ABM INDUSTRIES
INCORPORATED
“TIME VESTED” INCENTIVE
STOCK OPTION PLAN
(as amended and restated as of June 7, 2005)
This
“Time Vested” Incentive Stock Option Plan (the
“Plan”) is intended to increase incentive and to
encourage stock ownership on the part of nonemployee directors of
ABM Industries Incorporated (the “Company”) and
selected key employees of the Company or of other corporations
which are to become subsidiaries of the Company, and other
individuals whose efforts may aid the Company. It is also the
purpose of the Plan to provide such employees and other individuals
with a proprietary interest, or to increase their proprietary
interest, in the Company and its subsidiaries, and to encourage
them to remain in the employ of the Company or its subsidiaries. It
is intended that certain options granted pursuant to the Plan shall
constitute incentive stock options within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended
(the “Code”), and that certain other options granted
pursuant to the Plan shall not constitute incentive stock options
(“nonqualified stock options”).
The
Plan shall be administered by the Officer Compensation & Stock
Option Committee (the “Committee”) of the Board of
Directors of the Company (the “Board”). The Committee
shall from time to time at its discretion make determinations with
respect to the persons to who options shall be granted and the
amount of such options. The Committee shall consist of not fewer
than three members of the Board. Each member of the Committee shall
be a “disinterested person” as defined in Rule 16b-3
under the Securities Exchange Act of 1934, as amended
(“Rule 16b-3”).
The
interpretation and construction by the Committee of any provisions
of the Plan or of any option granted under it shall be final. No
member of the Committee shall be liable for any action or
determination made in good faith with respect to the Plan or any
option granted under it.
Subject
to Section 2 of this Article I, the persons who shall be
eligible to receive options under the Plan shall be such officers
and key employees (including directors who are also salaried
employees of the Company) of the Company as the Committee shall
select. In addition, independent contractors of the Company who are
not also salaried employees of the Company shall be eligible to
receive nonqualified stock options (but
such persons
shall not be eligible to receive incentive stock options). The
terms “officers and key employees” as used herein shall
mean such key employees as may be determined by the Committee in
its sole discretion. Directors of the Company who are not employees
of the Company nor of any of its subsidiary corporations
(“nonemployee directors”) shall be eligible only for
the options automatically granted pursuant to
Article V.
Except
where the context otherwise requires, the term
“Company,” as used herein, shall include (i) ABM
Industries Incorporated and (ii) any of its “subsidiary
corporations” which meet the definition of subsidiary
corporation contained in Section 424(f) of the Code, and the terms
“officers and key employees of the Company,” and words
of similar import, shall include officers and key employees of each
such subsidiary corporation, as well as officers and key employees
of ABM Industries Incorporated.
4. SHARES OF
STOCK SUBJECT TO THE PLAN.
The
shares that may be issued under the Plan shall be authorized and
unissued and reacquired shares of the Company’s common stock
(the “Common Stock”). The aggregate number of shares
which may be issued under the Plan shall not exceed 8,400,000
shares of Common Stock, unless an adjustment is required in
accordance with Article III.
5. AMENDMENT OF
THE PLAN.
The
Board of Directors may at any time, or from time to time, amend
this Plan in any respect, except that, to the extent required to
maintain this Plan’s qualification under Rule 16b-3, any
such amendment shall be subject to stockholder approval. In
addition, as required by Rule 16b-3, the provisions of
Article V regarding the formula for determining the amount,
exercise price, and timing of nonemployee director options shall in
no event be amended more than once every six months, other than to
comport with changes in the Code and/or the Employee Retirement
Income Security Act of 1974, as amended (“ERISA”).
(ERISA is inapplicable to the Plan.)
6. APPROVAL OF
STOCKHOLDERS.
All
options granted under the Plan before the Plan is approved by
affirmative vote at the next meeting of stockholders of the
Company, or any adjournment thereof, of the holders of a majority
of the outstanding shares of Common Stock shall be subject to such
approval. No option granted hereunder may become exercisable unless
and until such approval is obtained.
The
Plan, as amended and restated herein, shall remain in effect until
amended or terminated by the Board in accordance with
Section 5 of Article I. However, without further
stockholder approval, no option which is intended to be an
incentive stock option may be granted under the Plan after
December 19, 2005. Notwithstanding the foregoing,
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each option
granted under the Plan shall remain in effect until such option has
been satisfied by the issuance of shares or terminated in
accordance with its terms and the terms of the Plan.
All
options granted under the Plan shall be subject to the requirement
that, if at any time the Committee shall determine, in its
discretion, that the listing, registration or qualification of the
shares subject to options granted under the Plan upon any
securities exchange or under any state or federal law, or the
consent or approval of any government regulatory body, is necessary
or desirable as a condition of, or in connection with, the granting
of such option or the issuance, if any, or purchase of shares in
connection therewith, such options may not be exercised in whole or
in part unless such listing, registration, qualification, consent
or approval shall have been effected or obtained free of any
conditions not acceptable to the Committee.
No
option shall be assignable or transferable by the grantee except by
will or by the laws of descent and distribution. During the
lifetime of the optionee, the option shall be exercisable only by
him, and no other person shall acquire any rights
therein.
Whenever
shares of Common Stock are to be issued under the Plan, the Company
shall have the right to require the optionee to remit to the
Company an amount sufficient to satisfy federal, state and local
withholding tax requirements prior to the delivery of any
certificate or certificates for such shares.
11. DEFINITION
OF “FAIR MARKET VALUE.”
For
the purposes of this Plan, the term “fair market
value,” when used in reference to the date of grant of an
option or the date of surrender of Common Stock in payment for the
purchase of shares pursuant to the exercise of an option, as the
case may be, shall refer to the closing price of the Common Stock
as quoted in the Composite Transactions Index for the New York
Stock Exchange, on the day before such date as published in the
“Wall Street Journal,” or if no sale price was quoted
in any such Index on such date, then as of the next preceding date
on which such a sale price was quoted; provided, however, that when
the term “fair market value” is used in reference to
the grant of an option which is effective on a future date set by
the Compensation Committee, “fair market value” shall
refer to the closing price of the Common Stock as quoted in the
Composite Transactions Index for the New York Stock Exchange, on
such effective date as published in the “Wall Street
Journal.”
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1. AWARD OF
STOCK OPTIONS.
Awards
of stock options may be made under the Plan under all the terms and
conditions contained herein. However, in the cases of incentive
stock options the aggregate fair market value (determined as of the
date of grant) of the stock with respect to which incentive stock
options are exercisable for the first time by such officer or key
employee during any calendar year (under all incentive stock
options plans of the Company and its parent and subsidiary
corporations) shall not exceed $100,000. The date on which any
option is granted shall be the date of the Committee’s
authorization of such grant or such later date as may be determined
by the Committee at the time such grant is authorized.
2. TERM OF
OPTIONS AND EFFECT OF TERMINATION.
Notwithstanding
any other provision of the Plan, no nonqualified stock option
granted under the Plan shall be exercisable after the expiration of
ten (10) years and one (1) month from the date of its
grant, and no incentive stock option granted under the Plan shall
be exercisable after the expiration of ten (10) years from the
date of grant. In addition, notwithstanding any other provision of
the Plan, no incentive stock option granted under the Plan to a
person who, at the time such option is granted and in accordance
with Section 425(d) of the Code, owns stock possessing more than
10% of the total combined voting power of all classes of stock of
the Company shall be exercisable after the expiration of five
(5) years from the date of its grant.
In
the event that any outstanding option under the Plan expires by
reason of lapse of time or otherwise is terminated for any reason,
then the shares of Common Stock subject to any such option which
have not been issued pursuant to the exercise of the option shall
again become available in the pool of shares of Common Stock for
which options may be granted under the Plan.
3. CANCELLATION
OF AND SUBSTITUTION FOR NONQUALIFIED OPTIONS.
The
Company shall have the right to cancel any nonqualified stock
option at any time before it otherwise would have expired by its
terms and to grant to the same optionee in substitution therefor a
new nonqualified stock option stating an option price which is
lower (but not higher) than the option price stated in the
cancelled option. Any such substituted option shall contain all
other terms and conditions of the cancelled option provided,
however, that notwithstanding Section 2 of this Article II
such substituted option shall not be exercisable after the
expiration of ten (10) years from the date of grant of the
cancelled option.
4. TERMS AND
CONDITIONS OF OPTIONS.
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Options
granted pursuant to the Plan shall be evidenced by agreements in
such form as the Committee shall from time to
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