<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
MOBILE MINI, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE> 2
[MOBILE MINI, INC. LOGO]
1834 WEST THIRD STREET
TEMPE, ARIZONA 85281
Dear Shareholders:
You are cordially invited to attend the 1999 Annual Shareholders Meeting.
The meeting will be held on Wednesday, November 10, 1999, at the Radisson
Airport Hotel/Southbank, 3333 East University Drive, Phoenix, Arizona 85034. The
meeting will begin at 1:00 p.m.
The formal notice of the meeting follows on the next page. No admission
tickets or other credentials will be required for attendance at the meeting.
Directors and officers are expected to be available before and after the
meeting to speak with you. During the meeting, we will answer your questions
regarding our business affairs and will consider the matters explained in the
notice and proxy statement that follow.
Please vote, sign and return the enclosed proxy as soon as possible,
whether or not you plan to attend the meeting. Your vote is important.
Sincerely,
/s/ RICHARD E. BUNGER
--------------------------------------
Richard E. Bunger
Chairman of the Board
/s/ STEVEN G. BUNGER
--------------------------------------
Steven G. Bunger
President & Chief Executive Officer
<PAGE> 3
NOTICE OF ANNUAL SHAREHOLDERS MEETING
TO THE HOLDERS OF COMMON STOCK OF MOBILE MINI, INC.:
We will hold the annual shareholders meeting of Mobile Mini, Inc. at the
Radisson Airport Hotel/ Southbank, 3333 East University Drive, Phoenix, Arizona
85034 on November 10, 1999, at 1:00 p.m. local time. The meeting is being called
by Mobile Mini's board of directors to:
1. Elect 2 directors;
2. Approve and adopt the Mobile Mini, Inc. 1999 Stock Option Plan.
3. Ratify the appointment of Arthur Andersen LLP as our independent
auditors for 1999; and
4. Consider any other matters which properly come before the meeting
and any adjournments.
Only shareholders of record at the close of business on September 15, 1999
are entitled to receive notice of and to vote at the meeting. A list of
shareholders entitled to vote will be available for examination at the meeting
by any shareholder for any purpose germane to the meeting. The list will also be
available for the same purpose for ten days prior to the meeting at our
principal executive office at 1834 West Third Street, Tempe, Arizona 85281.
We have enclosed our 1998 annual report, including financial statements,
and the proxy statement with this notice of annual meeting.
To assure your representation at the meeting, please vote, sign, date and
return the enclosed proxy as soon as possible in the postage-prepaid envelope
enclosed for that purpose. Any shareholder attending the meeting may vote in
person even if he or she previously has returned a proxy. Your proxy is being
solicited by the board of directors of Mobile Mini.
Sincerely,
/s/ LAWRENCE TRACHTENBERG
--------------------------------------
Lawrence Trachtenberg
Secretary
Tempe, Arizona
September 24, 1999
<PAGE> 4
[MOBILE MINI, INC. LOGO]
1834 WEST THIRD STREET
TEMPE, ARIZONA 85281
ANNUAL SHAREHOLDERS MEETING
PROXY STATEMENT
ANNUAL MEETING: November 10, 1999 at 1:00 p.m. local time at the Radisson
Airport Hotel/Southbank, 3333 East University Drive, Phoenix, Arizona 85034.
RECORD DATE: Close of business on September 15, 1999. If you were a shareholder
at that time, you may vote at the meeting. Each share is entitled to one vote.
You may not cumulate votes. On the record date, we had 11,370,841 shares of our
common stock outstanding.
AGENDA:
1. Elect 2 directors;
2. Approve and adopt the Mobile Mini, Inc. 1999 Stock Option Plan.
3. Ratify the appointment of Arthur Andersen LLP as our independent
auditors for 1999; and
4. Any other proper business.
PROXIES: Unless you tell us on the proxy card to vote differently, we will vote
signed returned proxies "for" the director nominees named in this proxy
statement and "for" agenda items 2 and 3. The proxy holders will use their
discretion on other matters. If a nominee cannot or will not serve as a
director, the proxy holders will vote for a person whom they believe will carry
on the present policies of the board of directors.
PROXIES SOLICITED BY: The board of directors of Mobile Mini.
MAILING DATE: We anticipate mailing this proxy statement on September 28, 1999.
REVOKING YOUR PROXY: You may revoke your proxy before it is voted at the
meeting. To revoke, follow the procedures described on page 14 under "Voting
Procedures/Revoking Your Proxy."
PLEASE VOTE -- YOUR VOTE IS IMPORTANT
<PAGE> 5
CONTENTS
<TABLE>
<S> <C>
General Information......................................... 1
*Proposal 1 -- Election of Directors........................ 2
Board Information........................................... 3
*Proposal 2 -- Approve Mobile Mini, Inc. 1999 Stock Option
Plan...................................................... 4
*Proposal 3 -- Ratification of Appointment of Independent
Auditors.................................................. 7
Other Matters............................................... 7
Executive Compensation and Other Information................ 11
Security Ownership of Certain Beneficial Owners and
Management................................................ 13
Section 16(a) Beneficial Ownership Reporting Compliance..... 14
Voting Procedures/Revoking Your Proxy....................... 14
Submission of Shareholder Proposals......................... 15
Annual Report............................................... 15
</TABLE>
- ---------------
* We expect to vote on these items at the meeting.
PROPOSAL 1
ELECTION OF DIRECTORS
BOARD STRUCTURE
The board of directors has 6 members. The directors are divided into three
classes. At each annual meeting, the term of one class expires. Directors in
each class serve for three years.
BOARD NOMINEES
The board of directors has nominated Steven G. Bunger and George E. Berkner
for re-election as directors, each to serve a three-year term expiring at our
2002 annual meeting.
Steven G. Bunger has served as our Chief Executive Officer, President, and
a director since April 1997. Mr. Bunger joined Mobile Mini in 1983 and initially
worked in our drafting and design department. He served in a variety of
positions including dispatcher, salesperson, and advertising coordinator before
joining management. He served as sales manager of our Phoenix branch and our
operations manager and Vice President of Operations and Marketing before
becoming our Executive Vice President and Chief Operating Officer in November
1995. Mr. Bunger graduated from Arizona State University in 1986 with a B.A. in
Business Administration. He is the son of Richard E. Bunger. Age 38.
George E. Berkner has served as a director since December 1993. Since
August 1992, Mr. Berkner has been the Vice President of AdGraphics, Inc., a
computer graphics company. From 1990 to 1992, he was a private investor. From
1972 until 1990, he was President and Chief Executive Officer of Gila River
Products, a plastics manufacturer. Mr. Berkner graduated from St. Johns
University with a B.A. in Economics/Business in 1956. Age 65.
THE BOARD RECOMMENDS THAT YOU VOTE "FOR" THESE NOMINEES.
2
<PAGE> 6
BOARD INFORMATION
CONTINUING DIRECTORS
The terms of Richard E. Bunger and Stephen A McConnell expire at the 2000
annual meeting, and the terms Ronald J. Marusiak and Lawrence Trachtenberg
expire at the 2001 annual meeting.
Richard E. Bunger has served as our Chairman of the Board and a director
since he founded Mobile Mini in 1983. He also served as our Chief Executive
Officer and President through April 1997. Since April 1997, Mr. Bunger has
served as our Director of Product Research and Market Development. He has been
awarded approximately 67 patents, many related to portable storage technology.
For a period of approximately 25 years prior to founding Mobile Mini, Mr. Bunger
owned and operated Corral Industries Incorporated, a designer and builder of
integrated animal production facilities that also designed and built mini
storage facilities. He is the father of Steven G. Bunger. Age 62.
Stephen A McConnell has served as a director since August 1998. Since 1991,
he has been President of Solano Ventures, a private capital investment company.
Mr. McConnell has served since 1998 as Chairman of G-L Industries, L.L.C., a
Salt Lake City-based manufacturer of wood glu-lam beams used in the construction
industry. From 1991 to 1997, he also was Chairman of Mallco Lumber & Building
Materials, Inc., a wholesale distributor of lumber and doors. From 1991 to 1995
he was President of Belt Perry Associates, Inc., a property tax consulting firm.
He is also a director of Pilgrim Capital Corporation, JDA Software Group, Inc.,
Vodavi Technology, Inc. and Capital Title Group, Inc. Age 46.
Ronald J. Marusiak has served as a director since February 1996. He has
been the Division President of Micro-Tronics, Inc., a corporation engaged in
precision machining and tool and die building for companies throughout the
United States for more than 10 years. Mr. Marusiak is also a director for
FiestaNet Communications, Inc. and W.B. McKee Securities, Inc. Mr. Marusiak
received a Masters of Science in Management from LaVerne University in 1979 and
graduated from the United States Air Force Academy in 1971. Age 51.
Lawrence Trachtenberg has served as our Executive Vice President, Chief
Financial Officer, General Counsel, Secretary, Treasurer and a director since
December 1995. He is responsible for all of our accounting, banking and related
financial matters. Mr. Trachtenberg is admitted to practice law in Arizona and
New York and is a Certified Public Accountant in New York. Before he joined us,
Mr. Trachtenberg served as Vice President and General Counsel at Express
American Mortgage, a mortgage banking company, from February 1994 through
September 1995. Before then, he was Vice President and Chief Financial Officer
of Pacific International Services Corporation, a car rental and sales company,
from 1990 to 1994. Mr. Trachtenberg received his J.D. from Harvard Law School in
1981 and his B.A. in Accounting/Economics from Queens College of the City
University of New York in 1977. Age 43.
BOARD MEETINGS
In 1998, the Board held eight meetings. Each director attended all board of
director meetings and all meetings of committees on which he served.
BOARD COMMITTEES
The board of directors has an audit committee and a compensation committee.
Messrs. Berkner, Marusiak, and McConnell, who are non-employee directors, were
the members of those committees during 1998 and are currently the members of
those committees.
The audit committee recommends appointment of Mobile Mini's independent
auditors. It also approves audit reports and internal controls, and meets with
management and the independent auditors to review the results and scope of the
audit and the services provided by the independent auditors. The audit committee
met once during 1998 and has met twice during the current year.
3
<PAGE> 7
The compensation committee manages officer compensation and administers our
compensation and incentive plans, including the 1994 Stock Option Plan. The
compensation committee held six meetings during 1998.
The board of directors does not have a nominating committee. The entire
board performs those functions.
The board created the executive management committee and appointed Richard
E. Bunger, Steven G. Bunger and Larry Trachtenberg the members of the committee.
The executive management committee is comprised of our inside directors and
generally considers matters relating to policy and strategy. The committee's
actions do not constitute acts of the board of directors.
BOARD COMPENSATION
Non-employee directors received $500 for each board meeting in 1998,
whether attended in person or by telephone, and will be paid $15,000 per year
plus $500 per board meeting attended in 1999. In addition, non-employee
directors are reimbursed for any expenses related to their service. Non-employee
directors also receive options to purchase 7,500 shares on August 1st of each
year of their term. The exercise price of the options is the fair market value
of our shares on the date of grant.
Directors who are also officers do not receive any separate compensation
for serving as directors.
PROPOSAL 2
1999 STOCK OPTION PLAN
On August 17, 1999, the Board of Directors approved the adoption and
implementation of the Mobile Mini, Inc. 1999 Stock Option Plan, subject to
stockholder approval at the annual meeting, authorizing the issuance of 500,000
shares of Mobile Mini's common stock. The board of directors directed that the
plan be submitted to the stockholders for approval in order for awards under the
plan to qualify under the exception to Section 162(m) of the Internal Revenue
Code of 1986, as amended, as "qualified performance-based compensation" if the
requirements of the exception are otherwise satisfied. Unless otherwise
instructed on the proxy, properly executed proxies will be voted in favor of
approving the plan. The affirmative vote of a majority of the votes present in
person or represented by proxy at the annual meeting is required to approve
Proposal 2.
We also have a 1994 Stock Incentive Plan. 969,025 shares of common stock
are reserved for issuance upon exercise of options granted under that plan and
230,975 shares have been issued upon exercise of options granted under that
plan. The 1994 plan was originally adopted by the board of directors in August
1994 and approved the shareholders at the 1994 annual meeting. As of August 31,
1999, options to purchase an aggregate of 715,075 shares of common stock were
outstanding under the 1994 plan at a weighted-average exercise price of $7.165
per share. A total of 253,950 additional shares were available for option grants
under the 1994 plan at such date.
The purposes of the plan are to attract and retain the best available
personnel for positions of substantial responsibility and to provide incentive
to, and to encourage ownership of our stock by, key management and other
employees. The board of directors believes that stock options are important to
attract and to encourage the continued employment and service of officers and
other employees by facilitating their purchase of a stock interest in Mobile
Mini. The plan will be administered by the compensation committee, which is
comprised of our outside directors. Because the award of options is completely
within the discretion of the compensation committee, it is not possible to
determine at this time the awards that may be made to officers or other
employees.
Section 162(m) of the Internal Revenue Code generally provides that no
federal income tax business expense deduction is allowed for annual compensation
in excess of $1 million paid by a publicly traded corporation to its chief
executive officer and the four other most highly compensated officers. However,
there is no limitation under the Code on the deductibility of "qualified
performance-based compensation." To satisfy this definition, (1) the
compensation must be paid solely on account of the attainment of one or more
pre-established, objective performance goals; (2) the performance goal under
which compensation is paid
4
<PAGE> 8
must be established by a compensation committee comprised solely of two or more
directors who qualify as "outside directors" for purposes of the exception; (3)
the material terms under which the compensation is to be paid must be disclosed
to and subsequently approved by stockholders of the corporation before payment
is made; and (4) the compensation committee must certify in writing before
payment of the compensation that the performance goals and any other material
terms were in fact satisfied.
In the case of compensation attributable to stock options, the performance
goal requirement is deemed satisfied, and the certification requirement is
inapplicable, if (1) the grant or award is made by the compensation committee;
(2) the plan under which the option is granted states the maximum number of
shares with respect to which options may be granted to an employee during a
specified period; and (3) under the terms of the option, the amount of
compensation is based solely on an increase in the value of the stock after the
date of grant. Under the Code, a director is an "outside director" if he or she
is not a current employee of the corporation; is not a former employee who
receives compensation for prior services (other than under a qualified
retirement plan); has not been an officer of the corporation; and does not
receive, directly or indirectly (including amounts paid to an entity that
employs the director or in which the director has at least a 5% ownership
interest), remuneration from the corporation in any capacity other than as a
director. The regulations provide that the material terms of a performance goal
will be approved by stockholders for purposes of the foregoing rules if, in a
separate vote, affirmative votes are cast by a majority of the voting shares.
The following is a summary description of the material provisions of the
plan. This summary is qualified in its entirety by the complete text of the
plan, which is included as Attachment A to this Proxy Statement.
DESCRIPTION OF THE 1999 STOCK OPTION PLAN
Under the plan, 500,000 shares of our common stock are reserved and
authorized for issuance upon the exercise of options granted pursuant to the
plan. All employees of the Company are eligible to receive options under the
plan, which is administered by the compensation committee of the board of
directors. Options granted under the plan may either qualify as incentive stock
options under Section 422 of the Internal Revenue Code or they may be options
that do not qualify.
The option exercise price for all options granted under the plan may not be
less than 100% of the fair market value of our common stock on the date of grant
of the option (or 110% in the case of an incentive stock option granted to an
optionee beneficially owning more than 10% of the outstanding common stock). The
maximum option term is 10 years (or five years in the case of an incentive stock
option granted to an optionee beneficially owning more than 10% of the
outstanding Common Stock). Under current practice of the compensation committee,
options generally become exercisable in five equal annual increments beginning
six months following the option grant date. However, the compensation committee
has absolute discretion to determine the vesting schedule of options granted
under the plan.
Payment for shares purchased under the plan may be made either in cash or,
if permitted by the particular option agreement, by exchanging shares of common
stock with a fair market value equal to the total option exercise price plus
cash for any difference. Options may, if permitted by the particular option
agreement, be exercised by directing that certificates for the shares purchased
be delivered to a licensed broker as agent for the optionee, provided that the
broker tenders to Mobile Mini cash or cash equivalents equal to the option
exercise price.
The Board of Directors may terminate or suspend the plan at any time.
Unless previously terminated, the plan will terminate automatically on August
17, 2009, the tenth anniversary of the date the plan was adopted by the board of
directors.
FEDERAL INCOME TAX CONSEQUENCES
The grant of an option is not a taxable event for the optionee or Mobile
Mini.
Incentive Stock Options. An optionee will not recognize taxable income
upon exercise of an incentive stock option (except that the alternative minimum
tax may apply), and any gain realized upon a disposition of
5
<PAGE> 9
shares of common stock received pursuant to the exercise of an incentive stock
option will be taxed as long-term capital gain if the optionee holds the shares
for at least two years after the date of grant and for one year after the date
of exercise. Mobile Mini will not be entitled to any business expense deduction
with respect to the exercise of an incentive stock option, except as discussed
below.
For the exercise of an incentive stock option to qualify for the foregoing
tax treatment, the optionee generally must be a Mobile Mini employee from the
date the option is granted through a date within three months before the date of
exercise of the option. In the case of an optionee who is disabled, the
three-month period is extended to one year. In the case of an employee who dies,
the three-month period and the holding period requirement for shares received
pursuant to the exercise of the option are waived.
If all of the requirements for incentive option treatment are met except
for the holding period requirement, the optionee will recognize ordinary income
upon the disposition of the shares received upon the exercise of an incentive
stock option in an amount equal to the excess of the fair market value of the
shares of Common Stock at the time the option was exercised over the exercise
price. The balance of the realized gain, if any, will be taxed at applicable
capital gain tax rates. The Company will be allowed a business expense deduction
to the extent the optionee recognizes ordinary income, subject to Section 162(m)
of the Internal Revenue Code as summarized below.
If an optionee exercises an incentive stock option by tendering shares of
common stock with a fair market value equal to part or all of the option
exercise price, the exchange of shares will be treated as a nontaxable exchange
(except that this treatment would not apply if the optionee had acquired the
shares being transferred pursuant to the exercise of an incentive stock option
and had not satisfied the holding period requirement summarized above). If the
exercise is treated as a tax free exchange, the optionee would have no taxable
income from the exchange and exercise (other than alternative minimum taxable
income as noted above) and the tax basis of the shares exchanged would be
treated as the substituted basis for the shares received. If the optionee used
shares received pursuant to the exercise of an incentive stock option as to
which the optionee had not satisfied the holding period requirement, the
exchange would be treated as a taxable disqualifying disposition of the
exchanged shares, and the excess of the fair market value of the shares tendered
over the optionee's basis in the shares would be taxable.
Non-Qualified Options. Upon exercising an option that is not an incentive
stock option, an optionee will recognize ordinary income in an amount equal to
the difference between the exercise price and the fair market value of the
shares of common stock on the date of exercise. Upon a subsequent sale or
exchange of the shares acquired upon the exercise of a non-qualified stock
option, the optionee will have taxable gain or loss, measured by the difference
between the amount realized on the disposition and the tax basis of the shares
(generally, the amount paid for the shares plus the amount treated as ordinary
income at the time the option was exercised).
If Mobile Mini complies with applicable reporting requirements and with the
restrictions of Section 162(m) of the Internal Revenue Code, it will be entitled
to a business expense deduction in the same amount and generally at the same
time as the optionee recognizes ordinary income. Under Section 162(m) of the
Code, if the optionee is one of certain specified executive officers, then,
unless certain exceptions apply, Mobile Mini is not entitled to deduct
compensation with respect to the optionee, including compensation related to the
exercise of stock options, to the extent such compensation in the aggregate
exceeds $1,000,000 for the taxable year. The options are intended to comply with
the exception to Section 162(m) for "qualified performance-based compensation."
If the optionee surrenders shares of common stock in payment of part or all
of the exercise price for non-qualified stock options, no gain or loss will be
recognized with respect to the shares surrendered (regardless of whether the
shares were acquired pursuant to the exercise of an incentive stock option) and
the optionee will be treated as receiving an equivalent number of shares of
common stock upon the exercise of the option in a nontaxable exchange. The basis
of the shares surrendered will be treated as the substituted tax basis for an
equivalent number of shares received and the new shares will be treated as
having been held for the same holding period as had expired with respect to the
transferred shares. The difference between the aggregate option exercise price
and the aggregate fair market value of the shares received pursuant to the
exercise of the
6
<PAGE> 10
option will be taxed as ordinary income. The optionee's basis in the additional
shares will be equal to the amount included in the optionee's income.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSAL 2.
PROPOSAL 3
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The board of directors has appointed Arthur Andersen LLP, independent
public accountants, to audit the consolidated financial statements of Mobile
Mini for the fiscal year ending December 31, 1999. In the event of a negative
vote on such ratification, the board of directors will reconsider its selection.
The board of directors anticipates that representatives of Arthur Andersen LLP
will be present at the annual meeting, will have the opportunity to make a
statement if they desire, and will be available to respond to appropriate
questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSAL 3.
OTHER MATTERS
The board of directors knows of no other matters to be submitted to the
annual meeting. If any other matters properly come before the meeting, it is the
intention of the persons named in the enclosed proxy card to vote the shares
they represent as the board may recommend.
COMPENSATION COMMITTEE INTERLOCKS
AND RELATED PARTY TRANSACTIONS
Messrs. Berkner, Marusiak, and McConnell served as the members of the
compensation committee of the board of directors during 1998. None of these
directors was an executive officer or otherwise an employee of Mobile Mini
before or during such service, and no executive officer of Mobile Mini served on
any other company's compensation committee.
Mobile Mini leases certain business locations from persons and companies
related to Richard E. Bunger, including his children. Mr. Bunger is an executive
officer, director and founder of Mobile Mini. Mobile Mini entered into an
agreement, effective January 1, 1994, to lease a portion of the property
comprising its Phoenix and Tucson locations from Richard E. Bunger's five
children for total annual base lease payments of $66,000, with annual
adjustments based on the Consumer Price Index. Payments in 1998 for these leases
were approximately $73,000. The term of each of these leases will expire on
December 31, 2003. Mobile Mini also leases its Rialto facility from Mobile Mini
Systems, Inc., a corporation wholly owned by Richard E. Bunger, for total annual
base lease payments of $204,000, with annual adjustments based on the Consumer
Price Index. In 1998, Mobile Mini paid approximately $225,500 under the lease.
This lease expires in 2011. Management believes that the rental rates reflect
the fair market rental value of these properties, and the terms of these leases
were approved by the non-employee directors before the lease terms started.
Mobile Mini obtained services in 1998 from Skilquest, Inc., a company
engaged in sales and management support programs. Skilquest, Inc. is owned by
Carolyn Clawson, the daughter of Mr. Richard E. Bunger and sister to Steven G.
Bunger. Mobile Mini made aggregate payments of approximately $69,000 to
Skilquest, Inc. in 1998, which the board believes represented the fair market
value for the services performed.
Mobile Mini acquired 20 trucks from Richard E. Bunger in October, 1998. The
purchase price was $256,000 which Mobile Mini believes represented the fair
market value for these assets.
7
<PAGE> 11
COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
Mobile Mini's executive compensation program is administered by the
compensation committee of the board of directors, which is comprised only of
independent directors as defined by the Securities and Exchange Commission and
the Internal Revenue Service. As a part of its duties, the compensation
committee reviews compensation levels and performance of Mobile Mini's executive
officers. The compensation committee also administers Mobile Mini's short and
long-term incentive programs.
The following report of the compensation committee shall not be deemed to
be incorporated by reference into any previous filing by Mobile Mini under
either the Securities Act of 1933 or the Securities Exchange Act of 1934 that
incorporates future Securities Act or Exchange Act filings in whole or in part
by reference.
COMPENSATION PHILOSOPHY
Mobile Mini encourages each individual to enhance the value of the company
through their entrepreneurial efforts. As such, we position Mobile Mini's base
compensation levels for its executive officers consistent with the individual's
performance and skills, and the competitive marketplace.
Annual incentive payments are provided for achieving positive results that
prepare Mobile Mini for strategic growth and continued financial strength.
Annual incentives are designed to provide total cash compensation at competitive
levels relative to a peer group of companies in the durable goods leasing
industry as warranted by performance.
Long-term incentives in the form of stock options are provided to align the
interests of management and the interests of the shareholders, as well as reward
members of management for ongoing implementation of Mobile Mini's strategic
planning objectives.
In total, the three elements of Mobile Mini's executive officer
compensation program are designed to provide a competitive compensation program
taking into account Mobile Mini's financial performance relative to its
expectations and the peer companies' performance.
COMPENSATION OF THE CHAIRMAN
Mr. Richard E. Bunger served as the chairman of the board throughout 1998.
Mr. Bunger also serves as director of product research and market development.
During 1998, Mr. Bunger received base compensation of $183,750, an increase from
the $175,000 base compensation received in 1997. This increase provided Mr.
Bunger with a compensation package that when combined with an annual incentive
award and stock options is competitive with peer company compensation.
In light of Mobile Mini's significant 1998 improvement in financial
performance over 1997, Mr. Bunger was awarded as cash incentive payment of
$223,502 in 1998. The incentive payment was based upon Mobile Mini's 1998
earnings before taxes, increases in the size of the container rental fleet and
lease revenue. During 1998, earnings before one time charges, taxes and
extraordinary items increased 104%, rental fleet units increased 43%, and
revenues increased 14.3% over 1997 levels. These results were evaluated based on
the overall judgment of the committee with a principal emphasis on the increase
in earnings in the committee's evaluation of the performance levels.
The committee considers long-term incentives, typically in the form of
stock options, as an important component of Mobile Mini's overall executive
compensation program. During 1998, Mr. Bunger received stock options on 30,000
shares of Mobile Mini's common stock. The compensation committee considered Mr.
Bunger's position within Mobile Mini, his contributions to the continuing
success of Mobile Mini and the increased value of Mobile Mini, in determining
the stock option award.
8
<PAGE> 12
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
Steven G. Bunger, Mobile Mini's chief executive officer and president,
received a base salary for 1998 of $183,750, an increase from $170,000 in 1997.
The increase was a result of Mr. Bunger's performance as chief executive officer
and president during 1998 and is competitive with levels at peer companies.
In light of Mobile Mini's significantly improved financial performance over
1997 which is referred to above, Mr. Bunger received a cash incentive payment of
$193,812 in 1998.
During 1998, Mr. Bunger received stock options on 30,000 shares of Mobile
Mini's common stock. The compensation committee considered Mr. Bunger's
contributions to the continuing success and increased value of Mobile Mini in
determining the stock option award.
INTERNAL REVENUE CODE SECTION 162(m) COMPLIANCE
Internal Revenue Code Section 162(m), enacted in 1993, limits the
deductibility of non-performance based compensation in excess of $1 million for
certain of Mobile Mini's executive offices. The non-performance based
compensation paid to Mobile Mini's executive officers in 1998 did not exceed the
$1 million limit per officer, nor is it expected that the non-performance based
compensation to be paid to Mobile Mini's executive officers in 1999 will exceed
the limit. In 1997, Mobile Mini's 1994 Stock Option Plan was amended to comply
with Section 162(m), and the 1999 Stock Option Plan was prepared so that each
plan will qualify as performance based compensation. As such, awards granted
under the plans will not be subject to the $1 million limitation.
Because it is not likely that the cash compensation payable to any of
Mobile Mini's executive officers will exceed the $1 million limitation in the
foreseeable future, the committee has decided at this time not to take any other
action to limit or restructure the elements of cash compensation payable to
Mobile Mini's executive officers. The committee will reconsider this decision
should the individual compensation of any executive officer approach $1 million.
Compensation Committee
George E. Berkner
Ronald J. Marusiak
Stephen A McConnell
9
<PAGE> 13
PERFORMANCE GRAPH
The graph below compares cumulative total shareholder return on Mobile Mini
common stock, the Nasdaq Stock Market (U.S.) Index and the Standard & Poor's
(S&P) 500 Stock Index from February 17, 1994 (the date Mobile Mini's common
stock was first sold publicly in a market) to June 30, 1999. The graph assumes
that $100 was invested on February 17, 1994, and any dividends were reinvested
on the date on which they were paid. Historical performance does not necessarily
predict future results.
[Cumulative Total Return Graph]
<TABLE>
<CAPTION>
MOBILE MINI INC S&P 500 NASDAQ US
--------------- ------- ---------
<S> <C> <C> <C>
1994|(February 17) 100.00 100.00 100.00
1994 90.63 97.99 95.77
1995 93.75 134.81 135.43
1996 78.12 165.76 166.56
1997 145.30 221.07 204.34
1998 268.75 284.24 287.23
1999|(June 30) 489.04 319.43 352.44
</TABLE>
10
<PAGE> 14
EXECUTIVE COMPENSATION AND OTHER INFORMATION
The following table summarizes the compensation we paid the Chief Executive
Officer and each of the four other most highly compensated executive officers as
of the end of 1998 whose salary and bonus exceeded $100,000.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION OTHER LONG TERM
------------------- ANNUAL COMPENSATION ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION(1) STOCK OPTIONS COMPENSATION
- --------------------------- ---- -------- -------- --------------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Richard E. Bunger,........... 1998 $183,750 $223,502 -- 30,000 $27,340(2)
Chairman of the Board 1997 175,000 163,059 -- 40,000 25,087(2)
1996 100,000 107,873 -- -- 21,100(2)
Steven G. Bunger,............ 1998 $183,750 $193,812 $500 30,000 $ --
Chief Executive Officer, 1997 170,000 119,577 500 40,000 5,000(3)
President 1996 50,000 95,887 -- 25,000 5,000(3)
Lawrence Trachtenberg,....... 1998 $157,500 $140,487 $500 30,000 $ --
Chief Financial Officer, 1997 145,000 102,494 500 40,000 5,000(3)
Executive Vice President 1996 50,000 95,887 -- 25,000 5,000(3)
Burton K. Kennedy Jr.,....... 1998 $108,011 $ 20,887 $500 5,000 $ 5,000(3)
Senior Vice President 1997 99,045 11,296 500 5,000 5,000(3)
1996 14,423 51,320 -- 50,000 2,500(3)
Russell Lemley............... 1998 $ 89,364 $ 27,668 $225 29,000 $ 5,000(3)
Vice President, Operations 1997 76,796 20,775 253 3,000 5,000(3)
1996 63,969 -- -- -- 5,000(3)
</TABLE>
- ---------------
(1) Includes our contributions to the 401(k) retirement plan.
(2) We provide Richard E. Bunger with the use of a car we own and a $2 million
life insurance policy. The amount shown is our estimate of our annual costs
paid for the car and the life insurance premiums we paid.
(3) Payments under non-compete agreements with us.
STOCK OPTIONS
The following table lists our grants during 1998 of stock options to the
officers named in the Summary Compensation Table. The amounts shown as potential
realizable values rely on arbitrarily assumed rates of share price appreciation
prescribed by the Securities and Exchange Commission. In assessing those values,
please note that the ultimate value of the options, as well as your shares,
depends on actual future share values. Market conditions and the efforts of our
directors, officers and others to foster Mobile Mini's future success can
influence those future share values.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE AT
ASSUMED ANNUAL RATE OF
NUMBER OF % OF TOTAL STOCK PRICE APPRECIATION FOR
SHARES OPTIONS GRANTED EXERCISE OR OPTION TERM(1)
UNDERLYING TO EMPLOYEES IN BASE PRICE ------------------------------
NAME OPTIONS GRANTED FISCAL YEAR ($/SH) EXPIRATION DATE 5%($) 10%($)
- ---- --------------- --------------- ----------- --------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Richard E. Bunger......... 30,000 16% $6.125 January 2008 $115,559 $292,850
Steven G. Bunger.......... 30,000 16% $6.125 January 2008 $115,559 $292,850
Lawrence Trachtenberg..... 30,000 16% $6.125 January 2008 $115,559 $292,850
Burton K. Kennedy Jr. .... 5,000 3% $6.125 January 2008 $ 19,260 $ 48,808
Russell Lemley............ 4,000 2% $6.125 January 2008 $ 15,408 $ 39,047
25,000 13% $8.875 August 2008 $139,536 $353,612
</TABLE>
- ---------------
(1) Potential realizable value is based on the assumption that our common stock
appreciates at the annual rate shown, compounded annually, from the date of
grant until the expiration of the 10 year term. These
11
<PAGE> 15
numbers are calculated based on Securities and Exchange Commission
requirements and do not reflect our projection or estimate of future stock
price growth. Potential realizable values are computed by: (i) multiplying
the number of shares subject to a given option by the exercise price, (ii)
assuming that the aggregate stock value derived from that calculation
compounds as the annual $5 or 10% rate shown in the table for the entire
10-year term of the option, and (iii) subtracting from that result the
aggregated option exercise price.
OPTION EXERCISES AND YEAR-END VALUES
The following table sets forth certain information regarding the exercise
and values of options held by the officers named in the Summary Compensation
Table, as of December 31, 1998. The table contains values for "in the money"
options, meaning a positive spread between the year-end share price of $10.75
and the exercise price. These values have not been, and may never be, realized.
The options might never be exercised, and the value, if any, will depend on the
share price on the exercise date.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS AT
SHARES ACQUIRED DECEMBER 31, 1998 DECEMBER 31, 1998(1)
NAME ON EXERCISE VALUE REALIZED EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- ---- --------------- -------------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
Richard E. Bunger.................... 0 $0 97,000/48,000 $633,750/$291,000
Steven G. Bunger..................... 0 0 73,000/72,000 $481,050/$436,200
Lawrence Trachtenberg................ 0 0 73,000/72,000 $501,500/$443,500
Burton K. Kennedy Jr. ............... 0 0 23,000/37,000 $164,625/$258,500
Russell Lemley....................... 0 0 2,000/30,000 $ 12,700/$ 75,175
</TABLE>
- ---------------
(1) All the exercisable options were exercisable at a price less than the last
reported sale price of the Common Stock ($10.75) on the Nasdaq Stock Market
on December 31, 1998.
EMPLOYMENT AGREEMENTS
In September 1999 Mobile Mini entered into employment agreements with
Steven G. Bunger and Lawrence Trachtenberg. Each agreement has a three year
term, and the term automatically renews for additional one year periods unless
either we or the employee gives notice of non-renewal. Mr. Bunger's annual base
salary under his employment agreement is $245,000 and Mr. Trachtenberg's is
$175,000. The base salaries may be increased or decreased by the board of
directors, but decreases are limited to 15% of the then-current base salary,
unless greater decreases are in effect for other Key Executives, as defined in
the employment agreements. Each employee is eligible to participate in Mobile
Mini's incentive bonus programs, which are administered by the compensation
committee of the board of directors.
Each employment agreement provides that Mobile Mini will make specified
payments to the employee if either the employee's employment is terminated
involuntarily as determined under the agreement, for any reason other than cause
(as defined in the employment agreement), or if there is a change of control (as
defined in the employment agreement) of Mobile Mini. In the event of any such
involuntary termination, the employee would be entitled under the employment
agreement to receive a termination payment equal to three times his base salary
for the twelve month period preceding the date of termination, and Mobile Mini
would have the right to pay that amount over an 18 month period. If within six
months after a change in control either the employee is terminated or elects for
any reason to terminate his employment, the employee would be entitled to be
paid an amount equal to four times the greater of his annual base salary in
effect the day before the change of control occurred and his annual base salary
during the last twelve months preceding the change of control. This amount would
be payable in a lump sum, unless Mobile Mini provided a letter of credit to the
employee, in which event the amount could be paid over a period of up to 18
months. Any payment upon termination, however, will be limited to an amount
which is less than the "parachute payment" threshold under section 280G of the
Internal Revenue Code (currently, $1,000,000).
12
<PAGE> 16
Each employment agreement contains provisions restricting the employee's
disclosure and use of Mobile Mini confidential information, and providing that
the employee will not compete with Mobile Mini during the 18 months following
the termination of employment in connection with a change of control and during
the three years following termination under any other circumstances.
Although we have not entered into any long-term employment contracts with
any of our other key employees, we have entered into numerous agreements with
key employees which are terminable at will, with or without cause, including
agreements with Burton K. Kennedy Jr. and Russell Lemley. Each of the agreements
contains a covenant not to compete for a period of two years after termination
of employment and a covenant not to disclose confidential information of a
proprietary nature to third parties.
We had numerous bonus and incentive arrangements with several employees
during 1998, including Mr. Richard E. Bunger, Mr. Steven G. Bunger, Mr.
Trachtenberg, Mr. Kennedy and Mr. Lemley. These agreements included an incentive
program to provide financial awards for increases in profitability, revenues and
for the attainment of quotas. Compensation arrangements with our executive
officers are administered by the compensation committee of the board of
directors.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth certain information as of August 31, 1999
with respect to the beneficial ownership of Mobile Mini's common stock by each
shareholder known by us to be the beneficial owner of more than five percent of
its outstanding common stock, by each director and executive officer who owns
shares of common stock, and by all executive officers and directors as a group.
Each person named has sole voting and investment power with respect to all of
the shares indicated, except as otherwise noted. The address of each person
named is 1834 West Third Street, Tempe, Arizona 85281, unless otherwise noted.
<TABLE>
<CAPTION>
NAME NUMBER(1) PERCENT
- ---- --------- -------
<S> <C> <C>
Richard E. Bunger........................................... 1,747,000(2) 15.3%
Steven G. Bunger............................................ 351,849(3) 3.1%
Lawrence Trachtenberg....................................... 106,776 *
Ronald J. Marusiak.......................................... 139,228(4) 1.2%
Stephen A McConnell......................................... 20,000 *
George Berkner.............................................. 34,875 *
Burton K. Kennedy, Jr. ..................................... 36,135 *
Russell Lemley.............................................. 9,688 *
REB/BMB Family Limited Partnership(5)....................... 1,630,000 14.3%
Bunger Holdings, L.L.C.(6).................................. 410,000 3.6%
Pequot Capital Management, Inc.(7).......................... 605,000 5.3%
All Directors and Executive Officers as a group (8
persons).................................................. 2,276,172 20.0%
</TABLE>
- ---------------
* Less than 1%.
(1) Includes shares of common stock subject to options or warrants which are
presently exercisable or which may become exercisable within 60 days
following August 31, 1999 ("exercisable options").
(2) Includes shares owned by REB/BMB Family Limited Partnership and 42,000
shares subject to exercisable options. Mr. Bunger disclaims any beneficial
ownership of shares held by REB/BMB Family Limited Partnership in excess
1,008,350.
(3) Includes 82,000 shares owned by Bunger Holdings, L.L.C., 169,379 shares
owned by REB/BMB Family Limited Partnership 42,470 shares, and 58,000 shares
subject to exercisable options. Of the 169,379 shares owned by REB/BMB
Family Limited Partnership, 134,148 are held for members of Mr. Bunger's
immediate family.
13
<PAGE> 17
(4) Includes: (a) 12,400 shares held by Mr. Marusiak's children; (b) 11,453
shares held by Mr. Marusiak and his wife; (c) 95,000 shares held by a Profit
Sharing Plan and Trust (the "Plan") of which Mr. Marusiak is Trustee and
Plan Administrator; and (d) 19,875 shares subject to exercisable options.
Mr. Marusiak disclaims any beneficial ownership of 80% of the shares held by
the Plan.
(5) Richard E. Bunger and his wife, Barbara M. Bunger, are the general partners
of REB/BMB Family Limited Partnership.
(6) The members of Bunger Holdings, L.L.C. are Steven G. Bunger, Carolyn
Clawson, Michael Bunger, Jennifer Blackwell and Susan Keating, each a child
of Richard E. Bunger.
(7) Included in reliance upon information contained in Form 13F as reported by
the Nasdaq Stock Market Inc. as of September 20, 1999. Pequot's address is
500 Nyala Farm Road, Westport, Connecticut.
SECTION 16(A) BENEFICIAL OWNERSHIP
REPORTING COMPLIANCE
Based on a review of reports filed by our directors, executive officers and
beneficial holders of ten percent (10%) or more of our shares, and based upon
representations from those persons, all Securities and Exchange Commission stock
ownership reports required to be filed by those reporting persons during 1998
were timely made.
VOTING PROCEDURES/REVOKING YOUR PROXY
VOTING
To be elected, directors must receive a plurality of the shares present and
voting in person or by proxy, provided a quorum exists. A plurality means
receiving the largest number of votes, regardless of whether that is a majority.
A quorum is present if at least a majority of the outstanding shares on the
record date are present in person or by proxy. All matters submitted to you at
the meeting other than the election of directors will be decided by a majority
of the votes cast on the matter, provided a quorum exists, except as otherwise
provided by law or by our certificate of incorporation or bylaws.
Those who fail to return a proxy or attend the meeting will not count
towards determining any required plurality, majority or quorum. Shareholders and
brokers returning proxies or attending the meeting who abstain from voting on a
proposition will count towards determining a quorum, plurality or majority for
that proposition.
The enclosed proxies will be voted in accordance with the instructions you
place on the proxy card. Unless otherwise stated, all shares represented by your
returned, signed proxy will be voted as noted on the first page of this proxy
statement.
REVOCABILITY OF PROXIES
Proxies may be revoked if you:
- Deliver a signed, written revocation letter, dated later than the proxy,
to our Corporate Secretary at the address set forth on the first page of
this Proxy Statement.
- Deliver a signed proxy, dated later than the first one to our Corporate
Secretary at the address set forth on the first page of this Proxy
Statement; or
- Attend the meeting and vote in person or by proxy. Attending the meeting
alone will not revoke your proxy.
14
<PAGE> 18
SOLICITATION
The cost of this solicitation will be borne by Mobile Mini. In addition, we
may reimburse brokerage firms and other persons representing beneficial owners
of shares for expenses incurred in forwarding solicitation materials to
beneficial owners. Proxies also may be solicited by our directors and officers,
personally or by telephone or telegram, without additional compensation. We will
reimburse brokerage firms, banks and other custodians, nominees and fiduciaries
for their expenses reasonably incurred in forwarding solicitation material to
beneficial owners of our common stock.
SUBMISSION OF SHAREHOLDER PROPOSALS
From time to time, shareholders seek to nominate directors or to present
proposals for inclusion in the proxy statement and form of proxy, or otherwise
for consideration at the annual meeting. To be included in the proxy statement
or considered at an annual meeting, you must timely submit nominations of
directors or other proposals to Mobile Mini in addition to complying with
certain rules and regulations promulgated by the Securities and Exchange
Commission. We intend to hold our year 2000 annual meeting during June 2000. We
must receive proposals for our 2000 annual meeting no later than February 15,
2000, for possible inclusion in the proxy statement, or between March 15 and
April 1, 2000, for possible consideration at the meeting. Direct any proposals,
as well as related questions, to our Corporate Secretary at the address set
forth on the first page of this proxy statement.
ANNUAL REPORT
Our 1998 annual report to shareholders has been mailed to shareholders
concurrently with the mailing of this proxy statement, but is not incorporated
into this proxy statement and is not to be considered to be a part of our proxy
solicitation materials.
Upon request, we will provide, without charge to each shareholder of record
as of the record date specified on the first page of this proxy statement, a
copy of our Annual Report on Form 10-K for the year ended December 31, 1998 as
filed with the Securities and Exchange Commission. Any exhibits listed in the
Annual Report on Form 10-K also will be furnished upon request at the actual
expense we incur in furnishing such exhibit. Any such requests should be
directed to our Corporate Secretary at our executive offices set forth on the
first page of this proxy statement.
Tempe, Arizona
Dated: September 24, 1999
15
<PAGE> 19
MOBILE MINI, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR 1999 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON November 10, 1999
The undersigned hereby constitutes and appoints Larry Trachtenberg and
Shirley Pullen, and each of them, proxies and attorneys-in-fact, with full power
to each of substitution, on behalf and in the name of the undersigned, to
represent the undersigned at the 1999 Annual Meeting of Shareholders of MOBILE
MINI, INC. ("Mobile Mini"), to be held on November 10, 1999, and at any
adjournment or postponement thereof. This proxy, when properly executed and
returned in a timely manner, will be voted at this annual meeting and any
adjournment or postponement thereof in the manner described herein. If no
contrary indication is made, the proxy will be voted FOR the election of the
director nominees named herein, FOR Proposals 2 and 3, and in accordance with
the judgment of the persons named as proxies herein.
PLEASE MARK, SIGN, DATE AND MAIL THE PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
(Continued, and to be signed and dated, on reverse side.)
<PAGE> 20
The undersigned hereby directs this Proxy to be voted as follows:
PLEASE MARK YOUR VOTES IN THE FOLLOWING MANNER, USING DARK INK ONLY: /X/
<TABLE>
<CAPTION>
FOR ALL NOMINEES WITHHOLD
(except as marked to ALL NOMINEES
the contrary below)
<S> <C> <C>
Proposal 1: Election of two (2) Directors to
serve until their successors are elected and / / / /
shall duly qualify.
Nominees: Steven G. Bunger;
George E. Berkner
FOR, except vote withheld from the following
nominee(s): _______________________________________________________________________________________
_______________________________________________________________________________________
</TABLE>
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
<S> <C> <C> <C>
Proposal 2: to approve and adopt the Mobile / / / / / /
Mini, Inc. 1999 Stock Option Plan.
Proposal 3: to ratify selection of Arthur Andersen
LLP as independent auditors for the 1999 fiscal / / / / / /
year.
At the proxies' discretion on any other matters
which may properly come before the meeting or
any adjournment or postponement thereof.
</TABLE>
Dated: ___________________, 1999
Signature(s)_______________________________________________
This proxy should be dated, signed by the shareholder(s) exactly as his
or her name appears herein, and returned promptly in the enclosed envelope.
Persons signing in a fiduciary capacity should so indicate, if shares are held
by joint tenants or as community property, both shareholders should sign.
