EXECUTIVE EMPLOYMENT AGREEMENTExecutive Compensation Plan Agreement |
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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:
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1. |
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EMPLOYMENT. ABM hereby agrees to employ Executive,
and Executive hereby accepts such employment, on the terms and conditions set
forth in this Agreement. |
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2. |
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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. |
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3. |
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DEFINITIONS.
The capitalized terms
used in this agreement shall have the following definitions: |
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A. |
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“AAA”
means the American Arbitration Association. |
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B. |
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“ABM”
means ABM Industries Incorporated and its successors and assigns. |
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C. |
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“Base
Salary” means the salary paid under Paragraph 7A for the
applicable Fiscal Year. |
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D. |
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“Board”
means the Board of Directors of ABM. |
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E. |
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“Bonus”
means a performance-based bonus payable under Paragraph 7B of this
Agreement. |
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F. |
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“Chief
Executive Officer” means the Chief Executive Officer of ABM. |
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G. |
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“Company”
means ABM, its subsidiaries, successors, and assigns. |
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H. |
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“Compensation
Committee” means the Compensation Committee of the Board. |
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I. |
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“EPS”
means earnings per share for the applicable Fiscal Year as reported by ABM in
its Annual Report on Form 10-K. |
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J. |
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“Executive”
means Linda S. Auwers. |
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K. |
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“Extended
Term” means the period for which this agreement is extended under
Paragraph 15 of this Agreement. |
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L. |
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“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. |
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M. |
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“Initial
Term” is the period beginning on September ___, 2005 and ending October
31, 2007, unless sooner terminated under Paragraph 16 of this Agreement. |
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N. |
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“Insurance
Contribution” means ABM’s contribution to provide group health
and life insurance for Executive and excludes any payment by Executive for
such coverage. |
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O. |
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“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. |
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P. |
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“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. |
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“Performance
Assessment” means the Chief Executive Officer’s annual assessment
of Executive’s performance against the Performance Criteria. |
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R. |
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“Performance
Criteria” means the performance criteria for Executive established
annually by the Chief Executive Officer in accordance with Paragraph 7B
of this Agreement. |
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S. |
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“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. |
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T. |
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“Section 162(m)”
means Section 162(m) of the Internal Revenue Code of 1986, as amended, or any
successor statute. |
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U. |
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“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. |
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V. |
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“State of
Employment” means California. |
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W. |
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“Target
Bonus” means 33.3% of Executive’s Base Salary. |
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X. |
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“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. |
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Y. |
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“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. |
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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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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. |
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6. |
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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. |
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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: |
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A. |
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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. |
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B. |
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BONUS. Subject
to subparagraphs (iii), (iv) and (v) below, Executive shall be
entitled to a Bonus for each Fiscal Year, as follows: |
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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. |
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ii. |
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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, |
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rules of the New York Stock
Exchange and/or for any other reason which the Compensation Committee
determines, in good faith, to be appropriate.
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iii. |
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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. |
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iv. |
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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. |
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v. |
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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. |
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vi. |
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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. |
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C. |
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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. |
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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. |
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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. |
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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: |
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GOOD FAITH.
Executive shall not act in any way contrary to the best interest of Company. |
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BEST EFFORTS.
During all full-time employment hereunder, Executive shall devote full
working time and attention to ABM. |
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C. |
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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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