<PAGE>
                                                                    Exhibit 10.1
                              EMPLOYMENT AGREEMENT

         AGREEMENT effective as of February 3, 2000, by and between Storage USA,
Inc., a Tennessee corporation (the "Company"), and O. Dean Jernigan (the
"Executive").


                                   WITNESSETH:

         WHEREAS, the Company desires to employ the Executive to serve as the
Chairman, Chief Executive Officer and President of the Company; and

         WHEREAS, the Company and the Executive each deem it necessary and
desirable to execute a written document setting forth the terms and conditions
of said relationship.

         NOW, THEREFORE, in consideration of the premises and mutual obligations
hereinafter set forth the parties agree as follows:

         1.  Definitions. For purposes of this Agreement, the following terms
             -----------
shall have the following definitions:

             (a)  "1993 Omnibus Stock Plan" means the Company's 1993 Omnibus
Stock Plan, as amended.

             (b)  "1995 Employee Stock Purchase and Loan Plan" means the
Company's 1995 Employee Stock Purchase and Loan Plan, as amended.

             (c)  "1996 Officers' Stock Option Loan Program" means the Company's
1996 Officers' Stock Option Loan Program, as amended.

             (d)  "Arbitrators" means the arbitrators selected to conduct any
arbitration proceeding in connection with any disputes arising out of or
relating to this Agreement.

             (e)  "Award Period" means any period in which the Company's
performance is measured in connection with its Shareholder Value Plan.

             (f)  "Award Plans" has the meaning set forth in Section 4(b) of
                                                             ------------
this Agreement.

             (g)  "Base Salary" means the annual salary to be paid to Executive
as set forth in Section 4(a) of this Agreement.
                ------------

             (h)  "Benefit Plans" has the meaning set forth in Section 4(c) of
this Agreement.
<PAGE>

             (i)  "Company" means Storage USA, Inc., a Tennessee corporation,
and any successor to its business and/or assets which assumes and agrees to
perform this Agreement by operation of law, or otherwise.

             (j)  "Company Shares" means the shares of common stock of the
Company or any securities of a successor company which shall have replaced such
common stock.

             (k)  "Executive" means the person identified in the preamble
paragraph of this Agreement.

             (l)  "Fair Market Value" means, on any given date, the closing sale
price of the common stock of the Company on the New York Stock Exchange on such
date, or, if the New York Stock Exchange shall be closed on such date, the next
preceding date on which the New York Stock Exchange shall have been open.

             (m)  "Good Reason" means any of the following:

                  (i) a removal of the Executive from Executive's position as
                  Executive may hold from time to time pursuant to Section 2
                  hereof, except in connection with a Termination with Cause, as
                  a result of the Executive's death or Permanent Disability or
                  by Voluntary Termination;

                  (ii) a reduction in the Executive's Base Salary as in effect
                  on the date hereof; or as the same may be increased from time
                  to time, which reduction treats Executive differently than
                  other similarly situated executives or singles out or
                  discriminates against Executive; or modifying, suspending,
                  discontinuing, or terminating any Award Plan or Benefit Plan
                  in a manner which treats Executive differently than other
                  similarly situated employees or singles out or discriminates
                  against Executive;

                  (iii) the relocation of the Company's principal executive
                  offices to a location outside a thirty-mile radius of Memphis,
                  Tennessee or the Company's requiring the Executive to be based
                  at any place other than a location within a thirty-mile radius
                  of Memphis, Tennessee (unless such relocation of Executive is:
                  (i) for good business reasons, in connection with Executive's
                  promotion; (ii) otherwise approved by Executive; or (iii) in
                  connection with the relocation, for good business reason(s),
                  of the entire department or function for which Executive is
                  responsible), except for reasonably required travel on the
                  Company's business;

                                       2
<PAGE>

                  (iv) any material breach by the Company of any provision of
                  this Agreement;

                  (v) any purported termination of Executive's employment by the
                  Company which is not effected pursuant to the procedures set
                  forth in Section 3; or
                           ---------

                  (vi) the failure of the Company to obtain an agreement
                  reasonably satisfactory to Executive from any successor or
                  assign of the Company to assume and agree to perform this
                  Agreement.

             (n)  "Option(s)" means any options issued pursuant to the Company's
1993 Omnibus Stock Plan, or any other stock option plan adopted by the Company,
any option granted with respect to Partnership Units, or any option granted
under the plan of any successor company that replaces or assumes the Company's
or the Partnership's options.

             (o)  "Partnership" means SUSA Partnership, L.P.

             (p)  "Partnership Unit(s)" means limited partnership interests of
the Partnership.

             (q)  "Permanent Disability" means a complete physical or mental
inability, confirmed by a licensed physician, to perform the services described
in Section 2 of the Agreement that continues for a period of six (6) consecutive
months.

             (r)  "Plan Loan(s)" means any loan extended by the Company to
Executive pursuant to the 1995 Employee Stock Purchase and Loan Plan, or any
other similar plan or program adopted by the Company during the Term of this
Agreement.

             (s)  "Restricted Stock" means any restricted stock issued pursuant
to the Company's 1993 Omnibus Stock Plan, or any other Award Plan adopted by the
Company, or any restricted stock issued under the plan of any successor company
that replaces or assumes the Company's grants of restricted stock.

             (t)  "Retirement Age" means the Executive's sixty-fifth (65)
birthday.

             (u)  "Salary Continuation" shall have the meaning set out in
Section 8.a.

             (v)  "Self-Storage Business" means the business of acquiring,
developing, constructing, franchising, owning or operating self-storage
facilities.

             (w)  "Self-Storage Property" means any real estate upon which the
Self-Storage Business is being conducted.

                                       3
<PAGE>

             (x)  "Shareholder Value Plan" means the Company's Shareholder Value
Plan, as amended.

             (y)  "SVU Grant" means the total number of shareholder value units
granted to the Executive pursuant to the Company's Shareholder Value Plan.

             (z)  "SVU Value" means the value of each shareholder value unit
based upon certain performance measures as set forth in the Company's
Shareholder Value Plan.

             (aa) "Term" has the meaning assigned to it in Section 3 of this
                                                           ---------
Agreement.

             (bb) "Termination Date" means the date employment of Executive is
terminated, which date shall be: (i) in the case of Executive's Permanent
Disability, thirty (30) days after a Termination Notice is given and Executive
does not return to the full-time performance of his duties within such thirty
(30) day period; or (ii) in all other instances, the date specified as the
Termination Date in the Termination Notice, which date shall not be less than
thirty (30) nor more than sixty (60) days from the date the Termination Notice
is given.

             (cc) "Termination Notice" means a written notice of termination of
employment by Executive or the Company.

             (dd) "Termination With Cause" means the termination of the
Executive's employment by the Company for any of the following reasons:

                  (i) the Executive's conviction of a felony;

                  (ii) the Executive's theft, embezzlement, misappropriation of
                  or intentional infliction of material damage to the Company's
                  property or business opportunity;

                  (iii) the Executive's intentional breach of the noncompetition
                  or non-solicitation provisions contained in Section 9 of this
                                                              ---------
                  Agreement; or

                  (iv) the Executive's ongoing willful neglect of or failure to
                  perform his duties hereunder or his ongoing willful failure or
                  refusal to follow any reasonable, unambiguous duly adopted
                  written direction of the Company that is not inconsistent with
                  the description of the Executive's duties set forth in Section
                                                                         -------
                  2, if such willful neglect or failure is materially damaging
                  -
                  or materially detrimental to the business and operations of
                  the Company; provided that Executive shall have received
                  written notice of such

                                       4
<PAGE>

                  failure and shall have continued to engage in such failure
                  after thirty (30) days following receipt of such notice from
                  the Company, which notice specifically identifies the manner
                  in which the Company believes that Executive has engaged in
                  such failure.

                  For purposes of this subsection, no act, or failure to act,
                  shall be deemed "willful" unless done, or omitted to be done,
                  by Executive not in good faith, and without reasonable belief
                  that such action or omission was in the best interest of the
                  Company.

             (ee) "Termination Without Cause" means the termination of the
Executive's employment by the Company for any reason other than: (i) Termination
With Cause; or (ii) termination by the Company due to Executive's death or
Permanent Disability.

             (ff) "Uniform Arbitration Act" means the Uniform Arbitration Act,
Tennessee Code Annotatedss. 29-5-391 et seq., as amended.
                                     -------

             (gg) "Voluntary Termination" means the Executive's voluntary
termination of his employment hereunder for any reason other than Good Reason.

         2. Employment; Services. The Company, SUSA-TN, LLC and Partnership
            --------------------
shall employ the Executive, and the Executive agrees to be so employed, in the
capacity of Chairman, Chief Executive Officer and President of the Company, to
serve for the Term hereof, subject to earlier termination as hereinafter
provided. The Executive shall devote such amount of his time and attention to
the Company's affairs as are necessary to perform his duties to the Company in
his capacity as Chairman, Chief Executive Officer and President of the Company.
The Executive shall have authority and responsibility with respect to his
functional area of responsibility within the Company.


         3. Term; Termination.
            -----------------

            (a) The term of the Executive's employment hereunder shall be one
(1) year and shall commence on February 3, 2000 and shall be extended
automatically, for so long as the Executive remains employed by the Company
hereunder, on the first day of each month beginning January 3, 2001 for an
additional one-month period (such period, as it may be extended from time to
time, being herein referred to as the "Term"), unless terminated earlier in
accordance with the terms of this Agreement, to the effect that on the first day
of each month, the remaining term of this Agreement and the Executive's
employment hereunder shall be one (1) year, but shall in no event extend beyond
the Retirement Age.

                                       5
<PAGE>

            (b) Any purported termination of employment by Executive or the
Company shall be communicated by a Termination Notice. The Termination Notice
shall indicate the specific termination provision in this Agreement relied upon
and set forth the facts and circumstances claimed to provide a basis for
termination. If the party receiving the Termination Notice notifies the other
party prior to the Termination Date that a dispute exists concerning the
termination, the Termination Date shall be extended until the dispute is finally
determined, either by mutual written agreement of the parties, by a binding
arbitration award, or by a final judgment, order or decree of a court of
competent jurisdiction. The Termination Date shall be extended by a notice of
dispute only if such notice is given in good faith and the party giving such
notice pursues the resolution of such dispute with reasonable diligence.
Notwithstanding the pendency of any such dispute, the Company will continue to
pay Executive his full compensation in effect when the notice giving rise to the
dispute was given and Executive shall continue as a participant in all Award
Plans and Benefit Plans in which Executive participated when the Termination
Notice giving rise to the dispute was given, until the dispute is finally
resolved in accordance with this subsection. Amounts paid under this subsection
are in addition to all other amounts due under this Agreement and shall not be
offset against or reduce any other amounts due under this Agreement.

         4. Compensation.
            -------------

            (a) Base Salary. During the Term, the Company shall pay the
Executive for his services a Base Salary of $390,000, to be paid consistent with
the general payroll practices of the Company, such Base Salary being subject to
any increases or reductions approved by the Chief Executive Officer of the
Company; provided however, that any such reductions may not treat Executive
differently than similarly situated executives or otherwise single out or
discriminate against Executive. Executive agrees that, consistent with Company
policy as of the date hereof, Executive does not accrue any vacation or sick
pay. In the event such policy is changed to provide for such an accrual, this
Agreement will be amended to provide for such change.

            (b) Award Plans. During the Term, the Executive shall also be
eligible for additional compensation in the form of a cash bonus, shares of
stock in the Company, Partnership Units, Restricted Stock or Options, and shall
be eligible to participate in the Company's 1993 Omnibus Stock Plan, 1995
Employee Stock Purchase and Loan Plan, 1996 Officers' Stock Option Loan Program,
Shareholder Value Plan, and any other stock option, incentive compensation,
profit participation, bonus or extra compensation plan that is adopted by the
Company and in which the Company's executive officers generally participate
(collectively, "Award Plans"), but payments and/or awards are not "entitlements"
and shall be paid or made consistent with the terms of such Award Plans. For
example, if the Company's bonus plan provides that a bonus is only payable if
certain objectives are met, Executive shall only be paid such bonus if the
objectives are met.

            (c) Benefit Plans. During the Term, Executive shall be entitled to
participate in, and to all rights and benefits provided by, each and every
health, life,

                                       6
<PAGE>

medical, dental, disability, insurance and welfare plan maintained by the
Company including, without limitation, the benefits that are maintained from
time to time by the Company for the benefit of Executive, the executives of the
Company generally or for the Company's employees generally, provided that
Executive is eligible to participate in such plan under the eligibility
provisions thereof that are generally applicable to the participants thereof
(collectively, "Benefit Plans").

            (d) Overall Qualification. Nothing in this Agreement shall be
construed as preventing the Company from modifying, suspending, discontinuing or
terminating any of the Company Benefit Plans or Award Plans without notice or
liability to Executive so long as: (i) the modification, suspension,
discontinuation or termination of any such plan is authorized by and performed
in accordance with the specific provisions of such plan; and (ii) such
modification, suspension, discontinuation or termination is taken generally with
respect to all similarly situated employees of the Company and does not single
out or discriminate against Executive.

         5. Expenses. The Company recognizes that the Executive will have to
            --------
incur certain out-of-pocket expenses, including but not limited to travel
expenses, related to his services and the Company's business, and the Company
agrees to reimburse the Executive for all reasonable expenses necessarily
incurred by him in the performance of his duties upon presentation of a voucher
or documentation indicating the amount and business purposes of any such
expenses; provided that Executive complies with the Company's policies and
procedures regarding business expenses.

         6. Voluntary Termination; Termination With Cause. If: (i) the
            ---------------------  ----------------------
Executive ceases to be an employee of the Company on account of a Voluntary
Termination; or (ii) there shall be a Termination With Cause, the Executive
shall not be entitled to any compensation after the Termination Date of such
Voluntary Termination or Termination With Cause (except Base Salary accrued but
unpaid on the Termination Date of such event).

         7. Death or Disability. Executive's employment with the Company shall
            -------------------
terminate upon the Executive's death or Permanent Disability. Upon such
termination, the Company shall continue to pay the Executive or his heirs,
devisees, executors, legatees or personal representatives, as appropriate, Base
Salary then in effect for one (1) year from the Termination Date. The Company
shall also pay any amounts due pursuant to the terms of any Benefit Plans (as
appropriate) and Award Plans in which Executive was a participant, including,
without limitation, the pro rata amount of any bonus to be paid to Executive for
the fiscal year in which Executive was terminated. In addition, in the event of
a termination due to Executive's Permanent Disability, Executive shall be
permitted to participate in, and have all rights and benefits provided by, all
Benefit Plans which Executive was eligible to participate in immediately prior
to the Termination Date (to the extent such participation is possible under the
laws then pertaining to such Benefit Plans), for one (1) year following the
Termination Date.

                                       7
<PAGE>

         8. Termination Without Cause; Resignation for Good Reason. Executive's
            ------------------------------------------------------
employment with the Company is at will, consequently, the Company may terminate
Executive for any reason, or no reason at all, at any time and Executive may
resign his employment with the Company at any time; provided that, upon
termination of Executive's employment by the Executive for Good Reason, or in
the event of a Termination Without Cause, and only in such event(s), the Company
shall provide the compensation and benefits set forth in this Section 8.
                                                              ---------
Executive's continued employment shall not constitute consent to, or a waiver
of, rights with respect to any circumstances constituting Good Reason hereunder.

            (a) Base Salary, Benefit and Award Plans. The Company shall continue
to pay the Executive his Base Salary then in effect until the earlier of: (x)
two years after the Termination Date; or (y) the date that Executive commences
employment with another employer (or if Executive becomes self-employed) at an
annual base salary equal to Executive's Base Salary on the Termination Date; all
on the regular payroll schedule with appropriate payroll tax and other
deductions ("Salary Continuation"); provided however, that in no event shall
Salary Continuation be paid to Executive past the Retirement Age. In the event
that Executive commences Employment with another employer (or becomes self-
employed) at an annual base salary less than Executive's Base Salary on the
Termination Date, the Salary Continuation shall be reduced by an amount equal to
the amount of annual base salary received by Executive from such other employer
or from such self-employment. The Company shall also pay on the Termination Date
any amounts due pursuant to the terms of any Benefit Plans and Award Plans in
which Executive was a participant, including, without limitation, the pro rata
amount of any bonus to be paid to Executive for the fiscal year in which
Executive was terminated. In addition, Executive shall be permitted to
participate in, and have all rights and benefits provided by, all Benefit Plans
which Executive was eligible to participate in immediately prior to the
Termination Date (to the extent such participation is possible under the laws
then pertaining to such Benefit Plans), for one (1) year following the
Termination Date.

            (b) Restricted Stock and Stock Options. All restrictions upon any
Restricted Stock which may have been awarded to Executive shall expire and be
removed, such Restricted Stock shall vest according to the schedule for vesting
following the Termination Date and through the date of the final payment of
Salary Continuation (unless otherwise expired or removed and vested pursuant to
the terms of any Restricted Stock Award pursuant to the 1993 Omnibus Stock Plan
or any Award Plan), and such stock shall be delivered to Executive. All Options
granted to Executive prior to the Termination Date shall continue to vest,
according to their schedule following the Termination Date and through the date
of the final payment of Salary Continuation (unless otherwise previously vested
pursuant to the 1993 Omnibus Stock Plan or any other Award Plan). No Stock
Options or Restricted Stock will be granted to Executive after the Termination
Date. In lieu of Company Shares issuable upon exercise of any vested,
outstanding and unexercised Options granted to Executive, Executive may, at
Executive's option, receive an amount in cash equal to the product of (i) the
Fair Market Value of Company Shares on the Termination Date over the per share
exercise price of

                                       8
<PAGE>

each vested Option held by Executive, times (ii) the number of Company Shares
covered by each such Option. In the event Executive does not elect to receive a
cash payment for any vested, outstanding and unexercised Options granted to
Executive, Executive shall have the right to otherwise exercise such Options in
accordance with the terms and conditions provided in the 1993 Omnibus Stock Plan
or any other applicable Award Plans.

            (c) Plan Loans. If Executive has any Plan Loans outstanding to the
Company immediately prior to the Termination Date, the Company shall discharge
and cancel the amount of principal and interest due with respect to such Plan
Loans which exceeds the Fair Market Value of Company Shares securing the Plan
Loans on the Termination Date, such discharge to be effective upon Executive's
payment of the Plan Loans in full (less the amount discharged) within ninety
(90) days following the Termination Date. Executive shall have the option of
repaying all amounts due with respect to the Plan Loans by the transfer of the
Company Shares securing the Plan Loans, or by the payment, in cash, of the
amounts due with respect to the Plan Loans. Except as otherwise set forth
herein, Executive shall remain subject to all terms and conditions set forth in
the Loan Agreements and Promissory Notes until the Plan Loans are paid in full.

            (d) Shareholder Value Plan. With respect to Executive's
participation in the Company's Shareholder Value Plan, the Award Periods in
connection with all of Executive's outstanding SVU Grants shall be accelerated
such that each Award Period is deemed to have ended upon the Termination Date.
At such time, the Company shall pay Executive an amount equal to the SVU Value
multiplied by the number of Executive's outstanding SVU Grants. The SVU Value
shall be reduced by 66% for all SVU Grants which were granted less than twelve
months prior to the Termination Date and the SVU Value shall be reduced by 33%
for all SVU Grants which were granted less than twenty-four months but more than
twelve months prior to the Termination Date. No adjustments shall be made to the
SVU Value for SVU Grants which were granted more than twenty-four months prior
to the Termination Date. All payments made to Executive after the Termination
Date in connection with outstanding SVU Grants shall be made solely in cash.

            (e) Legal Fees. The Company shall also pay to Executive all
reasonable legal fees and expenses incurred by Executive as a result of a
dispute concerning this Agreement in connection with a Termination Without Cause
or Executive's resignation for Good Reason (including all such fees and
expenses, if any, incurred in contesting or disputing any such termination or in
seeking to obtain or enforce any right or benefit provided by this Agreement),
if Executive is the prevailing party in connection with such dispute.

         9. Non Competition; Non Solicitation.
            ---------------------------------
            (a) For a period of two (2) years following the Term, Executive
shall not: (i) solicit any employee of the Company to leave the service of the
Company; or (ii) own any interest in any Self-Storage Property (other than: (x)
any permissible interest acquired while Executive was employed by the Company;
or (y) any interest that is

                                       9
<PAGE>

expressly permitted by the Company) as partner, shareholder or otherwise; or
directly or indirectly, for his own account or of the account of others, either
as an officer, director, promoter, employee, consultant, advisor, agent,
manager, or in any other capacity, engage in the Self-Storage Business.

            (b) The non solicitation provision shall apply to any Company
employee during the period of such Employee's employment and for a period of
thirty (30) days after such Employee's termination of employment with the
Company.

            (c) The Executive agrees that damages at law for violation of the
restrictive covenant contained herein would not be an adequate or proper remedy
to the Company, and that should the Executive violate or threaten to violate any
of the provisions of such covenant, the Company, its successors or assigns,
shall be entitled to obtain a temporary or permanent injunction, as appropriate,
against the Executive in any court having jurisdiction over the person and the
subject matter, prohibiting any further violation of any such covenants. The
injunctive relief provided herein shall be in addition to any award of damages,
compensatory, exemplary or otherwise, payable by reason of such violation.

            (d) The Executive acknowledges that this Agreement has been
negotiated at arm's length by the parties, neither being under any compulsion to
enter into this Agreement, and that the foregoing restrictive covenant does not
in any respect inhibit his ability to earn a livelihood in his chosen profession
without violating the restrictive covenant contained herein. The Company by
these presents has attempted to limit the Executive's right to compete only to
the extent necessary to protect the Company from unfair competition. The Company
recognizes, however, that reasonable people may differ in making such a
determination. Consequently, the Company agrees that if the scope or
enforceability of the restricted covenant contained herein is in any way
disputed at any time, a court or other trier of fact may modify and enforce the
covenant to the extent that it believes to be reasonable under the circumstances
existing at the time.

         10. Employment Status. The parties acknowledge and agree that Executive
             -----------------
is an employee of the Company, not an independent contractor. Any payments made
to Executive by the Company pursuant to this Agreement shall be treated for
federal and state payroll tax purposes as payments made to a Company employee,
irrespective whether such payments are made subsequent to the Termination Date.

         11. Notices. All notices or deliveries authorized or required pursuant
             -------
to this Agreement shall be deemed to have been given when in writing and
personally delivered or when deposited in the U.S. mail, certified, return
receipt requested, postage prepaid, addressed to the parties at the following
addresses or to such other addresses as either may designate in writing to the
other party:

                                       10
<PAGE>

                  To the Company:                    165 Madison
                                                     Suite 1300
                                                     Memphis, TN 38103
                                                     Attn: General Counsel


                  To the Executive:                  6366 Lendenwood
                                                     Memphis, TN  38120

         12. Entire Agreement. This Agreement contains the entire understanding
             ----------------
between the parties hereto with respect to the subject matter hereof and shall
not be modified in any manner except by instrument in writing signed, by or on
behalf of, the parties hereto; provided however, that the parties to this
Agreement hereby acknowledge and agree that this Agreement is subject to the
Severance Agreement dated as of August 16, 1999, between the parties, to all
covenants and agreements set forth in the Severance Agreement, and to any
subsequent renewals, extensions or modifications to the Severance Agreement. Any
action by the Company or termination of Executive's employment with the Company
that constitutes or otherwise gives rise to a Change of Control Termination, as
defined in the Severance Agreement, shall be governed exclusively by the
Severance Agreement. The provisions of Section 2(b) of the Severance Agreement
governing disputes shall be effective with respect to any dispute as to whether
a Termination constitutes a Change of Control Termination. In the event that
Executive expressly agrees to waive any provision hereof, such waiver shall be
memorialized by an amendment to this Agreement, which Executive hereby agrees to
sign This Agreement shall be binding upon and inure to the benefit of the heirs,
successors and assigns of the parties hereto

         13. Arbitration. Any controversy concerning or claim arising out of or
             -----------
relating to this Agreement shall be settled by final and binding arbitration in
Memphis, Shelby County, Tennessee at a location specified by the party seeking
such arbitration.

             (a) The Arbitrators. Any arbitration proceeding shall be conducted
by three (3) Arbitrators and the decision of the Arbitrators shall be binding on
all parties. Each Arbitrator shall have substantial experience and expert
competence in the matters being arbitrated. The party desiring to submit any
matter relating to this Agreement to arbitration shall do so by written notice
to the other party, which notice shall set forth the items to be arbitrated,
such party's choice of Arbitrator, and such party's substantive position in the
arbitration. The party receiving such notice shall, within fifteen (15) days
after receipt of such notice, appoint an Arbitrator and notify the other party
of its appointment and of its substantive position. The Arbitrators appointed by
the parties to the Arbitration shall select an additional Arbitrator meeting the
aforedescribed criteria. The Arbitrators shall be required to render a decision
in accordance with the procedures set forth in Subparagraph (b) below within
thirty (30) days after being notified of their selection. The fees of the
Arbitrators shall be equally divided amongst the parties to the arbitration.

                                       11
<PAGE>

             (b) Arbitration Procedures. Arbitration shall be conducted in
accordance with the Uniform Arbitration Act, except to the extent the provisions
of such Act are modified by this Agreement or the subsequent mutual agreement of
the parties. Judgment upon the award rendered by the Arbitrator(s) may be
entered in any court having jurisdiction thereof. Any party hereto may bring an
action, including a summary or expedited proceeding, to compel arbitration of
any controversy or claim to which this provision applies in any court having
jurisdiction over such action in Shelby County, Tennessee, and the parties agree
that jurisdiction and venue in Shelby County, Tennessee are appropriate and
approved by such parties.

         14. Applicable Law. This Agreement shall be governed and construed in
             --------------
accordance with the laws of the State of Tennessee.

         15. Assignment. The Executive acknowledges that his services are
             ----------
unique and personal. Accordingly, the Executive may not assign his rights or
delegate his duties or obligations under this Agreement, except with respect to
certain rights to receive payments as described in Section 7.
                                                   ---------

         16. Headings. Headings in this Agreement are for convenience only
             --------
and shall not be used to interpret or construe its provisions.

         17. Successors; Binding Agreement. The Company will require any
             -----------------------------
successor to all or substantially all of the business and/or assets of the
Company to expressly assume and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform it
if no such succession had taken place. Failure of the Company to obtain such
assumption and agreement prior to the effectiveness of any such succession shall
be a beach of this Agreement and shall entitle Executive to compensation from
the Company in the same amount and on the same terms as Executive would be
entitled to hereunder if Executive terminates his employment for Good Reason.
The Company's rights and obligations under this Agreement shall inure to the
benefit of and shall be binding upon the Company's successors and assigns.

                                       12
<PAGE>

         IN WITNESS WHEREOF, the parties have executed this Agreement effective
as of the date first above written.

                                   STORAGE USA, INC.


                                   By:   /s/ John W. McConomy
                                         --------------------
                                   Name: John W. McConomy
                                   Title: Exec. VP, General Counsel & Secretary


                                   By:   /s/ Harry J. Thie
                                         -----------------
                                   Name: Harry J. Thie
                                   Title: Compensation Committee Chairman
                                          Board of Directors



                                   EXECUTIVE:

                                   Name: /s/ O. Dean Jernigan
                                         --------------------
                                         O. Dean Jernigan

                                       13