Exhibit 10.24
EMPLOYMENT AGREEMENT
This Employment Agreement (this “Agreement”) is entered into as of November 5,
2007 by and between Jeffrey A. Kluckman (the “Executive”) and Mobile Storage
Group, Inc., a Delaware corporation (the “Company”).
WHEREAS, the Company desires the Executive to serve as its Vice President of
Mergers and Acquisitions, and the Executive desires to serve as the Vice
President of Mergers and Acquisitions of the Company for the term and upon the
other conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the agreements and covenants contained
herein, the Executive and the Company hereby agree as follows:
ARTICLE 1
Employment
Section 1.1. Position; Term; Condition Precedent; Responsibilities. The Company
shall employ the Executive as its Vice President of Mergers and Acquisitions for
a term commencing on the date of this Agreement (the “Commencement Date”) and
ending on the date this Agreement is terminated pursuant to Article 3. The term
of employment as prescribed in this Section 1.1 is hereinafter called the
“Employment Period.” Subject to the powers, authorities and responsibilities
vested in the Board of Directors (the “Board”) of the Company and in duly
constituted committees of the Board under the Delaware General Corporation Law
and the Company’s Certificate of Incorporation and Bylaws, the Executive shall
have the responsibilities assigned to him by the President and Chief Executive
Officer of the Company, including the execution of the Company’s business plans,
and shall report to the President and Chief Executive Officer. The Executive
shall also perform such other executive and administrative duties as the
Executive may reasonably be expected to be capable of performing on behalf of
the Company and its subsidiaries, as may from time to time be authorized or
requested by the President. The Executive agrees to be employed by the Company
in all such capacities for the Employment Period, subject to all the covenants
and conditions hereinafter set forth.
Section 1.2. Faithful Performance. During the Employment Period, the Executive
shall perform faithfully the duties assigned to him hereunder to the best of his
abilities and devote substantially all of his business time and attention to the
transaction of the business of the Company and its subsidiaries. The Executive
covenants, warrants and represents to the Company that he shall: (i) devote his
best efforts to the fulfillment of his employment obligations; (ii) exercise the
highest degree of loyalty and the highest ethical standards of conduct in the
performance of his duties; and (iii) do nothing which the Executive knows or
should know will harm, in any way, the business or reputation of the Company or
any of its subsidiaries.

 

 

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ARTICLE 2
Compensation
Section 2.1. Basic Compensation. As compensation for his services hereunder, the
Company shall pay to the Executive during the Employment Period an annual salary
of $170,000 (the “Base Salary”) and $3,000 (the “Car Allowance”), payable in
installments in accordance with the Company’s normal payment schedule for senior
management of the Company and subject to payroll deductions as may be necessary
or customary in respect of the Company’s salaried employees. The Executive’s
annual salary and Car Allowance in effect from time to time under this
Section 2.1 is hereinafter called his “Basic Compensation”. Such Basic
Compensation shall be determined on a pro rata basis for any period described in
Article 3 which is not equal to one year.
Section 2.2. Discretionary Incentive Compensation. For 2007 and thereafter
Executive shall be eligible for bonuses based upon the achievement of certain
targeted financial results and operational and strategic objectives as
determined by the Compensation Committee as part of the 2007 annual budget and
subsequent budgets. Such targets and objectives shall be established in the
Company’s annual budget process, and any discretionary bonus payable hereunder
shall be payable within 30 days after finalization of the Company’s audited
financial statements for the immediately preceding fiscal year, subject to final
Board approval. Any discretionary bonus paid to Executive hereunder shall be
referred to herein as a “Discretionary Bonus.”
Section 2.3. Stock Options. The Executive previously received a grant of stock
options pursuant to that certain Grant of Non-Qualified Stock Options dated
August 1, 2006 pursuant to the MSG WC Holdings Corp. 2006 Stock Incentive Plan.
Section 2.4. Other Employee Benefits. The Executive shall be entitled to
participate in all employee benefit plans, including group health care plans,
disability plans and life insurance plans of the Company, to take up to three
weeks of time off for vacation and to receive all such fringe benefits
(including 401(k) savings plan) as are from time to time made generally
available to the senior management of the Company. The Company shall pay all
costs of the participation of Executive and the immediately family of Executive
in the group health care, vision and dental plans of the Company, except for
payment of co-payments and deductibles which shall be paid by Executive.
Section 2.5. Expense Reimbursements. The Company shall reimburse the Executive
for all proper expenses reasonably incurred by him in the performance of his
duties hereunder in accordance with the policies and procedures established by
the Board.
ARTICLE 3
Termination of Employment
Section 3.1. Events of Termination.
(a) In the event during the Employment Period there should occur any of the
following (as determined by the Board): (i) the “Disability” (as hereinafter
defined) of the Executive, (ii) “Cause” (as hereinafter defined) of the
Executive or (iii) the breach by the Executive of the terms of Article 4 of this
Agreement, the Board may elect to terminate the rights and obligations of the
parties hereunder by written notice to the Executive, except as otherwise
provided in this Section 3.1. In the event the Board exercises its election to
terminate the Executive pursuant to this Section 3.1, the Employment Period
shall terminate effective with such notice, and the Executive shall be entitled
to receive any accrued but unpaid amounts under Section 2.1 and any incurred but
unreimbursed expenses under Section 2.5, in each case through the effective date
of such termination, less standard withholdings for tax and social security
purposes. Except as set forth in Section 3.1(b) and as otherwise required under
any applicable benefit plan or statute, the Executive shall not be entitled to
receive any other amount under this Agreement.

 

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(b) In the case of (i) termination of this Agreement pursuant to
Section 3.1(a)(i), (ii) termination of this Agreement without Cause or
(iii) termination pursuant to Section 3.3 for “Good Reason”, the Executive shall
be entitled to: (A) participate in the insurance benefits described in
Section 2.4 for a period of 12 months from the date of the termination of this
Agreement (the “Termination Date”); provided, however, that the Executive’s
right to participate in insurance benefits shall terminate in the event the
Executive obtains new employment and has the ability to obtain comparable
insurance benefits through such new employment and (B) receive noncompetition
payments equal to the Basic Compensation, as determined pursuant to Section 2.1,
for a period of 12 months after the Termination Date in consideration for
Executive’s compliance with covenants set forth in Section 4.1. In each case
such amounts shall be payable in accordance with the Company’s payroll
procedures for senior management and as if the Executive’s employment had
continued for such period.
Section 3.2. Death. In the event of the death of the Executive during the
Employment Period, this Agreement shall be deemed immediately terminated and his
Designated Successors shall be entitled to: (A) receive any accrued and unpaid
compensation under Section 2.1, (B) receive reimbursement for any unreimbursed
expenses under Section 2.5, and (C) receive the Discretionary Bonus, if any, as
determined pursuant to Section 2.2, provided that the amount of such
Discretionary Bonus shall be prorated to the date of termination, in each case
less standard withholdings for tax and social security purposes. In each case,
such amounts shall be payable in accordance with the Company’s payroll
procedures for senior management and as if the Executive’s employment had
continued for such period. In addition, family members of the Executive who were
participating in any of the insurance benefits described in Section 2.4 on the
date of the termination of this Agreement shall continue to participate in such
insurance benefits for a period commencing as of the termination of this
Agreement and ending six months from the termination of this Agreement.
Section 3.3. Voluntary Termination by Employee. If the Executive chooses to
terminate his employment with the Company, the Executive shall provide written
notice to such effect to the Company’s Board, in which case the Employment
Period shall terminate effective with such notice, and the Executive shall be
entitled to receive any accrued but unpaid amounts under Section 2.1 and any
incurred but unreimbursed expenses under Section 2.5 less standard withholdings
for tax and social security purposes, in each case through the effective date of
such termination and, except as required under any applicable benefit plan or
statute, the Executive shall not be entitled to receive any other amount under
this Agreement. A termination by the Executive of his employment with the
Company will be considered to be for “Good Reason” if it follows, within a
reasonable period of time thereafter, (x) a material breach of the Company’s
obligations under this Agreement, or (y) the President and Chief Executive
Officer determines in his reasonable discretion that the Executive terminated
such employment for “Good Reason” under the circumstances then prevailing.

 

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Section 3.4. Definitions of Certain Terms.
(a) “Cause” used in connection with the termination of employment of Executive
shall mean a termination due to a finding by the Board in good faith that such
Executive has (i) failed to substantially perform Executive’s duties (as
reasonably imposed by the Company) (other than failure resulting from
Executive’s Disability), persisting for a reasonable period following the
delivery to Executive of written notice specifying the details of any alleged
failure to perform; (ii) violated or failed to comply in any material respect
with the Company’s published rules, regulations or policies, as currently in
effect or as may be adopted from time to time; (iii) breached this Agreement in
any material respect; (iv) been convicted of any felony offense or a misdemeanor
offense involving fraud, theft or dishonesty at any time; or (v) been
incarcerated during the term of this Agreement.
(b) “Designated Successors” shall mean such person or persons or the executors,
administrators or other legal representatives of such person or persons (and in
such order of priority) as the Executive may have designated in a written
instrument filed with the Secretary of the Company.
(c) “Disability” shall mean the inability of Executive to substantially render
to the Company the services required by the Company under this Agreement for
more than 60 days out of any consecutive 120 day period because of mental or
physical illness or incapacity, as determined in good faith by the Board. The
date of such Disability shall be on the last day of such 60 day period.
Disability shall also mean the development of any illness which is likely to
result in either death or Disability, as determined in good faith by the Board.
ARTICLE 4
Non-Competition; Confidential Information
Section 4.1 Non-Competition.
(a) From the date hereof until the termination of the Employment Period (subject
to extention as set forth below, the “Non-Competition Period”), the Executive:
(i) shall not engage, directly or indirectly, in any activities whether as
employer, proprietor, partner, shareholder (other than the holder of less than
5% of the stock of a corporation, the securities of which are traded on a
national securities exchange or in the over-the-counter market), director,
officer, employee or otherwise, in competition within the United States, England
and Canada with the Company or any of its affiliates;
(ii) shall not solicit, directly or indirectly, any person who is a customer or
supplier of the Company, any of its affiliates or Welsh, Carson, Anderson &
Stowe X, L.P. or its affiliates (collectively, “Welsh Carson”) for the purpose
of acquiring, marketing, leasing or selling storage containers, trailers or
mobile offices (the “Company Business”); and

 

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(iii) shall not induce or actively attempt to persuade any employee of the
Company, any of its affiliates or Welsh Carson to terminate his employment
relationship in order to enter into any competitive employment.
(b) Except as required by law, the Executive shall not, at any time during the
Non-Competition Period or thereafter, make use of any confidential information
of the Company, Welsh Carson or any of their respective affiliates, nor divulge
any trade secrets or proprietary or confidential information of the Company,
Welsh Carson or any of their respective affiliates (including, without
limitation, information relating to customers, suppliers, contracts, business
plans and developments, discoveries, processes, products, systems, know-how,
books and records), except to the extent that such information becomes a matter
of public record (other than as a result of disclosure by the Executive), is
published in a newspaper, magazine or other periodical available to the general
public or as Welsh Carson may so authorize in writing. When the Executive shall
cease to be employed by the Company, the Executive shall surrender to the
Company or Welsh Carson all records and other documents obtained by him or
entrusted to him during the course of his employment hereunder (together with
all copies thereof) which pertain to the business of the Company or Welsh Carson
or which were paid for by the Company other than the Executive’s counterparts of
this Agreement and employment-related documents referred to herein.
(c) The covenants contained in clauses (i) and (ii) of Section 4.1(a) shall
apply within all territories in which the Company is actively engaged in the
conduct of business during the Non-Competition Period.
(e) It is the desire and intent of the parties that the provisions of
Sections 4.1(a) and 4.1(b) shall be enforced to the fullest extent permissible
under the law and public policies applied in each jurisdiction in which
enforcement is sought. Accordingly, if any particular provision of
Sections 4.1(a) or 4.1(b) shall be adjudicated to be invalid or unenforceable,
such provision shall be deemed amended to delete therefrom the portion thus
adjudicated to be invalid or unenforceable, such deletion to apply only with
respect to the operation of such provision in the particular jurisdiction in
which such adjudication is made. In addition, should any court determine that
the provisions of Sections 4.1(a) or 4.1(b) shall be unenforceable with respect
to scope, duration or geographic area, such court shall be empowered to
substitute, to the extent enforceable, provisions similar hereto or other
provisions so as to provide to the Company and Welsh Carson, to the fullest
extent permitted by applicable law, the benefits intended by Sections 4.1(a) and
4.1(b).
(f) The covenants contained in Section 4.1(b) shall survive the conclusion of
the Executive’s employment by the Company and/or his service as an officer of
the Company.
(g) If, at any time, the Executive sells or transfers any securities of the
Company to the Company or to any then-current stockholder of the Company, a
subsequent Non-Competition Period shall begin on the effective date of any such
sale or transfer and expire on the first anniversary of such effective date;
provided, however, that such subsequent Non-Competition Periods shall not extend
beyond the tenth (10th) anniversary of the date hereof. Each and every provision
of this Agreement applicable to the Executive and the Company during the
original Non-Competition Period shall apply with equal force and effect to the
Executive and the Company during such subsequent Non-Competition Period and any
reference in this Agreement to the “Non-Competition Period” shall be deemed to
include such subsequent Non-Competition Period.

 

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(h) In the event Executive violates any provision of this Agreement, the running
of the time period of such provisions so violated shall be automatically
suspended upon the date of such violation and shall resume on the date such
violation ceases and all appeals, if any, are resolved.
(i) The Executive acknowledges and agrees that the covenants, obligations and
agreements of the Executive contained herein relate to special, unique and
extraordinary matters and that a violation of any of the terms of such
covenants, obligations or agreements will cause the Company and its successors
irreparable injury for which adequate remedies are not available at law. In the
event of a breach or threatened breach by Executive of any provision of this
Agreement, the Company and its successors, without proving actual damages, shall
be entitled to an injunction (without the requirement to post bond) restraining
Executive from (a) soliciting or interfering with employees, consultants,
independent contractors, customers or suppliers of the Company, its affiliates
or their respective successors, (b) disclosing, in whole or in part, the
private, secret and confidential information described herein, or from rendering
any services to any person, firm, corporation, association or other entity to
whom such information has been disclosed, or is threatened to be disclosed,
(c) engaging, participating or otherwise being connected with any arrangement in
competition with the Company’s Business described in Section 4.1 or (d)
otherwise violating the provisions of this Agreement. Nothing herein contained
shall be construed as prohibiting the Company or its successors from pursuing
any other remedies available to it or them for such breach or threatened breach,
including, without limitation, the recovery of damages from Executive.
(j) The Executive acknowledges and agrees that he has and will have a prominent
role in the management, and the development of the goodwill, of the Company and
its affiliates and has and will establish and develop relations and contacts
with the principal customers and suppliers of the Company and its affiliates in
the United States and the rest of the world, if any, all of which constitute
valuable goodwill of, and could be used by the Executive to compete unfairly
with, the Company and its affiliates and that (i) the Executive has obtained
confidential and proprietary information and trade secrets concerning the
business and operations of the Company and its affiliates in the United States
and the rest of the world that could be used to compete unfairly with the
Company and its affiliates, (ii) the covenants and restrictions contained herein
are intended to protect the legitimate interests of the Company and its
affiliates in their respective goodwill, trade secrets and other confidential
and proprietary information and (iii) the Executive desires to be bound by such
covenants and restrictions.
(k) The Executive represents that his economic means and circumstances are such
that the provisions of this Agreement, including the restrictive covenants
herein, will not prevent him from providing for himself and his family on a
basis satisfactory to him and them.

 

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(l) If the Executive raises any question as to the enforceability of any part or
terms of this Agreement, including, without limitation, the restrictive
covenants contained herein, the Executive agrees that he will comply fully with
this Agreement unless and until the entry of an award to the contrary.
ARTICLE 5
Miscellaneous
Section 5.1. Notices. Any notice or request required or permitted to be given
hereunder shall be sufficient if in writing and delivered personally or sent by
registered or certified mail, return receipt requested, as follows: if to the
Executive, to his address as set forth in the records of the Company, and if to
the Company, to the Company’s address hereinabove set forth, or to any other
address designated by either party by notice similarly given. Such notice shall
be deemed to have been given upon the personal delivery or such mailing thereof,
as the case may be.
Section 5.2. Authority: No Conflict. The Executive represents and warrants to
the Company that he has full right and authority to execute and deliver this
Agreement and to comply with the terms and provisions hereof and that the
execution and delivery of this Agreement and compliance with the terms and
provisions hereof by the Executive will not conflict with or result in a breach
of the terms, conditions or provisions of any agreement, restriction or
obligation by which the Executive is bound.
Section 5.3. Assignment and Succession. The rights and obligations of the
Company under this Agreement shall inure to the benefit of and be binding upon
its respective successors and assigns, and the Executive’s rights and
obligations hereunder shall inure to the benefit of and be binding upon his
Designated Successors. The Executive may not assign any obligations or
responsibilities he has under this Agreement.
Section 5.4. Headings. The Article, Section, paragraph and subparagraph headings
are for convenience of reference only and shall not define or limit the
provisions hereof.
Section 5.5. Tax Withholding. The Company may withhold from any amounts payable
under this Agreement, including, without limitation, any Discretionary Bonus
paid hereunder, all Federal, state, city or other taxes as may be required
pursuant to any law, regulation or ruling.
Section 5.6. Applicable Law. This Agreement shall at all times be governed by
and construed, interpreted and enforced in accordance with the internal laws (as
opposed to conflict of laws provisions) of the State of Illinois.
Section 5.7. Waiver. No waiver of any right or remedy of either party hereto
under this Agreement shall be effective unless in a writing, specifying such
waiver, executed by such party. A waiver by either party hereto of any of its
rights or remedies under this Agreement on any occasion shall not be a bar to
the exercise of the same right or remedy on any subsequent occasion or of any
other right or remedy at any time.

 

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Section 5.8. Amendment or Modification. This Agreement may be amended, altered,
or modified only by a writing, specifying such amendment, alteration or
modification, executed by all of the parties.
Section 5.9. Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original, but all of which shall constitute one and
the same instrument.
Section 5.10. Entire Agreement. This Agreement constitutes the entire Agreement
between the parties regarding the subject matter hereof, and supersedes all
prior or contemporaneous negotiations, understandings or agreements of the
parties, whether written or oral, with respect to such subject matter.

 

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IN WITNESS WHEREOF, the Company has caused this Agreement to be signed by its
respective duly authorized officer and the Executive has signed this Agreement
as of the day and year first above written.

              EXECUTIVE
 
       
 
                  Jeffrey A. Kluckman
 
            COMPANY
 
       
 
  By:    
 
       
 
      Douglas A. Waugaman
 
      President & Chief Executive Officer

 

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