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EX-32.1 - EXHIBIT 32.1 - MOBILE MINI INC | c06347exv32w1.htm |
EX-31.2 - EXHIBIT 31.2 - MOBILE MINI INC | c06347exv31w2.htm |
EX-31.1 - EXHIBIT 31.1 - MOBILE MINI INC | c06347exv31w1.htm |
Table of Contents
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K/A
(Amendment No. 1)
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2009
Commission File Number 1-12804
MOBILE MINI, INC.
(Exact name of registrant as specified in its charter)
Delaware | 86-0748362 | |
(State or other jurisdiction of | (IRS Employer | |
incorporation or organization) | Identification No.) |
7420 S. Kyrene Road, Suite 101
Tempe, Arizona 85283
(Address of principal executive offices)
(480) 894-6311
Tempe, Arizona 85283
(Address of principal executive offices)
(480) 894-6311
(Registrants telephone number, including area code)
Securities Registered pursuant to Section 12(b) of the Act:
Securities Registered pursuant to Section 12(b) of the Act:
Title of Class | Name of Each Exchange on Which Registered | |
Common Stock, $.01 par value | NASDAQ Global Select Market | |
Preferred Share Purchase Rights |
Securities registered pursuant to Section 12(g) of the Act:
None
None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act. Yes o No þ
Indicate by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Act. Yes o No þ
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes þ No o
Indicate by check mark whether the registrant has submitted electronically and posted on its
corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant
to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files). Yes þ No o
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the best of registrants
knowledge, in definitive proxy or information statements incorporated by reference in Part III of
this Form 10-K or any amendment to this Form 10-K. þ
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated
filer, a non-accelerated filer, or a smaller reporting company. See the definitions of large
accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the
Exchange Act. (Check one):
Large accelerated filer þ | Accelerated filer o | Non-accelerated filer o | Smaller reporting company o | |||
(Do not check if a smaller reporting company) |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of
the Act). Yes o No þ
The aggregate market value on June 30, 2009 of the voting stock owned by non-affiliates of the
registrant was approximately $508 million.
As of February 19, 2010, there were outstanding 36,258,593 shares of the registrants common stock,
par value $.01.
DOCUMENTS INCORPORATED BY REFERENCE:
None.
TABLE OF CONTENTS
PART III | ||||||||
ITEM 11. EXECUTIVE COMPENSATION | ||||||||
PART IV | ||||||||
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES | ||||||||
SIGNATURES | ||||||||
INDEX TO EXHIBITS FILED HEREWITH | ||||||||
Exhibit 31.1 | ||||||||
Exhibit 31.2 | ||||||||
Exhibit 32.1 |
Table of Contents
EXPLANATORY NOTE
This Amendment No. 1 to the Companys Annual Report on Form 10-K for the year ended December
31, 2009 as filed on March 1, 2010 (the Original Filing), is filed in response to comments set
forth in a letter dated September 13, 2010 received by the Company from the United States
Securities and Exchange Commission (the SEC) and a related letter from the SEC dated August 12,
2010, received by the Company. In response to such comments, we have included additional
disclosure under Part III, Item 11. EXECUTIVE COMPENSATION, which disclosure is intended to clarify
and supplement the disclosure previously set forth in the Companys Definitive Proxy Statement on
Schedule 14A filed with the SEC on April 30, 2010 (the 2010 Proxy Statement).
Pursuant to Rule 12b-15 under the Securities and Exchange Act of 1934, as amended, this
Amendment amends the Original Filing and contains new certifications pursuant to Section 302 and
906 of the Sarbanes-Oxley Act of 2002.
Except as described above, no other amendments have been made to the Original Filing. This
Amendment continues to speak as of the date of the Original Filing, and the Company has not updated
the disclosure contained therein to reflect events that have occurred since date of the Original
Filing. Accordingly, this Amendment should be read in conjunction with the Companys other filings
made with the United States Securities Exchange Commission subsequent to the filing of the Original
Filing, including any amendments to those filings.
PART III
ITEM 11. EXECUTIVE COMPENSATION.
Information with respect to executive compensation included in the 2010 Proxy Statement and
incorporated by reference into the Original Filing is hereby amended to also include the below
information. This information should be read in conjunction with the Original Filing and the
2010 Proxy Statement.
Setting Executive Compensation for 2009
As part of the Board of Directors yearly budgeting and goal setting process, in December
2008, the Compensation Committee reviewed the base salaries of the Companys executive officers to
ensure they fairly and competitively compensated these individuals for the jobs they perform. The
Compensation Committee considered the Companys performance in fiscal 2008, the current economic
outlook for the economy, the Companys prospects for 2009, and the Companys efforts to cut or
control costs. The Compensation Committee also considered the salary recommendations of Mr. Bunger
for each of the named executive officers. Based on all of the foregoing factors, the Compensation
Committee recommended to the full Board, and the full Board concurred, that the Company generally
target 3% increases in base salary for all employees, including executive officers, depending upon
individual performance. Based on a review by the Compensation Committee and the Board of Mr.
Bungers performance and recommendations, he was given the targeted 3% increase in base salary from
2008 to 2009. Mr. Lemleys salary change does not reflect an increase from 2008 to 2009 due to a
change in positions.
Bonus History and Determination of Non-Equity Incentive Plan Compensation
The
named executive officers (NEOs) that received incentive cash compensation (other than Mr. Funk) failed to achieve
substantially all of the company-wide targets necessary for the receipt of cash bonuses. Mr. Funk
had a guaranteed bonus minimum based on his employment agreement negotiated when he joined the
Company. The CEO and CFOs targets were, as disclosed, based on revenue, adjusted EBITDA and
adjusted diluted earnings per share. None of the targets for these measures were met. For the other
NEOs, their measures were weighted equally at 30% Company-wide results and 70% geographic specific
results for the areas they were responsible for during the year. Based on achievement of relatively
small portions of geographic specific results, Messrs. Halchishak, Lemley and Miller received 6.0%,
1.1% and 2.1%, respectively, of their total compensation in the form of a bonus. The following
discussion provides a summary of the attainment by the NEOs of incentive-based targets.
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Table of Contents
2009 Fiscal Year
For 2009, the Compensation Committee established the annual performance-based incentive
criteria to be revenue, adjusted EBITDA and adjusted diluted earnings per share. These measures
applied to all NEOs, with Messrs. Halchishak, Lemley and Miller also having geographic specific
goals, which the Board and Compensation Committee view to be sub-sets of either revenue or adjusted
EBITDA. The following chart illustrates the business criteria, weighting, and performance levels
necessary to achieve the threshold, target, and maximum payout amounts, and actual results during
the 2009 measurement period.
Non-Equity Incentive 2009 Plan and Bonuses
Weighting | Threshold ($) | Target (S) | Maximum ($) | Actual Results ($) | Bonus ($) | |||||||||||||||||||
CEO and CFO (1) |
||||||||||||||||||||||||
Total Revenue |
33 | % | 424,420,504 | 442,505,531 | 460,590,559 | 374,461,146 | | |||||||||||||||||
Adjusted EBITDA |
33 | % | 165,303,788 | 176,196,901 | 187,090,013 | 156,581,244 | | |||||||||||||||||
Adjusted Diluted EPS |
34 | % | 0.84 | 1.01 | 1.17 | 0.82 | | |||||||||||||||||
Other NEOs |
||||||||||||||||||||||||
Total Revenue |
10 | % | 424,420,504 | 442,505,531 | 460,590,559 | 374,461,146 | | |||||||||||||||||
Adjusted EBITDA |
10 | % | 165,303,788 | 176,196,901 | 187,090,013 | 156,581,244 | | |||||||||||||||||
Adjusted Diluted EPS |
10 | % | 0.84 | 1.01 | 1.17 | 0.82 | | |||||||||||||||||
Geographic specific goals |
70 | % | (2)(3) | (2)(3) | (2)(3) | (2)(3) | (3) |
(1) | The Companys CFO, Mr. Funk, was guaranteed a bonus in 2009 under the terms of his employment agreement of $87,872. | |
(2) | The performance goals for the other named executive officers were weighted 30% company-wide results and 70% geographic specific goals based on the geographic areas they manage related to revenue, gross profit, profitability, collection of limited liability waiver, and revenue based on damage and repair. These measures are non-GAAP definitions developed by the Company to measure local area performance. | |
(3) | The below table shows the measures for which the other NEOs received bonuses, the total weighted percentage of available bonus this measure represents, and bonus amount associated with achievement of the stated goal. |
Weighting | Bonus ($) | |||||||||
Mr. Halchishak |
profitability | 30 | % | 26,643 | ||||||
Mr. Lemley |
damage and repair | 5 | % | 4,027 | ||||||
limited liability waiver | 5 | % | 461 | |||||||
Mr. Miller |
damage and repair | 5 | % | 10,635 |
Determination of Equity-Based Incentives
Historically in late fall, the Board approves a budget for the following operating year. As
part of that budget-setting process and performance review of each executive officer, Mr. Bunger
proposes compensation amounts for each executive officer made up of base salary, target bonus
amounts and target dollar amount of equity awards. The Compensation Committee and the Board review
the recommendations of Mr. Bunger and the performance of each of the executive officers and approve
base salary, target bonus amounts and target dollar amount of equity awards for each executive
officer. The approved dollar amount for equity awards is divided into grants of 50% of the approved
equity amount being solely time-based vesting shares and 50% of the approved amount being both
performance-based and time-based vesting.
Once the budgeting process is completed and approved by the Board, the Compensation Committee
sets performance targets for that fiscal year that must be met in order for the executive officer
to receive target bonus amounts. Because the vesting of performance-based awards requires the
achievement of yearly EBITDA targets over a period of four years, the Committee also establishes
individual future year EBITDA targets for the four year period measured by the award.
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Table of Contents
Because the budgeting processes for fiscal 2010 and 2009 were not finalized by the end of the
respective preceding years, the Compensation Committee approved the grant of the equity awards that
were solely time-based vesting (i.e., 50% of each executive officers target equity grant amount)
in December of those preceding years. The performance-based shares (i.e., the other 50% of each
executive officers target equity grant amount) were not granted until the following January or
February once the budgeting process was complete and the Compensation Committee had sufficient
information to set the performance goals for that year.
For example, in December 2008, the Compensation Committee granted time-based shares to
executive officers. In January 2009, once the Board had approved the budget for 2009, the
Compensation Committee granted performance-based shares that vest over four years and also require
the achievement of certain EBITDA goals each year, beginning in 2009. Because the EBITDA targets
set by the Compensation Committee for 2009 were not met, the shares based on 2009 performance did
not vest.
As disclosed in the Companys 2010 Proxy Statement, in addition to the individual annual
EBITDA targets, there is a cumulative four year performance target that applies to all shares that
did not vest due to the failure to achieve yearly targets. If the sum of the cumulative EBITDA
actually achieved for the four years is greater than 90% of the sum of the targets for the same
four year period on a grant-by-grant basis, then shares will vest in proportion to the ratio
achieved between 90% and 100%. In other words, performance shares that do not vest due to failure
to achieve EBITDA targets in any given year may nevertheless vest at the end of the four-year grant
period if cumulative EBITDA achieved is 90% or more of the original four-year cumulative goal.
The Company re-evaluates the probable outcome of the performance conditions (i.e., likelihood
of achieving the previously-set EBITDA targets) at least annually for all prior grants and reflects
this likelihood and the value of the associated shares in column (e) of the Summary Compensation
table in the Companys proxy statement.
Set forth below is a table that summarizes the vesting history of the Companys
performance-based equity grants for the periods indicated, including the percent of the goal
achieved and the corresponding vesting outcome.
Vesting History of Grants | % of Goal Achieved | Vesting Outcome | ||||||
2007 Initial Performance Year (1) |
||||||||
2007 EBITDA |
97 | % | Did not vest | |||||
2008 EBITDA |
114 | % | Vested | |||||
2009 EBITDA |
89 | % | Did not vest | |||||
2008 Initial Performance Year (1) |
||||||||
2008 EBITDA |
126 | % | Vested | |||||
2009 EBITDA |
103 | % | Vested | |||||
2009 Initial Performance Year (1) |
||||||||
2009 EBITDA |
97 | % | Did not vest |
(1) | EBITDA calculated excluding stock based compensation and one time charges. |
Timing for Award of Equity-Based Incentives
For the fiscal years 2009 goals, the Company awarded performance-based equity awards in
January 2009 and for the fiscal years 2010 goals, the Company did not award the performance-based
equity awards until February 2010. The statement on page 17 of the 2010 Proxy Statement to the
effect that the Company did not make performance-based equity awards until 2010 was intended to
reference only the performance-based equity awards for the goals set for fiscal year 2010.
Potential Payments upon Termination or Change in Control
Each of Mr. Bunger, Mr. Funk and Mr. Miller is entitled to receive severance payments if
terminated without Cause, for Good Reason or within one year of a Change of Control. Cause, Good
Reason and Change of Control are defined in each respective employment agreement as described in
the 2010 Proxy Statement under the caption Compensation Discussion and AnalysisEmployment
Agreements / Severance.
3
Table of Contents
Under the terms of each of the employment agreements, assuming the employment of each of Mr.
Bunger, Mr. Funk and Mr. Miller was to be terminated as of December 31, 2009, such officers would
be entitled to the following payments and benefits:
| Accrued Compensation (as defined in each agreement); |
| in the event of termination without Cause or for Good Reason: for Mr. Bunger, a lump sum payment equal to two times the sum of his then-current base salary plus his base salary in the year of termination; for Mr. Funk, a lump sum payment equal to the sum of his then-current base salary plus 45% of his base salary in the year of termination; and for Mr. Miller, a lump sum payment equal to the sum of his then-current base salary plus 70% of his base salary in the year of termination, in each case, to be paid by the Company within 28 days of the date of termination; |
| in the event of termination within one year of a Change of Control: for Mr. Bunger, a lump sum payment equal to three times the sum of his then-current base salary plus his base salary in the year of termination; for Mr. Funk, a lump sum payment equal to two times the sum of his then-current base salary plus 45% of his base salary in the year of termination; and for Mr. Miller, a lump sum payment equal to two times the sum of his then-current base salary plus 70% of his base salary in the year of termination, in each case, to be paid by the Company within 28 days of the date of termination; |
| in the event of termination without Cause or for Good Reason: continued payment by the Company, for a period of 24 months in the case of Mr. Bunger and 12 months in the cases of Mr. Funk and Mr. Miller, of the same proportion of life insurance, disability, medical and dental insurance premiums and hospitalization benefits that was paid for by the Company prior to termination; |
| in the event of termination within one year of a Change of Control: continued payment by the Company, for a period of 36 months in the case of Mr. Bunger and 24 months in the cases of Mr. Funk and Mr. Miller, of the same proportion of life insurance, disability, medical and dental insurance premiums and hospitalization benefits that was paid for by the Company prior to termination; and |
| unvested equity time-based awards shall accelerate and vest in full, in most circumstances. |
The following tables detail the incremental compensation amounts provided to each of Mr.
Bunger, Mr. Funk and Mr. Miller in the event of termination without Cause or for Good Reason or as
a result of a change in control, assuming termination as of December 31, 2009:
Life and | Vesting of | |||||||||||||||||||
Accrued | Lump Sum | Health | Equity | |||||||||||||||||
Compensation | Termination | Benefits | Awards | |||||||||||||||||
Termination Without Cause or for Good Reason | ($) (1) | Payment ($) | ($) | ($) (2) | Total ($) | |||||||||||||||
Steven Bunger |
| 1,622,250 | 31,232 | 1,131,441 | 2,784,923 | |||||||||||||||
Mark Funk |
87,872 | 509,658 | 4,860 | 1,045,647 | 1,648,037 | |||||||||||||||
Jody Miller |
10,635 | 449,820 | 15,616 | 458,883 | 934,954 | |||||||||||||||
Life and | Vesting of | |||||||||||||||||||
Accrued | Lump Sum | Health | Equity | |||||||||||||||||
Compensation | Termination | Benefits | Awards | |||||||||||||||||
Termination Within One Year of Change of Control | ($) (1) | Payment ($) | ($) | ($) (2) | Total ($) | |||||||||||||||
Steven Bunger |
| 2,163,000 | 46,849 | 1,131,441 | 3,341,290 | |||||||||||||||
Mark Funk |
87,872 | 861,146 | 9,720 | 1,045,647 | 2,004,385 | |||||||||||||||
Jody Miller |
10,635 | 714,420 | 31,232 | 458,883 | 1,215,170 |
(1) | This amount represents the non-equity incentive earned for fiscal year 2009, but unpaid at December 31, 2009. At any given time this will be an amount, if any, that has been earned but unpaid at the time of the event. | |
(2) | Calculation based on the closing price of our common stock on December 31, 2009 of $14.09. |
Compensation Committee
Role of the Companys President, CEO and Chairman
The establishment of performance targets and individual performance objectives for the
Companys senior management, including the Companys NEOs, are recommended by
Mr. Bunger and reviewed by the Compensation Committee. These individual objectives are those that
Mr. Bunger and the Compensation Committee believe should be focused on during the year. Progress
against these objectives is monitored by Mr. Bunger and reviewed with the Compensation Committee
during the year. Mr. Bunger also makes recommendations to the Compensation Committee regarding the
performance targets and objectives that affect his own compensation.
4
Table of Contents
Mr. Bunger
reviews the performance of each of the other NEOs against
his/her objectives and presents his evaluation of their performance to the Compensation Committee.
However, recommendations about individual compensation elements and total compensation are
ultimately made by the Compensation Committee, using its judgment,
focusing primarily on each NEOs performance against his or her individual financial and strategic objectives,
as well as the Companys overall performance. The Compensation Committee also considers a variety
of qualitative factors, including the business environment in which the results were achieved.
Therefore, the Compensation Committee makes recommendations regarding
each NEOs compensation based on multiple factors, including the competitive market, individual
performance, internal equity and affordability. As required by the Compensation Committees
charter, these recommendations are made to the full Board of Directors of the Company, which
approves all compensation plans for senior management.
Mr. Bungers Ability to Call Meetings of the Compensation Committee or Meet with Consultants
In accordance with the Compensation Committees charter, the Compensation Committee meets as
often as it determines is appropriate to carry out its responsibilities under the charter. Meetings
of the Compensation Committee may be called by any member of the Committee. Mr. Bunger is not a
member of the Compensation Committee and, therefore, cannot call meetings of the Compensation
Committee. The Chairman of the Committee (Mr. Jeffrey S. Goble), in consultation with the other
Committee members, determines the frequency and length of the Committee meetings and sets meeting
agendas consistent with the Committees charter. Mr. Goble does coordinate the scheduling of
Committee meetings with Mr. Bunger so as not to conflict with other Board meetings. Under the terms
of the Compensation Committees charter, the Committee may invite to its meetings any Director,
member of management of the Company, and such other persons as it deems appropriate in order to
carry out its responsibilities.
While the Company has not engaged a compensation consultant since 2007, Mr. Bunger was
afforded the ability to provide data and input to the consultants and to review and discuss their
findings and suggestions. Similarly, in the future, it is expected that Mr. Bunger will be provided
the opportunity to provide data and input to any compensation consultants retained by the
Committee.
Evaluation of Mr. Bungers Performance
As noted above, the Compensation Committee makes recommendations to the full Board regarding
the performance targets and individual performance objectives for the Companys senior management,
including Mr. Bunger, and reviews his performance against his objectives. Recommendations about Mr.
Bungers compensation elements and total compensation are made by the Compensation Committee, using
its judgment, focusing primarily on Mr. Bungers performance against his individual financial and
strategic objectives, as well as the Companys overall performance and the qualitative factors
discussed above.
PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(b) The following exhibits are filed herewith.
Exhibit | ||||
Number | Description | |||
31.1 | Certification of Chief Executive Officer pursuant to Item 601(b)(31) of Regulation S-K. |
|||
31.2 | Certification of Chief Financial Officer pursuant to Item 601(b)(31) of Regulation S-K. |
|||
32.1 | Certification of Chief Executive Officer and Chief Financial Officer pursuant to Item 601(b)(32) of Regulation S-K. |
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Table of Contents
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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. | ||||||
Date: September 27, 2010
|
By: | /s/ Steven G. Bunger
|
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes
and appoints Christopher J. Miner and Steven G. Bunger, and each of them, with full power of
substitution and resubstitution and full power to act without the other, as his or her true and
lawful attorney-in-fact and agent to act in his or her name, place and stead and to execute in the
name and on behalf of each person, individually and in each capacity stated below, and to file, any
and all documents in connection therewith, with the Securities and Exchange Commission, granting
unto said attorneys-in-fact and agents, and each of them, full power and authority to do and
perform each and every act and thing, ratifying and confirming all that said attorneys-in-fact and
agents or any of them or their and his or her substitute or substitutes, may lawfully do or cause
to be done by virtue thereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been
signed by the following persons on behalf of the registrant and in the capacities and on the dates
indicated.
Date: September 27, 2010
|
By: | /s/ Steven G. Bunger
|
||||
President, Chief Executive Officer and | ||||||
Director (Principal Executive Officer) | ||||||
Date: September 27, 2010
|
By: | /s/ Mark E. Funk
|
||||
Executive Vice President and | ||||||
Chief Financial Officer (Principal Financial Officer) | ||||||
Date: September 27, 2010
|
By: | /s/ Deborah K. Keeley
|
||||
Senior Vice President and Chief | ||||||
Accounting Officer (Principal Accounting Officer) | ||||||
Date: September 27, 2010
|
By: | /s/ James J. Martell
|
||||
Date: September 27, 2010
|
By: | /s/ Jeffrey S. Goble
|
||||
Date: September 27, 2010
|
By: | /s/ Stephen A McConnell
|
||||
Date: September 27, 2010
|
By: | /s/ Frederick G. McNamee
|
||||
Date: September 27, 2010
|
By: | /s/ Sanjay Swani
|
||||
Date: September 27, 2010
|
By: | /s/ Lawrence Trachtenberg
|
||||
Date: September 27, 2010
|
By: | /s/ Michael L. Watts
|
Table of Contents
INDEX TO EXHIBITS FILED HEREWITH
Exhibit | ||||
Number | Description | |||
31.1 | Certification of Chief Executive Officer pursuant to Item 601(b)(31) of Regulation S-K. |
|||
31.2 | Certification of Chief Financial Officer pursuant to Item 601(b)(31) of Regulation S-K. |
|||
32.1 | Certification of Chief Executive Officer and Chief Financial Officer pursuant to Item 601(b)(32) of Regulation S-K. |