Document:

ex10-1.htm

    EXHIBIT
10.1

    

     

    AMENDMENT
TO THE IRON MOUNTAIN INCORPORATED

     

    2002
STOCK INCENTIVE PLAN

     

            The
Company's Board has unanimously approved, and unanimously recommends that the
stockholders of the Company approve, an amendment, attached as Appendix A,
to the 2002 Plan to increase the number of shares of Common Stock authorized for
issuance under the 2002 Plan by 7,500,000 from 12,528,815 to 20,028,815 and
extend the termination date thereunder from March 31, 2012 to
March 31, 2018.

     

            The
Board believes that equity interests are a significant factor in the Company's
ability to attract, retain and motivate key employees, directors and other
service providers (generally, and in connection with acquisitions) that are
critical to the Company's long-term success and that an increase in the number
of shares available for issuance under the 2002 Plan is necessary in order to
provide those persons with incentives to serve the Company. The Board believes
an extension of the termination date from March 31, 2012 to March 31,
2018 is appropriate in connection with the increase in shares available for
issuance under the 2002 Plan.

     

            In
approving the increase in the number of shares reserved for issuance under the
2002 Plan, the Board considered (i) that only approximately 2,203,903
shares remained available for grant under the 2002 Plan as of April 1,
2008, (ii) the average annual rate of grants of 1,843,412 from 2002 through
2007 and (iii) the portion of the Company's outstanding shares represented
by equity compensation, including shares subject to options. Further, under
applicable federal income tax law, if the shares available under the 2002 Plan
are increased by an amendment approved by the stockholders, the ten year period
established for purposes of issuing tax favored incentive stock options, or
ISOs, under the plan may be reset. The proposed increase will provide the
Company with additional options for use in future grants, including in
connection with acquisitions. Based on the Company's current outstanding common
stock and assuming all shares available for grant under the 2002 Plan were
issued and outstanding, dilution would increase from 6.7% to 9.8% as a result of
the additional 7,500,000 shares available for grant under the 2002 Plan. Even
with this increased dilution the Company would be only slightly above the 25
th
 percentile of the Custom Peer Group (as defined and discussed in
"Executive Compensation—Compensation Discussion and Analysis" below), which is
9.5% dilution resulting from option plans, while the median is at 11.6% dilution
resulting from option plans.

     

    Summary
of the 2002 Plan

     

            The
following summary of the material features of the 2002 Plan is qualified in its
entirety by reference to the complete text of the 2002 Plan and the First and
Second Amendments thereto, which are filed as appendices to the Company's Proxy
Statements on Schedule 14A filed in April 2002, April 2004 and April 2006,
respectively.

     

            The
2002 Plan permits the issuance of equity-based awards, including incentive stock
options, nonqualified stock options, grants of Common Stock, whether or not
subject to restrictions, and stock appreciation rights. The 2002 Plan initially
reserved 3,043,221 (after all stock dividends) shares of Common Stock and the
stockholders approved the First Amendment to the 2002 Plan in May 2004 to
increase the number of shares reserved to 7,543,222 (after all stock dividends)
shares of Common Stock and approved the Second Amendment to the 2002 Plan in May
2006 to increase the number of shares reserved to 12,528,815 (after all stock
dividends) shares of Common Stock. If stockholders approve the proposed
amendment to the 2002 Plan, the total amount of Common Stock authorized for
issuance under the 2002 Plan will be 20,028,815.

     

            Purpose,
Eligible Individuals, Effective Date and Duration.
    The 2002 Plan became effective April 1, 2002. The
purpose of the 2002 Plan is to encourage employees, officers, directors and
consultants of the Company and our subsidiaries who render services to us to
continue their association with us by

    
      

       

    

    

    

    

    
      
        
           

        

        
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    providing
favorable opportunities for them to participate in the ownership of our Common
Stock and in our future growth through grants of our Common Stock, with or
without restrictions, options to acquire our Common Stock and other rights to
compensation in amounts determined by the value of our Common Stock, or Awards.
For this purpose, subsidiaries include corporations, companies, partnerships and
other forms of business organizations in which we own directly or indirectly 50%
or more of the total combined voting power of all classes of stock or other form
of equity ownership or in which we have a significant financial interest. The
recipient of an Award is referred to as an "Optionee." At this time,
approximately 1,200 persons are eligible to receive options pursuant to the 2002
Plan.

     

            The
2002 Plan provides for termination on March 31, 2012, or March 31,
2018 if the proposed amendment is passed, unless earlier terminated by the
Board. Termination of the 2002 Plan will not affect Awards made prior to
termination, but no Awards will be made after termination.

     

            Shares
Subject to the 2002 Plan.     The total number of
shares of our Common Stock that may be subject to Awards under the 2002 Plan may
not exceed 12,528,815 (after all stock dividends) shares, or 20,028,815 shares
if the proposed amendment is approved. The shares may be authorized but unissued
shares or treasury shares. The total amount of Common Stock that may be granted
under the Plan to any single person in any calendar year may not exceed in the
aggregate 1,125,000 shares. To the extent that an option or other form of Award
lapses or is forfeited, the shares subject to the Award will again become
available for grant under the terms of the 2002 Plan.

     

            In
the event of any change in the number of shares or kind of Common Stock
outstanding pursuant to a reorganization, recapitalization, exchange of shares,
stock dividend or split or combination of shares, appropriate adjustments will
be made to the number of shares of authorized Common Stock, to the number of
shares of Common Stock subject to outstanding Awards, to the exercise price per
share of options and other forms of Awards and to the kind of shares that may be
issued under the 2002 Plan.

     

            As
of April 1, 2008, 9,302,371 Awards were outstanding, consisting primarily
of options to purchase shares of Common Stock under the 2002 Plan.

     

            Administration.
    Although the Board has the authority to administer the
Plan, it has generally delegated this authority to the Compensation Committee,
which administers all of our equity-based compensation plans. Each member of the
Compensation Committee is a "non-employee director" within the meaning of
Rule 16b-3 promulgated under the Exchange Act and an "outside director"
within the meaning of Section 162(m) of the Internal Revenue Code of 1986,
as amended, or the Code.

     

            Subject
to the terms of the 2002 Plan, the Compensation Committee has the authority to:
(1) select or approve Award recipients (including Optionees);
(2) determine the terms and conditions of Awards, including the price to be
paid by an Optionee for any Common Stock; and (3) interpret the 2002 Plan
and prescribe rules and regulations for its administration.

     

            Stock
Options.     The Compensation Committee may grant
incentive stock options and nonqualified stock options under the 2002 Plan. The
Compensation Committee determines the number of shares of Common Stock subject
to each option, its exercise price, its duration and the manner and time of
exercise. Incentive stock options may be issued only to employees of the Company
or of a corporate subsidiary of ours, and the exercise price must be at least
equal to the fair market value of the Common Stock as of the date the option is
granted. Further, an incentive stock option generally must be exercised within
ten years of grant. The Compensation Committee, in its discretion, may provide
that any option is subject to vesting limitations that make it exercisable
during its entire duration or during any lesser period of time.

     

            The
exercise price of an option may be paid in cash, in shares of Common Stock owned
by the Optionee, by delivery of a recourse promissory note secured by the Common
Stock acquired upon

    

    
      
        
           

        

        
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    exercise of the
option (except that such a loan would not be available to any executive officer
or director of the Company) or by means of a "cashless exercise" procedure in
which a broker transmits to us the exercise price in cash, either as a margin
loan or against the Optionee's notice of exercise and confirmation by us that we
will issue and deliver to the broker stock certificates for that number of
shares of Common Stock having an aggregate fair market value equal to the
exercise price, or agrees to pay the exercise price to us in cash upon its
receipt of stock certificates.

     

            In
its discretion, and subject to the terms of the 2002 Plan, the Compensation
Committee may grant a reload option to purchase the number of shares of Common
Stock delivered to us in full or partial payment of the exercise price on the
exercise of any option or in full or partial payment of the tax withholding
obligations resulting from the exercise of any option.

     

            Options
are, at the discretion of the Compensation Committee, transferable to members of
the Optionee's immediate family or to a family partnership or trust for the
benefit of the Optionee's immediate family.

     

            Stock
Appreciation Rights.     The Compensation Committee
may also grant stock appreciation rights to Optionees on such terms and
conditions as it may determine. Stock appreciation rights may be granted
separately or in connection with an option. Upon the exercise of a stock
appreciation right, the Optionee is entitled to receive payment equal to the
excess of the fair market value, on the date of exercise, of the number of
shares of Common Stock for which the stock appreciation right is exercised, over
the exercise price for the Common Stock under a related option, or if there is
not a related option, over an amount per share stated in the agreement setting
forth the terms and conditions of the stock appreciation right. Payment may be
made in cash or other property, including Common Stock, in accordance with the
provisions of the applicable agreement. Upon the exercise of a stock
appreciation right related to an option, the option will terminate as to the
number of shares of Common Stock for which the stock appreciation right is
exercised.

     

            Stock
Grants.     The Compensation Committee may issue
shares of Common Stock to Optionees, either with or without restrictions, as
determined by it in its discretion. Restrictions may include conditions that
require the Optionee to forfeit the shares in the event that the holder ceases
to provide services to us or one of our subsidiaries before a stated time.
Unlike holders of options and stock appreciation rights, the recipient of a
stock grant, including a stock grant subject to restrictions, unless otherwise
provided for in a restricted stock agreement, has the rights of a stockholder of
ours to vote and to receive payment of dividends on our Common
Stock.

     

            Special
Bonus Awards.     The Compensation Committee may
grant in connection with any nonqualified stock option or stock grant a special
cash bonus in an amount not to exceed the lesser of (1) the combined
federal, state and local income and employment tax liability incurred by the
Optionee as a consequence of acquiring Common Stock on the exercise of the
option or the grant or vesting of Common Stock, and the related special bonus,
or (2) 30% of the imputed income realized by the Optionee on account of the
exercise or vesting, and the related special bonus. A grant may also provide
that the Company will lend an Optionee an amount not more than the amount
described in the preceding sentence, less the amount of any special cash
bonus.

     

            Effect
of Certain Corporate Transactions.     If while
unexercised Awards remain outstanding under the 2002 Plan we merge or
consolidate with one or more corporations (whether or not we are the surviving
corporation), if we are liquidated or sell or otherwise dispose of substantially
all of our assets to another entity or if there is a "change in control" then,
except as otherwise specifically provided to the contrary in any applicable
agreement, the Compensation Committee may in its discretion amend the terms of
all unexercised Awards so that either: (1) after the effective date of the
event, each Optionee is entitled, upon exercise of an Award, to receive in lieu
of Common Stock the number and class of shares of such stock or other securities
to which he or she would have been entitled had he or she been a stockholder at
the time of the event, or is entitled to receive from the successor entity
a

    

    
      
        
           

        

        
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    new Award of
comparable value; (2) each Optionee is given an opportunity to exercise all
or some of his or her unexercised Awards during a 20 day period ending with
the event, at which time the unexercised Awards will be cancelled; or
(3) all unexercised Awards are cancelled as of the effective date of the
event in consideration for cash or other consideration with a value equal to the
value of the shares the Optionee would have received had the Award been
exercised (to the extent exercisable). In addition to the foregoing, the
Compensation Committee may in its discretion also amend the terms of an Award by
canceling some or all of the restrictions on its exercise to permit its exercise
to a greater extent than that permitted under its existing terms.

     

            For
these purposes, a change of control will be deemed to have occurred if any
person (as that term is used in Section 13(d) and 14(d)(2) of the Exchange
Act) other than a trust related to any employee benefit plan maintained by the
Company becomes the beneficial owner of 50% or more of our outstanding Common
Stock, and within the period of 24 consecutive months immediately thereafter,
individuals other than (1) individuals who at the beginning of such period
constitute the entire Board or (2) individuals whose election, or
nomination for election by the Company's stockholders, was approved by a vote of
at least two-thirds of the directors then still in office who were directors at
the beginning of the period, become a majority of the Board.

     

            Amendments
to the 2002 Plan.     The Board may modify, revise or
terminate the 2002 Plan at any time and from time to time, except that approval
of our stockholders is required with respect to any amendment to change the
aggregate number of shares of Common Stock that may be issued under the 2002
Plan or to any person in a year, change the class of persons eligible to receive
Awards or make any other changes that require stockholder approval under
applicable law. Amendments adversely affecting outstanding Awards may not be
made without the consent of the holder of the Award.

     

            The
Board may also amend without stockholder approval, and has in fact amended, the
2002 Plan as necessary to enable awards to qualify for favorable foreign tax
treatment in the case of an Optionee who is subject to a tax regime outside the
United States.

     

            Tax
Treatment.     The following description of the
federal income tax consequences of Awards is general and does not purport to be
complete.

     

            Tax
Treatment of Options.     An Optionee realizes no
taxable income when a nonqualified stock option is granted. Instead, the
difference between the fair market value of the Common Stock acquired pursuant
to an exercise of an option and the exercise price paid is taxed as ordinary
compensation income when the option is exercised. The difference is measured and
taxed as of the date of exercise, if the Common Stock is not subject to a
"substantial risk of forfeiture," or as of the date or dates on which the risk
terminates in other cases. An Optionee may elect to be taxed on the difference
between the exercise price and the fair market value of the Common Stock on the
date of exercise, even though some or all of the Common Stock acquired is
subject to a substantial risk of forfeiture. Gain on the subsequent sale of the
Common Stock acquired by exercise of the option is taxed as short-term or
long-term capital gain, depending on the holding period after exercise. We
receive no tax deduction on the grant of a nonqualified stock option, but we are
entitled to a tax deduction when the Optionee recognizes ordinary compensation
income on or after exercise of the option, in the same amount as the income
recognized by the Optionee.

     

            Generally,
an Optionee incurs no federal income tax liability on either the grant or the
exercise of an incentive stock option, although an Optionee will generally have
taxable income for alternative minimum tax purposes at the time of exercise
equal to the excess of the fair market value of the Common Stock subject to the
option over the exercise price. Provided that the Common Stock is held for at
least one year after the date of exercise of the option and at least two years
after its date of grant, any gain realized on a subsequent sale of the Common
Stock will be taxed as long-term capital gain. If the Common Stock is disposed
of within a shorter period of time, the Optionee will recognize ordinary
compensation income in an amount equal to the difference between the sales price
and the

    

    
      
        
           

        

        
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    exercise price or
(if less) the difference between the fair market value at the time of exercise
and the exercise price. We receive no tax deduction on the grant or exercise of
an incentive stock option, but we are entitled to a tax deduction if the
Optionee recognizes ordinary compensation income on account of a premature
disposition of shares acquired on exercise of an incentive stock option, in the
same amount and at the same time as the Optionee recognizes income.

     

            Tax
Treatment of Stock Appreciation Rights.     An
Optionee recognizes no income upon the grant of a stock appreciation right, but
upon its exercise realizes ordinary compensation income in an amount equal to
the cash or cash equivalent that he receives at that time. If the Optionee
receives Common Stock upon exercise of the stock appreciation right, he
recognizes ordinary compensation income equal to the fair market value of the
Common Stock received (or, if the Common Stock is subject to a substantial risk
of forfeiture at the exercise date, at the date or dates on which the risk
expires, unless he or she elects to be taxed currently), which is measured by
the difference between the base amount set forth in the related agreement and
the fair market value of the Common Stock. We are entitled to a tax deduction in
the amount of ordinary compensation income recognized.

     

            Tax
Treatment of Stock Grants.     A person who receives
a stock grant without any restrictions will recognize ordinary compensation
income on the fair market value of the Common Stock over the amount (if any)
paid for the Common Stock. If the Common Stock is subject to restrictions, the
recipient generally will not recognize ordinary compensation income at the time
the award is received, but will recognize ordinary compensation income when
restrictions constituting a substantial risk of forfeiture lapse. The amount of
such income will be equal to the excess of the aggregate fair market value, as
of the date the restrictions lapse, over the amount (if any) paid for the Common
Stock. Alternatively, the Optionee may elect to be taxed, pursuant to
Section 83(b) of the Code, on the excess of the fair market value of the
Common Stock at the time of grant over the amount (if any) paid for the Common
Stock, notwithstanding any restrictions. All such taxable amounts are deductible
by us at the time and in the amount of the ordinary compensation income
recognized by the Optionee.

     

            Section 162(m)
of the Code.     Section 162(m) of the Code
generally disallows an income tax deduction to public companies for compensation
in excess of $1,000,000 paid in any year to our principal executive officer, or
PEO, and the three other most highly compensated executive officers, but not
including our principal financial officer, to the extent that this compensation
is not "performance-based" within the meaning of Section 162(m) of the
Code. In the case of a stock plan, the performance-based exception is satisfied
if, in addition to other requirements, the plan, including the amount of stock
available for grant under the plan, is approved by stockholders, the grants are
made by a committee of outside directors, and the amount of compensation a
person can receive is based solely on an increase in the value of the Common
Stock after grant. If the proposed amendment is approved by stockholders, one of
the requirements for the performance-based exception will continue to be
satisfied with respect to shares awarded under the Plan.

     

            Award
Information.     The benefits or amounts that may be
received or allocated to any individual under the 2002 Plan, as proposed to be
amended, are not determinable.

    

    
      
        
           

        

        
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            Options
to purchase Common Stock that have been granted under the 2002 Plan in the past
are set forth in the following table.

     

    Option
Grants under the 2002 Plan

    

    
      	
              Name and Position

              
                 

                 

              

            	 	
              Number of Shares

              Underlying Options

              
                 

                
                

              

            	 
	
              C. Richard
      Reese,

              Chairman of
      the Board and Chief Executive Officer

            	 	 	—	 
	
              Robert T.
      Brennan,

              President
      and Chief Operating Officer

            	 	 	1,112,449	 
	
              John J.
      Connors,

              President,
      Americas

            	 	 	337,515	 
	
              Marc A.
      Duale,

              President
      of Iron Mountain Europe

            	 	 	333,958	 
	
              John F.
      Kenny, Jr.,

              Executive
      Vice President, Corporate Development

            	 	 	68,449	 
	
              Brian P.
      McKeon,

              Chief
      Financial Officer

            	 	 	469,907	 
	
              All current
      executive officers as a group

            	 	 	2,527,148	 
	
              All current
      directors who are not executive officers as a group

            	 	 	141,750	 
	
              Clarke H.
      Bailey

            	 	 	25,252	 
	
              Constantin
      R. Boden

            	 	 	25,252	 
	
              Kent P.
      Dauten

            	 	 	25,252	 
	
              Michael
      Lamach

            	 	 	6,673	 
	
              Arthur D.
      Little

            	 	 	25,252	 
	
              Vincent J.
      Ryan

            	 	 	25,252	 
	
              Laurie A.
      Tucker

            	 	 	8,817	 
	
              Each
      associate of such directors and executive officers

            	 	 	31,844	 
	
              Each other
      person who received 5% of such options

            	 	 	—	 
	
              All
      employees, including all current officers who are not executive officers,
      as a group

            	 	 	8,391,574ex10-2.htm

    EXHIBIT 10.2

      

       

      

       

       AMENDMENT TO THE IRON MOUNTAIN INCORPORATED

       

      2006
SENIOR EXECUTIVE INCENTIVE PROGRAM

       

      1.    Section 1
of the Iron Mountain Incorporated 2006 Senior Executive
Incentive Program (the "2006 SEIP") is hereby deleted in its entirety and
replaced with the following:

       

      "1.    
Participant.
    The sole participant in this Program shall be Robert T.
Brennan, the Chief Executive Officer of Iron Mountain Incorporated (the
"Corporation").

       

      2.    Section 2
of the 2006 SEIP is hereby deleted in its entirety and replaced with the
following:

       

      "2.    
Annual Limit on
Incentive Compensation.     The maximum amount
payable under this Program with respect to a fiscal year shall be the lesser of
1.25 times Mr. Brennan's annual base compensation for the fiscal year or
$1,500,000.00 (the "Annual Limit")."

       

      3.    Section 3
of the 2006 SEIP is hereby deleted in its entirety and replaced with the
following:

       

      "3.    
Eligibility for
Incentive Compensation.     While the outcome for the
Corporation's fiscal year to which the incentive compensation relates is
substantially uncertain (but not more than 90 days after the start of that
fiscal year), the Compensation Committee of the Board of Directors shall
establish the criteria for the payment of the Annual Limit. Such criteria may be
based on any one or more of the following business criteria: EBITDA; OIBDA;
contribution; gross revenues; growth rate; capital spending; return on invested
capital; free cash flow; operating income; attaining budget; and achievement of
stated corporate goals including, but not limited to acquisitions, alliances,
joint ventures, international development and internal expansion. Any such
criteria shall be adjusted as necessary to reflect acquisitions. If such
objectives are not fully achieved, the Compensation Committee may provide that
less than 100 percent of the Annual Limit shall be payable.

       

      Following the
close of the fiscal year, the Compensation Committee shall certify whether such
criteria were satisfied."

       

      4.    These
amendments will be effective for fiscal years beginning on or after
January 1, 2009; provided, however, that prior to effectiveness these
amendments must first be approved by an affirmative vote of a majority of the
votes properly cast at a duly held meeting of the stockholders of the Company at
which a quorum representing a majority of all outstanding common stock is
present, in person or by proxy. Except as hereinabove amended, the provisions of
the 2006 SEIP shall remain in full force and effect.

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