Exhibit 10.3

 

CHANGE IN CONTROL AGREEMENT

 

This Change in Control Agreement (this “Agreement”), effective as of March 31,
2015, is made between ABM Industries Incorporated, a Delaware corporation (the
“Company”) and the individual executing this Agreement as the Executive on the
signature page (the “Executive”).

 

RECITALS

 

A.        The Executive is a senior executive of the Company and is expected to
make major contributions to the short- and long-term profitability, growth and
financial strength of the Company;

 

B.        The Company recognizes that the possibility of a Change in Control, as
hereinafter defined, exists and that such possibility, and the uncertainty it
may create among management, may result in the distraction or departure of
management personnel, to the detriment of the Company and its stockholders,
including a reduction of the value received by stockholders in a Change in
Control transaction;

 

C.        The Company desires to assure itself of both present and future
continuity of management and to establish fixed severance benefits for certain
of its senior executives, including the Executive, applicable in the event of a
Change in Control; and

 

D.        The Company desires to provide additional inducement for the Executive
to continue to remain in the employ of the Company. Accordingly, the Company and
the Executive agree as follows:

 

1.         Certain Defined Terms. In addition to terms defined elsewhere herein,
the following terms have the following meanings when used in this Agreement with
initial capital letters:

 

(a)          “After-Tax Amount” means the amount to be received by the Executive
determined on an after-tax basis taking into account the excise tax imposed
pursuant to Section 4999 of the Code, or any successor provision thereto, any
tax imposed by any comparable provision of state law and any applicable federal,
state and local income and employment taxes.

 

(b)          “Base Pay” means the Executive’s annual base salary rate as in
effect at the time a determination is required to be made under Section 4.

 

(c)          “Board” means the Board of Directors of the Company; any action of
the Board herein contemplated will be valid if adopted by a majority of the
total number of directors then in office or a majority of the Incumbent
Directors and, for purposes of interpreting, amending or waiving any portion of
this Agreement, may be adopted by a majority of the Incumbent Directors by
written action, whether or not unanimous, or may be delegated by specific action
of the Board of Directors after the date hereof to any directorate committee
comprised solely of Incumbent Directors who are also Independent Directors.

 

(d)          “Cause” shall mean, with respect to the Executive: (i) the willful
and continued failure to substantially perform the Executive’s duties and
responsibilities for reasons

 

 

 

 

other than death or disability, after a written demand for substantial
performance is delivered to him by the Company which specifically identifies the
manner in which the Company believes that the Executive has not substantially
performed the Executive’s duties, and Executive fails to promptly and
substantially cure his performance consistent with the written demand; (ii) the
Executive’s conviction (or entry of a plea bargain admitting criminal guilt) of
any felony or a misdemeanor involving moral turpitude; (iii) intentional breach
by the Executive of his fiduciary obligations to the Company or any securities
laws applicable to the Company for which Executive has direct responsibility and
of which he was not acting under instructions of the Board or under the belief,
based on advice of Company counsel, that his conduct was appropriate; or (iv)
intentional wrongful engagement by the Executive in any Competitive Activity;
and, for purposes of this subsection (iv), any such act shall have been
demonstrably and materially harmful to the Company. For purposes of this
Agreement, no act or failure to act on the part of the Executive will be deemed
“intentional” if it was due primarily to an error in judgment or negligence, but
will be deemed “intentional” only if done or omitted to be done by the Executive
not in good faith and without reasonable belief that the Executive’s action or
omission was in the best interest of the Company.

 

(e)          “Change in Control” means that during the Term any of the following
events occurs, provided that the occurrence of such event constitutes a “change
in effective ownership or control” of the Company, as defined in Section 409A:

 

(i)          any individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Exchange Act) (a “Person”) (A) is or becomes the
beneficial owner (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of more than 35% of the combined voting power of the
then-outstanding Voting Stock of the Company or succeeds in having nominees as
directors elected in an “election contest” within the meaning of Rule 14a-12(c)
under the Exchange Act and (B) within 18 months after either such event,
individuals who were members of the Board immediately prior to either such event
cease to constitute a majority of the members of the Board; or

 

(ii)         a majority of the Board ceases to be comprised of Incumbent
Directors; or

 

(iii)        the consummation of a reorganization, merger, consolidation, plan
of liquidation or dissolution, recapitalization or sale or other disposition of
all or substantially all of the assets of the Company or the acquisition of the
stock or assets of another corporation, or other transaction (each, a “Business
Transaction”), unless, in any such case, (A) no Person (other than the Company,
any entity resulting from such Business Transaction or any employee benefit plan
(or related trust) sponsored or maintained by the Company, any Subsidiary or
such entity resulting from such Business Transaction) beneficially owns,
directly or indirectly, 35% or more of the combined voting power of the
then-outstanding shares of Voting Stock of the entity resulting from such
Business Transaction or, if it is such entity, the Company and (B) at least
one-half of the members of the Board of Directors of the entity resulting from
such Business Transaction were Incumbent

 

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Directors at the time of the execution of the initial agreement providing for
such Business Transaction.

 

(f)          “Code” means the Internal Revenue Code of 1986, as amended.

 

(g)          “Competitive Activity” means the Executive’s participation, without
the written consent signed by an officer of the Company and authorized by the
Board, in the management of any business enterprise if (i) such enterprise
engages in substantial and direct competition with the Company and such
enterprise’s sales of any product or service competitive with any product or
service of the Company amounted to 10% of such enterprise’s net sales for its
most recently completed fiscal year and if the Company’s net sales of said
product or service amounted to 10% of the Company’s net sales for its most
recently completed fiscal year or (ii) the primary business done or intended to
be done by such enterprise is in direct competition with the business of
providing facility services in any geographic market in which the Company
operates. “Competitive Activity” will not include the mere ownership of
securities in any such enterprise and the exercise of rights appurtenant
thereto, if such ownership is less than 5% of the outstanding voting securities
or units of such enterprise.

 

(h)          “Employee Benefits” means the benefits and service credit for
benefits as provided under any and all employee retirement income and welfare
benefit policies, plans, programs or arrangements in which the Executive is
entitled to participate, including without limitation any stock option,
performance share, performance unit, stock purchase, stock appreciation,
savings, pension, supplemental executive retirement, or other retirement income
or welfare benefit, deferred compensation, incentive compensation, group or
other life, health, medical/hospital or other insurance (whether funded by
actual insurance or self-insured by the Company or a Subsidiary), disability,
salary continuation, expense reimbursement and other employee benefit policies,
plans, programs or arrangements that may now exist or any equivalent successor
policies, plans, programs or arrangements that may be adopted hereafter by the
Company or a Subsidiary, providing benefits and service credit for benefits at
least as great in the aggregate as are payable thereunder immediately prior to a
Change in Control.

 

(i)          “ERISA” means the Employee Retirement Income Security Act of 1976,
as amended.

 

(j)          “Excess Parachute Payment” means a payment that creates an
obligation for Executive to pay excise taxes under Section 280G or 4999 of the
Code or any successor provision thereto.

 

(k)          “Exchange Act” means the Securities Exchange Act of 1934, as
amended.

 

(l)          “Good Reason” means the occurrence of one or more of the following
events:

 

(i)          Failure to elect or reelect or otherwise to maintain the Executive
in the offices or the positions he had with the Company immediately prior to a
Change in Control, or in a substantially equivalent or better office or position
than that which he had with the Company immediately prior to the Change in
Control,

 

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in either such case with the Company, any legal successor to the Company or, if
the Company merges with or into another entity with substantial operations, with
respect to the business of the Company and its Subsidiaries substantially as
conducted immediately prior to the Change in Control;

 

(ii)         Failure of the Company to remedy any of the following within 30
calendar days after receipt by the Company of written notice thereof from the
Executive: (A) a significant adverse change in the nature or scope of the
authorities, powers or functions attached to the position which the Executive
held immediately prior to the Change in Control, (B) a material reduction in the
Executive’s Base Pay, (C) a material reduction in the Executive’s Incentive Pay
Opportunity or Incentive Pay Target, or (D) the termination or denial of the
Executive’s rights to material Employee Benefits or a material reduction in the
scope or value thereof, unless such termination or reduction referred to in
clauses (B), (C) or (D) applies on a substantially similar basis to all
executives of the Company and the Company’s acquiror or successor, or such right
is replaced with a right with a substantially similar scope or value;

 

(iii)        The liquidation, dissolution, merger, consolidation or
reorganization of the Company or the transfer of all or substantially all of its
business and/or assets, unless the successor or successors (by liquidation,
merger, consolidation, reorganization, transfer or otherwise) to which all or
substantially all of its business and/or assets have been transferred (by
operation of law or otherwise) assumed all duties and obligations of the Company
under this Agreement pursuant to Section 11(a);

 

(iv)        If the Executive’s principal residence at the time in question is
within 35 miles of the Company’s headquarters or the headquarters of the
Subsidiary that is the Executive’s employer, the Company requires the Executive
to have Executive’s principal location of work changed to any location that is
in excess of 50 miles from such residence without the Executive’s prior written
consent; or

 

(v)         Without limiting the generality or effect of the foregoing, any
material breach of this Agreement or any Other Employment Agreement (as defined
in Section 6) by the Company or any successor thereto which is not remedied by
the Company within 10 calendar days after receipt by the Company of written
notice from the Executive of such breach.

 

A termination of employment by the Executive for one of the reasons set forth in
clauses (i) - (v), above, will not constitute “Good Reason” unless, within the
60-day period immediately following the occurrence of such Good Reason event,
the Executive has given written notice to the Company specifying in reasonable
detail the event or events relied upon for such termination and the Company has
not remedied such event or events within 30 days of the receipt of such notice.
The Company and the Executive may mutually waive in writing any of the foregoing
provisions with respect to an event or events that otherwise would constitute
Good Reason.

 

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(m)          “Incumbent Directors” means the individuals who, as of the date
hereof, are directors of the Company and any individual becoming a director
subsequent to the date hereof whose election, nomination for election by the
Company’s shareholders or appointment was approved by a vote of at least
two-thirds of the then Incumbent Directors (either by a specific vote or by
approval of the proxy statement of the Company in which such person is named as
a nominee for director, without objection to such nomination); provided,
however, that an individual shall not be an Incumbent Director if such
individual’s election or appointment to the Board occurs as a result of an
actual or threatened election contest (as described in Rule 14a-12(c) of the
Exchange Act) with respect to the election or removal of Directors or other
actual or threatened solicitation of proxies or consents by or on behalf of a
Person other than the Board.

 

(n)          “Incentive Pay” means compensation payable under an Incentive Pay
Plan in addition to Base Pay which is determined by reference to one or more
performance measures and which is payable in cash.

 

(o)          “Incentive Pay Opportunity” means the maximum amount of Incentive
Pay that the Executive would receive pursuant to any Incentive Pay Plan in
existence immediately prior to a Change in Control (disregarding the effects of
the Change in Control, including without limitation increased depreciation or
amortization, financing expense and transaction costs), assuming satisfaction of
all thresholds or other conditions thereto established (i) prior to the Change
in Control or (ii) after the Change in Control either (A) with the Executive’s
specific prior written approval or (B) by action of a committee of the Board
comprised solely of Independent Directors.

 

(p)          “Incentive Pay Plan” means any plan, program, agreement or
arrangement (excluding employee stock options, restricted stock, restricted
stock units, performance shares or other rights the value of which is determined
by reference to the value of the Company’s common stock).

 

(q)          “Incentive Pay Target” means the amount or value of Incentive Pay
the Executive would have received assuming that the Incentive Pay Plans in
effect immediately prior to the Change in Control continue unchanged and are
satisfied at the target level and, if applicable, any conditions to entitlement
to payment at the target level thereunder that are not measured by the Company’s
results of operation are satisfied at the target level.

 

(r)          “Independent Directors” means directors who qualify as
“independent” directors under then-applicable New York Stock Exchange rules
applicable to compensation committees (whether or not the Company’s securities
continue to be listed for trading thereon).

 

(s)          “Other Agreement” means an agreement, contract or understanding
(including any option or equity plan or agreement) other than this Agreement,
heretofore or hereafter entered into by the Executive with the Company or any
Subsidiary.

 

(t)          “Retirement Plans” means the benefit plans of the Company that are
intended to be qualified under Section 401(a) of the Code and any supplemental
executive retirement benefit plan or any other plan that is a successor thereto
as such Retirement Plans were

 

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in effect immediately prior to the Change in Control and if the Executive was a
participant in such Retirement Plan immediately prior to the Change in Control.

 

(u)          Section 409A means Section 409A of the Code, and the regulations
and guidance promulgated thereunder, or any successor statute.

 

(v)         “Severance Period” means the period of time commencing on the date
of the first occurrence of a Change in Control and continuing until the earlier
of (i) the second anniversary of the occurrence of the Change in Control and
(ii) the Executive’s death.

 

(w)          “Subsidiary” means an entity in which the Company directly or
indirectly beneficially owns 50% or more of the outstanding voting interests.

 

(x)          “Term” means the period commencing as of the date hereof and
expiring on the close of business on October 31, 2017; provided, however, that
(i) if a Change in Control occurs during the Term, the Term will expire on the
last day of the Severance Period; and (ii) subject to Section 3(c), if, prior to
a Change in Control, the Executive ceases for any reason to be a full-time
employee of the Company, thereupon without further action the Term shall be
deemed to have expired and this Agreement will immediately terminate and be of
no further effect.

 

(y)          “Termination Date” means the date on which the Executive’s
employment is terminated (the effective date of which will be the date of
termination, or such other date that may be specified by the Executive if the
termination is pursuant to Section 3(b)); provided such date constitutes the
date of the Executive's "separation from service" as defined in Section 409A.

 

(z)          “Voting Stock” means securities entitled to vote generally in the
election of directors.

 

(aa)         “Welfare Benefits” means Employee Benefits that are provided under
any “welfare plan” (within the meaning of Section 3(1) of ERISA) of the Company,
and fringe benefits and other perquisites of employment, such as car allowances,
club dues, financial planning and product discounts.

 

2.         Operation of Agreement. This Agreement will be effective and binding
immediately upon its execution, but, anything in this Agreement to the contrary
notwithstanding, this Agreement will not be operative unless and until a Change
in Control occurs. Upon the occurrence of a Change in Control at any time during
the Term, without further action, this Agreement will become immediately
operative.

 

3.         Termination Following a Change in Control. (a) In the event of the
occurrence of a Change in Control, the Executive’s employment may be terminated
by the Company during the Severance Period and the Executive will be entitled to
the benefits provided by Section 4 unless such termination is the result of the
occurrence of one or more of the following events:

 

(i)          the Executive’s death;

 

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(ii)         the Executive becomes permanently disabled within the meaning of,
and begins actually to receive disability benefits pursuant to, the long-term
disability plan in effect for, or applicable to, the Executive immediately prior
to the Change in Control; or

 

(iii)        Cause.

 

If, during the Severance Period, the Executive’s employment is terminated by the
Company other than pursuant to Section 3(a)(i), 3(a)(ii) or 3(a)(iii), the
Executive will be entitled to the benefits provided by Section 4, provided that
such termination constitutes a “separation from service” as defined in Section
409A.

 

(b)          In the event of the occurrence of a Change in Control, the
Executive may terminate employment with the Company during the Severance Period
for Good Reason with the right to severance compensation as provided in Section
4 regardless of whether any other reason, other than Cause, for such termination
exists or has occurred, including without limitation other employment or
permanent disability.

 

(c)          Nothing in this Agreement will (i) be construed as creating an
express or implied contract of employment, changing the status of Executive as
an employee at will, giving the Executive any right to be retained in the employ
of the Company, or giving the Executive the right to any particular level of
compensation or benefits or (ii) interfere in any way with the right of the
Company to terminate the employment of the Executive at any time with or without
Cause, subject in either case to the obligations of the Company under this
Agreement.

 

4.         Severance Compensation. (a) If, following the occurrence of a Change
in Control, the Company terminates the Executive’s employment during the
Severance Period other than pursuant to Section 3(a)(i), 3(a)(ii) or 3(a)(iii),
or if the Executive terminates Executive’s employment pursuant to Section 3(b)
(in either case, any such termination, a “Triggering Termination”), and provided
that such Triggering Termination constitutes a “separation from service” as
defined in Section 409A, the Company will pay to the Executive the amounts
described in Annex A within five business days after the Termination Date
(subject to the provisions of Section 4(d) of this Agreement) and will continue
to provide to the Executive the benefits described in Annex A for the periods
described therein.

 

(b)          Without limiting the rights of the Executive at law or in equity,
if the Company fails to make any payment or provide any benefit required to be
made or provided hereunder on a timely basis, the Company will pay interest on
the amount or value thereof at an annualized rate of interest equal to the
“prime rate” as set forth from time to time during the relevant period in The
Wall Street Journal “Money Rates” column, plus 200 basis points, compounded
monthly, or, if less, the maximum rate legally allowed. Such interest will be
payable as it accrues on demand. Any change in such prime rate will be effective
on and as of the date of such change.

 

(c)          Unless otherwise expressly provided by the applicable plan, program
or agreement, after the occurrence of a Change in Control, the Company will pay
in cash

 

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to the Executive a lump sum amount equal to the sum of (i) any unpaid Incentive
Pay that has been earned, accrued, allocated or awarded to the Executive for any
performance period that by its terms as in effect prior to a Triggering
Termination has been completed (any such period, a “Completed Performance
Period”) (regardless of whether payment of such compensation would otherwise be
contingent on the continuing performance of services by the Executive) and (ii)
the Pro Rata Portion of the Incentive Pay Target in effect for any subsequent
performance period. For this purpose, “Pro Rata Portion” means (x) the number of
days from and including the first day immediately following the last day of the
immediately preceding Completed Performance Period to and including the
Termination Date, divided by (y) the total number of days in such subsequent
performance period. Such payments will be made at the earlier of (x) the date
prescribed for payment pursuant to the applicable plan, program or agreement and
(y) within five business days after the Termination Date, and will be payable
and calculated disregarding any otherwise applicable vesting requirements.

 

(d)          To the extent required in order to avoid accelerated taxation
and/or tax penalties under Section 409A, amounts that would otherwise be payable
and benefits that would otherwise be provided pursuant to this Agreement during
the six-month period immediately following the Executive’s termination of
employment shall instead be paid on the first business day after the date that
is six months following the Executive’s termination of employment (or upon the
Executive’s death, if earlier). In addition, for purposes of this Agreement,
each amount to be paid or benefit to be provided shall be construed as a
separate identified payment for purposes of Section 409A, and any payments
described in Annex A that are due within the “short term deferral period” as
defined in Section 409A shall not be treated as deferred compensation unless
applicable law requires otherwise.

 

5.         Limitations on Payments and Benefits. Notwithstanding any provision
of this Agreement or any Other Agreement to the contrary, if any amount or
benefit to be paid or provided under this Agreement or any Other Agreement would
be an Excess Parachute Payment (including after taking into account the value,
to the maximum extent permitted by Section 280G of the Code, of the covenants in
Section 8 hereof), but for the application of this sentence, then the payments
and benefits to be paid or provided under this Agreement and any Other Agreement
will be reduced to the minimum extent necessary (but in no event to less than
zero) so that no portion of any such payment or benefit, as so reduced,
constitutes an Excess Parachute Payment; provided, however, that the foregoing
reduction will not be made if such reduction would result in the Executive
receiving an After-Tax Amount less than 90% of the After-Tax Amount of the
severance payments he or she would have received under Section 4 or under any
Other Agreement without regard to this clause. Whether requested by the
Executive or the Company, the determination of whether any reduction in such
payments or benefits to be provided under this Agreement or otherwise is
required pursuant to the preceding sentence, and the value to be assigned to the
Executive’s covenants in Section 8 hereof for purposes of determining the
amount, if any, of the Excess Parachute Payment will be made at the expense of
the Company by the Company’s independent accountants or benefits consultant. The
fact that the Executive’s right to payments or benefits may be reduced by reason
of the limitations contained in this Section 5 will not of itself limit or
otherwise affect any other rights of the Executive pursuant to this Agreement or
any Other Agreement. In the event that any payment or benefit intended to be
provided is required to be reduced pursuant to this Section 5, the Executive
will be entitled to designate the payments and/or

 

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benefits to be so reduced in order to give effect to this Section 5, to the
extent that the payment or benefit does not constitute deferred compensation
within the meaning of Section 409A. The Company will provide the Executive with
all information reasonably requested by the Executive to permit the Executive to
make such designation.

 

6.         No Mitigation Obligation; Other Agreements. (a) The Company hereby
acknowledges that it will be difficult and may be impossible for the Executive
to find reasonably comparable employment following the Termination Date.
Accordingly, the payment of the severance compensation by the Company to the
Executive in accordance with the terms of this Agreement is hereby acknowledged
by the Company to be reasonable, and the Executive will not be required to
mitigate the amount of any payment provided for in this Agreement by seeking
other employment or otherwise, nor will any profits, income, earnings or other
benefits from any source whatsoever create any mitigation, offset, reduction or
any other obligation on the part of the Executive hereunder or otherwise, except
as expressly provided in Paragraph 2(E) of Annex A.

 

(b)          A termination of employment pursuant to Section 3(a), 3(b) or 3(c)
will not affect any rights that the Executive may have pursuant to any
agreement, policy, plan, program or arrangement of the Company or Subsidiary
providing Employee Benefits, which rights will be governed by the terms thereof.
To the extent that the Executive receives payments by reason of his or her
termination of employment pursuant to any other employment or severance
agreement or employee plan (collectively, “Other Employment Agreements”), the
amounts otherwise receivable under Section 4 will be reduced by the amounts
actually paid pursuant to the Other Employment Agreements, but not below zero,
to avoid duplication of payments so that the total amount payable or value of
benefits receivable hereunder and under the Other Employment Agreements is not
less than the amounts so payable or value so receivable had such benefits been
paid in full hereunder.

 

7.         Legal Fees and Expenses. It is the intent of the Company that the
Executive not be required to incur legal fees and the related expenses
associated with the interpretation, enforcement or defense of the Executive’s
rights in connection with any dispute arising under this Agreement because the
cost and expense thereof would substantially detract from the benefits intended
to be extended to the Executive hereunder. Accordingly, if it should appear to
the Executive that the Company has failed to comply with any of its obligations
under this Agreement or in the event that the Company or any other person takes
or threatens to take any action to declare this Agreement void or unenforceable,
or institutes any proceeding designed to deny, or to recover from, the Executive
the benefits provided or intended to be provided to the Executive hereunder, the
Company irrevocably authorizes the Executive from time to time to retain counsel
of the Executive’s choice, at the expense of the Company as hereafter provided,
to advise and represent the Executive in connection with any such dispute or
proceeding. Without respect to whether the Executive prevails, in whole or in
part, in connection with any of the foregoing, the Company will pay and be
solely financially responsible for any and all reasonable attorneys’ and related
fees and expenses incurred by the Executive in connection with any of the
foregoing; provided that, in regard to such matters, the Executive has not acted
in bad faith. The Executive shall promptly submit a written request for
reimbursement of such expenses, but in no event later than ninety days following
the date on which such expenses were incurred, accompanied by such evidence of
fees and expenses incurred as the Company may reasonably require, and such
reimbursements will be made within thirty business days after delivery of the
Executive’s written requests for payment.

 

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8.         Competitive Activity; Confidentiality; Nonsolicitation. (a) For the
period following the Termination Date specified in Paragraph (3) of Annex A (the
“Non-Competition Period”), subject to the Executive’s receipt of benefits under
Section 4, the Executive will not, without the prior written consent of the
Company, which consent will not be unreasonably withheld, engage in any
Competitive Activity.

 

(b)          During the Term, the Company agrees that it will disclose to the
Executive its confidential or proprietary information (as defined in this
Section 8(b)) to the extent necessary for the Executive to carry out the
Executive’s obligations to the Company. The Executive hereby covenants and
agrees that the Executive will not, without the prior written consent of the
Company, during the Term and two years thereafter disclose to any person not
employed by the Company, or use in connection with engaging in competition with
the Company, any confidential or proprietary information of the Company. For
purposes of this Agreement, the term “confidential or proprietary information”
will include all information of any nature and in any form that is owned by the
Company and that is not publicly available (other than by the Executive’s breach
of this Section 8(b)) or generally known to persons engaged in businesses
similar or related to those of the Company. Confidential or proprietary
information will include, without limitation, the Company’s financial matters,
customers, employees, industry contracts, strategic business plans, product
development (or other proprietary product data), marketing plans, and all other
secrets and all other information of a confidential or proprietary nature. For
purposes of the preceding two sentences, the term “Company” will also include
any Subsidiary (collectively, the “Restricted Group”). The obligations imposed
by this Section 8(b) will not apply (i) during the Term, in the course of the
business of and for the benefit of the Company, (ii) if such confidential or
proprietary information has become, through no fault of the Executive, generally
known to the public or (iii) if the Executive is required by law to make
disclosure (after giving the Company notice and an opportunity to contest such
requirement).

 

(c)          The Executive hereby covenants and agrees that for a period ending
one year after the Termination Date the Executive will not, without the prior
written consent of the Company, which consent will not unreasonably be withheld
as to the Executive’s personal assistant, on behalf of the Executive or on
behalf of any person, firm or company, directly or indirectly, attempt to
influence, persuade or induce, or assist any other person in so persuading or
inducing, any employee of the Restricted Group to give up, or to not commence,
employment or a business relationship with the Restricted Group.

 

(d)          The Executive and the Company agree that the covenants contained in
this Section 8 are reasonable under the circumstances and subject to the
provisions of Section 14 of this Agreement. The Executive acknowledges and
agrees that the remedy at law available to the Company for breach of any of the
Executive’s obligations under this Section 8 would be inadequate and that
damages flowing from such a breach may not readily be susceptible to being
measured in monetary terms. Accordingly, the Executive acknowledges, consents
and agrees that, in addition to any other rights or remedies that the Company
may have at law, in equity or under this Agreement, upon adequate proof of the
Executive’s violation of any such provision of this Agreement, the Company will
be entitled to immediate injunctive relief and may obtain a temporary order
restraining any threatened or further breach, without the necessity of proof of
actual damage.

 

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9.         Employment Rights. Nothing expressed or implied in this Agreement
will create any right or duty on the part of the Company or the Executive to
have the Executive remain in the employment of the Company or any Subsidiary
prior to or following any Change in Control.

 

10.        Withholding of Taxes. The Company may withhold from any amounts
payable under this Agreement all federal, state, city or other taxes as the
Company is required to withhold pursuant to any applicable law, regulation or
ruling.

 

11.        Successors and Binding Agreement. (a) The Company will require any
successor (whether direct or indirect, by purchase, merger, consolidation,
reorganization or otherwise) to all or substantially all of the business or
assets of the Company, by agreement in form and substance reasonably
satisfactory to the Executive, expressly to assume and agree to perform this
Agreement in the same manner and to the same extent the Company would be
required to perform if no such succession had taken place. This Agreement will
be binding upon the Company and any successor to the Company, including without
limitation any persons acquiring directly or indirectly all or substantially all
of the business or assets of the Company whether by purchase, merger,
consolidation, reorganization or otherwise (and such successor will thereafter
be deemed the “Company” for the purposes of this Agreement), but will not
otherwise be assignable, transferable or delegable by the Company.

 

(b)          This Agreement will inure to the benefit of and be enforceable by
the Executive’s personal or legal representatives, executors, administrators,
successors, heirs, distributees and legatees.

 

(c)          This Agreement is personal in nature and neither of the parties
hereto will, without the consent of the other (except as required by a court
order), assign, transfer or delegate this Agreement or any rights or obligations
hereunder except as expressly provided in Sections 11(a) and 11(b). Without
limiting the generality or effect of the foregoing, the Executive’s right to
receive payments hereunder will not be assignable, transferable or delegable,
whether by pledge, creation of a security interest, or otherwise, other than by
a transfer by the Executive’s will or by the laws of descent and distribution
and, in the event of any attempted assignment or transfer contrary to this
Section 11(c), the Company will have no liability to pay any amount so attempted
to be assigned, transferred or delegated.

 

12.        Notices. For all purposes of this Agreement, all communications,
including without limitation notices, consents, requests or approvals, required
or permitted to be given hereunder will be in writing and will be deemed to have
been duly given when hand delivered or dispatched by electronic facsimile
transmission (with receipt thereof orally confirmed), or five business days
after having been mailed by United States registered or certified mail, return
receipt requested, postage prepaid, or three business days after having been
sent by a nationally recognized overnight courier service such as FedEx or UPS,
addressed to the Company (to the attention of the Secretary of the Company) at
its principal executive office and to the Executive at the Executive’s principal
residence, or to such other address as any party may have furnished to the other
in writing and in accordance herewith, except that notices of changes of address
will be effective only upon receipt.

 

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13.         Governing Law. The validity, interpretation, construction and
performance of this Agreement will be governed by and construed in accordance
with the substantive laws of the State of Delaware and federal law, without
giving effect to the principles of conflict of laws of such State, except as
expressly provided herein. In the event the Company exercises its discretion
under Section 8(d) to bring an action to enforce the covenants contained in
Section 8 in a court of competent jurisdiction where the Executive has breached
or threatened to breach such covenants, and in no other event, the parties agree
that the court may apply the law of the jurisdiction in which such action is
pending in order to enforce the covenants to the fullest extent permissible.

 

14.         Validity. If any provision of this Agreement or the application of
any provision hereof to any person or circumstance is held invalid,
unenforceable or otherwise illegal, including without limitation Section 8
hereof, the remainder of this Agreement and the application of such provision to
any other person or circumstance will not be affected, and the provision so held
to be invalid, unenforceable or otherwise illegal will be reformed to the extent
(and only to the extent) necessary to make it enforceable, valid or legal. If
any covenant in Section 8 should be deemed invalid, illegal or unenforceable
because its time, geographical area, or restricted activity, is considered
excessive, such covenant will be modified to the minimum extent necessary to
render the modified covenant valid, legal and enforceable.

 

15.         Miscellaneous. No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing signed by the Executive and the Company. No waiver by either party
hereto at any time of any breach by the other party hereto or compliance with
any condition or provision of this Agreement to be performed by such other party
will be deemed a waiver of similar or dissimilar provisions or conditions at the
same or at any prior or subsequent time. No agreements or representations, oral
or otherwise, expressed or implied with respect to the subject matter hereof
have been made by either party that are not set forth expressly in this
Agreement. The headings used in this Agreement are intended for convenience or
reference only and will not in any manner amplify, limit, modify or otherwise be
used in the construction or interpretation of any provision of this Agreement.
References to Sections are to Sections of this Agreement. References to
Paragraphs are to Paragraphs of an Annex to this Agreement. Any reference in
this Agreement to a provision of a statute, rule or regulation will also include
any successor provision thereto.

 

16.         Survival. Notwithstanding any provision of this Agreement to the
contrary, the parties’ respective rights and obligations under Sections 3(b),
3(c), 4, 5, 7, 8, 9, 10, 11(b), 16 and 18 will survive any termination or
expiration of this Agreement or the termination of the Executive’s employment
following a Change in Control for any reason whatsoever.

 

17.         Beneficiaries. The Executive will be entitled to select (and change,
to the extent permitted under any applicable law) a beneficiary or beneficiaries
to receive any compensation or benefit payable hereunder following the
Executive’s death, and may change such election, in either case by giving the
Company written notice thereof in accordance with Section 12. In the event of
the Executive’s death or a judicial determination of the Executive’s
incompetence, reference in this Agreement to the “Executive” will be deemed,
where appropriate, to the Executive’s beneficiary, estate or other legal
representative.

 

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18.         Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original but all of which
together will constitute one and the same agreement.

 

19.         Section 409A. To the extent applicable, it is intended that this
Agreement comply with the provisions of Section 409A. This Agreement will be
administered in a manner consistent with this intent, and any provision that
would cause the Agreement to fail to satisfy Section 409A will have no force and
effect until amended to comply with Section 409A (which amendment may be
retroactive to the extent permitted by Section 409A and may be made by the
Company without the consent of the Executive). Prior to any Change in Control,
the Company and the Executive will agree to any amendment of this Agreement
approved by the Board based on the advice of a nationally recognized law firm
designated by the Board that such amendment, if implemented, is or is reasonably
likely to reduce any adverse effect on the Company or the Executive of any rule,
regulation or IRS interpretation of Section 409A and that such firm is
recommending similar changes or provisions to its other clients that have
change-in-control, severance or employment agreements or plans.

 

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EXECUTION COPY

 

IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
and delivered as of the date last written below.

 

  EXECUTIVE:  SCOTT SALMIRS         Signature:   /s/ Scott Salmirs        
Date:    January 12, 2015           ABM INDUSTRIES INCORPORATED      
By:  Sudhakar Kesavan       Title:  Chair of the Compensation Committee        
Signature:   /s/ Sudhakar Kesavan         Date:    January 12, 2015

 

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Annex A

SEVERANCE COMPENSATION, ETC.

 

1.         A lump sum payment in an amount equal to 2.5 times the sum of (A)
Base Pay (at the rate in effect for the year in which the Termination Date
occurs), plus (B) Incentive Pay Target (or, if the Incentive Pay Target shall
not have been established or shall be reduced after a Change in Control, the
highest aggregate Incentive Pay Target as in effect for any of the three fiscal
years immediately preceding the year in which the Change in Control occurred).

 

2.(A)    For any Welfare Benefits that the Executive was receiving or entitled
to receive immediately prior to the Termination Date (or, if greater,
immediately prior to the reduction, termination or denial described in Section
1(l)(ii)) that are considered to be “reimbursement arrangements” covered under
Section 1.409A-1(b)(9)(v)(A) of the Code:

 

(i)          for a period of 18 months following the Termination Date (the
“Continuation Period”), the Company will arrange to provide the Executive with
Welfare Benefits substantially similar to those that the Executive was receiving
or entitled to receive immediately prior to the Termination Date (or, if
greater, immediately prior to the reduction, termination, or denial described in
Section 1(l)(ii)) except that the level of any such Welfare Benefits to be
provided to the Executive may be reduced in the event of a corresponding
reduction generally applicable to all similarly situated recipients of or
participants in such Welfare Benefits. If and to the extent that any benefit
described in this Paragraph 2 is not or cannot be paid or provided under any
policy, plan, program or arrangement of the Company or any Subsidiary, as the
case may be, then the Company will itself pay or provide for the payment to the
Executive, or the Executive’s dependents and beneficiaries, of such Welfare
Benefits along with, in the case of any benefit described in this Paragraph 2
that is subject to tax because it is not or cannot be paid or provided under any
such policy, plan, program or arrangement of the Company or any Subsidiary, an
additional amount such that after payment by the Executive, or the Executive’s
dependents or beneficiaries, as the case may be, of all taxes so imposed, the
recipient retains an amount equal to such taxes. Such tax payment will be made
to the Executive by the Company no later than December 31st of the year in which
the Executive remits such tax payments to the appropriate taxing authorities.

 

(ii)         the Company will pay to the Executive, in a lump sum within the
time period described in Section 4(a), an amount equal to the difference between
(1) the present value of the continuation of such benefits for 18 months and (2)
the present value of the benefits the Executive will receive under Paragraph
2(A)(i).

 

(B)         Notwithstanding the foregoing, or any other provision of the
Agreement, for purposes of determining the period of continuation coverage to
which the Executive or any of the Executive’s dependents is entitled pursuant to
Section 4980B of the Code under the Company’s medical, dental and other group
health plans, or successor plans, the Executive’s “qualifying event” will be the
termination of the Continuation Period and the Executive will be considered to
have remained actively employed on a full-time basis through that date,
provided, however, that (1) with respect to health benefits the continuation
period will in all events terminate on the 18-

 

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month anniversary of the Termination Date as so determined and (2) the Company
will pay, or reimburse the Executive for, all COBRA continuation costs during
such period.

 

(C)         For purposes of the immediately preceding sentence and for purposes
of calculating service or age to determine the Executive’s eligibility for
Welfare Benefits, including benefits under any retiree medical benefits or life
insurance plan or policy, the Executive will be considered to have remained
actively employed on a full-time basis through the termination of the
Continuation Period.

 

(D)         For any Welfare Benefits that the Executive was receiving or
entitled to receive immediately prior to the Termination Date (or, if greater,
immediately prior to the reduction, termination, or denial described in Section
1(l)(ii)) that are not considered to be “reimbursement arrangements” covered
under Section 1.409A-1(b)(9)(v)(A) of the Code, the Company shall pay to the
Executive, within the time period described in Section 4(a), in a lump sum, an
amount equal to the present value of the continuation of such benefits for 18
months following the Termination Date.

 

(E)         Welfare Benefits otherwise receivable by the Executive pursuant to
this Paragraph 2 will be reduced to the extent comparable Welfare Benefits are
actually received by the Executive from another employer during the Continuation
Period following the Executive’s Termination Date, and any such Welfare Benefits
actually received by the Executive will be reported by the Executive to the
Company.

 

3.           The Non-Competition Period contemplated by Section 8(a) will be 12
months from the Termination Date.

 

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