ABM INDUSTRIES INCORPORATED
STATEMENT OF TERMS AND CONDITIONS APPLICABLE TO
OPTIONS, RESTRICTED STOCK, RESTRICTED STOCK UNITS
AND PERFORMANCE SHARES GRANTED TO EMPLOYEES
PURSUANT TO THE 2006 EQUITY INCENTIVE PLAN
(As Adopted October __ 2, 2006)
The following
terms and conditions shall apply to each Award granted under the
Plan to an Employee eligible to participate in the Plan. This
Statement of Terms and Conditions is subject to the terms of the
Plan and of any Award made pursuant to the Plan. In the event of
any inconsistency between this Statement of Terms and Conditions
and the Plan, the Plan shall govern.
Capitalized
terms not otherwise defined in this Statement of Terms and
Conditions shall have the meaning set forth in the Plan. When
capitalized in this Statement of Terms and Conditions, the
following additional terms shall have the meaning set forth
below:
A. “
Grant Date ” means the date the Administrator grants
the Award.
B. “
Option Period ” means the period commencing on the
Grant Date of an Option and, except at otherwise provided in
Section III.E, ending on the Termination Date.
C. “
Termination Date ” means the date that an Option
expires as set forth in the Option Agreement .
A.
Option Notice and Agreement . An Option granted under the
Plan shall be evidenced by an Option Agreement setting forth the
terms and conditions of the Option, including whether the Option is
an Incentive Stock Option or a Nonqualified Stock Option and the
number of Shares subject to the Option. Each Option Agreement shall
incorporate by reference and be subject to this Statement of Terms
and Conditions and the terms and conditions of the Plan.
B.
Exercise Price . The Exercise Price of an Option, as
specified in the Option Agreement, shall be equal to or greater
than the Fair Market Value of the Shares underlying the Option on
the Grant Date.
C.
Option Period . An Option shall be exercisable only during
the applicable Option Period, and during such Option Period the
exercisability of the Option shall be subject to the vesting
provisions of Section III.D as modified by the rules set forth
in Sections III.E, V and VI. The Option Period shall be not
more than seven years from the Grant Date.
D.
Vesting of Right to Exercise Options .
1. Except as
provided in Sections V and VI, an Option shall be exercisable
during the Option Period in accordance with the following vesting
schedule: (i) 25 percent of the Shares subject to the
Option shall vest on the first anniversary of the Grant Date;
(ii) an additional 25 percent of the Shares shall vest on
the second anniversary of the Grant Date; (iii) an additional
25 percent of the Shares shall vest on the third anniversary
of the Grant Date; and (iv) the remaining 25 percent of
the Shares subject to the Option shall vest on the fourth
anniversary of the Grant Date. Notwithstanding the foregoing, the
Administrator may specify a different vesting schedule at the time
the Option is granted and as specified in the Option
Agreement.
2. Any vested
portion of an Option not exercised hereunder shall accumulate and
be exercisable at any time on or before the Termination Date,
subject to the rules set forth in Sections III.E, V and VI. No
Option may be exercised for less than 5 percent of the total
number of Shares then available for exercise under such Option. In
no event shall the Company be required to issue fractional
shares.
E.
Termination of Employment . In addition to the terms set
forth in the Plan with respect to termination of
employment:
1. If a
Participant ceases to be a bona fide employee of the Company or an
Affiliate due to his or her Retirement, Disability or death during
the Option Period, in addition to any Shares vested under the
Option Agreement prior to the date of Disability or death, the
Option shall vest in the number of Shares equal to 25 percent
of the number of Shares originally subject to the Option,
multiplied by the number of whole months between the most recent
anniversary date of the Option grant and the date of Retirement,
Disability or death, and divided by 12.
2. If a
Participant who ceases to be a bona fide employee of the Company or
an Affiliate is subsequently rehired prior to the expiration of his
or her Option, then the Option shall continue to remain outstanding
until such time as the Participant subsequently terminates
employment or the Option otherwise terminates pursuant to this
Statement of Terms and Conditions. Upon the Participant’s
subsequent termination of employment, the post-termination exercise
period calculated pursuant to the terms and conditions of this
Section III.E shall be reduced by the number days between the
date of the Participant’s initial termination of employment
and his or her rehire date; provided, however, that if the rehired
Participant continues to be employed by the Company or an Affiliate
for at least one year from his or her rehire date, then the
post-termination exercise period for the Option shall be determined
in accordance with the Plan and shall not be adjusted as described
above.
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F.
Method of Exercise . A Participant may exercise an Option
with respect to all or any part of the exercisable Shares as
follows:
1. By giving
the Company, or its authorized representative designated for this
purpose, written notice of such exercise specifying the number of
Shares as to which the Option is so exercised. Such notice shall be
accompanied by an amount equal to the Exercise Price of such
Shares, in the form of any one or combination of the
following:
a. cash or
certified check, bank draft, postal or express money order payable
to the order of the Company in lawful money of the United
States;
b. if approved
by the Company at the time of exercise, personal check of the
Participant;
c. if approved
by the Company at the time of exercise, a “net
exercise” pursuant to which the Company will not require a
payment of the exercise price from the Participant but will reduce
the number of Shares issued upon the exercise by the largest number
of whole Shares that has a Fair Market Value that does not exceed
the aggregate exercise price. With respect to any remaining balance
of the aggregate exercise price, the Company shall accept payment
in a form identified in (a) or (b) of this
section;
d. if approved
by the Company at the time of exercise, by tendering to the Company
or its authorized representative Shares which have been owned by
the Participant for at least six months prior to said tender, and
having a Fair Market Value, as determined by the Company, equal to
the Exercise Price. In the event a Participant tenders Shares to
pay the Exercise Price, tender of Shares acquired through exercise
of an Incentive Stock Option may result in unfavorable income tax
consequences unless such Shares are held for at least two years
from the Grant Date of the Incentive Stock Option and one year from
the date of exercise of the Incentive Stock Option;
e. if approved
by the Company at the time of exercise, delivery (including by FAX
transmission) to the Company or its authorized representative of an
executed irrevocable option exercise form together with irrevocable
instructions to an approved registered investment broker to sell
Shares in an amount sufficient to pay the Exercise Price plus any
applicable withholding taxes and to transfer the proceeds of such
sale to the Company; and
2. If required
by the Company, by giving satisfactory assurance in writing, signed
by the Participant, the Participant shall give his or her assurance
that the Shares subject to the Option are being purchased for
investment and not with a view to
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the
distribution thereof; provided that such assurance shall be deemed
inapplicable to (i) any sale of the Shares by such Participant
made in accordance with the terms of a registration statement
covering such sale, which has heretofore been (or may hereafter be)
filed and become effective under the Securities Act of 1933, as
amended (the “Securities Act”) and with respect to
which no stop order suspending the effectiveness thereof has been
issued, and (ii) any other sale of the Shares with respect to
which, in the opinion of counsel for the Company, such assurance is
not required to be given in order to comply with the provisions of
the Securities Act.
G.
Limitations on Transfer . 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 as set forth in the Plan. In the event of any attempt by
a Participant to 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.
H. No
Shareholder Rights . Neither a Participant nor any person
entitled to exercise a Participant’s rights in the event of
the Participant’s death shall have any of the rights of a
shareholder with respect to the Shares subject to an Option except
to the extent that an Option has been exercised.
IV.
RESTRICTED STOCK, RESTRICTED STOCK UNITS, AND PERFORMANCE
SHARES
A.
Agreement . A Restricted Stock Award, Restricted Stock Unit
Award, or Performance Share Award granted under the Plan shall be
evidenced by an Agreement to be executed by the Participant and the
Company setting forth the terms and conditions of the Award. Each
Award Agreement shall incorporate by reference and be subject to
this Statement of Terms and Conditions and the terms and conditions
of the Plan.
B.
Special Restrictions . Each Restricted Stock Award,
Restricted Stock Unit Award, or Performance Share Award made under
the Plan shall contain the following terms, conditions and
restrictions and such additional terms, conditions and restrictions
as may be determined by the Administrator; provided, however, that
no Award shall be subject to additional terms, conditions and
restrictions which are more favorable to a Participant than the
terms, conditions and restrictions set forth in the Plan, the
Restricted Stock Agreement, Restricted Stock Unit Award Agreement,
Performance Share Award Agreement, or this Statement of Terms and
Conditions.
1.
Restrictions . Until the restrictions imposed on any
Restricted Stock Award shall lapse, shares of Restricted Stock
granted to a Participant: (a) shall not be sold, assigned,
transferred, pledged, hypothecated, or otherwise disposed of, and
(b) shall, if the Participant’s continuous employment
with the
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Company or an
Affiliate shall terminate for any reason (except as otherwise
provided in the Plan or in Section IV.B.2) be returned to the
Company forthwith, and all the rights of the Participant to such
Shares shall immediately terminate. A Participant shall not be
permitted to sell, transfer, pledge, assign or encumber such
Restricted Stock Units or Performance Shares, other than pursuant
to a qualified domestic relations order as defined in the Code or
Title I of the Employee Retirement Income Security Act. If a
Participant ceases to be a bona fide employee of the Company or an
Affiliate (except as otherwise provided in the Plan or in
Section IV.B.2) prior to the lapse of the restrictions imposed
on a Restricted Stock Unit Award or Performance Share Award, the
unvested portion of the Restricted Stock Unit Award or Performance
Share Award shall be forfeited to the Company, and all the rights
of the Participant to such Award shall immediately terminate. If a
Participant is absent from work with the Company or an Affiliate
because of his or her short-term disability or because the
Participant is on an approved leave of absence, the Participant
shall not be deemed during the period of any such absence, by
virtue of such absence alone, to have terminated employment with
the Company or an Affiliate except as the Administrator may
otherwise expressly determine. Notwithstanding the foregoing, if
the Participant is on a voluntary leave of absence for the purpose
of serving the government of the country of which the Participant
is a citizen or in which the Participant’s principal place of
employment is located such leave shall be considered an approved
leave of absence.
2.
Termination of Employment by Reason of Retirement, Disability or
Death .
a.
Restricted Stock Awards and Restricted Stock Unit Awards .
Notwithstanding any provision contained herein or in the Plan or
the Restricted Stock Agreement or Restricted Stock Unit Agreement
to the contr
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