2006 EQUITY INCENTIVE PLAN
As amended and restated January 13, 2009
This 2006 Equity
Incentive Plan is intended to provide incentive to Employees and
Directors of ABM Industries Incorporated (the
“Company”) and its eligible Affiliates, to encourage
proprietary interest in the Company and to encourage Employees and
Directors to remain in the service of the Company or its
Affiliates.
(a) “
Administrator ” means the Board or the Committee
appointed to administer the Plan, or a delegate of the Board as
provided in Section 4(c).
(b) “
Affiliate ” means any entity, whether a
corporation, partnership, joint venture or other organization that
directly, or indirectly through one or more intermediaries,
controls, is controlled by, or is under common control with the
Company.
(c) “
After-Tax Amount ” means any amount to be received
by an Executive in connection with a Change in Control determined
on an after-tax basis taking into account the excise tax imposed
pursuant to Code Section 4999, or any successor provision
thereto, any tax imposed by any comparable provision of state law,
and any applicable federal, state and local income and employment
taxes.
(d) “
Award ” means any award of an Option, Stock
Appreciation Rights, Restricted Stock, Restricted Stock Units,
Performance Shares or an Other Share-Based Award under the
Plan.
(e) “
Award Agreement ” means the agreement between the
Company and the recipient of an Award which contains the terms and
conditions pertaining to the Award.
(f) “
Beneficiary ” means a person designated as such by
a Participant or a Beneficiary for purposes of the Plan or
determined with reference to Section 20.
(g) “
Board ” means the Board of Directors of the
Company.
(h) “
Cause ” means (i) theft or dishonesty,
(ii) more than one instance of neglect or failure to perform
employment duties, (iii) inability or unwillingness to perform
employment duties for an Employer, (iv) insubordination,
(v) abuse of alcohol or other drugs or substances affecting
Participant’s performance of his or her employment duties,
(vi) the breach of an employment agreement, including
covenants not to compete, or any other agreement between
Participant and an Employer, (vii) the breach of fiduciary
duties to an Employer or any securities laws applicable to the
Company, (viii) other misconduct, unethical or unlawful
activity, (ix) being charged with a crime involving a fraud,
embezzlement or theft in connection with Participant’s duties
or in the course of Participant’s employment with an
Employer, (x) a conviction of or plea of “guilty”
or “no contest” to a felony under the laws of the
United States or any state thereof, or (xi) a conviction of or
plea of “guilty” or “no contest” to a
misdemeanor involving a crime of moral turpitude under the laws of
the United States or any state thereof.
(i) “
Change in Control ” means, unless otherwise set
forth in an award agreement, that any of the following events
occurs:
(i) any individual,
entity or group (within the meaning of Section 13(d)(3) or
14(d)(2) of the Exchange Act) (a “Person”) (A) is
or becomes the beneficial owner (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of more than 35% of the
combined voting power of the then-outstanding Voting Stock of the
Company or succeeds in having nominees as directors elected in an
“election contest” within the meaning of
Rule 14a-12(c) under the Exchange Act and (B) within
18 months thereafter, individuals who were members of the
Board of Directors of the Company
1
immediately prior to either such
event cease to constitute a majority of the members of the Board of
Directors of the Company;
(ii) a majority of
the Board ceases to be comprised of Incumbent
Directors; or
(iii) the
consummation of a reorganization, merger, consolidation, plan of
liquidation or dissolution, recapitalization or sale or other
disposition of all or substantially all of the assets of the
Company or the acquisition of the stock or assets of another
Company, or other transaction (each, a “Business
Transaction”), unless, in any such case, (A) no Person
(other than the Company, any entity resulting from such Business
Transaction or any employee benefit plan (or related trust)
sponsored or maintained by the Company, any Subsidiary or such
entity resulting from such Business Transaction) beneficially owns,
directly or indirectly, 35% or more of the combined voting power of
the then outstanding shares of Voting Stock of the entity resulting
from such Business Transaction and (B) at least one-half of
the members of the Board of Directors of the entity resulting from
such Business Transaction were Incumbent Directors at the time of
the execution of the initial agreement providing for such Business
Transaction.
(j) “
Code ” means the Internal Revenue Code of 1986, as
amended.
(k) “
Committee ” means the Officer Compensation and
Stock Option Committee of the Board.
(l) “
Common Stock ” means the $.01 par value
common stock of the Company.
(m) “
Company ” means ABM Industries Incorporated, a
Delaware Company.
(n) “
Covered Employee ” shall have the meaning assigned
in Code Section 162(m), as amended, which generally includes
the chief executive officer or any Employee whose total
compensation for the taxable year is required to be reported to
shareholders under the Exchange Act by reason of such Employee
being among the four highest compensated officers for the taxable
year (other than the chief executive officer).
(o) “
Director ” means a director of the
Company.
(p) “
Disability ” or “ Disabled
” means, unless otherwise set forth in an award
agreement, that the Participant is unable to engage in any
substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to
result in death or can be expected to last for a continuous period
of not less than 12 months.
(q) “
Employee ” means an individual employed by the
Company or an Affiliate (within the meaning of Code
Section 3401 and the regulations thereunder).
(r) “
Employer ” means the Company or an Affiliate,
which is the employer of a Participant.
(s) “
Excess Parachute Payment ” means a payment that
creates an obligation for an Executive to pay excise taxes under
Code Section 280G or any successor provision
thereto.
(t) “
Exchange Act ” means the Securities Exchange Act
of 1934, as amended.
(u) “
Exercise Price ” means the price per Share of
Common Stock at which an Option or Stock Appreciation Right may be
exercised.
(v) “
Fair Market Value ” of a Share as of a specified
date means the closing price at which Shares are traded on such
date as reported in the New York Stock Exchange composite
transactions published in the Wall Street Journal, or if no trading
of Shares is reported for that day, on the next following day on
which trading is reported; provided that for purposes of
determining the exercise price of an Incentive Stock Option the
Fair Market Value of a Share as of the date of grant means the
average of the opening and closing price at which Shares are traded
on such date as reported in the New York Stock Exchange composite
transactions published in the Wall Street Journal, or if no trading
of Shares is reported for that day, on the next preceding day on
which trading was reported.
(w) “
Family Member ” means any person identified as an
“immediate family” member in Rule 16(a)-1(c) of
the Exchange Act, as such Rule may be amended from time to time.
Notwithstanding the foregoing, the Administrator may designate any
other person(s) or entity(ies) as a “family
member.”
2
(x) “
Full Value Award ” means an Award denominated in
Shares that does not provide for full payment in cash or property
by the Participant.
(y) “
Incentive Stock Option ” means an Option described
in Code Section 422(b).
(z) “
Incumbent Directors ” means the individuals who,
as of the date of adoption of this Plan, are Directors of the
Company and any individual becoming a Director subsequent to the
date hereof whose election, nomination for election by the
Company’s shareholders, or appointment, was approved by a
vote of at least two-thirds of the then Incumbent Directors (either
by a specific vote or by approval of the proxy statement of the
Company in which such person is named as a nominee for director,
without objection to such nomination); provided, however, that an
individual shall not be an Incumbent Director if such
individual’s election or appointment to the Board occurs as a
result of an actual or threatened election contest (as described in
Rule 14a-12(c) of the Exchange Act) with respect to the
election or removal of Directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person
other than the Board.
(aa) “
Nonqualified Stock Option ” means an Option not
described in Code Section 422(b) or 423(b).
(bb) “
Option ” means a stock option granted pursuant to
Section 7.
(cc) “
Other Share-Based Award ” means an Award granted
pursuant to Section 12.
(dd) “
Outside Director ” means a Director who is not an
Employee.
(ee) “
Participant ” means an Employee or Director who
has received an Award.
(ff) “
Performance Shares ” means an Award denominated in
Shares granted pursuant to Section 11 that may be earned in
whole or in part based upon attainment of performance objectives
established by the Administrator pursuant to
Section 14.
(gg) “
Plan ” means this 2006 Stock Incentive
Plan.
(hh) “
Prior Plans ” means the Company’s 2002
Price-Vested Stock Option Plan, the 1996 Price-Vested Stock Option
Plan and the Time-Vested Stock Option Plan.
(ii) “
Purchase Price ” means the Exercise Price times
the number of whole Shares with respect to which an Option is
exercised.
(jj) “
Restricted Stock ” means Shares granted pursuant
to Section 9.
(kk) “
Restricted Stock Unit ” means an Award denominated
in Shares granted pursuant to Section 10 in which the
Participant has the right to receive a specified number of Shares
over a specified period of time.
(ll) “
Retirement ” means the voluntary termination of
Employment by an Employee at (i) age 60 or
(ii) age 55 or older at a time when age plus years of
service equals or exceeds 65.
(mm) “
Share ” means one share of Common Stock, adjusted
in accordance with Section 18 (if applicable).
(nn) “
Share Equivalent ” means a bookkeeping entry
representing a right to the equivalent of one Share.
(oo) “
Stock Right ” means a right to receive an amount
equal to the value of a specified number of Shares which will be
payable in Shares or cash as established by the
Administrator.
(pp) “
Subsidiary ” means any company in an unbroken
chain of companies beginning with the Company if each of the
companies other than the last company in the unbroken chain owns
stock possessing 50% or more of the total combined voting power of
all classes of stock in one of the other Companies in such
chain.
This Plan was adopted by
the Board on January 10, 2006, to be effective on the date the
Plan is approved by the Company’s shareholders.
3
(a)
Administration with respect to Outside Directors .
With respect to Awards to Outside Directors, the Plan
shall be administered by the Board or the Governance Committee of
the Board. Notwithstanding the foregoing, all Awards made to
members of the Governance Committee of the Board shall be approved
by the Board.
(b)
Administration with respect to Employees .
With respect to Awards to Employees, the Plan shall be
administered by the Board or the Committee.
(i) If any member
of the Committee does not qualify as an “outside
director” for purposes of Code Section 162(m), Awards
under the Plan for the Covered Employees shall be administered by a
subcommittee consisting of each Committee member who qualifies as
an “outside director.” If fewer than two Committee
members qualify as “outside directors,” the Board shall
appoint one or more other Board members to such subcommittee who do
qualify as “outside directors,” so that the
subcommittee will at all times consist of two or more members all
of whom qualify as “outside directors” for purposes of
Code Section 162(m).
(ii) If any member
of the Committee does not qualify as a “non-employee
director” for purposes of Rule 16b-3 promulgated under
the Exchange Act, then Awards under the Plan for the executive
officers of the Company and Directors shall be administered by a
subcommittee consisting of each Committee member who qualifies as a
“non-employee director.” If fewer than two Committee
members qualify as “non-employee directors,” then the
Board shall appoint one or more other Board members to such
subcommittee who do qualify as “non-employee
directors,” so that the subcommittee will at all times
consist of two or more members all of whom qualify as
“non-employee directors” for purposes of
Rule 16b-3 promulgated under the Exchange Act.
(c)
Delegation of Authority to an Officer of the Company
. The Board may delegate to an officer or officers
of the Company the authority to administer the Plan with respect to
Awards made to Employees who are not subject to Section 16 of
the Exchange Act.
(d) Powers
of the Administrator . The Administrator shall
from time to time at its discretion make determinations with
respect to Employees and Directors who shall be granted Awards, the
number of Shares or Share Equivalents to be subject to each Award,
the vesting of Awards, the designation of Options as Incentive
Stock Options or Nonqualified Stock Options and other conditions of
Awards to Employees and Directors.
The interpretation and
construction by the Administrator of any provisions of the Plan or
of any Award shall be final. No member of a Committee shall be
liable for any action or determination made in good faith with
respect to the Plan or any Award.
(e) Claims
Administration . Notwithstanding the foregoing,
within 30 days after a Change in Control, the Committee shall
appoint an independent committee consisting of at least three
current (as of the effective date of such event) or former officers
and Directors of the Company, which shall thereafter administer all
claims for benefits under the Plan. Upon such appointment the
Administrator shall cease to have any responsibility for claims
administration under the Plan but shall continue to administer the
Plan.
Subject to the terms and
conditions set forth below, Awards may be granted to Employees and
Directors. Notwithstanding the foregoing, only employees of the
Company and its Subsidiaries may be granted Incentive Stock
Options.
(a) Ten
Percent Shareholders . An Employee who
owns more than 10% of the total combined voting power of all
classes of outstanding stock of the Company, its parent or any of
its Subsidiaries is not eligible to receive an Incentive Stock
Option pursuant to this Plan. For purposes of this
Section 5(a) the stock ownership of an Employee shall be
determined pursuant to Code Section 424(d).
(b) Number
of Awards . A Participant may receive more than
one Award, including Awards of the same type, but only on the terms
and subject to the restrictions set forth in the Plan. Subject to
adjustment as
4
provided in Section 18, the
maximum aggregate number of Shares or Share Equivalents that may be
subject to Awards to a Participant in any calendar year is
1,000,000 Shares. Notwithstanding the foregoing, for any one
Share granted pursuant to a Full Value Award, 2.12 fewer Shares may
be made subject to Awards to that Participant in that calendar
year.
The stock subject to
Awards granted under the Plan shall be Shares of the
Company’s authorized but unissued or reacquired Common Stock.
The aggregate number of Shares subject to Awards issued under this
Plan shall not exceed 7,879,265 Shares. Notwithstanding the
foregoing, for any one Share issued in connection with a Full Value
Award, 2.12 fewer Shares will be available for issuance in
connection with future Awards. If any outstanding Option under the
Plan or any outstanding stock option grant under the Prior Plans
for any reason expires or is terminated or any Restricted Stock or
Other Share-Based Award is forfeited and under the terms of the
expired or terminated Award the Participant received no benefits of
ownership during the period the Award was outstanding, then the
Shares allocable to the unexercised portion of such Option or the
forfeited Restricted Stock or Other Share-Based Award may again be
subjected to Awards under the Plan. The following Shares may not
again be made available for issuance under the Plan: Shares not
issued or delivered as a result of the net exercise of a Stock
Appreciation Right or Option and Shares used to pay the withholding
taxes related to an Award.
The limitations
established by this Section 6 shall be subject to adjustment
as provided in Section 18.
|
|
|
7.
|
TERMS AND CONDITIONS OF
OPTIONS .
|
Options granted to
Employees and Directors pursuant to the Plan shall be evidenced by
written Option Agreements in such form as the Administrator shall
determine, subject to the following terms and
conditions:
(a) Number
of Shares . Each Option shall state the number
of Shares to which it pertains, which shall be subject to
adjustment in accordance with Section 18.
(b) Exercise
Price . Each Option shall state the Exercise
Price, determined by the Administrator, which shall not be less
than the Fair Market Value of a Share on the date of grant, except
as provided in Section 18.
(c) Medium
and Time of Payment . The Purchase Price shall
be payable in full in United States dollars upon the exercise of
the Option; provided that with the consent of the Administrator and
in accordance with its rules and regulations, the Purchase Price
may be paid by the surrender of Shares in good form for transfer,
owned by the person exercising the Option and having a Fair Market
Value on the date of exercise equal to the Purchase Price, or in
any combination of cash and Shares, or in such acceptable form of
payment as approved by the Administrator, so long as the total of
the cash and the Fair Market Value of the Shares surrendered equals
the Purchase Price. No Shares shall be issued until full payment
has been made.
(d) Term and
Exercise of Options; Nontransferability of Options .
Each Option shall state the date after which it shall
cease to be exercisable. No Option shall be exercisable after the
expiration of seven years from the date it is granted or such
lesser period established by the Administrator. An Option shall,
during a Participant’s lifetime, be exercisable only by the
Participant. No Option or any right granted thereunder shall be
transferable by the Participant by operation of law or otherwise,
other than by will or the laws of descent and distribution.
Notwithstanding the foregoing, (i) a Participant may designate
a Beneficiary to succeed, after the Participant’s death, to
all of the Participant’s Options outstanding on the date of
death; (ii) a Nonstatutory Stock Option or any right granted
thereunder may be transferable pursuant to a qualified domestic
relations order as defined in the Code or Title I of the
Employee Retirement Income Security Act; and (iii) any
Participant may voluntarily transfer any Nonstatutory Stock Option
to a Family Member as a gift or through a transfer to an entity
domiciled in the United States in which more than 50% of the voting
or beneficial interests are owned by Family Members (or the
Participant) in exchange for an interest in that entity. In the
event of any attempt by a Participant to
5
alienate, assign, pledge,
hypothecate or otherwise dispose of an Option or of any right
thereunder, except as provided herein, or in the event of the levy
of any attachment, execution or similar process upon the rights or
interest hereby conferred, the Company at its election may
terminate the affected Option by notice to the Participant and the
Option shall thereupon become null and void.
(e)
Termination of Employment . In the event
that a Participant who is an Employee ceases to be employed by the
Company or any of its Affiliates for any reason, such Participant
(or in the case of death, such Participant’s designated
Beneficiary) shall have the right (subject to the limitation that
no option may be exercised after its stated expiration date) to
exercise the Option either:
(i) within four
months after such termination of employment; or
(ii) in the case of
Retirement or death, within one year after the date
thereof; or
(iii) in the case
of Disability, within one year from the date the Committee or its
delegate determines that the Participant is
Disabled; or
(iv) on such other
terms established by the Committee in the Agreement or otherwise
prior to termination to the extent that, at the date of termination
of employment, the Option had vested pursuant to the terms of the
Option Agreement with respect to which such Option was granted and
had not previously been exercised. However, in addition to the
rights and obligations established in Section 16 below, if the
employment of a Participant is terminated by the Company or an
Affiliate by reason of Cause, such Option shall cease to be
exercisable at the time of the Participant’s termination of
employment. The Administrator (or its delegate) shall determine
whether a Participant’s employment is terminated by reason of
Cause. In making such determination the Administrator (or its
delegate) shall act fairly and shall give the Participant an
opportunity to be heard and present evidence on his or her behalf.
If a Participant’s employment terminates for reasons other
than Cause, but Cause is discovered after the termination and is
determined to have occurred by the Administrator (or its delegate),
all outstanding Options shall cease to be exercisable upon such
determination.
For purposes of this
Section, the employment relationship will be treated as continuing
while the Participant is on military leave, sick leave (including
short-term disability) or other bona fide leave of absence (to be
determined in the sole discretion of the Administrator, in
accordance with rules and regulations construing Code
Sections 422(a)(2) and 409A). Notwithstanding the foregoing,
in the case of an Incentive Stock Option, employment shall not be
deemed to continue beyond three months after the Participant ceased
active employment, unless the Participant’s reemployment
rights are guaranteed by statute or by contract. In the event that
an Incentive Stock Option is exercised after the period following
termination of employment that is required for qualification under
Code Section 422(b), such option shall be treated as a
Nonqualified Stock Option for all Plan purposes.
In the event an Outside
Director terminates service as a Director, the former Director (or
his or her designated Beneficiary in the event of the Outside
Director’s death) shall have the right (subject to the
limitation that no option may be exercised after its stated
expiration date) to exercise the Option (to the extent vested
pursuant to the terms of the Option Agreement and not previously
exercised) within one year after such termination or on such other
terms established by the Board in the Agreement or otherwise prior
to termination of service.
(f) Rights
as a Shareholder . A Participant or a
transferee of a Participant shall have no rights as a shareholder
with respect to any Shares covered by his or her Option until the
date of issuance of a stock certificate for such Shares. No
adjustment shall be made for dividends, distributions or other
rights for which the record date is prior to the date such stock
certificate is issued, except as provided in
Section 18.
(g)
Modification, Extension and Renewal of Options .
Subject to the terms and conditions and within the
limitations of the Plan, including the limitations of
Section 22, the Administrator may modify, extend or renew
outstanding Options granted to Employees and Directors under the
Plan. Notwithstanding
6
the foregoing, however, no
modification of an Option shall, without the consent of the
Participant, alter or impair any rights or obligations under any
Option previously granted under the Plan or cause any Option to
fail to be exempt from the requirements of Code
Section 409A.
(h)
Limitation of Incentive Stock Option Awards .
If and to the extent that the aggregate Fair Market
Value (determined as of the date the Option is granted) of the
Shares with respect to which any Incentive Stock Options are
exercisable for the first time by a Participant during any calendar
year under this Plan and all other
|
