Exhibit 10.2
ABM INDUSTRIES INCORPORATED
STATEMENT OF TERMS AND CONDITIONS APPLICABLE
TO OPTIONS, RESTRICTED STOCK AND RESTRICTED STOCK UNITS
GRANTED TO NON-EMPLOYEE DIRECTORS PURSUANT TO
THE 2006 EQUITY INCENTIVE PLAN
(For Awards Granted On or After January 1, 2020)
I.INTRODUCTION
The following terms and conditions shall apply to each Award granted under the
Plan to a Non-Employee Director 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.
II.DEFINITIONS
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.“Mandatory Retirement” means the mandatory termination of service by a
Non-Employee Director on (but not before) the date of the annual meeting of
shareholders next following the attainment of such Director of age 73.
C.“Option Period” means the period commencing on the Grant Date of an Option
and, except as otherwise provided in Section III.E, ending on the Termination
Date.
D.“Retirement” means the voluntary termination of service by a Non-Employee
Director at (i) age 65 or older or (ii) age 55 or older at a time when age plus
years of service equals or exceeds 65.
E.“Termination Date” means the date that an Option expires as set forth in the
Option Agreement.
III.OPTIONS
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 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.
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B.Exercise Price. The per Share Exercise Price of an Option, as specified in the
Option Agreement, shall be equal to or greater than the per Share 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 and V. 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 III.E and V, an Option shall be exercisable
during the Option Period in accordance with the following vesting schedule: (i)
one-third of the Shares subject to the Option shall vest on the first
anniversary of the Grant Date; (ii) an additional one-third of the Shares shall
vest on the second anniversary of the Grant Date; and (iii) the remaining
one-third of the Shares subject to the Option shall vest on the third
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 Section III.E and V. No Option may be exercised for less than
5% 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 Service due to Retirement. If, during the Option Period, a
Participant ceases to be a Director of the Company due to his or her Retirement
at least one year following the Grant Date, then in addition to any Shares
vested under the Option Agreement prior to the date of such Retirement, the
Option shall vest in the number of Shares equal to one-third 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 Grant Date and the date
of such Retirement, and divided by 12.
F.Termination of Service due to Mandatory Retirement, Disability or Death. If,
during the Option Period, a Participant ceases to be a Director of the Company
due to his or her Mandatory Retirement at least one year following the Grant
Date, Disability or death, in addition to any Shares vested under the Option
Agreement prior to the date of such Mandatory Retirement, Disability or death,
the Option shall immediately vest on the date of such Mandatory Retirement,
Disability or death.
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G.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 a 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 a 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 prior to said tender, and having
a fair market value, as determined by the Company, equal to the Exercise Price;
or
e.if approved by the Company at the time of exercise, delivery (including by
facsimile or email 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 and to transfer the proceeds of such
sale to the Company.
2.If required by the Company, the Participant shall give his or her assurance in
writing, signed by the Participant, that the Shares subject to the Option are
being purchased for investment and not with a view to 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
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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.
H.Limitations on Transfer. An Option shall, during a Participant’s lifetime, be
exercisable only by the Participant. No Option or any right granted under the
Plan 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 under the Plan, 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.
I.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 AND RESTRICTED STOCK UNITS
A.Agreement. A Restricted Stock Award or Restricted Stock Unit Award granted
under the Plan shall be evidenced by an Award 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 or Restricted Stock Unit
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, or this Statement of Terms and Conditions.
1.Restrictions. Until the restrictions imposed on any Restricted Stock Award or
Restricted Stock Unit Award shall lapse, shares of Restricted Stock or
Restricted Stock Units granted to a Participant: (a) shall not be sold,
assigned, transferred, pledged, hypothecated, or otherwise disposed of, and (b)
shall, if the Participant experiences a “separation from service” (within the
meaning of Section 409A of the Code) from the Company for any reason (except as
otherwise provided in the Plan or in Sections IV.B.2 or V) be returned to the
Company forthwith, and all the
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rights of the Participant to such Shares or Restricted Stock Units shall
immediately terminate. A Participant shall not be permitted to sell, transfer,
pledge, assign or encumber such Restricted Stock or Restricted Stock Units,
[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 experiences a “separation from service” (within the meaning of
Section 409A of the Code) (except as otherwise provided in the Plan or in
Sections IV.B.2 or V prior to the lapse of the restrictions imposed on
Restricted Stock or a Restricted Stock Unit Award), the unvested portion of the
Restricted Stock or Restricted Stock Unit Award shall be forfeited to the
Company, and all the rights of the Participant to such Award shall immediately
terminate.
2.Termination of Service by Reason of Retirement. Notwithstanding any provision
contained herein or in the Plan or the Restricted Stock Agreement or Restricted
Stock Unit Agreement to the contrary, if a Participant who has been serving as a
Director of the Company since the Grant Date of a Restricted Stock Award or
Restricted Stock Unit Award that remains outstanding ceases to be a Director of
the Company, which cessation constitutes a “separation from service” within the
meaning of Section 409A of the Code and which is a result of Retirement at least
one year following the Grant Date, then the restrictions shall lapse as to the
number of Shares or Share Equivalents equal to: (i) the number of Shares or
Share Equivalents originally subject to the Award, multiplied by a fraction (ii)
the number of whole months between the Grant Date and the date of such
Retirement and divided by 12.
3.Termination of Service by Reason of Mandatory Retirement, Disability or Death.
Notwithstanding any provision contained herein or in the Plan or the Restricted
Stock Agreement or Restricted Stock Unit Agreement to the contrary, if a
Participant who has been serving as a Director of the Company since the Grant
Date of a Restricted Stock Award or Restricted Stock Unit Award that remains
outstanding ceases to be a Director of the Company, which cessation constitutes
a “separation from service” within the meaning of Section 409A of the Code and
which is the result of Mandatory Retirement at least one year following the
Grant Date, Disability or death,, then the restrictions shall immediately lapse,
on the date of such Mandatory Retirement, Disability or death, as to all Shares
or Share Equivalents that had not previously lapsed.
C.Dividends or Dividend Equivalents. Upon dividends being paid on outstanding
Shares of the Company’s common stock, dividends shall be paid with respect to
Restricted Stock during the Restriction Period and shall be converted to
additional Shares of Restricted Stock at the Fair Market Value on the date of
payment, which shall be subject to the same restrictions as the original Award
for the duration of
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the Restricted Period. Upon dividends being paid on outstanding Shares of the
Company’s common stock, dividend equivalents shall be credited in respect of
Restricted Stock Units, which shall be converted into additional Restricted
Stock Units at the Fair Market Value on the date of payment, which will be
subject to all of the terms and conditions of the underlying Restricted Stock
Unit Award, including the same vesting restrictions as the underlying Award.
D.No Shareholder Rights for Restricted Stock Units. 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 Share Equivalents subject to a Restricted Stock Unit Award except to the
extent that restrictions have lapsed and Shares have been issued upon the
payment of any vested Restricted Stock Unit Award.
E.Time of Payment of Restricted Stock Units.
1.Subject to Section IV.E.2 below, upon the lapse of the restriction imposed on
Restricted Stock Unit Awards, all Restricted Stock Units that were not forfeited
pursuant to Section IV.B.1 shall be paid to the Participant as soon as
reasonably practicable after the restrictions lapse but not later than 75 days
following the date on which the restrictions lapse. Payment shall be made in
Shares.
2.To the extent required in order to avoid accelerated taxation and/or tax
penalties under Code Section 409A, amounts that would otherwise be payable
pursuant to Section IV.E of this Statement of Terms and Conditions during the
six-month period immediately following a Participant’s termination of employment
shall instead be paid on the first business day after the date that is six
months following the Participant’s “separation from service” (within the meaning
of Section 409A of the Code) or upon the Participant’s death, if earlier.
V.CHANGE-IN-CONTROL
A.Effect of Change-in-Control on Options. In the event of a Change-in-Control,
the surviving, continuing, successor, or purchasing Company or other business
entity or parent thereof, as the case may be (the “Acquiror”) may, without the
consent of any Participant, either assume or continue the Company’s rights and
obligations under outstanding Options or substitute for outstanding Options
substantially equivalent options covering the Acquiror’s stock. All Options
assumed or continued by the Acquiror in connection with a Change-in-Control will
become fully vested and exercisable if the Participant’s service is terminated
without Cause at any time during the 12-month period following the
Change-in-Control.
Any Option granted one year or more prior to the Change-in-Control that is
neither assumed nor continued by the Acquiror in connection with the Change-in-
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Control shall, contingent on the Change-in-Control, become fully vested and
exercisable immediately prior to the Change-in-Control. Any Option granted less
than one year prior to the Change-in-Control that is neither assumed nor
continued by the Acquiror in connection with the Change-in-Control shall, to the
extent not previously vested and exercisable, immediately prior to the
Change-in-Control become vested and exercisable as to the number of Shares
subject to such Option equal to (i) the number of Shares originally subject to
such Option, multiplied by a fraction (ii) the number of whole months between
the Grant Date and the Change-in-Control, divided by (iii) the number of months
between the Grant Date and the date on which all Shares originally subject to
such Option would have been fully vested and exercisable; and such Option shall
terminate with respect to all remaining Shares subject to such Option.
B.Effect of Change-in-Control on Awards Other than Options. In the event of a
Change-in-Control, the Acquiror may, without the consent of any Participant,
either assume or continue the Company’s rights and obligations under outstanding
Awards other than Options or substitute for such Awards substantially equivalent
awards covering the Acquiror’s stock. All Awards other than Options assumed or
continued by the Acquiror in connection with a Change-in-Control will become
fully vested and all restrictions on such Awards will lapse if the Participant’s
service is terminated without Cause at any time during the 12-month period
following the Change-in-Control. Any Award that is neither assumed nor continued
by the Acquiror in connection with the Change-in-Control (or, with respect to
any Award that constitutes deferred compensation within the meaning of Code
Section 409A, any Award which at the time of the Change-in-Control is otherwise
considered to be vested for purposes of Code Section 409A) shall, upon the
Change-in- Control, become fully vested and all restrictions shall be released
immediately prior to the Change-in-Control, and such Award shall become
immediately payable. Notwithstanding anything in this Section V.B to the
contrary, with respect to any Award that constitutes deferred compensation
within the meaning of Code Section 409A, if the Change-in-Control does not
constitute a “change in control event” of the Company within the meaning of Code
Section 409A, such Award will vest as provided in this Section V.B, but will be
payable to the Participant in accordance with the provisions of Section IV.
VI.MISCELLANEOUS
A.Grants to Participants in Foreign Countries. In making grants to Participants
in foreign countries, the Administrator has the full discretion to deviate from
this Statement of Terms and Conditions in order to adjust Awards under the Plan
to prevailing local conditions, including custom and legal and tax requirements.
B.Information Notification. Any information required to be given under the terms
of an Award Agreement shall be addressed to the Company in care of the General
Counsel and Corporate Secretary, and any notice to be given to a Participant
shall
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be addressed to him or her at the address indicated beneath his or her name on
the Award Agreement or such other address as either party may designate in
writing to the other. Any such notice shall be deemed to have been duly given
when enclosed in a properly sealed envelope or wrapper addressed as aforesaid,
registered or certified and deposited (postage or registration or certification
fee prepaid) in a post office or branch post office regularly maintained by the
United States.
C.Administrator Decisions Conclusive. All decisions of the Administrator
administering the Plan upon any questions arising under the Plan, under this
Statement of Terms and Conditions, or under an Award Agreement, shall be
conclusive.
D.No Effect on Other Benefit Plans. Nothing herein contained shall affect a
Participant’s right to participate in and receive benefits from and in
accordance with the then current provisions of any pensions, insurance or other
employment welfare plan or program offered by the Company to its non-employee
directors.
E.Tax Payments. Each Participant shall agree to satisfy any applicable federal,
state or local income taxes associated with an Award.
F.Successors. This Statement of Terms and Conditions and the Award Agreements
shall be binding upon and inure to the benefit of any successor or successors of
the Company. “Participant” as used herein shall include the Participant’s
Beneficiary.
G.Governing Law. The interpretation, performance, and enforcement of this
Statement of Terms and Conditions and all Award Agreements shall be governed by
the laws of the State of Delaware.

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