Exhibit 10.28


EMPLOYMENT AGREEMENT


This EMPLOYMENT
AGREEMENT made and entered into to be effective as of July 14, 2005, is by and
between Extra Space Management, Inc. with its principal place of business at
2795 East Cottonwood Parkway, Suite 400, Salt Lake City, Utah 84121 (the “Company”),
and Karl Haas, residing at the address set forth on the signature page hereof
(the “Executive”).


WHEREAS,
the Company wishes to employ the Executive, and the Executive wishes to accept
such offer, on the terms set forth below:


Accordingly,
the parties hereto agree as follows:


1.             Term.  The Company hereby employs the Executive, and
the Executive hereby accepts such employment, for an initial term (the “Initial
Term”) commencing as of the date hereof and continuing for a three-year period,
unless sooner terminated in accordance with the provisions of Section 4 or
Section 5; with such employment to continue for successive one-year periods in
accordance with the terms of this Agreement (subject to termination as
aforesaid) unless either party notifies the other party of non-renewal in
writing prior to 90 days before the expiration of the Initial Term and each
annual renewal, as applicable (the period during which the Executive is
employed hereunder being hereinafter referred to as the “Term”).


2.             Duties.  During the Term, the Executive shall be
employed by the Company as Senior Vice President, Operations of the Company,
and, as such, the Executive shall faithfully perform for the Company the duties
of said office and shall perform such other duties of an executive, managerial
or administrative nature as shall be specified and designated from time to time
by the Board (including, without limitation, the performance of duties for
affiliates and subsidiaries of the Company). 
The Executive shall devote substantially all of his business time













 


and
effort to the performance of his duties hereunder; provided that in no event
shall this sentence prohibit the Executive from performing personal and
charitable activities, and any other business interests as may be approved by
the Board.


3.             Compensation.


3.1           Salary.  The
Company shall pay the Executive during the Term a salary at the rate of
$250,000 per annum (the “Annual Salary”), in accordance with the customary
payroll practices of the Company applicable to senior executives (or, if there
is no such policy, such practices of the Company’s principal affiliates).  At least annually, the Company shall review
the Executive’s Annual Salary and may provide for increases therein as it may
in its discretion deem appropriate, but in no event shall the Executive’s
Annual Salary be reduced during the Term.


3.2           Bonus. 
During the Term, in addition to the Annual Salary, for each fiscal year
of the Company ending during the Term, the Executive shall have the opportunity
to receive an annual bonus in an amount to be determined by the Company. The
target bonus level for the Executive is 45% of base salary, with said target
capable of being increased, but not decreased, during the Term.  At least annually, the Company shall review
the Executive’s bonus and may provide for changes therein as it may in its
discretion deem appropriate.


3.3           Benefits - In General.  The Executive shall be permitted during the
Term to participate in any group life, hospitalization or disability insurance
plans, health programs, stock option plans, retirement plans, fringe benefit
programs and similar benefits that may be available to other senior executives
of the Company generally, on the same terms as such other executives, in each
case to the extent that the Executive is eligible under the terms of such plans
or programs.  Executive has been granted
a Restricted Stock Award pursuant to that Agreement



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attached hereto as
Exhibit “A” and stock options pursuant to the Option Award Agreement attached
hereto as Exhibit “B”


3.4           Expenses. 
The Company shall pay or reimburse the Executive for all ordinary and
reasonable out-of-pocket expenses actually incurred (and, in the case of
reimbursement, paid) by the Executive during the Term in the performance of the
Executive’s services under this Agreement; provided that the Executive submits
proof of such expenses, with the properly completed forms as prescribed from
time to time by the Company, no later than 60 days after such expenses have been
so incurred.


3.5           Moving Expenses.  The Company shall pay or reimburse the
Executive for all direct expenses associated with relocating, including, but
not limited to,  the costs associated
with the sale of Executive’s home (inclusive of the brokerage commission),
packing and moving services, travel to Salt Lake City, the costs associated
with the purchase of a new home (except the actual price of the home).  All reimbursements shall be in accordance
with plan in effect at Storage USA before acquisition by the Company. All
reimbursement costs will be “grossed-up” to compensate for any tax consequences
applicable to the Executive. For purposes of “gross up” the Company shall
multiply the reimbursement costs by the sum of 1.0 plus the maximum percentage
marginal state plus federal tax rates (inclusive of the rates for Social
Security taxes, if not yet paid for the applicable year, and Medicaid) applying
to the Executive (as an example, if reimbursement costs aggregate $100,000, and
the highest marginal tax rates are 35% federal, 9% state, and 1.45% for
Medicaid—Social Security assumed to be paid for the year—the grossed-up
reimbursement shall be $145,450).   The Company shall also pay or
reimburse the Executive for the costs associated with renting an apartment (up
to 3 bedrooms) and rented furnishings within



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15 miles of the
Company headquarters for up to one year. 
All such costs will be grossed up in the manner described above to
compensate the Executive for any tax consequences.


4.             Termination upon Death or
Disability.  If the Executive dies
during the Term, the Term shall terminate as of the date of death, and the
obligations of the Company to or with respect to the Executive shall terminate
in their entirety upon such date except as otherwise provided under this
Section 4.  If the Executive by virtue of
ill health or other disability is unable to perform substantially and
continuously the duties assigned to him for more than 180 consecutive or
non-consecutive days out of any consecutive 12-month period, the Company shall
have the right, to the extent permitted by law, to terminate the employment of
the Executive upon 90-day notice in writing to the Executive.  Upon termination of employment due to death
or disability, (i) the Executive (or the Executive’s estate or beneficiaries in
the case of the death of the Executive) shall be entitled to receive any Annual
Salary and other benefits earned and accrued under this Agreement prior to the
date of termination (and reimbursement under this Agreement for expenses
incurred prior to the date of termination), and (ii) except as otherwise
required under applicable law, the Executive (or, in the event of his death,
his estate and beneficiaries) shall have no further rights to any other
compensation or benefits hereunder on or after the termination of employment,
or any other rights hereunder.


5.             Certain Terminations of
Employment.


5.1           Termination by the Company for Cause; Termination by
the Executive without Good Reason.


(a)           For purposes of this Agreement, “Cause” shall mean the
Executive’s:



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(i)            commission of and indictment for, or
formal admission to, a felony, a crime of moral turpitude, dishonesty, breach
of trust or unethical business conduct, or any crime involving the Company;


(ii)           engagement in the performance of his
duties hereunder, or otherwise to the material and demonstrable detriment of
the Company, in willful misconduct, willful or gross neglect, fraud,
misappropriation or embezzlement;


(iii)          repeated failure to adhere to the
directions of the Board, to adhere to the Company’s policies and practices or
to devote substantially all of his business time and efforts to the Company


(iv)          willful
and continued failure to substantially perform his duties properly assigned to
him (other than any such failure resulting from his disability) after demand
for substantial performance is delivered by the Company specifically
identifying the manner in which the Company believes the Executive has not
substantially performed such duties;


(v)           breach of any of the provisions of
Section 6; or


(vi)          breach in any material respect of the
terms and provisions of this Agreement and failure to cure such breach within
21 days following written notice from the Company specifying such breach;


provided that the Company shall not be permitted to
terminate the Executive for Cause except on written notice given to the
Executive at any time following the occurrence of any of the events described
in clauses (i), (ii) or (v) above and on written notice given to the Executive
at any time not more than 30 days following the occurrence of any of the events
described in clause (iii), (iv) or (vi) above (or, if later, the Company’s
knowledge thereof).  No termination for
Cause shall be effective unless the Board makes a Cause determination after
notice to the Executive and the Executive has been provided with the
opportunity (with counsel of his choice) to contest the determination at a
meeting of the Board.


(b)           The
Company may terminate the Executive’s employment hereunder for Cause, and the
Executive may terminate his employment for Good Reason on at least 30 days’ and
not more than 60 days’ written notice given to the Company.  If the Company terminates the


 



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Executive for
Cause, or the Executive terminates his employment and the termination by the
Executive is not for Good Reason in accordance with Section 5.2 or covered by
Section 5.3, (i) the Executive shall receive Annual Salary and other benefits
(but, in all events, and without increasing the Executive’s rights under any
other provision hereof, excluding any bonuses not yet paid) earned and accrued
under this Agreement prior to the termination of employment (and reimbursement
under this Agreement for expenses incurred prior to the termination of
employment); and (ii) except as otherwise required under applicable law, the
Executive shall have no further rights to any other compensation or benefits
hereunder on or after the termination of employment, or any other rights
hereunder.


5.2           Termination
by the Company without Cause; Termination by the Executive for Good Reason.


(a)           For
purposes of this Agreement, “Good Reason” shall mean, unless otherwise
consented to by the Executive,


(i)            the material reduction of the
Executive’s authority, duties and responsibilities, or the assignment to the
Executive of duties materially inconsistent with the Executive’s position or
positions with the Company; Or the Executive being required to report to
someone other then Kenneth M. Woolley, Kent Christensen, or Spencer Kirk.


(ii)           a
reduction in Target Bonus applying to or Annual Salary of the Executive;


(iii)          the relocation of the Executive’s
office to more than 100 miles from Salt
Lake City, Utah; or


(iv)          the Company’s material and willful
breach of this Agreement.


Notwithstanding the foregoing, (i) Good Reason shall
not be deemed to exist unless notice of termination on account thereof
(specifying a termination date no later than 30 days from the date of such
notice) is given by Executive to Company no later than 30 days after the time
at which



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the event or condition purportedly giving rise to Good
Reason first occurs or arises and (ii) if there exists (without regard to this
clause (ii)) an event or condition that constitutes Good Reason, the Company
shall have 21 days from the date notice of such a termination is given to cure
such event or condition and, if the Company does so, such event or condition
shall not constitute Good Reason hereunder.


(b)           During the Initial Term, the Company may terminate the
Executive’s employment at any time for any reason or no reason and the
Executive may terminate the Executive’s employment with the Company for Good
Reason.  If the Company terminates the
Executive’s employment and the termination is not covered by Section 4, 5.1 or
5.3, or the Executive terminates his employment for Good Reason and the
termination by the Executive is not covered by Section 5.3, (i) the Executive
shall receive Annual Salary and other benefits earned and accrued under this
Agreement prior to the termination of employment (and reimbursement under this
Agreement for expenses incurred prior to the termination of employment); (ii)
the Executive shall receive (A) a cash payment equal to two times the sum of
(x) the Executive’s Annual Salary (as in effect on the effective date of such
termination) payable no later than 30 days after such termination and (y) an
amount equal to the previous Annual Bonuses received by the Executive as
provided for in Section 3.2, or, in the event the Executive has not received
any Annual Bonuses pursuant to Section 3.2 at the time of such termination, the
Termination Bonus shall be equal to the Annual Bonus the Executive would have
received under Section 3.2 if the Executive would have remained employed
through the period required to be entitled to receive the Annual Bonus and
satisfied all target performance objectives, payable no later than 30 days
after such termination (or, if later, as soon as practicable, but in no event
more than 30 days after, the amount of the Termination Bonus is known) and (B)
for a period of two



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years after
termination of employment such continuing health benefits (including any
medical, vision or dental benefits), under the Company’s health plans and
programs applicable to senior executives of the Company generally as the
Executive would have received under this Agreement (and at such costs to the
Executive) as would have applied in the absence of such termination (but not
taking into account any post-termination increases in Annual Salary that may
otherwise have occurred without regard to such termination and that may have
favorably affected such benefits); and after said two-year period of continued
benefits, Executive shall be entitled to participate in COBRA programs made
available to separated employees; (iii) all outstanding unvested options and
restricted stock held by the Executive shall vest and become immediately
exercisable and shall otherwise be exercisable in accordance with their terms
and the Executive shall become vested in any pension or other deferred
compensation other than pension or deferred compensation under a plan intended
to be qualified under Section 401(a) or 403(a) of the Internal Revenue Code of
1986, as amended; and (iv) except as otherwise required under applicable law,
the Executive shall have no further rights to any other compensation or
benefits hereunder on or after the termination of employment, or any other
rights hereunder.


(c)           Notwithstanding
clause (ii)(B) of the second sentence of Section 5.2(b), (i) nothing herein
shall restrict the ability of the Company to amend or terminate the plans and
programs referred to in such clause (ii)(B) from time to time in its sole
discretion, and (ii) the Company shall in no event be required to provide any
benefits otherwise required by such clause (ii)(B) after such time as the
Executive becomes entitled to receive benefits of the same type from another
employer or recipient of the Executive’s services (such entitlement being
determined without regard to any individual waivers or other similar
arrangements).


5.3           Change of Control.



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(a)           Without duplication of the foregoing,
upon a “Change in Control” (as defined below) while the Executive is employed,
all outstanding unvested equity-based awards (including, but not limited to,
stock options and restricted stock) shall fully vest and become immediately
exercisable, as applicable.  In addition,
if, after a Change in Control, the Executive terminates his employment with the
Company for any reason as of the one year 
anniversary of the Change in Control, such termination shall be deemed a
termination by the Executive for Good Reason covered by Section 5.2, provided,
that the Executive provides no less than 30 days’ advance written notice to the
Company.


(b)           For
purposes of this Agreement, “Change in Control” shall have the same meaning as
in the Extra Space Storage Inc. 2004 Long Term Incentive Compensation Plan (or
any successor plan thereof).


6.             Covenants of the Executive.


6.1           Covenant Against Competition; Other Covenants.  The Executive acknowledges that (i) the
principal business of the Company (which expressly includes for purposes of
this Section 6 (and any related enforcement provisions hereof), its successors
and assigns) is the development, acquisition, operation, management or
investment in self-storage facilities (such businesses, and any and all other
businesses that after the date hereof, and from time to time during the Term,
become material with respect to the Company’s then-overall business, herein
being collectively referred to as the “Business”); (ii) the Company is one
of the limited number of persons who have developed such a business;
(iii) the Company’s Business is, in part, national in scope; (iv) the
Executive’s work for the Company has given and will continue to give him access
to the confidential affairs and proprietary information of the Company;
(v) the covenants and agreements of the Executive contained in this
Section 6 are essential to the



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business and
goodwill of the Company; and (vi) the Company would not have entered into this
Agreement but for the covenants and agreements set forth in this Section
6.  Accordingly, the Executive covenants
and agrees that:


(a)           By and in consideration of the salary and benefits to be
provided by the Company hereunder, including the severance arrangements set
forth herein, and further in consideration of the Executive’s exposure to the
proprietary information of the Company, the Executive covenants and agrees that
(i) during such time as the Executive remains employed by the Company, he shall
not engage in the Restricted Activities (as defined below) and (ii) during the
period commencing on the date of termination of the Executive’s employment by
the Company for cause or by the Executive without Good Reason and ending
two  years following the date upon which
the Executive shall cease to be an employee of the Company and its affiliates,
he shall not within 5 miles of any facility maintained by the Company, directly
or indirectly, (i) engage in any element of the Business (other than for
the Company or its affiliates) or otherwise compete with the Company or its
affiliates, (ii) render any services to any person, corporation,
partnership or other entity (other than the Company or its affiliates) engaged
in any element of the Business, or (iii) become interested in any such
person, corporation, partnership or other entity (other than the Company or its
affiliates) as a partner, shareholder, principal, agent, employee, consultant
or in any other relationship or capacity (such activities set forth in Clauses
(A through (C) above collectively referred to as the “Restricted Activities”);
provided, however, that, notwithstanding the foregoing, the Executive may
invest in securities of any entity, solely for investment purposes and without
participating in the business thereof, if (1) such securities are traded on any
national securities exchange or the National Association of Securities Dealers,
Inc. Automated Quotation System, (2) the Executive is not a controlling


 



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person of, or a
member of a group which controls, such entity and (3) the Executive does
not, directly or indirectly, own 5% or more of any class of securities of such
entity. These provisions pertaining to Restricted Activities for the two year
period after the executive leaves the employ of the Company shall only apply if
the executive receives severance payments and benefits. They shall not apply if
no such payments are made to the executive.


(b)         During and after the
Restricted Period, the Executive shall keep secret and retain in strictest
confidence, and shall not use for his benefit or the benefit of others, except
in connection with the business and affairs of the Company and its affiliates,
all confidential matters relating to the Company’s Business and the business of
any of its affiliates and to the Company and any of its affiliates, learned by
the Executive heretofore or hereafter directly or indirectly from the Company
or any of its affiliates (the “Confidential Company Information”),  and shall not disclose such Confidential
Company Information to anyone outside of the Company except with the Company’s
express written consent and except for Confidential Company Information which
is at the time of receipt or thereafter becomes publicly known through no
wrongful act of the Executive or is received from a third party not under an
obligation to keep such information confidential and without breach of this
Agreement.  For the purposes of this
Agreement, “Restricted Period” shall mean the period commencing on the first
day of the Initial Term and ending one year following the date upon which the
Executive shall cease to be an employee of the Company and its affiliates.  Company
acknowledges that Executive is an experienced self-storage industry professional
with more than 18 years of experience prior to his employment by the Company.
Executive possesses knowledge and intellectual property that was acquired
preceding his employment by the Company.  
Therefore, should Company claim that Executive has breached this
Section, it shall have the burden of conclusively proving that the Executive’s
failure to maintain some aspect of the Confidential Company Information
involved information that the Executive could not possibly have obtained from
experiences preceding its employment by the Company.  If Company cannot prove that the standard in
the preceding sentence has been achieved, Executive shall not be deemed to have
breached this Section.


(c)           During the Restricted Period, the Executive shall not,
without the Company’s prior written consent, directly or indirectly, (i)
solicit or encourage to leave the employment or other service of the Company,
or any of its affiliates, any employee or independent contractor thereof or
(ii) hire (on behalf of the Executive or any other person or entity) any
employee or independent contractor who has left the employment or other service
of



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the Company or any
of its affiliates within the one-year period which follows the termination of
such employee’s or independent contractor’s employment or other service with
the Company and its affiliates.  From the
date hereof through the end of the one-year period commencing with the
Executive’s termination of employment with the Company, the Executive will not,
whether for his own account or for the account of any other person, firm,
corporation or other business organization, intentionally interfere with the
Company’s or any of its affiliates’ relationship with, or endeavor to entice
away from the Company or any of its affiliates, any person who during the Term
is or was a customer or client of the Company or any of its affiliates.  While the Executive’s non-compete obligations
under Section 6.1(a) are in effect, except as required by law, the Executive
shall not publish any statement or make any statement under circumstances
reasonably likely to become public that is critical of the Company or any of
its affiliates, or in any way adversely affecting or otherwise maligning the
Business or reputation of the Company or any of its affiliates.


(d)           All memoranda, notes, lists, records, property and any
other tangible product and documents (and all copies thereof), whether visually
perceptible, machine-readable or otherwise, made, produced or compiled by the
Executive or made available to the Executive concerning the business of the
Company or its affiliates, (i) shall at all times be the property of the
Company (and, as applicable, any affiliates) and shall be delivered to the
Company at any time upon its request, and (ii) upon the Executive’s termination
of employment, shall be immediately returned to the Company (at the Company’s
expense, should there be an expense).


6.2           Rights and Remedies upon Breach.


(a)           The Executive acknowledges and agrees that any breach by
him of any of the provisions of Section 6.1 (the “Restrictive Covenants”) would
result in irreparable injury and



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damage for which
money damages would not provide an adequate remedy.  Therefore, if the Executive breaches, or
threatens to commit a breach of, any of the provisions of Section 6.1, the
Company and its affiliates shall have the following rights and remedies, each
of which rights and remedies shall be independent of the other and severally
enforceable, and all of which rights and remedies shall be in addition to, and
not in lieu of, any other rights and remedies available to the Company and its
affiliates under law or in equity (including, without limitation, the recovery
of damages), shall have the right and remedy to have the Restrictive Covenants
specifically enforced (without posting bond and without the need to prove
damages) by any court having equity jurisdiction, including, without
limitation, the right to an entry against the Executive of restraining orders
and injunctions (preliminary, mandatory, temporary and permanent) against
violations, threatened or actual, and whether or not then continuing, of such
covenants.


(b)           The Executive agrees that in any action seeking specific
performance or other equitable relief, he will not assert or contend that any
of the provisions of this Section 6 are unreasonable or otherwise
unenforceable.  The existence of any
claim or cause of action by the Executive, whether predicated on this Agreement
or otherwise, shall not constitute a defense to the enforcement of the
Restrictive Covenants.


7.             Other Provisions.


7.1           Severability. 
The Executive acknowledges and agrees that (i) he has had an
opportunity to seek advice of counsel in connection with this Agreement and
(ii) the Restrictive Covenants are reasonable in geographical and temporal
scope and in all other respects.  If it
is determined that any of the provisions of this Agreement, including, without
limitation, any of the Restrictive Covenants, or any part thereof, is invalid
or unenforceable, the



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remainder of the
provisions of this Agreement shall not thereby be affected and shall be given
full effect, without regard to the invalid portions.


7.2           Duration and Scope of Covenants.  If any court or other decision-maker of
competent jurisdiction determines that any of the Executive’s covenants
contained in this Agreement, including, without limitation, any of the
Restrictive Covenants, or any part thereof, is unenforceable because of the
duration or geographical scope of such provision, then, after such
determination has become final and unappealable, the duration or scope of such
provision, as the case may be, shall be reduced so that such provision becomes
enforceable and, in its reduced form, such provision shall then be enforceable
and shall be enforced.


7.3           Enforceability; Jurisdiction; Arbitration.


(a)           The Company and the Executive intend
to and hereby confer jurisdiction to enforce the Restrictive Covenants set
forth in Section 6 upon the courts of any jurisdiction within the geographical
scope of the Restrictive Covenants.  If
the courts of any one or more of such jurisdictions hold the Restrictive
Covenants wholly unenforceable by reason of breadth of scope or otherwise it is
the intention of the Company and the Executive that such determination not bar
or in any way affect the Company’s right, or the right of any of its
affiliates, to the relief provided above in the courts of any other
jurisdiction within the geographical scope of such Restrictive Covenants, as to
breaches of such Restrictive Covenants in such other respective jurisdictions,
such Restrictive Covenants as they relate to each jurisdiction’s being, for
this purpose, severable, diverse and independent covenants, subject, where
appropriate, to the doctrine of res  judicata.  The parties hereby agree to waive any right
to a trial by jury for any and all disputes hereunder (whether or not relating
to the Restricted Covenants).



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(b)           Any controversy or claim arising out
of or relating to this Agreement or the breach of this Agreement (other than a
controversy or claim arising under Section 6, to the extent necessary for the
Company (or its affiliates, where applicable) to avail itself of the rights and
remedies referred to in Section 6.2) that is not resolved by the Executive and
the Company (or its affiliates, where applicable) shall be submitted to
arbitration in Salt Lake City, Utah in accordance with Utah law and the
procedures of the American Arbitration Association.  The determination of the arbitrator(s) shall
be conclusive and binding on the Company (or its affiliates, where applicable)
and the Executive and judgment may be entered on the arbitrator(s)’ award in
any court having jurisdiction.


7.4           Notices.  Any
notice or other communication required or permitted hereunder shall be in
writing and shall be delivered personally, telegraphed, telexed, sent by
facsimile transmission or sent by certified, registered or express mail,
postage prepaid.  Any such notice shall
be deemed given when so delivered personally, telegraphed, telexed or sent by
facsimile transmission or, if mailed, five days after the date of deposit in
the United States mails as follows:


(i)            If to the Company, to:


Extra Space Storage Inc.


2795 East Cottonwood
Parkway, Suite 400


Salt Lake City, Utah
84121


Attention:  Sr. Vice-President, Human Resources


(ii)           If to the Executive, to:


Karl Haas


[at the address set forth on the signature page
hereof]


 



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Any such person may by notice given in accordance with
this Section 7.4 to the other parties hereto designate another address or
person for receipt by such person of notices hereunder.


7.5           Entire Agreement. 
This Agreement contains the entire agreement between the parties with
respect to the subject matter hereof and supersedes all prior agreements,
written or oral, with respect thereto.


7.6           Waivers and Amendments.  This Agreement may be amended, superseded,
canceled, renewed or extended, and the terms hereof may be waived, only by a
written instrument signed by the parties or, in the case of a waiver, by the
party waiving compliance.  No delay on
the part of any party in exercising any right, power or privilege hereunder
shall operate as a waiver thereof, nor shall any waiver on the part of any
party of any such right, power or privilege nor any single or partial exercise
of any such right, power or privilege, preclude any other or further exercise
thereof or the exercise of any other such right, power or privilege.


7.7           GOVERNING LAW. 
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF UTAH WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.


7.8           Assignment. 
This Agreement, and the Executive’s rights and obligations hereunder,
may not be assigned by the Executive; any purported assignment by the Executive
in violation hereof shall be null and void. 
In the event of any sale, transfer or other disposition of all or
substantially all of the Company’s assets or business, whether by merger,
consolidation or otherwise, the Company may assign this Agreement and its
rights hereunder.


7.9           Withholding. 
The Company shall be entitled to withhold from any payments or deemed
payments any amount of tax withholding required by law.



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7.10         No Duty to Mitigate.    Except as may be provided in Section
5.2(c)(ii), the Executive shall not be required to mitigate damages or the
amount of any payment provided for under this Agreement by seeking other
employment or otherwise, nor will any payments hereunder be subject to offset
in the event the Executive does mitigate.


7.11         Binding Effect. 
This Agreement shall be binding upon and inure to the benefit of the
parties and their respective successors, permitted assigns, heirs, executors
and legal representatives.


7.12         Counterparts. 
This Agreement may be executed by the parties hereto in separate
counterparts, each of which when so executed and delivered shall be an original
but all such counterparts together shall constitute one and the same instrument.  Each counterpart may consist of two copies
hereof each signed by one of the parties hereto.


7.13         Survival. 
Anything contained in this Agreement to the contrary notwithstanding,
the provisions of Sections 6, 7.3 and 7.9, and the other provisions of this
Section 7 (to the extent necessary to effectuate the survival of Sections 6,
7.3 and 7.9), shall survive termination of this Agreement and any termination
of the Executive’s employment hereunder.


7.14         Existing Agreements. 
The Executive represents to the Company that he is not subject or a
party to any employment or consulting agreement, non-competition covenant or
other agreement, covenant or understanding which might prohibit him from
executing this Agreement or limit his ability to fulfill his responsibilities
hereunder.


7.15         Headings.  The
headings in this Agreement are for reference only and shall not affect the
interpretation of this Agreement.



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7.16         Parachutes.           If
any amount payable to or other benefit receivable by the Executive pursuant to
this Agreement is deemed to constitute a Parachute Payment (as defined below),
alone or when added to any other amount payable or paid to or other benefit
receivable or received by the Executive which is deemed to constitute a
Parachute Payment (whether or not under an existing plan, arrangement or other
agreement), and would result in the imposition on the Executive of an excise
tax under Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”),
then, in addition to any other benefits to which the Executive is entitled
under this Agreement, the Executive shall be paid by the Company an amount in
cash equal to the sum of the excise taxes payable by the Executive by reason of
receiving Parachute Payments plus the amount necessary to put the Executive in
the same after-tax position (taking into account any and all applicable
federal, state and local excise, income or other taxes at the highest
applicable rates on such Parachute Payments and on any payments under this
Section 7.16; at minimum this means that the payment shall be “grossed-up” as
described in Section 3.5, taking into account any additional taxes that the
Executive may owe due to any Parachute Payment) as if no excise taxes had been
imposed with respect to Parachute Payments. 
“Parachute Payment” shall mean a “parachute payment” as defined in
Section 280G of the Code.  The amount of
any payment under this Section 7.16 shall be computed by a certified public
accounting firm selected by the Company and reasonably acceptable to the Executive,
subject to the last sentence of this Section 7.16.  Notwithstanding any other provision of this
Section 7.16, if a reduction in Parachute Payments by 10% or less would cause
there not to be excise taxes imposed upon the Executive under Section 4999 of
the Code (as determined by the accounting firm referred to above, but subject
to the last sentence of this Section 7.16), then (i) no payments shall be made
to the Executive under the foregoing provisions of this Section 7.16, and (ii)
the payments and



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benefits provided
under this Agreement shall be reduced to the extent necessary so that no excise
taxes would be imposed upon the Executive. In the event that the Internal
Revenue Service or a court, as applicable, finally and in a decision that has
become unappealable, decides that the determinations by the accounting firm
under this Section 7.16 are incorrect, then the parties shall within five
business days take such corrective actions as are necessary to conform to such
final decision; provided that (i) the Executive shall not initiate any
proceeding or other contests regarding these matters, other than at the
direction of the Company, and shall provide notice to the Company of any
proceeding or other contest regarding these matters initiated by the Internal
Revenue Service, and (ii) the Company shall be entitled to direct and control
all such proceeding and other contests, if it commits to and does pay all costs
(including without limitation legal and other professional fees) associated
therewith.


IN WITNESS WHEREOF, the parties hereto have executed
this Agreement this 26th day of July, 2006.


	
  

  	
  COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  EXTRA SPACE STORAGE INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kenneth M. Woolley

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Kenneth M. Woolley

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  EXECUTIVE

  
	
   

  	
   

  
	
   

  	
   

  	
  /s/ Karl Haas

  
	
   

  	
   

  	
  Karl Haas

  
				



 



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