Document:

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EXHIBIT 10.2

ABM INDUSTRIES INCORPORATED

“TIME VESTED” INCENTIVE STOCK OPTION PLAN

(as amended and restated as of January 11, 2005)

ARTICLE I

GENERAL

1. PURPOSE.

     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”).

2. ADMINISTRATION.

     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.

3. ELIGIBILITY.

     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 2,100,000 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.

7. TERM OF PLAN.

     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

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may be granted under the Plan after December 19, 2005. Notwithstanding the foregoing, 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.

8. RESTRICTIONS

     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.

9. NONASSIGNABILITY.

     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.

10. WITHHOLDING TAXES.

     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.

ARTICLE II

STOCK OPTIONS

1. AWARD OF STOCK OPTIONS.

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     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.

     Options granted pursuant to the Plan shall be evidenced by agreements in such form as the
Committee shall from time to time determine, which agreements shall comply with the following terms
and conditions.

(A) OPTIONEE’S AGREEMENT

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     Each optionee shall agree to remain in the employ of and to render to the Company his services
for a period of one (1) year from the date of the option, but such agreement shall not impose upon
the Company any obligation to retain the optionee in its employ for any period.

(B) NUMBER OF SHARES AND TYPE OF OPTION

     Each option agreement shall state the number of shares to which the option pertains and
whether the option is intended to be an incentive stock option or a nonqualified stock option.
Notwithstanding any contrary provision of the Plan, during any single fiscal year of the Company,
no individual shall be granted options covering more than 25,000 shares of Common Stock.

(C) OPTION PRICE

     Each option agreement shall state the option price per share (or the method by which such
price shall be computed). The option price per share shall not be less than 99% of the fair market
value of a share of the Common Stock on the date such option is granted. In the cases of incentive
stock options and options granted to non-employee directors pursuant to Article V hereof, the
option price shall be not less than 100% of the fair market value of a share of the Common Stock on
the date such option is granted. Notwithstanding the foregoing, the option price per share of an
incentive stock option granted to a person who, on the date of such grant and in accordance with
Section 424(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 not less than 110% of the fair market value of a
share of the Common Stock on the date that the option is granted.

(D) MEDIUM AND TIME OF PAYMENT

     The option price shall be payable upon the exercise of an option in the legal tender of the
United States or, in the discretion of the Committee, in shares of the Common Stock or in a
combination of such legal tender and such shares. Upon receipt of payment, the Company shall
deliver to the optionee (or person entitled to exercise the option) a certificate or certificates
for the shares of Common Stock to which the option pertains.

(E) EXERCISE OF OPTIONS

     Pursuant to the terms of a written option agreement approved by the Committee, each option
shall become exercisable at a rate of twenty percent (20%) per year of the shares subject to the
option, commencing one year after the date that the option was granted, but only if the optionee
has been continuously employed by the Company from the date of grant through the date of vesting.
The Committee may, in its discretion, waive any vesting provisions contained in an option
agreement.

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     To the extent that an option has become vested (except as provided in Article III), and
subject to the foregoing restrictions, it may be exercised in whole or in such lesser amount as may
be authorized by the option agreement provided, however, that no partial exercise of an option
shall be for fewer than twenty-five (25) shares. If exercised in part, the unexercised portion of
an option shall continue to be held by the optionee and may thereafter be exercised as herein
provided. Notwithstanding any inconsistent or contrary Plan provisions, in the event an optionee
who is at least age 64 dies while in the service of the Company or of a subsidiary, all unvested
options granted after April 19, 1999 shall immediately vest and become fully exercisable as of the
date of such death.

(F) TERMINATION OF EMPLOYMENT EXCEPT BY DISABILITY OR DEATH

     In the event that an optionee shall cease to be employed by the Company for any reason other
than his death or disability, his option shall terminate on the date three (30) months after the
date that he ceases to be an employee of the Company.

(G) DISABILITY OF OPTIONEE

     If an optionee shall cease to be employed by the Company by reason of his becoming permanently
and totally disabled within the meaning of Section 22(e)(3) of the Code (as determined by the
Committee), such option shall terminate on the date one (1) year after cessation of employment due
to such disability.

(H) DEATH OF OPTIONEE AND TRANSFER OF OPTION

     If an optionee should die while in the employ of the Company, or within the three-month period
after termination of his employment with the Company during which he is permitted to exercise an
option in accordance with Subsection 4(F) of this Article II, such option shall terminate on the
date one (1) year after the optionee’s death. During such one-year period, such option may be
exercised by the executors or administrators of the optionee’s estate or by any person or persons
who shall have acquired the option directly from the optionee by his will or the applicable law of
descent and distribution. During such one-year period, such option maybe exercised with respect to
the number of shares for which the deceased optionee would have been entitled to exercise it at the
time of his death and also with respect to 10 percent of the additional number of shares for which he
would have been entitled to exercise it during the balance of the option period, had he survived
and remained in the employ of the Company.

ARTICLE III

RECAPITALIZATIONS AND REORGANIZATIONS

     The number of shares of Common Stock covered by the Plan, the maximum number of shares with
respect to which options may be granted during any single fiscal year to any employee, and the
number of shares and price per share of each outstanding option, shall be proportionately adjusted
for any increase or decrease in the number of

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issued and outstanding shares of Common Stock resulting from a subdivision or consolidation of
shares or the payment of a stock dividend, or any other increase or decrease in the number of
issued and outstanding shares of Common Stock effected without receipt of consideration by the
Company.

     If the Company shall be the surviving corporation in any merger or consolidation, each
outstanding option shall pertain to and apply to the securities to which a holder of the same
number of shares of Common Stock that are subject to that option would have been entitled (unless
the Committee determines the provisions of the following sentences are applicable to such merger or
consolidation). A Change in Control of the Company (as defined below) shall cause each outstanding
option to terminate, provided that each optionee in the event of a Change in Control which will
cause his option to terminate shall have the right immediately prior to such Change in Control to
exercise his option in whole or in part, subject to every limitation on the exercisability of such
option other than any vesting provisions. For purposes hereof, a “Change in Control” means:

    (1) the acquisition (other than by ABM or by an employee benefit plan or related
trust sponsored or maintained by ABM), directly or indirectly, in one or more transactions,
by any person or by any group of persons, within the meaning of Section 13(d) or 14(d) of
the Securities Exchange Act of 1934 or any comparable successor provisions (the “Exchange
Act”), of beneficial ownership (within the meaning of Rule 13d-3 of the Exchange Act) of
twenty-five percent or more of either the outstanding shares of common stock or the
combined voting power of ABM’s outstanding voting securities entitled to vote generally, if
the acquisition was not previously approved by the existing directors;

    (2) the acquisition (other than by ABM or by an employee benefit plan or related
trust sponsored or maintained by ABM), directly or indirectly, in one or more transactions,
by any such person or by any group of persons of beneficial ownership (within the meaning
of Rule 13d-3 of the Exchange Act) of fifty percent or more of either the outstanding
            shares of common stock or the combined voting power of ABM’s outstanding voting securities
entitled to vote generally, whether or not the acquisition was approved by the existing
directors, other than an acquisition that complies with clause (i) and (ii) of paragraph
(3);

    (3) consummation of a reorganization, merger or consolidation of ABM or the sale or
other disposition of all or substantially all of ABM’s assets unless, immediately following
such event, (i) all or substantially all of the stockholders of ABM immediately prior to
such event own, directly or indirectly, seventy-five percent or more of the then
outstanding voting securities entitled to vote generally of the resulting corporation
(including without limitation, a corporation which as a result of such event owns ABM or
all or substantially all of ABM’s assets either directly or through one or more
subsidiaries) in substantially the same proportions as their ownership of ABM’s outstanding
voting securities entitled to vote generally immediately prior to such event and (ii) the
securities of the surviving

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or resulting corporation received or retained by the stockholders of ABM is publicly
traded;

    (4) approval by the stockholders of the complete liquidation or dissolution of ABM;
or

    (5) a greater than one-third change in the composition of the Board of Directors
within 24 months if not approved by a majority of the pre-existing directors.

provided that, with respect of options that are outstanding as of September 22, 1999, the following
shall also apply:

    A dissolution or liquidation of the Company, a merger or consolidation in which the
Company is not the surviving corporation or a “change in control” of the Company (as
defined below) (each a “Terminating Transaction”), shall cause each outstanding option to
terminate, unless the agreement of merger or consolidation or any agreement relating to a
dissolution, liquidation or change in control shall otherwise provide, provided that each
optionee in the event of a Terminating Transaction which will cause his option to terminate
shall have the right immediately prior to such Terminating Transaction to exercise his
option in whole or in part, subject to every limitation on the exercisability of such
option other than any vesting provisions. For purposes of this proviso only, a“change of
control” shall be deemed to have occurred when (i) a person or group or persons acquires
fifty percent (50%) or more of the Company’s voting securities, and (ii) the Board of
Directors of the company or the Committee shall have determined that such a “change of
control,” as established by the Board or Committee, has been satisfied.

     The foregoing adjustments shall be made by the Committee, whose determination in that respect
shall be final, binding and conclusive.

     The grant of an option pursuant to the Plan shall not affect in any way the right or power of
the Company to make adjustments, reclassifications, reorganizations or changes of its capital or
business structure or to merge or to consolidate or to dissolve, liquidate or sell, or transfer all
or any part of its business or assets.

ARTICLE IV

MISCELLANEOUS PROVISIONS

1. RIGHTS AS A STOCKHOLDER.

     An optionee or a transferee of an option shall have no rights as a stockholder with respect to
any shares covered by an option until the date of the receipt of payment (including any amounts
required by the Company pursuant to Section 10 of Article I) by the Company. No adjustment shall be
made as to any option for dividends (ordinary or

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extraordinary, whether in cash, securities or other property) or distributions or other rights for
which the record date is prior to such date of receipt of payment, except as provided in Article
III.

2. MODIFICATION, EXTENSION AND RENEWAL OF OPTIONS.

     Subject to the terms and conditions and within the limitations of the Plan, the Committee may
modify, extend, renew or cancel outstanding options granted under the Plan. Notwithstanding the
foregoing, however, no modification of an option shall, without the consent of the optionee impair
or diminish any rights or obligations under any option theretofore granted under the Plan. For
purposes of the preceding sentence, the right of the Company pursuant to Section 3 of Article II to
cancel any outstanding nonqualified option and to issue therefor a substituted nonqualified option
stating a lower portion price shall not be construed or impairing or diminishing an optionee’s
rights or obligations.

3. OTHER PROVISIONS.

     The option agreements authorized under the Plan shall contain such other provisions,
including, without limitation, restrictions upon the exercise of the option or restrictions
required by any applicable securities laws, as the Committee shall deem advisable.

4. APPLICATION OF FUNDS.

     The proceeds received by the Company from the sale of Common Stock pursuant to the exercise of
options will be used for general corporate purposes.

5. NO OBLIGATION TO EXERCISE OPTION.

     The granting of an option shall impose no obligation upon the optionee or a transferee of the
option to exercise such option.

ARTICLE V

NONEMPLOYEE DIRECTOR OPTIONS

     The provisions of this Article V are applicable only to options granted to nonemployee
directors. The provisions of Article II are applicable to options granted to other individuals.

1. GRANTING OF OPTIONS.

     Each nonemployee director who is a nonemployee director on the date of the 1994 Annual Meeting
of Stockholders, automatically will receive, as of such date only, an option to purchase 2,000
shares of Common Stock. Each nonemployee director who

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becomes a nonemployee director after the 1994 Annual Meeting of Stockholders automatically will
receive, as of the date of such nonemployee director’s election or appointment to the Board of
Directors of the Company, an option to purchase 2,000 shares of Common Stock.

     Each continuing nonemployee director (i.e., a nonemployee director who has received an initial
grant of an option to purchase 2,000 shares of Common Stock) automatically will receive, on the
first day of each subsequent fiscal year, an option to purchase 2,000 shares of Common Stock.

2. TERMS OF OPTIONS.

(A) OPTION AGREEMENT

     Each option shall be evidenced by written stock option agreement which shall be executed by
the optionee and the Company.

(B) OPTION PRICE

     The price of the shares subject to each option shall be 100% of the fair market value for such
shares on the date that the option is granted.

(C) EXERCISABILITY

     An option granted pursuant to this Article V shall become exercisable at the rate of twenty
percent (20%) per year of the shares subject to the option, commencing one year after the date that
the option was granted, but only if the optionee has been a nonemployee director continuously from
the date of grant through the date of vesting.

(D) EXPIRATION OF OPTIONS

     In the event that an optionee shall cease to be a nonemployee director for any reason other
than his death or disability, his option shall terminate on the date three (3) months after the
date that he ceases to be a nonemployee director.

     If an optionee shall cease to be a nonemployee director by reason of his becoming permanently
and totally disabled within the meaning of Section 22(e)(3) of the Code (as determined by the
Committee), such option shall terminate on the date one (1) year after his cessation of service as
nonemployee director.

     If an optionee should die while a nonemployee director, or within the three-month period
described above in this Subsection 2(D), such option shall terminate on the date one (1) year after
the optionee’s death. During such one-year period, such option may be exercised by the executors or
administrators of the optionee’s estate or by any person or persons who shall have acquired the
option directly from the optionee by his will or the applicable law of descent and distribution.
During such one-year period, such

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option may be exercised with respect to the number of shares for which the deceased optionee would
have been entitled to exercise it at the time of his death and also with respect to 10 percent of
the additional number of shares for which he would have been entitled to exercise it during the
balance of the option period, had he survived and remained a nonemployee director.

(E) INCENTIVE STOCK OPTIONS.

     Options granted pursuant to this Article V shall not be designated as incentive stock options.

(F) OTHER TERMS.

     All provisions of the Plan not inconsistent with this Article V shall apply to options granted
to nonemployee directors.

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EXHIBIT 10.3

ABM INDUSTRIES INCORPORATED

“TIME-VESTED” INCENTIVE STOCK OPTION AGREEMENT

     THIS AGREEMENT made and entered into this ___Day of ___________, by and between ABM
Industries Incorporated, a Delaware corporation (the “Company”), and Employee Name, an employee
(the “Employee”) of the Company or of a subsidiary of the Company (hereinafter included within the
term “Company”) within the meaning of Section 425(f) of the Internal Revenue Code of 1986, as
amended (the “Code”),

W I T N E S S E T H

     WHEREAS, the Company has adopted the “Time-Vested” Incentive Stock Option Plan (the “Plan”),
providing for the granting to its employees of stock options relating to shares of its common
stock (the “Common Stock”) and the administering of the Plan by the Executive Officer
Compensation & Stock Option Committee of the Board of Directors (“Committee”); and

     WHEREAS, the Plan provides for the grant of certain options which are intended to be
incentive stock options (“incentive stock options” or “options”) within the meaning of Section
422 of the Code; and

     WHEREAS, the Employee is an officer or key employee who is in a position to make an
important contribution to the long-term performance of the Company;

     NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants hereinafter set
forth and other good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto hereby agree as follows:

     1. The Company hereby grants to the Employee an incentive stock option to purchase XXX shares
of the Common Stock at the price set forth in Paragraph 2, on the terms and conditions hereinafter
stated. In consideration of the grant of this option and the other rights which are being
concurrently granted to him, the Employee hereby agrees to continue in the employment of the
Company for a period of at least one year from the date of grant of this option.

     2. The purchase price per share is $XXXX which is hereby agreed to be 100% of the fair market
value, as defined in Paragraph 4, of such Common Stock at the date of grant.

     3. This option may not be exercised in whole or in part until _______________. On
_______________, this option shall become exercisable with respect to twenty (20) percent of the
number of shares stated in Paragraph 1. Upon the expiration of twelve (12) months from
_______________this option may be exercised to the extent of twenty (20) percent of the shares
subject to the option plus the shares as to which the right to exercise the option has previously
accrued but has not been exercised (for a total of 40%). Upon the expiration of the next twelve
(12) month period thereafter, this option may be exercised to the extent of twenty (20) percent of
the shares subject to the option plus the shares as to which the right to exercise the option has
previously accrued but has not been exercised (for a total of 60%). Upon the expiration of the
next twelve (12) month period thereafter, this option may be exercised to the extent of twenty (20)
percent of the shares subject to the option plus the shares as to which the right to exercise the
option has previously accrued but has not been exercised (for a total of 80%). Upon the expiration
of the next twelve (12) month period thereafter, this option will be fully exercisable.

     Notwithstanding any other provision of this Agreement, this option is not exercisable after
the expiration of ten years from the date hereof.

     4. For the purposes of this Agreement, the terms “fair market value,” when used in
reference to the date of grant of this option or the date of any surrender of Common Stock in
payment for the purchase of shares pursuant to the exercise of this 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.

 

 

     5. The number of shares of Common Stock covered hereby and the price per share thereof
shall be proportionately adjusted for any increase or decrease in the number of issued and
outstanding shares of Common Stock resulting from a subdivision or consolidation of shares or
the payment of a stock dividend, or any other increase or decrease in the number of issued and
outstanding shares of Common Stock effected without receipt of consideration by the Company.

     If the Company shall be the surviving corporation in any merger or consolidation, this
option (to the extent that it is still outstanding) shall pertain (unless the Committee
determines the provisions of the following sentence are applicable to such merger or
consolidation) to and apply to the securities of which a holder of the same number of shares of
Common Stock that are subject to the option would have been entitled. A dissolution or
liquidation of the Company, a merger or consolidation in which the Company is not the surviving
corporation or a “change in control” of the Company (as defined below) (each a “Terminating
Transaction”) shall cause this option to terminate, unless the agreement of merger or
consolidation or any agreement relating to a dissolution liquidation or change in control shall
otherwise provide, provided that the Employee in the event of a Terminating Transaction which
will cause his option to terminate shall have the right immediately prior to such Terminating
Transaction to exercise this option in whole or in part subject to every limitation on
exercisability provided herein other than the vesting provision set forth in Paragraph 3. For
purposes hereof, a “change in control” shall be deemed to have occurred when (i) a person or
group of persons acquires fifty percent (50%) or more of the Company’s voting securities, and
(ii) the Board of Directors of the Company or the Committee shall have determined that such a
“change in control” has occurred or the criteria for a “change in control,” as established by the
Board or Committee has been satisfied.

     The foregoing adjustments shall be made by the Committee, whose determination in that
respect shall be final, binding and conclusive.

     The grant of the options shall not affect in any way the right or power of the
Company to make adjustments, reclassifications, reorganizations or changes of its capital
or business structure or to merge or to consolidate or to dissolve, liquidate or sell, or
transfer all or any part of its business or assets.

     6. No partial exercise of this option will be permitted for fewer than twenty-five shares.

     7. In the event of termination of the Employee’s employment for any reason other than
his death or disability, this option may not be exercised after three months after the date
he ceases to be an employee of the Company.

     8. This option shall be exercisable during the Employee’s lifetime only by him
and shall be nontransferable by the Employee otherwise than by will or the laws of
descent and distribution.

     9. In the event the Employee ceases to be employed by the Company on account of his
permanent and total disability within the meaning of Section 22(e)(3) of the Code (as determined
by the Committee) this option may not be exercised after one year after cessation of employment
due to such disability.

     10. In the event of the Employee’s death while in the employ of the Company, or during the
three-month period following termination of employment during which the Employee is permitted
to exercise this option pursuant to Paragraph 8, this option may not be exercised after the
date one year after the Employee’s death. During such one-year period, this option may be
exercised by the executor or administrator of the Employee’s estate or any person who shall
have acquired the option from the Employee by his will or the applicable law of descent and
distribution. During such one-year period, such option may be exercised with respect to the
number of shares for which the deceased optionee would have been entitled to exercise it at the
time of his death and also with respect to ten percent of the additional number of shares for
which he would have been entitled to exercise it during the balance of the option period, had
he survived and remained in the employ of the Company. Any such transferee exercising this
option must furnish the Company upon request of the Committee (a) written notice of his status
as transferee, (b) evidence satisfactory to the Company to establish the validity of the
transfer of the option in compliance with any laws or regulations pertaining to said transfer,
and (c) written acceptance of the terms and conditions of the option as prescribed in this
Agreement.

 

 

     11. This option may be exercised by the person then entitled to do so as to any share which
may then be purchased by giving written notice of exercise to the Company, specifying the number of
full shares to be purchased and accompanied by full payment of the purchase price thereof and the
amount of any income tax the Company is required by law to withhold by reason of such exercise.
The purchase price shall be payable in cash.

     12. Neither the Employee nor any person claiming under or through him shall be or have any of
the rights or privileges of a stockholder of the Company in respect of any of the shares issuable
upon the exercise of the option until the date of receipt of payment (including any amounts
required by income tax withholding requirements) by the Company.

     13. Any notice to be given to the Company under the terms of this Agreement shall be addressed
to ABM Industries Incorporated, in care of its Corporate Secretary, at 160 Pacific Avenue, Suite
222, San Francisco, California 94111, or at such other address as the Company may hereafter
designate in writing. Any notice to be given to the Employee shall be addressed to the Employee at
the address set forth beneath his signature hereto, or at any such other address as the Employee
may hereafter designate in writing. Any such notice shall be deemed to have been duly given if and
when enclosed in a properly sealed envelope, addressed as aforesaid, registered and deposited,
postage and registry fee prepaid, in a post office or branch post office regularly maintained by
the United States Government.

     14. Except as otherwise provided herein, the option herein granted and the rights and
privileges conferred hereby shall not be transferred, assigned, pledged or hypothecated in any way
(whether by operation of law or otherwise) and shall not be subject to sale under execution
attachment or similar process upon the rights and privileges conferred hereby. Upon any attempt to
transfer, assign, pledge or otherwise dispose of said option, or of any right or privilege
conferred hereby, contrary to the provisions hereof, or upon any attempted sale under any
execution, attachment or similar process upon the rights and privileges conferred hereby, said
option and the rights and privileges conferred hereby shall immediately become null and void.

     15. Subject to the limitations on transferability contained herein, this Agreement
shall be binding upon and inure to the benefit of the heirs, legal representatives, successors and
assigns of the parties hereto.

     16. The rights awarded hereby are subject to the requirement that, if at any time the
Committee shall determine, in its sole discretion, that the listing, registration or qualification
of the shares of Common Stock subject to such rights 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 rights or issuance of
shares in connection therewith, such rights 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.

     17. In the event the Employee disposes of any of the shares that may be acquired
hereunder within two years of the date hereof or within one year of the date such shares are
acquired hereunder, Employee agrees to notify the Company in writing within ten days of the date
of such disposition of the number of shares disposed of, the nature of the transaction, and the
amount received (if any) upon such disposition. Employee understands that such a disposition may
result in imposition of withholding taxes, and agrees to remit to the Company on request any
amount requested to satisfy any withholding tax liability.

     18. The Employee agrees to notify in writing the Corporate Secretary of the Company of
his intention, if any, to terminate his employment within ten days after said intention is
formed.

     19. Subject to any employment contract with the Employee, the terms of employment
of the Employee shall be determined from time to time by the Company or the subsidiary employing
the Employee, as the case may be, and the Company, or the subsidiary employing the Employee, as
the case may be, shall have the right, which is hereby expressly reserved, to terminate the
employee or change the terms of the employment at any time for any reason whatsoever, with or
without good cause.

 

 

     20. Whenever shares of Common Stock are to be issued to the Employee in satisfaction of
the rights conferred hereby, the Company shall have the right to require the Employee 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.

     21. The Committee shall have the power to interpret the Plan and this Agreement and to adopt
such rules for the administration, interpretation and application of the Plan as are consistent
therewith and to interpret or revoke any such rules. All actions taken and all interpretations
and determinations made by the Committee in good faith shall be final and binding upon Employee,
the Company and all other interested persons. No member of the Committee shall be personally
liable for any action, determination or interpretation made in good faith with respect to the
Plan or this Agreement.

     22. In the event that any provision in this Agreement shall be invalid or unenforceable,
such provision shall be severable from, and such invalidity or unenforceability shall not be
construed to have any effect on the remaining provisions of this Agreement.

     IN WITNESS HEREOF, the parties hereto have executed the Agreement, in duplicate, the day
and year first above written.

	 	 	 	 	 
	 	ABM INDUSTRIES INCORPORATED

 	 
	 	 	 
	 	 	 
	 	 	 
	 

	 	 	 	 	 	 	 
	

	 	BY	 	 	 	 
	

	 	 	 	 	 	 
	

	 	 	 	Henrik C. Slipsager	 	 
	

	 	 	 	President and Chief Executive Officer
	 	 
	 
	 	 	 	 	 	 
	

	 	BY	 	 	 	 
	

	 	 	 	 	 	 
	

	 	 	 	(Employee)

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