or proceeding on behalf of such indemnified party, it
being understood, however, that the indemnifying party shall not, in connection
with any one such action or proceeding or separate but substantially similar or
related actions or proceedings in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the fees and expenses of
more than one separate firm of attorneys at any time for such indemnified party
and any other indemnified parties, which firm shall be designated in writing by
such indemnified parties). The indemnifying party shall not be liable for any
settlement of any such action or proceeding effected without its written consent
(which consent shall not be unreasonably withheld, delayed or conditioned), but
if settled with its written consent, or if there be a final judgment for the
plaintiff in any such action or proceeding, the indemnifying party agrees to
indemnify and hold harmless such indemnified parties from and against any loss
or liability by reason of such settlement or judgment.
(d) Contribution. If the indemnification provided for in this
Section or in Section 4 is unavailable to a party that would have been an
indemnified party under either such Section in respect of any Claims referred to
therein, then each party that would have been an indemnifying party thereunder
shall, in lieu of indemnifying such indemnified party, contribute to the amount
paid or payable by such indemnified party as a result of such Claims in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party on the one hand and such indemnified party on the other in connection with
the statement or omission which resulted in such Claims, as well as any other
relevant equitable considerations. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the indemnifying party or such indemnified
party and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company and
each holder of Registrable Securities agrees that it would not be just and
equitable if contribution pursuant to this Section were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to above in this Section. The amount paid
or payable by an indemnified party as a result of the Claims referred to above
in this Section or Section 4 shall include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigation
or defending any such action or claim (which shall be limited as provided in
Section 3(c) if the indemnifying party has assumed the defense of any such
action in accordance with the provisions thereof). In no event shall the
liability of any selling holder of Registrable Securities under this Section
3(d) be greater in amount than the dollar amount of the net proceeds received by
such holder upon the sale of the Registrable Securities giving rise to such
contribution obligation.
No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
Indemnification or, if appropriate, contribution, similar to that
specified in the preceding provisions of this Section (with appropriate
modifications) shall be given by the Company and each seller of Registrable
Securities with respect to any required registration or other qualification of
Registrable Securities under any Applicable Law other than the Securities Act.
<PAGE>
-15-
In the event of any underwritten offering of Registrable Securities
under the Securities Act pursuant to the provisions of Section 1, the Company
and each Stockholder on whose behalf Registrable Securities shall have been
registered agree to enter into an underwriting agreement, in standard form, with
the underwriters, which underwriting agreement may contain additional provisions
with respect to indemnification and contribution in lieu of the provisions of
this Section.
Section 4. Exchange Act Registration.
The Company covenants and agrees that, at its expense, until such time
as the Stockholders no longer hold any Registrable Securities:
(a) it will, if required by law, maintain a registration
statement (containing such information and documents as the Commission shall
specify) with respect to the Common Stock of the Company under Section 12(g) of
the Exchange Act effective and will file on time such information, documents and
reports as the Commission may require or prescribe for companies whose stock has
been registered pursuant to said Section 12(g); and
(b) it will, if a registration statement with respect to the
Common Stock of the Company under Section 12(b) or Section 12(g) is effective,
upon the request of any Stockholder, make whatever other filings with the
Commission or otherwise make generally available to the public such financial
and other information as any Stockholder may deem necessary or desirable in
order to enable him to be permitted to sell shares of Common Stock pursuant to
the provisions of Rule 144 promulgated under the Securities Act (or any
successor rule or regulation thereto or any statute hereafter adopted to replace
or to establish the exemption that is now covered by said Rule 144).
The Company represents and warrants that any such registration
statement or any information, documents or report filed with the Commission in
connection therewith or any information so made public shall not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements contained therein
not misleading. The Company agrees to indemnify and hold harmless (or to the
extent the same is not enforceable, make contribution to) the Stockholders,
their partners, trustees, advisory committee members, officers, directors,
employees, representatives and agents, each broker, dealer or underwriter
(within the meaning of the Securities Act) acting for any Stockholder in
connection with any offering or sale by such Stockholder of Registrable
Securities or any person, firm or corporation controlling (within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act) such
Stockholder or any such broker, dealer or underwriter from and against any and
all Claims arising out of or resulting from any breach of the foregoing
representation or warranty, all on terms and conditions comparable to those set
forth in Section 3; provided, however, that the Company shall be given written
notice and an opportunity to participate in, and, to the extent that it may
wish, to assume on terms and conditions comparable to those set forth in Section
3, the defense thereof.
<PAGE>
-16-
Section 5. Termination of Registration Obligations.
(a) The obligations of the Company to any Stockholder with
respect to its rights of registration provided for in Section 1:
(i) shall continue until such time as Sullivan & Worcester
LLP or other counsel for the Company knowledgeable in securities law matters and
reasonably acceptable to such Stockholder has delivered a written opinion to the
Company and such Stockholder (or group of related Stockholders) to the effect
that either (A) such Stockholder has no further obligation to comply with the
registration requirements of the Securities Act or to deliver a prospectus
meeting the requirements of Section 10(a)(3) of the Securities Act in connection
with further sales by such Stockholder of Registrable Securities or (B) such
Stockholder owns less than 3% of the outstanding Common Stock and is able to
sell all of the Registrable Securities owned by him pursuant to the provisions
of Rule 144 under the Securities Act in a three-month period; and
(ii) shall not apply to any proposed sales or other
dispositions or offers therefor of any Registrable Securities with respect to
which Sullivan & Worcester LLP or other counsel for the Company knowledgeable in
securities law matters and reasonably acceptable to such Stockholder (or group
of related Stockholders) has delivered a written opinion to the Company and the
Stockholder proposing to make such offer, sale or other disposition to the
effect that such Stockholder has no obligation to comply with the registration
requirements of the Securities Act or to deliver a prospectus meeting the
requirements of Section 10(a)(3) of the Securities Act.
Any such opinion (a copy of which shall be addressed to such
Stockholder (or group of related Stockholders)) shall be reasonably satisfactory
(in the case of such opinion as to form, scope and substance) to such
Stockholder (or group of related Stockholders).
The Company shall, to the extent permitted by law, indemnify and hold
harmless each Stockholder, its partners, trustees, advisory committee members,
officers, directors, employees, representatives and agents and each person, if
any, who controls such Stockholder within the meaning of either Section 15 of
the Securities Act or Section 20 of the Exchange Act, against any Claims to
which such Stockholder, or such partners, trustees, advisory committee members,
officers, directors, employees, representatives and agents or controlling
persons may become subject under the Securities Act, the Exchange Act or
otherwise, insofar as such Claims arise out of or are based upon the failure to
register the Registrable Securities because of the invocation by the Company of
the provisions of this Section 5(a) under the Securities Act, all on terms and
conditions comparable to those set forth in Section 3; provided, however, that
the Company shall be given written notice and an opportunity to participate in,
and to the extent that it may wish, to assume, on terms and conditions
comparable to those set forth in Section 3, the defense thereof.
The indemnification and contributions provisions of Sections 3 and 4
and this Section, and the obligations of each Stockholder pursuant to the
provisions of Section 7, shall survive any termination of the Company's
obligations pursuant to this Section.
(b) In addition to and not in limitation of the provisions of
Section 5(a), the obligations of the Company to any Significant Stockholder with
respect to its rights of
<PAGE>
-17-
registration provided for in Section 1(b) will terminate: (i) in the case of
BankAmerica, Vincent J. Ryan, Schooner Capital Corporation and C. Richard Reese
and their respective successors and assigns, on December 14, 2000; (ii) in the
case of the Safesite Stockholders, on the fifth anniversary of the effective
time of the merger of Safesite Records Management Corporation with a wholly
owned subsidiary of the Company; and (iii) in the case of any other Significant
Stockholder or group of Significant Stockholders, on such date as the Board of
Directors of the Company elects in respect of such Significant Subsidiary or
group thereof (which date shall be set forth in the instrument pursuant to which
such Significant Stockholder or group thereof becomes party to this Agreement).
Section 6. Limitation on Registration Rights of Others.
The Company shall not, after the date hereof, grant any registration
rights which conflict with or impair the registration rights granted hereby. The
provisions of this Section 6 shall not restrict the Company from granting
"demand" registration rights to persons other than the Stockholders, so long as
Stockholders shall be entitled to exercise their rights under Section 1(a) in
connection with each such "demand" registration and the shares requested to be
registered thereunder by the Stockholders shall be included in such offering
after the shares being registered by the party initiating such demand
registration but before any shares being registered on behalf of the Company.
Section 7. Lock-Up Agreement.
Each Stockholder agrees that (a) it and the Registrable Securities
shall be bound by any "lock-up" or other agreement between the Company and any
underwriter of Common Stock (or other equity securities of the Company) which
may be entered into in connection with each underwritten public offering of the
Common Stock (or other equity securities of the Company) so long as the
"lock-up" period does not exceed ninety (90) days (or such longer period as may
have been approved by the Board of Directors of the Company by not less than
two-thirds (2/3) of the directors then in office) following the commencement of
the public offering, and (b) it will execute such agreements or other documents
as may be reasonably requested by any such underwriter in order to evidence its
agreement set forth in this Section; provided, however, that the obligations set
forth in this Section 7 shall not bind any Registrable Securities or the holder
thereof that have been held by such Stockholder and its permitted transferors
for at least five (5) years.
Section 8. Definitions.
As used herein, unless the context otherwise requires, the terms (or
any variant in the form thereof) set forth in this Agreement shall have the
respective meanings so set forth. Terms defined in the singular shall have a
comparable meaning when used in the plural, and vice versa, and the reference to
any gender shall be deemed to include all genders. Unless otherwise defined or
the context otherwise clearly requires, terms for which meanings are provided in
this Agreement shall have such meanings when used in each agreement, notice,
certificate, communication, opinion or other document executed or required to be
executed pursuant hereto or thereto or otherwise delivered, from time to time,
pursuant hereto or thereto.
<PAGE>
-18-
"Affiliate" of any Person shall mean any Person which, directly or
indirectly, owns or controls, is under common ownership or control with, or is
owned or controlled by, such Person. A Person shall be deemed to be "controlled
by" any other Person if such other Person possesses, directly or indirectly,
power to direct or cause the direction of the management or policies of such
Person or the disposition of its assets or property, whether by stock, equity or
other ownership, contract, arrangement or understanding, or otherwise.
"Applicable Law" shall mean any Law of any Authority, whether domestic
or foreign, including without limitation all federal and state Laws, to which
the Person in question is subject or by which it or any of its business or
operations is subject or any of its property is bound.
"Authority" shall mean any governmental or quasi-governmental
authority, whether executive, legislative, judicial, administrative or other, or
any combination thereof, including without limitation any federal, state,
territorial, county, municipal or other government or governmental or
quasi-governmental agency, arbitrator, board, body, branch, bureau, central bank
or comparable agency or Entity, commission, corporation, court, department,
instrumentality, master, mediator, panel, referee, system or other political
unit or subdivision or other Entity of any of the foregoing, whether domestic or
foreign.
"BACC" shall mean BankAmerica Capital Corporation.
"BankAmerica" shall mean SP Capital and BACC.
"Claims" shall mean, with respect to any Person, any and all debts,
liabilities, obligations, losses, damages, deficiencies, assessments and
penalties of or against such Person, together with all Legal Actions, pending or
threatened, claims and judgments of whatever kind and nature relating thereto,
and all fees, costs, expenses and disbursements (including without limitation
reasonable attorneys' and other legal fees, costs and expenses) relating to any
of the foregoing.
"Common Stock" and "Nonvoting Common Stock" shall have the respective
meanings set forth for those terms in the Certificate of Incorporation, as
amended, of the Company.
"Commission" shall mean the Securities and Exchange Commission or any
successor Authority.
"Company" is defined in the first paragraph of this Agreement.
"Entity" shall mean any corporation, firm, unincorporated organization,
association, partnership, a trust (inter vivos or testamentary), an estate of a
deceased, insane or incompetent individual, business trust, joint stock company,
joint venture or other organization, entity or business, whether acting in an
individual, fiduciary or other capacity, or any Authority.
"Equity Agreement" shall mean any one of (i) the Agreement and Plan of
Merger among the Company, Safesite Records Management Corporation and IM-1
Acquisition Corp., dated as of February 19, 1997, as amended and (ii) any other
agreement approved from time to time by Board of Directors pursuant to which
Registrable Securities may be issued and which
<PAGE>
-19-
is designated by the Board of Directors as an Equity Agreement for purposes of
this Agreement. "Equity Agreements" shall mean all of the foregoing agreements.
"Exchange Act" shall mean the Securities Exchange Act of 1934, and the
rules and regulations of the Commission thereunder, all as from time to time in
effect, or any successor law, rules or regulations, and any reference to any
statutory or regulatory provision shall be deemed to be a reference to any
successor statutory or regulatory provision.
"Founder Stockholders" shall mean Vincent J. Ryan, Schooner Capital
Corporation, C. Richard Reese, Eugene B. Doggett, The Little Family Trust, the
Little Family Foundation and Constantin R. Boden.
"Law" shall mean any action, code, consent decree, constitution,
decree, directive, enactment, finding, guideline, law, injunction,
interpretation, judgment, order, ordinance, policy statement, proclamation,
promulgation, regulation, requirement, rule, rule of law, rule of public policy,
settlement agreement, statute, or writ, or the common law, or any particular
section, part or provision thereof, or any interpretation, directive, guideline
or request (whether or not having the force of law), of any Authority, including
without limitation (a) the judicial systems thereof, or any particular section,
part or provision thereof, and (b) any of the foregoing relating to antitrust or
prohibiting other anticompetitive business practices, those relating to
employment practices (such as discrimination, health and safety), and those
relating to minority business enterprises.
"Legal Action" shall mean, with respect to any Person, any litigation
or legal or other actions, arbitrations, investigations, proceedings or suits,
at law or in arbitration, equity or admiralty (whether or not purported to be
brought on behalf of such Person) affecting such Person or any of its business
or property or assets.
"NASDAQ" shall mean the automatic quotation system of the National
Association of Securities Dealers, Inc.
"Original Agreement" is defined in the first Whereas clause herein.
"Person" shall mean any natural individual or any Entity.
"Prospectus" shall mean each prospectus included in any Registration
Statement, as amended or supplemented by any prospectus supplement with respect
to the terms of the offering of any portion of the Registrable Securities
covered by the Registration Statement and by all other amendments and
supplements to the prospectus, including each preliminary prospectus and
post-effective amendments and all material incorporated by reference in such
prospectus.
"Registered Stockholder" shall mean (a) each Safesite Stockholder, (b)
any other Stockholder designated by the Board of Directors of the Company in
connection with such Stockholder's becoming a party to this Agreement in
accordance with Section 9(a) as a Registered Stockholder with respect to
Registrable Securities, and (c) permitted transferees of such Registered
Stockholders.
<PAGE>
-20-
"Registrable Securities" shall mean (a) all shares of Common Stock or
Nonvoting Common Stock held as of the date hereof by SP Capital, BACC and the
Founder Stockholders, (b) all shares of Common Stock acquired by any of the
Stockholders pursuant to any of the Equity Agreements, (c) shares of Common
Stock acquired, directly or indirectly through one or more such conversions or
exchanges, upon the exercise of conversion or exchange provisions set forth, in
the case of SP Capital or BACC, the shares of Nonvoting Common Stock, and, in
the case of any other Stockholder, other securities of the Company issued
pursuant to the provisions of any Equity Agreement, or pursuant to the
redemption or repurchase of any such securities by the Company, and (d) any
share of Common Stock or other equity securities of the Company derived from the
Registrable Securities, whether as a result of stock split, stock dividend,
stock distribution, stock combination, recapitalization or similar event.
"Registration Expenses" shall mean all (or where appropriate any one or
more) of the following:
(a) all registration, filing and listing fees;
(b) fees and expenses of compliance with securities or blue sky laws
(including without limitation reasonable fees and disbursements
of counsel for the underwriters or selling holders in connection
with blue sky and state securities qualifications of the
Registrable Securities under the laws of such jurisdictions as
the managing underwriters or the holders of not less than a
majority in value (based on the proposed public offering price)
of the Registrable Securities being sold may designate);
(c) printing (including without limitation expenses of printing or
engraving certificates for the Registrable Securities in a form
eligible for deposit with Depositary Trust Company and otherwise
meeting the requirements of any securities exchange on which they
are listed and of printing Prospectuses), messenger, telephone
and delivery expenses;
(d) fees and disbursements of counsel for the Company, and reasonable
fees and disbursements of counsel for the underwriters and for
the selling holders of the Registrable Securities (subject to any
provisions to the contrary in this Agreement);
(e) fees and disbursements of all independent public accountants of
the Company and any acquired Person whose financial statements
are included in a Registration Statement (including without
limitation the expenses of any annual or special audit and "cold
comfort" letters required by the provisions of this Agreement);
(f) fees and disbursements of underwriters (excluding discounts,
commissions or fees of underwriters), selling brokers, dealer
managers or similar securities industry professionals relating to
the distribution of the Registrable Securities or legal expenses
of any Person other than the Company, the underwriters and the
selling holders;
<PAGE>
-21-
(g) fees and expenses of other Persons, including any experts,
retained by the Company;
(h) fees and expenses incurred in connection with the listing of the
Registrable Securities on each securities exchange on which
securities of the same class are then listed;
(i) fees and expenses associated with any NASD filing required to be
made in connection with the Registration Statement, including, if
applicable, the fees and expenses of any "qualified independent
underwriter" (and its counsel) that is required to be retained in
accordance with the rules and regulations of the NASD; and
(j) the Company's internal expenses (including without limitation all
salaries and expenses of its officers and employees performing
legal or accounting duties).
"Registration Statement" shall mean any registration statement of the
Company which covers Registrable Securities pursuant to the provisions of this
Agreement, including the Prospectus, amendments, including post-effective
amendments to such registration statement, and supplements to such Prospectus
and all exhibits and all material incorporated by reference in such registration
statement.
"Safesite Stockholders" shall mean B. Thomas Golisano and James Wayman.
"Securities Act" shall mean the Securities Act of 1933, and the rules
and regulations of the Commission thereunder, all as from time to time in
effect, or any successor law, rules or regulations, and any reference to any
statutory or regulatory provision shall be deemed to be a reference to any
successor statutory or regulatory provision.
"Significant Stockholder" shall mean (a) each Safesite Stockholder, (b)
SP Capital and BankAmerica, (c) Vincent J. Ryan and Schooner Capital
Corporation, (d) C. Richard Reese, (e) any other Stockholder or group of
Stockholders designated by the Board of Directors of the Company in connection
with such Stockholder's or group of Stockholder's becoming a party to this
Agreement in accordance with Section 9(a) as a Significant Stockholder with
respect to Registrable Securities and (f) permitted assignees of such
Significant Stockholders.
"SP Capital" shall mean Security Pacific Capital Investors L.P.
"Stockholders" shall mean those persons who executed the Original
Agreement or this Agreement or who hereafter become parties to this Agreement by
executing a counterpart hereof, and is further defined in Section 9(a).
"Subsidiary" shall mean, with respect to any Person, any Entity a
majority of the capital stock ordinarily entitled to vote for the election of
directors, or if no such voting stock is outstanding a majority of the equity
interests, of which is owned directly or indirectly by such Person or any
Subsidiary of such Person.
<PAGE>
-22-
Section 9. Miscellaneous.
(a) Assignment; Successors and Assigns. In the event that the
Company shall be merged with, or consolidated into, any other Entity or in the
event that it shall sell and transfer substantially all of its assets to another
Entity, the terms of this Agreement shall inure to the benefit of, and be
assumed by, the Entity resulting from such merger or consolidation, or to which
the Company's assets shall be sold and transferred. Each Stockholder may assign
its rights hereunder to any purchaser or transferee of Registrable Securities;
provided, however, (i) there shall be no assignment of rights hereunder to a
purchaser of Registrable Securities which constitute less than one percent of
the shares of the then outstanding Common Stock of the Company (on a fully
diluted basis giving effect to the conversion of all convertible securities of
the Company (including, without limitation, the Nonvoting Common Stock) or, in
the case of each of The Little Family Trust, the Little Family Foundation or
Constantin R. Boden, which constitute less than all of the Registrable
Securities held by such Stockholder, or, in the case of any other Stockholder
who becomes a party to this Agreement after the date hereof (other than by way
of assignment) such other limitations as the Company may impose (which
limitations shall be set forth in the instrument pursuant to which such
Stockholder becomes party to this Agreement) and (ii) that such purchaser or
transferee shall, as a condition to the effectiveness of such assignment, be
required to execute a counterpart to this Agreement agreeing to be treated as a
Stockholder whereupon such purchaser or transferee shall have the benefits of,
and shall be subject to the restrictions contained in, this Agreement. Anything
in this Agreement to the contrary notwithstanding, the term "Stockholders" as
used in this Agreement shall include the Stockholders party to this Agreement,
their permitted successors and assigns and such other Stockholders as may
receive Registrable Securities pursuant to an Equity Agreement provided that
such Stockholder shall execute a counterpart to the Agreement in accordance with
clause (ii) of the immediately preceding sentence.
Nothing in this Agreement expressed or implied is intended to and shall
not be construed to confer upon or create in any Person (other than the parties
hereto and their permitted successors and assigns) any rights or remedies under
or by reason of this Agreement, including without limitation any rights to
enforce this Agreement.
(b) Specific Performance; Other Rights and Remedies. Each
party recognizes and agrees that the other parties' remedies at law for any
breach of the provisions of this Agreement would be inadequate and agrees that
for breach of such provisions, each such party shall, in addition to such other
remedies as may be available to it at law or in equity or as provided in this
Agreement, be entitled to injunctive relief and to enforce its rights by an
action for specific performance to the extent permitted by Law. Each party
hereby waives any requirement for security or the posting of any bond or other
surety in connection with any temporary or permanent award of injunctive,
mandatory or other equitable relief. Nothing herein contained shall be construed
as prohibiting any party from pursuing any other remedies available to it for
such breach or threatened breach, including without limitation the recovery of
damages.
(c) Expenses. Each party shall pay its own expenses incident
to the negotiation, preparation, performance and enforcement of this Agreement
(including all fees and expenses of its counsel, accountants and other
consultants, advisors and representatives for all activities
<PAGE>
-23-
of such persons undertaken pursuant to this Agreement), except to the extent
otherwise specifically set forth in this Agreement.
(d) Entire Agreement. This Agreement constitutes the entire
agreement among the parties with respect to the subject matter hereof and
supersedes all prior agreements, arrangements, covenants, promises, conditions,
understandings, inducements, representations and negotiations, expressed or
implied, oral or written, among them as to such subject matter.
(e) Waivers; Amendments. Notwithstanding anything in this
Agreement to the contrary, amendments to and modifications of this Agreement may
be made, required consents and approvals may be granted, compliance with any
term, covenant, agreement, condition or other provision set forth herein may be
omitted or waived, either generally or in a particular instance and either
retroactively or prospectively with, but only with, the written consent of the
Company (to the extent it is entitled to the benefit thereof) and a majority in
interest of the Stockholders (to the extent they are entitled to the benefit
thereof or obligated thereby); provided, however, that in the event any such
amendment, modification, consent, approval or waiver shall be for the benefit of
or materially adverse to less than all of the Stockholders, such amendment,
modification, consent, approval or waiver shall require a majority in interest
of those Stockholders who are not so benefitted or who are so materially
adversely affected.
(f) Notices. All notices and other communications which by any
provision of this Agreement are required or permitted to be given shall be given
in writing and shall be (a) mailed by first-class or express mail, postage
prepaid, (b) sent by telex, telegram, telecopy or other form of rapid
transmission, confirmed by mailing (by first class or express mail, postage
prepaid) written confirmation at substantially the same time as such rapid
transmission, or (c) personally delivered to the receiving party (which if other
than an individual shall be an officer or other responsible party of the
receiving party). All such notices and communications shall be mailed, sent or
delivered as follows:
If to the Company, at:
745 Atlantic Avenue
Boston, MA 02111
Attention: C. Richard Reese, Chairman of the Board
Facsimile: (617) 350-7881
with a copy to:
Sullivan & Worcester LLP
One Post Office Square
Boston, MA 02109
Attention: William J. Curry, Esq.
Facsimile: (617) 338-2880
If to any Stockholder, at his address as it appears on the stock
records of the Company, and/or to such other person(s), facsimile number(s) or
address(es) as the party to receive any such communication or notice may have
designated by written notice to the other parties.
<PAGE>
-24-
(g) Severability. If any provision of this Agreement shall be
held or deemed to be, or shall in fact be, invalid, inoperative, illegal or
unenforceable as applied to any particular case in any jurisdiction or
jurisdictions, or in all jurisdictions or in all cases, because of the
conflicting of any provision with any constitution or statute or rule of public
policy or for any other reason, such circumstance shall not have the effect of
rendering the provision or provisions in question invalid, inoperative, illegal
or unenforceable in any other jurisdiction or in any other case or circumstance
or of rendering any other provision or provisions herein contained invalid,
inoperative, illegal or unenforceable to the extent that such other provisions
are not themselves actually in conflict with such constitution, statute or rule
of public policy, but this Agreement shall be reformed and construed in any such
jurisdiction or case as if such invalid, inoperative, illegal or unenforceable
provision had never been contained herein and such provision reformed so that it
would be valid, operative and enforceable to the maximum extent permitted in
such jurisdiction or in such case, except when such reformation and construction
could operate as an undue hardship on either party, or constitute a substantial
deviation from the general intent and purpose of such party as reflected in this
Agreement.
The parties shall endeavor in good faith negotiations to
replace the invalid, inoperative, illegal or unenforceable provisions with
valid, operative, legal and enforceable provisions the economic effect of which
comes as close as possible to that of the invalid, inoperative, illegal or
unenforceable provisions.
(h) Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument, binding upon all the
parties hereto. In pleading or proving any provision of this Agreement, it shall
not be necessary to produce more than one of such counterparts.
(i) Section Headings. The headings contained in this Agreement
are for reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
(j) Governing Law. The validity, interpretation, construction
and performance of this Agreement shall be governed by the applicable laws of
the United States of America and the domestic substantive laws of the
Commonwealth of Massachusetts without giving effect to any choice or conflict of
laws provision or rule that would cause the application of domestic substantive
laws of any other jurisdiction.
(k) Further Acts. Each party agrees that at any time, and from
time to time, before and after the consummation of the transactions contemplated
by this Agreement, it will do all such things and execute and deliver all such
agreements, assignments, instruments, other documents and assurances, as any
other party or its counsel reasonably deems necessary or desirable in order to
carry out the terms and conditions of this Agreement and the transactions
contemplated hereby or to facilitate the enjoyment of any of the rights created
hereby or to be created hereunder.
<PAGE>
-25-
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the date first above written.
IRON MOUNTAIN INCORPORATED
By: /s/ Eugene B. Doggett
----------------------------------
Name: Eugene B. Doggett
Title: Executive Vice President
STOCKHOLDERS
SECURITY PACIFIC CAPITAL INVESTORS L.P.
By: Security Pacific Investors, Inc.
Its General Partner
By: /s/ James Murphy
---------------------------------
Name: James Murphy
Title:
BANKAMERICA CAPITAL CORPORATION
By: /s/ James Murphy
---------------------------------
Name: James Murphy
Title:
SCHOONER CAPITAL CORPORATION
By: /s/ Vincent J. Ryan
---------------------------------
Name: Vincent J. Ryan
Title:
/s/ Vincent J. Ryan
--------------------------------------
Vincent J. Ryan
/s/ C. Richard Reese
--------------------------------------
C. Richard Reese
/s/ Eugene B. Doggett
--------------------------------------
Eugene B. Doggett
<PAGE>
-26-
THE LITTLE FAMILY TRUST
By: Rhode Island Hospital Trust National
Bank, as Corporate Trustee under the
Trust Indenture dated July 1, 1966
By: ___________________________________
Name:
Title:
THE LITTLE FAMILY FOUNDATION
By: BOSTON SAFE DEPOSIT & TRUST CO.,
as Trustee
By: ___________________________________
Name:
Title:
/s/ Constantin R. Boden
---------------------------------------
Constantin R. Boden
<PAGE>
-27-
/s/ B. Thomas Golisano
--------------------------------------
B. Thomas Golisano
/s/ James B. Wayman
--------------------------------------
James B. Wayman
EXHIBIT 10.2
IRON MOUNTAIN INCORPORATED(1)
1995 STOCK INCENTIVE PLAN
1. PURPOSE
The purpose of this 1995 Stock Incentive Plan (the "Plan") is to
encourage key employees, directors, and consultants of Iron Mountain
Incorporated (the "Company") and its Subsidiaries (as hereinafter defined) to
continue their association with the Company, by providing favorable
opportunities for them to participate in the ownership of the Company and in its
future growth through the granting of awards ("Awards") of stock, stock options,
and other rights to compensation in amounts determined by the value of the
Company's stock. The term "Subsidiary" as used in the Plan means a corporation
of which the Company owns, directly or indirectly through an unbroken chain of
ownership, fifty percent (50%) or more of the total combined voting power of all
classes of stock.
2. ADMINISTRATION OF THE PLAN
The Plan shall be administered by the Board of Directors of the Company
(the "Board") or, in the discretion of the Board, a committee or subcommittee of
the Board (the "Committee"), appointed by the Board and composed of at least two
(2) members of the Board. In the event that a vacancy on the Committee occurs on
account of the resignation of a member or the removal of a member by vote of the
Board, a successor member shall be appointed by vote of the Board. All
references in the Plan to the "Committee" shall be understood to refer to the
Committee or the Board, whoever shall administer the Plan.
For so long as Section 16 of the Securities Exchange Act of 1934, as
amended from time to time (the "Exchange Act"), is applicable to the Company,
each member of the Committee shall be a "non-employee director" or the
equivalent within the meaning of Rule 16b-3 under the Exchange Act, and, for so
long as Section 162(m) of the Internal Revenue Code of 1986, as amended from
time to time (the "Code"), is applicable to the Company, an "outside director"
within the meaning of Section 162 of the Code and the regulations thereunder.
The Committee shall select those persons to receive Awards under the Plan
("Participants") and determine the terms and conditions of all Awards.
- ----------------------------
(1) As amended through May 29, 1997.
<PAGE>
-2-
The Committee shall select one of its members as Chairman and shall
hold meetings at such times and places as it may determine. A majority of the
Committee shall constitute a quorum, and acts of the Committee at which a quorum
is present, or acts reduced to or approved in writing by all the members of the
Committee, shall be the valid acts of the Committee. The Committee shall have
the authority to adopt, amend, and rescind such rules and regulations as, in its
opinion, may be advisable in the administration of the Plan. All questions of
interpretation and application of such rules and regulations, of the Plan and of
options granted thereunder (the "Options"), and of Common Stock transferred
subject to restrictions under the Plan ("Restricted Stock"), and stock
appreciation rights granted under the Plan ("SARs") (collectively, "Other
Rights") shall be subject to the determination of the Committee, which shall be
final and binding.
With respect to persons subject to Section 16 of the Exchange Act
("Insiders"), transactions under the Plan are intended to comply with all
applicable conditions of Rule 16b-3 or its successor under the Exchange Act. To
the extent any provision of the Plan or action by the Committee fails to so
comply, it shall be deemed to be modified so as to be in compliance with such
Rule, or, if such modification is not possible, it shall be deemed to be null
and void, to the extent permitted by law and deemed advisable by the Committee.
The Plan shall be administered in such a manner as to permit those
Options granted hereunder and specially designated under Section 5 to qualify as
incentive stock options as described in Section 422 of the Code.
3. STOCK SUBJECT TO THE PLAN
The total number of shares of stock which may be subject to Options and
Other Rights under the Plan shall be 1,400,000 of the Company's outstanding
Class A Common Stock, $0.01 par value per share, from either authorized but
unissued shares or treasury shares. For purposes of the limitation set forth in
the preceding sentence, options granted under the Iron Mountain Information
Services, Inc. Stock Option Plan and outstanding on the effective date of this
Plan shall be treated as Options. The number of shares stated in this Section 3
shall be subject to adjustment in accordance with the provisions of Section 11.
Shares of Restricted Stock that fail to vest, and shares of Common Stock subject
to an Option that is neither fully exercised prior to its expiration or other
termination nor terminated by reason of the exercise of an SAR related to the
Option, shall again become available for grant under the terms of the Plan.
The total amount of the Common Stock with respect to which Options and
Other Rights may be granted to any single employee under the Plan shall not
exceed in the aggregate 250,000 shares.
The Company intends that the Plan shall apply to "common stock"
proposed to be issued as a result of the Company's recapitalization in
connection with an offering of "common stock" proposed to be registered under
the Securities Act of 1933, as amended (the "Securities Act"), and intends that
the provisions of Section 11 of the Plan shall be construed so as to achieve
this result.
<PAGE>
-3-
4. ELIGIBILITY
The individuals who shall be eligible for grant of Options and Other
Rights under the Plan shall be key employees, directors and other individuals
who render services of special importance to the management, operation, or
development of the Company or a Subsidiary, and who have contributed or may be
expected to contribute materially to the success of the Company or a Subsidiary.
Incentive stock options ("ISOs") shall not be granted to any individual who is
not an employee of the Company or a Subsidiary. The term "Optionee," as used in
the Plan, refers to any individual to whom an Option or Other Right has been
granted.
5. TERMS AND CONDITIONS OF OPTIONS
Every Option shall be evidenced by a written Stock Option Agreement in
such form as the Committee shall approve from time to time, specifying the
number of shares of Common Stock that may be purchased pursuant to the Option,
the time or times at which the Option shall become exercisable in whole or in
part, whether the Option is intended to be an ISO or a non-qualified stock
option ("NSO"), and such other terms and conditions as the Committee shall
approve, and containing or incorporating by reference the following terms and
conditions:
(a) Duration. The duration of each Option shall be as
specified by the Committee in its discretion; provided, however, that
no ISO shall expire later than ten (10) years from its date of grant,
and no ISO granted to an employee who owns (directly or under the
attribution rules of Section 424(d) of the Code) stock possessing more
than ten percent (10%) of the total combined voting power of all
classes of stock of the Company or any Subsidiary shall expire later
than five (5) years from its date of grant.
(b) Exercise Price. The exercise price of each Option shall be
any lawful consideration, as specified by the Committee in its
discretion; provided, however, that the price with respect to an ISO
shall be at least one hundred percent (100%) of the fair market value
of the shares on the date on which the Committee awards the Option,
which shall be considered the date of grant of the Option for purposes
of fixing the price; and provided further that the price with respect
to an ISO granted to an employee who at the time of grant owns
(directly or under the attribution rules of Section 424(d) of the Code)
stock representing more than ten percent (10%) of the voting power of
all classes of stock of the Company or of any Subsidiary shall be at
least one hundred ten percent (110%) of the fair market value of the
shares on the date of grant of the ISO. For purposes of the Plan,
except as may be otherwise explicitly provided in the Plan or in any
Stock Option Agreement, Restricted Stock Agreement, SAR Agreement or
similar document, the "fair market value" of a share of Common Stock at
any particular date shall be determined according to the following
rules: (i) if the Common Stock is not at the time listed or admitted to
trading on a stock exchange or the Nasdaq National Market, the fair
market value shall be the closing price of the Common Stock on the date
in question in the over-the-counter market, as such price is reported
in a publication of general circulation selected by the Board and
regularly reporting the price of the Common Stock in such market;
provided, however, that if the price of the Common Stock is not so
reported, the fair market value shall be determined in good faith by
the Board, which may take into
<PAGE>
-4-
consideration (1) the price paid for the Common Stock in the most
recent trade of a substantial number of shares known to the Board to
have occurred at arm's length between willing and knowledgeable
investors, or (2) an appraisal by an independent party, or (3) any
other method of valuation undertaken in good faith by the Board, or
some or all of the above as the Board shall in its discretion elect; or
(ii) if the Common Stock is at the time listed or admitted to trading
on any stock exchange or the Nasdaq National Market, then the fair
market value shall be the mean between the lowest and highest reported
sale prices (or the lowest reported bid price and the highest reported
asked price) of the Common Stock on the date in question on the
principal exchange on which the Common Stock is then listed or admitted
to trading. If no reported sale of Common Stock takes place on the date
in question on the principal exchange or the Nasdaq National Market, as
the case may be, then the reported closing sale price (or the reported
closing asked price) of the Common Stock on such date on the principal
exchange or the Nasdaq National Market, as the case may be, shall be
determinative of fair market value.
(c) Method of Exercise. To the extent that it has become
exercisable under the terms of the Stock Option Agreement, an Option
may be exercised from time to time by written notice to the Chief
Financial Officer of the Company or his designee stating the number of
shares with respect to which the Option is being exercised and
accompanied by payment of the exercise price in cash or check payable
to the Company, or, if the Stock Option Agreement so provides, other
payment or deemed payment described in this subsection 5(c). Such
notice shall be delivered in person or by facsimile transmission to the
Chief Financial Officer of the Company or his designee or shall be sent
by registered mail, return receipt requested, to the Chief Financial
Officer of the Company or his designee, in which case delivery shall be
deemed made on the date such notice is deposited in the mail.
Alternatively, payment of the exercise price may be made:
(1) In whole or in part, in shares of Common Stock
already owned by the Optionee or to be received upon exercise
of the Option, provided that such shares are fully vested and
free of all liens, claims, and encumbrances of any kind;
provided, further, that the Optionee may not make payment in
shares of Common Stock that he acquired upon the earlier
exercise of any ISO, unless he has held the shares until at
least two (2) years after the date the ISO was granted and at
least one (1) year after the date the ISO was exercised. If
payment is made in whole or in part in shares of Common Stock,
then the Optionee shall deliver to the Company certificates
registered in his name representing a number of shares of
Common Stock legally and beneficially owned by him, fully
vested and free of all liens, claims, and encumbrances of
every kind and having a fair market value on the date of
delivery that is not greater than the exercise price, such
certificates to be duly endorsed, or accompanied by stock
powers duly endorsed, by the record holder of the shares
represented by such certificates. If the exercise price
exceeds the fair market value of the shares for which
certificates are delivered, the Optionee shall also deliver
cash or a check payable to the order of the Company in an
amount equal to the amount of that excess, or, if the Stock
Option
<PAGE>
-5-
Agreement so provides, his promissory note as described in the
next following paragraph of this subsection 5(c); or
(2) In whole or in part by delivery of the Optionee's
recourse promissory note, in a form specified by the Company,
secured by the Common Stock acquired upon exercise of the
Option and such other security as the Committee may require.
Alternatively, Options may be exercised by means of a
"cashless exercise" procedure in which a broker: (i) transmits the
option price to the Company in cash or acceptable cash equivalents,
either (1) against the Optionee's notice of exercise and the Company's
confirmation that it will deliver to the broker stock certificates
issued in the name of the broker for at least that number of shares
having a fair market value equal to the option price, or (2) as the
proceeds of a margin loan to the Optionee; or (ii) agrees to pay the
option price to the Company in cash or acceptable cash equivalents upon
the broker's receipt from the Company of stock certificates issued in
the name of the broker for at least that number of shares having a fair
market value equal to the option price.
At the time specified in an Optionee's notice of exercise, the
Company shall, without issue or transfer tax to the Optionee, deliver
to him at the main office of the Company, or such other place as shall
be mutually acceptable, a certificate for the shares as to which his
Option is exercised. If the Optionee fails to pay for or to accept
delivery of all or any part of the number of shares specified in his
notice upon tender of delivery thereof, his right to exercise the
Option with respect to those shares shall be terminated, unless the
Company otherwise agrees.
(d) Reload Options. The Committee may, in its discretion,
provide in the terms of any Stock Option Agreement that if the Optionee
delivers shares of Common Stock already owned or to be received upon
exercise of the Option in full or partial payment of the option price,
or in full or partial payment of the tax withholding obligations
incurred on account of the exercise of the Option, the Optionee shall,
either automatically and immediately upon such exercise, or in the
discretion of the Committee upon such exercise, be granted a new option
(a "Reload Option") to purchase that number of shares of Common Stock
delivered by the Optionee to the Company, on such terms and conditions
as the Committee may determine under the terms of the Plan. The
exercise price for shares subject to a Reload Option shall be not less
than one hundred percent (100%) of the fair market value of the shares
on the date of grant of the Reload Option, and the duration of a Reload
Option shall be equal to the unexpired term of the exercised Option on
the date of exercise.
(e) Notice of ISO Stock Disposition. The Optionee must notify
the Company promptly in the event that he sells, transfers, exchanges
or otherwise disposes of any shares of Common Stock issued upon
exercise of an ISO, before the later of (i) the second anniversary of
the date of grant of the ISO, and (ii) the first anniversary of the
date the shares were issued upon his exercise of the ISO.
<PAGE>
-6-
(f) Effect of Cessation of Employment. The Committee shall
determine in its discretion and specify in each Stock Option Agreement
the effect, if any, of the termination of the Optionee's employment
upon the exercisability of the Option.
(g) No Rights as Stockholder. An Optionee shall have no rights
as a stockholder with respect to any shares covered by an Option until
the date of issuance of a certificate to him for the shares. No
adjustment shall be made for dividends or other rights for which the
record date is earlier than the date the certificate is issued, other
than as required or permitted pursuant to Section 11.
(h) Substituted Option. With the consent of the Optionee, the
Committee shall have the authority at any time and from time to time to
terminate any outstanding Option and grant in substitution for it a new
Option covering the same number or a different number of shares,
provided that the option price under the new Option shall be no less
than the fair market value of the Common Stock on the date of grant of
the new Option.
6. STOCK APPRECIATION RIGHTS
The Committee may grant SARs in respect of such number of shares of
Common Stock subject to the Plan as it shall determine, in its discretion, and
may grant SARs either separately or in connection with Options, as described in
the following sentence. An SAR granted in connection with an Option may be
exercised only to the extent of the surrender of the related Option, and to the
extent of the exercise of the related Option the SAR shall terminate. Shares of
Common Stock covered by an Option that terminates upon the exercise of a related
SAR shall cease to be available under the Plan. The terms and conditions of an
SAR related to an Option shall be contained in the Stock Option Agreement, and
the terms of an SAR not related to any Option shall be contained in an SAR
Agreement.
Upon exercise of an SAR, the Optionee shall be entitled to receive from
the Company an amount equal to the excess of the fair market value, on the
exercise date, of the number of shares of Common Stock as to which the SAR is
exercised, over the exercise price for those shares under a related Option, or
if there is no related Option, over the base value stated in the SAR Agreement.
The amount payable by the Company upon exercise of an SAR shall be paid in the
form of cash or other property (including Common Stock of the Company), as
provided in the Stock Option Agreement or SAR Agreement governing the SAR.
All grants of SARs to Insiders shall be capable of being settled only
for cash and may not be granted in connection with an Option. If an SAR is
awarded to a person who is not an Insider at the time of award but subsequently
becomes an Insider, it shall be deemed to be amended to provide that it may be
settled only in cash while such person is an Insider.
<PAGE>
-7-
7. RESTRICTED STOCK
The Committee may grant or award shares of Restricted Stock in respect
of such number of shares of Common Stock, and subject to such terms or
conditions, as it shall determine and specify in a Restricted Stock Agreement.
A holder of Restricted Stock shall have all of the rights of a
stockholder of the Company, including the right to vote the shares and the right
to receive any cash dividends, unless the Committee shall otherwise determine.
Certificates representing Restricted Stock shall be imprinted with a legend to
the effect that the shares represented may not be sold, exchanged, transferred,
pledged, hypothecated or otherwise disposed of except in accordance with the
terms of the Restricted Stock Agreement, and, if the Committee so determines,
the Optionee may be required to deposit the certificates with an escrow agent
designated by the Committee, together with a stock power or other instrument of
transfer appropriately endorsed in blank.
8. SPECIAL BONUS GRANTS AND LOANS
In its discretion, the Committee may grant in connection with any NSO
or grant of Restricted Stock a special cash bonus in an amount not to exceed the
lesser of (i) the combined federal, state and local income tax liability
incurred by the Optionee as a consequence of his acquisition of stock pursuant
to the exercise of the NSO or the grant or vesting of the Restricted Stock, and
the related special bonus, or (ii) thirty percent (30%) of the imputed income
realized by the Optionee on account of such exercise or vesting and the related
special bonus. The Committee may, in its discretion, estimate the amount of the
tax liability described in clause (i) of the immediately preceding sentence,
using formulae or methods uniformly applied to Optionees in similar
circumstances, without regard to the particular circumstances of an individual
Optionee. A special bonus shall be payable solely to federal, state, and local
taxing authorities for the benefit of the Optionee at such time or times as
withholding payments of income tax may be required. A special bonus may be
granted simultaneously with a related NSO or Restricted Stock grant or
separately with respect to an outstanding NSO or Restricted Stock granted at an
earlier date. In the event that an NSO with respect to which a special bonus has
been granted becomes exercisable by the personal representative of the estate of
the Optionee, or that Restricted Stock with respect to which a special bonus has
been granted shall vest after the death of an Optionee, the bonus shall be
payable to or for the benefit of the estate in the same manner and to the same
extent as it would have been payable for the benefit of the Optionee had he
survived to the date of exercise or vesting.
In the Committee's discretion, a Stock Option Agreement or Restricted
Stock Agreement may provide that to the extent that an Optionee does not receive
a special bonus of the maximum amount permissible under this Section 8, the
Company shall lend the Optionee an amount no greater than the excess of such
maximum over the special bonus (if any) paid to the Optionee, for such term and
at such rate of interest (or no interest) and on such further terms and
conditions as the Committee determines.
<PAGE>
-8-
9. OPTIONS AND OTHER RIGHTS VOIDABLE
If an individual to whom a grant has been made fails to execute and
deliver to the Committee a Stock Option Agreement, SAR Agreement or Restricted
Stock Agreement within thirty (30) days after it is submitted to him, the Option
or Other Rights granted under the agreement shall be voidable by the Company at
its election, without further notice to the Optionee.
10. REQUIREMENTS OF LAW
The Company shall not be required to transfer any Restricted Stock or
to sell or issue any shares upon the exercise of any Option or SAR if the
issuance of such shares will result in a violation by the Optionee or the
Company of any provisions of any law, statute or regulation of any governmental
authority. Specifically, in connection with the Securities Act, upon the
transfer of Restricted Stock or the exercise of any Option or SAR the Company
shall not be required to issue shares unless the Board has received evidence
satisfactory to it to the effect that the holder of the Option or Other Right
will not transfer such shares except pursuant to a registration statement in
effect under the Securities Act or unless an opinion of counsel satisfactory to
the Company has been received by the Company to the effect that such
registration is not required. Any determination in this connection by the Board
shall be conclusive. The Company shall not be obligated to take any other
affirmative action in order to cause the transfer of Restricted Stock or the
exercise of an Option or SAR to comply with any law or regulations of any
governmental authority, including, without limitation, the Securities Act or
applicable state securities laws.
11. CHANGES IN CAPITAL STRUCTURE
In the event that the outstanding shares of Common Stock are hereafter
changed for a different number or kind of shares or other securities of the
Company, by reason of a reorganization, recapitalization, exchange of shares,
stock split, combination of shares or dividend payable in shares or other
securities, a corresponding adjustment shall be made by the Committee in the
number and kind of shares or other securities covered by outstanding Options and
Other Rights, and for which Options or Other Rights may be granted under the
Plan. Any such adjustment in outstanding Options or Other Rights shall be made
without change in the total price applicable to the unexercised portion of the
Option, but the price per share specified in each Stock Option Agreement or
agreement as to Other Rights shall be correspondingly adjusted; provided,
however, that no adjustment shall be made with respect to an ISO that would
constitute a modification as defined in Section 424 of the Code. Any such
adjustment made by the Committee shall be conclusive and binding upon all
affected persons, including the Company and all Optionees.
If while unexercised Options or SARs remain outstanding under the Plan
the Company merges or consolidates with a wholly-owned subsidiary for the
purpose of reincorporating itself under the laws of another jurisdiction, the
Optionees will be entitled to acquire shares of Common Stock of the
reincorporated Company upon the same terms and conditions as were in
<PAGE>
-9-
effect immediately prior to such reincorporation (unless such reincorporation
involves a change in the number of shares or the capitalization of the Company,
in which case proportional adjustments shall be made as provided above) and the
Plan, unless otherwise rescinded by the Board, will remain the Plan of the
reincorporated Company.
Except as otherwise provided in the preceding paragraph, if while
unexercised Options or SARs remain outstanding under the Plan the Company merges
or consolidates with one or more corporations (whether or not the Company is the
surviving corporation), or is liquidated or sells or otherwise disposes of
substantially all of its assets to another entity, or upon a Change of Control
(as defined herein), then, except as otherwise specifically provided to the
contrary in an Optionee's Stock Option Agreement, SAR Agreement or Restricted
Stock Agreement, the Committee, in its discretion, shall amend the terms of all
outstanding Options and SARs so that either:
(i) after the effective date of such merger, consolidation,
sale or Change of Control, as the case may be, each Optionee shall be
entitled, upon exercise of an Option or SAR, to receive in lieu of
shares of Common Stock the number and class of shares of such stock or
other securities to which he would have been entitled pursuant to the
terms of the merger, consolidation, sale or Change of Control if he had
been the holder of record of the number of shares of Common Stock as to
which the Option or SAR is being exercised, or shall be entitled to
receive from the successor entity a new stock option or stock
appreciation right of comparable value; or
(ii) all outstanding Options and SARs shall be cancelled as of
the effective date of any such merger, consolidation, liquidation, sale
or Change of Control, provided that each Optionee shall have the right
to exercise his Option or SAR according to its terms during the period
of twenty (20) days ending on the day preceding the effective date of
such merger, consolidation, liquidation, sale or Change of Control; and
in addition to the foregoing, the Committee may in its discretion amend
the terms of an Option or SAR by cancelling some or all of the
restrictions on its exercise, to permit its exercise pursuant to this
paragraph (ii) to a greater extent than that permitted on its existing
terms; or
(iii) all outstanding Options and SARs shall be cancelled as
of the effective date of any such merger, consolidation, liquidation,
sale or Change of Control in exchange for consideration in cash or in
kind, which consideration in both cases shall be equal in value to the
value of those shares of stock or other securities the Optionee would
have received had the Option been exercised (to the extent then
exercisable) and no disposition of the shares acquired upon such
exercise had been made prior to such merger, consolidation,
liquidation, sale or Change in Control, less the option price therefor.
Upon receipt of such consideration by the Optionee, his or her Option
shall immediately terminate and be of no further force and effect. The
value of the stock or other securities the Optionee would have received
if the Option had been exercised shall be determined in good faith by
the Committee, and in the case of shares of the Common Stock of the
Company, in accordance with the provisions of Section 5(b).
<PAGE>
-10-
A "Change of Control" of the Company shall be deemed to have occurred
if any person (as such term is used in Section 13(d) and 14(d)(2) of the
Exchange Act) other than a trust related to an employee benefit plan maintained
by the Company becomes the beneficial owner (within the meaning of Rule 13d-3
under the Exchange Act) of fifty percent (50%) or more of the Company's
outstanding Common Stock, and within the period of twenty-four (24) consecutive
months immediately thereafter, individuals other than (a) individuals who at the
beginning of such period constitute the entire Board of Directors or (b)
individuals whose election, or nomination for election by the Company's
stockholders, was approved by a vote of at least two-thirds of the directors
then still in office who were directors at the beginning of the period, become a
majority of the Board of Directors.
Notwithstanding any provision of this Section 11 to the contrary, if
while unexercised Options or SARs remain outstanding under the Plan the Company
or a wholly owned subsidiary of the Company merges or consolidates with one or
more corporations (whether or not the Company is the surviving corporation) in
any transaction or series of related transactions and there is a Limited Change
of Control (as defined herein), then the terms of all outstanding Options and
SARs shall be amended so that any vesting restrictions on the exercise of the
Option or SAR shall be cancelled as of the effective date of the merger or
consolidation and, if the Company is not the surviving corporation, after the
effective date of such merger or consolidation each Optionee shall be entitled,
upon exercise of an Option or SAR, to receive in lieu of shares of Common Stock
the number and class of shares of such stock or other securities and such other
consideration to which he would have been entitled as a result of the terms of
the merger or consolidation if he had been the holder of record of the number of
shares of Common Stock as to which the Option or SAR is being exercised. A
"Limited Change of Control" shall be deemed to have occurred if (i) following
the merger or consolidation individuals serving as members of the Board
immediately prior to the merger or consolidation no longer constitute a majority
of the individuals serving as members of the Board (or the board of directors of
the surviving corporation) and (ii) the voting securities of the Company
outstanding immediately prior to the merger or consolidation fail to represent
(either by remaining outstanding or by being converted into voting securities of
the surviving entity) more than 50% of the voting power of the securities of the
Company or the surviving entity outstanding immediately after the merger or
consolidation.
Except as expressly provided to the contrary in this Section 11, the
issuance by the Company of shares of stock of any class for cash or property or
for services, either upon direct sale or upon the exercise of rights or
warrants, or upon conversion of shares or obligations of the Company convertible
into such shares or other securities, shall not affect the number, class or
price of shares of Common Stock then subject to outstanding Options or SARs.
12. FORFEITURE FOR DISHONESTY
Notwithstanding anything to the contrary in the Plan, if the Board
determines, after full consideration of the facts presented on behalf of both
the Company and an Optionee, that the Optionee has been engaged in fraud,
embezzlement, theft, commission of a felony or proven dishonesty in the course
of his employment by the Company or a Subsidiary, which damaged the Company or
Subsidiary, or has disclosed trade secrets or other proprietary information of
the
<PAGE>
-11-
Company or a Subsidiary, (a) the Optionee shall forfeit all unexercised Options
and all exercised Options under which the Company has not yet delivered the
certificates, and (b) the Company shall have the right to repurchase all or any
part of the shares of Common Stock acquired by the Optionee upon the earlier
exercise of any Option, at a price equal to the amount paid to the Company upon
such exercise, increased by an amount equal to the interest that would have
accrued in the period between the date of exercise of the Option and the date of
such repurchase upon a debt in the amount of the exercise price, at the prime
rate(s) announced from time to time during such period in the Federal Reserve
Statistical Release Selected Interest Rates. The decision of the Board as to the
cause of an Optionee's discharge and the damage done to the Company or a
Subsidiary shall be final, binding, and conclusive. No decision of the Board,
however, shall affect in any manner the finality of the discharge of an Optionee
by the Company or a Subsidiary.
13. MISCELLANEOUS
(a) Nonassignability of Other Rights. No Other Rights shall be
assignable or transferable by the Optionee except by will or the laws of descent
and distribution. During the life of the Optionee, Other Rights shall be
exercisable only by the Optionee.
(b) No Guarantee of Employment. Neither the Plan nor any Stock Option
Agreement, SAR Agreement or Restricted Stock Agreement shall give an employee
the right to continue in the employment of the Company or a Subsidiary, or give
the Company or a Subsidiary the right to require an employee to continue in
employment.
(c) Tax Withholding. To the extent required by law, the Company shall
withhold or cause to be withheld income and other taxes with respect to any
income recognized by an Optionee by reason of the exercise or vesting of an
Option or Other Right, or a cash bonus paid in connection with such exercise or
vesting, and as a condition to the receipt of any Option or Other Right or
related cash bonus the Optionee shall agree that if the amount payable to him by
the Company and any Subsidiary in the ordinary course is insufficient to pay
such taxes, then he shall upon the request of the Company pay to the Company an
amount sufficient to satisfy its tax withholding obligations.
Without limiting the foregoing, the Committee may in its discretion
permit any Optionee's withholding obligation to be paid in whole or in part in
the form of shares of Common Stock, by withholding from the shares to be issued
or by accepting delivery from the Optionee of shares already owned by him. The
fair market value of the shares for such purposes shall be determined as set
forth in Section 5(b). An Optionee may not make any such payment in the form of
shares of Common Stock acquired upon the exercise of an ISO until the shares
have been held by him for at least two (2) years after the date the ISO was
granted and at least one (1) year after the date the ISO was exercised. If
payment of withholding taxes is made in whole or in part in shares of Common
Stock, the Optionee shall deliver to the Company certificates registered in his
name representing shares of Common Stock legally and beneficially owned by him,
fully vested and free of all liens, claims, and encumbrances of every kind, duly
endorsed or accompanied by stock powers duly endorsed by the record holder of
the shares represented by such certificates. If the Optionee is subject to
Section 16(a) of the Exchange Act, his ability to
<PAGE>
-12-
pay his withholding obligation in the form of shares of Common Stock shall be
subject to such additional restrictions as may be necessary to avoid any
transaction that might give rise to liability under Section 16(b) of the
Exchange Act.
(d) Use of Proceeds. The proceeds from the sale of shares pursuant to
Options or Other Rights shall constitute general funds of the Company.
14. EFFECTIVE DATE, DURATION, AMENDMENT AND TERMINATION OF PLAN
The Plan shall be effective as of November 30, 1995, subject to
ratification by (a) the holders of a majority of the outstanding shares of
capital stock present, or represented, and entitled to vote thereon (voting as a
single class) at a duly held meeting of the shareholders of the Company, or (b)
by the written consent of the holders of a majority (or such greater degree as
may be prescribed under the Company's charter, by-laws, and applicable state
law) of the capital stock of the issuer entitled to vote thereon (voting as a
single class) within twelve (12) months after such date. Options that are
conditioned upon such ratification of the Plan by the shareholders may be
granted prior to such ratification. The Committee may grant Options and Other
Rights under the Plan from time to time until the close of business on November
26, 2005. The Board may at any time amend the Plan, provided, however, that
without approval of the Company's stockholders there shall be no: (i) increase
in the total number of shares covered by the Plan, except by operation of the
provisions of Section 11, or the aggregate number of shares of Common Stock
which may be issued to any single employee; (ii) change in the class of
individuals eligible to receive Options or Other Rights; (iii) reduction in the
exercise price of any ISO; (iv) extension of the latest date upon which any ISO
may be exercised; (v) material increase of the obligations of the Company or
rights of any Optionee under the Plan or any Option or Other Rights granted
pursuant to the Plan; or (vi) other change in the Plan that requires stockholder
approval under applicable law. No amendment shall adversely affect outstanding
Options or Other Rights without the consent of the Optionee. The Plan may be
terminated at any time by action of the Board, but any such termination will not
terminate Options and Other Rights then outstanding, without the consent of the
Optionee.
Exhibit 11
IRON MOUNTAIN INCORPORATED
STATEMENT RE: COMPUTATION OF EARNINGS PER SHARE
(Amounts in Thousands except Per Share Data)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
-------------------------------------------
1996 1997 1996 1997
--------- -------- ------ --------
<S> <C> <C> <C> <C>
Net income (loss) applicable to common
stockholders $411 $(969) $417 $(1,485)
====== ====== ===== ======
Weighted average shares:
Common Stock 9,627 10,057 7,987 9,863
Common Stock - Nonvoting 500 454 415 463
Class A Common Stock -- -- 8 --
Series A1 Preferred Stock -- -- 22 --
Series A2 Preferred Stock -- -- 330 --
Series A3 Preferred Stock -- -- 146 --
Series C Preferred Stock -- -- 819 --
------ ------ ----- ------
Weighted average shares outstanding 10,127 10,511 9,727 10,326
Dilutive effect of stock options
considered common stock equivalents
computed under the treasury stock
method using the average price 209 -- 172 --
------ ------ ----- ------
Weighted average common and common equivalent
shares outstanding 10,336 10,511 9,899 10,326
====== ====== ===== ======
Net income (loss) per common and common
equivalent share $ 0.04 $ (0.09) $ 0.04 $ (0.14)
====== ====== ===== ======
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET AT JUNE 30, 1997 AND THE
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE SIX MONTHS THEN
ENDED AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<CIK> 0001004317
<NAME> IRON MOUNTAIN INCORPORATED
<MULTIPLIER> 1000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<EXCHANGE-RATE> 1.000
<CASH> 585
<SECURITIES> 0
<RECEIVABLES> 30,700
<ALLOWANCES> (1,098)
<INVENTORY> 920
<CURRENT-ASSETS> 39,525
<PP&E> 193,428
<DEPRECIATION> (53,032)
<TOTAL-ASSETS> 395,647
<CURRENT-LIABILITIES> 32,156
<BONDS> 241,967
0
0
<COMMON> 119
<OTHER-SE> 104,303
<TOTAL-LIABILITY-AND-EQUITY> 395,647
<SALES> 88,739
<TOTAL-REVENUES> 88,739
<CGS> 45,872
<TOTAL-COSTS> 79,340
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 11,080
<INCOME-PRETAX> (1,681)
<INCOME-TAX> (196)
<INCOME-CONTINUING> (1,485)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,485)
<EPS-PRIMARY> (0.14)
<EPS-DILUTED> (0.14)
</TABLE>
