-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, U007z14m234fv9adXWaPgCS8LW8lYWr3YxeByMOl7ljfjgmlIl//nsk64rHsncUr luTubrhnVoKci44aUKPe1w== 0001047469-05-006702.txt : 20050316 0001047469-05-006702.hdr.sgml : 20050316 20050316142426 ACCESSION NUMBER: 0001047469-05-006702 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 20 CONFORMED PERIOD OF REPORT: 20041231 FILED AS OF DATE: 20050316 DATE AS OF CHANGE: 20050316 FILER: COMPANY DATA: COMPANY CONFORMED NAME: IRON MOUNTAIN INC/PA CENTRAL INDEX KEY: 0001020569 STANDARD INDUSTRIAL CLASSIFICATION: PUBLIC WAREHOUSING & STORAGE [4220] IRS NUMBER: 232588479 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-13045 FILM NUMBER: 05684725 BUSINESS ADDRESS: STREET 1: 745 ATLANTIC AVENUE CITY: BOSTON STATE: MA ZIP: 02111 BUSINESS PHONE: 6175354766 MAIL ADDRESS: STREET 1: 745 ATLANTIC AVENUE CITY: BOSTON STATE: MA ZIP: 02111 FORMER COMPANY: FORMER CONFORMED NAME: PIERCE LEAHY CORP DATE OF NAME CHANGE: 19960807 10-K 1 a2152867z10-k.htm FORM 10-K

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

(Mark One)

ý	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended December 31, 2004

o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 1-13045

IRON MOUNTAIN INCORPORATED
(Exact name of registrant as specified in its charter)

Pennsylvania		23-2588479
(State or other jurisdiction of incorporation)		(I.R.S. Employer Identification No.)
745 Atlantic Avenue, Boston, Massachusetts		02111
(Address of principal executive offices)		(Zip Code)

617-535-4766
(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class		Name of Exchange on Which Registered
Common Stock, $.01 par value per share		New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2). Yes ý No o

As of June 30, 2004, the aggregate market value of the Common Stock of the registrant held by non-affiliates of the registrant was $2,120,312,025 based on the closing price on the New York Stock Exchange on such date.

Number of shares of the registrant's Common Stock at March 2, 2005: 129,889,755

IRON MOUNTAIN INCORPORATED
2004 FORM 10-K ANNUAL REPORT

Table of Contents

		Page
PART I
Item 1.	Business	1
Item 2.	Properties	12
Item 3.	Legal Proceedings	12
Item 4.	Submission of Matters to a Vote of Security Holders	15
PART II
Item 5.	Market for the Registrant's Common Stock, Related Shareholder Matters and Issuer Purchases of Equity Securities	16
Item 6.	Selected Financial Data	17
Item 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations	21
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	47
Item 8.	Financial Statements and Supplementary Data	48
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	48
Item 9A.	Controls and Procedures	48
Item 9B.	Other Information	49
PART III
Item 10.	Directors and Executive Officers of the Registrant	49
Item 11.	Executive Compensation	49
Item 12.	Security Ownership of Certain Beneficial Owners and Management	49
Item 13.	Certain Relationships and Related Transactions	49
Item 14.	Principal Accountant Fees and Services	49
Item 15.	Exhibits and Financial Statement Schedules	50

References in this Annual Report on Form 10-K to "the Company", "we", "us" or "our" include Iron Mountain Incorporated and its consolidated subsidiaries, unless the context indicates otherwise.

DOCUMENTS INCORPORATED BY REFERENCE

Certain information required in Items 10, 11, 12, 13 and 14 of Part III of this Annual Report on Form 10-K is incorporated by reference from our definitive Proxy Statement for the Annual Meeting of Shareholders to be held on or about May 26, 2005.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

We have made statements in this Annual Report on Form 10-K that constitute "forward-looking statements" as that term is defined in the Private Securities Litigation Reform Act of 1995 and other federal securities laws. These forward-looking statements concern our operations, economic performance, financial condition, goals, beliefs, strategies, objectives, plans and current expectations. The forward-looking statements are subject to various known and unknown risks, uncertainties and other factors. When we use words such as "believes," "expects," "anticipates," "estimates" or similar expressions, we are making forward-looking statements.

Although we believe that our forward-looking statements are based on reasonable assumptions, our expected results may not be achieved, and actual results may differ materially from our expectations. Important factors that could cause actual results to differ from expectations include, among others:

•: changes in customer preferences and demand for our services;
•: changes in the price for our services relative to the cost of providing such services;
•: in the various digital businesses in which we are engaged, capital and technical requirements will be beyond our means, markets for our services will be less robust than anticipated, or competition will be more intense than anticipated;
•: our ability or inability to complete acquisitions on satisfactory terms and to integrate acquired companies efficiently;
•: the cost and availability of financing for contemplated growth;
•: Business partners upon whom we depend for technical assistance or management and acquisition expertise outside the U.S. will not perform as anticipated;
•: changes in the political and economic environments in the countries in which our international subsidiaries operate; and
•: other trends in competitive or economic conditions affecting our financial condition or results of operations not presently contemplated.

You should not rely upon forward-looking statements except as statements of our present intentions and of our present expectations, which may or may not occur. You should read these cautionary statements as being applicable to all forward-looking statements wherever they appear. We undertake no obligation to release publicly the result of any revision to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. Readers are also urged to carefully review and consider the various disclosures we have made in this document, as well as our other periodic reports filed with the Securities and Exchange Commission (the "Commission" or "SEC").

PART I

Item 1. Business.

A. Development of Business.

We are the leader in information storage and protection services. We are an international, full-service provider of information storage and protection and related services, enabling customers to outsource these functions. We have a diversified customer base comprised of numerous commercial, legal, banking, healthcare, accounting, insurance, entertainment, and government organizations, including more than 95% of the Fortune 1000 and more than two-thirds of the FTSE 100. Our comprehensive solutions help customers save money and manage risks associated with legal and regulatory compliance, protection of vital assets, and business continuity challenges.

Our core records management services include: records management program development and implementation based on best-practices to help customers comply with specific regulatory requirements; implementation of policy-based programs that feature secure, cost-effective storage for all major media, including paper, which is the dominant form of records storage, flexible retrieval access and retention management; digital archiving services for secure, legally compliant and cost-effective long-term archiving of electronic records; secure shredding services that ensure privacy and a secure chain of record custody; and specialized services for vital records, film and sound and regulated industries such as healthcare, energy and financial services.

Our data protection services include: disaster preparedness planning support; secure, off-site vaulting of data backup media for fast and efficient data recovery in the event of a disaster, human error or virus; electronic vaulting to provide managed, online data backup and recovery services for personal computers and server data; and intellectual property management services consisting of escrow services to protect and manage source code and other proprietary information with a trusted, neutral third party and domain name management services.

In addition to our core records management and data protection services, we sell storage materials, including cardboard boxes and magnetic media, and provide consulting, facilities management, fulfillment and other outsourcing services.

Iron Mountain was founded in 1951 in an underground facility near Hudson, New York. Now in our 54^th year, we have experienced tremendous growth and organizational change, particularly since successfully completing the initial public offering of our common stock in February 1996. Since then, we have built ourselves from a regional business with limited product offerings and annual revenues of $104 million in 1995 into the leader in information storage and protection services, providing a full range of services to customers in markets around the world. For the year ended December 31, 2004, we had total revenues of $1.8 billion.

Our growth since 1995 has been accomplished primarily through the acquisition of U.S. and international information storage and protection services companies. The goal of our current acquisition program is to supplement internal growth by continuing to establish a footprint in targeted international markets and adding fold-in acquisitions both in the U.S. and internationally. Having substantially completed our North American geographic expansion by the end of 2000, we shifted our focus from growth through acquisitions to internal revenue growth. In 2001, as a result of this shift, internal revenue growth exceeded growth through acquisitions for the first time since we began our acquisition program in 1996. This was also the case in 2002 and 2003. In 2004, revenue growth from acquisitions exceeded internal revenue growth due primarily to the acquisition of the records management operations of Hays plc ("Hays IMS") in July 2003. In the absence of unusual acquisition activity, we expect to achieve most of our revenue growth internally in 2005 and beyond. We expect to achieve our internal revenue growth through a sophisticated sales and account management coverage model that is designed to drive incremental revenue by acquiring new customer relationships, increasing the revenue generated by existing customer relationships and by effectively selling a wide range of

records management and data protection services to expand our new and existing customer relationships.

In February 2004, we completed the acquisition of the 49.9% equity interest held by Mentmore plc ("Mentmore") in Iron Mountain Europe Limited ("IME"), our European joint venture, for total consideration of 82.5 million British pounds sterling ($154 million) in cash. Included in this amount is the repayment of all trade and working capital funding owed to Mentmore by IME. Completion of the transaction gave us 100% ownership of IME, affording us full access to all future cash flows and greater strategic and financial flexibility.

In November 2004, we acquired Connected Corporation ("Connected") for total cash consideration of $109 million (net of cash acquired). Connected is the technology and market leader in the protection, archiving and recovery of distributed data. Our acquisition of Connected builds on our mission to protect our customers' information and protect our customers through compliant records management.

As of December 31, 2004, we provided services to over 235,000 customer accounts in 85 markets in the U.S. and 63 markets outside of the U.S., employed over 14,500 people and operated approximately 830 records management facilities in the U.S., Canada, Europe and Latin America.

B. Description of Business.

The Information Storage and Protection Services Industry

Overview

Companies in the information storage and protection services industry store and manage information in a variety of media formats, which can broadly be divided into physical and electronic records, and provide a wide range of services related to the records stored. We refer to our general physical records storage and management services as records management. We define physical records to include paper documents, as well as all other non-electronic media such as microfilm and microfiche, master audio and videotapes, film, X-rays and blueprints. Electronic records include various forms of magnetic media such as computer tapes and hard drives and optical disks. We include in our electronic records storage and management services (1) data protection and (2) digital archiving services.

Physical Records

Physical records may be broadly divided into two categories: active and inactive. Active records relate to ongoing and recently completed activities or contain information that is frequently referenced. Active records are usually stored and managed on-site by the organization that originated them to ensure ready availability. Inactive physical records are the principal focus of the information storage and protection services industry. Inactive records consist of those records that are not needed for immediate access but which must be retained for legal, regulatory and compliance reasons or for occasional reference in support of ongoing business operations. A large and growing specialty subset of the physical records market is medical records. These are active and semi-active records that are often stored off-site with and serviced by a information storage and protection services vendor. Special regulatory requirements often apply to medical records.

Electronic Records

Electronic records management focuses on the storage of, and related services for, computer media that is either a backup copy of recently processed data or archival in nature. Customer needs for data backup and recovery and archiving are distinctively different. Backup data exists because of the need of many businesses to maintain backup copies of their data in order to be able to recover the data in the event of a system failure, casualty loss or other disaster. It is customary (and a best

practice) for data processing groups to rotate backup tapes to off-site locations on a regular basis and to require multiple copies of such information at multiple sites.

In addition to the physical rotation and storage of backup data, we offer electronic vaulting services as an alternative way for businesses to transfer data to us, and to access the data they have stored with us. Electronic vaulting is a Web-based service that automatically backs up computer data over the Internet and stores it off site in one of our secure data centers. In early 2003, we announced an expansion of the electronic vaulting service to include backup and recovery for personal computer data, answering customers' needs to protect critical business data, which is often unprotected on employee laptops and desktop personal computers. In November 2004, we acquired Connected, the market leader in the backup and recovery of this distributed data. We refer to the physical rotation and storage of backup data and electronic vaulting as data protection services.

There is a growing need for better ways of archiving data for legal, regulatory and compliance reasons and for occasional reference in support of ongoing business operations. Historically, businesses have relied on backup tapes for storing archived data in electronic format, but this process can be costly and ineffective when attempting to search and retrieve the data for litigation or other needs. In addition, many industries, such as healthcare and financial services, are facing increased governmental regulation mandating the way in which electronic records are stored and managed. To help customers meet these growing storage challenges, we introduced digital archiving services. We have experienced early market adoption of these services, especially for e-mail archiving, which enables businesses to identify and retrieve electronic records quickly and cost-effectively, while maintaining regulatory compliance.

Growth of Market

We believe that the volume of stored physical and electronic records will continue to increase for a number of reasons, including: (1) the rapid growth of inexpensive document producing technologies such as facsimile, desktop publishing software and desktop printing; (2) the continued proliferation of data processing technologies such as personal computers and networks; (3) regulatory requirements; (4) concerns over possible future litigation and the resulting increases in volume and holding periods of documentation; (5) the high cost of reviewing records and deciding whether to retain or destroy them; (6) the failure of many entities to adopt or follow policies on records destruction; and (7) audit requirements to keep backup copies of certain records in off-site locations.

We believe that paper-based information will continue to grow, not in spite of, but because of, new "paperless" technologies such as e-mail and the Internet. These technologies have prompted the creation of hard copies of such electronic information and have also led to increased demand for electronic records services, such as the storage and off-site rotation of backup copies of magnetic media. In addition, we believe that the proliferation of digital information technologies and distributed data networks has created an emerging need for efficient, cost-effective, high quality solutions for digital archiving and the management of electronic documents.

Consolidation of a Highly Fragmented Industry

There was significant consolidation within the highly fragmented information storage and protection services industry in North America from 1995 to 2000 and at a slower but continuing pace in recent years. Most information storage and protection services companies serve a single local market, and are often either owner-operated or ancillary to another business, such as a moving and storage company. We believe that the consolidation trend, both in North America and other regions, will continue because of the industry's capital requirements for growth, opportunities for large information storage and protection services providers to achieve economies of scale and customer demands for more sophisticated technology-based solutions.

We believe that the consolidation trend in the industry is also due to, and will continue as a result of, the preference of certain large organizations to contract with one vendor in multiple cities and countries for multiple services. In particular, customers increasingly demand a single, large, sophisticated company to handle all of their important physical and electronic records needs. Large national and multinational companies are better able to satisfy these demands than smaller competitors. We have made, and intend to continue to make, acquisitions of our competitors, many of whom are small, single-city operators.

Description of Our Business

We generate our revenues by providing storage for a variety of information media formats, core records management services and an expanding menu of complementary products and services to a large and diverse customer base. Providing outsourced storage for records and information is the mainstay of our customer relationships and provides the foundation for our revenue growth. The core services, which are a vital part of a comprehensive records management program, are highly recurring in nature and therefore very predictable. Core services consist primarily of the handling and transportation of stored records and information. In our secure shredding business, core services consist primarily of the scheduled collection and handling of sensitive records. In 2004, our storage and core service revenues represented approximately 86% of our total revenues. In addition to our core services, we offer a wide array of complementary products and services such as performing special project work, selling records management services related products, providing fulfillment services and consulting on records management issues. These services address more specific needs and are designed to enhance our customers' overall records management programs. These services complement our core services; however, they are more episodic and discretionary in nature. Revenue generated by our business records and data protection businesses includes both core and complementary components.

Our various operating segments offer the products and services discussed below. In general, our business records management segment offers records management, secure shredding, healthcare information services, vital records services, and service and courier operations in the U.S. and Canada. Our data protection segment offers data backup and disaster recovery services, vital records services, service and courier operations, and intellectual property management services in the U.S. Our international segment offers elements of all our product and services lines outside the U.S. and Canada. Our corporate and other segment includes our fulfillment, consulting and digital archiving services. Some of our complementary services and products are offered within all of our segments. The amount of revenues derived from our business records management, data protection, international, and corporate and other operating segments and other relevant data, including financial information about geographic areas, for fiscal years 2002, 2003 and 2004 are set forth in Note 12 to Notes to Consolidated Financial Statements.

Business Records Management

The hard copy business records stored by our customers with us by their nature are not very active. These types of records are stored in cartons packed by the customer. We use a proprietary order processing and inventory management system known as the SafekeeperPLUS® system to efficiently store and later retrieve a customer's cartons. Storage charges are generally billed monthly on a per storage unit basis, usually either per carton or per cubic foot of records, and include the provision of space, racking, computerized inventory and activity tracking and physical security.

Data Protection

Data protection services consist of the storage and rotation of backup computer media as part of corporate disaster recovery and business continuity plans. Computer tapes, cartridges and disk packs are transported off-site by our courier operations on a scheduled basis to secure, climate-controlled facilities, where they are available to customers 24 hours a day, 365 days a year, to facilitate data

recovery in the event of a disaster. We use various proprietary information technology systems such as MediaLink™ and SecureBase™ software to manage this process. We also manage tape library relocations and support disaster recovery testing and execution. In addition, we offer electronic vaulting services as part of our data protection services product line. Our electronic vaulting service automatically backs up personal computer and server data over the Internet and stores it off site in one of our secure data centers, always available in the event of a disaster.

Healthcare Information Services

Healthcare information services principally include the handling, storage, filing, processing and retrieval of medical records used by hospitals, private practitioners and other medical institutions. Medical records tend to be more active in nature and are typically stored on specialized open shelving systems that provide easier access to individual files. Healthcare information services also include recurring project work and ancillary services. Recurring project work involves the on-site removal of aged patient files and related computerized file indexing. Ancillary healthcare information services include release of information (medical record copying), temporary staffing, contract coding, facilities management and imaging.

Vital Records Services

Vital records contain critical or irreplaceable data such as master audio and video recordings, film and other highly proprietary information. Vital records may require special facilities or services, either because of the data they contain or the media on which they are recorded. Our charges for providing enhanced security and special climate-controlled environments for vital records are higher than for typical storage functions. We provide the same ancillary services for vital records as we provide for our other storage operations.

Service and Courier Operations

Service and courier operations are an integral part of a comprehensive records management program for all physical media including paper and electronic records. They include adding records to storage, temporary removal of records from storage, refiling of removed records, permanent withdrawals from storage, and destruction of records. Service charges are generally assessed for each procedure on a per unit basis. The SafekeeperPLUS® system controls the service processes from order entry through transportation and invoicing for business records management while the MediaLink™ and SecureBase™ systems manage the process for the data protection services business.

Courier operations consist primarily of the pickup and delivery of records upon customer request. Charges for courier services are based on urgency of delivery, volume and location and are billed monthly. As of December 31, 2004, we were utilizing a fleet of approximately 2,900 owned or leased vehicles.

Secure Shredding

Secure shredding is a natural extension of our records management services, completing the life cycle of a record. The service involves the shredding of sensitive documents for corporate customers that, in many cases, also use our services for management of less sensitive archival records. We believe that customers are motivated by increased privacy regulation and the desire to protect their proprietary trade secrets. These services typically include the scheduled pick-up of loose office records which customers accumulate in specially designed secure containers we provide. Complementary to our shredding operations is the sale of the resultant waste paper to third-party recyclers. Through a combination of plant-based shredding operations and mobile shredding units comprised of custom built trucks, we are able to offer secure shredding services to our customers in all of our existing business records management markets throughout the U.S. and Canada. We seek to expand our presence in this

business through acquisitions and internal start-ups that leverage our existing records management infrastructure.

Intellectual Property Management Services

We provide intellectual property management services through our wholly-owned subsidiary, Iron Mountain Intellectual Property Management, Inc. ("IPM"). IPM specializes in third party technology escrow services that protect intellectual property assets such as software source code. In addition, IPM assists in securing intellectual property as collateral for lending, investments and joint ventures, in managing domain name registrations and transfers, and in providing expertise and assistance to brokers and dealers in complying with electronic records regulations of the SEC.

Digital Archiving Services

Our digital archiving services focus on archiving digital information with long-term preservation requirements. These services represent the digital analogy to our physical records management services. Because of increased litigation risks and regulatory mandates, companies are increasingly aware of the need to apply the same records management policies and retention schedules to electronic data as they do physical records. Typical digital records include e-mail, e-statements, images, electronic documents retained for legal or compliance purposes and other data documenting business transactions.

The growth rate of mission-critical digital information is accelerating, driven in part by the use of the Internet as a distribution and transaction medium. The rising cost and increasing importance of digital information management, coupled with the increasing availability of telecommunications bandwidth at lower costs, may create meaningful opportunities for us. We continue to cultivate marketing and technology partnerships to support this anticipated growth.

We believe the issues encountered by customers trying to manage their electronic records are similar to the ones they face in their business records management programs and consist primarily of: (1) storage capacity and the preservation of data; (2) access to and control over the data in a secure environment; and (3) the need to retain electronic records due to regulatory compliance or for litigation support. Our digital archiving service is representative of our commitment to address evolving records management needs and expand the array of services we offer.

Complementary Services and Products

We offer a variety of additional services which customers may request or contract for on an individual basis. These services include conducting records inventories, packing records into cartons or other containers, and creating computerized indices of files and individual documents. We also provide services for the management of active records programs. We can provide these services, which generally include document and file processing and storage, both off-site at our own facilities and by supplying our own personnel to perform management functions on-site at the customer's premises.

Other complementary lines of business that we operate include fulfillment services and professional consulting services. Fulfillment services are performed by our wholly-owned subsidiary, COMAC, Inc. ("COMAC"). COMAC stores customer marketing literature and delivers this material to sales offices, trade shows and prospective customers' sites based on current and prospective customer orders. In addition, COMAC assembles custom marketing packages and orders, and manages and provides detailed reporting on customer marketing literature inventories.

We provide professional consulting services to customers, enabling them to develop and implement comprehensive records and information management programs. Our consulting business draws on our experience in information storage and protection services to analyze the practices of companies and assist them in creating more effective programs of records and information management. Our

consultants work with these customers to develop policies for document review, analysis and evaluation and for scheduling of document retention and destruction.

We also sell: (1) a full line of specially designed corrugated cardboard, metal and plastic storage containers; (2) magnetic media products including computer tapes, cartridges and drives, tape cleaners and supplies and CDs; and (3) computer room equipment and supplies such as racking systems, furniture, bar code scanners and printers.

Financial Characteristics of Our Business

Our financial model is based on the recurring nature of our revenues. The historical predictability of this revenue stream and the resulting operating income before depreciation and amortization ("OIBDA")¹ allow us to operate with a high degree of financial leverage. Our primary financial goal has always been, and continues to be, to increase consolidated OIBDA in relation to capital invested, even as our focus has shifted from growth through acquisitions to internal revenue growth. Our business has the following financial characteristics:

1

For a more detailed definition and reconciliation of OIBDA and a discussion of why we believe this measure provides relevant and useful information to our current and potential investors, see Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Measures."

•: Recurring Revenues. We derive a majority of our consolidated revenues from fixed periodic, usually monthly, fees charged to customers based on the volume of records stored. Our quarterly revenues from these fixed periodic storage fees have grown for 64 consecutive quarters. Once a customer places physical records in storage with us and until those records are destroyed or permanently removed, for which we typically receive a service fee, we receive recurring payments for storage fees without incurring additional labor or marketing expenses or significant capital costs. Similarly, contracts for the storage of electronic backup media consist primarily of fixed monthly payments. In each of the last five years, storage revenues, which are stable and recurring, have accounted for over 57% of our total revenues. This stable and growing storage revenue base also provides the foundation for increases in service revenues and OIBDA.
•: Historically Non-Cyclical Storage Business. We have not experienced any significant reductions in our storage business as a result of past general economic downturns, although we can give no assurance that this would be the case in the future. We believe that companies that have outsourced records management services are less likely during economic downturns to incur the move-out costs and other expenses associated with switching vendors or moving their records management services programs in-house. However, during this most recent economic slowdown, the rate at which some customers added new cartons to their inventory was below historical levels. The net effect of these factors is the continued growth of our storage revenue base, albeit at a lower rate.
•: Inherent Growth from Existing Physical Records Customers. Our physical records customers have on average generated additional cartons at a faster rate than stored cartons have been destroyed or permanently removed. We estimate that inherent growth from existing customers represents approximately half of total net volume growth in North America. We believe the consistent growth of our physical records storage revenues is the result of a number of factors, including: (1) the trend toward increased records retention; (2) customer satisfaction with our services; and (3) the costs and inconvenience of moving storage operations in-house or to another provider of information storage and protection services.
•: Diversified and Stable Customer Base. As of December 31, 2004, we had over 235,000 customer accounts in a variety of industries. We currently provide services to numerous commercial, legal,

banking, healthcare, accounting, insurance, entertainment and government organizations, including more than 95% of the Fortune 1000 and more than two-thirds of the FTSE 100. No customer accounted for more than 2% of our consolidated revenues for the year ended December 31, 2004. For the years 2002 through 2004, the average volume reduction due to customers terminating their relationship with us was less than 2%.

•: Capital Expenditures Related Primarily to Growth. Our information storage and protection business requires limited annual capital expenditures made in order to maintain our current revenue stream. For the years 2002 through 2004, over 85% of our aggregate capital expenditures were growth-related investments, primarily in storage systems, which include racking, building and leasehold improvements, computer systems hardware and software, and buildings. These growth-related capital expenditures are primarily discretionary and create additional capacity for increases in revenues and OIBDA. In addition, since shifting our focus from growth through acquisitions to internal revenue growth, our capital expenditures, made primarily to support our internal revenue growth, have exceeded the aggregate acquisition consideration we conveyed in both 2001 and 2002. Although this was not the case in 2003 due to the acquisition of Hays IMS and in 2004 due to the acquisition of Connected and the 49.9% equity interest held by Mentmore in IME, we expect this to be the case in 2005 and thereafter.

Growth Strategy

Our objective is to maintain our position as the leader in information storage and protection services. In the U.S. and Canada, we seek to be one of the largest information storage and protection services providers in each of our geographic markets. Internationally, our objectives are to continue to capitalize on our expertise in the information storage and protection services industry and to make additional acquisitions and investments in selected international markets. Our primary avenues of growth are: (1) increased business with existing customers; (2) the addition of new customers; (3) the introduction of new products and services such as secure shredding, electronic vaulting and digital archiving; and (4) selective acquisitions in new and existing markets.

Growth from Existing Customers

Our existing customers storing physical records contribute to storage and storage-related service revenues growth because on average they generate additional cartons at a faster rate than old cartons are destroyed or permanently removed. In order to maximize growth opportunities from existing customers, we seek to maintain high levels of customer retention by providing premium customer service through our local account management staff.

Our sales coverage model is designed to identify and capitalize on incremental revenue opportunities by reallocating our sales resources based on a more sophisticated segmentation of our customer base and selling additional business records management and data protection services within our existing customer relationships. We also seek to leverage existing business relationships with our customers by selling complementary services and products. Services include records tracking, indexing, customized reporting, vital records management and consulting services.

Addition of New Customers

Our sales forces are dedicated to three primary objectives: (1) establishing new customer account relationships, (2) generating additional revenue from existing customers and (3) expanding new and existing customer relationships by effectively selling a wide array of complementary services and products. In order to accomplish these objectives, our sales forces draw on our U.S. and international marketing organizations and senior management. As a result of acquisitions and our decision to recruit additional qualified sales professionals, we have increased the size of our sales force to approximately 700 such professionals as of December 31, 2004 from approximately 450 as of December 31, 2002.

Introduction of New Products and Services

We continue to expand our menu of products and services. We have established a national presence in the U.S. and Canadian secure shredding industry and offer new electronic vaulting and digital archiving services. These new products and services allow us to further penetrate our existing customer accounts and attract new customers in previously untapped markets.

Growth through Acquisitions

Our acquisition strategy includes expanding geographically, as necessary, and increasing our presence and scale within existing markets through "fold-in" acquisitions. We have a successful record of acquiring and integrating information storage and protection services companies. Between January 1, 1996 and December 31, 2000, the height of our acquisition activity, we completed 78 acquisitions in North America, Europe and Latin America for total consideration of approximately $2 billion, including approximately $1.0 billion associated with our merger with Pierce Leahy Corp. ("Pierce Leahy") in February 2000. During that period, we substantially completed our geographic expansion in North America and began to expand in Europe and Latin America. Between January 1, 2001 and December 31, 2004, we completed an additional 63 acquisitions for total consideration of approximately $890 million, primarily in the information storage and protection services industry in North America, Europe and Latin America and the secure shredding industry in North America. The major transactions during this period included the Hays IMS acquisition in July 2003 for approximately $333 million, the acquisition of the 49.9% interest held by Mentmore in IME for approximately 82.5 million British pounds sterling ($154 million) in cash in February 2004 and the Connected acquisition in November 2004 for approximately $109 million, net of cash acquired.

Acquisitions in the U.S. and Canada

We intend to continue our acquisition program in the U.S. and Canada focusing on the secure shredding industry, expanding geographically, as necessary and building scale in some of our smaller markets through "fold-in" acquisitions. However, given the small number of large acquisition prospects and our increased revenue base, future acquisitions are expected to be less significant to overall U.S. and Canadian revenue growth than they were prior to 2001.

International Growth Strategy

We also intend to continue to make acquisitions and investments in information storage and protection services businesses outside the U.S. and Canada. We have acquired and invested in, and seek to acquire and invest in, information storage and protection services companies in countries, and, more specifically, markets within such countries, where we believe there is sufficient demand from existing multinational customers or the potential for significant growth. Since beginning our international expansion program in January 1999, we have directly and through joint ventures, expanded our operations into 20 countries in Europe and Latin America. These transactions have taken, and may continue to take, the form of acquisitions of the entire business or controlling or minority investments, with a long-term goal of full ownership. In addition to the criteria we use to evaluate U.S. and Canadian acquisition candidates, we also evaluate the presence in the potential market of our existing customers as well as the risks uniquely associated with an international investment, including those risks described below.

The experience, depth and strength of local management are particularly important in our international acquisition strategy. As a result, we have formed joint ventures with, or acquired significant interests in, target businesses throughout Europe and Latin America. We began our international expansion by acquiring a 50.1% controlling interest in each of our Iron Mountain Europe Limited, Iron Mountain South America, Ltd. ("IMSA") and Sistemas de Archivo Corporativo (a Mexican limited liability company) subsidiaries. IMSA has in some cases bought controlling, yet not

full, ownership in local businesses in order to enhance our local market expertise. We believe this strategy, rather than an outright acquisition, may, in certain markets, better position us to expand the existing business. The local partner benefits from our expertise in the information storage and protection services industry, our access to capital and our technology, and we benefit from our local partner's knowledge of the market, relationships with customers and their presence in the community.

Our long-term goal is to acquire full ownership of each such business. To that end, in February 2004 we acquired the 49.9% equity interest held by Mentmore in IME and in January 2005 we acquired the 49.9% equity interest in IMSA held by Compass Capital Fund L.P. In addition, we have bought out partnership interests, in whole or in part, in Chile, Mexico, Eastern Europe and the Netherlands. As a result of these transactions we have direct ownership of more than 98% of our international operations.

Our international investments are subject to risks and uncertainties relating to the indigenous political, social, regulatory, tax and economic structures of other countries, as well as fluctuations in currency valuation, exchange controls, expropriation and governmental policies limiting returns to foreign investors.

The amount of our revenues derived from international operations and other relevant financial data for fiscal years 2002, 2003 and 2004 are set forth in Note 12 to Notes to Consolidated Financial Statements. For the years ended December 31, 2002, 2003 and 2004, we derived approximately 14%, 19% and 27%, respectively, of our total revenues from outside of the U.S. As of December 31, 2002, 2003 and 2004, we have long-lived assets of approximately 16%, 27% and 31%, respectively, from outside of the U.S.

Customers

Our customer base is diversified in terms of revenues and industry concentration. We track customer accounts based on invoices. Accordingly, depending upon how many invoices have been arranged at the request of a customer, one organization may represent multiple customer accounts. As of December 31, 2004, we had over 235,000 customer accounts in a variety of industries. We currently provide services to numerous commercial, legal, banking, healthcare, accounting, insurance, entertainment and government organizations, including more than 95% of the Fortune 1000 and more than two-thirds of the FTSE 100. No customer accounted for more than 2% of our consolidated revenues for the year ended December 31, 2004.

Competition

We compete with our current and potential customers' internal information storage and protection services capabilities. We can provide no assurance that these organizations will begin or continue to use an outside company such as Iron Mountain for their future information storage and protection services.

We compete with multiple information storage and protection services providers in all geographic areas where we operate. We believe that competition for customers is based on price, reputation for reliability, quality of service and scope and scale of technology and that we generally compete effectively based on these factors.

We also compete with other information storage and protection services providers for companies to acquire. Some of our competitors may possess substantial financial and other resources. If any such competitor were to devote additional resources to the information storage and protection services business and such acquisition candidates or focus their strategy on our markets, our results of operations could be adversely affected.

Alternative Technologies

We derive most of our revenues from the storage of paper documents and storage-related services. This storage requires significant physical space. Alternative storage technologies exist, many of which require significantly less space than paper documents. These technologies include computer media, microform, CD-ROM and optical disk. To date, none of these technologies has replaced paper documents as the principal means for storing information. However, we can provide no assurance that our customers will continue to store most of their records in paper documents format. We continue to invest in additional services such as electronic vaulting and digital archiving, designed to address our customers' need for efficient, cost-effective, high quality solutions for electronic records and information management.

Employees

As of December 31, 2004, we employed over 9,500 employees in the U.S. and over 5,000 employees outside of the U.S. At December 31, 2004, an aggregate of 460 employees were represented by unions in California and two cities in Canada.

All non-union employees are generally eligible to participate in our benefit programs, which include medical, dental, life, short and long-term disability, retirement/401(k) and accidental death and dismemberment plans. Unionized employees receive these types of benefits through their unions. In addition to base compensation and other usual benefits, all full-time employees participate in some form of incentive-based compensation program that provides payments based on revenues, profits, collections or attainment of specified objectives for the unit in which they work. Management believes that we have good relationships with our employees and unions.

Insurance

For strategic risk transfer purposes, we maintain a comprehensive insurance program with insurers that we believe to be reputable and that have adequate capitalization in amounts that we believe to be appropriate. Property insurance is purchased on an all-risk basis, including flood and earthquake, subject to certain policy conditions, sublimits and deductibles, and inclusive of the replacement cost of real and personal property, including leasehold improvements, business income loss and extra expense. Separate excess policies for insurer defined Critical Earthquake Zone exposures are maintained at what we believe to be appropriate limits and deductibles for that exposure. Included among other types of insurance that we carry are: workers compensation, general liability, umbrella, automobile, professional and directors and officers liability policies, subject to certain policy conditions, sublimits and deductibles. In 2002, we established a wholly-owned Vermont domiciled captive insurance company as a subsidiary; through the subsidiary we retain and reinsure a portion of our property loss exposure.

Our standard form of storage contract sets forth an agreed maximum valuation for each carton or other storage unit held by us, which serves as a limitation of liability for loss or damage, as permitted under the Uniform Commercial Code. In contracts containing such limits, such values are nominal, and we believe that in typical circumstances our liability would be so limited in the event of loss or damage to stored items for which we may be held liable. However, some of our agreements with large volume accounts and some of the contracts assumed in our acquisitions contain no such limits or contain higher limits or supplemental insurance arrangements.

Environmental Matters

Some of our currently and formerly owned or operated properties were previously used by entities other than us for industrial or other purposes that involved the use or storage of hazardous substances or petroleum products or may have involved the generation of hazardous wastes. In some instances these properties included the operation of underground storage tanks or the presence of asbestos-containing materials. We have undertaken remediation activities at some of our properties. Although

we regularly conduct limited environmental reviews of real property that we intend to purchase, we have not undertaken an in-depth environmental review of all of our owned and operated properties. Under various federal, state and local environmental laws, we may be potentially liable for environmental compliance and remediation costs to address contamination, if any, located at owned and operated properties as well as damages arising from such contamination. Environmental conditions for which we might be liable may also exist at properties that we may acquire in the future. In addition, future regulatory action and environmental laws may impose costs for environmental compliance that do not exist today.

We transfer a portion of our risk of financial loss due to currently undetected environmental matters by purchasing an environmental impairment liability insurance policy, which covers all owned and leased locations. Coverage is provided for both liability and remediation costs.

Internet Website

Our Internet address is www.ironmountain.com. Under the "Investor Relations" category on our Internet website, we make available through a hyperlink to a third party website, free of charge, our Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q, our Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (the "Exchange Act") as soon as reasonably practicable after such forms are electronically filed with or furnished to the SEC. We are not including the information contained on or available through our website as a part of, or incorporating such information by reference into, this Annual Report. Copies of our corporate governance guidelines, code of ethics and the charters of our audit, compensation, and nominating and governance committees may be obtained free of charge by writing to our Secretary, Iron Mountain Incorporated, 745 Atlantic Avenue, Boston, Massachusetts, 02111 and are available on our website www.ironmountain.com under the heading "Corporate Governance".

Item 2. Properties.

As of December 31, 2004, we conducted operations through 627 leased facilities and 206 facilities that we own. Our facilities are divided among our reportable segments as follows: Business Records Management (563), Data Protection (63), International (193) and Corporate and Other (14). These facilities contain a total of 51.7 million square feet of space. Facility rent expense was $112.8 million and $134.4 million for the years ended December 31, 2003 and 2004, respectively. The leased facilities typically have initial lease terms of ten years with options to renew for an additional five to ten years. In addition, some of the leases contain either a purchase option or a right of first refusal upon the sale of the property. Our facilities are located throughout North America, Europe and Latin America, with the largest number of facilities in California, Florida, Illinois, New Jersey, Texas, Canada and the U.K. We believe that the space available in our facilities is adequate to meet our current needs, although future growth may require that we acquire additional real property either by leasing or purchasing. See Note 13 to Notes to Consolidated Financial Statements for information regarding our minimum annual rental commitments.

Item 3. Legal Proceedings.

Pierce, H-W Associates, Pioneer and Sequedex Proceedings

We are involved as a plaintiff or defendant in a series of actions in New Jersey and Pennsylvania generally involving or arising out of assertions by Iron Mountain Incorporated that J. Peter Pierce, Sr. and others engaged in conduct in respect of an entity, Sequedex, LLC ("Sequedex"), that constituted a breach of Mr. Pierce's contractual and fiduciary obligations to us. The following is a summary of each of those cases.

On March 28, 2002, we and Iron Mountain Information Management, Inc. ("IMIM"), one of our wholly owned subsidiaries, commenced an action in the Middlesex County, New Jersey, Superior Court, Chancery Division, captioned Iron Mountain Incorporated and Iron Mountain Information Management, Inc. v. J. Peter Pierce, Sr., Douglas B. Huntley, J. Michael Gold, Fred A. Mathewson, Jr., Michael DiIanni, J. Anthony Hayden, Pioneer Capital, LLC, and Sequedex, LLC. In the complaint, we alleged that defendant J. Peter Pierce, Sr., a former member of our Board of Directors and the former President of IMIM until his termination without cause effective June 30, 2000, violated his fiduciary obligations, as well as various noncompetition and other provisions of an employment agreement with us, dated February 1, 2000, by providing direct and/or indirect financial, management and other support to defendant Sequedex. Sequedex was established in October 2000, and competed directly with us in the records and information management services industry. The complaint also alleged that Mr. Pierce and certain of the other defendants, who were employed by or affiliated with Pierce Leahy Corp. prior to the merger of Pierce Leahy with Iron Mountain in February 2000, misappropriated and used our trade secrets and other confidential information. Finally, the complaint asserted claims against Sequedex and others for tortious interference with contractual relations, against all of the defendants for civil conspiracy in respect of the matters described above, and against defendant Michael DiIanni for breach of his employment agreement with IMIM, dated September 6, 2000. The litigation sought injunctions in respect of certain matters and recovery of damages against the defendants.

On April 12, 2002, we also initiated a related arbitration proceeding against Mr. Pierce before the Philadelphia, Pennsylvania, office of the American Arbitration Association (the "AAA") pursuant to an arbitration clause in the employment agreement between us and Mr. Pierce. In the arbitration, Mr. Pierce counterclaimed for indemnification of his expenses, including attorneys' fees. We disputed Mr. Pierce's claim. On July 19, 2002, the litigation was stayed pending the outcome of the arbitration proceeding. On February 25, 2003, in response to our request, the AAA removed the arbitrator. The arbitration proceeding was transferred by agreement of the parties to ADR Options, Inc. On February 4, 2004, the arbitrator rendered a decision. The arbitrator did not find the evidence provided by us in our action against Mr. Pierce sufficient to rule in our favor on the particular claims at issue. In addition, the arbitrator ruled that, pursuant to an indemnification provision in Mr. Pierce's employment agreement, we must pay Mr. Pierce's attorneys fees and costs that are attributable to this single arbitration. The arbitrator established a procedure to ascertain the amount of these fees and expenses. We filed a motion to vacate the arbitrator's decision and award in Middlesex County, New Jersey. On June 16, 2004, that court denied our motion to vacate and confirmed the arbitration decision. We appealed the court's decision to the Appellate Division of the New Jersey Superior Court and voluntarily withdrew, without prejudice, the claims in that case other than those purportedly covered by the arbitration decision. Mr. Pierce filed a motion to dismiss the appeal, which was denied by the Appellate Division. Mr. Pierce subsequently filed an opposition to the appeal. The parties are awaiting notice of a hearing date for the appeal.

On September 13, 2004, the arbitrator issued a final award, granting Mr. Pierce indemnification for legal expenses incurred in the arbitration in the amount of approximately $1.6 million. Mr. Pierce brought an action in the Superior Court for Middlesex County to confirm such award and such court issued an order to show cause. We opposed this action and filed a motion to dismiss Mr. Pierce's claims and vacate the arbitration award, or in the alternative, for a stay pending disposition of the pending appeal regarding the motion to vacate.

prospective customer of Sequedex and, as a result, caused Sequedex to default on its lease to H-W Associates. The complaint seeks damages in excess of $0.1 million. We have denied the material allegations in the complaint filed against us by H-W Associates and the other plaintiffs and have since filed counterclaims against the plaintiffs alleging tortious interference with our business relationship with one of our longstanding customers. Certain discovery has been undertaken.

Also on December 16, 2002, Pioneer Capital L.P. ("Pioneer"), Pioneer Capital Genpar, Inc. ("PCG"), the general partner of Pioneer, and Mr. Pierce, the President of PCG, commenced an action in the Court of Common Pleas, Montgomery County, Pennsylvania, against Iron Mountain Incorporated, C. Richard Reese, John F. Kenny, Jr., Garry Watzke, Schooner Capital LLC ("Schooner") and Vincent J. Ryan. The named individuals are Directors and/or officers of Iron Mountain and Schooner is a shareholder of Iron Mountain. In the complaint, the plaintiffs allege that the defendants had numerous conversations and arrangements with Thomas Carr, one of Mr. Pierce's and Pioneer's business partners in a company named Logisteq LLC. The plaintiffs further allege that, as a result of such conversations and arrangements, defendants conspired to, and did intentionally, interfere with Pioneer's relationship with its partner and Logisteq. The plaintiffs also allege that defendants damaged Mr. Pierce's reputation in the community by telling our employees and other third parties that Mr. Pierce breached his employment agreement with us, misappropriated and used our confidential information, breached his fiduciary duties to our shareholders and assisted Sequedex, then a competitor of ours, in unfairly competing with us. Finally, the complaint alleges that the business partner in Logisteq taped conversations with Mr. Pierce and others which allegedly violated privacy laws, that the defendants knew, or should have known, that the tapes were being made without the consent of the individuals and, as a result, Mr. Pierce was harmed. The complaint seeks damages in excess of $5.0 million. We and the other defendants have challenged the legal sufficiency of the plaintiffs' pleadings in each of these cases and the court has issued a notice of its intention to dismiss the case for inactivity unless a party gives written notice of his or its intention to proceed by April 15, 2005.

On September 10, 2003, IMIM filed a complaint in the Court of Common Pleas, Montgomery County, Pennsylvania in a matter related to the litigation between Iron Mountain Incorporated and Sequedex, Mr. Pierce and others disclosed above. The new matter named Sequedex, J. Michael Gold and Peter Hamilton as defendants, and alleges that in 2000 defendants Gold and Hamilton, both former IMIM employees, used confidential and proprietary business information that they had obtained while employed by IMIM to form their own records management company, Sequedex. The complaint also alleged unlawful interference with IMIM's contractual relationship with a certain customer and other matters. The defendants filed preliminary objections to our complaint and we answered those preliminary objections. This matter has been voluntarily dismissed without prejudice.

In approximately October 2000, three former management employees of IMIM became employed by or otherwise associated with Sequedex. IMIM commenced actions against these three former employees to enforce its rights under their confidentiality and non-competition agreements. IMIM also asserted claims against Sequedex for tortious interference with these agreements, and against both Sequedex and the former employees for misappropriation and use of IMIM's trade secrets and confidential information.

held that the three individual defendants had not violated their covenants not to compete and had not misappropriated any of IMIM's trade secrets or confidential information, that Sequedex had not tortiously interfered with those agreements, and that IMIM and Iron Mountain Incorporated had not interfered with any of Sequedex's potential or actual business relationships and had not disparaged or defamed Sequedex. The Court thus entered a judgment dismissing all claims and counterclaims. Sequedex appealed the Court's decision to the Appellate Division of the New Jersey Superior Court. Iron Mountain Incorporated and IMIM filed an appellate brief in opposition to Sequedex's appeal. We intend to oppose the appeal by Sequedex vigorously. The parties are awaiting notice of a hearing date for the appeal.

General

In addition to the matters discussed above, we are involved in litigation from time to time in the ordinary course of business with a portion of the defense and/or settlement costs being covered by various commercial liability insurance policies purchased by us. In the opinion of management, no other material legal proceedings are pending to which we, or any of our properties, are subject.

The outcome of Pierce, H-W Associates, Pioneer and Sequedex proceedings cannot be predicted with certainty. Based on our present assessment of the situation, after consultation with legal counsel, management does not believe that the outcome of these proceedings will have a material adverse effect on our financial condition or results of operations, although there can be no assurance in this regard.

Item 4. Submission of Matters to a Vote of Security Holders.

There were no matters submitted to a vote of security holders of Iron Mountain during the fourth quarter of the fiscal year ended December 31, 2004.

PART II

Item 5. Market for the Registrant's Common Stock, Related Shareholder Matters and Issuer Purchases of Equity Securities.

Our common stock is traded on the New York Stock Exchange ("NYSE") under the symbol "IRM." On May 27, 2004, our board authorized and approved a three-for-two stock split effected in the form of a dividend on our common stock. We issued the additional shares of common stock resulting from this stock dividend on June 30, 2004 to all shareholders of record as of the close of business on June 15, 2004.

The following table sets forth the high and low sale prices on the NYSE, for the years 2003 and 2004, giving effect to such stock split:

		Sale Prices
		High		Low
2003
	First Quarter	$	26.33	$	20.15
	Second Quarter		27.09		24.42
	Third Quarter		26.63		22.37
	Fourth Quarter		26.77		23.19
2004
	First Quarter	$	30.75	$	25.83
	Second Quarter		32.77		27.95
	Third Quarter		33.94		30.21
	Fourth Quarter		35.09		28.80

The closing price of our common stock on the NYSE on March 2, 2005 was $30.45. As of March 2, 2005, there were 529 holders of record of our common stock. We believe that there are more than 24,000 beneficial owners of our common stock.

The only dividends we have paid on our common stock during the last two years was the stock dividend paid in connection with the stock split referenced above. Our Board currently intends to retain future earnings, if any, for the development of our business and does not anticipate paying cash dividends on our common stock in the foreseeable future. Any determinations by our Board to pay cash dividends on our common stock in the future will be based primarily upon our financial condition, results of operations and business requirements. Our Amended and Restated Credit Agreement dated July 8, 2004 contains provisions permitting the payment of cash dividends and stock repurchases subject to certain limitations.

The following table sets forth our common stock repurchased for the three months ended December 31, 2004:

Issuer Purchases of Equity Securities

Period	Total Number of Shares Purchased(1)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs
December 1, 2004-December 31, 2004	10,379	$	30.45	—	—

Total	10,379	$	30.45	—	—

(1): Consists of shares tendered by current and former employees, as payment of the exercise price of stock options granted, in accordance with provisions of our equity compensation plans and individual stock option agreements. No shares have been purchased other than as payment of the exercise price of stock options.

Item 6. Selected Financial Data.

The following selected consolidated statements of operations, balance sheet and other data have been derived from our audited consolidated financial statements. The selected consolidated financial and operating information set forth below should be read in conjunction with Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our Consolidated Financial Statements and the Notes thereto included elsewhere in this filing.

			Year Ended December 31,
			2000(1)			2001(1)			2002(1)(2)			2003(2)			2004(2)
			(In thousands, except per share data)
Consolidated Statements of Operations Data:
Revenues:
	Storage		$	585,664		$	694,474		$	759,536		$	875,035		$	1,043,366
	Service and Storage Material Sales			418,501			491,244			558,961			626,294			774,223

		Total Revenues		1,004,165			1,185,718			1,318,497			1,501,329			1,817,589
Operating Expenses:
	Cost of Sales (excluding depreciation)(3)			500,565			576,538			622,299			680,747			823,899
	Selling, General and Administrative(3)			246,998			307,800			333,050			383,641			486,246
	Depreciation and Amortization			126,662			153,271			108,992			130,918			163,629
	Stock Option Compensation Expense			15,110			—			—			—			—
	Merger-related Expenses			9,133			3,673			796			—			—
	Loss (Gain) on Disposal/Writedown of Property, Plant and Equipment, Net			148			320			774			1,130			(681	)

		Total Operating Expenses		898,616			1,041,602			1,065,911			1,196,436			1,473,093
Operating Income				105,549			144,116			252,586			304,893			344,496
Interest Expense, Net				117,975			134,742			136,632			150,468			185,749
Other Expense (Income), Net				10,865			37,485			1,435			(2,564	)		(7,988	)

(Loss) Income from Continuing Operations Before Provision for Income Taxes and Minority Interest				(23,291	)		(28,111	)		114,519			156,989			166,735
Provision for Income Taxes				6,758			17,875			47,318			66,730			69,574
Minority Interests in (Losses) Earnings of Subsidiaries, Net				(2,224	)		(1,929	)		3,629			5,622			2,970

(Loss) Income from Continuing Operations before Discontinued Operations and Cumulative Effect of Change in Accounting Principle				(27,825	)		(44,057	)		63,572			84,637			94,191
Income from Discontinued Operations (net of tax)				—			—			1,116			—			—
Cumulative Effect of Change in Accounting Principle (net of minority interest)				—			—			(6,396	)		—			—

Net (Loss) Income			$	(27,825	)	$	(44,057	)	$	58,292		$	84,637		$	94,191

Net (Loss) Income per Common Share—Basic:
	(Loss) Income from Continuing Operations		$	(0.23	)	$	(0.35	)	$	0.50		$	0.66		$	0.73
	Income from Discontinued Operations (net of tax)			—			—			0.01			—			—
	Cumulative Effect of Change in Accounting Principle (net of minority interest)			—			—			(0.05	)		—			—

Net (Loss) Income—Basic			$	(0.23	)	$	(0.35	)	$	0.46		$	0.66		$	0.73

Net (Loss) Income per Common Share—Diluted:
	(Loss) Income from Continuing Operations		$	(0.23	)	$	(0.35	)	$	0.49		$	0.65		$	0.72
	Income from Discontinued Operations (net of tax)			—			—			0.01			—			—
	Cumulative Effect of Change in Accounting Principle (net of minority interest)			—			—			(0.05	)		—			—

Net (Loss) Income—Diluted			$	(0.23	)	$	(0.35	)	$	0.45		$	0.65		$	0.72

Weighted Average Common Shares Outstanding—Basic				119,532			125,499			126,977			127,901			129,083

Weighted Average Common Shares Outstanding—Diluted				119,532			125,499			129,107			130,077			131,176

(footnotes follow)

	Year Ended December 31,
	2000(1)			2001(1)			2002(1)			2003			2004
	(In thousands)
Other Data:
OIBDA (4)	$	232,211		$	297,387		$	361,578		$	435,811		$	508,125
OIBDA Margin (4)		23.1	%		25.1	%		27.4	%		29.0	%		28.0	%
Ratio of Earnings to Fixed Charges		0.8	x(5)		0.8	x(5)		1.6	x		1.8	x		1.7	x

	As of December 31,
	2000(1)		2001		2002		2003		2004
	(In thousands)
Consolidated Balance Sheet Data:
Cash and Cash Equivalents	$	6,200	$	21,359	$	56,292	$	74,683	$	31,942
Total Assets		2,659,096		2,859,906		3,230,655		3,892,099		4,442,387
Total Long-Term Debt (including Current Portion of Long-Term Debt)		1,355,131		1,496,099		1,732,097		2,089,928		2,478,022
Shareholders' Equity		924,458		885,959		944,861		1,066,114		1,218,568

Reconciliation of OIBDA to Operating Income and Net (Loss) Income:

		Year Ended December 31,
		2000(1)			2001(1)			2002(1)(2)			2003(2)			2004(2)
		(In thousands)
OIBDA		$	232,211		$	297,387		$	361,578		$	435,811		$	508,125
Less: Depreciation and Amortization			126,662			153,271			108,992			130,918			163,629

Operating Income			105,549			144,116			252,586			304,893			344,496
Less: Interest Expense, Net			117,975			134,742			136,632			150,468			185,749
	Other Expense (Income), Net		10,865			37,485			1,435			(2,564	)		(7,988	)
	Provision for Income Taxes		6,758			17,875			47,318			66,730			69,574
	Minority Interests in (Losses) Earnings of Subsidiaries		(2,224	)		(1,929	)		3,629			5,622			2,970
	Income from Discontinued Operations (net of tax)		—			—			(1,116	)		—			—
	Cumulative Effect of Change in Accounting Principle (net of minority interest)		—			—			6,396			—			—

Net (Loss) Income		$	(27,825	)	$	(44,057	)	$	58,292		$	84,637		$	94,191

(footnotes follow)

(1): On February 1, 2000, we completed a merger with Pierce Leahy in a transaction valued at approximately $1,036,000. The results of the Pierce Leahy merger are reflected in the table above beginning with 11 months of activity in 2000. In addition, we recorded specific charges associated with the integration of the operations of Pierce Leahy in 2000, 2001 and 2002 within merger related expenses and recorded non-cash stock option compensation expense as a result of the Pierce Leahy acquisition in 2000. This merger impacts the comparability of results before and after the merger.
(2): Effective January 1, 2002, we ceased amortizing our goodwill balance in accordance with Statement of Financial Accounting Standards ("SFAS") No. 142, "Goodwill and Other Intangible Assets." The accounting change impacts the comparability of results to previous years. See Note 2(g) to Notes to Consolidated Financial Statements.
(3): Effective January 1, 2003, we began using the fair value method of accounting in our financial statements using the prospective method in accordance with SFAS No. 123, "Accounting for Stock-Based Compensation," as amended by SFAS No. 148, "Accounting for Stock-Based Compensation—Transition and Disclosure." As a result, we recorded $1,664 and $3,857 for the years ended December 31, 2003 and 2004, respectively, associated with such stock compensation expenses.
(4): OIBDA is defined as operating income before depreciation and amortization expenses. OIBDA Margin is calculated by dividing OIBDA by total revenues. For a more detailed definition and reconciliation of OIBDA and a discussion of why we believe these measures provide relevant and useful information to our current and potential investors, see Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Measures."
(5): We reported a loss from continuing operations before provision for income taxes and minority interest for the years ended December 31, 2000 and 2001. We would have needed to generate for the years ended December 31, 2000 and 2001 additional income from operations before provision for income taxes and minority interest of $23,291 and $28,111, respectively, to cover our fixed charges of $154,975 and $177,032, respectively.

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion should be read in conjunction with "Item 6. Selected Financial Data" and the Consolidated Financial Statements and Notes thereto and the other financial and operating information included elsewhere in this filing.

This discussion contains "forward-looking statements," as that term is defined in the Private Securities Litigation Reform Act of 1995 and in other federal securities laws. See "Cautionary Note Regarding Forward-Looking Statements" on page ii of this filing.

Overview

Our revenues consist of storage revenues as well as service and storage material sales revenues. Storage revenues, which are considered a key performance indicator for the information storage and protection services industry, consist of largely recurring periodic charges related to the storage of materials (either on a per unit or per cubic foot of records basis), which are typically retained by customers for many years, and have accounted for over 57% of total consolidated revenues in each of the last five years. Our quarterly revenues from these fixed periodic storage fees have grown for 64 consecutive quarters. In certain circumstances, based upon customer requirements, storage revenues include periodic charges associated with normal, recurring service activities. Service and storage material sales revenues are comprised of charges for related service activities and courier operations and the sale of storage materials. Related core service revenues arise from additions of new records, temporary removal of records from storage, refiling of removed records, destructions of records, permanent withdrawals from storage and the secure shredding of sensitive records. Our complementary services revenues arise from special project work, providing fulfillment services, consulting services and sales of software licenses, specially designed storage containers, magnetic media including computer tapes and related supplies. Courier operations consist primarily of the pickup and delivery of records upon customer request. Customers are generally billed on a monthly basis on contractually agreed-upon terms. Our consolidated revenues are subject to variations caused by the net effect of foreign currency translation on revenue derived from outside the U.S. For the years ended December 31, 2003 and 2004, we derived 19.0% and 26.8%, respectively, of our total revenues from outside the U.S. The increase in total revenues derived from outside the U.S. is primarily a result of our acquisition of Hays IMS.

Cost of sales (excluding depreciation) consists primarily of wages and benefits for field personnel, facility occupancy costs including rent and utilities, transportation expenses including vehicle leases and fuel, other product cost of sales and other equipment costs and supplies. Of these, wages and benefits and facility occupancy costs are the most significant. Trends in total wages and benefits dollars and as a percentage of total consolidated revenue are influenced by changes in headcount and compensation levels, achievement of incentive compensation targets, workforce productivity and variability in costs associated with medical insurance and workers compensation. Trends in facility occupancy costs are similarly impacted by the total number of facilities we occupy, the mix of properties we own versus properties we occupy under operating leases, fluctuations in per square foot occupancy costs, and the levels of utilization of these properties.

The expansion of our European operations, including the acquisition of Hays IMS, and secure shredding operations has resulted in changes to the mix of certain cost of sales components. Our European and secure shredding operations are more labor intensive; therefore, our labor expense will be higher as a percentage of revenue as compared to our North American information storage and protection operations. In addition, our secure shredding operations incur higher transportation costs and lower facility costs, as a percentage of consolidated revenue, as compared to our North American information storage and protection operations.

Selling, general and administrative expenses consist primarily of wages and benefits for management, administrative, information technology, sales, account management and marketing

personnel, as well as expenses related to communications and data processing, travel, professional fees, bad debts, training, office equipment and supplies. Trends in total wages and benefits dollars and as a percentage of total consolidated revenue are influenced by changes in headcount and compensation levels, achievement of incentive compensation targets, workforce productivity and variability in costs associated with medical insurance. Our adoption of the measurement provisions of SFAS No. 123 as amended by SFAS No. 148 has resulted in increasing amounts of selling, general and administrative expenses. We began using the fair value method of accounting in our financial statements beginning January 1, 2003 using the prospective method. The prospective method involves recognizing expense for the fair value for all awards granted or modified in the year of adoption and thereafter with no expense recognition for previous awards. The overhead structure of our expanding European operations, as compared to our North American operations, is more labor intensive and has not achieved the same level of overhead leverage, which may result in an increase in selling, general and administrative expenses, as a percentage of consolidated revenue, as our European operations become a more meaningful percentage of our consolidated results.

Our depreciation and amortization charges result primarily from the capital-intensive nature of our business. The principal components of depreciation relate to storage systems, which include racking, building and leasehold improvements, computer systems hardware and software, and buildings. Amortization relates primarily to customer relationships and acquisition costs.

In February 2004, we completed the acquisition of the 49.9% equity interest held by Mentmore in IME. This transaction had no material impact on revenue or operating income since we already fully consolidate IME's financial results. Since we have used the purchase method of accounting for this acquisition, 49.9% of the net assets of IME have been adjusted to reflect their fair market value if different from their carrying value on the acquisition date. As a result, this transaction increased depreciation and amortization expenses. Additionally, we have recorded an increase in interest expense, net associated with debt used to fund this acquisition and no longer record the minority interest in earnings of subsidiaries, net related to Mentmore's ownership interest in IME.

Our consolidated expenses are subject to variations caused by the net effect of foreign currency translation on expenses incurred by our entities outside the U.S. During 2004, we have seen increases in both revenues and expenses as a result of the strengthening of the British pound sterling, the Euro, and the Canadian dollar against the U.S. dollar, based on an analysis of weighted average rates for the comparable periods. It is difficult to predict how much foreign currency exchange rates will fluctuate in the future and how those fluctuations will impact individual balances reported in our consolidated statement of operations. Given the relative increase in our international operations, these fluctuations may become material on individual balances. However, because both the revenues and expenses are denominated in the local currency of the country in which they are derived or incurred, the impact of currency fluctuations of our operating income, operating margin and net income is mitigated.

Non-GAAP Measures

Operating Income Before Depreciation and Amortization, or OIBDA

OIBDA is defined as operating income before depreciation and amortization expenses. OIBDA Margin is calculated by dividing OIBDA by total revenues. Our management uses these measures to evaluate the operating performance of our consolidated business. As such, we believe these measures provide relevant and useful information to our current and potential investors. We use OIBDA for planning purposes and multiples of current or projected OIBDA-based calculations in conjunction with our discounted cash flow models to determine our overall enterprise valuation and to evaluate acquisition targets. We believe OIBDA and OIBDA Margin are useful measures to evaluate our ability to grow our revenues faster than our operating expenses and they are an integral part of our internal reporting system utilized by management to assess and evaluate the operating performance of our

business. OIBDA does not include certain items, specifically (1) minority interest in earnings (losses) of subsidiaries, net, (2) other (income) expense, net, (3) income from discontinued operations and loss on sale of discontinued operations and (4) cumulative effect of change in accounting principle that we believe are not indicative of our core operating results. OIBDA also does not include interest expense, net and the provision for income taxes. These expenses are associated with our capitalization and tax structures, which management does not consider when evaluating the profitability of our core operations. Finally, OIBDA does not include depreciation and amortization expenses, in order to eliminate the impact of capital investments, which management believes is better evaluated by comparing capital expenditures to incremental revenue generated and as a percentage of total revenues. OIBDA and OIBDA Margin should be considered in addition to, but not as a substitute for, other measures of financial performance reported in accordance with accounting principles generally accepted in the Unites States of America, or GAAP, such as operating or net income or cash flows from operating activities (as determined in accordance with GAAP).

Reconciliation of OIBDA to Operating Income and Net Income (In Thousands):

		Year Ended December 31,
		2002			2003			2004
OIBDA		$	361,578		$	435,811		$	508,125
Less: Depreciation and Amortization			108,992			130,918			163,629

Operating Income			252,586			304,893			344,496
Less: Interest Expense, Net			136,632			150,468			185,749
	Other Expense (Income), Net		1,435			(2,564	)		(7,988	)
	Provision for Income Taxes		47,318			66,730			69,574
	Minority Interest		3,629			5,622			2,970
	Income from Discontinued Operations		(1,116	)		—			—
	Cumulative Effect of Change in Accounting Principle		6,396			—			—

Net Income		$	58,292		$	84,637		$	94,191

Critical Accounting Policies

Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires us to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities at the date of the financial statements and for the period then ended. On an on-going basis, we evaluate the estimates used, including those related to the allowance for doubtful accounts and credit memos, impairments of tangible and intangible assets, income taxes, purchase accounting related reserves, self-insurance liabilities, incentive compensation liabilities, litigation liabilities and contingencies. We base our estimates on historical experience, actuarial estimates, current conditions and various other assumptions that we believe to be reasonable under the circumstances. These estimates form the basis for making judgments about the carrying values of assets and liabilities and are not readily apparent from other sources. We use these estimates to assist us in the identification and assessment of the accounting treatment necessary with respect to commitments and contingencies. Actual results may

differ from these estimates. Our critical accounting policies include the following, which are listed in no particular order:

Accounting for Acquisitions

Part of our growth strategy has included the acquisition of numerous businesses. The purchase price of these acquisitions has been determined after due diligence of the acquired business, market research, strategic planning, and the forecasting of expected future results and synergies. Estimated future results and expected synergies are subject to revisions as we integrate each acquisition and attempt to leverage resources.

Each acquisition has been accounted for using the purchase method of accounting as defined under the applicable accounting standards at the date of each acquisition, including, Accounting Principles Board Opinion No. 16, "Accounting for Business Combinations," and more recently, SFAS No. 141, "Business Combinations." Accounting for these acquisitions has resulted in the capitalization of the cost in excess of fair value of the net assets acquired in each of these acquisitions as goodwill. We estimated the fair values of the assets acquired in each acquisition as of the date of acquisition and these estimates are subject to adjustment. These estimates are subject to final assessments of the fair value of property, plant and equipment, intangible assets, operating leases and deferred income taxes. We complete these assessments within one year of the date of acquisition. We are not aware of any information that would indicate that the final purchase price allocations for acquisitions completed in 2004 would differ meaningfully from preliminary estimates. See Note 7 to Notes to Consolidated Financial Statements.

In connection with each of our acquisitions, we have undertaken certain restructurings of the acquired businesses to realize efficiencies and potential cost savings. Our restructuring activities include the elimination of duplicate facilities, reductions in staffing levels, and other costs associated with exiting certain activities of the businesses we acquire. The estimated cost of these restructuring activities are included as costs of the acquisition and are recorded as goodwill consistent with the guidance of Emerging Issues Task Force ("EITF") Issue No. 95-3, "Recognition of Liabilities in Connection with a Purchase Business Combination." While we finalize our plans to restructure the businesses we acquire within one year of the date of acquisition, it may take more than one year to complete all activities related to the restructuring of an acquired business.

Our acquisitions have resulted in a significant accumulation of goodwill. Beginning on January 1, 2002, we ceased to amortize goodwill in accordance with SFAS No. 142. We reviewed goodwill for impairment consistent with the guidelines of SFAS No. 142 using a discounted future cash flow approach to approximate fair value. The result of testing our goodwill for impairment in accordance with SFAS No. 142, as of January 1, 2002, was a non-cash charge of $6.4 million (net of minority interest of $8.5 million), which, consistent with SFAS No. 142, is reported in the caption "cumulative effect of change in accounting principle" in our consolidated statement of operations. Impairment adjustments recognized in the future, if any, are generally required to be recognized as operating expenses. The $6.4 million charge related to our South American reporting unit within our international reporting segment. The South American reporting unit failed the impairment test primarily due to a reduction in the expected future performance of the unit resulting from a deterioration of the local economic environment and the devaluation of the currency in Argentina. As goodwill amortization expense in our South American reporting unit is not deductible for tax purposes, this impairment charge is not net of a tax benefit. At the time of the impairment, we had a controlling interest in Iron Mountain South America, Ltd ("IMSA") and the remainder was owned by an unaffiliated entity; in January 2005 we acquired the unaffiliated entity's interest in IMSA. IMSA has acquired a controlling interest in entities in which local partners have retained a minority interest in order to enhance our local market expertise. These local partners have no ownership interest in IMSA. This caused the minority interest portion of the non-cash goodwill impairment charge ($8.5 million) to

exceed our portion of the non-cash goodwill impairment charge ($6.4 million). In accordance with SFAS No. 142, we selected October 1 as our annual goodwill impairment review date. We performed our most recent annual goodwill impairment review as of October 1, 2004 and noted no impairment of goodwill at our reporting units as of that date. As of December 31, 2004, no factors were identified that would alter this assessment.

Allowance for Doubtful Accounts and Credit Memos

We maintain an allowance for doubtful accounts and credit memos for estimated losses resulting from the potential inability of our customers to make required payments and disputes regarding billing and service issues. When calculating the allowance, we consider our past loss experience, current and prior trends in our aged receivables and credit memo activity, current economic conditions, and specific circumstances of individual receivable balances. If the financial condition of our customers were to significantly change, resulting in a significant improvement or impairment of their ability to make payments, an adjustment of the allowance may be required. As of December 31, 2003 and 2004, our allowance for doubtful accounts and credit memos balance totaled $20.9 million and $13.9 million, respectively. The decrease in the allowance for doubtful accounts and credit memos as of December 31, 2004 compared to December 31, 2003 is primarily attributable to the success of our centralized collection efforts within the U.S. and Canada, which resulted in improved cash collections and an improved accounts receivable aging that enabled us to significantly reduce our allowance for doubtful accounts and credit memos. This decrease was partially offset by an increase in the allowance for doubtful accounts and credit memos associated with businesses acquired during the year ended December 31, 2004.

Accounting for Derivative Instruments and Hedging Activities

SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities," establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts (collectively referred to as derivatives), and for hedging activities. SFAS No. 133 requires an entity to recognize all derivatives as either assets or liabilities on its balance sheet and measure those instruments at fair value. If certain conditions are met, a derivative may be specifically designated as (1) a hedge of the exposure to changes in the fair value of a recognized asset or liability or an unrecognized firm commitment; (2) a hedge of the exposure to variable cash flows of a forecasted transaction; or (3) a hedge of the foreign currency exposure of a net investment in a foreign operation, an unrecognized firm commitment, an available-for-sale security, or a foreign-currency-denominated forecasted transaction. The accounting for changes in the fair value of a derivative depends on the intended use of the derivative and resulting designation. Unrealized gains and losses are recognized each period as other comprehensive income which is a component of accumulated other comprehensive items included in shareholders' equity, assets and liabilities or earnings depending on the nature of such derivatives. See Note 4 to Notes to Consolidated Financial Statements for a detailed description of our derivative instruments.

In order for a derivative contract to be designated as a hedge, the relationship between the hedging instrument and the hedged item or transaction must be highly effective. The effectiveness test is performed at the inception of the hedge and each reporting period thereafter, throughout the period that the hedge is designated. Any amounts determined to be ineffective are recorded currently in earnings.

For fair value hedges, the gains and losses are recorded in earnings each period along with the change in the fair value of the hedged item. For cash flow hedges, the effective portions of the gains and losses are recorded to other comprehensive income and are recognized in earnings concurrent with the disposition of the hedged risks. For hedges of foreign currency the accounting treatment generally

follows the treatment for cash flow hedges or fair value hedges depending on the nature of the foreign currency hedge.

Although we apply some judgment in the assessment of hedge effectiveness to designate certain derivatives as hedges, the nature of the contracts used to hedge the underlying risks is such that the correlation of the changes in fair values of the derivatives and underlying risks is generally high. We had net interest rate risk management liabilities of $11.3 million related to cash flow hedges at December 31, 2004. During the year ended December 31, 2004, we recorded charges totaling $9.5 million due to the recharacterization of interest rate swaps associated with our real estate term loans. As of December 31, 2004, we had $2.7 million, net of tax of unrealized losses included in other comprehensive income in shareholders' equity.

We provided the initial financing totaling 190.5 million British pounds sterling to IME for all of the consideration associated with the July 2003 acquisition of the European operations of Hays IMS using cash on hand and borrowings under our revolving credit facility. In order to minimize the foreign currency risk associated with providing IME with the consideration necessary for the acquisition of Hays IMS, we borrowed 80.0 million British pounds sterling under our revolving credit facility to create a natural hedge against our British pounds sterling denominated intercompany receivable from IME. The 80.0 million British pounds sterling outstanding under our revolving credit facility was repaid in March 2004 using proceeds received from IME in repayment of the initial financing, which reduced the intercompany balance. Foreign currency losses and gains associated with the revolving credit balance were equivalent to gains and losses recorded on the associated portion of the intercompany balance with IME. In addition, we entered into two cross currency swaps with a combined notional value of 100.0 million British pounds sterling. These swaps each had a term of one year and at maturity we had a right to receive $162.8 million in exchange for 100.0 million British pounds sterling. We did not designate these swaps as hedges and, therefore, all mark to market fluctuations of the swaps were recorded in other (income) expense, net in our consolidated statements of operations from inception to cash payment of the swaps. We have recorded foreign currency losses of $19.0 million and $8.7 million for the years ended December 31, 2003 and 2004, respectively, in other (income) expense, net. Both cross currency swaps were terminated in March 2004 and were settled with proceeds received from IME in repayment of the initial financing.

One of our interest rate swaps was used to hedge interest rate risk on certain variable operating lease commitments. As a result of the December 31, 2002 consolidation of one of our variable interest entities ("VIE I"), the operating lease commitments that were hedged by this swap are now considered to be inter-company transactions and we determined that this hedge was no longer effective on a prospective basis. We have consolidated the real estate term loans of VIE I, and beginning on January 1, 2003 we began prospectively recording interest expense instead of rent expense as we made cash interest payments on this debt. In March 2004, we repaid this real estate term loan. As a result, we recorded a charge of $0.8 million in interest expense due to recharacterization of the interest rate swap associated with this real estate term loan. This charge represents the fair market value of the swap, which is a calculation of the net present value of the expected monthly cash payments over the remaining term of the swap based on current market conditions, as of the date the real estate term loan was repaid. We did not terminate the swap and expect to enjoy the benefit of the fixed rate financing and will continue to mark to market the fair market value of the derivative liability to interest expense, net and make our monthly cash payments as required under the swap contract for the remaining term. This swap will terminate in March 2005.

Another of our interest rate swaps was used to hedge interest rate risk on certain variable operating lease commitments. This swap agreement was established to hedge the majority of interest rate risk associated with another of our variable interest entity's ("VIE III") real estate term loans. This swap had been since inception an effective hedge in accordance with SFAS No. 133. As a result of repaying VIE III's real estate term loan in August 2004, we recorded an additional $8.7 million in interest expense due to recharacterization of the interest rate swap associated with this real estate term

loan. This charge represents the fair market value of the swap, which is a calculation of the net present value of the expected monthly cash payments over the remaining term of the swap based on current market conditions, as of the date the real estate term loan was repaid. We did not terminate the swap and expect to enjoy the benefit of the fixed rate financing and will continue to mark to market the fair market value of the derivative liability to interest expense, net and make our monthly cash payments as required under the swap contract for the remaining term of approximately three years. See Notes 3, 4 and 5 to Notes to Consolidated Financial Statements.

Accounting for Internal Use Software

We develop various software applications for internal use. We account for those costs in accordance with the provisions of Statement of Position ("SOP") 98-1, "Accounting for the Costs of Computer Software Developed or Obtained for Internal Use." SOP 98-1 requires computer software costs associated with internal use software to be expensed as incurred until certain capitalization criteria are met. SOP 98-1 also defines which types of costs should be capitalized and which should be expensed. Payroll and related costs for employees who are directly associated with, and who devote time to, the development of internal use computer software projects, to the extent time is spent directly on the project, are capitalized and depreciated over the estimated useful life of the software. Capitalization begins when the design stage of the application has been completed and it is probable that the project will be completed and used to perform the function intended. Depreciation begins when the software is placed in service. Computer software costs that are capitalized are evaluated for impairment in accordance with SFAS No.144, "Accounting for the Impairment or Disposal of Long-Lived Assets."

It may be necessary for us to write-off amounts associated with the development of internal use software if the project cannot be completed as intended. Our expansion into new technology-based service offerings requires the development of internal use software that will be susceptible to rapid and significant changes in technology. We may be required to write-off unamortized costs or shorten the estimated useful life if an internal use software program is replaced with an alternative tool prior to the end of the software's estimated useful life. General uncertainties related to expansion into digital businesses, including the timing of introduction and market acceptance of our services, may adversely impact the recoverability of these assets.

During the years ended December 31, 2002 and 2003, we replaced internal use software programs, which resulted in the write-off to loss on disposal/writedown of property, plant and equipment, net of the remaining net book value of $1.1 million and $0.7 million, respectively. We did not have any such write-offs during 2004.

Deferred Income Taxes

We have recorded a valuation allowance to reduce our deferred tax assets to the amount that is more likely than not to be realized. In the ordinary course of our business, there are many transactions and calculations where the ultimate tax outcome is uncertain. If actual results differ unfavorably from certain of our estimates used, we may not be able to realize all or part of our net deferred tax assets and additional valuation allowances may be required. Although we believe our estimates are reasonable, no assurance can be given that our estimates reflected in the income tax provisions and accruals will equal our actual results. These differences could have a material impact on our income tax provision and operating results in the period in which such determination is made.

We have not provided deferred taxes on book basis differences related to certain foreign subsidiaries because such basis differences are not expected to reverse in the foreseeable future and we intend to reinvest indefinitely outside the U.S. These basis differences arose primarily through the undistributed book earnings of our foreign subsidiaries. The basis differences could be reversed through a sale of the subsidiaries, the receipt of dividends from subsidiaries as well as certain other events or actions on our part, which would result in an increase in our provision for income taxes.

In December 2004, the Financial Accounting Standards Board ("FASB") issued FASB Staff Position No. 109-2, "Accounting and Disclosure Guidance for the Foreign Earnings Repatriation Provision within the American Jobs Creation Act of 2004" ("FSP 109-2"). The American Jobs Creation Act of 2004 ("AJCA") introduces a special one-time dividends received deduction on the repatriation of certain foreign earnings to a U.S. taxpayer ("repatriation provision"), provided certain criteria are met. FSP 109-2 provides accounting and disclosure guidance for the repatriation provision. The Treasury Department or Congress will be providing additional clarifying language on key elements of the repatriation provision in the future. FSP 109-2 grants an enterprise additional time beyond the year ended December 31, 2004, in which the AJCA was enacted, to evaluate the effects of the AJCA on its plan for reinvestment or repatriation of unremitted earnings. FSP 109-2 calls for enhanced disclosures of, among other items, the status of our evaluations, the effects of completed evaluations, and the potential range of income tax effects of repatriations. Such disclosures are included in Note 10 to Notes to Consolidated Financial Statements.

Stock-based Compensation

As of January 1, 2003, we adopted the measurement provisions of SFAS No. 123 and SFAS No. 148. As a result we began using the fair value method of accounting in our financial statements beginning January 1, 2003 using the prospective method. The prospective method involves recognizing expense for the fair value for all awards granted or modified in the year of adoption and thereafter with no expense recognition for previous awards. We have applied the fair value recognition provisions to all stock based awards granted, modified or settled on or after January 1, 2003 and will continue to provide the required pro forma information for all awards previously granted, modified or settled before January 1, 2003 in our consolidated financial statements. During the year ended December 31, 2004, we recorded $3.9 million of stock compensation expense in our consolidated statement of operations. Had we elected to recognize compensation cost based on the fair value of all options as of their grant dates as prescribed by SFAS No. 123 and No. 148, we would have recorded stock compensation expense of $4.5 million, $5.6 million and $7.0 million in our consolidated statements of operations for the years ended December 31, 2002, 2003 and 2004, respectively.

In December 2004, the Financial Accounting Standards Board issued SFAS No. 123R, "Share-Based Payment." SFAS No. 123R is a revision of SFAS No. 123 and supersedes Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees" ("APB No. 25"). Among other items, SFAS No. 123R eliminates the use of APB No. 25 and the intrinsic value method of accounting, and requires companies to recognize the cost of employee services received in exchange for awards of equity instruments, based on the grant date fair value of those awards, in the financial statements. The effective date of SFAS No. 123R is the first reporting period beginning after June 15, 2005, which would be our third quarter of 2005, although early adoption is allowed. SFAS No. 123R permits companies to adopt its requirements using either a "modified prospective" method, or a "modified retrospective" method. Under the "modified prospective" method, compensation cost is recognized in the financial statements beginning with the effective date, based on the requirements of SFAS No. 123R for all share-based payments granted after that date, and based on the requirements of SFAS No. 123 for all unvested awards granted prior to the effective date of SFAS No. 123R. Under the "modified retrospective" method, the requirements are the same as under the "modified prospective" method, but this method also permits entities to restate financial statements of previous periods based on pro forma disclosures made in accordance with SFAS No. 123.

SFAS No. 123R also requires that the benefits associated with the tax deductions in excess of recognized compensation cost be reported as a financing cash flow, rather than as an operating cash flow as required under current rules. This requirement will reduce net operating cash flows and increase net financing cash flows in periods after the effective date. Since we do not pay significant cash taxes currently, we do not expect this provision to materially impact our statement of cash flows within the next few years.

We expect to adopt SFAS No. 123R effective July 1, 2005 using the modified prospective method of implementation. Based on outstanding stock options granted to employees prior to our prospective implementation of the measurement provisions of SFAS No. 123 and SFAS No. 148 on January 1, 2003, we expect to record approximately $0.9 million of stock compensation expense in the second half of 2005 associated with unvested stock option grants issued prior to January 1, 2003.

Self-Insured Liabilities

We are self-insured up to certain limits for costs associated with workers' compensation claims, vehicle accidents, property and general business liabilities, and benefits paid under employee healthcare and long-term disability programs. At December 31, 2003 and 2004 there were approximately $23.2 million and $25.7 million, respectively, of self-insurance accruals reflected in our consolidated balance sheets. The measurement of these costs requires the consideration of historical cost experience and judgments about the present and expected levels of cost per claim. We account for these costs primarily through actuarial methods, which develop estimates of the undiscounted liability for claims incurred, including those claims incurred but not reported. These methods provide estimates of future ultimate claim costs based on claims incurred as of the balance sheet date.

We believe the use of actuarial methods to account for these liabilities provides a consistent and effective way to measure these highly judgmental accruals. However, the use of estimate techniques in this area is inherently sensitive given the magnitude of claims involved and the length of time until the ultimate cost is known. We believe our recorded obligations for these expenses are consistently measured on a conservative basis. Nevertheless, changes in healthcare costs, accident frequency and severity, and other factors can materially affect the estimates for these liabilities.

Results of Operations

Comparison of Year Ended December 31, 2004 to Year Ended December 31, 2003 and Comparison of Year Ended December 31, 2003 to Year Ended December 31, 2002 (in thousands):

	Year Ended December 31,
	Year Ended December 31,						Dollar Change		Percent Change
	2003			2004			Dollar Change		Percent Change
Revenues	$	1,501,329		$	1,817,589		$	316,260	21.1	%
Operating Expenses		1,196,436			1,473,093			276,657	23.1	%

Operating Income		304,893			344,496			39,603	13.0	%
Other Expenses, Net		220,256			250,305			30,049	13.6	%

Net Income	$	84,637		$	94,191		$	9,554	11.3	%

OIBDA(1)	$	435,811		$	508,125		$	72,314	16.6	%

OIBDA Margin(1)		29.0	%		28.0	%

	Year Ended December 31,
	Year Ended December 31,						Dollar Change		Percent Change
	2002			2003			Dollar Change		Percent Change
Revenues	$	1,318,497		$	1,501,329		$	182,832	13.9	%
Operating Expenses		1,065,911			1,196,436			130,525	12.2	%

Operating Income		252,586			304,893			52,307	20.7	%
Other Expenses, Net		194,294			220,256			25,962	13.4	%

Net Income	$	58,292		$	84,637		$	26,345	45.2	%

OIBDA(1)	$	361,578		$	435,811		$	74,233	20.5	%

OIBDA Margin(1)		27.4	%		29.0	%

(1): See "Non-GAAP Measures—Operating Income Before Depreciation and Amortization, or OIBDA" for definition, reconciliation and a discussion of why we believe these measures provide relevant and useful information to our current and potential investors.

Revenue

Our consolidated storage revenues increased $168.3 million, or 19.2%, to $1,043.4 million for the year ended December 31, 2004 and $115.5 million, or 15.2%, to $875.0 million for the year ended December 31, 2003, in comparison to the years ended December 31, 2003 and 2002, respectively. The increase is attributable to internal revenue growth (9% during 2004 and 8% during 2003) resulting from net increases in records and other media stored by existing customers and sales to new customers, acquisitions (8% during 2004 and 5% during 2003), primarily consisting of $91.2 million and $30.0 million from the operations of Hays IMS in 2004 and 2003, respectively, and foreign currency exchange rate fluctuations (3% during 2004 and 2% during 2003).

Consolidated service and storage material sales revenues increased $147.9 million, or 23.6%, to $774.2 million for the year ended December 31, 2004 and $67.3 million, or 12.0%, to $626.3 million for the year ended December 31, 2003, in comparison to the years ended December 31, 2003 and 2002, respectively. The increase is attributable to acquisitions (14% during 2004 and 7% during 2003), including revenue from the Hays IMS operations of $86.3 million and $24.6 million in 2004 and 2003, respectively, internal revenue growth (6% during 2004 and 3% during 2003) resulting from net increases in service and storage material sales to existing customers and sales to new customers, and foreign currency exchange rate fluctuations (3% during 2004 and 2% during 2003).

For the reasons stated above, our consolidated revenues increased $316.3 million, or 21.1%, to $1,817.6 million for the year ended December 31, 2004 and $182.8 million, or 13.9%, to $1,501.3 million for the year ended December 31, 2003, in comparison to the years ended December 31, 2003 and 2002, respectively. Foreign currency exchange rate fluctuations that impacted our revenues were primarily due to the strengthening of the British pound sterling, Canadian dollar, and Euro against the U.S. dollar, based on an analysis of weighted average rates for the comparable periods. Internal revenue growth was 10%, 6%, and 8% for the years ended December 31, 2002, 2003, and 2004, respectively. We calculate internal revenue growth in local currency for our international operations.

Internal Growth—Eight-Quarter Trend

	2003										2004
	First Quarter		Second Quarter		Third Quarter		Fourth Quarter		Full Year		First Quarter		Second Quarter		Third Quarter		Fourth Quarter		Full Year
Storage Revenue	8	%	8	%	9	%	8	%	8	%	8	%	9	%	8	%	9	%	9	%
Service and Storage Material Sales Revenue	8	%	3	%	2	%	1	%	3	%	6	%	4	%	5	%	9	%	6	%
Total Revenue	8	%	6	%	6	%	5	%	6	%	8	%	7	%	7	%	9	%	8	%

Our internal revenue growth rate represents the weighted average year over year growth rate of our revenues after removing the effects of acquisitions and foreign currency exchange rate fluctuations. Over the past eight quarters, the internal growth rate of our storage revenues has consistently ranged between 8% and 9%. Our storage revenue internal growth rate trend for the years ended December 31, 2004 and 2003 reflects stable net carton volume growth in our North American records management business and strong growth rates in our digital and international businesses. Net carton volume growth is a function of the rate new cartons are added by existing and new customers offset by the rate of carton destructions and other permanent removals.

The internal growth rate for service and storage material sales revenue is inherently more volatile than the storage revenue internal growth rate due to more discretionary services we offer such as large special projects, data products and carton sales, and the cost of recycled paper. These revenues are impacted to a greater extent by economic downturns as customers defer or cancel the purchase of these

services as a way to reduce their short-term costs. As a commodity, recycled paper prices are subject to the volatility of that market.

The internal growth rate for service and storage material sales revenues increased during 2004 compared to 2003 due primarily to high growth in our Secure Shredding product line and several of our complementary service lines including data product sales, special projects and fulfillment services. The growth rate of our secure shredding product line increased for 2004 primarily due to increased sales production as our entire records management sales force began selling the shredding product for the first time. In addition, our data product sales were particularly strong in the second half of 2004 and we completed several large special projects in our film and sound and fulfillment product lines.

Cost of Sales

Consolidated cost of sales (excluding depreciation) is comprised of the following expenses (in thousands):

									% of Consolidated Revenues
													Percent Change (Favorable)/ Unfavorable
					Dollar Change		Percent Change
	2003		2004		Dollar Change		Percent Change		2003		2004
Labor	$	344,761	$	419,345	$	74,584	21.6	%	23.0	%	23.1	%	0.1	%
Facilities		211,597		246,325		34,728	16.4	%	14.1	%	13.6	%	(0.5	)%
Transportation		65,142		81,976		16,834	25.8	%	4.3	%	4.5	%	0.2	%
Product Cost of Sales		30,987		35,908		4,921	15.9	%	2.1	%	2.0	%	(0.1	)%
Other		28,260		40,345		12,085	42.8	%	1.9	%	2.2	%	0.3	%

	$	680,747	$	823,899	$	143,152	21.0	%	45.3	%	45.3	%	—	%

										% of Consolidated Revenues
														Percent Change (Favorable)/ Unfavorable
					Dollar Change			Percent Change
	2002		2003		Dollar Change			Percent Change		2002		2003
Labor	$	318,707	$	344,761	$	26,054		8.2	%	24.2	%	23.0	%	(1.2	)%
Facilities		184,988		211,597		26,609		14.4	%	14.0	%	14.1	%	0.1	%
Transportation		56,972		65,142		8,170		14.3	%	4.3	%	4.3	%	—
Product Cost of Sales		34,552		30,987		(3,565	)	(10.3	)%	2.6	%	2.1	%	(0.5	)%
Other		27,080		28,260		1,180		4.4	%	2.1	%	1.9	%	(0.2	)%

	$	622,299	$	680,747	$	58,448		9.4	%	47.2	%	45.3	%	(1.9	)%

Labor

For the year ended December 31, 2004 as compared to the year ended December 31, 2003, labor expense increased slightly as a percentage of revenue due primarily to our mix of services. Specifically, increases in labor expense were caused by (1) more labor intensive operations, primarily in Europe and in our secure shredding operations, (2) higher incentive compensation expense in 2004 compared to 2003, and (3) higher allocations of labor costs associated with internal information technology personnel and consultants to revenue producing projects in our digital business. These increases were partially offset by improved labor management in our data protection operations.

For the year ended December 31, 2003 as compared to the year ended December 31, 2002, labor expense as a percentage of revenue decreased as a result of improved labor management in our North American operations and lower incentive compensation expense. This improvement was partially offset by increases in wages, medical expenses, and headcount due to growth, acquisitions, including Hays

IMS, and changes in our labor mix resulting from the expansion of our secure shredding operations. Our secure shredding operations are more labor intensive, therefore, labor expense will be higher as a percentage of revenue in these operations as compared to our storage operations.

Facilities

Facilities costs as a percentage of consolidated revenues decreased to 13.6% as of December 31, 2004 from 14.1% as of December 31, 2003. The decrease in facilities costs as a percentage of consolidated revenues was primarily a result of maintaining approximately the same overall base rent per square foot in our North American operations during 2003 and 2004 while we increased our square footage under lease over that period. The largest component of our facilities cost is rent expense, which increased $21.0 million for the year ended December 31, 2004 compared to the year ended December 31, 2003 primarily as a result of increased rent in our European operations of $15.4 million attributable to new facilities and properties acquired through acquisitions, including our acquisition of Hays IMS. Other facilities expenses in our European operations for year ended December 31, 2004 increased $14.4 million compared to the year ended December 31, 2003 primarily due to the growth of operations and acquisitions. Aside from our European operations, the remaining facilities expenses for the year ended December 31, 2004 were consistent with the year ended December 31, 2003.

Rent expense increased $6.9 million for the year ended December 31, 2003 primarily as a result of increased rent in our European operations of $9.0 million attributable to new facilities and properties acquired through acquisitions, including our acquisition of Hays IMS. In addition, after adjusting for the consolidation of properties owned by our variable interest entities, we increased the number of leased facilities we occupy in the U.S. and Canada as of December 31, 2003 compared to December 31, 2002 primarily due to acquisitions. The increase in rent was offset by the consolidation of 38 properties owned by our variable interest entities during the third and fourth quarter of 2002. The leases associated with these properties were accounted for as operating leases prior to December 31, 2002. We recorded $5.9 million of rent expense for these 38 properties during the year ended December 31, 2002 and no rent expense in the year ended December 31, 2003. Rather than rent expense, we recorded interest expense and depreciation expense associated with these properties for the year ended December 31, 2003. Aside from our European operations, the dollar increase in facilities expenses is attributable to property taxes, utilities, and property insurance, which increased $5.5 million, $4.0 million, and $1.9 million, respectively, for the year ended December 31, 2003 compared to the year ended December 31, 2002. Facilities expenses in our European operations increased $6.4 million primarily due to the growth of operations and acquisitions for the year ended December 31, 2003 compared to the year ended December 31, 2002.

Transportation

Our transportation expenses, which increased 0.2% as a percentage of consolidated revenues for the year ended December 31, 2004 compared to the year ended December 31, 2003, are influenced by several variables including total number of vehicles, owned versus leased vehicles, use of subcontracted couriers, fuel expenses, and maintenance. In the year ended December 31, 2004, we experienced a $7.0 million increase in transportation expenses in our European operations as compared to the year ended December 31, 2003, which is primarily attributable to an increase in fleet size and vehicles under operating lease resulting from the acquisition of Hays IMS and growth of operations. An increased percentage of vehicles under operating lease, higher fuel expenses, and increased subcontracted courier expenses during the year ended December 31, 2004 compared to the year ended December 31, 2003 also contributed to higher expenses.

In the year ended December 31, 2003, our transportation expenses were flat as a percentage of consolidated revenues. Transportation expenses increased $3.4 million in our European operations as compared to the year ended December 31, 2002, which is primarily attributable to an increase in fleet

size and vehicles under operating lease resulting from the acquisition of Hays IMS and growth of operations. Transportation efficiencies achieved in our North American operations, partially offset by higher fuel costs and an increased percentage of vehicles under operating lease, mitigated the impact of our European operations on transportation expenses as a percentage of consolidated revenues.

Product and Other Cost of Sales

Product and other cost of sales are highly correlated to complementary revenue streams. Product and other cost of sales for the year ended December 31, 2004 were higher than the year ended December 31, 2003 as a percentage of consolidated revenues due to increased royalty payments associated with our electronic vaulting revenues and increased sales of lower margin data products in the second half of 2004.

Selling, General and Administrative Expenses

Selling, general and administrative expenses are comprised of the following expenses (in thousands):

												% of Consolidated Revenues
																Percent Change (Favorable)/ Unfavorable
							Dollar Change			Percent Change
	2003			2004			Dollar Change			Percent Change		2003		2004
General and Administrative	$	206,293		$	259,209		$	52,916		25.7	%	13.7	%	14.3	%	0.6	%
Sales, Marketing & Account Management		111,432			150,419			38,987		35.0	%	7.4	%	8.3	%	0.9	%
Information Technology		68,208			81,187			12,979		19.0	%	4.5	%	4.5	%	—	%
Bad Debt Expense		(2,292	)		(4,569	)		(2,277	)	(99.3	)%	(0.2	)%	(0.3	)%	(0.1	)%

	$	383,641		$	486,246		$	102,605		26.7	%	25.6	%	26.8	%	1.2	%

											% of Consolidated Revenues
															Percent Change (Favorable)/ Unfavorable
						Dollar Change			Percent Change
	2002		2003			Dollar Change			Percent Change		2002		2003
General and Administrative	$	179,550	$	206,293		$	26,743		14.9	%	13.6	%	13.7	%	0.1	%
Sales, Marketing & Account Management		85,932		111,432			25,500		29.7	%	6.5	%	7.4	%	0.9	%
Information Technology		55,971		68,208			12,237		21.9	%	4.2	%	4.5	%	0.3	%
Bad Debt Expense		11,597		(2,292	)		(13,889	)	(119.8	)%	0.9	%	(0.2	)%	(1.1	)%

	$	333,050	$	383,641		$	50,591		15.2	%	25.3	%	25.6	%	0.3	%

General and Administrative

The increase in general and administrative expenses as a percentage of consolidated revenues for the year ended December 31, 2004 compared to the year ended December 31, 2003 is primarily attributable to a $31.0 million increase in general and administrative expenses in our European operations due to the growth of operations and acquisitions, including Hays IMS. In our North American operations, general and administrative expenses increased as a result of increased headcount and higher wages due to normal inflation and merit increases, increased stock compensation expense, increased travel, recruiting, and professional fees, including costs associated with compliance with the Sarbanes-Oxley Act of 2002. These increases were partially offset by lower incentive compensation expenses.

The increase in general and administrative expenses as a percentage of consolidated revenues for the year ended December 31, 2003 is primarily attributable to a $16.4 million increase in general and administrative expenses in our European operations due to the growth of operations and acquisitions. In our North American operations, general and administrative expenses increased as a result of higher wages due to normal inflation and merit increases, and increases in worker's compensation and medical expenses and was partially offset by decreases in general insurance expenses and lower incentive compensation expenses.

Sales, Marketing & Account Management

The majority of our sales, marketing and account management costs are labor related and are primarily driven by the headcount in each of these departments. Increased headcount and commissions are the most significant contributors to the increase in sales and marketing expenses as a percentage of revenues for the years ended December 31, 2003 and 2004. Throughout the year ended December 31, 2003 and during 2004, we continued to invest in the expansion and improvement of our sales force and account management personnel. We added sales and marketing employees, enlarged our account management force, and continued several new marketing and promotional efforts to develop awareness in the marketplace of our entire service offerings. The costs associated with these efforts contributed to the increase in our sales, marketing and account management expenses. Our larger North American sales force generated a $10.3 million increase in sales commissions for the year ended December 31, 2004 compared to the year ended December 31, 2003. During the year ended December 31, 2003 our North American sales force generated a comparable increase of $10.3 million over the year ended December 31, 2002. In addition, costs associated with our European sales and account management teams increased by $7.7 million and $4.1 million for the years ended December 31, 2004 and 2003, respectively, compared to the years ended December 31, 2003 and 2002, respectively, due to the doubling of our sales force through the hiring of new personnel and acquisitions. We expect that sales, marketing and account management expenses will continue to increase as a percentage of consolidated revenues as our sales force gains traction and we continue to develop new product development and marketing initiatives.

Information Technology

Information technology expenses remained flat as a percentage of consolidated revenues for the year ended December 31, 2004 compared to the year ended December 31, 2003. Higher utilization of existing information technology resources and increased allocations of information technology resources to revenue producing projects were offset by increases in internal software development projects within our digital business, the acquisition of Connected, associated research and development activities and increased information technology spending in our European operations of $8.5 million.

Information technology expenses increased as a percentage of consolidated revenues for the year ended December 31, 2003 principally due to higher compensation costs resulting from increased headcount, normal inflation and merit increases, as well as an increase in external resources, which was partially offset by lower incentive compensation expenses. As our technology initiatives mature, less of our efforts are development related, thus decreasing capitalizable expenditures, which results in increased information technology expenses. In addition, we incurred additional costs to expand bandwidth and international connectivity in the year ended December 31, 2003 as compared to the year ended December 31, 2002 to satisfy growth of our business and to integrate acquisitions.

Bad Debt Expense

The decrease in consolidated bad debt expense for the years ended December 31, 2003 and 2004 compared to prior years is primarily attributable to the success of our centralized collection efforts within the U.S. and Canada, which resulted in improved cash collections and an improved accounts

receivable aging that allowed us to reduce our allowance for doubtful accounts during the years ended December 31, 2003 and 2004.

Depreciation, Amortization and (Gain) Loss on Disposal/Writedown of Property, Plant and Equipment, Net

Consolidated depreciation and amortization expense increased $32.7 million to $163.6 million (9.0% of consolidated revenues) for the year ended December 31, 2004 from $130.9 million (8.7% of consolidated revenues) for the year ended December 31, 2003. Depreciation expense increased $28.0 million for the year ended December 31, 2004 compared to the year ended December 31, 2003 primarily due to the additional depreciation expense related to recent capital expenditures, including storage systems, which include racking, building and leasehold improvements, computer systems hardware and software, and buildings. Amortization expense increased $4.7 million for the year ended December 31, 2004 compared to the year ended December 31, 2003 due to amortization of intangible assets, primarily customer relationship intangible assets acquired through business combinations. We expect that amortization expense will continue to increase as we acquire new businesses and buy out our minority interest partners.

Consolidated depreciation and amortization expense increased $21.9 million to $130.9 million (8.7% of consolidated revenues) for the year ended December 31, 2003 from $109.0 million (8.3% of consolidated revenues) for the year ended December 31, 2002. Depreciation expense increased $19.8 million, primarily due to the additional depreciation expense related to recent capital expenditures, including storage systems, which include racking, building and leasehold improvements, computer systems hardware and software, and buildings, and depreciation associated with facilities accounted for as capital leases. Depreciation associated with our digital initiatives increased $5.4 million during the year ended December 31, 2003 as a result of software and hardware assets placed in service throughout the years ended December 31, 2002 and 2003. The consolidation of the properties owned by our variable interest entities during the year ended December 31, 2002 resulted in $2.2 million of additional depreciation in the year ended December 31, 2003. Amortization expense increased as a result of the amortization of intangible assets associated with acquisitions we completed in the fourth quarter of 2002 and during the year ended December 31, 2003.

Consolidated gains on disposal/writedown of property, plant and equipment, net of $0.7 million for the year ended December 31, 2004, consisted primarily of a $1.2 million gain on the sale of a property in Florida during the second quarter of 2004 offset by disposals and asset writedowns. We recorded consolidated losses on disposal/writedown of property, plant and equipment, net of $1.1 million in the year ended December 31, 2003 consisting of disposals and asset writedowns partially offset by $4.2 million of gains on the sale of properties in Texas, Florida and the U.K. We recorded consolidated losses on disposal/writedown of property, plant and equipment, net of $0.8 million in the year ended December 31, 2002 consisting of disposals and asset writedowns partially offset by a $2.1 million gain on the sale of a property in the U.K.

Operating Income

As a result of the foregoing factors, consolidated operating income increased $39.6 million, or 13.0%, to $344.5 million (19.0% of consolidated revenues) for the year ended December 31, 2004 from $304.9 million (20.3% of consolidated revenues) for the year ended December 31, 2003.

Consolidated operating income increased $52.3 million, or 20.7%, to $304.9 million (20.3% of consolidated revenues) for the year ended December 31, 2003 from $252.6 million (19.2% of consolidated revenues) for the year ended December 31, 2002.

OIBDA

As a result of the foregoing factors, consolidated OIBDA increased $72.3 million, or 16.6%, to $508.1 million (28.0% of consolidated revenues) for the year ended December 31, 2004 from $435.8 million (29.0% of consolidated revenues) for the year ended December 31, 2003.

Consolidated OIBDA increased $74.2 million, or 20.5%, to $435.8 million (29.0% of consolidated revenues) for the year ended December 31, 2003 from $361.6 million (27.4% of consolidated revenues) for the year ended December 31, 2002.

Interest Expense, Net

Consolidated interest expense, net increased $35.3 million to $185.7 million (10.2% of consolidated revenues) for year ended December 31, 2004 from $150.5 million (10.0% of consolidated revenues) for the year ended December 31, 2003. Increased borrowings, primarily from the issuance of our 7¹/4% GBP Senior Subordinated Notes due 2014, contributed to the dollar increase in interest expense. The increase of interest expense, net as a percentage of consolidated revenues was partially due to charges totaling $9.5 million (0.5% of consolidated revenues) related to recharacterization of interest rate swaps associated with real estate term loans we repaid in March and August 2004. These charges represent the fair market value of the swaps, which is a calculation of the net present value of the expected monthly cash payments over the remaining term of the swap based on current market conditions, as of the date the real estate term loan was repaid. We did not terminate the swaps and will continue to mark to market the fair market value of the derivative liability to interest expense, net and make our monthly cash payments as required under the swap contract for the remaining term of approximately three years.

Consolidated interest expense, net increased $13.8 million to $150.5 million (10.0% of consolidated revenues) for the year ended December 31, 2003 from $136.6 million (10.4% of consolidated revenues) for the year ended December 31, 2002. This increase was primarily attributable to (1) $7.4 million of interest expense associated with real estate term loans held by our variable interest entities that were consolidated in the second half of 2002, (2) borrowings under our revolving credit facility and the issuance of our 6⁵/8% Senior Subordinated Notes due 2016 (the "6⁵/8% notes") which were used to finance the Hays IMS acquisition, and (3) an increase in our overall weighted average outstanding borrowings. The decrease as a percentage of revenues was attributable to the decline in our overall weighted average interest rate from 8.3% as of December 31, 2002 to 7.7% as of December 31, 2003 resulting from our refinancing efforts and a decline in variable interest rates.

Other Expense (Income), Net (in thousands)

	2003			2004			Change
Foreign currency transaction gains	$	(30,220	)	$	(8,915	)	$	21,305
Debt extinguishment expense		28,174			2,454			(25,720	)
Loss on investments		(462	)		0			462
Other, net		(56	)		(1,527	)		(1,471	)

	$	(2,564	)	$	(7,988	)	$	(5,424	)

	2002			2003			Change
Foreign currency transaction gains	$	(5,045	)	$	(30,220	)	$	(25,175	)
Debt extinguishment expense		5,431			28,174			22,743
Loss on investments		901			(462	)		(1,363	)
Other, net		148			(56	)		(204	)

	$	1,435		$	(2,564	)	$	(3,999	)

Foreign currency gains of $8.9 million based on period-end exchange rates were recorded in the year ended December 31, 2004 primarily due to the strengthening of the British pound sterling, Euro, and the Canadian dollar against the U.S. dollar as these currencies relate to our intercompany balances with our Canadian, U.K. and European subsidiaries, U.S. dollar denominated debt held by our Canadian subsidiary, borrowings denominated in foreign currencies under our revolving credit facility, British pounds sterling denominated debt held by our U.S. parent company, British pounds sterling currency held in the U.S. and our British pound sterling denominated cross currency swap, which was terminated in March 2004.

We recorded foreign currency gains of $30.2 million and $5.0 million during the years ended December 31, 2003 and 2002, respectively, based on period-end exchange rates, primarily due to the strengthening of the Canadian dollar and British pound sterling against the U.S. dollar as these currencies relate to our intercompany balances with our Canadian and U.K. subsidiaries, U.S. dollar denominated debt held by our Canadian subsidiary, borrowings denominated in foreign currencies under our revolving credit facility, and our British pound sterling denominated cross currency swap.

During the three months ended March 31, 2004, we redeemed the remaining outstanding principal amount of the 8¹/8% Senior Notes due 2008 of our Canadian subsidiary (the "Subsidiary notes"), resulting in a charge of $2.0 million, and we repaid a portion of our real estate term loans, which resulted in a charge of $0.4 million. During the year ended December 31, 2003, we redeemed the remaining outstanding principal amount of our 9¹/8% Senior Subordinated Notes due 2007 (the "9¹/8% notes"), resulting in a charge of $1.8 million, the remaining outstanding principal amount of our 8³/4% Senior Subordinated Notes due 2009 (the "8³/4% notes"), resulting in a charge of $13.8 million, and $115.0 million of the outstanding principal of our Subsidiary notes, resulting in a charge of $12.6 million. During the year ended December 31, 2002, we recorded a charge of $1.2 million related to the early retirement of debt in conjunction with the refinancing of our revolving credit facility and a charge of $4.2 million related to the early retirement of a portion of our 9¹/8% notes. The charges consisted primarily of the call and tender premiums associated with the extinguished debt and the write-off of unamortized deferred financing cost and discounts.

Provision for Income Taxes

Our effective tax rates for the years ended December 31, 2002, 2003, and 2004 were 41.3%, 42.5%, and 41.7%, respectively. The primary reconciling item between the statutory rate of 35% and our effective rate is state income taxes (net of federal benefit). The disallowance of certain intercompany

interest charges by states, including a change in Massachusetts tax laws, retroactive to January 1, 2002, increased our provision for income taxes by 1.1% and 1.0% for the years ended December 31, 2003 and 2004, respectively. We are subject to income taxes in both the U.S. and numerous foreign jurisdictions. Significant judgment is required in determining our worldwide provision for income taxes. In the ordinary course of our business, there are many transactions and calculations where the ultimate tax determination is uncertain. Although we believe our tax estimates are reasonable, the final determination of tax audits and any related litigation could be materially different than that which is reflected in historical income tax provisions and accruals. Additional taxes assessed as a result of an audit or litigation could have a material effect on our income tax provision and net income in the period or periods in which that determination is made. As a result of our net operating loss carryforwards, we do not expect to pay any significant international, U.S. federal and state income taxes during 2005.

Minority Interest, Discontinued Operations, and Cumulative Effect of Change in Accounting Principle

Minority interest in earnings of subsidiaries, net resulted in a charge to income of $3.6 million (0.3% of consolidated revenues), $5.6 million (0.4% of consolidated revenues) and $3.0 million (0.2% of consolidated revenues) for the years ended December 31, 2002, 2003, and 2004, respectively. This represents our minority partners' share of earnings in our majority-owned international subsidiaries that are consolidated in our operating results. The decrease during 2004 is a result of our acquisition of the remaining 49.9% equity interest in IME which was reflected for the first time during the second quarter of 2004. Increased profitability of our South American businesses in 2003 and 2004 contributed to the increase in minority interest in 2003 and offset the impact of acquiring the remaining 49.9% equity interest in IME in 2004.

In the fourth quarter of 2002, we recorded income from discontinued operations of $1.1 million (net of tax of $0.8 million) as a result of resolving several outstanding contingencies remaining from the sale of the Arcus Staffing Resources, Inc. business unit in 1999. There was no such income recorded in 2003 and 2004.

In the first quarter of 2002, we recorded a non-cash charge for the cumulative effect of change in accounting principle of $6.4 million (net of minority interest of $8.5 million) as a result of our implementation of SFAS No. 142. There was no such charge in 2003 and 2004.

Net Income

As a result of the foregoing factors, for the year ended December 31, 2004 consolidated net income increased $9.6 million, or 11.3%, to $94.2 million (5.2% of consolidated revenues) from net income of $84.6 million (5.6% of consolidated revenues) for the year ended December 31, 2003.

Consolidated net income for the year ended December 31, 2003 increased $26.3 million, or 45.2%, to $84.6 million (5.6% of consolidated revenues) for the year ended December 31, 2003 from net income of $58.3 million (4.4% of consolidated revenues) for the year ended December 31, 2002.

Segment Analysis (in thousands)

The results of our various operating segments are discussed below. In general, our business records management segment offers records management, secure shredding, healthcare information services, vital records services, and service and courier operations in the U.S. and Canada. Our data protection segment offers data backup and disaster recovery services, vital records services, service and courier operations, and intellectual property management services in the U.S. Our international segment offers elements of all our product and services lines outside the U.S. and Canada. Our corporate and other segment includes our corporate overhead functions and our fulfillment, consulting, digital archiving and PC/desktop computing electronic vaulting services.

Business Records Management

Segment Revenue						Increase in Revenues				Percentage Increase in Revenues
For Years Ended
December 31, 2002		December 31, 2003		December 31, 2004		December 31, 2003		December 31, 2004		December 31, 2003		December 31, 2004
$	944,845	$	1,022,335	$	1,107,587	$	77,490	$	85,252	8.2	%	8.3	%

Segment Contribution(1)						Segment Contribution(1) as a Percentage of Segment Revenue
For Years Ended
December 31, 2002		December 31, 2003		December 31, 2004		December 31, 2002		December 31, 2003		December 31, 2004
$	262,541	$	286,208	$	308,630	27.8	%	28.0	%	27.9	%

Items Excluded from the Calculation of Segment Contribution(1)

Depreciation and Amortization						Foreign Currency (Gains) Losses, Net									Loss (Gain) on Disposal/Writedown of Property, Plant and Equipment, Net								Loss on Debt Extinguishment
For Years Ended
Dec. 31, 2002		Dec. 31, 2003		Dec. 31, 2004		Dec. 31, 2002			Dec. 31, 2003			Dec. 31, 2004			Dec. 31, 2002		Dec. 31, 2003			Dec. 31, 2004			Dec. 31, 2002	Dec. 31, 2003		Dec. 31, 2004
$	67,702	$	71,709	$	82,955	$	(1,864	)	$	(29,459	)	$	(2,127	)	$	1,686	$	(631	)	$	(846	)	—	$	12,530	$	2,028

(1): See Note 12 of Notes to Consolidated Financial Statements for definition of Contribution and for the basis on which allocations are made and a reconciliation of Contribution to net income on a consolidated basis.

During the year ended December 31, 2004, revenue in our business records management segment increased 8.3% primarily due to increased storage revenues, growth of our secure shredding operations and acquisitions (including a full year of revenue from the U.S. operations of Hays IMS in 2004 which represents an increase of $8.6 million over the partial year of revenue recorded in 2003), and was impacted by slower growth in service and special project revenue. In addition, favorable currency fluctuations during the year ended December 31, 2004 in Canada increased revenue $7.8 million when compared to the year ended December 31, 2003. Contribution as a percent of segment revenue decreased in the year ended December 31, 2004 due to higher transportation expenses and our increased investment in our sales and account management force, which were partially offset by reduced facility expenses.

During the year ended December 31, 2003, revenue in our business records management segment increased 8.2% primarily due to increased storage revenues, growth of our secure shredding operations and acquisitions (including a partial year of revenue from the U.S. operations of Hays IMS of $8.2 million), and was offset by lower special project service revenue and lower permanent removal and destruction fees. In addition, favorable currency fluctuations during the year ended December 31, 2003 in Canada increased revenue $9.6 million when compared to the year ended December 31, 2002. Contribution as a percent of segment revenue increased primarily due to lower bad debt expense and lower incentive compensation expense which were partially offset by higher property taxes, utilities and our increased investment in our sales and account management force.

Data Protection

Segment Revenue						Increase in Revenues				Percentage Increase in Revenues
For Years Ended
December 31, 2002		December 31, 2003		December 31, 2004		December 31, 2003		December 31, 2004		December 31, 2003		December 31, 2004
$	239,081	$	251,141	$	278,984	$	12,060	$	27,843	5.0	%	11.1	%

Segment Contribution(1)						Segment Contribution(1) as a Percentage of Segment Revenue
For Years Ended
December 31, 2002		December 31, 2003		December 31, 2004		December 31, 2002		December 31, 2003		December 31, 2004
$	61,729	$	71,240	$	78,597	25.8	%	28.4	%	28.2	%

Items Excluded from the Calculation of Segment Contribution(1)

Depreciation and Amortization						Loss (Gain) on Disposal/Writedown of Property, Plant and Equipment, Net
For Years Ended
December 31, 2002		December 31, 2003		December 31, 2004		December 31, 2002		December 31, 2003		December 31, 2004
$	12,835	$	13,792	$	14,808	$	237	$	1,944	$	18

(1): See Note 12 of Notes to Consolidated Financial Statements for definition of Contribution and for the basis on which allocations are made and a reconciliation of Contribution to net income on a consolidated basis.

During the year ended December 31, 2004, revenue in our data protection segment increased 11.1% primarily due to internal revenue growth from both existing and new customers. Higher revenue growth rates from our product sales, electronic vaulting, and intellectual property management services augmented the segment's overall revenue growth rate. Contribution as a percent of segment revenue decreased primarily due to decreased product sales margins, increased royalty payments, and the growth of our sales and account management force including higher sales commissions. This decrease was partially offset by improved labor management and stable overhead costs.

During the year ended December 31, 2003, revenue in our data protection segment increased 5.0% primarily due to internal revenue growth from both existing and new customers in the face of increasing pressure in the marketplace to reduce information technology related spending. Contribution as a percent of segment revenue increased primarily due to reduced bad debt expense and improved labor management. This increase was partially offset by the growth of our sales and account management force.

International

Segment Revenue						Increase in Revenues				Percentage Increase in Revenues
For Years Ended
December 31, 2002		December 31, 2003		December 31, 2004		December 31, 2003		December 31, 2004		December 31, 2003		December 31, 2004
$	109,381	$	198,068	$	380,033	$	88,687	$	181,965	81.1	%	91.9	%

Segment Contribution(1)						Segment Contribution(1) as a Percentage of Segment Revenue
For Years Ended
December 31, 2002		December 31, 2003		December 31, 2004		December 31, 2002		December 31, 2003		December 31, 2004
$	21,988	$	46,825	$	89,751	20.1	%	23.6	%	23.6	%

Items Excluded from the Calculation of Segment Contribution(1)

Depreciation and Amortization						Foreign Currency (Gains) Losses, Net						Loss (Gain) on Disposal/Writedown of Property, Plant and Equipment, Net
For Years Ended
December 31, 2002		December 31, 2003		December 31, 2004		December 31, 2002		December 31, 2003		December 31, 2004		December 31, 2002			December 31, 2003			December 31, 2004
$	7,074	$	16,048	$	33,234	$	250	$	507	$	1,562	$	(1,927	)	$	(879	)	$	176

(1): See Note 12 of Notes to Consolidated Financial Statements for definition of Contribution and for the basis on which allocations are made and a reconciliation of Contribution to net income on a consolidated basis.

Revenue in our international segment increased 91.9% during the year ended December 31, 2004 primarily due to acquisitions completed in Europe, including a full year of revenue from the acquisition of Hays IMS in 2004 which represents an increase of $114.2 million over the partial year of revenue recorded in 2003, and in South America and strong internal growth in both Europe and Latin America. Favorable currency fluctuations during the year ended December 31, 2004 in Europe, Mexico and South America increased revenue, as measured in U.S. dollars, by $35.7 million compared to the year ended December 31, 2003. Contribution as a percent of segment revenue remained flat primarily due to lower gross margins and increased overhead in our European operations attributable to our acquisition integration efforts and the establishment of a new shared service center offset by improved gross margins from our South American and Mexican operations.

Revenue in our international segment increased 81.1% primarily due to acquisitions completed in Europe, including $46.4 million from the acquisition of Hays IMS, and in South America, as well as strong internal growth and a large service project in the U.K. Favorable currency fluctuations during the year ended December 31, 2003 in Europe increased revenue, as measured in U.S. dollars, by $17.5 million compared to the year ended December 31, 2002. This increase was offset by $1.2 million of unfavorable currency fluctuations in Mexico and South America during the year ended December 31, 2003 compared to the year ended December 31, 2002. Contribution as a percent of segment revenue increased primarily due to improved gross margins from our European, South American, and Mexican operations and overall increased direct labor utilization and lower bad debt expenses. This increase was partially offset by increased overhead expenses associated with the growth of these emerging businesses.

Corporate and Other

The Corporate and Other segment is comprised of results from operations not discussed above, including our digital archiving services, PC/Desktop computing electronic vaulting services, consulting

and fulfillment operations and costs associated with our corporate headquarters' operations. Certain costs incurred by our Corporate division were allocated to the other segments in 2002, 2003, and 2004, primarily to our Business Records Management and Data Protection segments. These allocations, which include rent, worker's compensation, property, general liability, auto and other insurance, pension/medical costs, incentive compensation, real estate property taxes and provision for bad debts, are based on rates set at the beginning of each year.

Revenue in our Corporate and Other segment increased $21.2 million to $51.0 million for the year ended December 31, 2004 and $4.6 million to $29.8 million for the year ended December 31, 2003 from $25.2 million for the year ended December 31, 2002. Contribution decreased $2.2 million to $30.5 million for the year ended December 31, 2004 and increased $15.8 million to $32.7 million for the year ended December 31, 2003 from $16.9 million for the year ended December 31, 2002. Items excluded from the calculation of Contribution include the following: (1) depreciation and amortization expense for the years ended December 31, 2002, 2003, and 2004 of $21.4 million, $29.4 million, and $32.6 million, respectively, (2) foreign currency gains of $3.4 million, $1.3 million, and $8.4 million for the years ended December 31, 2002, 2003, and 2004, respectively, (3) debt extinguishment expense of $5.4 million, $15.6 million, and $0.4 million for the years ended December 31, 2002, 2003, and 2004, respectively, and (4) a $0.8 million and $0.7 million loss on disposal/writedown of property, plant and equipment, net for the years ended December 31, 2002 and 2003, respectively.

Liquidity and Capital Resources

The following is a summary of our cash balances and cash flows for the years ended 2002, 2003 and 2004 (in thousands).

	2002			2003			2004
Cash flows provided by operating activities	$	254,948		$	288,693		$	305,364
Cash flows used in investing activities		(247,757	)		(586,634	)		(626,523	)
Cash flows provided by financing activities		27,098			315,054			276,569
Cash and cash equivalents at the end of year	$	56,292		$	74,683		$	31,942

Net cash provided by operating activities was $305.4 million for the year ended December 31, 2004 compared to $288.7 million for the year ended December 31, 2003. The increase resulted primarily from an increase in operating income and non-cash items, such as depreciation offset by the net change in assets and liabilities. The net change in assets and liabilities is primarily associated with growth in revenues and the resulting increase in receivables, growth in deferred revenue from selling efforts in our digital businesses, an increase in days sales outstanding in our European operations and increased purchase reserve payments year over year.

We have made significant capital expenditures, additions to customer relationship and acquisition costs and other investments, primarily acquisitions. Our capital expenditures are primarily related to growth and include investments in storage systems, information systems and discretionary investments in real estate. Cash paid for our capital expenditures and additions to customer relationship and acquisition costs during the year ended December 31, 2004 amounted to $232.0 million and $12.5 million, respectively. For the years ended December 31, 2002, 2003 and 2004, capital expenditures, net and additions to customer relationship and acquisition costs were funded entirely with cash flows provided by operating activities. Excluding acquisitions, we expect our capital expenditures to be between approximately $220 million and approximately $250 million in the year ending December 31, 2005.

In the year ended December 31, 2004, we paid net cash consideration of $384.3 million for acquisitions, which included $111.7 million associated with the purchase of Mentmore's 49.9% equity interest in IME and approximately $109 million (net of cash acquired) to acquire Connected. Cash

flows from operations, borrowings under our revolving credit facilities and net proceeds from other financing transactions funded these acquisitions. Since December 31, 2004, we completed 6 acquisitions for total consideration of approximately $15 million. We also closed on two transactions to buy out minority interest partners in our Latin American subsidiaries for total consideration of $19 million. These transactions will be reflected in our consolidated statement of cash flows in the first quarter of 2005.

Net cash provided by financing activities was $276.6 million for the year ended December 31, 2004. During the year ended December 31, 2004 we had gross borrowings under our revolving credit facilities and term loan facilities of $1,148.3 million and we received net proceeds of $269.4 million from the issuance of our 7¹/4% GBP Senior Subordinated Notes due 2014 ("7¹/4% notes"). We used the proceeds from these financing transactions to repay debt and term loans ($1,085.0 million), retire notes of our principal Canadian subsidiary, that we guaranteed, (the "Subsidiary notes"), ($20.8 million), repay debt financing from minority shareholders, net ($42.0 million) and to fund acquisitions.

We are highly leveraged and expect to continue to be highly leveraged for the foreseeable future. Our consolidated debt as of December 31, 2004 was comprised of the following (in thousands):

IMI Revolving Credit Facility	$	122,563
IMI Term Loan Facility		349,000
IME Revolving Credit Facility		101,478
IME Term Loan Facility		184,330
8¹/4% Senior Subordinated Notes due 2011(1)		149,715
8⁵/8% Senior Subordinated Notes due 2013(1)		481,054
7¹/4% GBP Senior Subordinated Notes due 2014(1)		288,990
7³/4% Senior Subordinated Notes due 2015(1)		440,418
6⁵/8% Senior Subordinated Notes due 2016(1)		314,565
Real Estate Mortgages		5,908
Seller Notes		11,307
Other		28,694

Long-term Debt		2,478,022
Less Current Portion		(39,435	)

Long-term Debt, Net of Current Portion	$	2,438,587

(1): These debt instruments are collectively referred to as the "Parent Notes." The Parent notes are fully and unconditionally guaranteed, on a senior subordinated basis, by substantially all of our direct and indirect wholly owned U.S. subsidiaries (the "Guarantors"). These guarantees are joint and several obligations of the Guarantors. The remainder of our subsidiaries do not guarantee the Parent notes or the IMI revolving credit facility and IMI term loan facility.

Our indentures use OIBDA-based calculations as primary measures of financial performance, including leverage ratios. Our key bond leverage ratio, as calculated per our bond indentures, was 5.0 as of December 31, 2003 and 2004. Noncompliance with this leverage ratio would have a material adverse effect on our financial condition and liquidity. Our target for this ratio is generally in the range of 4.5 to 5.5 while the maximum ratio allowable under the bond indentures is 6.5.

Our ability to pay interest on or to refinance our indebtedness depends on our future performance, working capital levels and capital structure, which are subject to general economic, financial, competitive, legislative, regulatory and other factors which may be beyond our control. There can be no assurance that we will generate sufficient cash flow from our operations or that future financings will be available on acceptable terms or in amounts sufficient to enable us to service or refinance our indebtedness, or to make necessary capital expenditures.

Our indentures and other agreements governing our indebtedness contain certain restrictive financial and operating covenants including covenants that restrict our ability to complete acquisitions, pay cash dividends, incur indebtedness, make investments, sell assets and take certain other corporate actions. The covenants do not contain a rating trigger. Therefore, a change in our debt rating would not trigger a default under our indentures and other agreements governing our indebtedness. As of December 31, 2004, we were in compliance with all material debt covenants and agreements.

In January 2004, we completed an offering of 150 million British pounds sterling in aggregate principal amount of our 7¹/4% notes, which were issued at a price of 100.0% of par. Our net proceeds of 146.9 million British pounds sterling (approximately $270 million), after paying the initial purchasers' discounts, commissions and transaction fees, were used to fund our acquisition of Mentmore's 49.9% equity interest in IME for total consideration of 82.5 million British pounds sterling (approximately $154 million), to redeem $20.0 million in aggregate principal amount of our outstanding Subsidiary notes in February 2004, to repay borrowings under our revolving credit facility, to repay $48.8 million of our term loans, to repay other indebtedness and to pay for other acquisitions.

In February 2004, using proceeds from our January 2004 offering of 7¹/4% notes, we redeemed the remaining $20 million of outstanding principal amount of the Subsidiary notes, at a redemption price (expressed as a percentage of principal amount) of 104.063%, plus accrued and unpaid interest. We recorded a charge of approximately $2 million to other (income) expense, net in the first quarter of 2004 related to the early retirement of these remaining Subsidiary notes, which consists of redemption premiums and transaction costs as well as original issue discount related to these Subsidiary notes.

In February 2004, we completed the acquisition of the 49.9% equity interest held by Mentmore in IME for total consideration of 82.5 million British pounds sterling (approximately $154 million) in cash from proceeds of our 7¹/4% notes issued in January 2004. Included in this amount is the repayment of all trade and working capital funding owed to Mentmore by IME. Completion of the transaction gave us 100% ownership of IME, affording us full access to all future cash flows and greater strategic and financial flexibility.

In March 2004, IME and certain of its subsidiaries entered into a credit agreement (the "IME Credit Agreement") with a syndicate of European lenders. The IME Credit Agreement provides for maximum borrowing availability in the principal amount of 210 million British pounds sterling, including a 100 million British pounds sterling revolving credit facility (the "IME revolving credit facility"), which includes the ability to borrow in certain other foreign currencies, a 100 million British pounds sterling term loan (the "IME term loan facility"), and a 10 million British pounds sterling overdraft protection line. The IME revolving credit facility matures on March 5, 2009. The IME term loan facility is payable in three installments; two installments of 20 million British pounds sterling on March 5, 2007 and 2008, respectively, and the final payment of the remaining balance on March 5, 2009. The interest rate on borrowings under the IME Credit Agreement varies depending on IME's choice of currency options and interest rate period, plus an applicable margin. The IME Credit Agreement includes various financial covenants applicable to the results of IME, which may restrict IME's ability to incur indebtedness under the IME Credit Agreement and from third parties, as well as limit IME's ability to pay dividends to us. Most of IME's non-dormant subsidiaries have either guaranteed the obligations or have their shares pledged to secure IME's obligations under the IME Credit Agreement. We have not guaranteed or otherwise provided security for the IME Credit Agreement nor have any of our U.S., Canadian, Mexican or South American subsidiaries.

In March 2004, IME borrowed approximately 147 million British pounds sterling under the IME Credit Agreement, including the full amount of the term loan. IME used those proceeds to repay us 135 million British pounds sterling related to our initial financing of the acquisition of the European operations of Hays IMS, to repay amounts outstanding under its prior term loan and revolving credit facility and to pay transaction costs associated with the IME Credit Agreement. We used the

135 million British pounds sterling received from IME to: (1) pay down approximately $104 million of real estate term loans, (2) settle all obligations totaling $27.7 million associated with terminating our two cross currency swaps used to hedge the foreign currency impact of our intercompany financing with IME related to the Hays IMS acquisition and (3) to pay down amounts outstanding under our prior credit agreement. The IME Credit Agreement in conjunction with our 7¹/4% notes provided permanent financing for the Hays IMS acquisition and allowed us to maintain the economics of the transaction with respect to exchange rates as originally contemplated at the time of the acquisition. Our consolidated balance sheet as of December 31, 2004 included 155.1 million British pounds sterling (approximately $285.8 million) of borrowings under the IME Credit Agreement. The remaining availability, based on its current level of external debt and the leverage ratio under the IME revolving credit facility on October 31, 2004, was approximately 49.0 million British pounds sterling (approximately $90.2 million).

On April 2, 2004 and subsequently on July 8, 2004, we entered into a new amended and restated credit facility and term loan facility (the "IMI Credit Agreement") to replace our prior credit agreement and to reflect more favorable pricing of our term loans. The IMI Credit Agreement has an aggregate principal amount of $550.0 million and is comprised of a $350.0 million revolving credit facility (the "IMI revolving credit facility"), which includes the ability to borrow in certain foreign currencies, and a $200.0 million term loan facility (the "IMI term loan facility"). The IMI revolving credit facility matures on April 2, 2009. With respect to the IMI term loan facility, quarterly loan payments of $0.5 million began in the third quarter of 2004 and will continue through maturity on April 2, 2011, at which time the remaining outstanding principal balance of the IMI term loan facility is due. The interest rate on borrowings under the IMI Credit Agreement varies depending on our choice of interest rate and currency options, plus an applicable margin. All intercompany notes and the capital stock of most of our U.S. subsidiaries are pledged to secure the IMI Credit Agreement. As of December 31, 2004, we had $122.6 million of borrowings under the IMI revolving credit facility, of which $3 million was denominated in U.S. dollars and the remaining balance was denominated in Canadian dollars (CAD 144.0 million); we also had various outstanding letters of credit totaling $22.1 million. The remaining availability, based on IMI's current level of external debt and the leverage ratio under the IMI revolving credit facility, on December 31, 2004 was $205.3 million. In November 2004, we entered into an additional $150.0 million of term loans as permitted under our IMI Credit Agreement. The new term loans will mature at the same time as our current IMI term loan facility with quarterly loan payments of $0.4 million beginning in the first quarter of 2005 and are priced at LIBOR plus a margin of 1.75%. As a result, the IMI Credit Agreement has an aggregate maximum principal amount of $700 million as of December 31, 2004. The interest rate in effect under the IMI revolving credit facility was 4.6% as of December 31, 2004.

In April 2004, IME entered into two floating for fixed interest rate swap contracts, each with a notional value of 50.0 million British pounds sterling and a duration of two years, which were designated as cash flow hedges. These swap agreements hedge interest rate risk on IME's term loan facility.

Our variable interest entities were financed with real estate term loans. In March 2004, approximately $104 million of these real estate term loans was repaid. In August 2004, we repaid the remaining $98.7 million of real estate term loans held by one of our variable interest entities using available borrowing capacity under the IMI revolving credit facility. As a result, we recorded a charge of $9.5 million due to recharacterization of the interest rate swaps associated with these real estate term loans during 2004. This charge represents the fair market value of the swap, which is a calculation of the net present value of the expected monthly cash payments over the remaining term of the swap based on current market conditions, as of the date the real estate term loan was repaid. We did not terminate the swap and expect to enjoy the benefit of the fixed rate financing and will continue to mark to market the fair market value of the derivative liability to interest expense, net and make our

monthly cash payments as required under the swap contract for the remaining term of approximately three years. See Notes 4 and 5 to Notes to Consolidated Financial Statements.

The IME Credit Agreement, IMI Credit Agreement and our indentures and other agreements governing our indebtedness contain certain restrictive financial and operating covenants, including covenants that restrict our ability to complete acquisitions, pay cash dividends, incur indebtedness, make investments, sell assets and take certain other corporate actions. The covenants do not contain a rating trigger. Therefore, a change in our debt rating would not trigger a default under the IME Credit Agreement and IMI Credit Agreement. We were in compliance with all material debt covenants as of December 31, 2004.

Contractual Obligations

The following table summarizes our contractual obligations as of December 31, 2004 and the anticipated effect of these obligations on our liquidity in future years (in thousands):

	Payments Due by Period
	Total		Less than 1 Year		1-3 Years		3-5 Years		More than 5 Years
Long-term Debt (including Capital Lease Obligations)	$	2,474,399	$	39,435	$	52,508	$	370,238	$	2,012,218
Interest Payments(1)		1,257,981		163,244		281,821		262,627		550,289
Operating Lease Obligations		1,077,681		151,166		253,298		182,915		490,302
Purchase Obligations(2)		70,362		21,428		31,784		17,150		—

Total	$	4,880,423	$	375,273	$	619,411	$	832,930	$	3,052,809

(1): Amounts do not include variable rate interest payments; see Note 5 to Notes to Consolidated Financial Statements for the applicable interest rates.
(2): In addition, in connection with some of our acquisitions, we have potential earn-out obligations that would be payable in the event businesses we acquired meet certain operational objectives. These payments are based on the future results of these operations and our estimate of the maximum contingent earn-out payments we would be required to make under all such agreements as of December 31, 2004 is approximately $16.8 million.

We expect to meet our cash flow requirements for the next twelve months from cash generated from operations, existing cash, cash equivalents and marketable securities, borrowings under the IMI revolving credit facility and other financings, which may include secured credit facilities, securitizations and mortgage or capital lease financings. See Notes 5, 10 and 13 to Notes to Consolidated Financial Statements.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements as defined in Regulation S-K, Item 303(a)(4)(ii).

Net Operating Loss Carryforwards

At December 31, 2004, we had estimated net operating loss carryforwards of approximately $170 million for federal income tax purposes. As a result of such loss carryforwards, cash paid for income taxes has historically been substantially lower than the provision for income taxes. These net operating loss carryforwards do not include approximately $103 million of potential preacquisition net operation loss carryforwards of Arcus Group, Inc. ("Arcus Group"). Any tax benefit realized related to preacquisition net operating loss carryforwards will be recorded as a reduction of goodwill when, and if,

realized. The Arcus Group carryforwards begin to expire next year. As a result of these loss carryforwards, we do not expect to pay any significant international, U.S. federal and state income taxes in 2005.

Seasonality

Historically, our businesses have not been subject to seasonality in any material respect.

Inflation

Certain of our expenses, such as wages and benefits, insurance, occupancy costs and equipment repair and replacement, are subject to normal inflationary pressures. Although to date we have been able to offset inflationary cost increases through increased operating efficiencies and the negotiation of favorable long-term real estate leases, we can give no assurance that we will be able to offset any future inflationary cost increases through similar efficiencies, leases or increased storage or service charges.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

Interest Rate Risk

Given the recurring nature of our revenues and the long term nature of our asset base, we have the ability and the preference to use long term, fixed interest rate debt to finance our business, thereby helping to preserve our long term returns on invested capital. We target a range 80% to 85% of our debt portfolio to be fixed with respect to interest rates. Occasionally, we will use floating to fixed interest rate swaps as a tool to maintain our targeted level of fixed rate debt. As part of this strategy, in December 2000, January 2001, May 2001, and April 2004 we, IME, and variable interest entities we now consolidate, entered into a total of six derivative financial contracts, which are variable-for-fixed interest rate swaps consisting of (a) two contracts for interest payments payable on the IMI term loan facility of an aggregate principal amount of $195.5 million, (b) one contract based on interest payments previously payable on our real estate term loans of an aggregate principal amount of $47.5 million that have been subsequently repaid, (c) one contract based on interest payments previously payable on our real estate term loans of an aggregate principal amount of $97.0 million that have been subsequently repaid, and (d) two contracts for interest payments payable on IME's term loan facility of an aggregate principal amount of 100.0 million British pounds sterling. See Note 4 to Notes to Consolidated Financial Statements and "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies" in this Form 10-K.

After consideration of the swap contracts mentioned above, as of December 31, 2004, we had $275.3 million of variable rate debt outstanding with a weighted average variable interest rate of 5.1%, and $2,202.8 million of fixed rate debt outstanding. As of December 31, 2004, 89% of our total debt outstanding was fixed. If the weighted average variable interest rate on our variable rate debt had increased by 1%, our net income for the year ended December 31, 2004 would have been reduced by $1.5 million. See Note 5 to Notes to Consolidated Financial Statements included in this Form 10-K for a discussion of our long-term indebtedness, including the fair values of such indebtedness as of December 31, 2004.

Currency Risk

Our investments in IME, Iron Mountain Canada Corporation ("IM Canada"), Iron Mountain Mexico, SA de RL de CV, IMSA and other international investments may be subject to risks and uncertainties related to fluctuations in currency valuation. Our reporting currency is the U..S. dollar. However, our international revenues and expenses are generated in the currencies of the countries in which we operate, primarily the Canadian dollar and British pound sterling. The currencies of many Latin American countries, particularly the Argentine peso, have experienced substantial volatility and

depreciation. Declines in the value of the local currencies in which we are paid relative to the U.S. dollar will cause revenues in U.S. dollar terms to decrease and dollar-denominated liabilities to increase in local currency. The impact on our earnings is mitigated somewhat by the fact that most operating and other expenses are also incurred and paid in the local currency. We also have several intercompany obligations between our foreign subsidiaries and Iron Mountain and our U.S.-based subsidiaries. These intercompany obligations are primarily denominated in the local currency of the foreign subsidiary.

We have adopted and implemented a number of strategies to mitigate the risks associated with fluctuations in currency valuations. One strategy is to finance our largest international subsidiaries with local debt that is denominated in local currencies, thereby providing a natural hedge. In determining the amount of any such financing, we take into account local tax strategies among other factors. Another strategy we utilize is to borrow in foreign currencies at the U.S. parent level to hedge our intercompany financing activities. Finally, on occasion, we enter into currency swaps to temporarily hedge an overseas investment, such as a major acquisition to lock in certain transaction economics, while we arrange permanent financing. We have implemented these strategies for our two major foreign investments in the U.K. and Canada. Specifically, through IME borrowing under the IME Credit Agreement and our 150 million British pounds sterling denominated 7¹/4% senior subordinated notes, which effectively hedges most of our outstanding intercompany loan with IME. With respect to Canada, in August 2004, we repaid the remaining $98.7 million of real estate term loans by having IM Canada draw on its portion of the IMI revolving credit facility in local currency and repaying a portion of its intercompany loan back to the U.S. parent. This has created a natural hedge on a portion of the intercompany balance and will reduce our currency fluctuations with regard to our investment in IM Canada while providing IM Canada with additional borrowings and interest expenses to reduce its income tax burden. As of December 31, 2004, except as noted above, our currency exposures to intercompany balances are unhedged.

The impact of devaluation or depreciating currency on an entity depends on the residual effect on the local economy and the ability of an entity to raise prices and/or reduce expenses. Due to our constantly changing currency exposure and the potential substantial volatility of currency exchange rates, we cannot predict the effect of exchange fluctuations on our business. The effect of a change in foreign exchange rates on our net investment in foreign subsidiaries is reflected in the "Accumulated Other Comprehensive Items" component of shareholders' equity. A 10% depreciation in year-end 2004 functional currencies, relative to the U.S. dollar, would result in a reduction in our shareholders' equity of approximately $20 million.

Item 8. Financial Statements and Supplementary Data.

The information required by this item is included in Item 15 (a) of this Annual Report on Form 10-K.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

None.

Item 9A. Controls and Procedures.

The term "disclosure controls and procedures" is defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act. These rules refer to the controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files under the Exchange Act is recorded, processed, summarized and reported within required time periods. As of December 31, 2004 (the "Evaluation Date"), we carried out an evaluation, under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures.

Based upon that evaluation, the chief executive officer and chief financial officer have concluded that, as of the Evaluation Date, such disclosure controls and procedures were effective in ensuring that required information will be disclosed on a timely basis in our reports filed under the Exchange Act.

We continue to strive to give our shareholders as much information as possible to allow them to make their own judgments regarding our performance. In that spirit, we are providing an update to our disclosure in our Quarterly Report on Form 10-Q for the period ended September 30, 2004 filed with the SEC on November 9, 2004. In that report, we disclosed a material change to our European internal controls over financial reporting related to the Hays integration which had resulted in the relocation of our United Kingdom accounting operations center. We have since completed our internal testing of controls and concluded that, as of the December 31, 2004, controls over financial reporting were effective.

There have been no changes in our internal control over financial reporting during the quarter ended December 31, 2004 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 9B. Other Information.

None.

PART III

Item 10. Directors and Executive Officers of the Registrant.

The information required by Item 10 is incorporated by reference to our definitive Proxy Statement for the Annual Meeting of Shareholders to be held on or about May 26, 2005.

Item 11. Executive Compensation.

The information required by Item 11 is incorporated by reference to our definitive Proxy Statement for the Annual Meeting of Shareholders to be held on or about May 26, 2005.

Item 12. Security Ownership of Certain Beneficial Owners and Management.

The information required by Item 12 is incorporated by reference to our definitive Proxy Statement for the Annual Meeting of Shareholders to be held on or about May 26, 2005.

Item 13. Certain Relationships and Related Transactions.

The information required by Item 13 is incorporated by reference to our definitive Proxy Statement for the Annual Meeting of Shareholders to be held on or about May 26, 2005.

Item 14. Principal Accountant Fees and Services.

The information required by Item 14 is incorporated by reference to our definitive Proxy Statement for the Annual Meeting of Shareholders to be held on or about May 26, 2005.

Item 15. Exhibits and Financial Statement Schedules.

(a) Financial Statements and Financial Statement Schedules filed as part of this report:

		Page
A. Iron Mountain Incorporated
Report of Independent Registered Public Accounting Firm		51
Management's Report on Internal Control Over Financial Reporting		52
Report of Independent Registered Public Accounting Firm		53
Consolidated Balance Sheets, December 31, 2003 and 2004		55
Consolidated Statements of Operations, Years Ended December 31, 2002, 2003 and 2004		56
Consolidated Statements of Shareholders' Equity and Comprehensive Income, Years Ended December 31, 2002, 2003 and 2004		57
Consolidated Statements of Cash Flows, Years Ended December 31, 2002, 2003 and 2004		58
Notes to Consolidated Financial Statements		59
B. Iron Mountain Europe Limited
Report of the Independent Auditors		103

(b) Exhibits filed as part of this report:

As listed in the Exhibit Index following the signature page hereof.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of
Iron Mountain Incorporated:

We have audited the accompanying consolidated balance sheets of Iron Mountain Incorporated (a Pennsylvania corporation) and its subsidiaries (the "Company") as of December 31, 2004 and 2003, and the related consolidated statements of operations, stockholders' equity and comprehensive income, and cash flows for each of the three years in the period ended December 31, 2004. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We did not audit the financial statements of Iron Mountain Europe Limited (a consolidated subsidiary) as of or for the two years ended October 31, 2003, which statements reflect total assets constituting 18% of consolidated total assets as of December 31, 2003, and total revenues constituting 12% and 7% of the total consolidated revenue for the years ended December 31, 2003 and 2002, respectively. Such financial statements were audited by other auditors whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included for Iron Mountain Europe Limited for 2003 and 2002, is based solely on the report of such other auditors.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits and the report of other auditors provide a reasonable basis for our opinion.

In our opinion, based on our audits and the report of other auditors, such consolidated financial statements present fairly, in all material respects, the financial position of Iron Mountain Incorporated and subsidiaries as of December 31, 2004 and 2003, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2004, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the effectiveness of the Company's internal control over financial reporting as of December 31, 2004, based on the criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 11, 2005 expressed an unqualified opinion on management's assessment of the effectiveness of the Company's internal control over financial reporting and an unqualified opinion on the effectiveness of the Company's internal control over financial reporting.

/s/ DELOITTE & TOUCHE LLP

Boston, Massachusetts
March 11, 2005

Management's Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in the Securities Exchange Act of 1934 Rule 13a-15(f). Under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our evaluation under the framework in Internal Control—Integrated Framework, our management concluded that our internal control over financial reporting was effective as of December 31, 2004. Our management's assessment of the effectiveness of our internal control over financial reporting as of December 31, 2004 has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report which is included herein.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of
Iron Mountain Incorporated:

We have audited management's assessment, included in the accompanying Management's Report on Internal Control Over Financial Reporting, that Iron Mountain Incorporated and subsidiaries (the "Company") maintained effective internal control over financial reporting as of December 31, 2004, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. The Company's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting. Our responsibility is to express an opinion on management's assessment and an opinion on the effectiveness of the Company's internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, evaluating management's assessment, testing and evaluating the design and operating effectiveness of internal control, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinions.

A company's internal control over financial reporting is a process designed by, or under the supervision of, the company's principal executive and principal financial officers, or persons performing similar functions, and effected by the company's board of directors, management, and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, management's assessment that the Company maintained effective internal control over financial reporting as of December 31, 2004, is fairly stated, in all material respects, based on the criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2004, based on the criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated financial statements as of and for the year ended December 31, 2004 of the Company and our report dated March 11, 2005 expressed an unqualified opinion on those financial statements.

/s/ DELOITTE & TOUCHE LLP

Boston, Massachusetts
March 11, 2005

IRON MOUNTAIN INCORPORATED

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)

			December 31,
			2003			2004
ASSETS
Current Assets:
	Cash and cash equivalents		$	74,683		$	31,942
	Accounts receivable (less allowances of $20,922 and $13,886, respectively)			279,800			354,434
	Deferred income taxes			33,043			36,033
	Prepaid expenses and other			84,057			78,745

		Total Current Assets		471,583			501,154
Property, Plant and Equipment:
	Property, plant and equipment			1,950,893			2,266,839
	Less—Accumulated depreciation			(458,626	)		(617,043	)

		Net Property, Plant and Equipment		1,492,267			1,649,796
Other Assets, net:
	Goodwill			1,776,279			2,040,217
	Customer relationships and acquisition costs			116,466			189,780
	Deferred financing costs			23,934			36,590
	Other			11,570			24,850

		Total Other Assets, net		1,928,249			2,291,437

		Total Assets	$	3,892,099		$	4,442,387

LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
	Current portion of long-term debt		$	115,781		$	39,435
	Accounts payable			87,006			103,415
	Accrued expenses			234,426			234,697
	Deferred revenue			107,857			136,470
	Other current liabilities			39,675			1,446

		Total Current Liabilities		584,745			515,463
Long-term Debt, net of current portion				1,974,147			2,438,587
Other Long-term Liabilities				24,499			23,932
Deferred Rent				20,578			26,253
Deferred Income Taxes				146,231			206,539
Commitments and Contingencies (see Note 13)
Minority Interests				75,785			13,045
Shareholders' Equity:
	Preferred stock (par value $0.01; authorized 10,000,000 shares; none issued and outstanding)			—			—
	Common stock (par value $0.01; authorized 200,000,000 shares; issued and outstanding 128,362,881 shares and 129,817,914 shares, respectively)			1,283			1,298
	Additional paid-in capital			1,033,643			1,063,560
	Retained earnings			39,234			133,425
	Accumulated other comprehensive items, net			(8,046	)		20,285

		Total Shareholders' Equity		1,066,114			1,218,568

		Total Liabilities and Shareholders' Equity	$	3,892,099		$	4,442,387

The accompanying notes are an integral part of these consolidated financial statements.

IRON MOUNTAIN INCORPORATED

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

			Year Ended December 31,
			2002			2003			2004
Revenues:
	Storage		$	759,536		$	875,035		$	1,043,366
	Service and storage material sales			558,961			626,294			774,223

		Total Revenues		1,318,497			1,501,329			1,817,589
Operating Expenses:
	Cost of sales (excluding depreciation)			622,299			680,747			823,899
	Selling, general and administrative			333,050			383,641			486,246
	Depreciation and amortization			108,992			130,918			163,629
	Merger-related expenses			796			—			—
	Loss (Gain) on disposal/writedown of property, plant and equipment, net			774			1,130			(681	)

		Total Operating Expenses		1,065,911			1,196,436			1,473,093
Operating Income				252,586			304,893			344,496
Interest Expense, Net				136,632			150,468			185,749
Other Expense (Income), Net				1,435			(2,564	)		(7,988	)

	Income from Continuing Operations Before Provision for Income Taxes and Minority Interest			114,519			156,989			166,735
Provision for Income Taxes				47,318			66,730			69,574
Minority Interest in Earnings of Subsidiaries				3,629			5,622			2,970

	Income from Continuing Operations before Discontinued Operations and Cumulative Effect of Change in Accounting Principle			63,572			84,637			94,191
Income from Discontinued Operations (net of tax of $768)				1,116			—			—
Cumulative Effect of Change in Accounting Principle (net of minority interest)				(6,396	)		—			—

		Net Income	$	58,292		$	84,637		$	94,191

Net Income per Share—Basic:
	Income from Continuing Operations before Discontinued Operations and Cumulative Effect of Change in Accounting Principle		$	0.50		$	0.66		$	0.73
	Income from Discontinued Operations (net of tax)			0.01			—			—
	Cumulative Effect of Change in Accounting Principle (net of minority interest)			(0.05	)		—			—

		Net Income per Share—Basic	$	0.46		$	0.66		$	0.73

Net Income per Share—Diluted:
	Income from Continuing Operations before Discontinued Operations and Cumulative Effect of Change in Accounting Principle		$	0.49		$	0.65		$	0.72
	Income from Discontinued Operations (net of tax)			0.01			—			—
	Cumulative Effect of Change in Accounting Principle (net of minority interest)			(0.05	)		—			—

		Net Income per Share—Diluted	$	0.45		$	0.65		$	0.72

Weighted Average Common Shares Outstanding—Basic				126,977			127,901			129,083

Weighted Average Common Shares Outstanding—Diluted				129,107			130,077			131,176

The accompanying notes are an integral part of these consolidated financial statements.

IRON MOUNTAIN INCORPORATED

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
AND COMPREHENSIVE INCOME

(In thousands, except share data)

	Common Stock Voting
	Common Stock Voting			Additional Paid-in Capital			(Accumulated Deficit) Retained Earnings			Accumulated Other Comprehensive Items			Total Shareholders' Equity
	Shares	Amounts		Additional Paid-in Capital			(Accumulated Deficit) Retained Earnings			Accumulated Other Comprehensive Items			Total Shareholders' Equity
Balance, December 31, 2001	126,441,473	$	1,264	$	1,006,415		$	(103,695	)	$	(18,025	)	$	885,959
Issuance of shares under employee stock purchase plan and option plans, including tax benefit	1,132,963		11		13,369			—			—			13,380
Deferred compensation	—		—		243			—			—			243
Currency translation adjustment	—		—		—			—			3,378			3,378
Market value adjustments for hedging contracts	—		—		—			—			(16,391	)		(16,391	)
Net income	—		—		—			58,292			—			58,292

Balance, December 31, 2002	127,574,436		1,275		1,020,027			(45,403	)		(31,038	)		944,861
Issuance of shares under employee stock purchase plan and option plans, including tax benefit	788,445		8		18,240			—			—			18,248
Deferred compensation	—		—		(4,624	)		—			—			(4,624	)
Currency translation adjustment	—		—		—			—			16,466			16,466
Market value adjustments for hedging contracts	—		—		—			—			6,215			6,215
Market value adjustments for securities	—		—		—			—			311			311
Net income	—		—		—			84,637			—			84,637

Balance, December 31, 2003	128,362,881		1,283		1,033,643			39,234			(8,046	)		1,066,114
Issuance of shares under employee stock purchase plan and option plans, including tax benefit	1,455,033		15		33,450			—			—			33,465
Deferred compensation	—		—		(3,533	)		—			—			(3,533	)
Currency translation adjustment	—		—		—			—			14,669			14,669
Market value adjustments for hedging contracts	—		—		—			—			13,576			13,576
Market value adjustments for securities	—		—		—			—			86			86
Net income	—		—		—			94,191			—			94,191

Balance, December 31, 2004	129,817,914	$	1,298	$	1,063,560		$	133,425		$	20,285		$	1,218,568

		2002			2003		2004
COMPREHENSIVE INCOME:
Net Income		$	58,292		$	84,637	$	94,191
Other Comprehensive (Loss) Income:
	Foreign Currency Translation Adjustments		3,378			16,466		14,669
	Market Value Adjustments for Hedging Contracts, Net of (Tax Benefit) Tax Provision of $(5,983), $2,268 and $4,955		(16,391	)		6,215		13,576
	Market Value Adjustments for Securities		—			311		86

Comprehensive Income		$	45,279		$	107,629	$	122,522

The accompanying notes are an integral part of these consolidated financial statements.

IRON MOUNTAIN INCORPORATED

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

		Year Ended December 31,
		2002			2003			2004
Cash Flows from Operating Activities:
	Net income	$	58,292		$	84,637		$	94,191
Adjustments to reconcile net income to income from continuing operations before discontinued operations and cumulative effect of change in accounting principle:
	Income from discontinued operations (net of tax of $768)		(1,116	)		—			—
	Cumulative effect of change in accounting principle (net of minority interest)		6,396			—			—

Income from continuing operations			63,572			84,637			94,191
Adjustments to reconcile income from continuing operations to cash flows provided by operating activities:
	Minority interests in earnings of subsidiaries, net		3,629			5,622			2,970
	Depreciation		104,176			123,974			151,947
	Amortization (includes deferred financing costs and bond discount of $4,921, $3,654 and $3,646, respectively)		9,737			10,598			15,328
	Provision for deferred income taxes		44,112			61,485			62,165
	Loss on early extinguishment of debt		5,430			28,175			2,454
	Loss on impairment of long-term assets		1,717			—			—
	Loss (Gain) on disposal/writedown of property, plant and equipment, net		774			1,130			(681	)
	(Gain) Loss on foreign currency and other, net		(5,773	)		(28,961	)		9,084
Changes in Assets and Liabilities (exclusive of acquisitions):
	Accounts receivable		(2,547	)		(16,004	)		(48,020	)
	Prepaid expenses and other current assets		(3,792	)		6			(7,462	)
	Accounts payable		11,802			979			12,366
	Accrued expenses, deferred revenue and other current liabilities		20,575			18,134			9,852
	Other assets and long-term liabilities		1,536			(1,082	)		1,170

	Cash Flows Provided by Operating Activities		254,948			288,693			305,364
Cash Flows from Investing Activities:
	Capital expenditures		(196,997	)		(204,477	)		(231,966	)
	Cash paid for acquisitions, net of cash acquired		(49,361	)		(379,890	)		(384,338	)
	Additions to customer relationship and acquisition costs		(8,419	)		(12,577	)		(12,472	)
	Investment in convertible preferred stock		—			(1,357	)		(858	)
	Proceeds from sales of property and equipment		7,020			11,667			3,111

	Cash Flows Used in Investing Activities		(247,757	)		(586,634	)		(626,523	)
Cash Flows from Financing Activities:
	Repayment of debt and term loans		(462,243	)		(698,817	)		(1,085,013	)
	Proceeds from borrowings and term loans		438,842			744,016			1,148,275
	Early retirement of notes		(54,380	)		(374,258	)		(20,797	)
	Net proceeds from sales of senior subordinated notes		99,000			617,179			269,427
	Debt (repayment to) financing and equity (distribution to) contribution from minority shareholders, net		(1,241	)		20,225			(41,978	)
	Other, net		7,120			6,709			6,655

	Cash Flows Provided by Financing Activities		27,098			315,054			276,569
Effect of Exchange Rates on Cash and Cash Equivalents			644			1,278			1,849

Increase (Decrease) in Cash and Cash Equivalents			34,933			18,391			(42,741	)
Cash and Cash Equivalents, Beginning of Year			21,359			56,292			74,683

Cash and Cash Equivalents, End of Year		$	56,292		$	74,683		$	31,942

Supplemental Information:
Cash Paid for Interest		$	133,873		$	126,952		$	177,005

Cash Paid for Income Taxes		$	3,147		$	8,316		$	6,888

The accompanying notes are an integral part of these consolidated financial statements.

IRON MOUNTAIN INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2004

(In thousands, except share and per share data)

1. Nature of Business

The accompanying financial statements represent the consolidated accounts of Iron Mountain Incorporated, a Pennsylvania corporation, and its subsidiaries. We are an international full-service provider of information storage and protection and related services for all media in various locations throughout the United States, Canada, Europe, Mexico and South America to numerous legal, banking, health care, accounting, insurance, entertainment and government organizations, including more than 95% of the Fortune 1000 and more than two-thirds of the FTSE 100.

2. Summary of Significant Accounting Policies

a. Principles of Consolidation

The accompanying financial statements reflect our financial position and results of operations on a consolidated basis. Financial position and results of operations of Iron Mountain Europe Limited ("IME"), our European subsidiary, are consolidated for the appropriate periods based on its fiscal year ended October 31. All significant intercompany account balances have been eliminated or presented to reflect the underlying economics of the transactions.

b. Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires us to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities at the date of the financial statements and for the period then ended. On an on-going basis, we evaluate the estimates used, including those related to the allowance for doubtful accounts and credit memos, impairments of tangible and intangible assets, income taxes, purchase accounting related reserves, self-insurance liabilities, incentive compensation liabilities, litigation liabilities and contingencies. We base our estimates on historical experience, actuarial estimates, current conditions and various other assumptions that we believe to be reasonable under the circumstances. These estimates form the basis for making judgments about the carrying values of assets and liabilities and are not readily apparent from other sources. We use these estimates to assist us in the identification and assessment of the accounting treatment necessary with respect to commitments and contingencies. Actual results may differ from these estimates.

c. Cash and Cash Equivalents

Cash and cash equivalents include cash on hand and cash invested in short-term securities which have remaining maturities at the date of purchase of less than 90 days. Cash and cash equivalents are carried at cost, which approximates fair value.

d. Foreign Currency Translation

Local currencies are considered the functional currencies for most of our operations outside the United States. All assets and liabilities are translated at period-end exchange rates, and revenues and expenses are translated at average exchange rates for the applicable period, in accordance with Statement of Financial Accounting Standards ("SFAS") No. 52, "Foreign Currency Translation." Resulting translation adjustments are reflected in the accumulated other comprehensive items

component of shareholders' equity. The gain or loss on foreign currency transactions, including those related to (a) U.S. dollar denominated 8¹/8% senior notes of our Canadian subsidiary (the "Subsidiary notes"), (b) our 7¹/4% GBP Senior Subordinated Notes due 2014 (the "7¹/4% notes"), (c) the borrowings in certain foreign currencies under our revolving credit agreements, and (d) the foreign currency denominated intercompany obligations of our foreign subsidiaries to us, are included in other (income) expense, net, on our consolidated statements of operations. The total of such net gains amounted to $5,043, $30,223 and $8,915 for the years ended December 31, 2002, 2003 and 2004, respectively.

e. Derivative Instruments and Hedging Activities

SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities," requires that every derivative instrument be recorded in the balance sheet as either an asset or a liability measured at its fair value. Periodically, we acquire derivative instruments that are intended to hedge either cash flows or values which are subject to foreign exchange or other market price risk, and not for trading purposes. We have formally documented our hedging relationships, including identification of the hedging instruments and the hedged items, as well as our risk management objectives and strategies for undertaking each hedge transaction. Given the recurring nature of our revenues and the long term nature of our asset base, we have the ability and the preference to use long term, fixed interest rate debt to finance our business, thereby preserving our long term returns on invested capital. We target a range 80% to 85% of our debt portfolio to be long term and fixed with respect to interest rates. Occasionally, we will use floating to fixed interest rate swaps as a tool to maintain our targeted level of fixed rate debt. In addition, we will use borrowings in foreign currencies, either obtained in the U.S. or by our foreign subsidiaries, to naturally hedge foreign currency risk associated with our international investments. Sometimes we enter into currency swaps to temporarily hedge an overseas investment, such as a major acquisition, while we arrange permanent financing.

f. Property, Plant and Equipment

Property, plant and equipment are stated at cost and depreciated using the straight-line method with the following useful lives:

Buildings		40 to 50 years
Leasehold improvements		8 to 10 years or the life of the lease, whichever is shorter
Racking		5 to 20 years
Warehouse equipment		3 to 9 years
Vehicles		5 to 10 years
Furniture and fixtures		2 to 5 years
Computer hardware and software		3 to 5 years

Property, plant and equipment, at cost, consist of the following:

	December 31,
	2003		2004
Land and buildings	$	745,838	$	819,221
Leasehold improvements		144,244		181,452
Racking		598,101		699,104
Warehouse equipment/vehicles		88,127		117,740
Furniture and fixtures		41,996		51,075
Computer hardware and software		260,190		326,613
Construction in progress		72,397		71,634

	$	1,950,893	$	2,266,839

Minor maintenance costs are expensed as incurred. Major improvements which extend the life, increase the capacity or improve the safety or the efficiency of property owned are capitalized. Major improvements to leased buildings are capitalized as leasehold improvements and depreciated.

We develop various software applications for internal use. Payroll and related costs for employees who are directly associated with, and who devote time to, the development of internal use computer software projects (to the extent of the time spent directly on the project) are capitalized and depreciated over the estimated useful life of the software. Capitalization begins when the design stage of the application has been completed and it is probable that the project will be completed and used to perform the function intended. Depreciation begins when the software is placed in service.

We apply the provisions of Statement of Position 98-1, "Accounting for the Costs of Computer Software Developed or Obtained for Internal Use" ("SOP 98-1") which requires computer software costs associated with internal use software to be expensed as incurred until certain capitalization criteria are met.. SOP 98-1 also defines which types of costs should be capitalized and which should be expensed. The computer software costs incurred and capitalized are being depreciated over their useful lives or the useful lives of the related assets.

g. Goodwill and Other Intangible Assets

Effective July 1, 2001 and January 1, 2002, we adopted the provisions of SFAS No. 141, "Business Combinations" and SFAS No. 142, "Goodwill and Other Intangible Assets," respectively. SFAS No. 141 requires all business combinations initiated after June 30, 2001 to be accounted for using the purchase method. Under SFAS No. 142, goodwill and intangible assets with indefinite lives are no longer amortized but are reviewed annually for impairment or more frequently if impairment indicators arise. Separable intangible assets that are not deemed to have indefinite lives will continue to be amortized over their useful lives.

Effective January 1, 2002, we reviewed goodwill for impairment consistent with the guidelines of SFAS No. 142 using a discounted future cash flow approach to approximate fair value. The result of testing our goodwill for impairment in accordance with SFAS No. 142, as of January 1, 2002, was a non-cash charge of $6,396 (net of minority interest of $8,487), which, consistent with SFAS No. 142, is reported in the caption "cumulative effect of change in accounting principle" in the accompanying consolidated statement of operations. Impairment adjustments recognized in the future, if any, are

generally required to be recognized as operating expenses. The $6,396 charge relates to our South American reporting unit within our international reporting segment. The South American reporting unit failed the impairment test primarily due to a reduction in the expected future performance of the unit resulting from a deterioration of the local economic environment and the devaluation of the currency in Argentina. As goodwill amortization expense in our South American reporting unit is not deductible for tax purposes, this impairment charge is not net of a tax benefit. We have a controlling 50.1% interest in Iron Mountain South America, Ltd. ("IMSA") and the remainder is owned by an unaffiliated entity. IMSA has acquired a controlling interest in entities in which local partners have retained a minority interest in order to enhance our local market expertise. These local partners have no ownership interest in IMSA. This has caused the minority interest portion of the non-cash goodwill impairment charge ($8,487) to exceed our portion of the non-cash goodwill impairment charge ($6,396). In accordance with SFAS No. 142, we selected October 1 as our annual goodwill impairment review date. We performed our annual goodwill impairment review as of October 1, 2003 and 2004 and noted no impairment of goodwill at our reporting units as of such dates. As of December 31, 2004, no factors were identified that would alter this assessment.

The changes in the carrying value of goodwill attributable to each reportable operating segment for the years ended December 31, 2003 and 2004 is as follows:

	Business Records Management			Data Protection			International			Corporate & Other			Total Consolidated
Balance as of December 31, 2002	$	1,151,760		$	237,178		$	154,665		$	1,371		$	1,544,974
Deductible Goodwill acquired during the year		18,998			7,675			136,178			—			162,851
Non-Deductible Goodwill acquired during the year		20,332			—			5,887			—			26,219
Adjustments to purchase reserves		(613	)		(52	)		(285	)		—			(950	)
Fair value adjustments		3,097			(150	)		(4,385	)		—			(1,438	)
Currency effects and other adjustments		24,898			(30	)		19,755			—			44,623

Balance as of December 31, 2003		1,218,472			244,621			311,815			1,371			1,776,279
Deductible Goodwill acquired during the year		50,408			881			55,297			3,238			109,824
Non-Deductible Goodwill acquired during the year		11,106			1,599			11,141			73,667			97,513
Adjustments to purchase reserves		(414	)		(104	)		11,966			—			11,448
Fair value adjustments		(1,701	)		(31	)		940			—			(792	)
Currency effects and other adjustments		12,780			—			33,214			(49	)		45,945

Balance as of December 31, 2004	$	1,290,651		$	246,966		$	424,373		$	78,227		$	2,040,217

Estimated amortization expense for existing intangible assets (excluding deferred financing costs which are amortized through interest expense) for the next five succeeding fiscal years is as follows:

	Estimated Amortization Expense
2005	$	14,672
2006		14,391
2007		14,193
2008		13,957
2009		13,920

h. Long-Lived Assets

In accordance with SFAS No. 144, we review long-lived assets and all amortizable intangible assets (excluding goodwill) for impairment whenever events or changes in circumstances indicate the carrying amount of such assets may not be recoverable. Recoverability of these assets is determined by comparing the forecasted undiscounted net cash flows of the operation to which the assets relate to their carrying amount. The operations are generally distinguished by the business segment and geographic region in which they operate. If the operation is determined to be unable to recover the carrying amount of its assets, then intangible assets are written down first, followed by the other long-lived assets of the operation, to fair value. Fair value is determined based on discounted cash flows or appraised values, depending upon the nature of the assets.

Consolidated losses on disposal/writedown of property, plant and equipment, net of $774 in the year ended December 31, 2002 consisted of disposals and asset writedowns partially offset by a $2,091 gain on the sale of a property in the U.K. Consolidated losses on disposal/writedown of property, plant and equipment, net of $1,130 in the year ended December 31, 2003 consisted of disposals and asset writedowns partially offset by approximately $4,200 of gains on the sale of properties in Texas, Florida and the U.K. Consolidated gains on disposal/writedown of property, plant and equipment, net of $681 for the year ended December 31, 2004, consisted primarily of a gain on the sale of a property in Florida during the second quarter of 2004 of approximately $1,200 offset by disposals and asset writedowns.

i. Customer Relationships and Acquisition Costs and Other

In connection with adopting SFAS No. 142, we reassessed the useful lives and classification of our intangible assets. Costs related to the acquisition of large volume accounts, net of revenues received for the initial transfer of the records, are capitalized and amortized for periods ranging from five to 30 years (weighted average of 28 years at December 31, 2004). These costs had previously been amortized over periods not to exceed 12 years. If the customer terminates its relationship with us, the unamortized cost is charged to expense. However, in the event of such termination, we collect, and record as income, permanent removal fees that generally equal or exceed the amount of the unamortized costs. Customer relationship intangible assets acquired through business combinations are amortized over periods ranging from five to 30 years (weighted average of 18 years at December 31, 2004). As of December 31, 2003 and 2004, the gross carrying amount of customer relationships and acquisition costs was $131,294 and $213,378, respectively, and accumulated amortization of those costs

was $14,828 and $23,598, respectively. For the years ended December 31, 2002, 2003 and 2004, amortization expense was $1,770, $4,395 and $10,044, respectively.

Other intangible assets, including noncompetition agreements, acquired core technology and trademarks, are capitalized and amortized over a weighted average period of six years. As of December 31, 2003 and 2004, the gross carrying amount of other intangible assets was $22,212 and $26,410, respectively, and accumulated amortization of those costs was $20,280 and $9,447, respectively. For the years ended December 31, 2002, 2003 and 2004, amortization expense was $3,046, $2,559 and $1,638, respectively.

j. Deferred Financing Costs

Deferred financing costs are amortized over the life of the related debt using the effective interest rate method. If debt is retired early, the related unamortized deferred financing costs are written off in the period the debt is retired to other (income) expense, net. As of December 31, 2003 and 2004, gross carrying amount of deferred financing costs was $29,620 and $46,231, respectively, and accumulated amortization of those costs was $5,686 and $9,641, respectively, and was recorded in interest expense, net.

k. Investment in Preferred Stock

In May 2000, we made a $6,500 investment in the convertible preferred stock of LiveVault Corporation, a technology development company. This investment is accounted for at the lower of cost or market. In September 2001, we recorded an impairment charge in other (income) expense, net of $6,900, including the original investment and certain loans related to such investment. In December 2001, in connection with a recapitalization of LiveVault, we made an additional $2,000 investment in LiveVault's convertible preferred stock. In December 2002, we recorded an impairment charge related to this investment in other (income) expense, net of $600. In March 2003 and October 2004, we made additional investments of $1,357 and $858, respectively, in LiveVault's convertible preferred stock. As of December 31, 2003 and 2004, $2,757 and $3,615, respectively, of carrying value related to this investment is included in other assets in the accompanying consolidated balance sheets.

l. Accrued Expenses

Accrued expenses consist of the following:

	December 31
	2003		2004
Interest	$	48,960	$	50,669
Payroll and vacation		45,652		43,637
Derivative liability		30,633		7,150
Restructuring costs (see Note 7)		16,322		21,414
Incentive compensation		17,528		21,789
Other		75,331		90,038

	$	234,426	$	234,697

m. Revenues

Our revenues consist of storage revenues as well as service and storage material sales revenues. Storage revenues consist of periodic charges related to the storage of materials (either on a per unit or per cubic foot of records basis). In certain circumstances, based upon customer requirements, storage revenues include periodic charges associated with normal, recurring service activities. Service and storage material sales revenues are comprised of charges for related service activities and courier operations and the sale of storage materials. Customers are generally billed on a monthly basis on contractually agreed-upon terms.

Storage and service revenues are recognized in the month the respective service is provided. Storage material sales are recognized when shipped to the customer. Amounts related to future storage for customers where storage fees are billed in advance are accounted for as deferred revenue and amortized over the applicable period.

n. Rent Normalization

We have entered into various leases for buildings used in the storage of records. Certain leases have fixed escalation clauses or other features which require normalization of the rental expense over the life of the lease resulting in deferred rent being reflected in the accompanying consolidated balance sheets. In addition, we have assumed various above and below market leases in connection with certain of our acquisitions. The difference between the present value of these lease obligations and the market rate at the date of the acquisition was recorded as a prepaid rent or deferred rent liability and is being amortized over the remaining lives of the respective leases.

o. Stock-based Compensation

As of January 1, 2003, we adopted the measurement provisions of SFAS No. 123, "Accounting for Stock-Based Compensation," as amended by SFAS No. 148, "Accounting for Stock-Based Compensation—Transition and Disclosure." As a result we began using the fair value method of accounting in our financial statements beginning January 1, 2003 using the prospective method. The prospective method involves recognizing expense for the fair value for all awards granted or modified in the year of adoption and thereafter with no expense recognition for previous awards. Additionally, we recognize expense related to the discount embedded in our employee stock purchase plan. We will apply the fair value recognition provisions to all stock based awards granted, modified or settled on or after January 1, 2003 and will continue to provide the required pro forma information for all awards previously granted, modified or settled before January 1, 2003.

Had we elected to recognize compensation cost based on the fair value of the options granted at grant date as prescribed by SFAS No. 123 and No. 148, net income and net income per share would have been changed to the pro forma amounts indicated in the table below:

		Year Ended December 31,
		2002			2003			2004
Net income, as reported		$	58,292		$	84,637		$	94,191
Add: Stock-based employee compensation expense included in reported net income, net of tax benefit			—			984			3,567
Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards, net of tax benefit			(2,687	)		(3,304	)		(5,432	)

Net income, pro forma		$	55,605		$	82,317		$	92,326

Earnings per share:
	Basic—as reported		0.46			0.66			0.73
	Basic—pro forma		0.44			0.65			0.72
	Diluted—as reported		0.45			0.65			0.72
	Diluted—pro forma		0.43			0.63			0.70

The weighted average fair value of options granted in 2002, 2003 and 2004 was $9.70, $10.97 and $8.58 per share, respectively. The values were estimated on the date of grant using the Black-Scholes option pricing model. The following table summarizes the weighted average assumptions used for grants in the year ended December 31:

Assumption	2002		2003		2004
Expected volatility	27.5	%	27.0	%	24.8	%
Risk-free interest rate	4.08		2.91		3.41
Expected dividend yield	None		None		None
Expected life of the option	5.0 years		5.0 years		5.0 years

p. Merger-related Expenses

Merger-related expenses as presented in the accompanying consolidated financial statements relate primarily to non-capitalizable expenses directly related to our merger with Pierce Leahy Corp. and consist primarily of severance, relocation and pay-to-stay payments, costs of exiting certain facilities, system conversion costs and other transaction-related costs.

q. Income Taxes

We account for income taxes in accordance with SFAS No. 109, "Accounting for Income Taxes," which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the tax and financial reporting basis of assets and liabilities and for loss and credit carryforwards. Valuation allowances are provided when recovery of deferred tax assets is not considered likely.

r. Income Per Share—Basic and Diluted

In accordance with SFAS No. 128, "Earnings per Share," basic net income per common share is calculated by dividing net income by the weighted average number of common shares outstanding. The calculation of diluted net income per share is consistent with that of basic net income per share but gives effect to all potential common shares (that is, securities such as options, warrants or convertible securities) that were outstanding during the period, unless the effect is antidilutive. Potential common shares, substantially attributable to stock options, included in the calculation of diluted net income per share totaled 2,130,983, 2,177,201 and 2,092,831 shares for the years ended December 31, 2002, 2003 and 2004, respectively. Potential common shares of 475,296, 570,456 and 91,045 for the years ended December 31, 2002, 2003 and 2004, respectively, have been excluded from the calculation of diluted net income per share, as their effects are antidilutive.

s. New Accounting Pronouncements

In December 2004, the Financial Accounting Standards Board ("FASB") issued SFAS No. 123R, "Share-Based Payment." SFAS No. 123R is a revision of SFAS No. 123 and supersedes Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees" ("APB No. 25"). We adopted the measurement provisions of SFAS No. 123 and SFAS No. 148 in our financial statements beginning January 1, 2003 using the prospective method. The prospective method involves recognizing expense for the fair value for all awards granted or modified in the year of adoption and thereafter with no expense recognition for previous awards. We have applied the fair value recognition provisions to all stock based awards granted, modified or settled on or after January 1, 2003.

Among other items, SFAS No. 123R eliminates the use of APB No. 25 and the intrinsic value method of accounting, and requires companies to recognize the cost of employee services received in exchange for awards of equity instruments, based on the grant date fair value of those awards, in the financial statements. The effective date of SFAS No. 123R is the first reporting period beginning after June 15, 2005, which would be our third quarter of 2005, although early adoption is allowed. SFAS No. 123R permits companies to adopt its requirements using either a "modified prospective" method, or a "modified retrospective" method. Under the "modified prospective" method, compensation cost is recognized in the financial statements beginning with the effective date, based on the requirements of SFAS No. 123R for all share-based payments granted after that date, and based on the requirements of SFAS No. 123 for all unvested awards granted prior to the effective date of SFAS No. 123R. Under the "modified retrospective" method, the requirements are the same as under the "modified prospective" method, but this method also permits entities to restate financial statements of previous periods based on proforma disclosures made in accordance with SFAS No. 123.

We expect to adopt SFAS No. 123R effective July 1, 2005 using the modified prospective method of implementation. Subject to a complete review of the requirements of SFAS No. 123R, based on outstanding stock options granted to employees prior to our prospective implementation of the measurement provisions of SFAS No. 123 and SFAS No. 148 on January 1, 2003, we expect to record approximately $900 of stock compensation expense in the second half of 2005 associated with unvested stock option grants issued prior to January 1, 2003.

In December 2004, the FASB issued FASB Staff Position No. 109-2, "Accounting and Disclosure Guidance for the Foreign Earnings Repatriation Provision within the American Jobs Creation Act of 2004" ("FSP 109-2"). The American Jobs Creation Act of 2004 ("AJCA") introduces a special one-time dividends received deduction on the repatriation of certain foreign earnings to a U.S. taxpayer ("repatriation provision"), provided certain criteria are met. FSP 109-2 provides accounting and disclosure guidance for the repatriation provision. The Treasury Department or Congress will be providing additional clarifying language on key elements of the repatriation provision in the future. FSP 109-2 grants an enterprise additional time beyond the year ended December 31, 2004, in which the AJCA was enacted, to evaluate the effects of the AJCA on its plan for reinvestment or repatriation of unremitted earnings. FSP 109-2 calls for enhanced disclosures of, among other items, the status of our evaluations, the effects of completed evaluations, and the potential range of income tax effects of repatriations. Such disclosures are included in Note 10.

t. Rollforward of Allowance for Doubtful Accounts and Credit Memo Reserves

Year Ended December 31,	Balance at Beginning of the Year		Charged to Revenue		Charged to Expense			Other Additions(1)		Deductions(2)			Balance at End of the Year
2002	$	17,086	$	12,133	$	11,597		$	3,365	$	(22,772	)	$	21,409
2003		21,409		14,657		(2,292	)		9,133		(21,985	)		20,922
2004		20,922		17,858		(4,569	)		4,397		(24,722	)		13,886

(1): Primarily consists of recoveries of previously written-off accounts receivable, allowances of businesses acquired and the impact associated with currency translation adjustments.
(2): Primarily consists of the write-off of accounts receivable and adjustments to allowances of businesses acquired.

u. Accumulated Other Comprehensive Items, Net

Accumulated other comprehensive items, net consists of the following:

	December 31,
	2003			2004
Foreign currency translation adjustments	$	7,890		$	22,559
Unrealized loss on hedging contracts		(16,247	)		(2,671	)
Unrealized gain on securities		311			397

	$	(8,046	)	$	20,285

3. Variable Interest Entities

Three variable interest entities were established to acquire properties and lease those properties to us. These leases were designed to qualify as operating leases for accounting purposes, where the monthly lease expense was recorded as rent expense in our consolidated statements of operations and where the related underlying assets and liabilities were not consolidated in our consolidated balance sheets. We changed the characterization and the related accounting for properties in one variable interest entity ("VIE III") during the third quarter of 2002 and prospectively for new property acquisitions in the fourth quarter of 2002. In addition, anticipating the requirement to consolidate, and in line with our objective of transparent reporting, we voluntarily guaranteed all of the at-risk equity in VIE III and our two other variable interest entities (together, the "Other Variable Interest Entities" and, collectively with VIE III, our "Variable Interest Entities") as of December 31, 2002. These guarantees resulted in our consolidating all of our Variable Interest Entities' assets and liabilities. The underlying leases associated with the Other Variable Interest Entities were treated as operating leases from inception (as early as 1998) through consolidation on December 31, 2002. As a result, we recorded $5,915 in rent expense in our consolidated statement of operations related to these leases for the year ended December 31, 2002. For the years ended December 31, 2003 and 2004, we recorded depreciation expense of $2,001 for each year associated with the properties, and interest expense of $5,464 and $2,014, respectively, associated with the real estate term loans which were repaid in March 2004. We no longer have rent expense related to leases associated with the Other Variable Interest Entities in our consolidated financial results.

4. Derivative Instruments and Hedging Activities

We have entered into two interest rate swap agreements, which are derivatives as defined by SFAS No. 133 and designated as cash flow hedges. These swap agreements hedge interest rate risk on certain amounts of our term loan. For all qualifying and highly effective cash flow hedges, the changes in the fair value of the derivatives are recorded in other comprehensive income (loss). Specifically, we chose to swap the interest rates on $195,500 of floating rate debt to fixed rate. Since entering into these two swap agreements, interest rates have fallen. As a result, the estimated cost to terminate these swaps (fair value of derivative liability) would be $13,370 and $4,333 at December 31, 2003 and 2004, respectively. We have recorded, in the accompanying consolidated balance sheets, the fair value of the

derivative liability, a deferred tax asset and a corresponding charge to accumulated other comprehensive items of $13,370 ($8,709 recorded in accrued expenses and $4,661 recorded in other long-term liabilities), $4,878 and $8,492, respectively, as of December 31, 2003. We have recorded, in the accompanying consolidated balance sheets, the fair value of the derivative liability, a deferred tax asset and a corresponding charge to accumulated other comprehensive items of $4,333 ($2,910 recorded in accrued expenses and $1,423 recorded in other long-term liabilities), $1,585 and $2,748, respectively, as of December 31, 2004. Additionally, as a result of the foregoing, for the years ended December 31, 2002, 2003 and 2004, we recorded additional interest expense of $7,534, $8,709 and $8,460 resulting from interest rate swap payments. These interest rate swap agreements were determined to be highly effective, and therefore no ineffectiveness was recorded in earnings.

In addition, we have entered into a third interest rate swap agreement, which was designated as a cash flow hedge through December 31, 2002. This swap agreement hedged interest rate risk on certain amounts of our variable operating lease commitments. Specifically, we chose to swap the variable component of $47,500 of certain operating lease commitments to fixed operating lease commitments. Since entering into the swap agreement, interest rates have fallen. As a result, the estimated cost to terminate these swaps (fair value of derivative liability) would be $1,250 and $140 at December 31, 2003 and 2004, respectively. We have recorded, in the accompanying consolidated balance sheet, the estimated cost to terminate this swap (fair value of the derivative liability) of $140 (which was all recorded in accrued expenses) as of December 31, 2004. From inception through December 31, 2002, this interest rate swap agreement was determined to be highly effective, and therefore no ineffectiveness was recorded in earnings. As a result of the consolidation of one of the Other Variable Interest Entities ("VIE I") on December 31, 2002, we consolidated the real estate term loans of VIE I and the operating lease commitments that were hedged by this swap are now considered to be inter-company transactions. As a result, this interest rate swap agreement was deemed to be no longer effective on a prospective basis. The unrealized mark to market losses previously recorded in other comprehensive income attributable to this swap ($1,875, net of tax, as of December 31, 2002) will be amortized through other (income) expense, net in the accompanying consolidated statement of operations based on the changes in the fair value of the swap each period that the remaining interest payments are made on VIE I's real estate term loans. We will prospectively account for mark to market changes in the derivative liability of this swap through other (income) expense, net in the accompanying consolidated statement of operations. This accounting will have a net zero impact within our consolidated statement of operations as it relates to the amortization of unrealized mark to market losses and the fair valuing of the derivative liability. Additionally, as a result of the foregoing, for the year ended December 31, 2002, we recorded additional rent expense of $1,807, resulting from the payments associated with this interest rate swap agreement and for the year ended December 31, 2003 we recorded additional interest expense of $2,083 resulting from payments associated with this interest rate swap agreement. As a result of the repayment of the real estate term loans discussed in Note 5, we recorded an additional $795 of interest in the first quarter of 2004, representing the fair value of the derivative liability. The total impact of marking to market the fair market value of the derivative liability and cash payments associated with the interest rate swaps agreement resulted in our recording additional interest expense of $1,246 for the year ended December 31, 2004.

Also, as of December 31, 2002, we consolidated VIE III which had entered into an interest rate swap agreement upon its inception which was designated as a cash flow hedge. This swap agreement hedges the majority of interest rate risk associated with VIE III's real estate term loans. Specifically, VIE III has swapped $97,000 of floating rate debt to fixed rate debt. Since the time it entered into the swap agreement, interest rates have fallen. As a result, the estimated cost to terminate these swaps (fair value of derivative liability) would be $10,960 and $6,934 at December 31, 2003 and 2004, respectively. We have recorded, in the accompanying consolidated balance sheet, the estimated cost to terminate this swap (fair value of the derivative liability) of $6,934 ($4,100 recorded in accrued expenses and $2,834 recorded in other long-term liabilities) as of December 31, 2004. Additionally, as a result of the foregoing, for the year ended December 31, 2002 and 2003, we recorded additional interest expense of $3,423 and $4,806, respectively, resulting from interest rate swap payments. As a result of the repayment of the real estate term loans discussed in Note 5, we recorded an additional $8,656 of interest in the third quarter of 2004, representing the fair value of the derivative liability. The total impact of marking to market the fair market value of the derivative liability and cash payments associated with the interest rate swap agreement resulted in our recording additional interest expense of $11,565 for the year ended December 31, 2004.

In July 2003, we provided the initial financing totaling 190,459 British pounds sterling to IME for all of the consideration associated with the acquisition of the European information management services business of Hays plc ("Hays IMS") using cash on hand and borrowings under our revolving credit facility. We recorded a foreign currency gain of $27,777 in other (income) expense, net for this intercompany balance for the year ended December 31, 2003. In March 2004, IME repaid 135,000 British pounds sterling with proceeds from their new credit agreement (see Note 5). We recorded a foreign currency gain of $11,866 in other (income) expense, net for this intercompany balance in the first quarter of 2004. In order to minimize the foreign currency risk associated with providing IME with the consideration necessary for the acquisition of the European operations of Hays IMS, we borrowed 80,000 British pounds sterling under our revolving credit facility to create a natural hedge. We recorded a foreign currency loss of $11,496 on the translation of this revolving credit balance to U.S. dollars in other (income) expense, net for the year ended December 31, 2003. In the first quarter of 2004, these borrowings were repaid and we recorded a foreign currency loss of $2,995 on the translation of this revolving credit balance to U.S. dollars in other (income) expense, net.

In addition, on July 16, 2003, we entered into two cross currency swaps with a combined notional value of 100,000 British pounds sterling. We settled these swaps in March 2004 by paying our counter parties a total of $27,714 representing the fair market value of the derivative and the associated swap costs, of which $18,978 was accrued for as of December 31, 2003. In the first quarter of 2004, we recorded a foreign currency loss for this swap of $8,736 in other (income) expense, net in the accompanying consolidated statement of operations. Upon cash payment, we received $162,800 in exchange for 100,000 British pounds sterling. We did not designate these swaps as hedges and, therefore, all mark to market fluctuations of the swaps were recorded in other (income) expense, net in our consolidated statements of operations from inception to cash payment of the swaps.

In April 2004, IME entered into two floating for fixed interest rate swap contracts, each with a notional value of 50,000 British pounds sterling and a duration of two years, which were designated as

cash flow hedges. These swap agreements hedge interest rate risk on IME's 100,000 British pounds sterling term loan facility (see Note 5). We have recorded, in the accompanying consolidated balance sheet, the fair value of the derivative asset, a deferred tax liability and a corresponding increase to accumulated other comprehensive items of $115 (which was all recorded in other current assets), $39 and $76, respectively, as of December 31, 2004. For the year ended December 31, 2004, we recorded additional interest expense of $202 resulting from interest rate swap cash payments.

5. Debt

Long-term debt consists of the following:

	December 31,
	2003			2004
IMI Revolving Credit Facility	$	142,280		$	122,563
IMI Term Loan Facility		248,750			349,000
IME Revolving Credit Facility		—			101,478
IME Term Loan Facility		—			184,330
8¹/8% Senior Notes due 2008 (the "Subsidiary notes")		18,768			—
8¹/4% Senior Subordinated Notes due 2011 (the "8¹/4% notes")		149,670			149,715
8⁵/8% Senior Subordinated Notes due 2013 (the "8⁵/8% notes")		481,075			481,054
7¹/4% GBP Senior Subordinated Notes due 2014 (the "7¹/4% notes")		—			288,990
7³/4% Senior Subordinated Notes due 2015 (the "7³/4% notes")		441,331			440,418
6⁵/8% Senior Subordinated Notes due 2016 (the "6⁵/8% notes")		314,071			314,565
Real Estate Term Loans		202,647			—
Real Estate Mortgages		17,584			5,908
Seller Notes		12,607			11,307
Other(1)		61,145			28,694

Total Long-term Debt		2,089,928			2,478,022
Less Current Portion		(115,781	)		(39,435	)

Long-term Debt, Net of Current Portion	$	1,974,147		$	2,438,587

(1): Includes $51,990 of outstanding amounts under IME's previous term loan and revolving credit facilities as of December 31, 2003.

a. Revolving Credit Facility and Term Loans

IME revolving credit facility matures on March 5, 2009. The IME term loan facility is payable in three installments; two installments of 20,000 British pounds sterling on March 5, 2007 and 2008, respectively, and the final payment of the remaining balance on March 5, 2009. The interest rate on borrowings under the IME Credit Agreement varies depending on IME's choice of currency options and interest rate period, plus an applicable margin. The IME Credit Agreement includes various financial covenants applicable to the results of IME, which may restrict IME's ability to incur indebtedness under the IME Credit Agreement and from third parties, as well as limit IME's ability to pay dividends to us. Most of IME's non-dormant subsidiaries have either guaranteed the obligations or have their shares pledged to secure IME's obligations under the IME Credit Agreement. We have not guaranteed or otherwise provided security for the IME Credit Agreement nor have any of our U.S., Canadian, Mexican or South American subsidiaries.

In March 2004, IME borrowed approximately 147,000 British pounds sterling under the IME Credit Agreement, including the full amount of the term loan. IME used those proceeds to repay us 135,000 British pounds sterling related to our initial financing of the acquisition of Hays IMS, to repay amounts outstanding under its prior term loan and revolving credit facility and to pay transaction costs associated with the IME Credit Agreement. We used the 135,000 British pounds sterling received from IME to: (1) pay down $103,932 of real estate term loans, (2) settle all obligations totaling $27,714 associated with terminating our two cross currency swaps used to hedge the foreign currency impact of our intercompany financing with IME related to the Hays IMS acquisition, and (3) to pay down amounts outstanding under our prior credit agreement. Our consolidated balance sheet as of December 31, 2004 included 155,052 British pounds sterling ($285,808) of borrowings under the IME Credit Agreement. The remaining availability, based on its current level of external debt and the leverage ratio under the IME revolving credit facility on October 31, 2004, was approximately 48,951 British pounds sterling ($90,231). The interest rate in effect under the IME revolving credit facility ranged from 3.4% to 6.6% as of October 31, 2004. For the year ended December 31, 2004, we recorded commitment fees of $396 based on 0.9% of unused balances under the IME revolving credit facility.

On April 2, 2004 and subsequently on July 8, 2004, we entered into a new amended and restated revolving credit facility and term loan facility (the "IMI Credit Agreement") to replace our prior credit agreement and to reflect more favorable pricing of our term loans. The IMI Credit Agreement has an aggregate principal amount of $550,000 and is comprised of a $350,000 revolving credit facility (the "IMI revolving credit facility"), which includes the ability to borrow in certain foreign currencies, and a $200,000 term loan facility (the "IMI term loan facility"). The IMI revolving credit facility matures on April 2, 2009. With respect to the IMI term loan facility, quarterly loan payments of $500 began in the third quarter of 2004 and will continue through maturity on April 2, 2011, at which time the remaining outstanding principal balance of the IMI term loan facility is due. In November 2004, we entered into an additional $150,000 of term loans as permitted under our IMI Credit Agreement. The new term loans will mature at the same time as our current IMI term loan facility with quarterly loan payments of $375 beginning in the first quarter of 2005 and will be priced at LIBOR plus a margin of 1.75%. As a result, the IMI Credit Agreement has an aggregate maximum principal amount of $700,000 as of December 31, 2004. The interest rate on borrowings under the IMI Credit Agreement varies depending

on our choice of interest rate and currency options, plus an applicable margin. All intercompany notes and the capital stock of most of our U.S. subsidiaries are pledged to secure the IMI Credit Agreement. As of December 31, 2004, we had $122,563 of borrowings under our IMI revolving credit facility, of which $3,000 was denominated in U.S. dollars and the remaining balance was denominated in Canadian dollars (CAD 144,000); we also had various outstanding letters of credit totaling $22,099. The remaining availability, based on IMI's current level of external debt and the leverage ratio under the IMI revolving credit facility, on December 31, 2004 was $205,338. The interest rate in effect under the IMI revolving credit facility was 4.6% as of December 31, 2004. For the year ended December 31, 2004, we recorded commitment fees of $1,112 based on 0.5% of unused balances under the IMI revolving credit facility.

In December 2000, we entered into an interest rate swap contract to hedge the risk of changes in market interest rates on our term loan. The instrument is a variable-for-fixed swap of quarterly interest payments payable on certain amounts of our term loan through 2006. The notional value of the swap equals $99,500 and has a fixed rate of 5.9% and a variable rate based on periodic three-month London Inter-Bank Offered Rate (LIBOR). In January 2001, we entered into a second interest rate swap contract on our term loan. The notional value of the second swap equals $96,000 and has a fixed rate of 5.5% and a variable rate based on periodic three-month LIBOR.. In conjunction with the IMI Credit Agreement, these interest rate swap contracts hedge the risk of changes in market interest rates on our new term loan due 2011 rather than the previous term loan due 2006.

The IME Credit Agreement and IMI Credit Agreement contain certain restrictive financial and operating covenants, including covenants that restrict our ability to complete acquisitions, pay cash dividends, incur indebtedness, make investments, sell assets and take certain other corporate actions. The covenants do not contain a rating trigger. Therefore, a change in our debt rating would not trigger a default under the IME Credit Agreement and IMI Credit Agreement. We were in compliance with all material debt covenants as of December 31, 2004.

b. Notes Issued under Indentures

As of December 31, 2004, we have five series of senior subordinated notes issued under various indentures, that are obligations of the parent company, Iron Mountain Incorporated (the "Parent notes"):

•: $150,000 principal amount of notes maturing on July 1, 2011 and bearing interest at a rate of 8¹/4% per annum, payable semi-annually in arrears on January 1 and July 1;
•: $480,874 principal amount of notes maturing on April 1, 2013 and bearing interest at a rate of 8⁵/8% per annum, payable semi-annually in arrears on April 1 and October 1;
•: 150,000 British pounds sterling principal amount of notes maturing on April 15, 2014 and bearing interest at a rate of 7¹/4% per annum, payable semi-annually in arrears on April 15 and October 15, these notes are listed on the Luxembourg Stock Exchange;
•: $431,255 principal amount of notes maturing on January 15, 2015 and bearing interest at a rate of 7³/4% per annum, payable semi-annually in arrears on January 15 and July 15; and

•: $320,000 principal amount of notes maturing on January 1, 2016 and bearing interest at a rate of 6⁵/8% per annum, payable semi-annually in arrears on January 1 and July 1.

The Parent notes are fully and unconditionally guaranteed, on a senior subordinated basis, by substantially all of our direct and indirect wholly owned U.S. subsidiaries (the "Guarantors"). These guarantees are joint and several obligations of the Guarantors. The remainder of our subsidiaries do not guarantee the Parent notes or the IMI Credit Agreement.

In January 2004, we completed an offering of 150,000 British pounds sterling in aggregate principal amount of our 7¹/4% notes, which were issued at a price of 100% of par. Our net proceeds of 146,900 British pounds sterling ($269,427), after paying the initial purchasers' discounts, commissions and transaction fees, were used to fund our acquisition of the 49.9% equity interest held by Mentmore in IME for total consideration of 82,500 British pounds sterling ($154,000), to redeem $19,985 in aggregate principal amount of our outstanding Subsidiary notes in February 2004, to repay borrowings under our revolving credit facility, to repay $48,750 of our term loans, to repay other indebtedness and to pay for other acquisitions.

In addition, Iron Mountain Canada Corporation ("IM Canada"), our principal Canadian subsidiary, had publicly issued $135,000 principal amount of senior notes that matured on May 15, 2008 and bore interest at a rate of 8¹/8% per annum, payable semi-annually in arrears on May 15 and November 15. The Subsidiary notes were general unsecured obligations of IM Canada, ranking pari passu in right of payment to all of IM Canada's existing and future senior indebtedness. The Subsidiary notes were fully and unconditionally guaranteed, on a senior subordinated basis, by Iron Mountain Incorporated and the Guarantors. In addition, several of the non-guarantors that are organized under the laws of Canadian provinces fully and unconditionally guaranteed the Subsidiary notes on a senior basis. As with the Parent notes, these guarantees were joint and several. In July 2003, we redeemed $50,000 of outstanding principal amount of the Subsidiary notes, at a redemption price (expressed as a percentage of principal amount) of 104.063%, plus accrued and unpaid interest. In December 2003, we redeemed $65,015 of outstanding principal amount of the Subsidiary notes, at a redemption price (expressed as a percentage of principal amount) of 104.313%, plus accrued and unpaid interest. We recorded a charge to other (income) expense, net of $12,530 in 2003 related to the early retirement of these Subsidiary notes, which consists of redemption premiums and transaction costs, as well as original issue discount related to these Subsidiary notes. In February 2004, we redeemed the remaining $19,985 of outstanding principal amount of the Subsidiary notes, at a redemption price (expressed as a percentage of principal amount) of 104.063%, plus accrued and unpaid interest. We recorded a charge to other (income) expense, net of $2,028 in 2004 related to the early retirement of these remaining Subsidiary notes, which consists of redemption premiums and transaction costs as well as original issue discount related to these Subsidiary notes.

For the year ended December 31, 2002, we recorded a charge to other (income) expense, net of $5,431 related to the early retirement of debt in conjunction with the refinancing of the IMI credit facility and 9¹/8% Senior Subordinated Notes (the "9¹/8% notes"). For the year ended December 31, 2003, we recorded a charge to other (income) expense, net of $28,174 related to the early retirement of 9¹/8% notes, 8³/4% Senior Subordinated Notes and the Subsidiary notes.

Each of the indentures for the notes provides that we may redeem the outstanding notes, in whole or in part, upon satisfaction of certain terms and conditions. In any redemption, we are also required to pay all accrued but unpaid interest on the outstanding notes.

The following table presents the various redemption dates and prices of the public notes. The redemption dates reflect the date at or after which the notes may be redeemed at our option at a premium redemption price. After these dates, the notes may be redeemed at 100% of face value:

Redemption Date	8¹/4% notes July 15,		8⁵/8% notes April 1,		7¹/4% notes April 15,		7³/4% notes January 15,		6⁵/8% notes July 1,
2004	104.125	%	—		—		—		—
2005	102.750	%	—		—		—		—
2006	101.375	%	104.313	%	—		—		—
2007	—		102.875	%	—		—		—
2008	—		101.438	%	—		103.875	%	103.313	%
2009	—		—		103.625	%	102.583	%	102.208	%
2010	—		—		102.417	%	101.292	%	101.104	%
2011	—		—		101.208	%	—		—

Prior to January 15, 2008, the 7³/4% notes are redeemable at our option, in whole or in part, at a specified make-whole price. Prior to January 15, 2006, we may under certain conditions redeem up to 35% of the 7³/4% notes with the net proceeds of one or more public equity offerings, at a redemption price of 107.750% of the principal amount.

Prior to July 1, 2008, the 6⁵/8% notes are redeemable at our option, in whole or in part, at a specified make-whole price. Prior to July 1, 2006, we may under certain conditions redeem 6⁵/8% notes with the net proceeds of one or more public equity offerings, at a redemption price of 106.625% of the principal amount.

Prior to April 15, 2009, the 7¹/4% notes are redeemable at our option, in whole or in part, at a specified make-whole price. Prior to April 15, 2007, we may under certain conditions redeem 7¹/4% notes with the net proceeds of one or more public equity offerings, at a redemption price of 107.25% of the principal amount.

Each of the indentures for the notes provides that we must repurchase, at the option of the holders, the notes at 101% of their principal amount, plus accrued and unpaid interest, upon the occurrence of a "Change of Control," which is defined in each respective indenture. Except for required repurchases upon the occurrence of a Change of Control or in the event of certain asset sales, each as described in the respective indenture, we are not required to make sinking fund or redemption payments with respect to any of the notes.

actions. The covenants do not contain a rating trigger. Therefore, a change in our debt rating would not trigger a default under our indentures and other agreements governing our indebtedness. As of December 31, 2004, we were in compliance with all material debt covenants and agreements.

c. Real Estate Term Loans

Our Variable Interest Entities were financed with real estate term loans. As of December 31, 2003, these real estate term loans amounted to $202,647 bearing interest at various variable interest rates based on LIBOR plus an applicable margin. In March 2004, $103,932 of these real estate term loans was repaid; the remaining $98,715 of real estate term loans was repaid in August 2004. We recorded a charge to other (income) expense, net of $426 in 2004 related to the early retirement of these real estate term loans.

d. Real Estate Mortgages

In connection with the purchase of real estate and acquisitions, we assumed several mortgages on real property. The mortgages bear interest at rates ranging from 5.5% to 7.6% and are payable in various installments through 2023.

e. Seller Notes

In connection with the merger with Pierce Leahy in 2000, we assumed debt related to certain existing notes as a result of acquisitions which Pierce Leahy completed in 1999. The notes bear interest at a rate of 4.75% per year. The outstanding balance of 5,869 British pounds sterling ($11,307) on these notes at December 31, 2004 is due on demand through 2009 and is classified as a current portion of long-term debt.

f. Other

Other long-term debt includes various notes and obligations assumed by us as a result of certain acquisitions. The outstanding balance of $28,694 on these notes at December 31, 2004 with a weighted average interest rate of 7.9%.

Maturities of long-term debt, excluding (premiums) discounts, net, are as follows:

Year	Amount
2005	$	39,435
2006		8,464
2007		44,044
2008		43,885
2009		326,353
Thereafter		2,012,218

	$	2,474,399

We have estimated the following fair values for our long-term debt as of December 31:

	2003				2004
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
IMI Revolving Credit Facility(1)	$	142,280	$	142,280	$	122,563	$	122,563
IMI Term Loan Facility(1)		248,750		248,750		349,000		349,000
IME Revolving Credit Facility(1)		—		—		101,478		101,478
IME Term Loan Facility(1)		—		—		184,330		184,330
8¹/4% notes(2)(3)		149,670		156,375		149,715		154,500
8⁵/8% notes(2)(3)		481,075		521,748		481,054		509,726
7¹/4% notes(2)(3)		—		—		288,990		275,263
7³/4% notes(2)(3)		441,331		456,052		440,418		435,568
6⁵/8% notes(2)(3)		314,071		311,200		314,565		299,200
Subsidiary notes(3)		18,768		20,684		—		—
Real Estate Term Loans(1)		202,647		202,647		—		—
Real Estate Mortgages(1)		17,584		17,584		5,908		5,908
Seller Notes(1)		12,607		12,607		11,307		11,307
Other(1)		61,145		61,145		28,694		28,694

(1): The fair value of this long-term debt either approximates the carrying value (as borrowings under these debt instruments are based on current variable market interest rates as of December 31, 2003 and 2004) or it is impracticable to estimate the fair value due to the nature of such long-term debt.
(2): These debt instruments are collectively referred to as the "Parent notes."
(3): The fair values of the Parent notes and the Subsidiary notes are based on quoted market prices for these notes on December 31, 2003 and 2004.

6. Selected Consolidated Financial Statements of Parent, Guarantors and Non-Guarantors

The following financial data summarizes the consolidating Company on the equity method of accounting as of December 31, 2003 and 2004 and for the years ended December 31, 2002, 2003 and 2004. The Guarantors column includes all subsidiaries that guarantee the Parent notes. The subsidiaries that do not guarantee the Parent notes are referred to in the table as the "Non-Guarantors."

			December 31, 2003
			Parent		Guarantors		Non- Guarantors		Eliminations			Consolidated
Assets
Current Assets:
	Cash and Cash Equivalents		$	—	$	54,793	$	19,890	$	—		$	74,683
	Accounts Receivable			—		202,271		77,529		—			279,800
	Intercompany Receivable			870,924		—		13,935		(884,859	)		—
	Other Current Assets			3,591		84,733		29,186		(410	)		117,100

		Total Current Assets		874,515		341,797		140,540		(885,269	)		471,583
Property, Plant and Equipment, Net				—		973,619		518,648		—			1,492,267
Other Assets, Net:
	Long-term Notes Receivable from Affiliates and Intercompany Receivable			1,625,796		1,000		98,715		(1,725,511	)		—
	Investment in Subsidiaries			402,045		91,336		—		(493,381	)		—
	Goodwill			—		1,323,340		443,198		9,741			1,776,279
	Other			23,661		69,221		61,783		(2,695	)		151,970

		Total Other Assets, Net		2,051,502		1,484,897		603,696		(2,211,846	)		1,928,249

		Total Assets	$	2,926,017	$	2,800,313	$	1,262,884	$	(3,097,115	)	$	3,892,099

Liabilities and Shareholders' Equity
	Intercompany Payable		$	—	$	237,392	$	647,467	$	(884,859	)	$	—
	Current Portion of Long-term Debt			1,265		1,645		112,871		—			115,781
	Total Other Current Liabilities			73,385		256,018		139,971		(410	)		468,964
	Long-term Debt, Net of Current Portion			1,777,480		2,924		193,743		—			1,974,147
	Long-term Notes Payable to Affiliates and Intercompany Payable			1,000		1,724,511		—		(1,725,511	)		—
	Other Long-term Liabilities			6,773		169,695		17,535		(2,695	)		191,308
	Commitments and Contingencies
	Minority Interests			—		—		6,105		69,680			75,785
	Shareholders' Equity			1,066,114		408,128		145,192		(553,320	)		1,066,114

		Total Liabilities and Shareholders' Equity	$	2,926,017	$	2,800,313	$	1,262,884	$	(3,097,115	)	$	3,892,099

			December 31, 2004
			Parent		Guarantors		Non- Guarantors		Eliminations			Consolidated
Assets
Current Assets:
	Cash and Cash Equivalents		$	—	$	11,021	$	20,921	$	—		$	31,942
	Accounts Receivable			—		239,015		115,419		—			354,434
	Intercompany Receivable			869,370		—		—		(869,370	)		—
	Other Current Assets			1,064		83,977		30,146		(409	)		114,778

		Total Current Assets		870,434		334,013		166,486		(869,779	)		501,154
Property, Plant and Equipment, Net				—		1,131,277		518,519		—			1,649,796
Other Assets, Net:
	Long-term Notes Receivable from Affiliates and Intercompany Receivable			1,923,614		11,420		—		(1,935,034	)		—
	Investment in Subsidiaries			479,270		182,866		1,061		(663,197	)		—
	Goodwill			—		1,435,151		594,264		10,802			2,040,217
	Other			30,128		116,438		105,196		(542	)		251,220

		Total Other Assets, Net		2,433,012		1,745,875		700,521		(2,587,971	)		2,291,437

		Total Assets	$	3,303,446	$	3,211,165	$	1,385,526	$	(3,457,750	)	$	4,442,387

Liabilities and Shareholders' Equity
	Intercompany Payable		$	—	$	313,259	$	556,111	$	(869,370	)	$	—
	Current Portion of Long-term Debt			3,823		2,355		33,257		—			39,435
	Total Other Current Liabilities			51,190		298,755		126,492		(409	)		476,028
	Long-term Debt, Net of Current Portion			2,024,224		112		414,251		—			2,438,587
	Long-term Notes Payable to Affiliates and Intercompany Payable			1,000		1,923,614		10,420		(1,935,034	)		—
	Other Long-term Liabilities			4,641		212,083		40,542		(542	)		256,724
	Commitments and Contingencies
	Minority Interests			—		—		4,177		8,868			13,045
	Shareholders' Equity			1,218,568		460,987		200,276		(661,263	)		1,218,568

		Total Liabilities and Shareholders' Equity	$	3,303,446	$	3,211,165	$	1,385,526	$	(3,457,750	)	$	4,442,387

			December 31, 2002
			Parent			Guarantors			Non- Guarantors			Eliminations			Consolidated
Revenues:
	Storage		$	—		$	658,613		$	100,923		$	—		$	759,536
	Service and Storage Material Sales			—			473,077			85,884			—			558,961

		Total Revenues		—			1,131,690			186,807			—			1,318,497
Operating Expenses:
	Cost of Sales (Excluding Depreciation)			—			527,215			95,084			—			622,299
	Selling, General and Administrative			57			295,435			37,558			—			333,050
	Depreciation and Amortization			—			95,622			13,370			—			108,992
	Merger-related Expenses			—			796			—			—			796
	Loss (Gain) on Disposal/Writedown of Property, Plant and Equipment, Net			—			2,706			(1,932	)		—			774

		Total Operating Expenses		57			921,774			144,080			—			1,065,911

	Operating (Loss) Income			(57	)		209,916			42,727			—			252,586
	Interest Expense, Net			7,077			101,660			27,895			—			136,632
	Equity in the (Earnings) Losses of Subsidiaries			(72,104	)		3,320			—			68,784			—
	Other Expense (Income), Net			6,678			(4,189	)		(1,054	)		—			1,435

		Income from Continuing Operations Before Provision for Income Taxes and Minority Interest		58,292			109,125			15,886			(68,784	)		114,519
	Provision for Income Taxes			—			41,132			6,186			—			47,318
	Minority Interest in Earnings of Subsidiaries			—			—			3,629			—			3,629
		Income from Continuing Operations before Discontinued Operations and Cumulative Effect of Change in Accounting Principle		58,292			67,993			6,071			(68,784	)		63,572
	Income from Discontinued Operations (Net of Tax of $768)			—			1,116			—			—			1,116
	Cumulative Effect of Change in Accounting Principle (net of Minority Interest)			—			—			(6,396	)		—			(6,396	)

	Net Income (Loss)		$	58,292		$	69,109		$	(325	)	$	(68,784	)	$	58,292

			Year Ended December 31, 2003
			Parent			Guarantors			Non- Guarantors			Eliminations			Consolidated
Revenues:
	Storage		$	—		$	712,862		$	162,173		$	—		$	875,035
	Service and Storage Material Sales			—			499,992			126,302			—			626,294

		Total Revenues		—			1,212,854			288,475			—			1,501,329
Operating Expenses:
	Cost of Sales (Excluding Depreciation)			—			545,202			135,545			—			680,747
	Selling, General and Administrative			427			314,424			68,790			—			383,641
	Depreciation and Amortization			20			106,024			24,874			—			130,918
	Loss (Gain) on Disposal/Writedown of Property, Plant and Equipment, Net			—			1,771			(641	)		—			1,130

		Total Operating Expenses		447			967,421			228,568			—			1,196,436

Operating (Loss) Income				(447	)		245,433			59,907			—			304,893
Interest Expense, Net				23,809			91,881			34,778			—			150,468
Equity in the Earnings of Subsidiaries				(159,933	)		(4,334	)		—			164,267			—
Other Expense (Income), Net				51,040			(45,492	)		(8,112	)		—			(2,564	)

	Income Before Provision for Income Taxes and Minority Interest			84,637			203,378			33,241			(164,267	)		156,989
Provision for Income Taxes				—			53,449			13,281			—			66,730
Minority Interest in Earnings of Subsidiaries				—			—			5,622			—			5,622

Net Income			$	84,637		$	149,929		$	14,338		$	(164,267	)	$	84,637

			Year Ended December 31, 2004
			Parent			Guarantors			Non- Guarantors		Eliminations			Consolidated
Revenues:
	Storage		$	—		$	774,945		$	268,421	$	—		$	1,043,366
	Service and Storage Material Sales			—			552,405			221,818		—			774,223

		Total Revenues		—			1,327,350			490,239		—			1,817,589
Operating Expenses:
	Cost of Sales (Excluding Depreciation)			—			586,437			237,462		—			823,899
	Selling, General and Administrative			460			362,635			123,151		—			486,246
	Depreciation and Amortization			36			123,098			40,495		—			163,629
	(Gain) Loss on Disposal/Writedown of Property, Plant and Equipment, Net			—			(861	)		180		—			(681	)

		Total Operating Expenses		496			1,071,309			401,288		—			1,473,093

Operating (Loss) Income				(496	)		256,041			88,951		—			344,496
Interest Expense (Income), Net				150,476			(29,598	)		64,871		—			185,749
Equity in the Earnings of Subsidiaries				(267,560	)		(6,812	)		—		274,372			—
Other Expense (Income), Net				22,397			(34,934	)		4,549		—			(7,988	)

	Income Before Provision for Income Taxes and Minority Interest			94,191			327,385			19,531		(274,372	)		166,735
Provision for Income Taxes				—			60,376			9,198		—			69,574
Minority Interest in Earnings of Subsidiaries				—			—			2,970		—			2,970

		Net Income	$	94,191		$	267,009		$	7,363	$	(274,372	)	$	94,191

			Year Ended December 31, 2002
			Parent			Guarantors			Non- Guarantors			Eliminations			Consolidated
Cash Flows from Operating Activities			$	2,259		$	223,446		$	29,243		$	—		$	254,948
Cash Flows from Investing Activities:
	Capital expenditures			—			(152,501	)		(44,496	)		—			(196,997	)
	Cash paid for acquisitions, net of cash acquired			—			(28,041	)		(21,320	)		—			(49,361	)
	Intercompany loans to subsidiaries			(19,365	)		(17,928	)		—			37,293			—
	Investment in subsidiaries			(1,940	)		(1,940	)		—			3,880			—
	Additions to customer relationship and acquisition costs			—			(7,137	)		(1,282	)		—			(8,419	)
	Proceeds from sales of property and equipment			—			1,460			5,560			—			7,020

		Cash Flows from Investing Activities		(21,305	)		(206,087	)		(61,538	)		41,173			(247,757	)
Cash Flows from Financing Activities:
	Repayment of debt and term loans			(458,929	)		(606	)		(2,708	)		—			(462,243	)
	Proceeds from borrowings and term loans			426,235			—			12,607			—			438,842
	Early retirement of notes			(54,380	)		—			—			—			(54,380	)
	Net proceeds from sales of senior subordinated notes			99,000			—			—			—			99,000
	Debt financing (repayment to) and equity contribution from (distribution to) minority shareholders, net			—			—			(1,241	)		—			(1,241	)
	Intercompany loans from parent			—			21,937			15,356			(37,293	)		—
	Equity contribution from parent			—			1,940			1,940			(3,880	)		—
	Other, net			7,120			—			—			—			7,120

		Cash Flows from Financing Activities		19,046			23,271			25,954			(41,173	)		27,098
Effect of exchange rates on cash and cash equivalents				—			—			644			—			644

Increase (Decrease) in cash and cash equivalents				—			40,630			(5,697	)		—			34,933
Cash and cash equivalents, beginning of year				—			11,395			9,964			—			21,359

Cash and cash equivalents, end of year			$	—		$	52,025		$	4,267		$	—		$	56,292

			Year Ended December 31, 2003
			Parent			Guarantors			Non- Guarantors			Eliminations			Consolidated
Cash Flows from Operating Activities			$	(3,823	)	$	252,175		$	40,341		$	—		$	288,693
Cash Flows from Investing Activities:
	Capital expenditures			—			(142,744	)		(61,733	)		—			(204,477	)
	Cash paid for acquisitions, net of cash acquired			—			(66,707	)		(313,183	)		—			(379,890	)
	Intercompany loans to subsidiaries			(407,292	)		(324,980	)		—			732,272			—
	Investment in subsidiaries			(1,705	)		(1,705	)		—			3,410			—
	Investment in convertible preferred stock			—			(1,357	)		—			—			(1,357	)
	Additions to customer relationship and acquisition costs			—			(9,549	)		(3,028	)		—			(12,577	)
	Proceeds from sales of property and equipment			—			9,423			2,244			—			11,667

		Cash Flows from Investing Activities		(408,997	)		(537,619	)		(375,700	)		735,682			(586,634	)
Cash Flows from Financing Activities:
	Repayment of debt and term loans			(600,445	)		(683	)		(97,689	)		—			(698,817	)
	Proceeds from borrowings and term loans			643,784			—			100,232			—			744,016
	Early retirement of notes			(254,407	)		—			(119,851	)		—			(374,258	)
	Net proceeds from sales of senior subordinated notes			617,179			—			—			—			617,179
	Debt financing (repayment to) and equity contribution from (distribution to) minority shareholders, net			—			—			20,225			—			20,225
	Intercompany loans from parent			—			287,190			445,082			(732,272	)		—
	Equity contribution from parent			—			1,705			1,705			(3,410	)		—
	Other, net			6,709			—			—			—			6,709

		Cash Flows from Financing Activities		412,820			288,212			349,704			(735,682	)		315,054

Effect of exchange rates on cash and cash equivalents				—			—			1,278			—			1,278

Increase in cash and cash equivalents				—			2,768			15,623			—			18,391
Cash and cash equivalents, beginning of year				—			52,025			4,267			—			56,292

Cash and cash equivalents, end of year			$	—		$	54,793		$	19,890		$	—		$	74,683

			Year Ended December 31, 2004
			Parent			Guarantors			Non- Guarantors			Eliminations			Consolidated
Cash Flows from Operating Activities			$	(176,437	)	$	426,230		$	55,571		$	—		$	305,364
Cash Flows from Investing Activities:
	Capital expenditures			—			(162,032	)		(69,934	)		—			(231,966	)
	Cash paid for acquisitions, net of cash acquired			—			(163,828	)		(220,510	)		—			(384,338	)
	Intercompany loans to subsidiaries			44,240			28,501			—			(72,741	)		—
	Investment in subsidiaries			(111,988	)		(111,988	)		—			223,976			—
	Investment in convertible preferred stock			—			(858	)		—			—			(858	)
	Additions to customer relationship and acquisition costs			—			(10,050	)		(2,422	)		—			(12,472	)
	Proceeds from sales of property and equipment			—			3,053			58			—			3,111

		Cash Flows from Investing Activities		(67,748	)		(417,202	)		(292,808	)		151,235			(626,523	)
Cash Flows from Financing Activities:
	Repayment of debt and term loans			(706,149	)		(117,246	)		(261,618	)		—			(1,085,013	)
	Proceeds from borrowings and term loans			668,882			—			479,393			—			1,148,275
	Early retirement of notes			—			—			(20,797	)		—			(20,797	)
	Net proceeds from sales of senior subordinated notes			269,427			—			—			—			269,427
	Debt financing (repayment to) and equity contribution from (distribution to) minority shareholders, net			—			—			(41,978	)		—			(41,978	)
	Intercompany loans from parent			—			(47,542	)		(25,199	)		72,741			—
	Equity contribution from parent			—			111,988			111,988			(223,976	)		—
	Other, net			12,025			—			(5,370	)		—			6,655

		Cash Flows from Financing Activities		244,185			(52,800	)		236,419			(151,235	)		276,569
Effect of exchange rates on cash and cash equivalents				—			—			1,849			—			1,849

(Decrease) Increase in cash and cash equivalents				—			(43,772	)		1,031			—			(42,741	)
Cash and cash equivalents, beginning of year				—			54,793			19,890			—			74,683

Cash and cash equivalents, end of year			$	—		$	11,021		$	20,921		$	—		$	31,942

7. Acquisitions

In July 2003, we and IME completed the acquisition of Hays IMS in two simultaneous transactions. IME acquired the European operations of Hays IMS for aggregate cash consideration (including transaction costs) of approximately 190,000 British pounds sterling ($309,000), while we acquired the U.S. operations of Hays IMS for aggregate cash consideration (including transaction costs) of approximately 14,500 British pounds sterling ($24,000). Both transactions were on a cash and debt free basis.

In February 2004, we completed the acquisition of the 49.9% equity interest held by Mentmore in IME for total consideration of 82,500 British pounds sterling ($154,000) in cash. Included in this amount is the repayment of all trade and working capital funding owed to Mentmore by IME. Completion of the transaction gives us 100% ownership of IME. This transaction did not have material impact on revenue or operating income since we already fully consolidate IME's financial results. Using the purchase method of accounting for this acquisition, the net assets of IME were adjusted to reflect 49.9% of the difference between the fair market value and their carrying value on the date of acquisition.

In November 2004, we acquired Connected Corporation ("Connected") for total cash consideration of $109,326 (net of cash acquired).

Each of the 2002, 2003 and 2004 acquisitions were accounted for using the purchase method of accounting, and accordingly, the results of operations for each acquisition have been included in our consolidated results from their respective acquisition dates. Cash consideration for the various acquisitions was provided through our credit facilities and the issuance of certain of our senior subordinated notes.

A summary of the consideration paid and the allocation of the purchase price of the acquisitions is as follows:

		2002			2003			2004
Cash Paid (gross of cash acquired)		$	41,356	(1)	$	387,803	(1)	$	388,243	(1)
Fair Value of Options Issued			—			—			1,245

	Total Consideration		41,356			387,803			389,488
Fair Value of Identifiable Assets Acquired(2)			10,440			244,950			160,622
Liabilities Assumed(3)			(4,868	)		(46,217	)		(50,006	)
Minority Interest(4)			—			—			71,535

	Total Fair Value of Identifiable Net Assets Acquired		5,572			198,733			182,151

Recorded Goodwill		$	35,784		$	189,070		$	207,337

(1): Included in cash paid for acquisitions in the consolidated statements of cash flows for the years ended December 31, 2002, 2003 and 2004 is a contingent payment of $7,165, $1,077 and $5,513, respectively, related to acquisitions made in the previous years.
(2): Consisted primarily of accounts receivable, prepaid expenses and other, land, buildings, racking, leasehold improvements, and customer relationship assets.

(3): Consisted primarily of accounts payable, accrued expenses and notes payable.
(4): Consisted primarily of the carrying value of Mentmore's 49.9% minority interest in IME at the date of acquisition.

Allocation of the purchase price for the 2004 acquisitions was based on estimates of the fair value of net assets acquired, and is subject to adjustment. The purchase price allocations of certain 2004 transactions are subject to finalization of the assessment of the fair value of property, plant and equipment, intangible assets (primarily customer relationship assets), operating leases, restructuring purchase reserves, deferred revenue and deferred income taxes. We are not aware of any information that would indicate that the final purchase price allocations will differ meaningfully from preliminary estimates.

In connection with each of our acquisitions, we have undertaken certain restructurings of the acquired businesses. The restructuring activities include certain reductions in staffing levels, elimination of duplicate facilities and other costs associated with exiting certain activities of the acquired businesses. The estimated cost of these restructuring activities were recorded as costs of the acquisitions and were provided in accordance with EITF No. 95-3, "Recognition of Liabilities in Connection with a Purchase Business Combination." We finalize restructuring plans for each business no later than one year from the date of acquisition. Unresolved matters at December 31, 2004 primarily include completion of planned abandonments of facilities and severance contracts in connection with certain acquisitions.

The following is a summary of reserves related to such restructuring activities:

	2003			2004
Reserves, beginning of the year	$	9,906		$	16,322
Reserves established		12,526			15,282
Expenditures		(5,436	)		(10,200	)
Adjustments to goodwill, including currency effect(1)		(674	)		10

Reserves, end of the year	$	16,322		$	21,414

(1): Includes adjustments to goodwill as a result of management finalizing its restructuring plans.

At December 31, 2003, the restructuring reserves related to acquisitions consisted of lease losses on abandoned facilities ($6,849), severance costs for approximately 158 people ($3,593) and move and other exit costs ($5,880). These accruals are expected to be used prior to December 31, 2004 except for lease losses of $4,927 and severance contracts of $314, both of which are based on contracts that extend beyond one year.

At December 31, 2004, the restructuring reserves related to acquisitions consisted of lease losses on abandoned facilities ($12,348), severance costs for approximately 56 people ($2,463) and move and other exit costs ($6,603). These accruals are expected to be used prior to December 31, 2005 except for lease losses of $10,560 and severance contracts of $193, both of which are based on contracts that extend beyond one year.

In connection with some of our acquisitions, we have potential earn-out obligations that would be payable in the event businesses we acquired meet certain operational objectives. These payments are based on the future results of these operations and our estimate of the maximum contingent earn-out payments we would be required to make under all such agreements as of December 31, 2004 is approximately $16,798.

8. Capital Stock and Stock Options

a. Capital Stock

On May 27, 2004, our board authorized and approved a three-for-two stock split effected in the form of a dividend on our common stock. We issued the additional shares of common stock resulting from this stock dividend on June 30, 2004 to all shareholders of record as of the close of business on June 15, 2004. All share data has been reflected for such stock split.

The following table summarizes the number of shares authorized, issued and outstanding for each issue of our capital stock as of December 31:

			Number of Shares
			Authorized		Issued and Outstanding
Equity Type			Authorized		Issued and Outstanding
Equity Type	Par Value		2003	2004	2003	2004
Preferred stock	$	.01	10,000,000	10,000,000	—	—
Common stock		.01	150,000,000	200,000,000	128,362,881	129,817,914

b. Stock Options

A total of 16,055,657 shares of common stock have been reserved for grants of options and other rights under our various stock incentive plans.

The following is a summary of stock option transactions, including those issued to employees of acquired companies, during the applicable periods, excluding transactions under the employee stock purchase plan:

	Options		Weighted Average Exercise Price
Options outstanding, December 31, 2001	6,426,588		$	10.42
Granted	648,840			19.97
Exercised	(891,074	)		6.17
Canceled	(339,130	)		11.34

Options outstanding, December 31, 2002	5,845,224			12.05
Granted	687,851			24.80
Exercised	(661,302	)		8.85
Canceled	(78,519	)		17.60

Options outstanding, December 31, 2003	5,793,254			13.73
Granted	811,722			28.55
Exercised	(1,118,332	)		9.38
Canceled	(214,598	)		23.58

Options outstanding, December 31, 2004	5,272,046			16.55

Options granted in 2002, 2003 and 2004 were granted with exercise prices equal to the market price of the stock at the date of grant. The majority of these options become exercisable ratably over a period of five years unless the holder terminates employment and generally have a contractual life of 10 years. The number of shares available for grant at December 31, 2004 was 3,855,031.

The following table summarizes additional information regarding options outstanding and exercisable at December 31, 2004:

		Outstanding
		Weighted Average Remaining Contractual Life (in Years)			Exercisable
Range of Exercise Prices	Number	Weighted Average Remaining Contractual Life (in Years)	Weighted Average Exercise Price		Number	Weighted Average Exercise Price
$0.33 to $0.39	1,944	2.1	$	0.37	1,944	$	0.37
$1.92 to $2.57	258,773	3.0		2.01	258,773		2.01
$2.95 to $4.05	94,406	3.6		3.68	94,406		3.68
$4.56 to $4.87	343,570	1.6		4.62	343,570		4.62
$7.63 to $10.78	619,840	2.8		9.54	619,840		9.54
$12.07 to $17.54	1,950,570	5.5		15.05	1,533,081		14.88
$18.28 to $25.60	1,328,899	7.6		22.18	468,662		20.90
$27.77 to $32.86	674,044	9.4		29.76	8,278		29.88

	5,272,046	5.8		16.55	3,328,554		12.39

9. Discontinued Operations

In June 1999, in order to focus on our information storage and protection services business, we decided to sell our information technology staffing business, Arcus Staffing Resources, Inc. ("Arcus Staffing"), which was acquired in January 1998 as part of the acquisition of Arcus Group, Inc. Effective November 1, 1999, we completed the sale of substantially all of the assets of Arcus Staffing. In accordance with the provisions of APB No. 30, the sale of Arcus Staffing was accounted for as a discontinued operation. Accordingly, the Arcus Staffing operations were segregated from our continuing operations and reported as a separate line item on our consolidated statement of operations.

In 1999, we recorded an estimated loss on the sale of Arcus Staffing of $13,400, comprised of a write-off of goodwill, a deferred tax benefit and estimated expenses directly related to the transaction partially offset by the estimated income from operations of Arcus Staffing through the date of disposition. In 2002, we recorded income from discontinued operations of $1,116 (net of tax of $768) related to the reversal of remaining liabilities associated with certain contingencies which have been resolved.

10. Income Taxes

The components of income from continuing operations before provision for income taxes and minority interest are:

	2002		2003		2004
U.S. and Canada	$	103,561	$	140,638	$	157,929
Foreign		10,958		16,351		8,806

	$	114,519	$	156,989	$	166,735

We have estimated federal net operating loss carryforwards which begin to expire in 2018 through 2021 of $169,900 at December 31, 2004 to reduce future federal taxable income, if any. The preceding net operating loss carryforwards do not include pre-acquisition net operating loss carryforwards of Arcus Group, Inc. in the amount of approximately $103,000. Any tax benefit realized related to pre-acquisition net operating loss carryforwards will be recorded as a reduction of goodwill when, and if, realized. The Arcus Group carryforwards begin to expire next year. We also have estimated state net operating loss carryforwards of $92,568. The state net operating loss carryforwards are subject to a valuation allowance of approximately 55%. Additionally, we have alternative minimum tax credit carryforwards of $1,364, which have no expiration date and are available to reduce future income taxes, if any.

We are subject to income taxes in many jurisdictions around the world. Significant judgment is required in determining our worldwide provision for income taxes. In the ordinary course of business, there are many transactions and calculations where the ultimate tax determination is uncertain. Although we believe our tax estimates for certain tax loss contingencies are reasonable, the final determination of tax audits and any related litigation could be materially different than that which is reflected in historical income tax provisions and accruals. Additional taxes assessed as a result of an audit or litigation could have a material effect on our income tax provision and net income in the

period or periods in which the determination is made. We revise our estimates of such tax loss contingencies, if and when appropriate.

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are presented below:

		December 31,
		2003			2004
Deferred Tax Assets:
	Accrued liabilities	$	12,854		$	26,181
	Deferred rent		8,399			8,654
	Net operating loss carryforwards		46,611			63,579
	AMT credit		1,187			1,364
	Valuation Allowance		(4,829	)		(5,691	)
	Unrealized loss on hedging contracts		9,332			1,585
	Other		16,589			9,278

			90,143			104,950
Deferred Tax Liabilities:
	Other assets, principally due to differences in amortization		(68,956	)		(98,348	)
	Plant and equipment, principally due to differences in depreciation		(115,061	)		(154,642	)
	Customer acquisition costs		(19,314	)		(22,466	)

			(203,331	)		(275,456	)

	Net deferred tax liability	$	(113,188	)	$	(170,506	)

We receive a tax deduction upon the exercise of non-qualified stock options or upon the disqualifying disposition by employees of incentive stock options and shares acquired under our employee stock purchase plan for the difference between the exercise price and the market price of the underlying common stock on the date of exercise or disqualifying disposition. The tax benefit for non-qualified stock options and the 15% discount associated with our employee stock purchase plan are included in the consolidated financial statements in the period in which compensation expense is recorded. The tax benefit associated with compensation expense recorded in the consolidated financial statements related to incentive stock options and incremental amounts recorded above the 15% discount associated with the employee stock purchase plan are recorded in the period the disqualifying disposition occurs. All tax benefits for awards issued prior to January 1, 2003 and incremental tax benefits in excess of compensation expense recorded in the consolidated financial statements are credited directly to equity and amounted to $4,476, $3,950 and $6,904 for the years ended December 31, 2002, 2003 and 2004, respectively.

undistributed book earnings of our foreign subsidiaries. The basis differences could be reversed through a sale of the subsidiaries, the receipt of dividends from subsidiaries as well as certain other events or actions on our part, which would result in an increase in our provision for income taxes. We currently do not anticipate utilizing the repatriation provision outlined in the American Jobs Creation Act of 2004.

We file a consolidated federal income tax return with our U.S. subsidiaries. The provision for income taxes consists of the following components:

	Year Ended December 31,
	2002		2003		2004
Federal—deferred	$	33,629	$	43,856	$	54,237
State—current		1,447		2,758		4,094
State—deferred		8,121		14,871		9,339
Foreign—current and deferred		4,121		5,245		1,904

	$	47,318	$	66,730	$	69,574

A reconciliation of total income tax expense and the amount computed by applying the federal income tax rate of 35% to income from continuing operations before provision for income taxes and minority interests for the years ended December 31, 2002, 2003 and 2004, respectively, is as follows:

		Year Ended December 31,
		2002			2003			2004
Computed "expected" tax provision		$	40,082		$	54,946		$	58,357
Changes in income taxes resulting from:
	State taxes (net of federal tax benefit)		6,220			10,650			7,107
	Impact of retroactive state law change (net of federal tax benefit)		—			809			1,625
	Increase in valuation allowance		210			—			—
	Foreign tax rate and tax law differential		(209	)		(540	)		(1,584	)
	Other, net		1,015			865			4,069

		$	47,318		$	66,730		$	69,574

11. Quarterly Results of Operations (Unaudited)

Quarter Ended	March 31		June 30		Sept. 30		Dec. 31
2003
Total revenues	$	351,811	$	359,270	$	381,758	$	408,490
Gross profit		191,660		197,238		210,403		221,281
Net income		21,284		20,133		14,794		28,426
Net income per share—basic		0.17		0.16		0.12		0.22
Net income per share—diluted		0.16		0.15		0.11		0.22
2004
Total revenues	$	433,922	$	445,410	$	459,330	$	478,927
Gross profit		235,612		244,583		249,533		263,962
Net income		22,997		22,857		18,450		29,887
Net income per share—basic		0.18		0.18		0.14		0.23
Net income per share—diluted		0.18		0.17		0.14		0.23

12. Segment Information

We operate in seven operating segments, based on their economic environment, geographic area, the nature of their services and the nature of their processes:

•: Business Records Management—throughout the United States and Canada, the storage of paper documents, as well as all other non-electronic media such as microfilm and microfiche, master audio and videotapes, film, X-rays and blueprints, including healthcare information services, vital records services and service, courier operations, and the collection, handling and disposal of sensitive documents for corporate customers
•: Data Protection—the storage and rotation of backup computer media as part of corporate disaster and business recovery plans, including service and courier operations and electronic vaulting services for the server market
•: Fulfillment—the storage of customer marketing literature and delivery to sales offices, trade shows and prospective customers' sites based on current and prospective customer orders; the assembly of custom marketing packages and orders; the management and detailed reporting on customer marketing literature inventories
•: Digital Archiving Services—storage and related services for electronic records conveyed via telecommunication lines and the Internet
•: Europe—information storage and protection services throughout Europe
•: South America—information storage and protection services throughout South America
•: Mexico—information storage and protection services throughout Mexico

The South America and Mexico operating segments do not individually meet the quantitative thresholds for a reporting segment, but have been aggregated and reported with Europe as one

reporting segment, "International," given their similar economic characteristics, products, customers and processes. The Fulfillment and Digital Archiving Services operating segments do not meet the quantitative thresholds for a reportable segment and thus are included in the "Corporate and Other" category. Corporate items include non-operating overhead, corporate general and administrative expenses, non-allocated operating expenses and inter-segment eliminations. Corporate assets are principally cash and cash equivalents, prepaid items, certain non-operating fixed assets, deferred income taxes, certain non-trade receivables, certain inter-segment receivables, and deferred financing costs.

An analysis of our business segment information to the respective information and reconciliation to the consolidated financial statements is as follows:

	Business Records Management		Data Protection		International		Corporate & Other(1)		Total Consolidated
2002
Total Revenues	$	944,845	$	239,081	$	109,381	$	25,190	$	1,318,497
Contribution		262,541		61,729		21,988		16,890		363,148
Total Assets		2,358,459		359,339		317,073		195,784		3,230,655
Expenditures for Segment Assets(2)		141,663		24,642		58,107		30,365		254,777
2003
Total Revenues		1,022,335		251,141		198,068		29,785		1,501,329
Contribution		286,208		71,240		46,825		32,668		436,941
Total Assets		2,536,415		375,845		765,814		214,025		3,892,099
Expenditures for Segment Assets(2)		179,450		28,667		358,515		30,312		596,944
2004
Total Revenues		1,107,587		278,984		380,033		50,985		1,817,589
Contribution		308,630		78,597		89,751		30,466		507,444
Total Assets		2,708,068		391,184		1,024,135		319,000		4,442,387
Expenditures for Segment Assets(2)		217,868		19,528		243,030		148,350		628,776

(1): Total assets include the inter-segment elimination amounts of $1,277,393, $1,813,276 and $1,884,185 as of December 31, 2002, 2003 and 2004, respectively.
(2): Includes capital expenditures, cash paid for acquisitions, net of cash acquired and additions to customer relationship and acquisition costs in the accompanying consolidated statements of cash flows.

The accounting policies of the reportable segments are the same as those described in Note 2 except that certain costs continue to be allocated from Corporate & Other to the other segments in 2002, 2003 and 2004, primarily to our Business Records Management and Data Protection segments. These allocations, which include rent, worker's compensation, property, general liability, auto and other insurance, pension/medical costs, incentive compensation, real estate property taxes and provision for

bad debts, are based on rates set at the beginning of each year. Contribution for each segment is defined as total revenues less cost of sales (excluding depreciation) and selling, general and administrative expenses (including the costs allocated to each segment as described above). Internally, we use Contribution as the basis for evaluating the performance of and allocating resources to our operating segments.

A reconciliation of Contribution to net income on a consolidated basis is as follows:

			Years Ended December 31,
			2002			2003			2004
Contribution			$	363,148		$	436,941		$	507,444
	Less: Depreciation and Amortization			108,992			130,918			163,629
		Merger-related Expenses		796			—			—
		Loss (Gain) on Disposal/Writedown of Property, Plant and Equipment, Net		774			1,130			(681	)
		Interest Expense, Net		136,632			150,468			185,749
		Other Expense (Income), Net		1,435			(2,564	)		(7,988	)
		Provision for Income Taxes		47,318			66,730			69,574
		Minority Interest in Earnings of Subsidiaries		3,629			5,622			2,970
		Income from Discontinued Operations, Net of Tax		(1,116	)		—			—
		Cumulative Effect of Change in Accounting Principle, Net of Minority Interest		6,396			—			—

Net Income			$	58,292		$	84,637		$	94,191

Information as to our operations in different geographical areas is as follows:

		2002		2003		2004
Revenues:
United States		$	1,134,000	$	1,215,669	$	1,330,979
United Kingdom			79,228		145,735		270,665
Canada			75,116		87,592		106,577
Other International			30,153		52,333		109,368

	Total Revenues	$	1,318,497	$	1,501,329	$	1,817,589

Long-lived Assets:
United States		$	2,395,018	$	2,514,031	$	2,735,545
United Kingdom			216,040		551,924		618,712
Canada			200,461		253,874		315,872
Other International			52,096		100,687		271,104

	Total Long-lived Assets	$	2,863,615	$	3,420,516	$	3,941,233

13. Commitments and Contingencies

a. Leases

We lease most of our facilities under various operating leases. A majority of these leases have renewal options of five to ten years and have either fixed or Consumer Price Index escalation clauses. We also lease equipment under operating leases, primarily computers which have an average lease life of three years. Trucks and office equipment are also leased and have remaining lease lives ranging from one to seven years. Total rent expense under all of our operating leases was $125,866, $134,371 and $163,564 for the years ended December 31, 2002, 2003 and 2004, respectively. There was $5,915 related to synthetic lease facilities included in rent expense for the year ended December 31, 2002. There was no such expense in 2003 and 2004. See Note 3.

Minimum future lease payments, net of sublease income of $2,715, $1,933, $1,375, $1,127, $912 and $1,546 for 2005, 2006, 2007, 2008, 2009 and thereafter, respectively, are as follows:

Year	Operating
2005	$	151,166
2006		134,694
2007		118,604
2008		99,714
2009		83,201
Thereafter		490,302

Total minimum lease payments	$	1,077,681

We have guaranteed the residual value of certain vehicle operating leases to which we are a party. The maximum net residual value guarantee obligation for these vehicles as of December 31, 2004 was $34,316. Such amount does not take into consideration the recovery or resale value associated with these vehicles. We believe that it is not reasonably likely that we will be required to perform under these guarantee agreements or that any performance requirement would have a material impact on our consolidated financial statements.

b. South Brunswick Fires Litigation

In March 1997, we experienced three fires, all of which authorities have determined were caused by arson. The fires resulted in damage to one and destruction of another records and information services facility in South Brunswick Township, New Jersey. Certain of our customers or their insurance carriers asserted claims as a consequence of the destruction of, or damage to, their records as a result of the fires, including claims with specific requests for compensation and allegations of negligence or other culpability on the part of Iron Mountain. Five lawsuits were filed against Iron Mountain by certain of our customers and/or their insurers, and a sixth lawsuit was filed by the issuers of an abutter of one of the South Brunswick facilities. As a result of a mediation in August 2004, the parties to these six lawsuits entered into a written settlement of these matters. Pursuant to the settlement agreement, Iron Mountain contributed $500 to a settlement fund in exchange for complete release. The Superior Court for Middlesex County, New Jersey has, therefore, dismissed all of these cases. In addition, our

insurers reimbursed us for the costs of the defense. A seventh lawsuit, also brought by a single customer, was tried before a federal judge in New Jersey in February 2000, with a defendant's verdict entered in favor of Iron Mountain. An eighth lawsuit filed by an injured firefighter was settled by our insurer for a nominal amount. Several other claims that were originally filed in relation to these lawsuits have been voluntarily dismissed without prejudice by the customers, abutting business owners, and/or their insurance carriers.

c. Pierce, H-W Associates, Pioneer and Sequedex Proceedings

On March 28, 2002, Iron Mountain Incorporated and Iron Mountain Information Management, Inc. ("IMIM"), one of our wholly owned subsidiaries, commenced an action in the Middlesex County, New Jersey, Superior Court, Chancery Division, captioned Iron Mountain Incorporated and Iron Mountain Information Management, Inc. v. J. Peter Pierce, Sr., Douglas B. Huntley, J. Michael Gold, Fred A. Mathewson, Jr., Michael DiIanni, J. Anthony Hayden, Pioneer Capital, LLC, and Sequedex, LLC. In the complaint, we alleged that defendant J. Peter Pierce, Sr., a former member of our Board of Directors and the former President of IMIM until his termination without cause effective June 30, 2000, violated his fiduciary obligations, as well as various noncompetition and other provisions of an employment agreement with us, dated February 1, 2000, by providing direct and/or indirect financial, management and other support to defendant Sequedex. Sequedex was established in October 2000, and competed directly with us in the records and information management services industry. The complaint also alleged that Mr. Pierce and certain of the other defendants, who were employed by or affiliated with Pierce Leahy Corp. prior to the merger of Pierce Leahy with Iron Mountain in February 2000, misappropriated and used our trade secrets and other confidential information. Finally, the complaint asserted claims against Sequedex and others for tortious interference with contractual relations, against all of the defendants for civil conspiracy in respect of the matters described above, and against defendant Michael DiIanni for breach of his employment agreement with IMIM, dated September 6, 2000. The litigation sought injunctions in respect of certain matters and recovery of damages against the defendants.

addition, the arbitrator ruled that, pursuant to an indemnification provision in Mr. Pierce's employment agreement, we must pay Mr. Pierce's attorneys fees and costs that are attributable to this single arbitration. The arbitrator established a procedure to ascertain the amount of these fees and expenses. We filed a motion to vacate the arbitrator's decision and award in Middlesex County, New Jersey. On June 16, 2004, that court denied our motion to vacate and confirmed the arbitration decision. We appealed the court's decision to the Appellate Division of the New Jersey Superior Court and voluntarily withdrew, without prejudice, the claims in that case other than those purportedly covered by the arbitration decision. Mr. Pierce filed a motion to dismiss the appeal, which was denied by the Appellate Division. Mr. Pierce subsequently filed an opposition to the appeal. The parties are awaiting notice of a hearing date for the appeal.

On September 13, 2004, the arbitrator issued a final award, granting Mr. Pierce indemnification for legal expenses incurred in the arbitration in the amount of approximately $1,600. Mr. Pierce brought an action in the Superior Court for Middlesex County to confirm such award and such court issued an order to show cause. We opposed this action and filed a motion to dismiss Mr. Pierce's claims and vacate the arbitration award, or in the alternative, for a stay pending disposition of the pending appeal regarding the motion to vacate.

On December 16, 2002, Hartford Windsor Associates, L.P. ("H-W Associates"), Hartford General, LLC, J. Anthony Hayden, Mr. Pierce, Frank Seidman and John H. Greenwald, Jr. commenced an action in the Court of Common Pleas, Montgomery County, Pennsylvania, against Iron Mountain Incorporated. In the complaint, the plaintiffs allege that H-W Associates purchased a warehouse property in Connecticut to serve as a records storage facility, and entered into a lease for the facility with Sequedex, then a competitor of ours, and that the remaining plaintiffs were limited or general partners of H-W Associates. The plaintiffs also allege that we tortiously interfered with Sequedex's contractual relations with an actual or prospective customer of Sequedex and, as a result, caused Sequedex to default on its lease to H-W Associates. The complaint seeks damages in excess of $100,000.. We have denied the material allegations in the complaint filed against us by H-W Associates and the other plaintiffs and have since filed counterclaims against the plaintiffs alleging tortious interference with our business relationship with one of our longstanding customers. Certain discovery has been undertaken.

misappropriated and used our confidential information, breached his fiduciary duties to our shareholders and assisted Sequedex, then a competitor of ours, in unfairly competing with us. Finally, the complaint alleges that the business partner in Logisteq taped conversations with Mr. Pierce and others which allegedly violated privacy laws, that the defendants knew, or should have known, that the tapes were being made without the consent of the individuals and, as a result, Mr. Pierce was harmed. The complaint seeks damages in excess of $5,000,000. We and the other defendants have challenged the legal sufficiency of the plaintiffs' pleadings in each of these cases and the court has issued a notice of its intention to dismiss the case for inactivity unless a party gives written notice of his or its intention to proceed by April 15, 2005.

The defendants in all three cases denied the material allegations in IMIM's complaints and asserted various affirmative defenses. Sequedex and the individual defendants filed counterclaims against IMIM and third party complaints against Iron Mountain Incorporated. The counterclaims and third party complaints asserted claims for tortious interference with certain contracts and prospective business relations between Sequedex and its current and potential customers as well as a claim for trade disparagement and defamation, and sought approximately $58,000 in damages, plus unspecified punitive damages. A trial of the three actions in which the Sequedex counterclaims and third party complaints were asserted occurred in April and May of 2004. On June 18, 2004, the Court held that the three individual defendants had not violated their covenants not to compete and had not misappropriated any of IMIM's trade secrets or confidential information, that Sequedex had not tortiously interfered with those agreements, and that IMIM and Iron Mountain Incorporated had not interfered with any of Sequedex's potential or actual business relationships and had not disparaged or defamed Sequedex. The Court thus entered a judgment dismissing all claims and counterclaims. Sequedex appealed the Court's decision to the Appellate Division of the New Jersey Superior Court. Iron Mountain Incorporated and IMIM filed an appellate brief in opposition to Sequedex's appeal. We intend to oppose the appeal by Sequedex vigorously. The parties are awaiting notice of a hearing date for the appeal.

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d. Other Litigation

14. Related Party Transactions

We lease space to an affiliated company, Schooner, for its corporate headquarters located in Boston, Massachusetts. For the years ended December 31, 2002, 2003 and 2004, Schooner paid rent to us totaling $128, $144 and $153, respectively. We lease facilities from an officer and three separate limited partnerships, whose general partner was a related party. Our aggregate rental payment for such facilities during 2002, 2003 and 2004 was $1,372, $1,309 and $1,345, respectively.

We have an agreement with Leo W. Pierce, Sr., our former Chairman Emeritus and the father of J. Peter Pierce, our former director, that requires pension payments of $8 per month until his death. The total benefit is recorded in accrued expenses in the accompanying consolidated balance sheets in the amount of $826 as of December 31, 2004.

At December 31, 2004, we have outstanding loans to an officer with an aggregate principal amount of $87. These notes bear interest at a variable rate. This liability was assumed in connection with our merger with Pierce Leahy.

15. Employee Benefit Plans

a. Iron Mountain Companies 401(k) Plan

We have a defined contribution plan, which generally covers all non-union U.S. employees meeting certain service requirements. Eligible employees may elect to defer from 1% to 25% of compensation per pay period up to the amount allowed by the Internal Revenue Code. In addition, IME operates a defined contribution plan, which is similar to the U.S.'s 401(k) Plan. We make matching contributions based on the amount of an employee's contribution in accordance with the plan document. We have expensed $3,043, $4,164 and $4,320 for the years ended December 31, 2002, 2003 and 2004, respectively.

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b. Employee Stock Purchase Plan

On March 23, 1998, we introduced an employee stock purchase plan (the "Plan"), participation in which is available to substantially all employees who meet certain service eligibility requirements. The Plan was approved by our shareholders on May 28, 1998 and commenced operations on October 1, 1998. The Plan provided a way for our eligible employees to become shareholders on favorable terms. The Plan provided for the purchase of up to 843,750 shares of our common stock by eligible employees through successive offering periods. At the start of each offering period, participating employees were granted options to acquire our common stock. As there were no shares remaining in the Plan on December 31, 2002, a new employee stock purchase plan (the "2003 Plan"), which provides for the purchase of up to 1,125,000 shares of our common stock was approved by our shareholders in May 2003 and commenced operations on July 1, 2003. During each offering period, participating employees accumulate after-tax payroll contributions, up to a maximum of 15% of their compensation, to pay the exercise price of their options. At the end of the offering period, outstanding options are exercised, and each employee's accumulated contributions are used to purchase our common stock. The price for shares purchased under the Plan was, and under the 2003 Plan is, 85% of their market price at either the beginning or the end of the offering period, whichever was or is lower. There were 240,179, 133,072 and 348,320 shares purchased under the Plan and the 2003 Plan for the years ended December 31, 2002, 2003 and 2004, respectively. The number of shares available for purchase at December 31, 2004 was 643,608.

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REPORT OF THE INDEPENDENT AUDITORS

To the Board of Directors of
Iron Mountain Europe Limited:

We have audited the accompanying consolidated balance sheet of Iron Mountain Europe Limited as of October 31, 2003, and the related consolidated statements of operations, stockholders' equity and comprehensive (loss)/income and cash flows for the two years ended October 31, 2003. These consolidated financial statements are the responsibility of the management of Iron Mountain Europe Limited. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Iron Mountain Europe Limited at October 31, 2003 and the consolidated results of their operations and their consolidated cash flows for the two years ended October 31, 2003, in conformity with generally accepted accounting principles in the United States of America.

/s/ RSM ROBSON RHODES LLP

Chartered Accountants
Birmingham, England

March 8, 2004

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	IRON MOUNTAIN INCORPORATED
	By:	/s/ C. RICHARD REESE C. Richard Reese Chairman of the Board, Chief Executive Officer and President
Dated: March 16, 2005

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Name	Title	Date

/s/ C. RICHARD REESE C. Richard Reese	Chairman of the Board of Directors, Chief Executive Officer and President	March 16, 2005
/s/ JOHN F. KENNY, JR. John F. Kenny, Jr.	Executive Vice President, Chief Financial Officer and Director	March 16, 2005
/s/ JEAN A. BUA Jean A. Bua	Senior Vice President and Corporate Controller (Chief Accounting Officer)	March 16, 2005
/s/ CLARKE H. BAILEY Clarke H. Bailey	Director	March 16, 2005
/s/ CONSTANTIN R. BODEN Constantin R. Boden	Director	March 16, 2005
/s/ KENT P. DAUTEN Kent P. Dauten	Director	March 16, 2005
/s/ B. THOMAS GOLISANO B. Thomas Golisano	Director	March 16, 2005
/s/ ARTHUR D. LITTLE Arthur D. Little	Director	March 16, 2005
/s/ VINCENT J. RYAN Vincent J. Ryan	Director	March 16, 2005

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INDEX TO EXHIBITS

Certain exhibits indicated below are incorporated by reference to documents we have filed with the Commission. Exhibit numbers in parentheses refer to the exhibit numbers in the applicable filing (which are identified in the footnotes appearing at the end of this index). Each exhibit marked by a pound sign (#) is a management contract or compensatory plan.

Exhibit	Item	Exhibit
2.1	Purchase Agreement, dated November 13, 2000, by and among Iron Mountain Canada Corporation, Iron Mountain Records Management, Inc. ("IMRM"), FACS Records Storage Income Fund, FACS Records Centre Inc. and 3796281 Canada Inc.	(2.1) ⁽¹⁸⁾
2.2	Asset Purchase and Sale Agreement, dated February 18, 2000, by and among IMRM, Data Storage Center, Inc., DSC of Florida, Inc., DSC of Massachusetts, Inc., and Suddath Van Lines, Inc.	(2.1) ⁽¹⁵⁾
2.3	Amendment No. 1 to Asset Purchase and Sale Agreement, dated May 1, 2000, by and among IMRM, Data Storage Center, Inc., DSC of Florida, Inc., DSC of Massachusetts, Inc., Suddath Van Lines, Inc. and Suddath Family Trust U/A 11/8/79.	(2.1) ⁽¹⁶⁾
2.4	Agreement and Plan of Merger, dated as of October 20, 1999, by and between the Company and Pierce Leahy.	(2) ⁽¹⁰⁾
2.5	Agreement, dated July 12, 2003, between Hays plc and Iron Mountain Europe Limited (portions of which have been omitted pursuant to a request for confidential treatment).	(2.1) ⁽²⁶⁾
3.1	Amended and Restated Articles of Incorporation of the Company, as amended.	(3.1) ⁽²⁸⁾
3.2	Amended and Restated By-laws of the Company, as amended.	(3.2) ⁽²⁸⁾
3.3	Declaration of Trust of IM Capital Trust I, dated as of December 10, 2001 among the Company, The Bank of New York, The Bank of New York (Delaware) and John P. Lawrence, as trustees.	(4.15) ⁽²¹⁾
3.4	Certificate of Trust of IM Capital Trust I.	(4.17) ⁽²¹⁾
4.1	Indenture for 8¹/4% Senior Subordinated Notes due 2011, dated April 26, 1999, by and among the Company, certain of its subsidiaries and The Bank of New York, as trustee.	(10.1) ⁽⁷⁾
4.2	Indenture for 8³/4% Senior Subordinated Notes due 2009, dated October 24, 1997, by and among the Company, certain of its subsidiaries and The Bank of New York, as trustee.	(4.1) ⁽²⁾
4.3	Indenture for 8¹/8% Senior Notes due 2008, dated as of April 7, 1998, by and among Iron Mountain Canada Corporation, as issuer, the Company and The Bank of New York, as trustee.	(4.1(c)) ⁽¹³⁾
4.4	Indenture for 8⁵/8% Senior Subordinated Notes due 2008, dated as of April 3, 2001, among the Company, the Guarantors named therein and The Bank of New York, as trustee.	(4.1) ⁽¹⁹⁾
4.5	First Supplemental Indenture, dated as of April 3, 2001, among the Company, the Guarantors named therein and The Bank of New York, as trustee.	(4.2) ⁽¹⁹⁾
4.6	Second Supplemental Indenture, dated as of September 14, 2001, among the Company, the Guarantors named therein and The Bank of New York, as trustee.	(4.7) ⁽²²⁾
4.7	Senior Subordinated Indenture for 7³/4% Senior Subordinated Notes due 2015 and 6⁵/8% Senior Subordinated Notes due 2016, dated as of December 30, 2002, among the Company, the Guarantors named therein and The Bank of New York, as trustee.	(4.7) ⁽²⁵⁾
4.8	First Supplemental Indenture, dated as of December 30, 2002, among the Company, the Guarantors named therein and the Trustee.	(4.8) ⁽²⁵⁾
4.9	Second Supplemental Indenture, dated as of June 20, 2003, among the Company, the Guarantors named therein and the Trustee.	(4.9) ⁽²⁷⁾
4.10	Form of stock certificate representing shares of Common Stock, $.01 par value per share, of the Company.	(4.1) ⁽¹⁴⁾
9	Amended and Restated Voting Trust Agreement, dated as of February 28, 1998, by and among the Company, certain shareholders of the Company and Leo W. Pierce, Sr. and J. Peter Pierce, as trustees.(#)	(9.0) ⁽¹²⁾

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10.1	Employment Agreement, dated as of February 1, 2000, by and between the Company and J. Peter Pierce.(#)	(10.5) ⁽¹⁵⁾
10.3	Iron Mountain Incorporated Executive Deferred Compensation Plan, as amended.(#)	(10.7) ⁽¹⁸⁾
10.4	Nonqualified Stock Option Plan of Pierce Leahy Corp.(#)	(10.3) ⁽¹¹⁾
10.5	Iron Mountain Incorporated 1997 Stock Option Plan, as amended.(#)	(10.9) ⁽¹⁸⁾
10.6	Iron Mountain/ATSI 1995 Stock Option Plan.(#)	(10.2) ⁽³⁾
10.7	Iron Mountain Incorporated 1995 Stock Incentive Plan, as amended.(#)	(10.3) ⁽⁶⁾
10.8	Iron Mountain Incorporated 2002 Stock Incentive Plan.(#)	(10.8) ⁽²⁵⁾
10.9	Form of Iron Mountain Incorporated Amended and Restated Non-Qualified Stock Option Agreement.(#)	Filed herewith as Exhibit 10.9
10.10	Form of Iron Mountain Incorporated Incentive Stock Option Agreement.(#)	Filed herewith as Exhibit 10.10
10.11	Form of Iron Mountain Incorporated 1995 Stock Incentive Plan Non-Qualified Stock Option Agreement.(#)	Filed herewith as Exhibit 10.11
10.12	Form of Iron Mountain Incorporated 1995 Stock Incentive Plan Amended and Restated Iron Mountain Non-Qualified Stock Option Agreement.(#)	Filed herewith as Exhibit 10.12
10.13	Form of Iron Mountain Incorporated 1995 Stock Incentive Plan Incentive Stock Option Agreement.(#)	Filed herewith as Exhibit 10.13
10.14	Form of Iron Mountain Incorporated 1995 Stock Incentive Plan Non-Qualified Stock Option Agreement.(#)	Filed herewith as Exhibit 10.14
10.15	Form of Iron Mountain Incorporated 1997 Stock Option Plan Stock Option Agreement.(#)	Filed herewith as Exhibit 10.15
10.16	Form of Iron Mountain Incorporated 1997 Stock Option Plan Stock Option Agreement.(#)	Filed herewith as Exhibit 10.16
10.17	Form of Iron Mountain Incorporated 2002 Stock Incentive Plan Stock Option Agreement.(#)	Filed herewith as Exhibit 10.17
10.18	Form of Iron Mountain Incorporated 2002 Stock Incentive Plan Stock Option Agreement.(#)	Filed herewith as Exhibit 10.18
10.19	Fifth Amended and Restated Credit Agreement dated as of March 15, 2002 among the Company, certain lenders party thereto and JPMorgan Chase Bank, as Administrative Agent.	(10.10) ⁽²²⁾
10.20	Amended and Restated Registration Rights Agreement, dated as of June 12, 1997, by and among the Company and certain shareholders of the Company.(#)	(10.1) ⁽¹⁾
10.21	Strategic Alliance Agreement, dated as of January 4, 1999, by and among the Company, Iron Mountain (U.K.) Limited, Britannia Data Management Limited and Mentmore Abbey plc.	(10.2) ⁽⁵⁾
10.22	Lease Agreement, dated as of October 1, 1998, between Iron Mountain Statutory Trust—1998 and IMRM.	(10.20) ⁽⁴⁾
10.23	Amendment No. 1 and Consent to Lease Agreement, dated March 15, 2002, between Iron Mountain Statutory Trust—1998 and IMIM	(10.1) ⁽²³⁾
10.24	Unconditional Guaranty, dated as of October 1, 1998, from the Company to Iron Mountain Statutory Trust—1998.	(10.21) ⁽⁴⁾
10.25	Amendment and Consent to Unconditional Guaranty, dated as of July 1, 1999, between the Company and Iron Mountain Statutory Trust—1998 and consented to by the lenders listed therein and the Bank of Nova Scotia, as Agent Bank for such lenders.	(10.1) ⁽⁸⁾
10.26	Amendment No. 2 and Consent to Unconditional Guaranty, dated as of October 22, 1999, between the Company and Iron Mountain Statutory Trust—1998, and consented to by the lenders listed therein and the Bank of Nova Scotia, as Agent Bank for such lenders.	(10.17) ⁽²²⁾
10.27	Amendment No. 3 and Consent to Unconditional Guaranty, dated as of January 31, 2000, between the Company and Iron Mountain Statutory Trust—1998, and consented to by the lenders listed therein and the Bank of Nova Scotia, as Agent Bank for such lenders.	(10.18) ⁽²²⁾
10.28	Amendment No. 4 and Consent to Unconditional Guaranty, dated as of August 15, 2000, between the Company and Iron Mountain Statutory Trust—1998, and consented to by the lenders listed therein and the Bank of Nova Scotia, as Agent Bank for such lenders.	(10.3) ⁽¹⁷⁾

106

10.29	Amendment No. 5 and Consent to Unconditional Guaranty, dated as of March 15, 2002 between the Company and Iron Mountain Statutory Trust—1998, and consented to by the lenders listed therein and the Bank of Nova Scotia, as Agent Bank for such lenders.	(10.2) ⁽²³⁾
10.30	Guaranty Letter, dated December 31, 2002, to Scotiabanc, Inc. from Iron Mountain Information Services, Inc., as Lessee and the Company as Guarantor.	(10.20) ⁽²⁵⁾
10.31	Amended and Restated Agency Agreement, dated October 1, 1998, by and between Iron Mountain Statutory Trust—1998 and IMRM.	(10.22) ⁽⁴⁾
10.32	Lease Agreement, dated as of July 1, 1999, by and between Iron Mountain Statutory Trust—1999 and IMRM.	(10.2) ⁽⁹⁾
10.33	Amendment No. 1 and Consent to Lease Agreement, dated March 15, 2002, between Iron Mountain Statutory Trust—1999 and IMIM.	(10.3) ⁽²³⁾
10.34	Agency Agreement, dated as of July 1, 1999, by and between Iron Mountain Statutory Trust—1999 and IMRM.	(10.1) ⁽⁹⁾
10.35	Unconditional Guaranty, dated as of July 1, 1999, from the Company to Iron Mountain Statutory Trust—1999.	(10.3) ⁽⁹⁾
10.36	Amendment No. 1 and Consent to Unconditional Guaranty, dated as of October 22, 1999, between the Company and Iron Mountain Statutory Trust—1999, and consented to by the lenders listed therein and Wachovia Capital Investments, Inc., as Agent Bank for such lenders.	(10.24) ⁽²²⁾
10.37	Amendment No. 2 and Consent to Unconditional Guaranty, dated as of January 31, 2000, between the Company and Iron Mountain Statutory Trust—1999, and consented to by the lenders listed therein and Wachovia Capital Investments, Inc., as Agent Bank for such lenders.	(10.25) ⁽²²⁾
10.38	Amendment No. 3 and Consent to Unconditional Guaranty, dated as of August 16, 2000, between the Company and Iron Mountain Statutory Trust—1999, and consented to by the lenders listed therein and Wachovia Capital Investments, Inc., as Agent Bank for such lenders.	(10.2) ⁽¹⁷⁾
10.39	Amendment No. 4 to Unconditional Guaranty, dated as of March 20, 2001 between the Company and Iron Mountain Statutory Trust—1999, and consented to by the lenders listed therein and Wachovia Capital Investments, Inc., as Agent Bank for such lenders.	(10.4) ⁽²³⁾
10.40	Amendment No. 5 and Unconditional Consent to Guaranty, dated as of March 15, 2002 between the Company and Iron Mountain Statutory Trust—1999, and consented to by the lenders listed therein and Wachovia Capital Investments, Inc., as Agent Bank for such lenders.	(10.5) ⁽²³⁾
10.41	Guaranty Letter, dated December 31, 2002, to BTM Capital and JH Equity Realty Investors, Inc., from Iron Mountain Information Services, Inc., as Lessee and the Company as Guarantor.	(10.31) ⁽²⁵⁾
10.42	Master Lease and Security Agreement, dated as of May 22, 2001, between Iron Mountain Statutory Trust—2001, as Lessor, and IMRM, as Lessee.	(10.1) ⁽²⁰⁾
10.43	Amendment No. 1 to Master Lease and Security Agreement, dated as of November 1, 2001 between Iron Mountain Statutory Trust—2001, as Lessor, and IMRM, as Lessee.	(10.28) ⁽²²⁾
10.44	Amendment to Master Lease and Security Agreement and Unconditional Guaranty, dated March 15, 2002, between Iron Mountain Statutory Trust—2001, IMIM and the Company.	(10.6) ⁽²³⁾
10.45	Unconditional Guaranty, dated as of May 22, 2001, from the Company, as Guarantor, to Iron Mountain Statutory Trust—2001, as Lessor.	(10.2) ⁽²⁰⁾
10.46	Subsidiary Guaranty, dated as of May 22, 2001, from certain subsidiaries of the Company as guarantors, for the benefit of Iron Mountain Statutory Trust—2001 and consented to by Bank of Nova Scotia.	(10.36) ⁽²⁵⁾
10.47	Guaranty Letter, dated December 31, 2002, to Scotiabanc, Inc. from Iron Mountain Information Services, Inc., as Lessee and the Company as Guarantor.	(10.37) ⁽²⁵⁾
10.48	Master Construction Agency Agreement, dated as of May 22, 2001, between Iron Mountain Statutory Trust—2001, as Lessor, and IMRM, as Construction Agent.	(10.3) ⁽²⁰⁾

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10.49	First Amendment, dated as of July 9, 2003, to the Fifth Amended and Restated Credit Agreement, dated as of March 15, 2002, among the Company, certain lenders party thereto and J.P. Morgan Chase Bank, as Administrative Agent.	(10.1) ⁽²⁶⁾
10.50	Multi-Currency Term, Revolving Credit Facilities Agreement, dated as of March 2004, among Iron Mountain Europe Limited, certain lenders party thereto, Barclays Capital and The Governor and Company of the Bank of Scotland, as arrangers, and The Bank of Scotland as the facility agent, security trustee and letter of credit issuing bank.	(10.40) ⁽²⁷⁾
10.51	Sixth Amended and Restated Credit Agreement dated as of April 2, 2004 among the Company, Iron Mountain Canada Corporation, certain lenders party thereto, Fleet National Bank, as Syndication Agent, Wachovia Bank, National Association and The Bank of Nova Scotia, as Co-Documentation Agents, J.P. Morgan Securities Inc., as arranger and bookrunner, JPMorgan Chase Bank, Toronto Branch as Canadian Administrative Agent and JPMorgan Chase Bank, as Administrative Agent.	(10.1) ⁽²⁹⁾
10.52	Seventh Amended and Restated Credit Agreement dated as of July 8, 2004 among the Company, Iron Mountain Canada Corporation, certain lenders party thereto, Fleet National Bank, as Syndication Agent, Wachovia Bank, National Association and The Bank of Nova Scotia, as Co-Documentation Agents, J.P. Morgan Securities Inc., as lead arranger and bookrunner, JPMorgan Chase Bank, Toronto Branch as Canadian Administrative Agent and JPMorgan Chase Bank, as Administrative Agent.	(10.1) ⁽³⁰⁾
10.53	Letter Agreement, dated December 8, 2004 and revised December 16, 2004, between Iron Mountain Records Management and Peter Delle Donne regarding severance benefits.	Filed herewith as Exhibit 10.53
12	Statement re: Computation of Ratios.	Filed herewith as Exhibit 12
16	Letter from Arthur Andersen LLP to the Securities and Exchange Commission, dated June 19, 2002, regarding the change in the Company's certifying accountant.	(16.1) ⁽²⁴⁾
21	Subsidiaries of the Company.	Filed herewith as Exhibit 21
23.1	Consent of Deloitte & Touche LLP (Iron Mountain Incorporated, Pennsylvania).	Filed herewith as Exhibit 23.1
23.2	Consent of RSM Robson Rhodes (Iron Mountain Europe Limited).	Filed herewith as Exhibit 23.2
23.3	Notice Regarding Consent of Arthur Andersen LLP.	(23.3) ⁽²⁵⁾
31.1	Certification required by Rule 13a-14(a)/15(d)-14(a) of the Securities Exchange Act of 1934, as amended.	Filed herewith as Exhibit 31.1
31.2	Certification required by Rule 13a-14(a)/15(d)-14(a) of the Securities Exchange Act of 1934, as amended.	Filed herewith as Exhibit 31.2
32.1	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.	Furnished herewith as Exhibit 32.1
32.2	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.	Furnished herewith as Exhibit 32.2

(1): Filed as an Exhibit to Iron Mountain/DE's Quarterly Report on Form 10-Q for the quarter ended June 30, 1997, filed with the Commission, File No. 0-27584.
(2): Filed as an Exhibit to Iron Mountain/DE's Current Report on Form 8-K dated October 30, 1997, filed with the Commission, File No. 0-27584.
(3): Filed as an Exhibit to Iron Mountain/DE's Current Report on Form 8-K dated March 9, 1998, filed with the Commission, File No. 0-27584.
(4): Filed as an Exhibit to Iron Mountain/DE's Registration Statement No. 333-67765, filed with Commission on November 23, 1998.
(5): Filed as an Exhibit to Iron Mountain/DE's Current Report on Form 8-K dated January 19, 1999, filed with the Commission, File No. 0-27584.
(6): Filed as an Exhibit to Iron Mountain/DE's Current Report on Form 8-K dated April 16, 1999, filed with the Commission, File No. 0-27584.

108

(7): Filed as an Exhibit to Iron Mountain/DE's Current Report of Form 8-K dated May 11, 1999, filed with the Commission, File No. 0-27584.
(8): Filed as an Exhibit to Iron Mountain/DE's Quarterly Report on Form 10-Q for the quarter ended June 30, 1999, filed with the Commission, File No. 0-27584.
(9): Filed as an Exhibit to Iron Mountain/DE's Quarterly Report on Form 10-Q for the quarter ended September 30, 1999, filed with the Commission, File No. 1-14937.
(10): Filed as an Exhibit to Pierce Leahy's Current Report on Form 8-K, dated October 20, 1999, filed with the Commission, File No.1-13045.
(11): Filed as an Exhibit Amendment No. 1 to Pierce Leahy's Registration Statement No. 333-9963, filed with the Commission on October 4, 1996.
(12): Filed as an Exhibit to Pierce Leahy's Annual Report on Form 10-K for the year ended December 31, 1997, filed with the Commission, File No. 333-09963.
(13): Filed as an Exhibit to Pierce Leahy's Registration Statement No. 333-58569, filed with the Commission on July 6, 1998.
(14): Filed as an Exhibit to the Company's Current Report on Form 8-K dated February 1, 2000, filed with the Commission, File No. 1-13045.
(15): Filed as an Exhibit to the Company's Annual Report on Form 10-K405 for the year ended December 31, 1999, filed with the Commission, File No. 1-13045.
(16): Filed as an Exhibit to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2000, filed with the Commission, File No. 1-13045.
(17): Filed as an Exhibit to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2000, filed with the Commission, File No. 1-13045.
(18): Filed as an Exhibit to the Company's Annual Report on Form 10-K for the year ended December 31, 2000, filed with the Commission, File No. 1-13045.
(19): Filed as an Exhibit to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2001, filed with the Commission, File No. 1-13045.
(20): Filed as an Exhibit to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2001, filed with the Commission, File No. 1-13045.
(21): Filed as an Exhibit to the Company's Registration Statement No. 333-75068, filed with the Commission on December 13, 2001.
(22): Filed as an Exhibit to the Company's Annual Report on Form 10-K for the year ended December 31, 2001, filed with the Commission, File No. 1-13045.
(23): Filed as an Exhibit to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2002, filed with the Commission, File No. 1-13045.
(24): Filed as an Exhibit to the Company's Current Report on Form 8-K dated June 19, 2002, filed with the Commission, File No. 1-13045.
(25): Filed as an Exhibit to the Company's Annual Report on Form 10-K for the year ended December 31, 2002, filed with the Commission, File No. 1-13045.
(26): Filed as an Exhibit to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2003, filed with the Commission, File No. 1-13045.
(27): Filed as an Exhibit to the Company's Annual Report on Form 10-K for the year ended December 31, 2003, filed with the Commission, File No. 1-13045.
(28): Filed as an Exhibit to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2004, filed with the Commission, File No. 1-13045.
(29): Filed as an Exhibit to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2004, filed with the Commission, File No. 1-13045.
(30): Filed as an Exhibit to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2004, filed with the Commission, File No. 1-13045.

109

EX-10.9 2 a2152867zex-10_9.txt EXHIBIT 10.9 / EXHIBIT 10.9 IRON MOUNTAIN INCORPORATED AMENDED AND RESTATED NON-QUALIFIED STOCK OPTION AGREEMENT This Amended and Restated Non-Qualified Stock Option Agreement and the attached Non-Qualified Stock Option Schedule (together the "Option Agreement") made as of this ___ day of ________, 19___ (the "Effective Date") by and between Iron Mountain Incorporated, a Delaware corporation (the "Company"), and the individual identified on the Non-Qualified Stock Option Schedule attached hereto (the "Optionee") constitute a consolidated amendment and restatement of each outstanding Non-Qualified Stock Option Agreement by and between Safesite Records Management Corporation ("Safesite") and the Optionee (each an "Old Agreement" and collectively, the "Old Agreements"). WITNESSETH THAT: WHEREAS, Safesite, has in the past issued one or more non-qualified stock options to the Optionee; and WHEREAS, the Company has instituted the Iron Mountain Incorporated 1995 Stock Incentive Plan, as amended (the "Plan"), a copy of which is attached hereto and incorporated herein; and WHEREAS, on June 12, 1997, Safesite merged with and into Iron Mountain/Safesite, Inc., a Delaware corporation wholly owned by the Company; and WHEREAS, the Company and the Optionee agree that it is desirable to issue options pursuant to a new agreement under the Plan that represent an amendment, restatement and consolidation of all outstanding options issued by Safesite to the Optionee; and WHEREAS, the Company and the Optionee agree that each such option shall be issued pursuant to and subject to the terms and conditions of the Plan; NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements herein contained and for other good and valuable consideration the receipt and adequacy of which are hereby acknowledged, the Company and the Optionee agree as follows: 1. FORM OF OPTION. The Company hereby affirms that as of the Effective Date the Optionee holds outstanding stock options (each an "Option") to purchase from the Company shares of its Common Stock ("Stock") in the amounts indicated on Line I of the attached Non-Qualified Stock Option Schedule (the "Schedule"). No Option evidenced by this Option Agreement is intended to be an incentive stock option or to qualify for special federal income tax treatment under Section 422 of the Internal Revenue Code of 1986, as amended. 2. OPTION PRICE. Each Option may be exercised at the Exercise Price specified for such Option on Line J of the Schedule, subject to adjustment as provided herein and in the Plan. 3. TERM AND EXERCISABILITY OF OPTION. Each Option will expire ten (10) years from the original grant date of such Option, as specified in the Schedule (the "Original Grant Date"), unless the Option earlier expires under this Section 3. At any time before its expiration, an Option may be exercised to the extent set forth on Line H of the Schedule, provided that: (a) at the time of exercise the Optionee is not in violation of any Employee Confidentiality and Non-Competition Agreement with the Company; and (b) the Optionee's employment or other contractual relationship with the Company ("Relationship") must be in effect on a given date in order for any additional vesting as set forth on Line H of the Schedule to become effective; and (c) no Option may be exercised after the sixtieth (60th) day following the date of termination of the Relationship between the Optionee and the Company, except that if the Relationship terminates by reason of the Optionee's death or total and permanent disability (as determined by the Board on the basis of medical advice satisfactory to it), the unexercised portion of each Option that is otherwise exercisable on the date of termination of the Relationship shall remain exercisable thereafter for no less than one (1) year. Subsection (a) shall not apply to an Optionee if the Optionee's Relationship with the Company is terminated on or before the first anniversary of the Effective Date. For purposes of this Section 3, the term "Company" refers to the Company and all Subsidiaries. 4. METHOD OF EXERCISE. To the extent that the right to purchase shares of Stock has accrued hereunder, each Option may be exercised from time to time by written notice to the Company, substantially in the form attached hereto as Exhibit 1, stating the number of shares with respect to which the Option is being exercised, and accompanied by either (a) payment in full of the option price for the number of shares to be delivered, by means of payment acceptable to the Company in accordance with Section 5(c) of the Plan, or (b) a description of a "cashless exercise" procedure and such other documents and undertakings as are necessary to satisfy that procedure. As soon as practicable after its receipt of such notice, the Company shall, without transfer or issue tax to the Optionee (or other person entitled to exercise the Option), deliver to the Optionee (or other person entitled to exercise the Option), at the principal executive offices of the Company or such other place as shall be mutually acceptable, a certificate or certificates for such shares out of theretofore authorized but unissued shares or reacquired shares of its Stock as the Company may elect; provided, however, that the time of such delivery may be postponed by the Company for such period as may be required for it with reasonable diligence to comply with any applicable requirements of law. Payment of the option price may be made in cash or cash equivalents, or, in accordance with the terms and conditions of Section 5(c) of the Plan, in whole or in part in shares of Stock of the Company; provided, however, that the Board reserves the right upon receipt of any written notice of exercise from the Optionee to require payment in cash with respect to the shares contemplated in such notice; and provided, further, that the Optionee may not make payment in shares of Stock that he acquired upon the earlier exercise of any incentive stock option, unless he has held the shares until at least two (2) years after the date the incentive stock option was granted and at least one (1) year after the date the incentive stock option was exercised. If the Optionee (or other person entitled to exercise the Option) fails to pay for and accept delivery of all of the shares specified in such notice upon tender of delivery - 2 - thereof, his right to exercise the Option with respect to such shares not paid for may be terminated by the Company. The Committee may, in its discretion at the time of exercise of the Option, grant to the Optionee a new option (a "Reload Option") to permit the Optionee to purchase that number of shares of Stock delivered by the Optionee to the Company in full or partial payment of the option price, or in full or partial payment of the tax withholding obligations incurred on account of the exercise of the Option, on such terms and conditions as the Committee may determine under the terms of the Plan. The option price for shares subject to a Reload Option shall be not less than one hundred percent (100%) of the fair market value of the shares on the date of grant of the Reload Option, and the duration of a Reload Option shall be equal to the unexpired term of the exercised Option on the date of exercise. 5. WITHHOLDING TAXES. The Optionee hereby agrees, as a condition to any exercise of an Option, to provide to the Company an amount sufficient to satisfy its obligation to withhold certain federal, state and local taxes arising by reason of such exercise (the "Withholding Amount"), if any, by (a) authorizing the Company to withhold the Withholding Amount from his cash compensation, or (b) remitting the Withholding Amount to the Company in cash; provided that to the extent that the Withholding Amount is not provided by one or a combination of such methods, the Company may at its election withhold from the Stock delivered upon exercise of an Option that number of shares having a fair market value, on the date of exercise, sufficient to eliminate any deficiency in the Withholding Amount. 6. NON-ASSIGNABILITY OF OPTION. No Option shall be assignable or transferable by the Optionee except by will or by the laws of descent and distribution. During the life of the Optionee, each Option shall be exercisable only by him, or by a conservator or guardian duly appointed for him by reason of his incapacity, or by the person appointed by the Optionee in a durable power of attorney acceptable to the Company's counsel. 7. COMPLIANCE WITH SECURITIES ACT; LOCK-UP AGREEMENT. The Company shall not be obligated to sell or issue any shares of Stock or other securities pursuant to the exercise of an Option unless the shares of Stock or other securities with respect to which the Option is being exercised are at that time effectively registered or exempt from registration under the Securities Act of 1933, as amended, and applicable state securities laws. In the event shares or other securities shall be issued which shall not be so registered, the Optionee hereby represents, warrants and agrees that he will receive such shares or other securities for investment and not with a view to their resale or distribution, and will execute an appropriate investment letter satisfactory to the Company and its counsel. The Optionee further hereby agrees that as a condition precedent to the purchase of shares upon exercise of an Option, he will execute an agreement in a form acceptable to the Company to the effect that the shares shall be subject to any underwriter's lock-up agreement in connection with a public offering of any securities of the Company that may from time to time apply to shares held by officers and employees of the Company, and such agreement or a successor agreement must be in full force and effect. 8. LEGENDS. The Optionee hereby acknowledges that the stock certificate or certificates evidencing shares of Stock or other securities issued pursuant to any exercise of an Option may bear a legend setting forth the restrictions on their transferability described in Section 7 hereof. - 3 - 9. RIGHTS AS STOCKHOLDER. The Optionee shall have no rights as a stockholder with respect to any shares covered by an Option until the date of issuance of a stock certificate to him for such shares. No adjustment shall be made for dividends or other rights for which the record date is prior to the date such stock certificate is issued. 10. TERMINATION OR AMENDMENT OF PLAN. The Board may terminate or amend the Plan at any time. No such termination or amendment will affect rights and obligations under an Option to the extent it is then in effect and unexercised. 11. EFFECT UPON EMPLOYMENT. Nothing in any Option or the Plan shall be construed to impose any obligation upon the Company or any Subsidiary, as defined in the Plan, to employ the Optionee or to retain the Optionee in its employ or to engage or retain the services of the Optionee. 12. TIME FOR ACCEPTANCE. Unless the Optionee shall evidence his acceptance of this Option by execution of the Schedule within thirty (30) days after its delivery to him, this Option Agreement shall be null and void. 13. RIGHT OF REPAYMENT. In the event that the Optionee accepts employment with a competitor of the Company within two (2) years after the date of exercise of an Option or any portion of it, the Optionee shall pay to the Company an amount equal to the excess of the fair market value of the shares as to which the Option was exercised on that date, over the price paid for such shares; provided, however, that the Committee in its discretion may release the Optionee from the requirement to make such payment, if the Committee determines that the Optionee's acceptance of such employment is not inimical to the best interests of the Company. The Company may deduct the amount of payment due under the preceding sentence from any compensation or other amount payable by the Company to the Optionee. This Section 13 shall not apply to an Optionee if the Optionee's Relationship with the Company is terminated on or before the first anniversary of the Effective Date. For purposes of this Section 13, the term "Company" refers to the Company and all Subsidiaries. 14. GENERAL PROVISIONS. (a) AMENDMENT; WAIVERS. This Option Agreement, including the Plan, contains the full and complete understanding and agreement of the parties hereto as to the subject matter hereof, and except as otherwise permitted by the express terms of the Plan and this Option Agreement, it may not be modified or amended, nor may any provision hereof be waived, without a further written agreement duly signed by each of the parties; provided, however, that a modification or amendment that does not materially diminish the rights of the Optionee hereunder, as they may exist immediately before the effective date of the modification or amendment, shall be effective upon written notice of its provisions to the Optionee. The waiver by either of the parties hereto of any provision hereof in any instance shall not operate as a waiver of any other provision hereof or in any other instance. - 4 - (b) BINDING EFFECT. This Option Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective heirs, executors, administrators, representatives, successors and assigns. (c) GOVERNING LAW. This Option Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts. (d) CONSTRUCTION. This Option Agreement is to be construed in accordance with the terms of the Plan. In case of any conflict between the Plan and this Option Agreement, the Plan shall control. The titles of the sections of this Option Agreement and of the Plan are included for convenience only and shall not be construed as modifying or affecting their provisions. The masculine gender shall include both sexes; the singular shall include the plural and the plural the singular unless the context otherwise requires. (e) NOTICES. Any notice in connection with this Option Agreement shall be deemed to have been properly delivered if it is in writing and is delivered in hand or by facsimile or sent by registered mail, postage prepaid, to the party addressed as follows, unless another address has been substituted by notice so given: To the Optionee: To his address as set forth on the Schedule To the Company: Iron Mountain Incorporated 745 Atlantic Avenue Boston, Massachusetts 02111 Attn: Chief Financial Officer Copy to: Sullivan & Worcester LLP One Post Office Square Boston, Massachusetts 02109 Attn: David A. Guadagnoli, Esq. IN WITNESS WHEREOF, the Company has caused this Option Agreement to be executed by its officer thereunto duly authorized, and its corporate seal to be affixed as of the date set forth below. (Corporate Seal) IRON MOUNTAIN INCORPORATED By: ------------------------ Title: --------------------- Attest: - ---------------------- Secretary - 5 - Exhibit 1 to Amended and Restated Non-Qualified Stock Option Agreement Iron Mountain Incorporated 745 Atlantic Avenue Boston, Massachusetts 02111 RE: EXERCISE OF NON-QUALIFIED OPTION UNDER IRON MOUNTAIN INCORPORATED 1995 STOCK INCENTIVE PLAN Gentlemen: The undersigned hereby elects to exercise the stock option granted to ___________ on _______________, 19__ by and to the extent of purchasing ________ shares of the Common Stock of Iron Mountain Incorporated for the option price of $_________ per share, subject to the terms and conditions of the Amended and Restated Non-Qualified Stock Option Agreement and Non-Qualified Stock Option Schedule between _________________ and Iron Mountain Incorporated dated as of _________, 19__ (together the "Agreement"). The undersigned encloses herewith payment, in cash or in such other property as is permitted under the Plan, of the purchase price for said shares. IF THE UNDERSIGNED IS MAKING PAYMENT OF ANY PART OF THE PURCHASE PRICE BY DELIVERY OF SHARES OF STOCK OF IRON MOUNTAIN INCORPORATED, HE HEREBY CONFIRMS THAT HE HAS INVESTIGATED AND CONSIDERED THE POSSIBLE INCOME TAX CONSEQUENCES TO HIM OF MAKING SUCH PAYMENTS IN THAT FORM. The undersigned hereby agrees to provide to Iron Mountain Incorporated an amount sufficient to satisfy its obligation to withhold certain taxes, in accordance with the Agreement. The undersigned hereby agrees to execute any securities lock-up agreement currently in effect between one or more underwriters and shareholders of the Company who are officers or employees of the Company or its Subsidiary, and any successor to that agreement, with regard to the shares acquired upon this exercise of a stock option granted under the Plan. The undersigned hereby specifically confirms to Iron Mountain Incorporated that he is acquiring the shares for investment and not with a view to their sale or distribution, and that the shares shall be held subject to all of the terms and conditions of the Stock Option Agreement. Very truly yours, - ----------------------- -------------------------------------- Date (Signed by --------------------------- or other party duly exercising option) - 6 - EX-10.10 3 a2152867zex-10_10.txt EXHIBIT 10.10 EXHIBIT 10.10 Grant No:[[Grantno]] IRON MOUNTAIN INCORPORATED INCENTIVE STOCK OPTION AGREEMENT This Agreement made as of this [[Dayth]] day of [[Month]], 199[[yr]] by and between Iron Mountain Incorporated, a Delaware corporation (the "Company"), and [[FullName]] (the "Optionee"). WITNESSETH THAT: WHEREAS, the Company has instituted a program entitled "Iron Mountain Incorporated 1995 Stock Incentive Plan," as amended (the "Plan"); and WHEREAS, the Board of Directors of the Company (the "Board"), upon the recommendation of the Stock Incentive Plan Subcommittee of the Compensation Committee, has authorized the grant of stock options upon certain terms and conditions set forth below; and WHEREAS, the Board has authorized the grant of this stock option pursuant and subject to the terms of the Plan, a copy of which is attached hereto and incorporated herein; and WHEREAS, the Board has designated this stock option an incentive stock option in accordance with Section 5 of the Plan; NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements herein contained, the Company and the parties hereto agree as follows: 1. GRANT. Subject to the terms of the Plan and this Agreement, the Company hereby grants to the Optionee a stock option (the "Option") to purchase from the Company [[Shares]] shares of its Common Stock ("Stock"). This Option is intended to constitute an "incentive stock option" within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"). 2. OPTION PRICE. This Option may be exercised at the option price of[[Price]]per share of Stock, subject to adjustment as provided herein and in the Plan. 3. TERM AND EXERCISABILITY OF OPTION. This Option shall expire on the earlier of [[yrs10]] or the last day of the exercise period determined pursuant to subsection (c) of this Section 3. At any time before its expiration, this Option may be exercised to the extent set forth in the following schedule, provided that: (a) at the time of exercise the Optionee is not in violation of any Employee Confidentiality and Non-Competition Agreement with the Company or a Subsidiary; and (b) the Optionee's employment or other contractual relationship with the Company or a Subsidiary ("Relationship") must be in effect on a given date in order for any scheduled increment in the exercisable portion of the option to become effective; and (c) this Option may not be exercised after the sixtieth (60th) day following the date of termination of the Relationship between the Optionee and the Company, except that if the Relationship terminates by reason of the Optionee's death or total and permanent disability (as determined by the Board on the basis of medical advice satisfactory to it), the unexercised portion of the option that is otherwise exercisable on the date of termination of the Relationship shall remain exercisable thereafter for no less than one (1) year. For purposes of this subsection (c), the term "Company" refers to the Company and all Subsidiaries. Percentage of Total Option

4. METHOD OF EXERCISE. To the extent that the right to purchase shares of Stock has accrued hereunder, this Option may be exercised from time to time by written notice to the Company, substantially in the form attached hereto as Exhibit 1, stating the number of shares with respect to which this Option is being exercised, and accompanied by either (a) payment in full of the option price for the number of shares to be delivered, by means of payment acceptable to the Company in accordance with Section 5(c) of the Plan, or (b) a description of a "cashless exercise" procedure and such other documents and undertakings as are necessary to satisfy that procedure. As soon as practicable after its receipt of such notice, the Company shall, without transfer or issue tax to the Optionee (or other person entitled to exercise this Option), deliver to the Optionee (or other person entitled to exercise this Option), at the principal executive offices of the Company or such other place as shall be mutually acceptable, a certificate or certificates for such shares out of theretofore authorized but unissued shares or reacquired shares of its Stock as the Company may elect; provided, however, that the time of such delivery may be postponed by the Company for such period as may be required for it with reasonable diligence to comply with any applicable requirements of law. Payment of the option price may be made in cash or cash equivalents, or, in accordance with the terms and conditions of Section 5(c) of the Plan, in whole or in part in shares of Common Stock of the Company; provided, however, that the Board reserves the right upon receipt of any written notice of exercise from the Optionee to require payment in cash with respect to the shares contemplated in such notice; and provided, further, - 2 - that the Optionee may not make payment in shares of Stock that he acquired upon the earlier exercise of any incentive stock option, unless he has held the shares until at least two (2) years after the date the incentive stock option was granted and at least one (1) year after the date the incentive stock option was exercised. If the Optionee (or other person entitled to exercise this Option) fails to pay for and accept delivery of all of the shares specified in such notice upon tender of delivery thereof, his right to exercise this Option with respect to such shares not paid for may be terminated by the Company. The Committee may, in its discretion at the time of exercise of the Option, grant to the Optionee a new option (a "Reload Option") to permit the Optionee to purchase that number of shares of Stock delivered by the Optionee to the Company in full or partial payment of the option price, on such terms and conditions as the Committee may determine under the terms of the Plan. The option price for shares subject to a Reload Option shall be not less than one hundred percent (100%) of the fair market value of the shares on the date of grant of the Reload Option, and the duration of a Reload Option shall be equal to the unexpired term of the exercised Option on the date of exercise. 5. NON-ASSIGNABILITY OF OPTION. This Option shall not be assignable or transferable by the Optionee except by will or by the laws of descent and distribution. During the life of the Optionee, this Option shall be exercisable only by him, or by a conservator or guardian duly appointed for him by reason of his incapacity, or by the person appointed by the Optionee in a Durable Power of Attorney acceptable to the Company's counsel. 6. COMPLIANCE WITH SECURITIES ACT; LOCK-UP AGREEMENT. The Company shall not be obligated to sell or issue any shares of Stock or other securities pursuant to the exercise of this Option unless the shares of Stock or other securities with respect to which this Option is being exercised are at that time effectively registered or exempt from registration under the Securities Act of 1933, as amended, and applicable state securities laws. In the event shares or other securities shall be issued which shall not be so registered, the Optionee hereby represents, warrants and agrees that he will receive such shares or other securities for investment and not with a view to their resale or distribution, and will execute an appropriate investment letter satisfactory to the Company and its counsel. The Optionee further hereby agrees that as a condition precedent to the purchase of shares upon exercise of this Option, he will execute an agreement in a form acceptable to the Company to the effect that the shares shall be subject to any underwriter's lock-up agreement in connection with a public offering of any securities of the Company that may from time to time apply to shares held by officers and employees of the Company, and such agreement or a successor agreement must be in full force and effect. 7. LEGENDS. The Optionee hereby acknowledges that the stock certificate or certificates evidencing shares of Stock or other securities issued pursuant to any exercise of this Option will bear a legend setting forth the restrictions on their transferability described in Section 6 hereof. 8. RIGHTS AS STOCKHOLDER. The Optionee shall have no rights as a stockholder with respect to any shares covered by this Option until the date of issuance of a stock certificate to him for such shares. No adjustment shall be made for dividends or other rights for which the record date is prior to the date such stock certificate is issued. - 3 - 9. TERMINATION OR AMENDMENT OF PLAN. The Board may terminate or amend the Plan at any time. No such termination or amendment will affect rights and obligations under this Option, to the extent it is then in effect and unexercised. 10. EFFECT UPON EMPLOYMENT. Nothing in this Option or the Plan shall be construed to impose any obligation upon the Company to retain the Optionee in its employ. 11. TIME FOR ACCEPTANCE. Unless the Optionee shall evidence his acceptance of this Option by execution of this Agreement within thirty (30) days after its delivery to him, the Option and this Agreement shall be null and void. 12. RIGHT OF REPAYMENT. In the event that he accepts employment with a competitor of the Company within two (2) years after the date of exercise of this Option or any portion of it, the Optionee shall pay to the Company an amount equal to the excess of the fair market value of the shares as to which the Option was exercised on that date, over the price paid for such shares; provided, however, that the Committee in its discretion may release the Optionee from the requirement to make such payment, if the Committee determines that the Optionee's acceptance of such employment is not inimical to the best interests of the Company. The Company may deduct from any compensation or other amount payable by the Company to the Optionee the amount of payment due under the preceding sentence. For purposes of this Section 12, the term "Company" refers to the Company and all Subsidiaries. 13. GENERAL PROVISIONS. (a) AMENDMENT; WAIVERS. This Agreement, including the Plan, contains the full and complete understanding and agreement of the parties hereto as to the subject matter hereof, and except as otherwise permitted by the express terms of the Plan and this Agreement, it may not be modified or amended, nor may any provision hereof be waived, without a further written agreement duly signed by each of the parties; provided, however, that a modification or amendment that does not materially diminish the rights of the Optionee hereunder, as they may exist immediately before the effective date of the modification or amendment, shall be effective upon written notice of its provisions to the Optionee. The waiver by either of the parties hereto of any provision hereof in any instance shall not operate as a waiver of any other provision hereof or in any other instance. (b) BINDING EFFECT. This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective heirs, executors, administrators, representatives, successors and assigns. (c) GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts. (d) CONSTRUCTION. This Agreement is to be construed in accordance with the terms of the Plan. In case of any conflict between the Plan and this Agreement, the Plan shall control. The titles of the sections of this Agreement and of the Plan are included for convenience only and shall not be construed as modifying or affecting their provisions. - 4 - The masculine gender shall include both sexes; the singular shall include the plural and the plural the singular unless the context otherwise requires. (e) NOTICES. Any notice in connection with this Agreement shall be deemed to have been properly delivered if it is in writing and is delivered in hand or by facsimile or sent by registered mail, postage prepaid, to the party addressed as follows, unless another address has been substituted by notice so given: To the Optionee: To his address as set forth on the signature page hereof. To the Company: Iron Mountain Incorporated 745 Atlantic Avenue Boston, Massachusetts 02111 Attn: Chief Financial Officer Copy to: Sullivan & Worcester LLP One Post Office Square Boston, Massachusetts 02109 Attn: David A. Guadagnoli, Esq. IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its officer thereunto duly authorized, and its corporate seal to be affixed as of the date set forth below. Date of grant:[[Month]][[Day]], 199[[yr]] IRON MOUNTAIN INCORPORATED By: --------------------------- Title: --------------------- (Corporate Seal) Attest: - ------------------------ Secretary - 5 - Grant No.:[[Grantno]] A C C E P T A N C E I hereby accept the foregoing Option in accordance with its terms and conditions and in accordance with the terms and conditions of the Iron Mountain Incorporated 1995 Stock Incentive Plan. - ---------------------- ---------------------------------- Date (Signature of[[FullName]]) Notice Address: - ----------------- - ----------------- - ----------------- - 6 - EXHIBIT 1 to Incentive Stock Option Agreement Iron Mountain Incorporated 745 Atlantic Avenue Boston, Massachusetts 02111 RE: EXERCISE OF INCENTIVE STOCK OPTION UNDER IRON MOUNTAIN INCORPORATED 1995 STOCK INCENTIVE PLAN Gentlemen: Please take notice that the undersigned hereby elects to exercise the stock option granted to [[FullName]] on [[Month]] [[Day]], 199[[yr]] by and to the extent of purchasing _______shares of the Common Stock of Iron Mountain Incorporated, for the option price of [[Price]] per share, subject to the terms and conditions of the Incentive Stock Option Agreement between [[FullName]] and Iron Mountain Incorporated dated as of [[Month]] [[Day]], 199[[yr]] (the "Agreement"). The undersigned encloses herewith payment, in cash or in such other property as is permitted under the Plan, of the purchase price for said shares. IF THE UNDERSIGNED IS MAKING PAYMENT OF ANY PART OF THE PURCHASE PRICE BY DELIVERY OF SHARES OF STOCK OF IRON MOUNTAIN INCORPORATED, HE HEREBY CONFIRMS THAT HE HAS INVESTIGATED AND CONSIDERED THE POSSIBLE INCOME TAX CONSEQUENCES TO HIM OF MAKING SUCH PAYMENTS IN THAT FORM. The undersigned hereby agrees to execute any securities lock-up agreement currently in effect between one or more underwriters and shareholders of the Company who are officers or employees of the Company or its Subsidiary, and any successor to that agreement, with regard to the shares acquired upon this exercise of a stock option granted under the Plan. The undersigned hereby specifically confirms to Iron Mountain Incorporated that he is acquiring the shares for investment and not with a view to their sale or distribution, and that the shares shall be held subject to all of the terms and conditions of the Agreement. Very truly yours, - -------------------------- -------------------------------- Date (Signed by[[FullName]] or other party duly exercising option) - 7 - EX-10.11 4 a2152867zex-10_11.txt EXHIBIT 10.11 EXHIBIT 10.11 IRON MOUNTAIN INCORPORATED IRON MOUNTAIN INCORPORATED 1995 STOCK INCENTIVE PLAN NON-QUALIFIED STOCK OPTION AGREEMENT This Non-Qualified Stock Option Agreement and the attached Non-Qualified Stock Option Schedule (together, the "Option Agreement") made as of the "Date of Grant" on the attached Non-Qualified Stock Option Schedule (the "Schedule") by and between Iron Mountain Incorporated, a Delaware corporation (the "Company"), and the Optionee. WITNESSETH THAT: WHEREAS, the Company has instituted the "Iron Mountain Incorporated 1995 Stock Incentive Plan," as amended (the "Plan"); and WHEREAS, the Stock Incentive Plan Subcommittee of the Compensation Committee (the "Subcommittee") has authorized the grant of a stock option upon the terms and conditions set forth below and pursuant to the Plan, a copy of which is attached hereto and incorporated herein; and WHEREAS, the Subcommittee has designated this stock option a non-qualified option in accordance with Section 5 of the Plan; NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements herein contained and for other good and valuable consideration the receipt and adequacy of which are hereby acknowledged, the Company and the Optionee agree as follows. 1. GRANT. Subject to the terms of the Plan and this Option Agreement, the Company hereby grants to the Optionee a stock option (the "Option") to purchase from the Company the amount of Common Stock ("Stock") shown as the "Total Number of Shares" on the Schedule. This Option is not intended to be an incentive stock option or to qualify for special federal income tax treatment under Section 422 of the Code. 2. EXERCISE PRICE. This Option may be exercised at the "Exercise Price Per Share" shown on the Schedule, subject to adjustment as provided herein and in the Plan. 3. TERM AND EXERCISABILITY OF OPTION. Unless sooner terminated pursuant to the Plan or this Section 3, this Option shall expire on the last day of the exercise period shown on the Schedule. This Option may be exercised to the extent vested, as shown on the Schedule, provided that: (a) at the time of exercise the Optionee is not in violation of any Employee Confidentiality and Non-Competition Agreement with the Company; (b) the Optionee's employment, contractual or other service relationship with the Company ("Relationship") must be in effect on a given date in order for any scheduled increment in vesting, as set forth in the "Vesting Schedule" on the Schedule, to become effective; and (c) this Option may not be exercised after the sixtieth (60th) day following the date of termination of the Relationship between the Optionee and the Company, except that if the Relationship terminates by reason of the Optionee's death or total and permanent disability (as determined by the Board on the basis of medical advice satisfactory to it), the unexercised portion of the option that is otherwise exercisable on the date of termination of the Relationship shall remain exercisable thereafter for one (1) year. For purposes of this Section 3, the term "Company" refers to the Company and all Subsidiaries. 4. METHOD OF EXERCISE. Prior to its expiration and to the extent that the right to purchase shares of Stock has vested hereunder, this Option may be exercised from time to time by notice acceptable to the Company stating the number of shares with respect to which this Option is being exercised and accompanied by either (a) payment in full of the Exercise Price for the number of shares to be delivered, by means of payment acceptable to the Company in accordance with Section 5(c) of the Plan, or (b) a description of a "cashless exercise" procedure and such other documents and undertakings as are necessary to satisfy that procedure. The Company, or the Committee, may from time to time designate one or more forms or methods of providing notice of the exercise of an Option and in that event the Optionee agrees to utilize such form or method. As soon as practicable after its receipt of such notice, the Company shall, without transfer or issue tax to the Optionee (or other person entitled to exercise this Option), deliver to the Optionee (or other person entitled to exercise this Option), at the principal executive offices of the Company or such other place as shall be mutually acceptable, a stock certificate or certificates for such shares out of theretofore authorized but unissued shares or reacquired shares of its Stock as the Company may elect; provided, however, that the time of such delivery may be postponed by the Company for such period as may be required for it with reasonable diligence to comply with any applicable requirements of law. Payment of the Exercise Price may be made in cash or cash equivalents or, in accordance with the terms and conditions of Section 5(c) of the Plan, in whole or in part in shares of Stock of the Company; provided, however, that the Board reserves the right upon receipt of any written notice of exercise from the Optionee to require payment in cash with respect to the shares contemplated in such notice; and provided, further, that the Optionee may not make payment in shares of Stock that he acquired upon the earlier exercise of any incentive stock option, unless he has held the shares until at least two (2) years after the date the incentive stock option was granted and at least one (1) year after the date the incentive stock option was exercised. If the Optionee (or other person entitled to exercise this Option) fails to pay for and accept delivery of all of the shares specified in such notice upon tender of delivery thereof, his right to exercise this Option with respect to such shares not paid for may be terminated by the Company. The Committee may, in its discretion at the time of exercise of the Option, grant to the Optionee a new option (a "Reload Option") to permit the Optionee to purchase that number of shares of Stock delivered by the Optionee to the Company in full or partial payment of the Exercise Price, or in full or partial payment of the tax withholding obligations incurred on account of the exercise of the Option, on such terms and conditions as the Committee may determine under the terms of the Plan. The Exercise Price for shares subject to a Reload Option shall be not less than one hundred percent (100%) of the Fair Market Value of the shares on the - 2 - date of grant of the Reload Option, and the duration of a Reload Option shall be equal to the unexpired term of the exercised Option on the date of exercise. 5. WITHHOLDING TAXES. The Optionee hereby agrees, as a condition to any exercise of this Option, to provide to the Company an amount sufficient to satisfy the Company's obligation to withhold certain federal, state and local taxes arising by reason of such exercise (the "Withholding Amount"), if any, by (a) authorizing the Company and/or any Subsidiary to withhold the Withholding Amount from his cash compensation or (b) remitting the Withholding Amount to the Company in cash; provided, however, that to the extent that the Withholding Amount is not provided by one or a combination of such methods, the Company may at its election withhold from the Stock that would otherwise be delivered upon exercise of this Option that number of shares having a Fair Market Value on the date of exercise sufficient to eliminate any deficiency in the Withholding Amount. 6. NON-ASSIGNABILITY OF OPTION. This Option shall not be assignable or transferable by the Optionee except by will or by the laws of descent and distribution. During the life of the Optionee, this Option shall be exercisable only by him, by a conservator or guardian duly appointed for him by reason of the Optionee's incapacity or by the person appointed by the Optionee in a durable power of attorney acceptable to the Company's counsel. 7. COMPLIANCE WITH SECURITIES ACT; LOCK-UP AGREEMENT. The Company shall not be obligated to sell or issue any shares of Stock or other securities pursuant to the exercise of this Option unless the shares of Stock or other securities with respect to which this Option is being exercised are at that time effectively registered or exempt from registration under the Securities Act and applicable state securities laws. In the event shares or other securities shall be issued that shall not be so registered, the Optionee hereby represents, warrants and agrees that he will receive such shares or other securities for investment and not with a view to their resale or distribution, and will execute an appropriate investment letter satisfactory to the Company and its counsel. The Optionee further hereby agrees that as a condition to the purchase of shares upon exercise of this Option, he will execute an agreement in a form acceptable to the Company to the effect that the shares shall be subject to any underwriter's lock-up agreement in connection with a public offering of any securities of the Company that may from time to time apply to shares held by officers and employees of the Company, and such agreement or a successor agreement must be in full force and effect. 8. LEGENDS. The Optionee hereby acknowledges that the stock certificate or certificates evidencing shares of Stock or other securities issued pursuant to any exercise of this Option may bear a legend setting forth the restrictions on their transferability described in Section 7 hereof, if such restrictions are then in effect. 9. RIGHTS AS STOCKHOLDER. The Optionee shall have no rights as a stockholder with respect to any shares covered by this Option until the date of issuance of a stock certificate to him for such shares. No adjustment shall be made for dividends or other rights for which the record date is prior to the date such stock certificate is issued. - 3 - 10. TERMINATION OR AMENDMENT OF PLAN. The Board may terminate or amend the Plan at any time. No such termination or amendment will affect rights and obligations under this Option to the extent it is then in effect and unexercised. 11. EFFECT UPON EMPLOYMENT AND PERFORMANCE OF SERVICES. Nothing in this Option or the Plan shall be construed to impose any obligation upon the Company or any Subsidiary to employ or utilize the services of the Optionee or to retain the Optionee in its employ or to engage or retain the services of the Optionee. 12. TIME FOR ACCEPTANCE. Unless the Optionee shall evidence his acceptance of this Option by execution of the Schedule within thirty (30) days after its delivery to him, the Option shall be null and void. 13. RIGHT OF REPAYMENT. In the event that the Optionee accepts employment with or provides services for a competitor of the Company within two (2) years after the date of exercise of this Option or any portion of it, the Optionee shall pay to the Company an amount equal to the excess of the Fair Market Value of the Stock as of the date of exercise over the price paid for such shares; provided, however, that the Committee in its discretion may release the Optionee from the requirement to make such payment, if the Committee determines that the Optionee's acceptance of such employment or performance of such services is not inimical to the best interests of the Company. The Company may deduct the amount of payment due under the preceding sentence from any compensation or other amount payable by the Company to the Optionee. For purposes of this Section 13, the term "Company" refers to the Company and all Subsidiaries. 14. GENERAL PROVISIONS. (a) AMENDMENT; WAIVERS. This Option Agreement, including the Plan, contains the full and complete understanding and agreement of the parties hereto as to the subject matter hereof, and except as otherwise permitted by the express terms of the Plan and this Option Agreement, it may not be modified or amended nor may any provision hereof be waived without a further written agreement duly signed by each of the parties; provided, however, that a modification or amendment that does not materially diminish the rights of the Optionee hereunder, as they may exist immediately before the effective date of the modification or amendment, shall be effective upon written notice of its provisions to the Optionee. The waiver by either of the parties hereto of any provision hereof in any instance shall not operate as a waiver of any other provision hereof or in any other instance. (b) BINDING EFFECT. This Option Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective heirs, executors, administrators, representatives, successors and assigns. (c) GOVERNING LAW. This Option Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts, without regard to the principles of conflicts of law. - 4 - (d) CONSTRUCTION. This Option Agreement is to be construed in accordance with the terms of the Plan. In case of any conflict between the Plan and this Option Agreement, the Plan shall control. The titles of the sections of this Option Agreement and of the Plan are included for convenience only and shall not be construed as modifying or affecting their provisions. The masculine gender shall include both sexes; the singular shall include the plural and the plural the singular unless the context otherwise requires. Capitalized terms not defined herein shall have the meanings given to them in the Plan. (e) NOTICES. Any notice in connection with this Option Agreement shall be deemed to have been properly delivered if it is in writing and is delivered by hand or facsimile or sent by registered mail, postage prepaid, to the party addressed as follows, unless another address has been substituted by notice so given: To the Optionee: To his address as set forth on the Schedule To the Company: Iron Mountain Incorporated 745 Atlantic Avenue Boston, Massachusetts 02111 Attn: Chief Financial Officer Copy to: Sullivan & Worcester LLP One Post Office Square Boston, Massachusetts 02109 Attn: David A. Guadagnoli, Esq. (f) VERSION NUMBER. This document is Version 1 of the Non-Qualified Stock Option Agreement. IN WITNESS WHEREOF, the Company has caused this Option Agreement to be issued as of the date set forth in the Schedule. IRON MOUNTAIN INCORPORATED -------------------------- - 5 - EX-10.12 5 a2152867zex-10_12.txt EXHIBIT 10.12 EXHIBIT 10.12 IRON MOUNTAIN INCORPORATED IRON MOUNTAIN INCORPORATED 1995 STOCK INCENTIVE PLAN AMENDED AND RESTATED IRON MOUNTAIN NON-QUALIFIED STOCK OPTION AGREEMENT This Amended and Restated Iron Mountain Non-Qualified Stock Option Agreement and each attached Amended and Restated Iron Mountain Non-Qualified Stock Option Schedule (together, an "Option Agreement") made as of the "Date of Original Grant" (the "Effective Date") on the attached Amended and Restated Iron Mountain Non-Qualified Stock Option Schedule (the "Schedule") by and between Iron Mountain Incorporated, a Delaware corporation (the "Company"), and the individual identified on the Schedule (the "Optionee") constitutes an amendment and restatement of each outstanding Stock Option Agreement (each an "Old Agreement"). WITNESSETH THAT: WHEREAS, the Company instituted the "Iron Mountain Information Services, Inc. Stock Option Plan" (the "Prior Plan"); and WHEREAS, the program instituted by the Company entitled "Iron Mountain Incorporated 1995 Stock Incentive Plan," as amended (the "Plan"), is a restatement of the Prior Plan; and WHEREAS, the outstanding, unexpired options granted under the Prior Plan remain in full force and effect under the Plan and are subject to the terms and conditions of the Plan; and WHEREAS, effective November 29, 1995, the Company declared a stock dividend of 14.4215 shares; and WHEREAS, the Company and the Optionee agree that it is desirable to amend and restate the Old Agreement; NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements herein contained and for other good and valuable consideration the receipt and adequacy of which are hereby acknowledged, the Company and the Optionee agree as follows. 1. FORM OF OPTION. The Company hereby affirms that the Optionee holds outstanding stock options (each an "Option") to purchase from the Company the amount of Common Stock ("Stock") shown as the "Total Number of Shares" on each (if there be more than one) Schedule. No Option is intended to be an incentive stock option or to qualify for special federal income tax treatment under Section 422 of the Code. 2. EXERCISE PRICE. Each Option may be exercised at the "Exercise Price Per Share" shown on each (if there be more than one) Schedule, subject to adjustment as provided herein and in the Plan. 3. TERM AND EXERCISABILITY OF OPTION. Unless sooner terminated pursuant to the Plan or this Section 3, each Option shall expire on the last day of the exercise period shown on the Schedule. An Option may be exercised to the extent vested, as shown on the Schedule, provided that: (a) at the time of exercise the Optionee is not in violation of any Employee Confidentiality and Non-Competition Agreement with the Company; (b) the Optionee's employment, contractual or other service relationship with the Company ("Relationship") must be in effect on a given date in order for any scheduled increment in vesting, as set forth in the "Vesting Schedule" on the Schedule, to become effective; (c) the Vesting Schedule shall not operate to preclude the exercise of an Option in full upon the Company's sale of substantially all of its assets and business to another corporation (other than a Subsidiary), or the merger of the Company into, or consolidation of the Company with, another corporation (other than a Subsidiary) under circumstances in which the Company will not be the surviving entity; and (d) an Option may not be exercised after the sixtieth (60th) day following the date of termination of the Relationship between the Optionee and the Company, except that if the Relationship terminates by reason of the Optionee's death or total and permanent disability (as determined by the Board on the basis of medical advice satisfactory to it), the unexercised portion of the Option that is otherwise exercisable on the date of termination of the Relationship shall remain exercisable thereafter for no less than one year; provided, however, that if the Relationship terminates for any reason (other than under circumstances described in Section 12 of the Plan) after the fifth anniversary of the date of grant of an Option, then the unexercised portion of an Option that is otherwise exercisable on the date of termination of the Relationship shall remain exercisable thereafter until the passage of one-half of that number of days elapsed between the date of grant of the Option and the date of termination of the Relationship. For purposes of this Section 3, the term "Company" refers to the Company and all Subsidiaries. 4. METHOD OF EXERCISE. Prior to its expiration and to the extent that the right to purchase shares of Stock has vested hereunder, the Option may be exercised from time to time by notice acceptable to the Company stating the number of shares with respect to which the Option is being exercised and accompanied by either (a) payment in full of the Exercise Price for the number of shares to be delivered, by means of payment acceptable to the Company in accordance with Section 5(c) of the Plan, or (b) a description of a "cashless exercise" procedure and such other documents and undertakings as are necessary to satisfy that procedure. The Company, or the Committee, may from time to time designate one or more forms or methods of providing notice of the exercise of an Option and in that event the Optionee agrees to utilize such form or method. As soon as practicable after its receipt of such notice, the Company shall, without transfer or issue tax to the Optionee (or other person entitled to exercise the Option), deliver to the Optionee (or other person entitled to exercise the Option), at the principal executive offices of the Company or such other place as shall be mutually acceptable, a stock certificate or certificates for such shares out of theretofore authorized but unissued shares or - 2 - reacquired shares of its Stock as the Company may elect; provided, however, that the time of such delivery may be postponed by the Company for such period as may be required for it with reasonable diligence to comply with any applicable requirements of law. Payment of the Exercise Price may be made in cash or cash equivalents, or, in accordance with the terms and conditions of Section 5(c) of the Plan, in whole or in part in shares of Stock of the Company; provided, however, that the Board reserves the right upon receipt of any written notice of exercise from the Optionee to require payment in cash with respect to the shares contemplated in such notice; and provided, further, that the Optionee may not make payment in shares of Stock that he acquired upon the earlier exercise of any incentive stock option, unless he has held the shares until at least two (2) years after the date the incentive stock option was granted and at least one (1) year after the date the incentive stock option was exercised. If the Optionee (or other person entitled to exercise the Option) fails to pay for and accept delivery of all of the shares specified in such notice upon tender of delivery thereof, his right to exercise the Option with respect to such shares not paid for may be terminated by the Company. The Committee may, in its discretion at the time of exercise of the Option, grant to the Optionee a new option (a "Reload Option") to permit the Optionee to purchase that number of shares of Stock delivered by the Optionee to the Company in full or partial payment of the Exercise Price, or in full or partial payment of the tax withholding obligations incurred on account of the exercise of the Option, on such terms and conditions as the Committee may determine under the terms of the Plan. The Exercise Price for shares subject to a Reload Option shall be not less than one hundred percent (100%) of the Fair Market Value of the shares on the date of grant of the Reload Option, and the duration of a Reload Option shall be equal to the unexpired term of the exercised Option on the date of exercise. 5. WITHHOLDING TAXES. The Optionee hereby agrees, as a condition to any exercise of an Option, to provide to the Company an amount sufficient to satisfy the Company's obligation to withhold certain federal, state and local taxes arising by reason of such exercise (the "Withholding Amount"), if any, by (a) authorizing the Company or any Subsidiary to withhold the Withholding Amount from his cash compensation or (b) remitting the Withholding Amount to the Company in cash; provided, however, that to the extent that the Withholding Amount is not provided by one or a combination of such methods, the Company may at its election withhold from the Stock that would otherwise be delivered upon exercise of this Option that number of shares having a Fair Market Value on the date of exercise sufficient to eliminate any deficiency in the Withholding Amount. 6. NON-ASSIGNABILITY OF OPTION. No Option shall be assignable or transferable by the Optionee except by will or by the laws of descent and distribution. During the life of the Optionee, each Option shall be exercisable only by him, by a conservator or guardian duly appointed for him by reason of the Optionee's incapacity or by the person appointed by the Optionee in a durable power of attorney acceptable to the Company's counsel. 7. COMPLIANCE WITH SECURITIES ACT; LOCK-UP AGREEMENT. The Company shall not be obligated to sell or issue any shares of Stock or other securities pursuant to the exercise of the Option unless the shares of Stock or other securities with respect to which the Option is being exercised are at that time effectively registered or exempt from registration under the Securities Act and applicable state securities laws. In the event shares or other securities shall be issued - 3 - that shall not be so registered, the Optionee hereby represents, warrants and agrees that he will receive such shares or other securities for investment and not with a view to their resale or distribution, and will execute an appropriate investment letter satisfactory to the Company and its counsel. The Optionee further hereby agrees that as a condition to the purchase of shares upon exercise of the Option, he will execute an agreement in a form acceptable to the Company to the effect that the shares shall be subject to any underwriter's lock-up agreement in connection with a public offering of any securities of the Company that may from time to time apply to shares held by officers and employees of the Company, and such agreement or a successor agreement must be in full force and effect. 8. LEGENDS. The Optionee hereby acknowledges that the stock certificate or certificates evidencing shares of Stock or other securities issued pursuant to any exercise of this Option may bear a legend setting forth the restrictions on their transferability described in Section 7 hereof, if such restrictions are then in effect. 9. RIGHTS AS STOCKHOLDER. The Optionee shall have no rights as a stockholder with respect to any shares covered by the Option until the date of issuance of a stock certificate to him for such shares. No adjustment shall be made for dividends or other rights for which the record date is prior to the date such stock certificate is issued. 10. TERMINATION OR AMENDMENT OF PLAN. The Board may terminate or amend the Plan at any time. No such termination or amendment will affect rights and obligations under the Option to the extent it is then in effect and unexercised. 11. EFFECT UPON EMPLOYMENT OR PERFORMANCE OF SERVICES. Nothing in any Option or the Plan shall be construed to impose any obligation upon the Company or any Subsidiary to employ or utilize the services of the Optionee or to retain the Optionee in its employ or to engage or retain the services of the Optionee. 12. TIME FOR ACCEPTANCE. Unless the Optionee shall evidence his acceptance of an Option by execution of its related Schedule within thirty (30) days after its delivery to him, an Option Agreement shall be null and void. 13. GENERAL PROVISIONS. (a) AMENDMENT; WAIVERS. Each Option Agreement, including the Plan, contains the full and complete understanding and agreement of the parties hereto as to the subject matter hereof, and except as otherwise permitted by the express terms of the Plan and the Option Agreement, it may not be modified or amended nor may any provision hereof be waived except by a further written agreement duly signed by each of the parties; provided, however, that a modification or amendment that does not materially diminish the rights of the Optionee hereunder, as they may exist immediately before the effective date of the modification or amendment, shall be effective upon written notice of its provisions to the Optionee. The waiver by either of the parties hereto of any provision hereof in any instance shall not operate as a waiver of any other provision hereof or in any other instance. - 4 - (b) BINDING EFFECT. An Option Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective heirs, executors, administrators, representatives, successors and assigns. (c) GOVERNING LAW. Each Option Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts, without regard to the principles of conflicts of law. (d) CONSTRUCTION. Each Option Agreement is to be construed in accordance with the terms of the Plan. In case of any conflict between the Plan and an Option Agreement, the Plan shall control. The titles of the sections of an Option Agreement and of the Plan are included for convenience only and shall not be construed as modifying or affecting their provisions. The masculine gender shall include both sexes; the singular shall include the plural and the plural the singular unless the context otherwise requires. Capitalized terms not defined herein shall have the meanings given to them in the Plan. (e) NOTICES. Any notice in connection with an Option Agreement shall be deemed to have been properly delivered if it is in writing and is delivered by hand or facsimile or sent by registered mail, postage prepaid, to the party addressed as follows, unless another address has been substituted by notice so given: To the Optionee: To his address as set forth on the Schedule To the Company: Iron Mountain Incorporated 745 Atlantic Avenue Boston, Massachusetts 02111 Attn: Chief Financial Officer Copy to: Sullivan & Worcester LLP One Post Office Square Boston, Massachusetts 02109 Attn: David A. Guadagnoli, Esq. IN WITNESS WHEREOF, the Company has caused this Option Agreement to be issued as of the date set forth above. IRON MOUNTAIN INCORPORATED --------------------------- - 5 - EX-10.13 6 a2152867zex-10_13.txt EXHIBIT 10.13 EXHIBIT 10.13 IRON MOUNTAIN INCORPORATED IRON MOUNTAIN INCORPORATED 1995 STOCK INCENTIVE PLAN INCENTIVE STOCK OPTION AGREEMENT This Incentive Stock Option Agreement and the attached Incentive Stock Option Schedule (together, the "Option Agreement") made as of the "Date of Grant" on the attached Incentive Stock Option Schedule (the "Schedule") by and between Iron Mountain Incorporated, a Delaware corporation (the "Company"), and the Optionee. WITNESSETH THAT: WHEREAS, the Company has instituted the "Iron Mountain Incorporated 1995 Stock Incentive Plan," as amended (the "Plan"); and WHEREAS, the Stock Incentive Plan Subcommittee of the Compensation Committee (the "Subcommittee"), has authorized the grant of a stock option upon the terms and conditions set forth below and pursuant to the Plan, a copy of which is attached hereto and incorporated herein; and WHEREAS, the Subcommittee has designated this stock option an incentive stock option in accordance with Section 5 of the Plan; NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements herein contained and for other good and valuable consideration the receipt and adequacy of which are hereby acknowledged, the Company and the Optionee agree as follows. 1. GRANT. Subject to the terms of the Plan and this Option Agreement, the Company hereby grants to the Optionee a stock option (the "Option") to purchase from the Company the amount of Common Stock ("Stock") shown as the "Total Number of Shares" on the Schedule. This Option is intended to constitute an incentive stock option and to qualify for special federal income tax treatment under Section 422 of the Code. 2. EXERCISE PRICE. This Option may be exercised at the "Exercise Price Per Share" shown on the Schedule, subject to adjustment as provided herein and in the Plan. 3. TERM AND EXERCISABILITY OF OPTION. This Option shall expire on the "Last Date to Exercise" shown on the Schedule, unless the Option expires earlier pursuant to this Section 3 or any provision of the Plan. At any time before its expiration, this Option may be exercised to the extent vested, as shown on the Schedule, provided that: (a) at the time of exercise the Optionee is not in violation of any Employee Confidentiality and Non-Competition Agreement with the Company; (b) the Optionee's employment relationship with the Company ("Relationship") must be in effect on a given date in order for any scheduled increment in vesting, as set forth in the "Vesting Schedule" on the Schedule, to become effective; and (c) this Option may not be exercised after the sixtieth (60th) day following the date of termination of the Relationship between the Optionee and the Company, except that if the Relationship terminates by reason of the Optionee's death or total and permanent disability (as determined by the Board on the basis of medical advice satisfactory to it), the unexercised portion of the option that is otherwise exercisable on the date of termination of the Relationship shall remain exercisable thereafter for one (1) year. For purposes of this Section 3, the term "Company" refers to the Company and all Subsidiaries. 4. METHOD OF EXERCISE. Prior to its expiration and to the extent that the right to purchase shares of Stock has vested hereunder, this Option may be exercised from time to time by notice acceptable to the Company stating the number of shares with respect to which this Option is being exercised and accompanied by either (a) payment in full of the Exercise Price for the number of shares to be delivered, by means of payment acceptable to the Company in accordance with Section 5(c) of the Plan, or (b) a description of a "cashless exercise" procedure and such other documents and undertakings as are necessary to satisfy that procedure. The Company, or the Committee, may from time to time designate one or more forms or methods of providing notice of the exercise of an Option and in that event the Optionee agrees to utilize such form or method. As soon as practicable after its receipt of such notice, the Company shall, without transfer or issue tax to the Optionee (or other person entitled to exercise this Option), deliver to the Optionee (or other person entitled to exercise this Option), at the principal executive offices of the Company or such other place as shall be mutually acceptable, a stock certificate or certificates for such shares out of theretofore authorized but unissued shares or reacquired shares of its Stock as the Company may elect; provided, however, that the time of such delivery may be postponed by the Company for such period as may be required for it with reasonable diligence to comply with any applicable requirements of law. Payment of the Exercise Price may be made in cash or cash equivalents or, in accordance with the terms and conditions of Section 5(c) of the Plan, in whole or in part in shares of Stock of the Company; provided, however, that the Board reserves the right upon receipt of any written notice of exercise from the Optionee to require payment in cash with respect to the shares contemplated in such notice; and provided, further, that the Optionee may not make payment in shares of Stock that he acquired upon the earlier exercise of any incentive stock option, unless he has held the shares until at least two (2) years after the date the incentive stock option was granted and at least one (1) year after the date the incentive stock option was exercised. If the Optionee (or other person entitled to exercise this Option) fails to pay for and accept delivery of all of the shares specified in such notice upon tender of delivery thereof, his right to exercise this Option with respect to such shares not paid for may be terminated by the Company. The Committee may, in its discretion at the time of exercise of the Option, grant to the Optionee a new option (a "Reload Option") to permit the Optionee to purchase that number of shares of Stock delivered by the Optionee to the Company in full or partial payment of the Exercise Price, on such terms and conditions as the Committee may determine under the terms of the Plan. The Exercise Price for shares subject to a Reload Option shall be not less than one hundred percent (100%) of the Fair Market Value of the shares on the date of grant of the Reload - 2 - Option, and the duration of a Reload Option shall be equal to the unexpired term of the exercised Option on the date of exercise. 5. NON-ASSIGNABILITY OF OPTION. This Option shall not be assignable or transferable by the Optionee except by will or by the laws of descent and distribution. During the life of the Optionee, this Option shall be exercisable only by him, by a conservator or guardian duly appointed for him by reason of the Optionee's incapacity or by the person appointed by the Optionee in a durable power of attorney acceptable to the Company's counsel. 6. COMPLIANCE WITH SECURITIES ACT; LOCK-UP AGREEMENT. The Company shall not be obligated to sell or issue any shares of Stock or other securities pursuant to the exercise of this Option unless the shares of Stock or other securities with respect to which this Option is being exercised are at that time effectively registered or exempt from registration under the Securities Act and applicable state securities laws. In the event shares or other securities shall be issued that shall not be so registered, the Optionee hereby represents, warrants and agrees that he will receive such shares or other securities for investment and not with a view to their resale or distribution, and will execute an appropriate investment letter satisfactory to the Company and its counsel. The Optionee further hereby agrees that as a condition to the purchase of shares upon exercise of this Option, he will execute an agreement in a form acceptable to the Company to the effect that the shares shall be subject to any underwriter's lock-up agreement in connection with a public offering of any securities of the Company that may from time to time apply to shares held by officers and employees of the Company, and such agreement or a successor agreement must be in full force and effect. 7. LEGENDS. The Optionee hereby acknowledges that the stock certificate or certificates evidencing shares of Stock or other securities issued pursuant to any exercise of this Option may bear a legend setting forth the restrictions on their transferability described in Section 6 hereof, if such restrictions are then in effect. 8. RIGHTS AS STOCKHOLDER. The Optionee shall have no rights as a stockholder with respect to any shares covered by this Option until the date of issuance of a stock certificate to him for such shares. No adjustment shall be made for dividends or other rights for which the record date is prior to the date such stock certificate is issued. 9. TERMINATION OR AMENDMENT OF PLAN. The Board may terminate or amend the Plan at any time. No such termination or amendment will affect rights and obligations under this Option, to the extent it is then in effect and unexercised. 10. EFFECT UPON EMPLOYMENT. Nothing in this Option or the Plan shall be construed to impose any obligation upon the Company or any Subsidiary to employ the Optionee or to retain the Optionee in its employ or to engage or retain the services of the Optionee. 11. TIME FOR ACCEPTANCE. Unless the Optionee shall evidence his acceptance of this Option by execution of the Schedule within thirty (30) days after its delivery to him, the Option shall be null and void. 12. NOTICE OF DISQUALIFYING DISPOSITION. The Optionee agrees to notify the Company promptly in the event that he sells, transfers, exchanges or otherwise disposes of any shares of - 3 - Stock issued upon exercise of the Option before the later of (a) the second anniversary of the date of grant of the Option and (b) the first anniversary of the date the shares were issued upon his exercise of the Option. 13. RIGHT OF REPAYMENT. In the event that the Optionee accepts employment with or provides services for a competitor of the Company within two (2) years after the date of exercise of this Option or any portion of it, the Optionee shall pay to the Company an amount equal to the excess of the Fair Market Value of the Stock as of the date of exercise over the price paid for such shares; provided, however, that the Committee in its discretion may release the Optionee from the requirement to make such payment, if the Committee determines that the Optionee's acceptance of such employment or performance of such services is not inimical to the best interests of the Company. The Company may deduct the amount of payment due under the preceding sentence from any compensation or other amount payable by the Company to the Optionee. For purposes of this Section 13, the term "Company" refers to the Company and all Subsidiaries. 14. GENERAL PROVISIONS. (a) AMENDMENT; WAIVERS. This Option Agreement, including the Plan, contains the full and complete understanding and agreement of the parties hereto as to the subject matter hereof, and except as otherwise permitted by the express terms of the Plan and this Option Agreement, it may not be modified or amended nor may any provision hereof be waived without a further written agreement duly signed by each of the parties; provided, however, that a modification or amendment that does not materially diminish the rights of the Optionee hereunder, as they may exist immediately before the effective date of the modification or amendment, shall be effective upon written notice of its provisions to the Optionee. The waiver by either of the parties hereto of any provision hereof in any instance shall not operate as a waiver of any other provision hereof or in any other instance. (b) BINDING EFFECT. This Option Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective heirs, executors, administrators, representatives, successors and assigns. (c) GOVERNING LAW. This Option Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts, without regard to the principles of conflicts of law. (d) CONSTRUCTION. This Option Agreement is to be construed in accordance with the terms of the Plan. In case of any conflict between the Plan and this Option Agreement, the Plan shall control. The titles of the sections of this Option Agreement and of the Plan are included for convenience only and shall not be construed as modifying or affecting their provisions. The masculine gender shall include both sexes; the singular shall include the plural and the plural the singular unless the context otherwise requires. Capitalized terms not defined herein shall have the meanings given to them in the Plan. - 4 - (e) NOTICES. Any notice in connection with this Option Agreement shall be deemed to have been properly delivered if it is in writing and is delivered by hand or facsimile or sent by registered mail, postage prepaid, to the party addressed as follows, unless another address has been substituted by notice so given: To the Optionee: To his address as set forth on the Schedule To the Company: Iron Mountain Incorporated 745 Atlantic Avenue Boston, Massachusetts 02111 Attn: Chief Financial Officer Copy to: Sullivan & Worcester LLP One Post Office Square Boston, Massachusetts 02109 Attn: David A. Guadagnoli, Esq. (f) VERSION NUMBER. This document is Version 1 of the Incentive Stock Option Agreement. IN WITNESS WHEREOF, the Company has caused this Option Agreement to be issued as of the date set forth in the Schedule. IRON MOUNTAIN INCORPORATED --------------------------- - 5 - EX-10.14 7 a2152867zex-10_14.txt EXHIBIT 10.14 EXHIBIT 10.14 IRON MOUNTAIN INCORPORATED IRON MOUNTAIN INCORPORATED 1995 STOCK INCENTIVE PLAN NON-QUALIFIED STOCK OPTION AGREEMENT This Non-Qualified Stock Option Agreement and the attached Non-Qualified Stock Option Schedule (together, the "Option Agreement") made as of the "Date of Grant" on the attached Non-Qualified Stock Option Schedule (the "Schedule") by and between Iron Mountain Incorporated, a Delaware corporation (the "Company"), and the Optionee. WITNESSETH THAT: WHEREAS, the Company has instituted the "Iron Mountain Incorporated 1995 Stock Incentive Plan," as amended (the "Plan"); and WHEREAS, the Board of Directors of the Company (the "Board") has authorized the grant of a stock option upon the terms and conditions set forth below and pursuant to the Plan, a copy of which is attached hereto and incorporated herein; and WHEREAS, the Board has designated this stock option a non-qualified option in accordance with Section 5 of the Plan; NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements herein contained and for other good and valuable consideration the receipt and adequacy of which are hereby acknowledged, the Company and the Optionee agree as follows. 1. GRANT. Subject to the terms of the Plan and this Option Agreement, the Company hereby grants to the Optionee a stock option (the "Option") to purchase from the Company the amount of Common Stock ("Stock") shown as the "Total Number of Shares" on the Schedule. This Option is not intended to be an incentive stock option or to qualify for special federal income tax treatment under Section 422 of the Code. 2. EXERCISE PRICE. This Option may be exercised at the "Exercise Price Per Share" shown on the Schedule, subject to adjustment as provided herein and in the Plan. 3. TERM AND EXERCISABILITY OF OPTION. Unless sooner terminated pursuant to the Plan or this Section 3, this Option shall expire on the "Last Date to Exercise" shown on the Schedule. This Option may be exercised to the extent vested, as shown on the Schedule, provided that: (a) at the time of exercise the Optionee is not in violation of any Employee Confidentiality and Non-Competition Agreement with the Company; (b) the Optionee's service relationship with the Company as a non-employee director (the "Relationship") must be in effect on a given date in order for any scheduled increment in vesting, as set forth in the "Vesting Schedule" on the Schedule, to become effective; and (c) this Option may not be exercised after one year following the date of termination of the Relationship between the Optionee and the Company. For purposes of this Section 3, the term "Company" refers to the Company and all Subsidiaries. 4. METHOD OF EXERCISE. Prior to its expiration and to the extent that the right to purchase shares of Stock has vested hereunder, this Option may be exercised from time to time by notice acceptable to the Company stating the number of shares with respect to which this Option is being exercised and accompanied by either (a) payment in full of the Exercise Price for the number of shares to be delivered, by means of payment acceptable to the Company in accordance with Section 5(c) of the Plan, or (b) a description of a "cashless exercise" procedure and such other documents and undertakings as are necessary to satisfy that procedure. The Company, or the Board, may from time to time designate one or more forms or methods of providing notice of the exercise of an Option and in that event the Optionee agrees to utilize such form or method. As soon as practicable after its receipt of such notice, the Company shall, without transfer or issue tax to the Optionee (or other person entitled to exercise this Option), deliver to the Optionee (or other person entitled to exercise this Option), at the principal executive offices of the Company or such other place as shall be mutually acceptable, a stock certificate or certificates for such shares out of theretofore authorized but unissued shares or reacquired shares of its Stock as the Company may elect; provided, however, that the time of such delivery may be postponed by the Company for such period as may be required for it with reasonable diligence to comply with any applicable requirements of law. Payment of the Exercise Price may be made in cash or cash equivalents or, in accordance with the terms and conditions of Section 5(c) of the Plan, in whole or in part in shares of Stock of the Company; provided, however, that the Board reserves the right upon receipt of any written notice of exercise from the Optionee to require payment in cash with respect to the shares contemplated in such notice; and provided, further, that the Optionee may not make payment in shares of Stock that he acquired upon the earlier exercise of any incentive stock option, unless he has held the shares until at least two (2) years after the date the incentive stock option was granted and at least one (1) year after the date the incentive stock option was exercised. If the Optionee (or other person entitled to exercise this Option) fails to pay for and accept delivery of all of the shares specified in such notice upon tender of delivery thereof, his right to exercise this Option with respect to such shares not paid for may be terminated by the Company. The Board may, in its discretion at the time of exercise of the Option, grant to the Optionee a new option (a "Reload Option") to permit the Optionee to purchase that number of shares of Stock delivered by the Optionee to the Company in full or partial payment of the Exercise Price, or in full or partial payment of the tax withholding obligations incurred on account of the exercise of the Option, on such terms and conditions as the Board may determine under the terms of the Plan. The Exercise Price for shares subject to a Reload Option shall be not less than one hundred percent (100%) of the Fair Market Value of the shares on the date of grant of the Reload Option, and the duration of a Reload Option shall be equal to the unexpired term of the exercised Option on the date of exercise. 5. WITHHOLDING TAXES. The Optionee hereby agrees, as a condition to any exercise of this Option, to provide to the Company an amount sufficient to satisfy the Company's obligation to withhold certain federal, state and local taxes arising by reason of such exercise - 2 - (the "Withholding Amount"), if any, by (a) authorizing the Company and/or any Subsidiary to withhold the Withholding Amount from his cash compensation or (b) remitting the Withholding Amount to the Company in cash; provided, however, that to the extent that the Withholding Amount is not provided by one or a combination of such methods, the Company may at its election withhold from the Stock that would otherwise be delivered upon exercise of this Option that number of shares having a Fair Market Value on the date of exercise sufficient to eliminate any deficiency in the Withholding Amount. 6. NON-ASSIGNABILITY OF OPTION. This Option shall not be assignable or transferable by the Optionee except by will or by the laws of descent and distribution. During the life of the Optionee, this Option shall be exercisable only by him, by a conservator or guardian duly appointed for him by reason of the Optionee's incapacity or by the person appointed by the Optionee in a durable power of attorney acceptable to the Company's counsel. 7. COMPLIANCE WITH SECURITIES ACT; LOCK-UP AGREEMENT. The Company shall not be obligated to sell or issue any shares of Stock or other securities pursuant to the exercise of this Option unless the shares of Stock or other securities with respect to which this Option is being exercised are at that time effectively registered or exempt from registration under the Securities Act and applicable state securities laws. In the event shares or other securities shall be issued that shall not be so registered, the Optionee hereby represents, warrants and agrees that he will receive such shares or other securities for investment and not with a view to their resale or distribution, and will execute an appropriate investment letter satisfactory to the Company and its counsel. The Optionee further hereby agrees that as a condition to the purchase of shares upon exercise of this Option, he will execute an agreement in a form acceptable to the Company to the effect that the shares shall be subject to any underwriter's lock-up agreement in connection with a public offering of any securities of the Company that may from time to time apply to shares held by officers and employees of the Company, and such agreement or a successor agreement must be in full force and effect. 8. LEGENDS. The Optionee hereby acknowledges that the stock certificate or certificates evidencing shares of Stock or other securities issued pursuant to any exercise of this Option may bear a legend setting forth the restrictions on their transferability described in Section 7 hereof, if such restrictions are then in effect. 9. RIGHTS AS STOCKHOLDER. The Optionee shall have no rights as a stockholder with respect to any shares covered by this Option until the date of issuance of a stock certificate to him for such shares. No adjustment shall be made for dividends or other rights for which the record date is prior to the date such stock certificate is issued. 10. TERMINATION OR AMENDMENT OF PLAN. The Board may terminate or amend the Plan at any time. No such termination or amendment will affect rights and obligations under this Option to the extent it is then in effect and unexercised. 11. EFFECT UPON EMPLOYMENT AND PERFORMANCE OF SERVICES. Nothing in this Option or the Plan shall be construed to impose any obligation upon the Company or any Subsidiary to employ or utilize the services of the Optionee or to retain the Optionee in its employ or to engage or retain the services of the Optionee. - 3 - 12. TIME FOR ACCEPTANCE. Unless the Optionee shall evidence his acceptance of this Option by execution of the Schedule within thirty (30) days after its delivery to him, the Option shall be null and void. 13. GENERAL PROVISIONS. (a) AMENDMENT; WAIVERS. This Option Agreement, including the Plan, contains the full and complete understanding and agreement of the parties hereto as to the subject matter hereof, and except as otherwise permitted by the express terms of the Plan and this Option Agreement, it may not be modified or amended nor may any provision hereof be waived without a further written agreement duly signed by each of the parties; provided, however, that a modification or amendment that does not materially diminish the rights of the Optionee hereunder, as they may exist immediately before the effective date of the modification or amendment, shall be effective upon written notice of its provisions to the Optionee. The waiver by either of the parties hereto of any provision hereof in any instance shall not operate as a waiver of any other provision hereof or in any other instance. (b) BINDING EFFECT. This Option Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective heirs, executors, administrators, representatives, successors and assigns. (c) GOVERNING LAW. This Option Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts, without regard to the principles of conflicts of law. (d) CONSTRUCTION. This Option Agreement is to be construed in accordance with the terms of the Plan. In case of any conflict between the Plan and this Option Agreement, the Plan shall control. The titles of the sections of this Option Agreement and of the Plan are included for convenience only and shall not be construed as modifying or affecting their provisions. The masculine gender shall include both sexes; the singular shall include the plural and the plural the singular unless the context otherwise requires. Capitalized terms not defined herein shall have the meanings given to them in the Plan. (e) NOTICES. Any notice in connection with this Option Agreement shall be deemed to have been properly delivered if it is in writing and is delivered by hand or facsimile or sent by registered mail, postage prepaid, to the party addressed as follows, unless another address has been substituted by notice so given: To the Optionee: To his address as set forth on the Schedule To the Company: Iron Mountain Incorporated 745 Atlantic Avenue Boston, Massachusetts 02111 Attn: Chief Financial Officer - 4 - Copy to: Sullivan & Worcester LLP One Post Office Square Boston, Massachusetts 02109 Attn: David A. Guadagnoli, Esq. (f) VERSION NUMBER. This document is Version 2 of the Non-Qualified Stock Option Agreement. IN WITNESS WHEREOF, the Company has caused this Option Agreement to be issued as of the date set forth in the Schedule. IRON MOUNTAIN INCORPORATED --------------------------- - 5 - EX-10.15 8 a2152867zex-10_15.txt EXHIBIT 10.15 EXHIBIT 10.15 IRON MOUNTAIN INCORPORATED 1997 STOCK OPTION PLAN STOCK OPTION AGREEMENT This Stock Option Agreement and the attached Stock Option Schedule (together, the "Option Document") made as of the "Date of Grant" on the attached Stock Option Schedule (the "Schedule") by and between Iron Mountain Incorporated, a Pennsylvania corporation (the "Company"), and the Optionee. WITNESSETH THAT: WHEREAS, the Company maintains the "Iron Mountain Incorporated 1997 Stock Option Plan," as amended (the "Plan"); and WHEREAS, the Board of Directors of the Company (the "Board") has authorized the grant of a stock option upon the terms and conditions set forth below and pursuant to the Plan, a copy of which is attached hereto and incorporated herein; NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements herein contained and for other good and valuable consideration the receipt and adequacy of which are hereby acknowledged, the Company and the Optionee agree as follows. 1. GRANT. Subject to the terms of the Plan and this Option Document, the Company hereby grants to the Optionee a stock option to purchase from the Company the amount of Common Stock shown as the "Total Number of Shares" on the Schedule. This Option is not intended to constitute an incentive stock option and to qualify for special federal income tax treatment under Section 422 of the Code. 2. OPTION PRICE. This Option may be exercised at the "Exercise Price Per Share" shown on the Schedule, subject to adjustment as provided herein and in the Plan. 3. TERM AND EXERCISABILITY OF OPTION. This Option shall expire on the "Last Date to Exercise" shown on the Schedule, unless the Option expires earlier pursuant to this Section 3 or any provision of the Plan. At any time before its expiration, this Option may be exercised to the extent vested, as shown on the Schedule, provided that: (a) at the time of exercise the Optionee is not in violation of any Employee Confidentiality and Non-Competition Agreement with the Company; (b) the Optionee's relationship with the Company as a non-employee director ("Relationship") must be in effect on a given date in order for any scheduled increment in vesting, as set forth in the "Vesting Schedule" on the Schedule, to become effective; and (c) this Option may not be exercised after thirty-six months following the date of termination of the Relationship between the Optionee and the Company. For purposes of this Section 3, the term "Company" refers to the Company and all Subsidiaries. In addition to the foregoing requirements, in no event shall the Option be exercised with respect to a fractional Share. 4. METHOD OF EXERCISE. Prior to its expiration and to the extent that the right to purchase Shares has vested hereunder, this Option may be exercised from time to time by notice acceptable to the Company stating the number of Shares with respect to which this Option is being exercised and accompanied by either (a) payment in full of the Option Price for the number of Shares to be delivered, by means of payment acceptable to the Company in accordance with Section 8(d) of the Plan, or (b) a description of a "cashless exercise" procedure and such other documents and undertakings as are necessary to satisfy that procedure. The Company, or the Board, may from time to time designate one or more forms or methods of providing notice of the exercise of an Option and in that event the Optionee agrees to utilize such form or method. As soon as practicable after its receipt of such notice, the Company shall, without transfer or issue tax to the Optionee (or other person entitled to exercise this Option), deliver to the Optionee (or other person entitled to exercise this Option), at the principal executive offices of the Company or such other place as shall be mutually acceptable, a stock certificate or certificates for such Shares out of theretofore authorized but unissued shares or reacquired shares of its Common Stock as the Company may elect; provided, however, that the time of such delivery may be postponed by the Company for such period as may be required for it with reasonable diligence to comply with any applicable requirements of law. Payment of the Option Price may be made in cash or cash equivalents or, in accordance with the terms and conditions of Section 8(d) of the Plan, in whole or in part in shares of Common Stock of the Company; provided, however, that the Board of Directors reserves the right upon receipt of any written notice of exercise from the Optionee to require payment in cash with respect to the Shares contemplated in such notice. If the Optionee (or other person entitled to exercise this Option) fails to pay for and accept delivery of all of the Shares specified in such notice upon tender of delivery thereof, his right to exercise this Option with respect to such Shares not paid for may be terminated by the Company. 5. WITHHOLDING TAXES. The Optionee hereby agrees, as a condition to any exercise of this Option, to provide to the Company an amount sufficient to satisfy the Company's obligation to withhold federal, state, local and other taxes arising by reason of such exercise (the "Withholding Amount"), if any, by (a) authorizing the Company and/or any Subsidiary to withhold the Withholding Amount from his cash compensation or (b) remitting the Withholding Amount to the Company in cash; provided, however, that to the extent that the Withholding Amount is not provided by one or a combination of such methods, the Company may at its election withhold from the Shares that would otherwise be delivered upon exercise of this Option that number of shares having a Fair Market Value on the date of exercise sufficient to eliminate any deficiency in the Withholding Amount; and provided, further, that the Fair Market Value of Shares withheld shall not exceed an amount in excess of the minimum required withholding. 6. NON-ASSIGNABILITY OF OPTION. This Option shall not be assignable or transferable by the Optionee except by will or by the laws of descent and distribution. During the life of the Optionee, this Option shall be exercisable only by him, by a conservator or guardian duly appointed for him by reason of the Optionee's incapacity or by the person appointed by the Optionee in a durable power of attorney acceptable to the Company's counsel. - 2 - 7. COMPLIANCE WITH SECURITIES ACT; LOCK-UP AGREEMENT. The Company shall not be obligated to sell or issue any shares of Common Stock or other securities pursuant to the exercise of this Option unless the Common Stock or other securities with respect to which this Option is being exercised are at that time effectively registered or exempt from registration under the Securities Act of 1933, as amended, and applicable state securities laws. In the event shares or other securities shall be issued that shall not be so registered, the Optionee hereby represents, warrants and agrees that he will receive such shares or other securities for investment and not with a view to their resale or distribution, and will execute an appropriate investment letter satisfactory to the Company and its counsel. The Optionee further hereby agrees that as a condition to the purchase of Shares upon exercise of this Option, he will execute an agreement in a form acceptable to the Company to the effect that the Shares shall be subject to any underwriter's lock-up agreement in connection with a public offering of any securities of the Company that may from time to time apply to shares held by officers and employees of the Company, and such agreement or a successor agreement must be in full force and effect. 8. LEGENDS. The Optionee hereby acknowledges that the stock certificate or certificates evidencing shares of Common Stock or other securities issued pursuant to any exercise of this Option may bear a legend setting forth the restrictions on their transferability described in Section 7 hereof, if such restrictions are then in effect. 9. RIGHTS AS STOCKHOLDER. The Optionee shall have no rights as a stockholder with respect to any shares covered by this Option until the date of issuance of a stock certificate to him for such shares. No adjustment shall be made for dividends or other rights for which the record date is prior to the date such stock certificate is issued. 10. TERMINATION OR AMENDMENT OF PLAN. The Board of Directors may terminate or amend the Plan at any time. No such termination or amendment will affect rights and obligations under this Option, to the extent it is then in effect and unexercised. 11. EFFECT UPON EMPLOYMENT AND PERFORMANCE OF SERVICES. Nothing in this Option or the Plan shall be construed to impose any obligation upon the Company or any Subsidiary to employ or utilize the services of the Optionee or to retain the Optionee in its employ or to engage or retain the services of the Optionee. 12. TIME FOR ACCEPTANCE. Unless the Optionee shall evidence his acceptance of this Option by execution of the Schedule within thirty (30) days after its delivery to him, the Option shall be null and void. 13. NOTICE OF DISQUALIFYING DISPOSITION. The Optionee agrees to notify the Company promptly in the event that he sells, transfers, exchanges or otherwise disposes of any Shares issued upon exercise of an ISO before the later of (a) the second anniversary of the date of grant of the Option and (b) the first anniversary of the date the shares were issued upon his exercise of the Option. 14. GENERAL PROVISIONS. (a) AMENDMENT; WAIVERS. This Option Document, including the Plan, contains the full and complete understanding and agreement of the parties hereto as to the subject - 3 - matter hereof, and except as otherwise permitted by the express terms of the Plan and this Option Document, it may not be modified or amended nor may any provision hereof be waived without a further written agreement duly signed by each of the parties; provided, however, that a modification or amendment that does not materially diminish the rights of the Optionee hereunder, as they may exist immediately before the effective date of the modification or amendment, shall be effective upon written notice of its provisions to the Optionee. The waiver by either of the parties hereto of any provision hereof in any instance shall not operate as a waiver of any other provision hereof or in any other instance. (b) BINDING EFFECT. This Option Document shall inure to the benefit of and be binding upon the parties hereto and their respective heirs, executors, administrators, representatives, successors and assigns. (c) GOVERNING LAW. This Option Document shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts, without regard to the principles of conflicts of law. (d) CONSTRUCTION. This Option Document is to be construed in accordance with the terms of the Plan. In case of any conflict between the Plan and this Option Document, the Plan shall control. The titles of the sections of this Option Document and of the Plan are included for convenience only and shall not be construed as modifying or affecting their provisions. The masculine gender shall include both sexes; the singular shall include the plural and the plural the singular unless the context otherwise requires. Capitalized terms not defined herein shall have the meanings given to them in the Plan. (e) NOTICES. Any notice in connection with this Option Document shall be deemed to have been properly delivered if it is in writing and is delivered by hand or facsimile or sent by registered mail, postage prepaid, to the party addressed as follows, unless another address has been substituted by notice so given: To the Optionee: To his address as set forth on the Schedule To the Company: Iron Mountain Incorporated 745 Atlantic Avenue Boston, Massachusetts 02111 Attn: Chief Financial Officer (f) VERSION NUMBER. This document is Version 2 of the Stock Option Agreement. - 4 - EX-10.16 9 a2152867zex-10_16.txt EXHIBIT 10.16 EXHIBIT 10.16 IRON MOUNTAIN INCORPORATED 1997 STOCK OPTION PLAN STOCK OPTION AGREEMENT This Stock Option Agreement and the attached Stock Option Schedule (together, the "Option Document") made as of the "Date of Grant" on the attached Stock Option Schedule (the "Schedule") by and between Iron Mountain Incorporated, a Pennsylvania corporation (the "Company"), and the Optionee. WITNESSETH THAT: WHEREAS, the Company maintains the "Iron Mountain Incorporated 1997 Stock Option Plan," as amended (the "Plan"); and WHEREAS, the Stock Incentive Plan Subcommittee of the Compensation Committee (the "Committee") has authorized the grant of a stock option upon the terms and conditions set forth below and pursuant to the Plan, a copy of which is attached hereto and incorporated herein; NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements herein contained and for other good and valuable consideration the receipt and adequacy of which are hereby acknowledged, the Company and the Optionee agree as follows. 1. GRANT. Subject to the terms of the Plan and this Option Document, the Company hereby grants to the Optionee a stock option to purchase from the Company the amount of Common Stock shown as the "Total Number of Shares" on the Schedule. If so provided in the "Type of Option" as shown on the Schedule, this Option is intended to constitute an incentive stock option and to qualify for special federal income tax treatment under Section 422 of the Code. 2. OPTION PRICE. This Option may be exercised at the "Exercise Price Per Share" shown on the Schedule, subject to adjustment as provided herein and in the Plan. 3. TERM AND EXERCISABILITY OF OPTION. This Option shall expire on the "Last Date to Exercise" shown on the Schedule, unless the Option expires earlier pursuant to this Section 3 or any provision of the Plan. At any time before its expiration, this Option may be exercised to the extent vested, as shown on the Schedule, provided that: (a) at the time of exercise the Optionee is not in violation of any Employee Confidentiality and Non-Competition Agreement with the Company; (b) the Optionee's employment, contractual or other service relationship with the Company ("Relationship") must be in effect on a given date in order for any scheduled increment in vesting, as set forth in the "Vesting Schedule" on the Schedule, to become effective; and (c) this Option may not be exercised after the sixtieth (60th) day following the date of termination of the Relationship between the Optionee and the Company, except that if the Relationship terminates by reason of the Optionee's death or Disability, the unexercised portion of the Option that is otherwise exercisable on the date of termination of the Relationship shall remain exercisable thereafter for one (1) year. For purposes of this Section 3, the term "Company" refers to the Company and all Subsidiaries. In addition to the foregoing requirements, in no event shall the Option be exercised with respect to a fractional Share. 4. METHOD OF EXERCISE. Prior to its expiration and to the extent that the right to purchase Shares has vested hereunder, this Option may be exercised from time to time by notice acceptable to the Company stating the number of Shares with respect to which this Option is being exercised and accompanied by either (a) payment in full of the Option Price for the number of Shares to be delivered, by means of payment acceptable to the Company in accordance with Section 8(d) of the Plan, or (b) a description of a "cashless exercise" procedure and such other documents and undertakings as are necessary to satisfy that procedure. The Company, or the Committee, may from time to time designate one or more forms or methods of providing notice of the exercise of an Option and in that event the Optionee agrees to utilize such form or method. As soon as practicable after its receipt of such notice, the Company shall, without transfer or issue tax to the Optionee (or other person entitled to exercise this Option), deliver to the Optionee (or other person entitled to exercise this Option), at the principal executive offices of the Company or such other place as shall be mutually acceptable, a stock certificate or certificates for such Shares out of theretofore authorized but unissued shares or reacquired shares of its Common Stock as the Company may elect; provided, however, that the time of such delivery may be postponed by the Company for such period as may be required for it with reasonable diligence to comply with any applicable requirements of law. Payment of the Option Price may be made in cash or cash equivalents or, in accordance with the terms and conditions of Section 8(d) of the Plan, in whole or in part in shares of Common Stock of the Company; provided, however, that the Board of Directors reserves the right upon receipt of any written notice of exercise from the Optionee to require payment in cash with respect to the Shares contemplated in such notice. If the Optionee (or other person entitled to exercise this Option) fails to pay for and accept delivery of all of the Shares specified in such notice upon tender of delivery thereof, his right to exercise this Option with respect to such Shares not paid for may be terminated by the Company. 5. WITHHOLDING TAXES. The Optionee hereby agrees, as a condition to any exercise of this Option, to provide to the Company an amount sufficient to satisfy the Company's obligation to withhold federal, state, local and other taxes arising by reason of such exercise (the "Withholding Amount"), if any, by (a) authorizing the Company and/or any Subsidiary to withhold the Withholding Amount from his cash compensation or (b) remitting the Withholding Amount to the Company in cash; provided, however, that to the extent that the Withholding Amount is not provided by one or a combination of such methods, the Company may at its election withhold from the Shares that would otherwise be delivered upon exercise of this Option that number of shares having a Fair Market Value on the date of exercise sufficient to eliminate any deficiency in the Withholding Amount; and provided, further, that the Fair Market Value of Shares withheld shall not exceed an amount in excess of the minimum required withholding. - 2 - 6. NON-ASSIGNABILITY OF OPTION. This Option shall not be assignable or transferable by the Optionee except by will or by the laws of descent and distribution. During the life of the Optionee, this Option shall be exercisable only by him, by a conservator or guardian duly appointed for him by reason of the Optionee's incapacity or by the person appointed by the Optionee in a durable power of attorney acceptable to the Company's counsel. Notwithstanding the foregoing, the Committee in its sole discretion may amend an outstanding Option to permit the transfer of such Option, without payment of consideration, to immediate family members of the Optionee and of trusts or partnerships for such family members. 7. COMPLIANCE WITH SECURITIES ACT; LOCK-UP AGREEMENT. The Company shall not be obligated to sell or issue any shares of Common Stock or other securities pursuant to the exercise of this Option unless the Common Stock or other securities with respect to which this Option is being exercised are at that time effectively registered or exempt from registration under the Securities Act of 1933, as amended, and applicable state securities laws. In the event shares or other securities shall be issued that shall not be so registered, the Optionee hereby represents, warrants and agrees that he will receive such shares or other securities for investment and not with a view to their resale or distribution, and will execute an appropriate investment letter satisfactory to the Company and its counsel. The Optionee further hereby agrees that as a condition to the purchase of Shares upon exercise of this Option, he will execute an agreement in a form acceptable to the Company to the effect that the Shares shall be subject to any underwriter's lock-up agreement in connection with a public offering of any securities of the Company that may from time to time apply to shares held by officers and employees of the Company, and such agreement or a successor agreement must be in full force and effect. 8. LEGENDS. The Optionee hereby acknowledges that the stock certificate or certificates evidencing shares of Common Stock or other securities issued pursuant to any exercise of this Option may bear a legend setting forth the restrictions on their transferability described in Section 7 hereof, if such restrictions are then in effect. 9. RIGHTS AS STOCKHOLDER. The Optionee shall have no rights as a stockholder with respect to any shares covered by this Option until the date of issuance of a stock certificate to him for such shares. No adjustment shall be made for dividends or other rights for which the record date is prior to the date such stock certificate is issued. 10. TERMINATION OR AMENDMENT OF PLAN. The Board of Directors may terminate or amend the Plan at any time. No such termination or amendment will affect rights and obligations under this Option, to the extent it is then in effect and unexercised. 11. EFFECT UPON EMPLOYMENT AND PERFORMANCE OF SERVICES. Nothing in this Option or the Plan shall be construed to impose any obligation upon the Company or any Subsidiary to employ or utilize the services of the Optionee or to retain the Optionee in its employ or to engage or retain the services of the Optionee. 12. TIME FOR ACCEPTANCE. Unless the Optionee shall evidence his acceptance of this Option by execution of the Schedule within thirty (30) days after its delivery to him, the Option shall be null and void. - 3 - 13. NOTICE OF DISQUALIFYING DISPOSITION. The Optionee agrees to notify the Company promptly in the event that he sells, transfers, exchanges or otherwise disposes of any Shares issued upon exercise of an ISO before the later of (a) the second anniversary of the date of grant of the Option and (b) the first anniversary of the date the shares were issued upon his exercise of the Option. 14. RIGHT OF REPAYMENT. In the event that the Optionee accepts employment with or provides services for a competitor of the Company within two (2) years after the date of exercise of this Option or any portion of it, the Optionee shall pay to the Company an amount equal to the excess of the Fair Market Value of the Shares as of the date of exercise over the price paid for such Shares; provided, however, that the Committee in its discretion may release the Optionee from the requirement to make such payment, if the Committee determines that the Optionee's acceptance of such employment or performance of such services is not inimical to the best interests of the Company. The Company may deduct the amount of payment due under the preceding sentence from any compensation or other amount payable by the Company to the Optionee. For purposes of this Section 14, the term "Company" refers to the Company and all Subsidiaries. 15. GENERAL PROVISIONS. (a) AMENDMENT; WAIVERS. This Option Document, including the Plan, contains the full and complete understanding and agreement of the parties hereto as to the subject matter hereof, and except as otherwise permitted by the express terms of the Plan and this Option Document, it may not be modified or amended nor may any provision hereof be waived without a further written agreement duly signed by each of the parties; provided, however, that a modification or amendment that does not materially diminish the rights of the Optionee hereunder, as they may exist immediately before the effective date of the modification or amendment, shall be effective upon written notice of its provisions to the Optionee. The waiver by either of the parties hereto of any provision hereof in any instance shall not operate as a waiver of any other provision hereof or in any other instance. (b) BINDING EFFECT. This Option Document shall inure to the benefit of and be binding upon the parties hereto and their respective heirs, executors, administrators, representatives, successors and assigns. (c) GOVERNING LAW. This Option Document shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts, without regard to the principles of conflicts of law. (d) CONSTRUCTION. This Option Document is to be construed in accordance with the terms of the Plan. In case of any conflict between the Plan and this Option Document, the Plan shall control. The titles of the sections of this Option Document and of the Plan are included for convenience only and shall not be construed as modifying or affecting their provisions. The masculine gender shall include both sexes; the singular shall include the plural and the plural the singular unless the context otherwise requires. Capitalized terms not defined herein shall have the meanings given to them in the Plan. - 4 - (e) NOTICES. Any notice in connection with this Option Document shall be deemed to have been properly delivered if it is in writing and is delivered by hand or facsimile or sent by registered mail, postage prepaid, to the party addressed as follows, unless another address has been substituted by notice so given: To the Optionee: To his address as set forth on the Schedule To the Company: Iron Mountain Incorporated 745 Atlantic Avenue Boston, Massachusetts 02111 Attn: Chief Financial Officer (f) VERSION NUMBER. This document is Version 1 of the Stock Option Agreement. - 5 - EX-10.17 10 a2152867zex-10_17.txt EXHIBIT 10.17 EXHIBIT 10.17 IRON MOUNTAIN INCORPORATED IRON MOUNTAIN INCORPORATED 2002 STOCK INCENTIVE PLAN STOCK OPTION AGREEMENT This Stock Option Agreement and the preceding Certificate of Stock Option Grant (the "Certificate" and together with this document, the "Option Agreement") made as of the date stated on the Certificate (the "Grant Date") by and between Iron Mountain Incorporated, a Pennsylvania corporation (the "Company"), and the Optionee. WITNESSETH THAT: WHEREAS, the Company has instituted the Iron Mountain Incorporated 2002 Stock Incentive Plan (the "Plan"); and WHEREAS, the Stock Incentive Plan Subcommittee of the Compensation Committee (the "Committee") has authorized the grant of a stock option upon the terms and conditions set forth below and pursuant to the Plan, a copy of which is attached hereto and incorporated herein; NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements herein contained and for other good and valuable consideration the receipt and adequacy of which are hereby acknowledged, the Company and the Optionee agree as follows. 1. GRANT. Subject to the terms of the Plan and this Option Agreement, the Company hereby grants to the Optionee a stock option (the "Option") to purchase from the Company the amount of Common Stock ("Stock") shown on the Certificate under "Option to Purchase." If so provided in the "Type of Option" shown on the Certificate, this Option is intended to constitute an incentive stock option and to qualify for special federal income tax treatment under Section 422 of the Code. 2. GRANT PRICE. This Option may be exercised at the "Grant Price" per share shown on the Certificate, subject to adjustment as provided herein and in the Plan. 3. TERM AND EXERCISABILITY OF OPTION. This Option shall expire on the "Grant Expiration Date" shown on the Certificate, unless the Option expires earlier pursuant to this Section 3 or any provision of the Plan. At any time before its expiration, this Option may be exercised to the extent vested, as shown on the Certificate, provided that: (a) at the time of exercise the Optionee is not in violation of any Employee Confidentiality and Non-Competition Agreement with the Company; (b) the Optionee's employment, contractual or other service relationship with the Company ("Relationship") must be in effect on a given date in order for any scheduled increment in vesting, as set forth in the "Vesting Schedule" on the Certificate, to become effective; and (c) this Option may not be exercised after the sixtieth (60th) day following the date of termination of the Relationship between the Optionee and the Company, except that if the Relationship terminates by reason of the Optionee's death or total and permanent disability (as determined by the Board on the basis of medical advice satisfactory to it), the unexercised portion of the Option that is otherwise exercisable on the date of termination of the Relationship shall remain exercisable thereafter for one (1) year. For purposes of this Section 3, the term "Company" refers to the Company and all Subsidiaries. 4. METHOD OF EXERCISE. Prior to its expiration and to the extent that the right to purchase shares of Stock has vested hereunder, this Option may be exercised from time to time by notice acceptable to the Company stating the number of shares with respect to which this Option is being exercised and accompanied by either (a) payment in full of the Grant Price for the number of shares to be delivered, by means of payment acceptable to the Company in accordance with Section 5(c) of the Plan, or (b) a description of a "cashless exercise" procedure and such other documents and undertakings as are necessary to satisfy that procedure. The Company, or the Committee, may from time to time designate one or more forms or methods of providing notice of the exercise of an Option and in that event the Optionee agrees to utilize such form or method. As soon as practicable after its receipt of such notice, the Company shall, without transfer or issue tax to the Optionee (or other person entitled to exercise this Option), deliver to the Optionee (or other person entitled to exercise this Option), at the principal executive offices of the Company or such other place as shall be mutually acceptable, a stock certificate or certificates for such shares out of theretofore authorized but unissued shares or reacquired shares of its Stock as the Company may elect; provided, however, that the time of such delivery may be postponed by the Company for such period as may be required for it with reasonable diligence to comply with any applicable requirements of law. If the Optionee (or other person entitled to exercise this Option) fails to pay for and accept delivery of all of the shares specified in such notice upon tender of delivery thereof, his right to exercise this Option with respect to such shares not paid for may be terminated by the Company. The Committee may, in its discretion at the time of exercise of the Option, grant to the Optionee a new option (a "Reload Option") to permit the Optionee to purchase that number of shares of Stock delivered by the Optionee to the Company in full or partial payment of the Grant Price, or in full or partial payment of the tax withholding obligations incurred on account of the exercise of the Option, on such terms and conditions as the Committee may determine under the terms of the Plan. The Grant Price for shares subject to a Reload Option shall be not less than one hundred percent (100%) of the Fair Market Value of the shares on the date of grant of the Reload Option, and the duration of a Reload Option shall be equal to the unexpired term of the exercised Option on the date of exercise. 5. WITHHOLDING TAXES. The Optionee hereby agrees, as a condition to any exercise of this Option, to provide to the Company an amount sufficient to satisfy the Company's obligation to withhold federal, state, local and other taxes arising by reason of such exercise (the "Withholding Amount"), if any, by (a) authorizing the Company and/or any Subsidiary to withhold the Withholding Amount from his cash compensation or (b) remitting the Withholding - 2 - Amount to the Company in cash; provided, however, that to the extent that the Withholding Amount is not provided by one or a combination of such methods, the Company may at its election withhold from the Stock that would otherwise be delivered upon exercise of this Option that number of shares having a Fair Market Value on the date of exercise sufficient to eliminate any deficiency in the Withholding Amount; and provided, further, that the Fair Market Value of Stock withheld shall not exceed an amount in excess of the minimum required withholding. 6. NON-ASSIGNABILITY OF OPTION. This Option shall not be assignable or transferable by the Optionee except by will or by the laws of descent and distribution or as permitted by the Committee in its discretion pursuant to the third sentence of Section 5(h) of the Plan. During the life of the Optionee, this Option shall be exercisable only by him, by a conservator or guardian duly appointed for him by reason of the Optionee's incapacity or by the person appointed by the Optionee in a durable power of attorney acceptable to the Company's counsel. 7. COMPLIANCE WITH SECURITIES ACT; LOCK-UP AGREEMENT. The Company shall not be obligated to sell or issue any shares of Stock or other securities pursuant to the exercise of this Option unless the shares of Stock or other securities with respect to which this Option is being exercised are at that time effectively registered or exempt from registration under the Securities Act and applicable state securities laws. In the event shares or other securities shall be issued that shall not be so registered, the Optionee hereby represents, warrants and agrees that he will receive such shares or other securities for investment and not with a view to their resale or distribution, and will execute an appropriate investment letter satisfactory to the Company and its counsel. The Optionee further hereby agrees that as a condition to the purchase of shares upon exercise of this Option, he will execute an agreement in a form acceptable to the Company to the effect that the shares shall be subject to any underwriter's lock-up agreement in connection with a public offering of any securities of the Company that may from time to time apply to shares held by officers and employees of the Company, and such agreement or a successor agreement must be in full force and effect. 8. LEGENDS. The Optionee hereby acknowledges that the stock certificate or certificates evidencing shares of Stock or other securities issued pursuant to any exercise of this Option may bear a legend setting forth the restrictions on their transferability described in Section 7 hereof, if such restrictions are then in effect. 9. RIGHTS AS STOCKHOLDER. The Optionee shall have no rights as a stockholder with respect to any shares covered by this Option until the date of issuance of a stock certificate to him for such shares. No adjustment shall be made for dividends or other rights for which the record date is prior to the date such stock certificate is issued. 10. TERMINATION OR AMENDMENT OF PLAN. The Board may terminate or amend the Plan at any time. No such termination or amendment will affect rights and obligations under this Option, to the extent it is then in effect and unexercised. 11. EFFECT UPON EMPLOYMENT AND PERFORMANCE OF SERVICES. Nothing in this Option or the Plan shall be construed to impose any obligation upon the Company or any Subsidiary to employ or utilize the services of the Optionee or to retain the Optionee in its employ or to engage or retain the services of the Optionee. - 3 - 12. TIME FOR ACCEPTANCE. Unless the Optionee shall evidence his acceptance of this Option by electronic or other execution of the Certificate within thirty (30) days after its delivery to him, the Option shall be null and void. 13. NOTICE OF DISQUALIFYING DISPOSITION. If the Option is designated under "Type of Option" as an ISO, the Optionee agrees to notify the Company promptly in the event that he sells, transfers, exchanges or otherwise disposes of any shares of Stock issued upon exercise of the Option before the later of (a) the second anniversary of the date of grant of the Option and (b) the first anniversary of the date the shares were issued upon his exercise of the Option. 14. RIGHT OF REPAYMENT. In the event that the Optionee accepts employment with or provides services for a competitor of the Company within two (2) years after the date of exercise of this Option or any portion of it, the Optionee shall pay to the Company an amount equal to the excess of the Fair Market Value of the Stock as of the date of exercise over the price paid for such shares; provided, however, that the Committee in its discretion may release the Optionee from the requirement to make such payment, if the Committee determines that the Optionee's acceptance of such employment or performance of such services is not inimical to the best interests of the Company. The Company may deduct the amount of payment due under the preceding sentence from any compensation or other amount payable by the Company to the Optionee. For purposes of this Section 14, the term "Company" refers to the Company and all Subsidiaries. 15. GENERAL PROVISIONS. (a) AMENDMENT; WAIVERS. This Option Agreement, including the Plan, contains the full and complete understanding and agreement of the parties hereto as to the subject matter hereof, and except as otherwise permitted by the express terms of the Plan and this Option Agreement, it may not be modified or amended nor may any provision hereof be waived without a further written agreement duly signed by each of the parties; provided, however, that a modification or amendment that does not materially diminish the rights of the Optionee hereunder, as they may exist immediately before the effective date of the modification or amendment, shall be effective upon written notice of its provisions to the Optionee. The waiver by either of the parties hereto of any provision hereof in any instance shall not operate as a waiver of any other provision hereof or in any other instance. (b) BINDING EFFECT. This Option Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective heirs, executors, administrators, representatives, successors and assigns. (c) GOVERNING LAW. This Option Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts, without regard to the principles of conflicts of law. (d) CONSTRUCTION. This Option Agreement is to be construed in accordance with the terms of the Plan. In case of any conflict between the Plan and this Option Agreement, the Plan shall control. The titles of the sections of this Option Agreement - 4 - and of the Plan are included for convenience only and shall not be construed as modifying or affecting their provisions. The masculine gender shall include both sexes; the singular shall include the plural and the plural the singular unless the context otherwise requires. Capitalized terms not defined herein shall have the meanings given to them in the Plan. (e) NOTICES. Any notice in connection with this Option Agreement shall be deemed to have been properly delivered if it is in writing and is delivered by hand or facsimile or sent by registered mail, postage prepaid, to the party addressed as follows, unless another address has been substituted by notice so given: To the Optionee: To his last address provided to the Company To the Company: Iron Mountain Incorporated 745 Atlantic Avenue Boston, Massachusetts 02111 Attn: Chief Financial Officer Copy to: Sullivan & Worcester LLP One Post Office Square Boston, Massachusetts 02109 Attn: David A. Guadagnoli, Esq. (f) VERSION NUMBER. This document is Version 1 of the Stock Option Agreement. IN WITNESS WHEREOF, the Company has caused this Option Agreement to be issued as of the Grant Date set forth on Certificate. IRON MOUNTAIN INCORPORATED -------------------------------------- Title: Vice President and Treasurer - 5 - EX-10.18 11 a2152867zex-10_18.txt EXHIBIT 10.18 EXHIBIT 10.18 IRON MOUNTAIN INCORPORATED IRON MOUNTAIN INCORPORATED 2002 STOCK INCENTIVE PLAN STOCK OPTION AGREEMENT This Stock Option Agreement and the associated grant award information (the "Customizing Information"), which Customizing Information is provided in written form or is available in electronic form from the recordkeeper for the Iron Mountain Incorporated 2002 Stock Incentive Plan, as amended and in effect from time to time (the "Plan"), made as of the date shown as the "Grant Date" in the Customizing Information (the "Grant Date") by and between Iron Mountain Incorporated, a Pennsylvania corporation (the "Company"), and the individual identified in the Customizing Information (the "Optionee"). This instrument and the Customizing Information is collectively referred to as the "Option Agreement." WITNESSETH THAT: WHEREAS, the Company has instituted the Plan; and WHEREAS, the Compensation Committee (the "Committee") has authorized the grant of a stock option upon the terms and conditions set forth below and pursuant to the Plan, a copy of which is attached hereto and incorporated herein; NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements herein contained and for other good and valuable consideration the receipt and adequacy of which are hereby acknowledged, the Company and the Optionee agree as follows. 1. GRANT. Subject to the terms of the Plan and this Option Agreement, the Company hereby grants to the Optionee a stock option (the "Option") to purchase from the Company the amount of Common Stock ("Stock") shown in the Customizing Information under "Shares Granted." If so provided in the "Grant Type" shown in the Customizing Information, this Option is intended to constitute an incentive stock option and to qualify for special federal income tax treatment under Section 422 of the Code. 2. GRANT PRICE. This Option may be exercised at the "Grant Price" per share shown in the Customizing Information, subject to adjustment as provided herein and in the Plan. 3. TERM AND EXERCISABILITY OF OPTION. This Option shall expire on the "Expiration Date" shown in the Customizing Information, unless the Option expires earlier pursuant to this Section 3 or any provision of the Plan. At any time before its expiration, this Option may be exercised to the extent vested, as shown in the Customizing Information, provided that: (a) at the time of exercise the Optionee is not in violation of any confidentiality, inventions and/or non-competition agreement with the Company; (b) the Optionee's employment, contractual or other service relationship with the Company ("Relationship") must be in effect on a given date in order for any scheduled increment in vesting, as set forth in the "Vesting Schedule" shown in the Customizing Information, to become effective; and (c) this Option may not be exercised after the sixtieth (60th) day following the date of termination of the Relationship between the Optionee and the Company, except that if the Relationship terminates by reason of the Optionee's death or total and permanent disability (as determined by the Board on the basis of medical advice satisfactory to it), the unexercised portion of the Option that is otherwise exercisable on the date of termination of the Relationship shall remain exercisable thereafter for one (1) year. For purposes of this Section 3, the term "Company" refers to the Company and all Subsidiaries. 4. METHOD OF EXERCISE. Prior to its expiration and to the extent that the right to purchase shares of Stock has vested hereunder, this Option may be exercised from time to time by notice acceptable to the Company stating the number of shares with respect to which this Option is being exercised and accompanied by either (a) payment in full of the Grant Price for the number of shares to be delivered, by means of payment acceptable to the Company in accordance with Section 5(c) of the Plan, or (b) a description of a "cashless exercise" procedure and such other documents and undertakings as are necessary to satisfy that procedure. The Company, or the Committee, may from time to time designate one or more forms or methods of providing notice of the exercise of an Option and in that event the Optionee agrees to utilize such form or method. As soon as practicable after its receipt of such notice, the Company shall, without transfer or issue tax to the Optionee (or other person entitled to exercise this Option), deliver to the Optionee (or other person entitled to exercise this Option), at the principal executive offices of the Company or such other place as shall be mutually acceptable, a stock certificate or certificates for such shares out of theretofore authorized but unissued shares or reacquired shares of its Stock as the Company may elect; provided, however, that the time of such delivery may be postponed by the Company for such period as may be required for it with reasonable diligence to comply with any applicable requirements of law. If the Optionee (or other person entitled to exercise this Option) fails to pay for and accept delivery of all of the shares specified in such notice upon tender of delivery thereof, his right to exercise this Option with respect to such shares not paid for may be terminated by the Company. The Committee may, in its discretion at the time of exercise of the Option, grant to the Optionee a new option (a "Reload Option") to permit the Optionee to purchase that number of shares of Stock delivered by the Optionee to the Company in full or partial payment of the Grant Price, or in full or partial payment of the tax withholding obligations incurred on account of the exercise of the Option, on such terms and conditions as the Committee may determine under the terms of the Plan. The Grant Price for shares subject to a Reload Option shall be not less than one hundred percent (100%) of the Fair Market Value of the shares on the date of grant of the Reload Option, and the duration of a Reload Option shall be equal to the unexpired term of the exercised Option on the date of exercise. 5. WITHHOLDING TAXES. The Optionee hereby agrees, as a condition to any exercise of this Option, to provide to the Company an amount sufficient to satisfy the Company's obligation - 2 - to withhold federal, state, local and other taxes arising by reason of such exercise (the "Withholding Amount"), if any, by (a) authorizing the Company and/or any Subsidiary to withhold the Withholding Amount from his cash compensation or (b) remitting the Withholding Amount to the Company in cash; provided, however, that to the extent that the Withholding Amount is not provided by one or a combination of such methods, the Company may at its election withhold from the Stock that would otherwise be delivered upon exercise of this Option that number of shares having a Fair Market Value on the date of exercise sufficient to eliminate any deficiency in the Withholding Amount; and provided, further, that the Fair Market Value of Stock withheld shall not exceed an amount in excess of the minimum required withholding. 6. NON-ASSIGNABILITY OF OPTION. This Option shall not be assignable or transferable by the Optionee except by will or by the laws of descent and distribution or as permitted by the Committee in its discretion pursuant to the third sentence of Section 5(h) of the Plan. During the life of the Optionee, this Option shall be exercisable only by him, by a conservator or guardian duly appointed for him by reason of the Optionee's incapacity or by the person appointed by the Optionee in a durable power of attorney acceptable to the Company's counsel. 7. COMPLIANCE WITH SECURITIES ACT; LOCK-UP AGREEMENT. The Company shall not be obligated to sell or issue any shares of Stock or other securities pursuant to the exercise of this Option unless the shares of Stock or other securities with respect to which this Option is being exercised are at that time effectively registered or exempt from registration under the Securities Act and applicable state securities laws. In the event shares or other securities shall be issued that shall not be so registered, the Optionee hereby represents, warrants and agrees that he will receive such shares or other securities for investment and not with a view to their resale or distribution, and will execute an appropriate investment letter satisfactory to the Company and its counsel. The Optionee further hereby agrees that as a condition to the purchase of shares upon exercise of this Option, he will execute an agreement in a form acceptable to the Company to the effect that the shares shall be subject to any underwriter's lock-up agreement in connection with a public offering of any securities of the Company that may from time to time apply to shares held by officers and employees of the Company, and such agreement or a successor agreement must be in full force and effect. 8. LEGENDS. The Optionee hereby acknowledges that the stock certificate or certificates evidencing shares of Stock or other securities issued pursuant to any exercise of this Option may bear a legend setting forth the restrictions on their transferability described in Section 7 hereof, if such restrictions are then in effect. 9. RIGHTS AS STOCKHOLDER. The Optionee shall have no rights as a stockholder with respect to any shares covered by this Option until the date of issuance of a stock certificate to him for such shares. No adjustment shall be made for dividends or other rights for which the record date is prior to the date such stock certificate is issued. 10. TERMINATION OR AMENDMENT OF PLAN. The Board may terminate or amend the Plan at any time. No such termination or amendment will affect rights and obligations under this Option, to the extent it is then in effect and unexercised. - 3 - 11. EFFECT UPON EMPLOYMENT AND PERFORMANCE OF SERVICES. Nothing in this Option or the Plan shall be construed to impose any obligation upon the Company or any Subsidiary to employ or utilize the services of the Optionee or to retain the Optionee in its employ or to engage or retain the services of the Optionee. 12. TIME FOR ACCEPTANCE. Unless the Optionee shall evidence his acceptance of this Option by electronic or other means prescribed by the Committee within thirty (30) days after its delivery to him, the Option shall be null and void (unless waived by the Committee). 13. NOTICE OF DISQUALIFYING DISPOSITION. If the "Grant Type" shown in the Customizing Information indicates that the Option is an ISO, the Optionee agrees to notify the Company promptly in the event that he sells, transfers, exchanges or otherwise disposes of any shares of Stock issued upon exercise of the Option before the later of (a) the second anniversary of the date of grant of the Option and (b) the first anniversary of the date the shares were issued upon his exercise of the Option. 14. RIGHT OF REPAYMENT. In the event that the Optionee accepts employment with or provides services for a competitor of the Company within two (2) years after the date of exercise of this Option or any portion of it, the Optionee shall pay to the Company an amount equal to the excess of the Fair Market Value of the Stock as of the date of exercise over the price paid for such shares; provided, however, that the Committee in its discretion may release the Optionee from the requirement to make such payment, if the Committee determines that the Optionee's acceptance of such employment or performance of such services is not inimical to the best interests of the Company. The Company may deduct the amount of payment due under the preceding sentence from any compensation or other amount payable by the Company to the Optionee. For purposes of this Section 14, the term "Company" refers to the Company and all Subsidiaries. 15. GENERAL PROVISIONS. (a) AMENDMENT; WAIVERS. This Option Agreement, including the Plan, contains the full and complete understanding and agreement of the parties hereto as to the subject matter hereof, and except as otherwise permitted by the express terms of the Plan and this Option Agreement, it may not be modified or amended nor may any provision hereof be waived without a further written agreement duly signed by each of the parties; provided, however, that a modification or amendment that does not materially diminish the rights of the Optionee hereunder, as they may exist immediately before the effective date of the modification or amendment, shall be effective upon written notice of its provisions to the Optionee. The waiver by either of the parties hereto of any provision hereof in any instance shall not operate as a waiver of any other provision hereof or in any other instance. The Optionee shall have the right to receive, upon request, a written confirmation from the Company of the Customizing Information. (b) BINDING EFFECT. This Option Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective heirs, executors, administrators, representatives, successors and assigns. - 4 - (c) GOVERNING LAW. This Option Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts, without regard to the principles of conflicts of law. (d) CONSTRUCTION. This Option Agreement is to be construed in accordance with the terms of the Plan. In case of any conflict between the Plan and this Option Agreement, the Plan shall control. The titles of the sections of this Option Agreement and of the Plan are included for convenience only and shall not be construed as modifying or affecting their provisions. The masculine gender shall include both sexes; the singular shall include the plural and the plural the singular unless the context otherwise requires. Capitalized terms not defined herein shall have the meanings given to them in the Plan. (e) DATA PRIVACY. By entering into this Option Agreement and except as otherwise provided in any data transfer agreement entered into by the Company, the Optionee: (i) authorizes the Company, and any agent of the Company administering the Plan or providing Plan recordkeeping services, to disclose to the Company such information and data as the Company shall request in order to facilitate the grant of options and the administration of the Plan; (ii) waives any data privacy rights he may have with respect to such information; and (iii) authorizes the Company to store and transmit such information in electronic form. For purposes of this Section 15(e), the term "Company" refers to the Company and each of its Subsidiaries. (f) NOTICES. Any notice in connection with this Option Agreement shall be deemed to have been properly delivered if it is delivered in the form specified by the Committee as follows: To the Optionee: To his last address provided to the Company To the Company: Iron Mountain Incorporated 745 Atlantic Avenue Boston, Massachusetts 02111 Attn: Chief Financial Officer (g) VERSION NUMBER. This document is Version 2 of the Iron Mountain Incorporated 2002 Stock Incentive Plan Stock Option Agreement. - 5 - EX-10.53 12 a2152867zex-10_53.txt EXHIBIT 10.53 EXHIBIT 10.53 December 8, 2004 (REVISED DECEMBER 16, 2004) Peter Delle Donne 34 Meachen Road Sudbury MA 01776 Dear Peter: In connection with your separation from employment with Iron Mountain, Incorporated and/or its affiliated entities (collectively "Iron Mountain"), we have agreed to the following: 1. Your have resigned your employment with Iron Mountain as of December 31, 2004 (the "Resignation Date"). Between now and the Resignation Date you will remain on a paid leave of absence and will provide such transition services as Iron Mountain may request. Effective upon your execution and non-revocation of this Agreement, and subject to the provisions of paragraph 6 below, Iron Mountain agrees that your resignation will be treated as a resignation for a "Qualifying Reason" as that term is defined in the employment agreement between you and Iron Mountain dated March 15, 2001 (as revised on April 4, 2001), a copy of which is attached hereto (the "Employment Agreement"). In lieu of the any severance payments that you may be entitled to under the Employment Agreement, you agree that, commencing on the on the Resignation Date, and continuing until May 15, 2006 (the "Consulting Period"), you will provide consulting services to Iron Mountain at such times and with respect to such matters as Iron Mountain may request. These consulting services will be predominately phone matters pertaining to, but not limited to, customers, budget/financial items, and ESS personal matters. Iron Mountain will pay you a total consulting fee of $330,200.00 for your services during the Consulting Period, which amount will be paid to you as follows: (a) $297,180.00 for the period from January 1, 2005, through December 31, 2005, in equal installments at such times as you would have received salary payments had you remain employed by Iron Mountain, and (b) $33,020.00 for the period from January 1, 2006, through May 15, 2006, again in equal installments at such times as you would have received salary payments had you remain employed by Iron Mountain. Any options previously granted to you pursuant to the Iron Mountain Incorporated 2002 Stock Incentive Plan shall continue to vest during the Consulting Period, and you shall have sixty (60) days after the expiration of the Consulting Period to exercise any options you may have. Iron Mountain shall be free to terminate the above consulting arrangement at any time for any reason, with the exception that the consulting arrangement cannot be terminated based on a change in Iron Mountain management; provided, however, that in the event of any such termination you shall remain entitled to receive the balance of the Consulting Fee and the Peter Delle Donne Page 2 payment referenced in paragraph five (5) at such times as you would have received it had Iron Mountain not terminated this consulting arrangement. If the agreement is terminated for any reason, all unvested options as of the date of termination will expire and you will have sixty (60) day from that termination date to exercise vested options. Additionally, subject to your execution and non-revocation of this Agreement, and subject to the provisions of paragraph 6 below, on or before March 31, 2005, Iron Mountain will pay you a bonus on account of calendar year 2004 in an amount equal to at least sixty percent (60%) of your base salary, minus withholdings as required by law. Any amount of such bonus in excess of sixty percent (60%) of your base salary shall be in Iron Mountain's sole discretion. 2. On or shortly after the Resignation Date, Iron Mountain will pay you five (5) weeks of vacation pay, minus required withholdings, which you agree represents the balance of your vacation days accrued but not yet taken as of the Resignation Date. Iron Mountain will also reimburse you for any reasonable business expenses that you may have incurred on Iron Mountain's behalf prior to December 6, 2004, so long as you provide documentation of such expenses in form satisfactory to Iron Mountain prior to December 31, 2004. 3. On or before January 31, 2005, Iron Mountain shall make a lump sum payment to you of $10,000 (grossed up to permit you to pay federal and state payroll taxes on that amount) to assist you in purchasing outplacement services. 4. Iron Mountain will provide you with a mutually agreeable reference from Richard Reese, John Kenny and/or Patricia Bowler to be used with future employers. You will provide a proposed draft of such a reference to Patricia Bowler for Iron Mountain's review. 5. Except as set forth above, after the Resignation Date, you shall not be eligible to participate or continue to participate in any employee benefit plans or programs of Iron Mountain. Commencing on the Resignation Date and continuing during the Consulting Period, Iron Mountain will make a monthly payment to you of $530.66 to assist you in paying the cost of your medical and dental coverage and pension benefit that you have obtained through sources other than Iron Mountain. 6. Any severance or consulting payments due you under this Agreement shall be made to your estate or legal representative in the event of your death. 7. You reaffirm and acknowledge that you remain bound by your obligations under the enclosed Employee Confidentiality and Non-Competition Agreement. For the avoidance of doubt, the two (2) year period referenced in paragraph 3 of the Employee Confidentiality and Non-Competition Agreement shall run from January 1, 2005 through and including December 31, 2006. 8. You agree that Iron Mountain has informed you of your right to consult, and that you should consult, an attorney with respect to this Agreement. You have until twenty-one (21) days from the receipt of this letter to decide whether or not to sign this Agreement. If the Agreement has not been returned to me within twenty-one (21) days of your receipt of this Agreement, this Agreement shall not be valid. In the event that you execute and return this Agreement to me within twenty-one (21) days of the date of its delivery to you, you shall Peter Delle Donne Page 3 have seven (7) days after executing this Agreement to revoke your execution of this Agreement, which can be accomplished by delivering a written notice of revocation to me before the expiration of the seven (7) day revocation period. This Agreement shall not be effective (and Iron Mountain shall have no obligations hereunder) until the expiration of the seven (7) day revocation period. 9. After your employment at Iron Mountain, you will treat as strictly confidential all proprietary or other confidential information of Iron Mountain. All documents (electronic, paper or otherwise), records (electronic, paper or otherwise), materials, software, equipment, and other physical property, and all copies of the foregoing, whether or not otherwise subject to the Confidentiality Agreement, that have come into your possession or been produced by you in connection with your employment ("Property"), have been and remain the sole property of Iron Mountain or the Iron Mountain Affiliates, as applicable. You agree that you have returned all such Property to Iron Mountain or the Iron Mountain Affiliates, as applicable (or, to the extent that you have not, that you immediately will do so); provided, however, that you may keep your current laptop computer. 10. You agree to hold as secret and confidential all details of this Separation Agreement, including its terms and the negotiations leading to it and the contents of the Memorandum ("Agreement-Related Matters"), except as required to seek legal counsel, financial, or tax advice. Further, you agree not to discuss any Agreement-Related Matters with any employee or ex-employee of Iron Mountain, or with any other third parties, without Iron Mountain's written authorization. You may, however, disclose the Agreement, if required to do so by law, provided, however, that if you anticipate making such a disclosure, you agree to provide Iron Mountain with at least 10 days written notice (or, if such notice is not practicable under the circumstances, with as much notice as is practicable) of the anticipated disclosure and the reasons therefore . 11. You agree not to take any action or to make any statement, written or oral, that disparages or criticizes the business or management of Iron Mountain, or any of its respective directors, officers, agents, or employees. You further agree not to take any action that is intended to, or that does in fact, damage the business or reputation of Iron Mountain, or the personal or business reputations of any of its respective directors, officers, agents, or employees, or that interferes with, impairs or disrupts the normal operations of Iron Mountain. 12. You, your heirs, successors, and assigns, hereby knowingly and voluntarily remise, release and forever discharge Iron Mountain, together with all of its respective current and former officers, directors, agents, representatives and employees, and each of its predecessors, successors and assigns (collectively, the "Releasees"), from any and all debts, demands, actions, causes of actions, accounts, covenants, contracts, agreements, claims, damages, omissions, promises, and any and all claims and liabilities whatsoever, of every name and nature, known or unknown, suspected or unsuspected, both in law and equity ("Claims"), which you ever had, now have, or may hereafter claim to have against the Releasees by reason of any matter, cause or thing whatsoever arising from the beginning of time to the time you sign this Agreement (the "General Release"). This General Release of Claims shall apply to any Claim of any type, including, without limitation, any and all Claims of any type that you may have arising under the common law, under Title VII of the Civil Rights Act of Peter Delle Donne Page 4 1964, the Civil Rights Act of 1991, the Age Discrimination in Employment Act of 1967, the Older Workers Benefit Protection Act, the Americans With Disabilities Act of 1967, the Family and Medical Leave Act of 1993, the Employee Retirement Income Security Act of 1974, or Mass. Gen. Laws ch. 151B, each as amended, and any other federal, state or local statutes, regulations, ordinances or common law creating employment-related causes of action, or under any policy, agreement, understanding or promise, written or oral, formal or informal, between any of the Releasees and you, and shall further apply, without limitation, to any and all Claims in connection with, related to or arising out of your employment, or the termination of your employment, with Iron Mountain, and all Claims for alleged tortious, defamatory or fraudulent conduct. You also hereby waive any Claim for reinstatement, severance pay, attorney's fees, or costs. By signing this Agreement, you agree and represent that you will not be entitled to any personal recovery in any action or proceeding that may be commenced on your behalf arising out of any of the matters that are the subject of the General Release; PROVIDED, HOWEVER, that nothing in this General Release shall prevent you from seeking to enforce your rights under this Agreement. 13. During and after the termination of your employment, you agree to cooperate fully with Iron Mountain concerning requests for information about the business of Iron Mountain or your involvement and participation therein; the defense or prosecution of any claims or actions now in existence or which may be brought in the future against or on behalf of Iron Mountain which relate to events or occurrences that transpired while you were employed by Iron Mountain. Your full cooperation shall include, but not be limited to, being available to meet and speak with officers or employees of Iron Mountain and/or their counsel at reasonable times and locations, executing accurate and truthful documents and taking such other actions as may reasonably be requested by Iron Mountain and/or their counsel to effectuate the foregoing. Iron Mountain agrees to reimburse you for any reasonable, out-of-pocket travel; hotel and meal expenses incurred in connection with your performance of obligations for which you have obtained prior approval from Iron Mountain. In addition, Iron Mountain will consider reimbursing you for your time spent in performing your obligations under paragraph 13 other than for routine matters or for time spent in testifying on Iron Mountain's behalf, the terms of such reimbursement to be negotiated on a case-by-case basis. 14. This Agreement is intended to operate as a contract under seal and shall be governed by, and enforced and interpreted in accordance with, the law of the Commonwealth of Massachusetts, and you hereby consent to jurisdiction in courts located in the Commonwealth of Massachusetts with respect to all matters arising out of or related to this Agreement. 15. Other than the enclosed Employee Confidentiality and Non-Competition Agreement, this Agreement constitutes the entire agreement and understanding between you and Iron Mountain and supersedes all other agreements between you and Iron Mountain. This Agreement (and its enclosures) may be modified, altered or amended only by a document signed by you and an authorized representative of Iron Mountain. Iron Mountain, in its sole discretion, will consider waiving restrictions of the Employee Confidentiality and Non-Competition Agreement on a case-by-case basis in response to a written request for a waiver Peter Delle Donne Page 5 from you that describes in detail all of the facts and circumstances as to which you are requesting a waiver. 16. It is the desire and intent of the parties that the provisions of this Agreement shall be enforced to the fullest extent permissible under the laws and public policies applied in each jurisdiction in which enforcement is sought. In the event that any one or more of the provisions of this Agreement shall be held to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. Moreover, if any one or more of the provisions contained in this Agreement shall be held to be excessively broad as to duration, scope, activity or subject, such provisions shall be construed by limiting or reducing them so as to be enforceable to the maximum extent compatible with applicable law. 17. By signing this Agreement, you acknowledge that you are doing so knowingly and voluntarily, and that you are receiving compensation and benefits hereunder to which you are not otherwise entitled. You also acknowledge that you are not relying on any representations or promises by me or any other representative of Iron Mountain concerning the meaning or any aspect of this Agreement. If the terms of this Agreement are agreeable to you, please sign and return one copy of this letter to me indicating your understanding of this Agreement. The other copy of this Agreement is for your records. Sincerely, Iron Mountain Records Management By /s/ Patricia M. Bowler ----------------------- Patricia M. Bowler Agreed and Accepted: /s/ Peter Delle Donne 12-20-04 - ------------------------- -------------------- Peter Delle Donne Date Enclosures EX-12 13 a2152867zex-12.txt EXHIBIT 12 Exhibit 12 IRON MOUNTAIN INCORPORATED STATEMENT OF THE CALCULATION OF RATIO OF EARNINGS TO FIXED CHARGES (Dollars in thousands)

(1) We reported a loss from continuing operations before provision for income taxes and minority interest for the years ended December 31, 2000 and December 31, 2001 and we would have needed to generate additional income from operations before provision for income taxes and minority interest of $23,291 and $28,111, respectively to cover our fixed charges of $154,975 and $177,032, respectively. EX-21 14 a2152867zex-21.txt EXHIBIT 21 EXHIBIT 21 SCHEDULE OF SUBSIDIARIES AS OF MARCH 2, 2005

Page 4 EX-23.1 15 a2152867zex-23_1.txt EX-23.1 Exhibit 23.1 CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM We consent to the incorporation by reference in Registration Statements on Forms S-3 (File No. 333-105494), S-4 (File No. 333-91577) and S-8 (File Nos. 333-43787, 333-89008, 333-95901, 333-105938, File No. 333-114398, File No. 333-118322, and File No. 333-120395) of our reports dated March 11, 2005, relating to the financial statements of Iron Mountain Incorporated and management's report of the effectiveness of internal control over financial reporting, appearing in this Annual Report on Form 10-K of Iron Mountain Incorporated for the year ended December 31, 2004. /s/ DELOITTE & TOUCHE LLP Boston, MA March 11, 2005 EX-23.2 16 a2152867zex-23_2.txt EXHIBIT 23.2 EXHIBIT 23.2 INDEPENDENT AUDITORS' CONSENT We hereby consent to the incorporation by reference of our report dated March 8, 2004 (which expresses an unqualified opinion), included in this Form 10-K, into Iron Mountain Incorporated's previously filed Registration Statements on Forms S-3 (File No. 333-105494), S-4 (File No. 333-91577) and S-8 (File Nos. 333-43787, 333-89008, 333-95901, 333-105938, 333-114398, 333-118322, and 333-120395). /s/ RSM Robson Rhodes LLP Chartered Accountants Birmingham, England March 10, 2005 EX-31.1 17 a2152867zex-31_1.txt EXHIBIT 31.1 EXHIBIT 31.1 CERTIFICATIONS I, C. Richard Reese, certify that: 1. I have reviewed this annual report on Form 10-K of Iron Mountain Incorporated; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of end of the period covered by this report based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: March 16, 2005 /s/ C. RICHARD REESE ------------------------------------- C. Richard Reese Chief Executive Officer EX-31.2 18 a2152867zex-31_2.txt EXHIBIT 31.2 EXHIBIT 31.2 CERTIFICATIONS I, John F. Kenny, Jr., certify that: 1. I have reviewed this annual report on Form 10-K of Iron Mountain Incorporated; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of end of the period covered by this report based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: March 16, 2005 /s/ JOHN F. KENNY, JR. --------------------------------------- John F. Kenny, Jr. Chief Financial Officer EX-32.1 19 a2152867zex-32_1.txt EXHIBIT 32.1 EXHIBIT 32.1 CERTIFICATION PURSUANT TO 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 In connection with the filing of the Annual Report on Form 10-K for the year ended December 31, 2004 (the "Report") by Iron Mountain Incorporated (the "Company"), the undersigned, as the Chief Executive Officer of the Company, hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge: 1. the Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934; and 2. the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Date: March 16, 2005 /s/ C. RICHARD REESE --------------------------------------- C. Richard Reese Chief Executive Officer EX-32.2 20 a2152867zex-32_2.txt EXHIBIT 32.2 EXHIBIT 32.2 CERTIFICATION PURSUANT TO 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 In connection with the filing of the Annual Report on Form 10-K for the year ended December 31, 2004 (the "Report") by Iron Mountain Incorporated (the "Company"), the undersigned, as the Chief Financial Officer of the Company, hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge: 1. the Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934; and 2. the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Date: March 16, 2005 /s/ JOHN F. KENNY, JR. --------------------------------------- John F. Kenny, Jr. Chief Financial Officer -----END PRIVACY-ENHANCED MESSAGE-----