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EXECUTIVE EMPLOYMENT AGREEMENT

Executive Compensation Plan Agreement

EXECUTIVE EMPLOYMENT AGREEMENT You are currently viewing:
This Executive Compensation Plan Agreement involves

Linda S. Auwers | ABM Industries Incorporated

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Title: EXECUTIVE EMPLOYMENT AGREEMENT
Date: 3/29/2006
Industry: SVSBUS     Sector: SERVIC

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exv10w22
 

EXHIBIT 10.22

EXECUTIVE EMPLOYMENT AGREEMENT

THIS EXECUTIVE EMPLOYMENT AGREEMENT (“Agreement”) is effective September 20, 2005, by and between Linda S. Auwers (“Executive”) and ABM Industries Incorporated (“ABM”) for itself and on behalf of its subsidiary corporations as applicable herein.

WHEREAS, the subsidiaries of ABM are engaged in the building maintenance and related service businesses, and

WHEREAS, Executive is experienced in the administration, finance, legal, marketing, and/or operation of such services, and

WHEREAS, ABM and its subsidiaries have invested significant time and money to develop proprietary trade secrets and other confidential business information, as well as invaluable goodwill among its customers, sales prospects and employees, and

WHEREAS, ABM and its subsidiaries have disclosed or will disclose to Executive such proprietary trade secrets and other confidential business information which Executive will utilize in the performance of her duties and responsibilities as Senior Vice President, General Counsel & Secretary and under this Agreement; and

WHEREAS, Executive wishes to, or has been and desires to remain employed by ABM, and to utilize such proprietary trade secrets, other confidential business information and goodwill in connection with her employment;

NOW THEREFORE, Executive and ABM agree as follows:

1.

 

EMPLOYMENT. ABM hereby agrees to employ Executive, and Executive hereby accepts such employment, on the terms and conditions set forth in this Agreement.

 

 

 

2.

 

TITLE. Executive’s title shall be Senior Vice President, General Counsel & Secretary of ABM, subject to modification as determined by ABM’s Board of Directors.

 

 

 

3.

 

DEFINITIONS. The capitalized terms used in this agreement shall have the following definitions:

 

A.

 

“AAA” means the American Arbitration Association.

 

 

 

 

 

B.

 

“ABM” means ABM Industries Incorporated and its successors and assigns.

 

 

 

 

 

C.

 

“Base Salary” means the salary paid under Paragraph 7A for the applicable Fiscal Year.

 

 

 

 

 

D.

 

“Board” means the Board of Directors of ABM.

 


 

 

E.

 

“Bonus” means a performance-based bonus payable under Paragraph 7B of this Agreement.

 

 

 

 

 

F.

 

“Chief Executive Officer” means the Chief Executive Officer of ABM.

 

 

 

 

 

G.

 

“Company” means ABM, its subsidiaries, successors, and assigns.

 

 

 

 

 

H.

 

“Compensation Committee” means the Compensation Committee of the Board.

 

 

 

 

 

I.

 

“EPS” means earnings per share for the applicable Fiscal Year as reported by ABM in its Annual Report on Form 10-K.

 

 

 

 

 

J.

 

“Executive” means Linda S. Auwers.

 

 

 

 

 

K.

 

“Extended Term” means the period for which this agreement is extended under Paragraph 15 of this Agreement.

 

 

 

 

 

L.

 

“Fiscal Year” means the period beginning on November 1 of a calendar year and ending on October 31 of the following calendar year or such other period as shall be designated by the Board as ABM’s fiscal year.

 

 

 

 

 

M.

 

“Initial Term” is the period beginning on September ___, 2005 and ending October 31, 2007, unless sooner terminated under Paragraph 16 of this Agreement.

 

 

 

 

 

N.

 

“Insurance Contribution” means ABM’s contribution to provide group health and life insurance for Executive and excludes any payment by Executive for such coverage.

 

 

 

 

 

O.

 

“Just Cause” means (i) theft or dishonesty, (ii) more than one instance of neglect or failure to perform employment duties, (iii) more than one instance of inability or unwillingness to perform employment duties, (iv) insubordination, (v) abuse of alcohol or other drugs or substances affecting Executive’s performance of her employment duties, (vi) material and willful breach of this Agreement, (vii) other misconduct, unethical or unlawful activity, (viii) 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 (ix) 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.

 

 

 

 

 

P.

 

“Modification Period” means the remainder of the Initial or the then current Extended Term, as applicable, of this Agreement, following the change in Executive’s employment status from that of a full-time employee to that of a part-time employee under Paragraph 14 of this Agreement.

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Q.

 

“Performance Assessment” means the Chief Executive Officer’s annual assessment of Executive’s performance against the Performance Criteria.

 

 

 

 

 

R.

 

“Performance Criteria” means the performance criteria for Executive established annually by the Chief Executive Officer in accordance with Paragraph 7B of this Agreement.

 

 

 

 

 

S.

 

“Proprietary Information” means Company’s proprietary trade secrets and other confidential information not in the public domain, including but not limited to specific customer data such as: (i) the identity of Company’s customers and sales prospects, (ii) the nature, extent, frequency, methodology, cost, price and profit associated with services and products purchased from Company, (iii) any particular needs or preferences regarding its service or supply requirements, (iv) the names, office hours, telephone numbers and street addresses of its purchasing agents or other buyers, (v) its billing procedures, (vi) its credit limits and payment practices, and (vii) its organization structure.

 

 

 

 

 

T.

 

“Section 162(m)” means Section 162(m) of the Internal Revenue Code of 1986, as amended, or any successor statute.

 

 

 

 

 

U.

 

“Significant Transaction” means Company’s acquisition or disposition of a business or assets which ABM is required to report under Item 2.01 of Form 8-K under the rules and regulations issued by the Securities and Exchange Commission.

 

 

 

 

 

V.

 

“State of Employment” means California.

 

 

 

 

 

W.

 

“Target Bonus” means 33.3% of Executive’s Base Salary.

 

 

 

 

 

X.

 

“Total Disability” means Executive’s inability to perform her duties under this Agreement and shall be deemed to occur on the 91st consecutive or non-consecutive calendar day within any 12 month period that Executive is unable to perform her duties under this Agreement because of any physical or mental illness or disability.

 

 

 

 

 

Y.

 

“WTC Related Gain” means the total amount of all items of income included in ABM’s audited consolidated financial statements for any Fiscal Year that result from ABM’s receipt of insurance proceeds or other compensation or damages due to ABM’s loss of property, business or profits as a result of the destruction of the World Trade Center on September 11, 2001.

4.

 

DUTIES & RESPONSIBILITIES. Executive shall assume and perform such executive or managerial duties and responsibilities as are assigned from time-to-time by the Chief Executive Officer or such other officer designated by the Chief Executive Officer, to whom Executive shall report and be accountable.

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5.

 

TERM OF AGREEMENT. This agreement shall end on October 31, 2007, unless sooner terminated pursuant to Paragraph 16 or later extended to an Extended Term under Paragraph 15 of this Agreement.

 

 

 

6.

 

PRINCIPAL OFFICE. During the Initial Term and any Extended Term, as applicable, of this Agreement, Executive shall be based at an ABM office located in the State of Employment or such other location as shall be mutually agreed upon by ABM and Executive.

 

 

 

7.

 

COMPENSATION. ABM agrees to compensate Executive, and Executive agrees to accept as compensation in full, for Executive’s assumption and performance of duties and responsibilities pursuant to this Agreement:

 

A.

 

SALARY. A salary paid in equal installments no less frequently than semi-monthly at the annual rate of $306,153. Executive shall be eligible, at the sole discretion of the Compensation Committee, to receive a merit increase based on Executive’s job performance or for any other reason deemed appropriate by the Compensation Committee.

 

 

 

 

 

B.

 

BONUS. Subject to subparagraphs (iii), (iv) and (v) below, Executive shall be entitled to a Bonus for each Fiscal Year, as follows:

 

 

i.

 

Executive’s Bonus may range from 0% to 150% of the Target Bonus and shall be based on the Performance Assessment of Executive for the applicable Fiscal Year evaluated on the basis of the Performance Criteria. Performance Criteria may include both ABM and individual objectives, may be both qualitative and quantitative in nature and shall be established by the Chief Executive Officer, reviewed by the Compensation Committee, and communicated to Executive within 90 days after the beginning of the Fiscal Year for which they apply. The 2005 Performance Criteria are attached as Exhibit A to this Agreement. The Performance Assessment for each Fiscal Year shall be the responsibility of the Chief Executive Officer, who shall submit the Performance Assessment to the Compensation Committee on the Calculation Worksheet attached as Exhibit B to this Agreement. The determination of the Bonus amount for each Fiscal Year shall be determined by the Compensation Committee based upon the Performance Assessment and the recommendation of the Chief Executive Officer.

 

 

 

 

 

ii.

 

The Compensation Committee reserves the right at any time to adjust the Performance Criteria in the event of a Significant Transaction and/or for any unanticipated and material events that are beyond the control of ABM, including but not limited to acts of god, nature, war or terrorism, or changes in the rules for financial reporting set forth by the Financial Accounting Standards Board, the Securities and Exchange Commission,

4


 

 

rules of the New York Stock Exchange and/or for any other reason which the Compensation Committee determines, in good faith, to be appropriate.

 

iii.

 

ABM shall pay Executive the Bonus for each Fiscal Year following completion of the audit of ABM’s financial statements for such Fiscal Year and within 10 days after determination of the Bonus by the Compensation Committee. In the event of modification of employment under Paragraph 14 or termination of employment hereunder other than (a) a termination under Paragraph 16B, (b) a termination under Paragraph 16C for reasons other than Executive’s health, or (c) Executive’s retiring at age 65 or more with no less than 10 years of employment at Company, ABM shall pay Executive, within 75 days thereafter, a prorated portion of the Target Bonus based on the fraction of the Fiscal Year that has been completed prior to the date of modification or termination.

 

 

 

 

 

iv.

 

Absent bad faith or material error, any conclusions of the Chief Executive Officer with respect to the Performance Assessment or the Compensation Committee with respect to the Performance Criteria or the Bonus shall be final and binding upon Executive and ABM.

 

 

 

 

 

v.

 

No Bonus for any Fiscal Year of ABM (other than the payment of a prorated portion of the Target Bonus under Paragraph 7B(iii) following a modification or termination of employment) shall be payable unless ABM’s EPS for the Fiscal Year then ending is equal to or greater than 80% of ABM’s EPS for the previous Fiscal Year of ABM, in each case excluding any gains and losses from sales of discontinued operations and any WTC Related Gain.

 

 

 

 

 

vi.

 

Notwithstanding any other provision of this Agreement, the Compensation Committee may, prior to the beginning of any Fiscal Year, approve and notify the Executive of a modification to the Target Bonus or the bonus range set forth in subparagraph (i) above. The Compensation Committee’s decision in this regard shall be deemed final and binding on Executive. In addition, the Compensation Committee may grant a discretionary incentive bonus to Executive at any time in its sole discretion.

 

C.

 

FRINGE BENEFITS. Executive shall receive the then current fringe benefits generally provided by ABM to its executives. Such benefits may include but not be limited to the use of an ABM-leased car or a car allowance, group health benefits, long-term disability benefits, group life insurance, sick leave and vacation. Each of these fringe benefits is subject to the applicable ABM policy at all times. Executive expressly agrees that should she terminate employment with ABM for the purpose of being re-employed by an ABM subsidiary or affiliate, she shall “carry-over” any previously accrued but unused vacation balance to the books of the affiliate. ABM reserves the right to add, increase, reduce or eliminate any fringe benefit at any time, but no such benefit or benefits shall be

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reduced or eliminated as to Executive unless generally reduced or eliminated as to senior executives at ABM.

 

D.

 

LIMIT. To the extent that any compensation to be paid to Executive under this Agreement would cause compensation payable to Executive to be non-deductible by ABM as a result of the $1 million compensation limit provisions of Section 162(m), Executive agrees that any such amount in excess of $1 million shall not be paid out to Executive but shall be deferred by Executive under the ABM Deferred Compensation Plan. The distribution of such deferred amounts will be made only after Executive is no longer considered a “covered employee” as defined in Section 162(m). Amounts deferred by Executive will be credited with interest or gains and losses in accordance with the ABM Deferred Compensation Plan.

 

8.

 

PAYMENT OR REIMBURSEMENT OF BUSINESS EXPENSES. ABM shall pay directly or reimburse Executive for reasonable business expenses of ABM incurred by Executive in connection with ABM business in accordance with the ABM Travel & Entertainment Policy.

 

 

 

9.

 

BUSINESS CONDUCT. Executive shall comply with all applicable laws pertaining to the performance of this Agreement, and with all lawful and ethical rules, regulations, policies, codes of conduct, procedures and instructions of Company, including but not limited to the following:

 

A.

 

GOOD FAITH. Executive shall not act in any way contrary to the best interest of Company.

 

 

 

 

 

B.

 

BEST EFFORTS. During all full-time employment hereunder, Executive shall devote full working time and attention to ABM.

 

 

 

 

 

C.

 

VERACITY. Executive shall make no claims or promises to any employee, supplier, contractor, customer or sales prospect of Company that are unauthorized by Company or are in any way untrue.

 

 

 

 

 

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