<PAGE> 1
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U. S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 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 September 30, 1999
[ ] 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 1-12804
-----------------------------------
MOBILE MINI, INC.
(Exact name of registrant as specific in its charter)
Delaware 86-0748362
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
1834 West 3rd Street
Tempe, Arizona 85281
(Address of principal executive offices)
(480) 894-6311
(Registrant's telephone number, including area code)
Indicate by check 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 October 29, 1999, there were outstanding 11,400,281 shares of the
issuer's common stock, par value $.01.
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1
<PAGE> 2
MOBILE MINI, INC.
INDEX TO FORM 10-Q FILING
FOR THE QUARTER ENDED SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
TABLE OF CONTENTS PAGE
NUMBER
<S> <C>
PART I.
FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets 3
December 31, 1998 and September 30, 1999
Consolidated Statements of Operations 4
Three Months and Nine Months ended September
30, 1998 and September 30, 1999
Consolidated Statements of Cash Flows 6
Nine Months Ended September 30, 1998 and
September 30, 1999
Notes to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 12
PART II.
OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 17
SIGNATURES 18
</TABLE>
2
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
MOBILE MINI, INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
ASSETS
December 31, September 30,
1998 1999
------------ ------------
<S> <C> <C>
CASH AND CASH EQUIVALENTS $ 1,030,138 $ 1,165,123
RECEIVABLES, net of allowance for doubtful
accounts of $1,085,000 and $1,587,000,
respectively 6,254,938 8,326,898
INVENTORIES 8,550,778 11,247,454
PORTABLE STORAGE UNIT LEASE FLEET, net 76,589,831 112,723,984
PROPERTY PLANT AND EQUIPMENT, net 20,262,738 22,272,899
DEPOSITS AND PREPAID EXPENSES 787,426 1,076,874
OTHER ASSETS, net 3,314,384 13,946,115
------------ ------------
Total assets $116,790,233 $170,759,347
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
ACCOUNTS PAYABLE $ 2,953,833 $ 6,250,440
ACCRUED LIABILITIES 3,858,165 5,491,556
LINE OF CREDIT 57,183,576 58,065,185
NOTES PAYABLE 4,819,976 6,990,284
OBLIGATIONS UNDER CAPITAL LEASES 3,196,021 703,135
SUBORDINATED NOTES, net 6,700,038 6,739,161
DEFERRED INCOME TAXES 8,206,830 12,219,770
------------ ------------
Total liabilities 86,918,439 96,459,531
------------ ------------
STOCKHOLDERS' EQUITY:
Common stock; $.01 par value, 17,000,000 shares
authorized, 7,966,863 and 11,370,941 issued
and outstanding at December 31, 1998 and
September 30, 1999, respectively 79,669 113,709
Additional paid-in capital 22,054,927 60,664,694
Common stock to be issued, 85,468 shares, at
December 31, 1998 500,000 --
Retained earnings 7,237,198 13,521,413
------------ ------------
Total stockholders' equity 29,871,794 74,299,816
------------ ------------
Total liabilities and stockholders' equity $116,790,233 $170,759,347
============ ============
</TABLE>
See the accompanying notes to these consolidated balance sheets.
3
<PAGE> 4
MOBILE MINI, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Three Months Ended September 30,
--------------------------------
1998 1999
------------ ------------
<S> <C> <C>
REVENUES:
Leasing $ 9,698,292 $ 14,876,911
Sales 3,472,281 3,210,209
Other 198,015 100,071
------------ ------------
13,368,588 18,187,191
COSTS AND EXPENSES:
Cost of sales 2,167,114 2,173,017
Leasing, selling and general expenses 6,668,556 8,501,736
Depreciation and amortization 737,515 1,100,170
------------ ------------
INCOME FROM OPERATIONS 3,795,403 6,412,268
OTHER INCOME (EXPENSE):
Interest income 9,181 13,530
Interest expense (1,455,818) (1,399,662)
------------ ------------
INCOME BEFORE PROVISION FOR INCOME TAXES 2,348,766 5,026,136
PROVISION FOR INCOME TAXES 939,506 2,010,454
------------ ------------
NET INCOME $ 1,409,260 $ 3,015,682
============ ============
EARNINGS PER SHARE:
BASIC $ 0.18 $ 0.27
============ ============
DILUTED $ 0.17 $ 0.25
============ ============
WEIGHTED AVERAGE NUMBER OF COMMON AND COMMON
SHARE EQUIVALENTS OUTSTANDING:
BASIC 7,960,170 11,322,397
============ ============
DILUTED 8,411,797 11,853,952
============ ============
</TABLE>
See the accompanying notes to these consolidated statements
4
<PAGE> 5
MOBILE MINI, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Nine Months Ended September 30,
-------------------------------
1998 1999
------------ ------------
<S> <C> <C>
REVENUES:
Leasing $ 25,457,210 $ 37,467,088
Sales 12,670,741 9,268,516
Other 387,342 310,347
------------ ------------
38,515,293 47,045,951
COSTS AND EXPENSES:
Cost of sales 8,872,001 6,192,066
Leasing, selling and general expenses 18,452,010 22,841,558
Depreciation and amortization 2,107,987 2,888,119
------------ ------------
INCOME FROM OPERATIONS 9,083,295 15,124,208
OTHER INCOME (EXPENSE):
Interest income 25,866 40,575
Interest expense (4,294,943) (4,654,560)
------------ ------------
INCOME BEFORE PROVISION FOR INCOME TAXES 4,814,218 10,510,223
PROVISION FOR INCOME TAXES 1,925,687 4,204,090
------------ ------------
NET INCOME 2,888,531 6,306,133
PREFERRED STOCK DIVIDEND -- 21,918
------------ ------------
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS $ 2,888,531 $ 6,284,215
============ ============
EARNINGS PER SHARE:
BASIC $ 0.37 $ 0.65
============ ============
DILUTED $ 0.35 $ 0.61
============ ============
WEIGHTED AVERAGE NUMBER OF COMMON AND COMMON
SHARE EQUIVALENTS OUTSTANDING:
BASIC 7,784,968 9,732,241
============ ============
DILUTED 8,366,628 10,237,445
============ ============
</TABLE>
See the accompanying notes to these consolidated statements.
5
<PAGE> 6
MOBILE MINI, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Nine Months Ended September 30,
-------------------------------
1998 1999
------------ ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 2,888,531 $ 6,306,133
Adjustments to reconcile income to net cash
provided by operating activities:
Provision for doubtful accounts 684,011 728,597
Amortization of deferred loan costs 447,195 401,603
Amortization of warrants issuance discount 39,123 39,123
Depreciation and amortization 2,107,987 2,888,119
(Gain) loss on disposal of property, plant and equipment (3,949) 35,050
Deferred income taxes 1,925,536 4,203,940
Changes in certain assets and liabilities,
net of effect of businesses acquired:
Increase in receivables (1,300,549) (1,913,212)
Increase in inventories (2,537,125) (2,636,192)
(Increase) decrease in deposits and prepaid expenses (719,410) 125,369
(Increase) decrease in other assets (17,035) 216,706
Increase in accounts payable 1,178,516 3,223,046
Increase in accrued liabilities 1,209,952 777,320
------------ ------------
Net cash provided by operating activities 5,902,783 14,395,602
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash paid for businesses acquired (3,944,446) (27,989,118)
Net purchases of portable storage unit lease fleet (17,191,111) (21,829,617)
Net purchases of property, plant, and equipment (2,132,583) (3,114,212)
------------ ------------
Net cash used in investing activities (23,268,140) (52,932,947)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings under lines of credit 15,170,780 881,609
Proceeds from issuance of notes payable 376,670 3,514,047
Deferred financing costs (300,000) --
Principal payments on notes payable (1,255,033) (1,343,739)
Principal payments on capital lease obligations (2,076,179) (2,501,476)
Exercise of warrants 5,179,877 678,161
Issuance of common stock 975 37,465,646
Preferred stock dividend -- (21,918)
------------ ------------
Net cash provided by financing activities 17,097,090 38,672,330
------------ ------------
NET (DECREASE) INCREASE IN CASH (268,267) 134,985
CASH AND CASH EQUIVALENTS AT BEGINNING OF
PERIOD 1,005,204 1,030,138
------------ ------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 736,937 $ 1,165,123
============ ============
</TABLE>
See the accompanying notes to these consolidated statements.
5
<PAGE> 7
MOBILE MINI, INC. AND SUBSIDIARIES - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE A - The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and the instructions to Form 10-Q. Accordingly, they do
not include all the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, all adjustments (which include only normal recurring adjustments)
necessary to present fairly the financial position, results of operations, and
cash flows for all periods presented have been made. The results of operations
for the nine month period ended September 30, 1999 are not necessarily
indicative of the operating results that may be expected for the entire year
ending December 31, 1999. These financial statements should be read in
conjunction with the Company's December 31, 1998 financial statements and
accompanying notes thereto.
Certain amounts in the 1998 financial statements have been reclassified to
conform with the 1999 financial statement presentation.
NOTE B - The Company adopted SFAS No. 128 Earnings per Share in 1997. Pursuant
to SFAS No. 128, basic earnings per common share are computed by dividing net
income by the weighted average number of shares of common stock outstanding
during the period. Diluted earnings per common share are determined assuming
that options were exercised at the beginning of each period or at the time of
issuance. The following table shows the computation of earnings per share for
the three month period and the nine month period ended September 30:
<TABLE>
<CAPTION>
Three months Nine months
ended September 30, ended September 30,
1998 1999 1998 1999
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
BASIC:
Common shares outstanding, beginning of period 7,868,933 11,144,666 6,799,524 7,966,863
Effect of weighting shares:
Weighted common shares issued 5,769 177,731 906,237 1,765,378
Common stock to be issued 85,468 -- 79,207 --
----------- ----------- ----------- -----------
Weighted average number of common
shares outstanding 7,960,170 11,322,397 7,784,968 9,732,241
=========== =========== =========== ===========
Net income available to common shareholders $ 1,409,260 $ 3,015,682 $ 2,888,531 $ 6,284,215
=========== =========== =========== ===========
Earnings per share $ 0.18 $ 0.27 $ 0.37 $ 0.65
=========== =========== =========== ===========
DILUTED:
Common shares outstanding, beginning of period 7,868,933 11,144,666 6,799,524 7,966,863
Effect of weighting shares:
Weighted common shares issued 5,769 177,731 906,237 1,765,378
Employee stock options 296,676 404,038 295,599 382,706
Warrants 154,951 127,517 286,061 122,498
Common stock to be issued 85,468 -- 79,207 --
----------- ----------- ----------- -----------
Weighted average number of common and
common equivalent shares outstanding 8,411,797 11,853,952 8,366,628 10,237,445
=========== =========== =========== ===========
Net income available to common shareholders $ 1,409,260 $ 3,015,682 $ 2,888,531 $ 6,284,215
=========== =========== =========== ===========
Earnings per share $ 0.17 $ 0.25 $ 0.35 $ 0.61
=========== =========== =========== ===========
</TABLE>
7
<PAGE> 8
NOTE C - Inventories are stated at the lower of cost or market, with cost being
determined under the specific identification method. Market is the lower of
replacement cost or net realizable value. Inventories consisted of the following
at:
<TABLE>
<CAPTION>
December 31, September 30,
1998 1999
----------- -----------
<S> <C> <C>
Raw material and supplies $ 6,480,553 $ 8,581,247
Work-in-process 801,338 538,669
Finished portable storage units 1,268,887 2,127,537
----------- -----------
$ 8,550,778 $11,247,454
=========== ===========
</TABLE>
NOTE D - Property, plant and equipment consisted of the following at:
<TABLE>
<CAPTION>
December 31, September 30,
1998 1999
------------ ------------
<S> <C> <C>
Land $ 777,668 $ 777,668
Vehicles and equipment 15,963,099 18,756,662
Buildings and improvements 7,211,833 7,484,820
Office fixtures and 3,404,320 3,833,604
equipment
------------ ------------
27,356,920 30,852,754
Less accumulated depreciation (7,094,182) (8,579,855)
------------ ------------
$ 20,262,738 $ 22,272,899
============ ============
</TABLE>
NOTE E - The Company maintains a portable storage unit lease fleet consisting of
refurbished or manufactured containers that are leased to customers under
short-term operating lease agreements with varying terms. Depreciation is
provided using the straight-line method with an estimated useful life of 20
years and a salvage value estimated at 70% of cost. In the opinion of
management, estimated salvage values do not cause carrying values to exceed net
realizable value. Normal repairs and maintenance to the lease fleet are expensed
when incurred. As of September 30, 1999, the portable storage unit lease fleet
was $112.7 million as compared to $76.6 million at December 31, 1998, net of
accumulated depreciation of $3.6 million and $2.6 million, respectively.
NOTE F - The Company adopted SFAS No. 131 Disclosures about Segments of an
Enterprise and Related Information, effective December 31, 1998. SFAS No. 131
superseded SFAS No. 14, Financial Reporting for Segments of a Business
Enterprise. The adoption of SFAS No. 131 did not affect results of operations or
financial position, but did affect the disclosure of segment information.
The Company's management approach includes evaluating each segment on which
operating decisions are made based on performance, results and profitability.
The Company currently has one reportable segment, branch operations. The branch
operations segment includes the leasing and sales of portable storage units to
businesses and consumers in the general geographic area of each branch. This
segment also includes the Company's manufacturing facilities which are
responsible for the purchase, manufacturing and refurbishment of the Company's
products for leasing, sales or equipment additions to the Company's delivery
system, and its discontinued dealer program. Previously, the Company had a
corporate sales segment, which related to specialty type product sales and
included the telecommunications and modular divisions of the Company. This
segment is now included in "other" as the modular program was discontinued and
the Company has de-emphasized the sales of telecommunication units.
The Company evaluates performance and profitability before interest costs,
depreciation, income taxes and major non-recurring transactions. The Company
does not account for intersegment revenues or expenses between its divisions.
8
<PAGE> 9
The Company's reportable segment concentrates on the Company's core business of
leasing, manufacturing, and selling portable storage and office units. Included
in the branch operations segment are residual sales from the Company's dealer
division that was discontinued in 1998. The operating segment has managers who
meet regularly and are accountable to the chief executive officer for financial
results and ongoing plans including the influence of competition.
For the Three Months Ended:
<TABLE>
<CAPTION>
Branch
Operations Other Combined
---------- ----- --------
<S> <C> <C> <C>
September 30, 1998
Revenues from external customers $12,970,199 $ 398,389 $13,368,588
Segment profit (loss) before
allocated interest, depreciation
and amortization expense 6,301,183 (1,647,886) 4,653,297
Allocated interest expense 1,453,916 1,382 1,455,298
Depreciation and amortization expense 631,908 105,607 737,515
Segment profit (loss) 1,512,506 (103,246) 1,409,260
September 30, 1999
Revenues from external customers $18,411,887 $ (224,696) $18,187,191
Segment profit (loss) before
allocated interest, depreciation
and amortization expense 10,176,960 (2,424,283) 7,752,677
Allocated interest expense 1,399,662 -- 1,399,662
Depreciation and amortization expense 996,881 103,289 1,100,170
Segment profit (loss) 3,020,976 (5,295) 3,015,681
</TABLE>
For the Nine Months Ended:
<TABLE>
<CAPTION>
Branch
Operations Other Combined
---------- ----- --------
<S> <C> <C> <C>
September 30, 1998
Revenues from external customers $34,799,631 $ 3,715,662 $38,515,293
Segment profit (loss) before
allocated interest, depreciation
and amortization expense 15,631,846 (4,113,391) 11,518,455
Allocated interest expense 4,290,346 4,077 4,294,423
Depreciation and amortization expense 1,790,705 317,282 2,107,987
Segment profit (loss) 3,054,512 (165,981) 2,888,531
September 30, 1999
Revenues from external customers $46,304,456 $ 741,495 $47,045,951
Segment profit (loss) before
allocated interest, depreciation
and amortization expense 23,552,074 (5,007,647) 18,544,427
Allocated interest expense 4,654,560 -- 4,654,560
Depreciation and amortization expense 2,585,301 302,818 2,888,119
Segment profit 6,239,211 45,004 6,284,215
</TABLE>
9
<PAGE> 10
As of:
<TABLE>
<CAPTION>
Branch
Operations Other Combined
------------ ---------- ------------
<S> <C> <C> <C>
September 30, 1998
Segment assets - lease fleet $ 70,574,768 $ -- $ 70,574,768
Segment assets - property, plant and equipment 17,929,157 1,080,958 19,010,115
Expenditures for long-lived assets - lease fleet 17,191,111 -- 17,191,111
Expenditures for long-lived assets - PPE 2,081,916 50,667 2,132,583
September 30, 1999
Segment assets - lease fleet $112,723,984 $ -- $112,723,984
Segment assets - property, plant and equipment 21,338,908 933,991 22,272,899
Expenditures for long-lived assets - lease fleet 21,829,617 -- 21,829,617
Expenditures for long-lived assets - PPE 2,856,221 257,991 3,114,212
</TABLE>
NOTE G - The Company's senior lenders, led by BT Commercial Corporation, agreed
to amend the Company's revolving line of credit effective September 1, 1999 to
reduce by $3.0 million the revolving line available to the Company and to
increase the Company's term loan by $3.0 million. As of September 30, 1999,
there was $58.1 million of outstanding borrowings under the credit facility and
$28.9 million of additional borrowings were available.
NOTE H - The Company commenced operations in Tulsa, Oklahoma in the first
quarter of 1999. The Tulsa branch is serviced primarily from the Company's
Oklahoma City branch.
On April 30, 1999 the Company acquired substantially all of the assets of
National Security Containers, L.L.C. ("NSC"), a privately owned portable storage
leasing company, for $25.5 million. Goodwill of approximately $10.2 million is
being amortized using the straight line method over 25 years from the date of
acquisition. NSC was headquartered in Phoenix, Arizona and operated nine leasing
locations. Six of these locations operated in cities in which the Company
already had branch leasing offices. The other three locations, Colorado Springs,
Memphis and New Orleans, became new markets for the Company.
On July 1, 1999 the Company acquired substantially all the assets of Mobile
Storage Systems, Inc., a privately owned portable storage leasing company
operating in Salt Lake City, Utah, for $1.6 million. On August 6, 1999 the
Company acquired the portable storage division of Great Western Sales and
Leasing which also operates in Salt Lake City for approximately $687,000.
On September 1, 1999 the Company commenced operations in the greater Chicago,
Illinois metropolitan area through the acquisition of the container assets of
Express Trailer Leasing & Sales for approximately $181,000. The Company
currently operates 18 leasing and sale branches in 11 states.
Each acquisition was accounted for as a purchase in accordance with Accounting
Principles Board (APB) Opinion No. 16 and, accordingly, the purchased assets and
assumed liabilities were recorded at their estimated fair values at the
acquisition date.
The total cost of the acquisitions were made up of the following:
<TABLE>
<S> <C>
Cash $19,989,000
Mandatorily redeemable
preferred stock 8,000,000
Other acquisition costs 812,000
-----------
$28,801,000
===========
</TABLE>
10
<PAGE> 11
The purchase prices were preliminarily allocated as follows:
<TABLE>
<S> <C>
Tangible assets $17,875,000
Goodwill 11,235,000
Receivables, net 888,000
Covenants not to compete 310,000
Prepaid expenses and deposits 87,000
Assumed liabilities (1,594,000)
-----------
$28,801,000
===========
</TABLE>
The following unaudited pro forma combined financial information for the year
ended December 31, 1998 gives effect to the NSC acquisition as if it had been
consummated January 1, 1998. The following unaudited pro forma combined
financial information for the nine months ended September 30, 1999 gives effect
to the acquisition of NSC as if it occurred on January 1, 1999.
This unaudited pro forma combined financial information does not purport to
project what the Company's actual results of operations would have been for the
current period or for any future period.
<TABLE>
<CAPTION>
Year Ended Nine Months Ended
December 31, 1998 September 30, 1999
Pro Forma Pro Forma
Historical Combined Historical Combined
---------- -------- ---------- --------
<S> <C> <C> <C> <C>
Revenue $ 52,676,531 $ 59,872,992 $ 47,045,951 $ 50,021,088
Net income available to
common shareholders $ 4,483,937 $ 4,271,647 $ 6,284,215 $ 6,080,016
Earnings per share - basic $ 0.57 $ 0.54 $ 0.65 $ 0.62
Earnings per share - diluted $ 0.53 $ 0.51 $ 0.61 $ 0.59
</TABLE>
Pro Forma adjustments include adjustments to:
Amortize the non-competition agreement on a straight line basis over 5
years.
Increase depreciation for the increase in the containers and decrease in
the vehicles and equipment carrying value to fair value.
Reflect the amortization of goodwill recorded in connection with the
acquisition, calculated based on a 25 year life.
Eliminate the predecessor's interest expense related to debt not assumed,
and record interest expense on debt issued or assumed in connection with
the acquisition.
Record the estimate tax provision associated with the pro forma
adjustments for the acquisition and to record the tax provision for the
acquired company which was a limited liability company for income tax
purposes for all periods prior to its acquisition by the Company. The
effective income tax rate used was 40%.
Record dividends on the Series B Manditorily Redeemable Preferred Stock.
NOTE I - On May 11, 1999, the Company completed a public offering of 3.1 million
shares of its common stock. Of the shares sold, 2.5 million shares were sold by
the Company and 600,000 shares were sold by selling shareholders. The Company
received gross proceeds of $33.1 million. Additionally, the underwriters
exercised their overallotment option to purchase an additional 465,000 shares of
common stock at the public offering price, resulting in additional gross
proceeds to the Company of approximately $6.2 million.
NOTE J - The Company redeemed the entire $6.9 million principal amount
outstanding of its 12% Senior Subordinated Notes at par plus accrued interest on
November 1, 1999.
11
<PAGE> 12
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 1999 COMPARED TO
THREE MONTHS ENDED SEPTEMBER 30, 1998
Our total revenues for the quarter ended September 30, 1999 increased by
36.0% to $18.2 million from $13.4 million for the same period in 1998. Leasing
revenues for the quarter increased by 53.4% to $14.9 million from $9.7 million
in the same period of 1998. The increase in our leasing revenues resulted from a
50.7% increase in the average number of portable storage units on lease and a
1.8% higher average rental rate per unit. Leasing revenues in the current
quarter include the operations of National Security Containers ("NSC") which we
acquired on April 30, 1999. Our sale of portable storage units for the three
months ended September 30, 1999 decreased by 7.5% to $3.2 million from $3.5
million in the same period in 1998. This reduction in sales results from our
de-emphasis of our dealer and telecommunication sales programs and was partially
offset by sales at our new branch locations and from a $263,000 sale to one
customer.
Cost of sales for the quarter ended September 30, 1999 increased to 67.7%
of sales revenues from 62.4% of sales revenues in the same quarter in 1998. Our
gross margin in the third quarter of 1999 was similar to the margin in the
second quarter. The margin in the third quarter of 1998 had been higher because
of higher telecommunication sales at higher margins than achieved in 1999.
Our leasing, selling and general expenses increased to $8.5 million, or
46.7% of total revenues, for the quarter ended September 30, 1999 from $6.7
million, or 49.9% of total revenues, for the quarter ended September 30, 1998.
This increase resulted mainly from an increase in the number of branches. At
September 30, 1998 we had 12 branch locations. We now have 18 branch locations.
In addition, our existing branches got larger so they had increased sales,
administrative and operating expenses. These expenses were a smaller percentage
of revenues in 1999 because of economies of scale.
Depreciation and amortization expenses increased by approximately $362,000
to $1.1 million during the 1999 quarter, from $738,000 during the same period in
1998. This expense was 6.0% of total revenues during the 1999 quarter, compared
to approximately 5.5%, during the same period in 1998. During 1999 our lease
fleet had grown and leasing had become a larger part of our business.
Our operating margin increased to 35.3% for the quarter ended September
30, 1999, from 28.4% for the same period in 1998. Our operating margins are
typically higher on leasing activities than on the sales of units and are also
increasing as we take advantage of economies of scale being achieved in our core
leasing business. As a result, income from operations increased by 68.9% to $6.4
million for the quarter ended September 30, 1999 from $3.8 million for the same
period in 1998.
Interest expense declined by 3.9% to $1.4 million for the three months
ended September 30, 1999 from $1.5 million for the same period in 1998,
primarily because we used the proceeds of our public offering to pay down a
portion of our debt and the weighted average interest rate declined to 7.1% for
the three months ended September 30, 1999 from 8.3% for the same period in 1998,
excluding amortization of debt issuance costs. This decline primarily resulted
from an interest rate reduction under our credit facility, which resulted in a
lower interest rate on our borrowings. These decreases were partially offset by
our average debt outstanding increasing by 11.0%.
12
<PAGE> 13
Our net income for the three months ended September 30, 1999 was $3.0
million, or $0.25 per diluted share of common stock, compared to net income for
the same period in 1998 of $1.4 million, or $0.17 per diluted share of common
stock. This 114.0% increase was primarily due to higher lease revenues and
higher operating margins in 1999. Our effective tax rate was 40.0% for both 1999
and 1998. We had a 40.9% increase in the number of common and common share
equivalents outstanding in 1999 due primarily to the sale of approximately 3.0
million shares of common stock in a public offering in May and June 1999.
NINE MONTHS ENDED SEPTEMBER 30, 1999 COMPARED TO
NINE MONTHS ENDED SEPTEMBER 30, 1998
Our revenues for the nine months ended September 30, 1999 increased by
22.1% to $47.0 million from $38.5 million for the nine months ended September
30, 1998. Leasing revenues for the nine months ended September 30, 1999
increased by 47.2% to $37.5 million from $25.5 million in the same period of
1998. These increases resulted from a 45.1% increase in the average number of
portable storage units on lease and a 1.4% higher average rental rate per unit.
Leasing revenues in the current year included five months of operations of NSC,
which we acquired on April 30, 1999. Our sales revenues for the nine months
ended September 30, 1999 decreased by 26.9% to $9.3 million from $12.7 million
in the same period in 1998. This reduction in sales primarily results from the
inclusion in 1998 revenues of a sale of our remaining modular building inventory
and from our de-emphasis in the current year of our dealer and telecommunication
sales programs.
Cost of sales for the nine months ended September 30, 1999 decreased to
66.8% of sales revenues from 70.0% of sales revenues in the same period in 1998.
The overall 1998 profit margin was reduced by the low profit margin on the final
sales of our remaining modular buildings.
Leasing, selling and general expenses increased to $22.8 million, or 48.6%
of total revenues, for the nine months ended September 30, 1999 from $18.5
million, or 47.9% of total revenues, for the nine months ended September 30,
1998. This increase resulted mainly from an increase in the number of branches.
At September 30, 1998 we had 12 branch locations. We now have 18 branch
locations. In addition, our existing branches got larger so they had increased
sales, administrative and operating expenses. These expenses were a larger
percentage of revenues in 1999 because of our shift toward leasing, which has
higher sales, general and administrative expenses associated with it than does
sales.
Depreciation and amortization expenses increased by $780,000, to $2.9
million or 6.1% of total revenues during the nine months ended September 30,
1999 from $2.1 million, or 5.5% of total revenues, during the same period in
1998. During 1999, our lease fleet had grown and leasing had become a larger
part of our business.
Our operating margin increased to 32.1% for the nine months ended
September 30, 1999 from 23.6% for the same period in 1998. Our operating margins
are typically higher on leasing activities than on portable storage unit sales
and are also increasing as we take advantage of economies of scale being
achieved in our core leasing business. As a result, income from operations
increased by 66.5% to $15.1 million for the nine months ended September 30, 1999
from $9.1 million for the same period in 1998.
Interest expense increased by 8.4% to $4.7 million for the nine months
ended September 30, 1999 from $4.3 million for the same period in 1998 because a
portion of our acquisitions and the increase in our portable storage unit lease
fleet was financed by using our bank line. The remainder was financed through
our common stock offering and from cash flow generated by operations. Our
average debt outstanding increased by 26.1%. The weighted average interest rate
declined to 7.6% for the nine months ended September 30, 1999 from 8.8% for the
same period in 1998, excluding amortization of
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<PAGE> 14
debt issuance costs. This decline primarily resulted from an interest rate
reduction under our credit facility, which resulted in a lower interest rate on
our borrowings.
Our net income available to common shareholders for the nine months ended
September 30, 1999 was $6.3 million, or $0.61 per diluted share of common stock,
compared to net income for the same period in 1998 of $2.9 million, or $0.35 per
diluted share of common stock. This 117.6% increase was primarily due to higher
leasing revenues and higher operating margins in 1999. Our effective tax rate
was 40.0% for both 1999 and 1998. We had a 22.4% increase in the number of
weighted average common and common share equivalents outstanding in 1999 due
primarily to the sale of approximately 3.0 million shares of common stock in a
public offering in May and June 1999. Our common stock outstanding at September
30, 1999 increased 44.3% to 11.4 million shares as compared to 7.9 million
shares outstanding at September 30, 1998.
LIQUIDITY AND CAPITAL RESOURCES
Our leasing and manufacturing business is very capital intensive. We
finance our working capital requirements through cash flows from operations,
proceeds from equity and debt financings and borrowings under our credit
facility.
In May and June, 1999, we received net proceeds of $36.9 million in
connection with the closing of a public offering of approximately 3.0 million
shares of our common stock.
Operating Activities. Our operations provided net cash flow of $14.4
million in the nine months ended September 30, 1999 and $5.9 million in the same
period in 1998. This increased cash flow in 1999 resulted primarily from our
higher net income and related deferred income taxes. An increase in inventories
and receivables was partially offset by increased accounts payable and accrued
liabilities. These increases primarily are related to the growth in our portable
storage unit business.
Investing Activities. Net cash used in investing activities was $52.9
million for the nine months ended September 30, 1999 and $23.3 million for the
same period in 1998. This use of cash is primarily for acquisitions and for
portable storage unit lease fleet expansion. In 1999 we spent $28.0 million for
acquisitions. Capital expenditures for our lease fleet were $21.8 million for
the nine months ended September 30, 1999 and $17.2 million for the same period
in 1998 and capital expenditures for property, plant and equipment were $3.1
million for the nine months ended September 30, 1999 and $2.1 million for the
same period in 1998, excluding acquisitions.
Financing Activities. Net cash provided by financing activities was $38.7
million for the nine months ended September 30, 1999 and $17.1 million for the
same period in 1998. During the nine months ended September 30, 1999, net cash
provided by financing activities was primarily provided by the public sale of
approximately 3.0 million shares of our common stock which resulted in net
proceeds to us of approximately $36.9 million after deducting underwriting
discounts. These proceeds were used to pay down our line of credit. We also
received net proceeds of $678,000 from the exercise of warrants during the nine
month period. We increased our term loan with our senior lenders by $3.0 million
and used those proceeds to pay down the line of credit under the credit
facility. As a consequence, we had a net borrowing of $882,000 under our credit
facility for the nine months ended September 30, 1999 as compared to $15.2
million in the same period in 1998. Our cash provided by financing activities
was partially offset by $3.8 million in principal payments and pre-payments on
certain higher interest rate debt obligations. During 1998, the net cash
provided by financing activities was primarily provided by $5.2 million of net
proceeds from the exercise of warrants issued in connection with our initial
public offering and net borrowings of $15.2 million under the credit facility.
Effective in September 1998, we entered into an Interest Rate Swap
Agreement (the Agreement), under which Mobile Mini is designated as the fixed
rate payer with a base rate of 5.5% per annum. Under the Agreement, we
effectively fixed, for a three year period, the interest rate payable on
14
<PAGE> 15
$30 million of our revolving line of credit so that the rate is based upon a
spread from 5.5%, rather than a spread from the Eurodollar rate.
Since March 1996, our principal source of liquidity has been our credit
facility, which currently consists of an $87.0 million revolving line of credit
and a term loan with a balance of $6.0 million at September 30, 1999. The
interest rate under our credit facility is determined quarterly, based on our
ratio of funded debt to earnings before interest, taxes, depreciation and
amortization (EBITDA). As of September 30, 1999, we had $58.1 million of
outstanding borrowings under our credit facility and $28.9 million of additional
borrowings were available. Our borrowing rate was 1.25% above the prevailing
Eurodollar rate.
We believe that our working capital, together with our cash flow from
operations, borrowing availability under our $87.0 million credit facility, the
net proceeds of our recent public offering and other available funding sources
will be sufficient to fund our operations for the next 12 months. We believe
that in order to maintain our growth rate we may be required to obtain
additional debt financing and to raise additional equity capital in the future.
However, there is no assurance that we will be able to continue to obtain debt
or equity financing on acceptable terms.
SEASONALITY
Although demand from some of our customers is somewhat seasonal, our
operations as a whole have not been seasonal. Demand for leases of our portable
storage units by large retailers is stronger from September through December
because these retailers need to store more inventory for the holiday season. Our
retail customers usually return these leased units to us early in the following
year. This has caused lower utilization rates for our lease fleet and a marginal
decrease in cash flow during the first quarter of the past several years.
YEAR 2000 COMPLIANCE AND EXPENDITURES
Our Year 2000 compliance plan was structured into five primary phases:
inventory, assessment, correction, testing and implementation. The inventory is
an investigation of all information technology ("IT") and non-IT hardware and
software components we use. The assessment is an analysis of each component to
determine date sensitivity to the year 2000. The correction phase is the effort
to fix, replace, upgrade or eliminate non-compliant hardware and software. The
testing phase involves verifying the results of the correction effort, and
implementation is the effort to deploy the fixes into a production environment.
We completed all five phases of the plan and the remediation project was
considered completed as planned on September 30, 1999. During the remainder of
the year, we will continue conducting validation of any new purchased products.
We have established ongoing communications with our significant vendors
and service providers to determine the extent to which we may be vulnerable to
our third-parties' failures to remediate their own year 2000 issue. To date,
none of our material vendors or service providers has disclosed that they
anticipate a business interruption. There can be no assurance that the systems
of other companies on which we rely will be converted in a timely manner or that
any such failure to convert by another company would not have a material adverse
effect on us.
Our primary software purchased in 1997 was made year 2000 compliant by the
vendor at no additional cost to us. Our estimated cost of converting other
hardware, software and internal costs was $122,000. We have expended less than
the original budget. Software and hardware remediation is being expensed as
incurred. We have not deferred any information technology projects to address
the year 2000 issue.
Although we believe that our systems are year 2000 compliant,
unanticipated year 2000 problems may arise which, depending on the nature and
magnitude of the problem, could adversely
15
<PAGE> 16
affect our business. Furthermore, year 2000 problems involving third parties may
have a negative impact on our customers or suppliers.
We have established a contingency plan, primarily manual processing should
it become necessary. In 1997 when we switched from a paper system to a
computerized system a contingency program was developed to allow for the
continued rental, sale and pick up of containers in the event of a system
failure. Since that time this system has been tested several times. The system
has also been tested when we have brought on new locations and their
communications are not connected for an extended period of time. Our corporate
personnel are trained in working with paper documents should the need arise.
However, additional staff would be required to continue this process on a
long-term basis.
EFFECTS OF INFLATION
Our results of operations for the periods discussed have not been
significantly affected by inflation.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We seek to reduce earnings and cash flow volatility associated with
changes in interest rates by entering into financial arrangements intended to
provide a hedge against a portion of the risks associated with such volatility.
We continue to have exposure to such risks to the extent they are not hedged.
An interest rate swap agreement is the only instrument we use to manage
interest rate fluctuations affecting our variable rate debt. We currently have
one outstanding interest rate swap agreement under which we pay a fixed rate and
receive a variable interest rate on $30.0 million of debt. At September 30,
1999, there had been no material changes in the reported market risks since
December 31, 1998.
FACTORS THAT MAY AFFECT FUTURE OPERATING RESULTS, AND "SAFE HARBOR" STATEMENT
UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
Statements in this Report which include such words as "believe", "intends"
or "anticipates", such as the statement regarding our ability to meet our
obligations and capital needs during the next 12 months, are forward-looking
statements. The occurrence of one or more unanticipated events, however,
including a decrease in cash flow generated from operations, a material increase
in the borrowing rates under our credit facility (which rates are based on the
prime rate or the Eurodollar rates in effect from time to time), a material
increase or decrease in prevailing market prices for used containers, or a
change in general economic conditions resulting in decreased demand for our
products, could cause actual results to differ materially from anticipated
results and have a material adverse effect on our ability to meet our
obligations and capital needs, and cause future operating results and other
events not to occur as presently anticipated. We issued approximately 3.0
million shares of common stock in May 1999, in a public offering. That
Registration Statement and the Prospectus, dated May 6, 1999, which is a part of
it (the "Prospectus"), include a section entitled "Risk Factors", which
describes certain factors that may affect our future operating results. That
section is hereby incorporated by reference in this Report. Those factors should
be considered carefully in evaluating an investment in our common stock. If you
do not have a copy of the Prospectus, you may obtain one by requesting it from
the Company's Investor Relations Department at (480) 894-6311 or by mail to
Mobile Mini, Inc., 1834 West Third Street, Tempe, Arizona 85281. Our filings
with the SEC, including the Prospectus, may be accessed at the SEC's World Wide
Web site at http://www.sec.gov.
16
<PAGE> 17
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS
<TABLE>
<CAPTION>
NUMBER DESCRIPTION
<S> <C>
10.5.8 Amendment No.8 to Senior Credit Agreement dated as September 1,
1999, by and among the Registrant, each financial institution a
party thereto, and BT Commercial Corporation, as Agent
10.21 Form of Employment Agreement dated September 22, 1999
between the Registrant and each of Steven G. Bunger and
Lawrence Trachtenberg.
27 Selected Financial Data
(b) REPORTS ON FORM 8-K:
Report on Form 8-K/A, dated July 14, 1999 (filing financial
statements of National Security Containers, L.L.C. and related pro
forma financial information, relating to our acquisition on
April 30, 1999 of the assets of NSC).
</TABLE>
17
<PAGE> 18
SIGNATURES
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.
MOBILE MINI, INC.
(Registrant)
Dated: November 5, 1999 /s/ Larry Trachtenberg
------------------------------------
Larry Trachtenberg
Chief Financial Officer &
Executive Vice President
18
<PAGE> 19
Exhibit Index
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
10.5.8 Amendment No.8 to Senior Credit Agreement dated as September 1,
1999, by and among the Registrant, each financial institution a
party thereto, and BT Commercial Corporation, as Agent
10.21 Form of Employment Agreement dated September 22, 1999
between the Registrant and each of Steven G. Bunger and
Lawrence Trachtenberg.
27 Selected Financial Data
</TABLE>
<PAGE> 1
Exhibit 10.5.8
AMENDMENT NUMBER EIGHT
TO
CREDIT AGREEMENT
This AMENDMENT NUMBER EIGHT TO CREDIT AGREEMENT (this "Amendment"), dated as of
September 1, 1999, is entered into by and among MOBILE MINI, INC., a Delaware
corporation (the "Borrower"), each financial institution a party to the Credit
Agreement (collectively, the "Lenders"), and BT COMMERCIAL CORPORATION acting as
agent for the Lenders ("BTCC"), in light of the following facts:
R E C I T A L S
A. The parties hereto have previously entered into that certain Credit
Agreement, dated as of March 28, 1996, as amended by that certain Amendment
Number One to Credit Agreement, dated as of November __, 1996, that certain
Amendment Number Two to Credit Agreement, dated as of March 24, 1997, that
certain Amendment Number Three to Credit Agreement, dated as of March 31, 1997,
that certain Amendment Number Four to Credit Agreement, dated as of July 30,
1997, that certain Amendment Number Five to Credit Agreement, dated as of March
31, 1998, that certain Amendment Number Six to Credit Agreement, dated as of
December 3, 1998, and that certain Amendment Number Seven to Credit Agreement,
dated as of March 31, 1999 (as amended, the "Agreement").
B. Borrower desires to pay off certain secured debt, capital leases and
subordinated debt, more fully described on Schedule 1, attached hereto, which if
paid without the consent of Agent and Lenders would violate Section 8.13(b) of
the Agreement and cause and Event of Default.
C. The parties hereto desire to amend the Agreement in accordance with the terms
of this Amendment.
A G R E E M E N T
NOW, THEREFORE, the parties hereto agree as follows:
1. Defined Terms. All initially capitalized terms used but not defined herein
shall have the meanings assigned to such terms in the Agreement.
2. Amendment to Section 2.1. Section 2.1(a) of the Agreement, as amended, is
hereby amended by deleting the phrase "in an amount not to exceed such Lender's
Proportionate Share of $6,000,000" from such Section and replacing it with the
phrase "in an amount not to exceed such Lender's Proportionate Share of
$6,083,334".
3. Amendment to Section 2.2. Section 2.2(a) of the Agreement, as amended, is
hereby amended by deleting the phrase "which shall not exceed $90,000,000" from
such Section and replacing it with the phrase "which shall not exceed
$87,000,000".
1
<PAGE> 2
4. Limited Waiver of Section 8.13(b). To the extent of the payments on
Indebtedness listed on Schedule 1, attached hereto and incorporated herein by
this reference, Agent and Lenders hereby waive the provisions of Section 8.13(b)
of the Agreement that prohibits Borrower from making such payments on
Indebtedness. Nothing contained herein shall be interpreted to permit Borrower
to make any payments now or in the future on Indebtedness not listed on
Schedule 1.
5. Delivery of Vehicle Titles. Borrower shall deliver to Agent, on or before
September 30, 1999, all of the certificates of title for those vehicles listed
as Schedule 1. Borrower's failure to deliver such titles shall be an Event of
Default under the Agreement.
6. Amendment of Annex I. Annex I of the Agreement is hereby amended by deleting
the amount of the Revolving Credit Commitment for each Lender and replacing such
amounts as follows:
<TABLE>
<CAPTION>
Lender Revolving Credit Commitment($)
- ------ -------------------------------
<S> <C>
BT Commercial Corporation 17,400,000
Bank of America, N.A. (F/K/A Nationsbank N.A.) 17,400,000
Deutsche Financial Services Corporation 17,400,000
Summit Commercial/Gibraltar Corp. 17,400,000
Bank One Arizona, N.A. 17,400,000
</TABLE>
and by deleting the amount of the Term Commitment for each Lender and replacing
such amount as follows:
<TABLE>
<CAPTION>
Lender Term Credit Commitment ($)
- ------ --------------------------
<S> <C>
BT Commercial Corporation 1,216,666
Bank of America, N.A. (F/K/A Nationsbank N.A.) 1,216,667
Deutsche Financial Services Corporation 1,216,667
Summit Commercial/Gibraltar Corp. 1,216,667
Bank One Arizona, N.A. 1,216,667
</TABLE>
7. Conditions Precedent. The effectiveness of this Amendment is subject to and
conditioned upon the fulfillment of each and all of the following conditions
precedent:
a. Agent shall have received this Amendment duly executed by Borrower and
Majority Lenders;
b. Agent shall have received an affirmation letter duly executed by each
guarantor under the Guaranties, indicating the consent by each such guarantor
to the execution and delivery by Borrower of this Amendment;
2
<PAGE> 3
3. Agent shall have received executed replacement revolving and term
promissory notes for each lender under the Agreement in form and
substance satisfactory to Agent pursuant to the amendments to the
Agreement under Sections 1 and 2 herein; and
4. Agent shall have received executed modifications or other necessary
documents and such title insurance as Agent shall require, either by
endorsement to the policy of title insurance, or by a new policy of
title insurance, insuring such deed(s) of trust or mortgages and that
the lien(s) created thereby continue to be first priority lien, all in
form and substance satisfactory to Agent in its sole and absolute
discretion, and subject to such exceptions as are approved by Agent.
8. Counterparts. This Amendment may be executed in any number of counterparts
and by different parties on separate counterparts, each of which when so
executed and delivered shall be deemed to be an original. All such counterparts,
taken together, shall constitute but one and the same Amendment.
9. Reaffirmation of the Agreement. Except as specifically amended by this
Amendment, the Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
at Los Angeles, California as of the date first hereinabove written.
MOBILE MINI, INC.,
a Delaware corporation
By:
---------------------------------
Larry Trachtenberg,
Chief Financial Officer
BT COMMERCIAL CORPORATION,
a Delaware corporation, individually and as agent
By:
---------------------------------
Title:
------------------------------
3
<PAGE> 4
NATIONSBANK, N.A.
By:
--------------------------------
Title:
----------------------------
4
<PAGE> 5
DEUTSCHE FINANCIAL SERVICES CORPORATION
By:
-----------------------------------------------
Title:
----------------------------------------------
5
<PAGE> 6
SUMMIT COMMERCIAL/GIBRALTER CORP.
By:
------------------------------------------
Title:
-----------------------------------------
6
<PAGE> 7
BANK ONE ARIZONA, N.A.
By:
------------------------------
Title:
-----------------------------
7
<PAGE> 8
Schedule 1
Permitted Payments on Indebtedness
[to be delivered by Borrower and approved by Agent]
8
<PAGE> 9
CONSENT OF GUARANTORS
Each of the undersigned, as a guarantor of the obligations of MOBILE MINI, INC.,
a Delaware corporation ("Borrower"), arising out of that certain Credit
Agreement, dated as of March 28, 1996, as amended by that certain Amendment
Number One to Credit Agreement, dated as of November __, 1996, that certain
Amendment Number Two to Credit Agreement, dated as of March 24, 1997, that
certain Amendment Number Three to Credit Agreement, dated as of March 31, 1997,
that certain Amendment Number Four to Credit Agreement, dated as of July 30,
1997, that certain Amendment Number Five to Credit Agreement, dated March 21,
1998, that certain Amendment Number Six to Credit Agreement, dated as of
December 3, 1998, and that certain Amendment Number Seven to Credit Agreement,
dated as of March 31, 1999 (as amended, the "Agreement"), among BT Commercial
Corporation, a Delaware corporation ("Agent") and the lenders party thereto
("Lenders"), on the one hand, and Borrower, on the other hand, hereby
acknowledges receipt of a copy of that certain Amendment Number Eight to Credit
Agreement, dated as of September 1, 1999, among Agent, Lenders and Borrower,
consents to the terms contained therein, and agrees that the Continuing Guaranty
executed by each of the undersigned shall remain in full force and effect as a
continuing guaranty of the obligations of Borrower owing to Agent and Lenders
under the Agreement.
Although Agent has informed us of the matters set forth above, and we have
acknowledged same, we understand and agree that Agent has no duty under the
Agreement, the Continuing Guaranty or any other agreement between us to so
notify us or to seek an acknowledgment, and nothing contained herein is intended
to or shall create such a duty as to any advances or transactions hereafter.
IN WITNESS WHEREOF, each of the undersigned has caused this Consent of
Guarantors to be duly executed by its respective authorized officers as of
September 1, 1999.
MOBILE MINI I, INC.,
an Arizona corporation
By
-------------------------------------------
Title
-------------------------------------------
DELIVERY DESIGN SYSTEMS, INC.,
an Arizona corporation
By
-------------------------------------------
Title
-------------------------------------------
9
<PAGE> 1
Exhibit 10.21
EMPLOYMENT AGREEMENT
THIS AGREEMENT (the "Agreement") is made and entered into as of the ______
day of __________________, ____, by and between MOBILE MINI, INC., a Delaware
corporation (the "Company"), and [EXECUTIVE] (the "Executive").
WHEREAS, the Company desires to employ the Executive to serve in the
capacity(ies) of [TITLE] of the Company upon the terms and conditions specified
in this Agreement and the Executive desires to serve in the employ of the
Company upon such terms and conditions; and
WHEREAS, the Company and the Executive desire to set forth in a written
agreement the terms and conditions of Executive's employment with the Company.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained, it is agreed as follows:
1. Employment. The Company hereby agrees to employ the Executive and
the Executive hereby agrees to remain in the employ of the Company upon the
terms and conditions herein set forth.
2. Term. Employment shall be for a term commencing on the date hereof
and, subject to termination under Section 8, expiring three (3) years from the
date hereof. Notwithstanding the previous sentence, this Agreement and the
employment of the Executive shall be automatically extended for successive
one-year periods upon the terms and conditions set forth herein, commencing on
the first anniversary of the date of this Agreement, and on each anniversary
date thereafter, unless either party of this Agreement gives the other party
written notice (in accordance with Section 17) of such party's intention to
terminate this Agreement and the employment of the Executive within the 60 day
period prior to the first anniversary of the date of this Agreement or prior to
each succeeding anniversary date thereafter, as applicable. For purposes of this
Agreement, any reference to the "term" of this Agreement shall include the
original term and any extension thereof.
3. Duties of the Executive; Service as Director.
(a) The Executive shall serve as [PRINCIPAL TITLE(S)] of the
Company. The Executive shall devote substantially all of his normal working time
to the business and affairs of the Company and shall perform all duties
commensurate with such position(s), including without limitation the duties
described on Exhibit A attached hereto, and such other related duties and
responsibilities consistent with the Executive's position as may from time to
time be reasonably requested by the Board of Directors of the Company (the
"Board").
1
<PAGE> 2
(b) During the term of this Agreement, the Board shall (i) nominate
the Executive to serve as a member of the Board, (ii) recommend to the Company's
stockholders that they vote for the Executive standing for election as a member
of the Board, and (iii) solicit proxies from the Company's stockholders that
provide for the election of the Executive.
4. Compensation.
(a) During the term of this Agreement, the Company shall pay to the
Executive a base salary of $[XXX,XXX] per annum, which base salary shall be
reviewed annually by the Board and may be increased or decreased from time to
time by the Board in its sole discretion, and shall be payable at the times and
in the manner consistent with the Company's general policies regarding
compensation of executive employees; provided, that no decrease in base salary
shall exceed the greater of (i) an aggregate amount equal to fifteen percent
(15%) of the Executive's then-current base salary, and (ii) the average
percentage amount by which the base salaries of the Key Executives (hereinafter
defined) are then being reduced. As used herein, the "Key Executives" are two
officers of the Company then serving as the Company's Chairman of the Board,
President and Executive Vice President, excluding the Executive (or, if one
other officer and the Executive serve, among them, in all such positions, then
the term means such other officer). The Board may from time to time authorize
such additional compensation to the Executive, in cash or in property, as the
Board may determine in its sole discretion to be appropriate.
(b) The Executive shall be eligible to participate in any incentive
bonus plan implemented by Company during the term of this Agreement.
(c) The Executive shall receive paid time off per year in accordance
with normal Company policy. In the event of termination of Executive's
employment for any reason, any accumulated but unused vacation days and sick
days shall be forfeited.
(d) Notwithstanding anything to the contrary in any stock option
agreement or other agreement between the Company and the Executive (i) the
Executive shall have the right during the 90-day period following the date of
termination of his employment pursuant to this Agreement for any reason (other
than termination for Cause) to exercise any options to purchase shares of the
Company's capital stock theretofore granted to the Executive ("Options"), to the
extent that such options were exercisable on the date of such termination, and
(ii) all Options shall immediately vest and become exercisable upon a Change of
Control (as hereinafter defined).
(e) The Company shall pay the costs, dues and fees related to the
Executive's membership or other participation in the organization(s) and
activities generally described on Exhibit B hereto and such other costs, dues
and fees as the Board may from time to time approve.
5. Executive Benefits. In addition to the compensation described in
Section 4, during the term of this Agreement the Company shall make available to
the Executive, subject to the terms and conditions of the applicable plans,
including without limitation the eligibility rules thereof, participation for
the Executive and his eligible dependents in all Company-sponsored
2
<PAGE> 3
employee welfare benefit plans and all plans intended to benefit executives
which are adopted or maintained by the Company.
6. Expenses. The Company shall pay or reimburse the Executive for
reasonable and necessary expenses incurred by the Executive in connection with
his duties on behalf of the Company in accordance with the general policies of
the Company.
7. Place of Performance. In connection with his employment by the
Company, the executive shall not be required, except with his consent, to
relocate his principal place of employment outside of the greater Phoenix
metropolitan area. Required travel on the Company's business shall not be deemed
a relocation so long as the Executive is not required to provide his services
outside of the greater Phoenix metropolitan area for more than fifty percent
(50%) of his working days during any consecutive six (6) month period.
8. Termination.
(a) Involuntary Termination. The Executive's employment hereunder
may be terminated by the Company for any reason by written notice. Such
termination shall be effective only if approved by a majority of all of the
members of the Board then serving. The Executive will be deemed for purposes of
this Agreement to have been involuntarily terminated by the Company if the
Executive terminates his employment with the Company under any of the following
circumstances: (i) the Company has materially breached any provision of this
Agreement and within 30 days after notice thereof from the Executive, the
Company fails to cure such breach; (ii) at any time after the Company has
notified the Executive pursuant to Section 2 hereof that the Company intends to
terminate this Agreement (rather than allow the term of this Agreement to renew
automatically); (iii) a successor or assign (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of the Company fails, not later than two business days
immediately prior to the date of occurrence of any such event, to assume
liability under this Agreement or enter into a replacement agreement
satisfactory to Executive; (iv) the Board fails to elect the Executive as
[INSERT PRINCIPAL TITLE(S)] of the Company; (v) the Executive is not elected a
member of the Board notwithstanding the due compliance with subsection 3(b)
hereof and, within the 360-day period following the stockholders meeting at
which the Executive was not elected, the Board fails to elect the Executive to
fill a vacancy on the Board; or (vi) the Board elects to give notice of
termination pursuant to this Section 8(a) other than for Cause (as hereinafter
defined) or Disability (as hereinafter defined).
(b) Voluntary Termination. Upon sixty (60) days' prior notice to the
Company, the Executive may voluntarily terminate this Agreement. The Executive's
death or termination by reason of Disability during the term of the Agreement
shall constitute a voluntary termination of employment for purposes of Section
9. The Executive shall not be entitled to any termination payments or benefits
pursuant to Section 9 hereof following Executive's voluntary termination of this
Agreement; and the provisions of Section 11 hereof shall survive any such
voluntary termination.
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<PAGE> 4
(c) Termination for Cause. The Executive's employment hereunder may
be terminated for Cause (defined in Section 9(e) hereof) and such termination
shall be effective upon the Board's issuance of a notice of such termination.
(d) Effect of Termination. Subject to Section 9 and any benefit
continuation requirements of applicable laws, in the event the Executive's
employment hereunder is voluntarily or involuntarily terminated for any reason
whatsoever, the compensation and benefits obligations of the Company under
Sections 4 and 5 shall cease as of the effective date of such termination.
9. Termination Payments and Benefits. If the Executive's employment
hereunder is involuntarily terminated by the Company (including any deemed
involuntary termination pursuant to Section 8(a)) other than for Cause (as
defined herein) prior to the end of the term of this Agreement as in effect from
time to time, then the Company shall, subject to subsection 9(a) hereof, be
obligated to pay to the Executive an amount equal to the product of (i) the
greater of (A) the Executive's annual base salary in effect on the day preceding
the date of such termination or (B) the Executive's annual base salary during
the twelve full calendar months preceding the date of such termination, times
(ii) three (3) (such amount hereinafter referred to as the "Termination Payment
Amount").
(a) Condition Precedent to Company's Payment Obligation (Release of
Claims). The Company's obligation to pay the Termination Payment Amount or any
portion thereof shall be conditioned upon the Executive executing and delivering
to the Company a mutual release agreement substantially in the form of Exhibit C
hereto (the "Release Agreement"). The Company shall be deemed for all purposes
to have executed and delivered the Release Agreement to the Executive
immediately upon the Company's receipt of the Release Agreement duly executed by
the Executive. In addition, the Company shall have no obligation to make any
payment of the Termination Payment Amount if the Executive shall be in default
of his obligations under Section 11 hereof.
(b) Method of Payment. The Termination Payment Amount shall be
payable in eighteen (18) equal monthly payments commencing on the first day of
the month following the month in which the termination shall occur. The
Company's obligation to pay the Termination Payment Amount shall be a general
unsecured obligation of the Company.
(c) Benefits. Upon termination of this Agreement for any reason, the
Company shall be obligated to provide the Executive with medical insurance and
other employee benefits only to the extend required by applicable law, and the
Company shall have no obligation to provide any benefits to the Executive which
the Executive would have been entitled to receive if his employment had not been
terminated.
(d) Termination for Cause. For purposes of this agreement, "Cause"
shall mean:
(i) the willful and continued failure by the Executive to
substantially perform his duties hereunder (other than any such failure
resulting from the Executive's incapacity
4
<PAGE> 5
due to physical or mental illness), after written demand for substantial
performance is delivered by the Company or the Board to the Executive that
specifically identifies the manner in which the Company or the Board believes
the Executive has not substantially performed his duties;
(ii) the conviction or plea bargain of the Executive of any
felony involving dishonesty, fraud, theft, embezzlement or the like;
(iii) the material breach of Section 11 of this Agreement by
the Executive; or
(iv) the Executive willfully engaging in conduct that is
intentionally insubordinate and harmful to the Company, that is not authorized
by the Board or not reasonably within (or which the Executive has no reason to
believe is within) the discretionary authority granted by the Company's Bylaws
or by act of the Board to an officer of the Company serving in the position in
which the Executive is serving, that is contrary to action authorized by the
Board, or that is materially detrimental to the Company.
Any decision to terminate the Executive under clause (i), (ii), (iii) or
(iv) shall require a majority of all of the members of the Board then serving.
Executive shall have 30 days to remedy any failure of substantial performance of
which he is given notice pursuant to clause (i) above. If remedied to the
reasonable satisfaction of the Board, the Board shall withdraw such
notification.
(e) Change of Control.
(i) For purposes of this Agreement, a "Change of Control" of
the Company shall be deemed to occur if:
(A) after the date of this Agreement, any person or
entity, or any group of persons or entities (other than an Exempted Person or an
Exempted Group), becomes the "beneficial owner" (as defined in the Securities
Exchange Act of 1934, as amended from time to time), directly or indirectly, of
35% or more of combined voting power of the Company's then outstanding
securities; or
(B) the occurrence within any thirty-six month
period during the term of this Agreement of a change in the Board with the
result that the Incumbent Members do not constitute a majority of the Board.
"Incumbent Members" in respect of any thirty-six month period shall mean the
members of the Board on the date immediately preceding the commencement of such
thirty-six month period, provided that any person becoming a Director during
such thirty-six month period whose election or nomination for election was
supported by a majority of the Directors who, on the date of such election or
nomination for election, comprised the Incumbent Members shall be considered one
of the Incumbent Members in respect of such thirty-six month period.
For purposes of subsection 9(e)(i)(A), (y) the term "Exempted Person"
shall mean any person or entity which, on the record date for the Company's 1998
annual meeting of
5
<PAGE> 6
stockholders, was the beneficial owner of ten percent (10%) or more of the
Company's voting stock, and (z) the term "Exempted Group" means any group or
entity which includes any Exempted Person.
(ii) Severance Compensation Upon a Change of Control and
Termination of Employment. If (X) a Change of Control of the Company shall have
occurred while the Executive is an employee of the Company, and (Y) within six
(6) months from the date of such Change in Control (I) the Company shall
terminate the Executive's employment for any reason (except for the death or
Disability of the Executive or for Cause) or (II) the Executive shall elect to
terminate his employment for any reason, then:
(A) the Company shall (subject to (B) below) pay
the Executive any earned and accrued but unpaid base salary through the date of
termination plus an amount of severance pay equal to the product of (i) the
greater of (A) the Executive's annual base salary in effect on the day preceding
the date on which the Change of Control occurred or (B) the Executive's annual
base salary during the twelve full calendar months preceding the date on which
the Change of Control occurred, times (ii) four (4) (such amount hereinafter
referred to as the "Change of Control Termination Payment Amount"). The Change
of Control Termination Payment Amount payable under this subsection 9(e) shall
be payable in a lump sum on the fourteenth day following the date of termination
hereunder, unless on or before such fourteenth day the Company shall have
delivered to the Executive a standby letter of credit issued by a financial
institution with its principal office located in the continental United States
having combined capital and surplus of at least $100,000,000, which letter of
credit shall (i) have a term of no less than 20 months from its date of
issuance; (ii) be irrevocable; (iii) be to the benefit of the Executive or his
assignee; (iv) permit draws thereunder in an amount up to the full amount of the
unpaid Change of Control Termination Payment Amount upon the receipt by the
issuing bank of a notice from the Executive of the Company's failure to pay any
amount of the Change of Control Termination Payment Amount when due, together
with a draft in the amount to be paid under the letter of credit; and (vi)
permit multiple draws, up to the full amount of the unpaid Change of Control
Termination Payment Amount outstanding from time to time, in which event the
Change of Control Termination Payment Amount payable under this Subsection 9(e)
shall be payable in eighteen (18) monthly payments commencing on the first day
of the month following the month in which such letter of credit shall be issued;
and
(B) in the event that the payment, calculated as
provided in (A) above, together with all other payments and the value of any
benefit received or to be received by the Executive in connection with
termination contingent upon a Change in Control of the Company (whether payable
pursuant to the terms of this Agreement or any other agreement, plan or
arrangement with the Company), (i) constitutes a "parachute payment" within the
meaning of Section 280G (b) (2) of the Internal Revenue Code of 1986, as amended
("Code") and (ii) such payment, together with all other payments or benefits
which constitute "parachute payments" within the meaning of Section 280G (b) (2)
would result in all or a portion of such payment being subject to excise tax
under Section 4999 or the Code, then the Change of Control Termination Payment
Amount shall be such lesser amount which would not result in any portion of the
severance pay determined hereunder being subject to excise tax under Section
4999 of the Code.
6
<PAGE> 7
(f) Disability Defined. "Disability" shall mean the
Executive's incapacity due to physical or mental illness to substantially
perform the essential functions of the position on a full-time basis for six (6)
consecutive months and, within thirty (30) days after a notice of termination is
thereafter given by the Company, the Executive shall not have returned to the
full-time performance of the Executive's duties; provided, however, if the
Executive shall not agree with a determination to terminate him because of
Disability, the question of Executive's disability shall be subject to the
certification of a qualified medical doctor agreed to by the Company and the
Executive or, in the event of the Executive's incapacity to designate a doctor,
the Executive's legal representative. In the absence of agreement between the
Company and the Executive, each party shall nominate a qualified medical doctor
and the two doctors shall select a third doctor, who shall make the
determination as to Disability.
(g) No Obligation to Mitigate. The Executive is under no
obligation to mitigate damages or the amount of any payment provided for
hereunder by seeking other employment or otherwise , and neither the obtaining
of other employment of any other similar factor shall reduce the amount of
severance payment payable hereunder.
10. Post-Termination Assistance. The Executive agrees that after his
employment with the Company has terminated he will provide to the Company, upon
reasonable notice from the Company, such information and assistance in the
nature of testifying and the preparation therefor as may reasonably be requested
by the Company in connection with any litigation, administrative or agency
proceeding, or other legal proceeding in which it or any of its affiliates is or
may become a party; provided, however, that the company agrees to reimburse the
executive for any reasonable, related expenses, including travel expenses, and
shall pay the executive a daily per diem comparable to his salary under this
agreement at time of termination (determined for this purpose on a per diem
basis by dividing such salary by 230).
11. Confidential Information; Covenant Not To Compete.
(a) Confidential Information. The Executive agrees that during his
employment with Company and thereafter, the Executive shall not at any time,
directly or indirectly, use or disclose to any person, except the Company and
its directors, officers or employees, the Company's customer lists, records,
statistics, manufacturing or installation processes, trade secrets or any other
information relating to the business, or the plans of the business or affairs of
the Company acquired by Executive in the course of his employment in any
capacity whatsoever, except for information which (i) is publicly available
other than by reason of the breach of this Section 11(a) by the Executive, or
(ii) is disclosed by the Executive in connection with the performance of his
duties and an officer and/or director of the Company.
(b) Covenant Not to Compete. For a period of either (i) three (3)
years from the date of the termination of his employment with the Company for
any reason other than a termination following a Change of Control or (ii)
eighteen (18) months from the date of termination of his employment with the
Company following a Change of Control, whichever is the case., the Executive
shall not, directly or indirectly, for the Executive's own benefit or for, with
or
7
<PAGE> 8
through any other individual, firm, corporation, partnership or other entity,
whether acting in an individual, fiduciary or other capacity (collectively a
"Person"), own, manage, operate, control, advise, invest in (except as a four
percent or less shareholder of a publicly held company), loan money to, or
participate or assist in the ownership, management, operation or control of or
be associated as a director, officer, employee, partner, consultant, advisor,
creditor, agent, independent contractor or otherwise with, or acquiesce in the
use of the Executive's name by, any Person, within any state in the United
States of America or similar political subdivision of any other country in which
the Company conducts business in at the time of termination of the Executive,
that is in direct competition with the Company, and shall not solicit any
employee or customer of the Company in connection with the business of any other
Person.
(c) Acknowledgment of Restrictions. The Company and the Executive
acknowledge the restrictions contained in subsections 11(a) and 11(b) above to
be reasonable for the purpose of preserving the Company's proprietary rights and
interests and that the consideration therefor is comprised of the payments made
hereunder and the mutual promises contained herein. If a court makes a final
judicial determination that any such restrictions are unreasonable or otherwise
unenforceable against the Executive, the Executive and the Company hereby
authorize such court to amend this Agreement so as to produce the broadest,
legally enforceable agreement and for this purpose the restrictions on time
period, geographical area and scope of activities set forth in said subsection
11(a) above are divisible; if the court refuses to do so, the Executive and the
Company hereby agree to modify the provision or provisions held to be
unenforceable to preserve each party's anticipated benefits thereunder.
(d) Specific Performance; Repayment of Termination Payment Amount.
The Executive hereby acknowledges that the services to be rendered to Company
and the information disclosed and to be disclosed are of a unique, special and
extraordinary character which would be difficult or impossible for Company to
replace or protect, and by reason thereof, the Executive hereby agrees that in
the event he violates any of the provisions of subsections 11(a) or 11(b)
hereof, the Company shall, in addition to any other rights and remedies
available to it, at law or otherwise, be entitled to an injunction or
restraining order to be issued by any court of competent jurisdiction in any
state enjoining and restraining the Executive from committing any violation of
said subsection 11(a) or 11(b).
The Executive agrees that, if he breaches subsection 11(a) or
11(b), he shall have forfeited all right to receive any amount of the
Termination Payment Amount and he shall promptly repay to the Company the entire
Termination Payment Amount theretofore paid to him or to his order.
8
<PAGE> 9
12. Assignment of Inventions.
(a) General Assignment. The Executive agrees to assign and hereby
does assign to the Company all right, title and interest in and to any
inventions, designs and copyrights made during employment by Company which
relate, directly or indirectly, to the business of the Company.
(b) Further Assurances. The Executive shall acknowledge and deliver
promptly to the Company without charge to the Company but at its expense such
written instruments and do such other acts, as may be necessary in the opinion
of the Company to obtain, maintain, extend, reissue and enforce United States
and/or foreign letters patent and copyrights relating to the inventions, designs
and copyrights and to vest the entire right and title thereto in the Company or
its nominee. The Executive acknowledges and agrees that any copyright developed
or conceived of by the Executive during the term of the Executive's employment
which is related to the business of the Company shall be a "work for hire" under
the copyright law of the United States and other applicable jurisdictions.
(c) Excepted Inventions. As a matter of record the Executive has
identified on Exhibit D attached hereto all inventions or improvements relevant
to the subject matter of his engagement by the Company which have been made or
conceived or first reduced to practice by the Executive alone or jointly with
others prior to his engagement by the Company, and the Executive covenants that
such list is complete. If there is no such list on Exhibit C, the Executive
represents that he has made no such inventions and improvements at the time of
signing this Agreement.
13. Indemnification: Litigation.
(a) The Company shall indemnify the Executive to the fullest extent
permitted by the laws of the state of the Company's incorporation in effect at
the relevant time, or certificate of incorporation and by-laws of the Company,
whichever affords the greater protection to the Executive. The Executive shall
be entitled to (i) advancement of expenses to the fullest extent permitted by
law and (ii) the benefits of any insurance policies the Company may elect to
maintain generally for the benefit of its officers and directors against all
costs, charges and expenses, in either case incurred in connection with any
action, suit or proceeding to which he may be made a party by reason of being a
director or officer of the Company.
(b) In the event of any litigation or other proceeding between the
Company and the Executive with respect to the subject matter of this Agreement,
the party which prevails in such litigation or other proceeding shall reimburse
the other for all costs and expenses related to the litigation or proceeding
(including attorney's fees and expenses) incurred by the prevailing party.
14. Entire Agreement. This Agreement (together with the Exhibits hereto
which are an integral part hereof) supersedes any and all other agreements
(except agreements, if any, relating to stock options granted to the Executive
by the Company), either oral or in writing, between the parties hereto with
respect to the subject matter hereof and contains the entire agreement of the
parties with respect to the subject matter hereof. Except as aforesaid, no other
agreement, statement, promise or representation pertaining to the subject matter
hereof that is not
9
<PAGE> 10
contained herein shall be valid or binding on either party, and the Company and
the Executive expressly agree that this Agreement supersedes in all respects
each and all of the following agreements to which they are or may be parties,
whenever the same were entered into: (i) any Confidentiality and Proprietary
Information Agreement; (ii) any Restrictive Competition Agreement; and (iii) any
Site Access Agreement and Confidential Information Agreement (including any
agreement similarly named in each of the foregoing cases).
15. Withholding of Taxes. The Company may withhold from any amounts
payable under this Agreement all federal, state, city or other applicable taxes
and withholdings as may be required pursuant to any law or government regulation
or ruling.
16. Successors and Binding Agreement.
(a) This Agreement shall be binding upon and inure to the benefit of
the Company and successor (and such successor shall thereafter be deemed the
"Company" for the purposes of this Agreement), but will not otherwise be
assignable, transferable or delegable by the Company.
(b) This Agreement will inure to the benefit of and be enforceable
by the Executive's personal or legal representatives, executors, administrators,
successors, heirs, distributes and legatees.
(c) This Agreement is personal in nature and neither of the parties
hereto shall, without the consent of the other, assign, transfer or delegate
this Agreement or any rights or obligations hereunder except as expressly
provided in Section 16(a) and 16(b).
17. Notices. All communications hereunder, including without limitation
notices, consents, requests or approvals, required or permitted to be given
hereunder, shall be in writing and be deemed to have been duly given when hand
delivered or dispatched by electronic facsimile transmission (with transmission
and receipt confirmed), or five business days after having been mailed by United
States registered or certified mail, return receipt requested, postage prepaid,
or two business days after having been sent by a nationally recognized overnight
courier service, addressed to the Company (to the attention of the Secretary of
the Company) at its principal executive office and to the Executive at his
principal residence at shown in the records of the Company, or to such other
address as any party may have furnished to the other in writing and in
accordance herewith, except that notices of changes of address shall be
effective only upon receipt.
18. Governing Law; Jurisdiction. The validity, interpretation,
construction and performance of this Agreement will be governed by and construed
in accordance with the substantive laws of the State of Arizona, without giving
effect to the principles of conflict of laws of such State.
19. Validity. If any provision of this Agreement or the application of
any provision hereof to any person or circumstances is held invalid,
unenforceable or otherwise illegal, the
10
<PAGE> 11
remainder of this Agreement and the application of such provision to any other
person or circumstances will not be affected, and the provision so held to be
invalid, unenforceable or otherwise illegal will be reformed to the extent (and
only to the extent) necessary to make it enforceable, valid or legal.
20. Survival of Provisions. Notwithstanding any other provision of this
Agreement, the parties' respective rights and obligations under Sections 4(d),
8, 9, 10, 11, 12 and 13 shall survive any termination or expiration of this
Agreement or the termination of the Executive's employment for any reason
whatsoever.
21. Miscellaneous. No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing signed by the Executive and the Company. No waiver by either party
hereto at any time of any breach by the other party hereto or compliance with
any condition or provision of this Agreement to be performed by such other party
will be deemed a waiver of similar or dissimilar provisions or conditions at the
same or at any prior or subsequent time. Unless otherwise noted, references to
"Sections" are to sections of this Agreement. The captions used in this
Agreement are designed for convenient reference only and are not to be used for
the purpose of interpreting any provision of this Agreement.
22. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original and all of which
together will constitute one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the day and year first above written.
Company:
MOBILE MINI, INC.
By:____________________________________
Its:_____________________________
Executive:
_________________________________
11
<PAGE> 12
[Name]
12
<PAGE> 13
EXHIBIT A
Description of Duties and Responsibilities
13
<PAGE> 14
EXHIBIT B
List of Organizations/Activities
14
<PAGE> 15
EXHIBIT C
Form of Release Agreement
[Form of]
MUTUAL RELEASE
This Mutual Release agreement (the "Release" or the "Agreement") is made
this ____ day of ___________, ____, by and entered into between MOBILE MINI,
INC., a Delaware corporation (the "Company") and __________________
("Executive").
RECITALS
This Agreement is the mutual release agreement referred to in Section 9(a)
of that certain Employment Agreement between the Company and the Executive,
pursuant to which Executive was employed by the Company (as in effect on the
date of the termination of Executive's employment, the "Employment Agreement").
AGREEMENT
In consideration of the Termination Payment Amount pursuant to the
Employment Agreement, the covenants and obligations of the parties thereunder
which survive the termination of Executive's employment with the Company, and
any and all claims each may have against the other, the parties mutually agree
as follows:
1.0 MUTUAL RELEASE AND DISCHARGE
1.1 The parties hereby completely release and forever discharge each
other from any and all past, present or future claims, demands, obligations,
actions, causes of action, rights to damages, costs, losses of services,
expenses and compensation of any nature whatsoever, whether based on a tort,
contract or other theory of recovery, which either party now has, or which may
hereafter accrue or otherwise be acquired on account of, or may in any way arise
out of the Employment Agreement or Executive's service as an officer and/or
director of the Company; provided, however, that the Company does not intend to,
nor shall it be deemed hereby to have, released or discharged any claim that it
may have against Executive or any other person or any entity, arising from or
under (i) any act or failure to act by Executive after the termination of
Executive's employment by the Company; or (ii) any act which is violative of
Article 11 or Article 12 of the Employment Agreement; provided, further, that
Executive does not intend, nor shall he be deemed hereby to have, released or
discharged any claim that he may have against the Company relating to any
failure of the Company to pay any amount due and owing (or which may hereafter
become due and owing) to Executive under the Employment Agreement (including,
without limitation, the Termination Payment Amount).
15
<PAGE> 16
1.2 This Release shall also apply to the parties' past, present and
future officers, directors, stockholders, attorneys, agents, servants,
representatives, employees, subsidiaries, affiliates, partners,
successors-in-interest, assigns, heirs and personal representatives.
1.3 Except to the extent set forth in Section 1.1, this Release on the
part of the parties, shall be a fully binding and complete settlement between
both parties of all claims either may have against the other arising from the
employer-employee relationship between the parties (the "Relationship").
1.4 The parties acknowledge and agree that the Release set forth above
is a mutual general release. The parties expressly waive and assume the risk of
any and all claims for damages relating to the Relationship that exist as of the
date Executive's employment with the Company ended, but of which the parties do
not know or suspect to exist, whether through ignorance, oversight, error,
negligence, or otherwise, and which, if known, would materially affect the
parties' decision to enter into this mutual Release. It is understood and agreed
to by the parties that this mutual Release shall not constitute an admission
and/or denial of liability on the part of either party.
2.0 WARRANTY OF CAPACITY TO EXECUTE AGREEMENT
2.1 The parties executing this Release represent and warrant that no
other person or entity has or has had, any interest in the claims, demands,
obligations, or causes of action referred to in this mutual Release, except as
otherwise set forth herein; that the parties have the sole right and exclusive
authority to execute this mutual Release; and that the parties have not sold,
assigned, transferred, conveyed or otherwise disposed of any of the claims,
demands, obligations or causes of action or defenses or counterclaims referred
to in this mutual Release or that may be available.
3.0 ENTIRE AGREEMENT AND SUCCESSORS-IN-INTEREST
3.1 This mutual Release contains the entire agreement between the
Company and Executive with regard to the matters set forth in it and shall be
binding upon and inure to the benefit of the executors, administrators, personal
representatives, heirs, successors and assigns of each.
4.0 GOVERNING LAW
4.1 This mutual Release shall be governed by the laws of the State of
Arizona, and the parties agree that any action brought to enforce it shall be
brought in Maricopa County Superior Court, and the prevailing party shall be
entitled to collect its court costs and reasonable attorney's fees.
16
<PAGE> 17
5.0 SEVERABILITY
5.1 The parties agree that if a court should declare any portion of this
Agreement invalid, the remaining portions of this Agreement shall remain in full
force and effect.
6.0 CONSTRUCTION
6.1 Neither party shall be construed as having drafted this Release, and
any ambiguities found to exist herein shall not be construed against either
party.
DATED this ____ day of ______________________.
Company:
MOBILE MINI, INC.
______________________________________
Title: _______________________________
Executive:
______________________________________
[Name]
17
<PAGE> 18
EXHIBIT D
List of Inventions and Improvements
18
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<NET-INCOME> 6,306,133
<EPS-BASIC> 0.65
<EPS-DILUTED> 0.61
</TABLE>
