Document:

exv10w4

 

EXHIBIT 10.4

ABM INDUSTRIES INCORPORATED

“TIME-VESTED” NON-QUALIFIED 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 Compensation Committee of the Board
of Directors (“Committee”); 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 a non-qualified 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.

     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. 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.

     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, 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 Employee’s receiving an
After-Tax Amount less than 90% of the After-Tax Amount under this agreement or under any other
agreement without regard to this clause. Whether requested by the Employee 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, will be made at the expense
of the Company by the Company’s independent accountants or benefits consultant. The fact that the
Employee’s right to payments or benefits may be reduced by reason of the limitations contained in
this paragraph will not of itself limit or otherwise affect any other rights of the Employee
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 paragraph, the Employee will be
entitled to designate the payments and/or benefits to be so reduced in order to give effect to this
paragraph. The Company will provide the Employee with all information reasonably requested by the
Employee to permit the Employee to make such designation. In the event that the Employee fails to
make such designation within 10 business days after receiving notice from the Company of a
reduction under this paragraph, the Company may effect such reduction in any manner it deems
appropriate. The term “Excess Parachute Payment” as used in this Agreement means a payment that
creates an obligation for Employee to pay excise taxes under Section 280G of the Internal Revenue
Code or any successor provision thereto and the term “After-Tax Amount” means the amount to be
received by Employee determined on an after-tax basis taking into account the excise tax imposed
pursuant to Section 4999 of the Internal Revenue 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.

     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.

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

     6. 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.

     7. 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.

     8. 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.

     9. 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 7, 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.

     10. 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.

     11. 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.

     12. 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.

     13. 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.

     14. 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.

     15. 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.

     16. 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.

     17. 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.

     18. 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.

     19. 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.

     20. 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)exv10w6

 

EXHIBIT 10.6

ABM INDUSTRIES INCORPORATED

“PRICE-VESTED” PERFORMANCE STOCK OPTION PLAN

STOCK OPTION AGREEMENT

THIS AGREEMENT (“Agreement”) dated as of the Grant Date between ABM Industries
Incorporated, a Delaware corporation (the “Company”), and Employee Name (the “Optionee”).

WITNESSETH:

The Company has adopted the ABM Industries Incorporated “Price-Vested” Performance Stock Option
Plan (the “Plan”). The Plan is made a part hereof with the same effect as if set forth in this
Agreement. All capitalized terms that are used herein and not otherwise defined shall have the
meanings set forth in the Plan.

In consideration of the mutual promises and covenants made herein and the mutual benefits to be
derived here from, the parties hereto agree as follows:

	1.	 	Grant of Options.
	 
	 	 	Subject to the provisions of this Agreement and to the Plan, the Company hereby grants to
the Optionee the right and option (the “Option”) to purchase:

	 	a.	 	XXXX shares of common stock (“Common Stock”) of the Company at an exercise
price of $___per share and a Vesting Price of $___per share,
	 
	 	b.	 	XXXX shares of Common Stock at an exercise price of $___per share and a Vesting
Price of $___per share,
	 
	 	c.	 	XXXX shares of Common Stock at an exercise price of $___per share and a Vesting
Price of $___per share, and
	 
	 	d.	 	XXXX shares of Common Stock at an exercise price of $___per share and a Vesting
Price of $___per share.

	2.	 	Exercisability of Options.

	 	a.	 	No unvested and/or expired Option may be exercised, and
	 
	 	b.	 	any unexpired vested Option may be exercised in whole or in part at
the times and in the manner set forth in the Plan; provided, however, that an unexpired
vested Option may not be exercised:

	 	(1)	 	before the first (1st) anniversary of its date of grant,
	 
	 	(2)	 	at any one time as to fewer than 100 shares, or such number of shares as to
which such Option is then exercisable if such number of shares is less than 100,
	 
	 	(3)	 	on or after the tenth (10th) anniversary of its date of grant.

1

 

	3.	 	Vesting of Options.
	 
	 	 	Each Option granted hereunder shall vest in the circumstances set forth in the Plan or as set
forth in this paragraph. During the four-year period commencing on its date of grant, each
Option granted hereunder shall vest at such time as the Fair Market Value of the Common Stock
shall have been equal to or greater than the Vesting Price with respect to such Stock Option
for ten (10) trading days in any period of thirty (30) consecutive trading days. Any Stock
Option that has not vested on or before the close of business on the fourth (4th) anniversary
of its date of grant shall vest at the close of business on the eighth (8th) anniversary of its
date of grant, if such Option has not previously terminated.
	 
	4.	 	No Right to Employment.
	 
	 	 	Nothing in this Agreement or the Plan shall confer upon the Optionee any right to continue
in the employ of the Company or any of its Affiliates, or interfere in any way with the
right of the Company or any such Affiliate to terminate such employment with or without
cause at any time whatsoever absent a written employment contract to the contrary.
	 
	5.	 	Effect of Certain Changes.

	 	a.	 	If there is any change in the number of issued shares of Common Stock through the
declaration of stock dividends, or through recapitalization resulting in stock splits, or
combinations or exchanges of such shares, the number of Options granted pursuant to this
Agreement that have not been exercised or lapsed, and the price per share of such Options
shall be proportionately adjusted by the Committee to reflect any increase or decrease in
the number of shares of Common Stock, provided, however, that any fractional shares
resulting from such adjustment shall be eliminated.
	 
	 	b.	 	In the event of a change in the Common Stock of the Company as presently constituted,
which is limited to a change of all of its authorized shares with a par value into the
same number of shares with a different par value or without par value, the shares
resulting from any such change shall be deemed to be a Common Stock within the meaning of
this Agreement and the Plan.
	 
	 	c.	 	To the extent that the foregoing adjustments relate to stock or securities of the
Company, such adjustments shall be made by the Committee, whose determination in that
respect shall be final, binding and conclusive.

	6.	 	Change in Control.
	 
	 	 	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, 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 Employee’s
receiving an After-Tax Amount less than 90% of the After-Tax Amount under this agreement or
under any other agreement without regard to this clause. Whether requested by the Employee 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, will
be made at the expense of the Company by the Company’s independent accountants or benefits
consultant. The fact that the Employee’s right to payments or benefits may be reduced by
reason of the limitations contained in this paragraph will not of itself limit or otherwise
affect any other rights of

2

 

	 	 	the Employee 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 paragraph, the
Employee will be entitled to designate the payments and/or benefits to be so reduced in order
to give effect to this paragraph. The Company will provide the Employee with all information
reasonably requested by the Employee to permit the Employee to make such designation. In the
event that the Employee fails to make such designation within 10 business days after receiving
notice from the Company of a reduction under this paragraph, the Company may effect such
reduction in any manner it deems appropriate. The term “Excess Parachute Payment” as used in
this Agreement means a payment that creates an obligation for Employee to pay excise taxes
under Section 280G of the Internal Revenue Code or any successor provision thereto and the term
“After-Tax Amount” means the amount to be received by Employee determined on an after-tax basis
taking into account the excise tax imposed pursuant to Section 4999 of the Internal Revenue
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.

	7.	 	Payment of Transfer Taxes, Fees and Other Expenses.
	 
	 	 	The Company agrees to pay any and all original issue taxes and stock transfer taxes that
may be imposed on the issuance of shares acquired pursuant to exercise of the Options,
together with any and all other fees and expenses necessarily incurred by the Company in
connection therewith.
	 
	8.	 	Taxes and Withholding.

	 	a.	 	No later than the date of exercise of any Options granted hereunder, and prior to the
delivery of any shares of Stock to any Optionee, the Optionee shall pay to the Company or
make arrangements satisfactory to The Committee regarding payment of any federal, state or
local taxes of any kind required by law to be withheld upon the exercise of such Options
and the Company shall, to the extent permitted or required by law, have the right to
deduct from any payment of any kind otherwise due to the Optionee, federal, state and
local taxes of any kind required by law to be withheld upon the exercise of such Options,
	 
	 	b.	 	Optionee agrees that, in the event any governmental taxing authority claims that
any unpaid taxes, interest or penalties are due and owing in connection with The
Optionee’s exercise of any Stock Options granted under the Plan, the Optionee will be
solely responsible to defend and/or pay any such claim. Employee further agrees to
indemnify and hold The Company harmless from defending and/or paying any such claim,
including reasonable attorney’s fees, in the event that any governmental taxing
authority seeks payment of any and all such unpaid taxes, interest or penalties from
the Company.

	9.	 	Notices.
	 
	 	 	Any notice to be given under the terms of this Agreement shall be in writing and delivered
to the Company at 160 Pacific Avenue, Suite #222, San Francisco, California, 94111,
Attention: Corporate Secretary, and to the Optionee at his/her address of record or at
such other address as either party may hereafter designate in writing to the other.
	 
	10.	 	Effect of Agreement.
	 
	 	 	Except as otherwise provided hereunder, this Agreement shall be binding upon and shall inure
to the benefit of any successor(s) of the Company.
	 
	11.	 	Laws Applicable to Construction.

3

 

	 	 	The Options have been granted, executed and delivered in the State of California, and the
interpretation, performance and enforcement of this Agreement, shall be governed by the laws
of the State of California, as applied to contracts executed in and performed wholly within
the State of California.
	 
	12.	 	Interpretation.
	 
	 	 	In the event of any ambiguity in this Agreement, any term which is not defined in this
Agreement, or any matters as to which this Agreement is silent, the Plan shall govern
including, without limitation, the provisions thereof pursuant to which the Committee has the
power, among others, to:

	 	    a.	 	interpret the Plan,
	 
	 	    b.	 	prescribe, amend and rescind rules and regulations relating to the Plan, and
	 
	 	    c.	 	make all other determinations deemed necessary or advisable for the
administration of the Plan.

	13.	 	Headings.
	 
	 	 	The headings of paragraphs herein are included solely for convenience of reference and shall
not affect the meaning or interpretation of any of the provisions of this Agreement.
	 
	14.	 	Amendment.
	 
	 	 	This Agreement may not be modified, amended or waived in any manner except by an instrument in
writing signed by both parties hereto. The waiver by either party of compliance with any
provision of this Agreement shall not operate or be construed as a waiver of any other
provision of this Agreement, or of any subsequent breach by such party of a provision of this
Agreement.

     IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on its behalf by a
duly authorized officer and the Optionee has hereunto set his or her hand.

	 	 	 
	ABM INDUSTRIES INCORPORATED:

	 	OPTIONEE:
	 
	 	 
	 
	 	 
	 	 	 
	Henrik C. Slipsager

	 	Employee
	President and Chief Executive Officer
	 	 

4

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