Document:

EX-10.1

EXHIBIT 10.1

ABM INDUSTRIES INCORPORATED

EXECUTIVE STOCK OPTION PLAN

(as amended and restated as of December 9, 2008)

ARTICLE 1

Definitions

As used herein, the following terms have the meanings hereinafter set forth unless the context
clearly indicates to the contrary:

(a) “Beneficiary” means a person designated as such by an Optionee or a Beneficiary for purposes of
the Plan or determined with reference to Section 4.4.

(b) “Board” shall mean the Board of Directors of the Company.

(c) “Cause” shall mean, with respect to an Optionee, (i) the willful and continued failure to
substantially perform the Optionee’s duties and responsibilities for reasons other than death or
disability, after a written demand for substantial performance is delivered to him/her by the
Company which specifically identifies the manner in which the Company believes that the Optionee
has not substantially performed the Optionee’s duties; (ii) the Optionee’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 Optionee of his/her fiduciary obligations to the Company or any
securities laws applicable to the Company; or (iv) intentional wrongful engagement by the Optionee
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 the Plan, no act or
failure to act on the part of the Optionee 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 Optionee not in good faith and without reasonable belief that the Optionee’s action or
omission was in the best interest of the Company.

(d) “Change in Control” shall mean that any of the following events occurs: (i) (A) any
individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange
Act) (a “Person”) 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
thereafter, individuals who were members of the Board of Directors of the Company immediately prior
to either such event cease to constitute a majority of the members of the Board of Directors of the
Company; 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 Company, 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
and (B) at least one-half of the members of the Board of Directors of the entity resulting from
such Business Transaction were Incumbent Directors at the time of the execution of the initial
agreement providing for such Business Transaction.

(e) “Committee” shall mean the Compensation Committee of the Board, or such other committee as the
Board may designate. 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.

(f) “Company” shall mean ABM Industries Incorporated.

(g) “Competitive Activity” shall mean, with respect to an Optionee, the Optionee’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) The “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

(i) 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 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
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.

(j)
“Incumbent Directors” shall mean the individuals who, as of
December 9, 2008, are
members of the Board and any individual

 

 

becoming a member of the Board subsequent to such date 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
members of the Board or other actual or threatened solicitation of proxies or consents by or on
behalf of a Person other than the Board.

(k) “Nonemployee Director” shall mean a member of the Board who is neither an employee of the
Company nor of any Subsidiary.

(l) “Option” shall mean an option to purchase Stock granted to the provisions of Article VI hereof.

(m) “Optionee” shall mean an individual to whom an Option has been granted hereunder.

(n) “Plan” shall mean the ABM Industries Incorporated Executive Stock Option Plan, the terms of
which are set forth herein.

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(o) “Stock” shall mean the Common Stock of the Company or, in the event that the outstanding shares
of Stock are hereafter changed into or exchanged for shares of a different stock or securities of
the Company or some other corporation, such other stock or securities.

(p) “Stock Option Agreement” shall mean the agreement between the Company and the Optionee under
which the Optionee may purchase Stock hereunder.

(q) “Subsidiary” shall mean any corporation, the majority of the outstanding capital stock of which
is owned, directly or indirectly, by the Company.

(r) “Vesting Date” shall mean an Optionee’s “Initial Vesting Date” or “Final Vesting Date”, as the
case may be. An Optionee’s Initial Vesting Date shall apply to the first fifty percent (50 %) of
the shares covered by his or her Option, and shall mean the Optionee’s sixty-first (61st) birthday.
An Optionee’s Final Vesting Date shall apply to the remaining fifty percent (50%) of the shares
covered by such Option, and shall mean the Optionee’s sixty fourth (64th) birthday.

ARTICLE II

The Plan

     2.1 Name. This Plan shall be known as the “ABM Industries Incorporated Executive Stock Option
Plan”.

     2.2 Purpose. The purpose of the Plan is to advance the interests of the Company and its
shareholders by affording to Nonemployee Directors and to key management employees of the Company
and its Subsidiaries an opportunity to acquire or increase their proprietary interest in the
Company by the grant to such individuals of Options under the terms set forth herein. By thus
encouraging such individuals to become owners of the Company shares, the Company seeks to motivate,
retain, and attract those highly competent individuals upon whose judgment, initiative, leadership,
and continued efforts the success of the Company in large measure depends.

ARTICLE III

Participants

     Any officer or other key management employee of the Company of its Subsidiaries shall be
eligible to participate in the Plan. Prior to December 9, 2003, the Committee may grant Options to
any eligible employee in accordance with such determinations as the Committee from time to time in
its sole discretion shall make. Effective December 9, 2003, no additional Options shall be granted
under the Plan. Each Nonemployee Director who both (1) is such on the date of the 1995 Annual
Meeting of Stockholders, and (2) does not hold an Option, automatically shall receive as of such
date only, an Option to purchase 12,000 shares of Stock, but subject to Section 6.2 (regarding the
ineligibility of

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10 percent ((10%) holders). Each Nonemployee Director who becomes such after the 1995 Annual
Meeting of Stockholders and prior to December 9, 2003, automatically shall receive, as of the date
of his or her election or appointment to the Board, an Option to purchase 12,000 shares of Stock.

ARTICLE IV

Administration

     4.1 Duties and Powers of Committee. The Plan shall be administered by the Committee. Subject
to the express provisions of the Plan, the Committee shall have the sole discretion and authority
to determine from among eligible employee those to whom an the time or times at which the Options
may be granted and the number of shares of Stock to be subject to each Option. Subject to the
express provisions of the Plan, the Committee shall also have complete authority to interpret the
Plan, to prescribe, amend, and rescind rules and regulations relating to it, to determine the
details and provisions of each Stock Option Agreement, and to make all other determinations
necessary or advisable in the administration of the Plan.

     4.2 Majority Rule. A majority of the members of the committee shall constitute a quorum, and
any action taken by a majority present at a meeting at which a quorum is present or any action
taken without a meeting evidenced by a writing executed by a majority of the whole Committee shall
constitute the action of the Committee.

     4.3 Company Assistance. The Company shall supply fill and timely information to the Committee
on all matters relating to eligible employees and Nonemployee Directors, their employment or
service, death, retirement, disability or other termination of employment or service, and such
other pertinent facts as the Committee may require. The Company shall furnish the Committee with
such clerical and other assistance as is necessary in the performance of its duties.

     4.4 Beneficiary Designation. Optionees and their Beneficiaries may designate on the prescribed
form one or more Beneficiaries to whom distribution shall be made of any vested Options outstanding
at the time of the Optionee’s or Beneficiary’s death. An Optionee or Beneficiary may change such
designation at any time by filing the prescribed form with the Committee or its designee. If a
Beneficiary has not been designated or if no designated Beneficiary survives the Optionee or
Beneficiary, distribution will be made to the residuary beneficiary under the terms of the
Optionee’s or Beneficiary’s last will and testament or, in the absence of a last will and
testament, to the Optionee’s or Beneficiary’s estate as beneficiary.

ARTICLE V

Shares of Stock Subject to Plan

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     5.1 Limitations. Subject to adjustment pursuant to the provisions of Section 5.3 hereof, the
number of shares of Stock which may be issued and sold hereunder shall not exceed 2,360,000 shares.
Such shares may be either authorized and unissued shares or shares issued and thereafter acquired
by the Company.

     5.2 Options and Awards Granted Under Plan. Shares of Stock with respect to which an Option
granted hereunder shall have been exercised shall not again be available for Options hereunder. If
Options granted hereunder shall terminate for any reason without being wholly exercised, new
Options may be granted hereunder for the number of shares to which such Option termination relates.

     5.3 Antidilution. In the event that the outstanding shares of Stock hereafter are changed into
or exchanged for a different number or kind of shares or other securities of the Company or of
another corporation by reason of merger, consolidation, other reorganization, recapitalization,
reclassification, combination of shares, stock split-up or stock dividend:

(a) The aggregate number and kind of shares subject to Options which may be granted hereunder shall
be adjusted appropriately;

(b) Rights under outstanding Options granted hereunder, both as to the number of subject shares and
the Option price, shall be adjusted appropriately;

(c) Where dissolution or liquidation of the Company or any merger or combination in which the
Company is not a surviving corporation is involved, each outstanding Option granted hereunder shall
terminate, but the Optionee shall have the right, immediately prior to such dissolution,
liquidation, merger, or combination, to exercise his Option in whole or in part, without regard to
any time of exercise provisions.

     The foregoing adjustments and the manner of application of the foregoing provisions shall be
determined solely the Committee, and any such adjustment may provide for the elimination of
fractional share interests

ARTICLE VI

Options

     6.1 Option Grant and Agreement. Each Option granted hereunder shall be evidenced by minutes of
a meeting or the written consent of the Committee and by a written Stock Option Agreement dated as
of the date of grant and executed by the Company and the Optionee, which Agreement shall set forth
such terms and conditions as my be determined by the Committee consistent with the Plan.

     6.2 Participant Limitation. The Committee shall not grant an Option to any individual for such
number of shares of Stock that, immediately after the grant, the total number of shares of Stock
owned or subject to all options exercisable at any time by such individual

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exceed ten percent (10%) of the total combined voting power of all Stock of the Company or its
Subsidiaries. For this purpose an individual shall be considered as owning stock owned, directly or
indirectly, by or for his brothers and sisters (whether by the whole or half blood), spouse,
ancestors, and lineal descendents, and stock owned, directly or indirectly, by or for a
corporation, partnership, estate, or trust shall be considered as being owned proportionately by or
for its shareholders, partners, or beneficiaries.

     6.3 Option Price. The per share Option price of the Stock subject to each Option shall be
determined by the Committee, but the per share price shall not be less than the Fair Market Value
of the Stock on the date the Option is granted. The per share Option price of the Stock subject to
each Option granted to a Nonemployee Director shall equal 100% of the Fair Market Value of the
Stock on the date the Option is granted.

     6.4 Period of Exercisablity. Subject to Sections 6.5 (a) and 6.7, the period during which each
Option may be exercised shall be determined in accordance with the following rules. As to the first
fifty percent (50%) of the shares covered by an Option, the Option may be exercised during the
period commencing on the Optionee’s Initial Vesting Date and ending one (1) year after the
Optionee’s termination of employment with the Company and all of its Subsidiaries (termination from
the Board, in the case of Nonemployee Director).

     As to the remaining fifty percent (50%) of the shares covered by the Option, the Option may be
exercised during the period commencing on the Optionee’s Final Vesting Date and ending one (1) year
after the Optionee’s termination of employment with the Company and all of its Subsidiaries
(termination from the Board, in the case of a Nonemployee Director).

     6.5 Option Exercise.

(a) Options granted hereunder may not be exercised unless the Optionee shall have remained in the
employ of the Company or its Subsidiaries (on the Board in the case of a Nonemployee Director)
until the applicable Vesting Date.

(b) Options may be exercised in whole or in part from time to time with respect to whole shares
only, during such period for the exercise thereof, and shall be exercised by written notice of
exercise with respect to a specified number of shares delivered to the Company at its headquarters
office, and payment in full to the Company at said office of the amount of the Option price for the
number of shares of Stock with respect to which the Option is exercised. In addition to and at the
time of payment of the Option price, Optionee shall pay to the Company in cash the full amount of
all the federal and/or state withholding taxes applicable to the taxable income of such Optionee
resulting from such exercise.

     6.6 Nontransferability of Option. Options shall be exercisable, during the Optionee’s
lifetime, only by the Optionee. No Option or any right granted thereunder shall be

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transferable by the Optionee by operation of law or otherwise, other than by will or the laws of
descent and distribution. Notwithstanding the foregoing, an Optionee may designate a Beneficiary to
succeed, after the Optionee’s death, to all of the Optionee’s Options outstanding on the date of
death.

     6.7 Effect of Change in Control on Options. In the event of a Change in Control, the
surviving, continuing, successor, or purchasing Company or other business entity or parent thereof,
as the case may be (the “Acquiror”) may, without the consent of any Optionee, either assume or
continue the Company’s rights and obligations under outstanding Options or substitute for
outstanding Options substantially equivalent options covering the Acquiror’s stock. All options
assumed or continued by the Acquiror in connection with a Change in Control will become fully
vested and exercisable if, during the 12-month period following the Change in Control, the
Optionee’s employment is terminated without Cause or, in the case of a Nonemployee Director, the
Optionee’s service to the Company as a Director is terminated. Any Options that are neither assumed
nor continued by the Acquiror in connection with the Change in Control shall, contingent on the
Change in Control, become fully vested and exercisable immediately prior to the Change in Control.

     6.8 Effect of Termination of Employment or Service. Subject to the provisions of Section 6.7
above, if, prior to an Optionees applicable Vesting Date, the Optionee’s employment or service
shall be terminated by the Company or a Subsidiary with or without Cause, or by the act of the
Optionee, the right to exercise such Option (or portion thereof) shall terminate and all rights
thereunder shall cease.

     6.9 Rights as Stockholder. An Optionee shall have no rights as a stockholder with respect to
any shares subject to such Option prior to the purchase of such shares by exercise of such Option
as provided herein.

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ARTICLE VII

Stock Certificates

     The Company shall not be required to issue or deliver any certificate for shares of Stock
purchased upon the exercise of any Option granted hereunder prior to fulfillment of all the
following conditions:

(a) The admission of such shares to listing on all stock exchanges on which the Stock is then
listed;

(b) The completion of any registration or other qualification of such shares under any federal or
state law or under the rulings or regulations of the Securities Exchange Commission or any other
governmental regulatory body, which the Committee shall in its sole discretion deem necessary or
advisable;

(c) The obtaining of any approval or other clearance from any federal or state governmental agency
which the Committee shall in its sole discretion determine to be necessary or advisable; and

(d) The lapse of such reasonable period of time following the exercise of the Option as the
Committee from time to time may establish or approve for reasons of administrative convenience.

ARTICLE VIII

Amendment and Termination of Plan

     The Board may at any time, or from time to time, amend or terminate the Plan in any respect,
except that, to the extent required to maintain this Plan’s qualification under Rule 16b-3, any
amendment shall be subject to stockholder approval.

ARTICLE IX

Miscellaneous

     9.1 No Effect on Employment or Service. Nothing in the Plan or in any Option granted hereunder
or in any Stock Option Agreement shall confer upon any employee the right to continue as a member
of the Board or in the employ of the Company or in any Subsidiary.

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     9.2 Use of Proceeds. The proceeds received by the Company from the sale of Stock pursuant to
the exercise of Options shall be added to the Company’s general funds and used for general
corporate purposes.

     9.3 Effective Date. The effective date of this amendment and restatement of the Plan is
January 11, 2005. The amendment and restatement of the Plan shall have no effect on the Options
granted under the Plan prior to the amendment and restatement.

     9.4 Plan Binding on Successors. The Plan shall be binding upon the successors and assigns of
the Company.

     9.5 Singular, Plural; Gender. Wherever used herein, nouns in the singular shall include the
plural and the masculine pronoun shall include the feminine gender.

     9.6 Headings Not Part of Plan. Headings of Articles and Sections hereof are inserted for
convenience and reference; they constitute no part of the Plan.

8EX-10.2

Exhibit 10.2

409A Form

ABM INDUSTRIES INCORPORATED

STATEMENT OF TERMS AND CONDITIONS APPLICABLE TO

OPTIONS, RESTRICTED STOCK, RESTRICTED STOCK UNITS

AND PERFORMANCE SHARES GRANTED TO EMPLOYEES

PURSUANT TO THE 2006 EQUITY INCENTIVE PLAN

(As Amended and Restated December 9, 2008)

	I.	 	INTRODUCTION

The following terms and conditions shall apply to each Award granted under the Plan to an Employee
eligible to participate in the Plan. This Statement of Terms and Conditions is subject to the terms
of the Plan and of any Award made pursuant to the Plan. In the event of any inconsistency between
this Statement of Terms and Conditions and the Plan, the Plan shall govern.

	II.	 	DEFINITIONS

Capitalized terms not otherwise defined in this Statement of Terms and Conditions shall have the
meaning set forth in the Plan. When capitalized in this Statement of Terms and Conditions, the
following additional terms shall have the meaning set forth below:

	A.	 	“Cause” means, with respect to a Participant:
	 
	 	 	(i) the willful and continued failure to substantially perform the Participant’s duties and
responsibilities for reasons other than death or disability, after a written demand for
substantial performance is delivered to him/her by the Company which specifically identifies
the manner in which the Company believes that the Participant has not substantially performed
the Participant’s duties;
	 
	 	 	(ii) the Participant’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 Participant of his/her fiduciary obligations to the Company
or any securities laws applicable to the Company; or
	 
	 	 	(iv) intentional wrongful engagement by the Participant 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 the Plan, no act or failure to act on the part of
the Participant 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
Participant not in good faith and without reasonable belief that the Participant’s action or
omission was in the best interest of the Company.
	 
	B.	 	“Competitive Activity” shall mean, with respect to a Participant, the Participant’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.
	 
	C.	 	“Grant Date” means the date the Administrator grants the Award.
	 
	D.	 	“Option Period” means the period commencing on the Grant Date of an Option and, except at
otherwise provided in Section III.E, ending on the Termination Date.
	 
	E.	 	“Termination Date” means the date that an Option expires as set forth in the Option Agreement.

 

 

	III.	 	OPTIONS
	 
	A.	 	Option Notice and Agreement. An Option granted under the Plan shall be
evidenced by an Option Agreement setting forth the terms and
conditions of the Option, including whether the Option is an Incentive
Stock Option or a Nonqualified Stock Option and the number of Shares
subject to the Option. Each Option Agreement shall incorporate by
reference and be subject to this Statement of Terms and Conditions and
the terms and conditions of the Plan.
	 
	B.	 	Exercise Price. The Exercise Price of an Option, as specified in the
Option Agreement, shall be equal to or greater than the Fair Market
Value of the Shares underlying the Option on the Grant Date.
	 
	C.	 	Option Period. An Option shall be exercisable only during the
applicable Option Period, and during such Option Period the
exercisability of the Option shall be subject to the vesting
provisions of Section III.D as modified by the rules set forth in
Sections III.E, V and VI. The Option Period shall be not more than
seven years from the Grant Date.

 

 

	D.	 	Vesting of Right to Exercise Options.

	 	1.	 	Except as provided in Sections V and VI, an Option shall be
exercisable during the Option Period in accordance with the following
vesting schedule: (i) 25 percent of the Shares subject to the Option
shall vest on the first anniversary of the Grant Date; (ii) an
additional 25 percent of the Shares shall vest on the second
anniversary of the Grant Date; (iii) an additional 25 percent of the
Shares shall vest on the third anniversary of the Grant Date; and (iv)
the remaining 25 percent of the Shares subject to the Option shall
vest on the fourth anniversary of the Grant Date. Notwithstanding the
foregoing, the Administrator may specify a different vesting schedule
at the time the Option is granted and as specified in the Option
Agreement.
	 
	 	2.	 	Any vested portion of an Option not exercised hereunder shall
accumulate and be exercisable at any time on or before the Termination
Date, subject to the rules set forth in Sections III.E, V and VI. No
Option may be exercised for less than 5 percent of the total number of
Shares then available for exercise under such Option. In no event
shall the Company be required to issue fractional shares.

	E.	 	Termination of Employment. In addition to the terms set forth in the Plan with respect to termination of employment:

	 	1.	 	If a Participant ceases to be a bona fide employee of the Company or
an Affiliate due to his or her Retirement, Disability or death during
the Option Period, in addition to any Shares vested under the Option
Agreement prior to the date of Disability or death, the Option shall
vest in the number of Shares equal to 25 percent of the number of
Shares originally subject to the Option, multiplied by the number of
whole months between the most recent anniversary date of the Option
grant and the date of Retirement, Disability or death, and divided by
12.
	 
	 	2.	 	If a Participant who ceases to be a bona fide employee of the Company
or an Affiliate is subsequently rehired prior to the expiration of his
or her Option, then the Option shall continue to remain outstanding
until such time as the Participant subsequently terminates employment
or the Option otherwise terminates pursuant to this Statement of Terms
and Conditions. Upon the Participant’s subsequent termination of
employment, the post-termination exercise period calculated pursuant
to the terms and conditions of this Section III.E shall be reduced by
the number days between the date of the Participant’s initial
termination of employment and his or her rehire date; provided,
however, that if the rehired Participant continues to be employed by
the Company or an Affiliate for at least one year from his or her
rehire date, then the post-termination exercise period for the Option
shall be determined in accordance with the Plan and shall not be
adjusted as described above.

	F.	 	Method of Exercise. A Participant may exercise an Option with respect to all or any part of the exercisable Shares as follows:

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	 	1.	 	By giving the Company, or its authorized representative designated for
this purpose, written notice of such exercise specifying the number of
Shares as to which the Option is so exercised. Such notice shall be
accompanied by an amount equal to the Exercise Price of such Shares,
in the form of any one or combination of the following:

	 	a.	 	cash or certified check, bank draft, postal or express money order payable to the
order of the Company in lawful money of the United States;
	 
	 	b.	 	if approved by the Company at the time of exercise, personal check of the Participant;
	 
	 	c.	 	if approved by the Company at the time of exercise, a “net exercise” pursuant to
which the Company will not require a payment of the exercise price from the
Participant but will reduce the number of Shares issued upon the exercise by the
largest number of whole Shares that has a Fair Market Value that does not exceed the
aggregate exercise price. With respect to any remaining balance of the aggregate
exercise price, the Company shall accept payment in a form identified in (a) or (b)
of this section;
	 
	 	d.	 	if approved by the Company at the time of exercise, by tendering to the Company or
its authorized representative Shares which have been owned by the Participant for at
least six months prior to said tender, and having a Fair Market Value, as determined
by the Company, equal to the Exercise Price. In the event a Participant tenders
Shares to pay the Exercise Price, tender of Shares acquired through exercise of an
Incentive Stock Option may result in unfavorable income tax consequences unless such
Shares are held for at least two years from the Grant Date of the Incentive Stock
Option and one year from the date of exercise of the Incentive Stock Option;
	 
	 	e.	 	if approved by the Company at the time of exercise, delivery (including by FAX
transmission) to the Company or its authorized representative of an executed
irrevocable option exercise form together with irrevocable instructions to an
approved registered investment broker to sell Shares in an amount sufficient to pay
the Exercise Price plus any applicable withholding taxes and to transfer the proceeds
of such sale to the Company; and

	 	2.	 	If required by the Company, by giving satisfactory assurance in
writing, signed by the Participant, the Participant shall give his or
her assurance that the Shares subject to the Option are being
purchased for investment and not with a view to the distribution
thereof; provided that such assurance shall be deemed inapplicable to
(i) any sale of the Shares by such Participant made in accordance with
the terms of a registration statement covering such sale, which has
heretofore been (or may hereafter be) filed and become effective under
the Securities Act of

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	 	 	 	1933, as amended (the “Securities Act”) and with respect to which no stop order
suspending the effectiveness thereof has been issued, and (ii) any other sale
of the Shares with respect to which, in the opinion of counsel for the Company,
such assurance is not required to be given in order to comply with the
provisions of the Securities Act.

	G.	 	Limitations on Transfer. An Option shall, during a Participant’s
lifetime, be exercisable only by the Participant. No Option or any
right granted thereunder shall be transferable by the Participant by
operation of law or otherwise, other than as set forth in the Plan. In
the event of any attempt by a Participant to alienate, assign, pledge,
hypothecate, or otherwise dispose of an Option or of any right
thereunder, except as provided herein, or in the event of the levy of
any attachment, execution, or similar process upon the rights or
interest hereby conferred, the Company at its election may terminate
the affected Option by notice to the Participant and the Option shall
thereupon become null and void.
	 
	H.	 	No Shareholder Rights. Neither a Participant nor any person entitled
to exercise a Participant’s rights in the event of the Participant’s
death shall have any of the rights of a shareholder with respect to
the Shares subject to an Option except to the extent that an Option
has been exercised.
	 
	IV.	 	RESTRICTED STOCK, RESTRICTED STOCK UNITS, AND PERFORMANCE SHARES
	 
	A.	 	Agreement. A Restricted Stock Award, Restricted Stock Unit Award, or
Performance Share Award granted under the Plan shall be evidenced by
an Agreement to be executed by the Participant and the Company setting
forth the terms and conditions of the Award. Each Award Agreement
shall incorporate by reference and be subject to this Statement of
Terms and Conditions and the terms and conditions of the Plan.
	 
	B.	 	Special Restrictions. Each Restricted Stock Award, Restricted Stock
Unit Award, or Performance Share Award made under the Plan shall
contain the following terms, conditions and restrictions and such
additional terms, conditions and restrictions as may be determined by
the Administrator; provided, however, that no Award shall be subject
to additional terms, conditions and restrictions which are more
favorable to a Participant than the terms, conditions and restrictions
set forth in the Plan, the Restricted Stock Agreement, Restricted
Stock Unit Award Agreement, Performance Share Award Agreement, or this
Statement of Terms and Conditions.

	 	1.	 	Restrictions. Until the restrictions imposed on any Restricted Stock
Award shall lapse, shares of Restricted Stock granted to a
Participant: (a) shall not be sold, assigned, transferred, pledged,
hypothecated, or otherwise disposed of, and (b) shall, if the
Participant experiences a “separation from service” (within the
meaning of Section 409A of the Code) from the Company or an Affiliate
for any reason (except as otherwise provided in the Plan or in Section
IV.B.2) be returned to the Company forthwith, and all the rights of
the Participant to such Shares shall immediately terminate. A
Participant shall not be permitted to sell, transfer, pledge, assign
or encumber such Restricted Stock Units or Performance Shares,

4

 

	 	 	 	other than pursuant to a qualified domestic relations order as defined
in the Code or Title I of the Employee Retirement Income Security Act.
If a Participant experiences a “separation from service” (within the
meaning of Section 409A of the Code) from the Company or an Affiliate
(except as otherwise provided in the Plan or in Section IV.B.2) prior
to the lapse of the restrictions imposed on a Restricted Stock Unit
Award or Performance Share Award, the unvested portion of the
Restricted Stock Unit Award or Performance Share Award shall be
forfeited to the Company, and all the rights of the Participant to
such Award shall immediately terminate. If a Participant is absent
from work with the Company or an Affiliate because of his or her
short-term disability or because the Participant is on an approved
leave of absence, if the period of such leave does not exceed six
months (or if longer, so long as the individual retains a right to
reemployment with the Company under an applicable statute or by
contract), the Participant shall not be deemed during the period of
any such absence, by virtue of such absence alone, to have experienced
a “separation from service” (within the meaning of Section 409A of the
Code) from the Company or an Affiliate except as the Administrator may
otherwise expressly determine. Notwithstanding the foregoing, if the
Participant is on a voluntary leave of absence for the purpose of
serving the government of the country of which the Participant is a
citizen or in which the Participant’s principal place of employment is
located such leave shall be considered an approved leave of absence.

	 	2.	 	Termination of Employment by Reason of Retirement, Disability or Death.

	 	a.	 	Restricted Stock Awards and Restricted Stock Unit Awards.
Notwithstanding any provision contained herein or in the Plan or the
Restricted Stock Agreement or Restricted Stock Unit Agreement to the
contrary, if a Participant who has been in the continuous employment
of the Company or an Affiliate since the Grant Date of a Restricted
Stock Award or Restricted Stock Unit Award ceases to be a bona fide
employee of the Company or an Affiliate, which cessation constitutes a
“separation from service” under Section 409A of the Code and which is
a result of Retirement, Disability or death, then the restrictions
shall lapse as to the number of Shares or Share Equivalents equal to:
(i) 50 percent of the number of Shares or Share Equivalents originally
subject to the Award, multiplied by (ii) the number of whole months
between the Grant Date (or if the Grant Date occurred more than two
years prior to the date of Retirement, Disability or death, the second
anniversary of the Grant Date) and the date of Retirement, Disability
or death, divided by (iii) 24.
	 
	 	b.	 	Performance Share Awards. Notwithstanding any provision contained
herein or in the Plan or the Performance Share Agreement to the
contrary, if a Participant who has been in the continuous employment
of the Company or an Affiliate since the Grant Date of a Performance
Share Award ceases to be a bona fide employee of the Company or an
Affiliate as a result of Retirement, Disability or death, then at the
end of the performance period the restrictions shall lapse as to the
number of Share

5

 

	 	 	 	Equivalents equal to: (i) the number of Performance Shares vested in accordance
with the performance objectives established by the Administrator for the Award,
multiplied by (ii) the number of whole months between the Grant Date and the
date of Retirement, Disability or death, divided by (iii) the number of months
in the performance period.

	C.	 	Dividends, Dividend Equivalents, and Business Transactions. Upon cash
dividends being paid on outstanding shares of ABM common stock,
dividends shall be paid with respect to Restricted Stock during the
Restriction Period and shall be converted to additional shares of
Restricted Stock, which shall be subject to the same restrictions as
the original Award for the duration of the Restricted Period. Upon
cash dividends being paid on outstanding shares of ABM common stock,
dividend equivalents shall be credited in respect of Restricted Stock
Units and Performance Shares, which shall be converted into additional
Restricted Stock Units or Performance Shares, which will be subject to
all of the terms and conditions of the underlying Restricted Stock
Unit Award or Performance Share Award, including the same vesting
restrictions as the underlying Award. Upon stock dividends being paid
on outstanding shares of ABM common stock or a Business Transaction,
the Administrator is authorized to take such actions and make such
changes with respect to outstanding Awards, including the performance
criteria for the termination of restrictions on Awards, as are
consistent with the Plan and this Statement of Terms and Conditions to
effect the terms of the Awards.
	 
	D.	 	Election to Recognize Gross Income in the Year of Grant. If any
Participant validly elects within thirty days of the Grant Date, to
include in gross income for federal income tax purposes an amount
equal to the Fair Market Value of the Shares of Restricted Stock
granted on the Grant Date, such Participant shall pay to the Company,
or make arrangements satisfactory to the Administrator to pay to the
Company in the year of such grant, any federal, state or local taxes
required to be withheld with respect to such shares in accordance with
Section VII.F.
	 
	E.	 	No Shareholder Rights for Restricted Stock Units or Performance
Shares. Neither a Participant nor any person entitled to exercise a
Participant’s rights in the event of the Participant’s death shall
have any of the rights of a shareholder with respect to the Share
Equivalents subject to a Restricted Stock Unit Award or Performance
Share Award except to the extent that a stock certificate has been
issued with respect to such Shares upon the payment of any vested
Restricted Stock Unit Award or Performance Share Award.
	 
	F.	 	Time of Payment of Restricted Stock Units and Performance Shares.

	 	1.	 	Subject to Section IV.F.2 below, upon the lapse of the restriction
imposed on Restricted Stock Unit Awards or Performance Share Award,
all Restricted Stock Units and Performance Shares that were not
forfeited pursuant to Sections IV.B. 1 or V shall be paid to the
Participant as soon as reasonably practicable after the restrictions
lapse but not later than 75 days following the date on which the
restrictions lapse. Payment shall be made in Shares in the form of a
stock

6

 

	certificate. The foregoing notwithstanding, the Participant may elect to defer payment of the
Restricted Stock Units in the manner described in Section IV.G;

	 	2.	 	To the extent required in order to avoid accelerated taxation and/or
tax penalties under Code Section 409A, amounts that would otherwise be
payable pursuant to Section (IV)(F) of this Statement of Terms and
Conditions during the six-month period immediately following a
Participant’s termination of employment shall instead be paid on the
first business day after the date that is six months following the
Participant’s termination of employment (or upon the Participant’s
death, if earlier).

	G.	 	Deferral Election. Each Participant, pursuant to rules established by
the Administrator, may be entitled to elect to defer all or a
percentage of any payment in respect of a Restricted Stock Unit Award
or Performance Shares that he or she may be entitled to receive as
determined pursuant to Section IV.F. This election shall be made by
giving notice in a manner and within the time prescribed by the
Administrator and in compliance with Code Section 409A. Each
Participant must indicate the percentage (expressed in whole
percentages) he or she chooses to defer of any payment he or she may
be entitled to receive. If no notice is given, the Participant shall
be deemed to have made no deferral election. Each deferral election
filed with the Company shall become irrevocable in accordance with the
terms and conditions of the Company’s Deferred Compensation Plan (or
any successor plan) and in compliance with Code Section 409A.

	V.	 	SPECIAL FORFEITURE AND REPAYMENT RULES

Any other provision of this Statement of Terms and Conditions to the contrary notwithstanding, if
the Administrator determines that a Participant has engaged in conduct which constitutes Cause
prior to, or during the 12 month period following, the exercise of an Option or the vesting of an
Award, the consequences set forth in Section 16 of the Plan govern and the following consequences
shall apply:

	A.	 	Any outstanding Option shall immediately and automatically terminate,
be forfeited and shall cease to be exercisable, without limitation. In
addition, any shares of Restricted Stock, Restricted Stock Units or
Performance Shares as to which the restrictions have not lapsed shall
immediately and automatically be forfeited, all of the rights of the
Participant to such shares or share equivalents shall immediately
terminate, and any Restricted Stock shall be returned to the Company.
	 
	B.	 	Any exercise of an Option during the period beginning 12 months prior
to through 24 months after the Participant’s termination of employment
with the Company or an Affiliate shall be rescinded and all
outstanding Awards shall be canceled up to 24 months after the
Participant’s termination of employment with the Company or an
Affiliate. The Participant shall deliver to the Company the Shares
received by the Participant upon exercise of an Option if such
exercise has been rescinded and the Shares retained by the
Participant.

7

 

	C.	 	The lapse of restrictions on or vesting of Restricted Stock,
Restricted Stock Units, or Performance Shares that have vested or upon
which the restrictions have lapsed during the period beginning 12
months prior to through 24 months after the Participant’s termination
of employment with the Company or an Affiliate shall be rescinded and
all outstanding Awards shall be cancelled up to 24 months after the
Participant’s termination of employment with the Company or an
Affiliate. The Participant shall deliver to the Company the Shares
delivered upon vesting or lapse of restrictions if such vesting or
lapse of restrictions has been rescinded and the Shares retained by
the Participant.
	 
	D.	 	The Participant shall pay over to the Company the proceeds (less the
Participant’s purchase price, if any) received by the Participant upon
(1) the sale, transfer or other transaction involving the Shares
acquired upon the exercise of any Option exercised during the period
beginning 12 months prior to through 24 months after the Participant’s
termination of employment with the Company or an Affiliate or (2) the
sale, transfer or other transaction involving the Shares acquired upon
the vesting of any Award or lapse of restrictions on any Award within
12 months prior to through 24 months after the Participant’s
termination of employment with the Company or an Affiliate in such
manner and on such terms and conditions as may be required, and,
without limiting any other remedy the Company or an Affiliate may
have, the Company shall be entitled to set-off against the amount of
any such proceeds any amount owed the Participant by the Company or an
Affiliate to the fullest extent permitted by law.

The Administrator shall determine in its sole discretion whether the Participant has engaged in
conduct that constitutes Cause.

Any provision of Section 16 of the Plan and this Section V which is determined by a court of
competent jurisdiction to be invalid or unenforceable should be construed or limited in a manner
that is valid and enforceable and that comes closest to the business objectives intended by such
invalid or unenforceable provision, without invalidating or rendering unenforceable the remaining
provisions of this Section V.

	VI.	 	CHANGE IN CONTROL
	 
	A.	 	Effect of Change in Control on Options. Subject to the limitations set
forth in Section VI.C, in the event of a Change in Control, the
surviving, continuing, successor, or purchasing Company or other
business entity or parent thereof, as the case may be (the “Acquiror”)
may, without the consent of any Participant, either assume or continue
the Company’s rights and obligations under outstanding Options or
substitute for outstanding Options substantially equivalent options
covering the Acquiror’s stock. All Options assumed or continued by
the Acquiror in connection with a Change in Control will become fully
vested and exercisable if the Participant’s employment is terminated
without Cause at any time during the 12-month period following the
Change in Control.

8

 

	 	 	Any Option granted one year or more prior to the Change in Control
that is neither assumed nor continued by the Acquiror in connection
with the Change in Control shall, contingent on the Change in Control,
become fully vested and exercisable immediately prior to the Change in
Control. Any Option granted less than one year prior to the Change of
Control that is neither assumed nor continued by the Acquiror in
connection with the Change in Control shall, to the extent not
previously vested and exercisable, immediately prior to the Change in
Control become vested and exercisable as to the number of Shares
subject to such Option equal to (i) the number of Shares originally
subject to such Option, multiplied by (ii) the number of whole months
between the Grant Date and the Change in Control, divided by (iii) the
number of months between the Grant Date and the date on which all
Shares originally subject to such Option would have been fully vested
and exercisable; and such Option shall terminate with respect to all
remaining Shares subject to such Option.
	 
	B.	 	Effect of Change in Control on Awards Other than Options. Subject to
the limitations set forth in Section VI.C, in the event of a Change in
Control, the Acquiror may, without the consent of any Participant,
either assume or continue the Company’s rights and obligations under
outstanding Awards other than Options or substitute for such Awards
substantially equivalent awards covering the Acquiror’s stock. All
Awards other than Options assumed or continued by the Acquiror in
connection with a Change in Control will become fully vested and all
restrictions on such Awards will lapse if the Participant’s employment
is terminated without Cause at any time during the 12-month period
following the Change in Control. Any Award that is neither assumed
nor continued by the Acquiror in connection with the Change in Control
shall, upon the Change in Control, become fully vested and all
restrictions shall be released immediately prior to the Change in
Control, and all Restricted Unit Awards and Performance Share Awards
shall become immediately payable. Notwithstanding anything in this
Section VI.B to the contrary, if the Change in Control does not
constitute a “change in effective ownership or control” of the Company
within the meaning of Code Section 409A, the Restricted Stock Units
and Performance Shares granted pursuant to this Statement of Terms and
Conditions will vest as provided in this Section VI.B, but will be
payable to the Participant in accordance with the provisions of
Section IV.
	 
	C.	 	Excess Parachute Payments. Subject to a Severance Agreement between
the Participant and the Company approved by the Board of Directors or
the Compensation Committee, if any amount or benefit to be paid or
provided under an Award or any other agreement

9

 

	 	 	between a Participant and the Company would be an Excess Parachute Payment but
for the application of this sentence, then the payments and benefits to be paid
or provided under the Award 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. The determination of whether any reduction in such payments or
benefits to be provided under the Award or any other agreement or otherwise is
required pursuant to the preceding sentence will be made at the expense of the
Company by independent accountants or the Company’s benefits consultant. The
fact that the Participant’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 Participant under 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 Participant 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 Participant with
all information reasonably requested by the Participant to permit the
Participant to make such designation. In the event that the Participant 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.

	VII.	 	MISCELLANEOUS
	 
	A.	 	No Effect on Terms of Employment. Subject to the terms of any
employment contract entered into by the Company and a Participant to
the contrary, the Company (or an Affiliate which employs him or her)
shall have the right to terminate or change the terms of employment
of a Participant at any time and for any reason whatsoever.
	 
	B.	 	Grants to Participants in Foreign Countries. In making grants to
Participants in foreign countries, the Administrator has the full
discretion to deviate from this Statement of Terms and Conditions in
order to adjust Awards under the Plan to prevailing local conditions,
including custom and legal and tax requirements.
	 
	C.	 	Information Notification. Any information required to be given under
the terms of an Award Agreement shall be addressed to the Company in
writing by mail, overnight delivery service, or by electronic
transmission to the Senior Vice President, Human Resources and the
Assistant Vice President & Director of Compensation. Any notice to be
given to a Participant shall be given in writing by mail, overnight
delivery service, or by electronic transmission.
	 
	D.	 	Administrator Decisions Conclusive. All decisions of the
Administrator administering the Plan upon any questions arising under
the Plan, under this Statement of Terms and Conditions, or under an
Award Agreement, shall be conclusive.
	 
	E.	 	No Effect on Other Benefit Plans. Nothing herein contained shall
affect a Participant’s right to participate in and receive benefits
from and in accordance with the then current provisions of any
pensions, insurance or other employment welfare plan or program
offered by the Company.

10

 

	F.	 	Withholding. Each Participant shall agree to make appropriate
arrangements with the Company and his or her employer for satisfaction
of any applicable federal, state or local income tax withholding
requirements or payroll tax requirements. If approved by the Company
at the time of exercise, such arrangements may include an election by
a Participant to have the Company retain some portion of the Stock
acquired pursuant to exercise of an Option to satisfy such withholding
requirements. The election must be made prior to the date on which the
amount to be withheld is determined. If a qualifying election is made,
then upon exercise of an Option, in whole or in part, the Company will
retain the number of Shares having a value equal to the amount
necessary to satisfy any withholding requirements. Calculation of the
number of Shares to be withheld shall be made based on the Fair Market
Value of the Stock. In no event, however, shall the Company be
required to issue fractional shares of Stock. The Administrator shall
be authorized to establish such rules, forms and procedures as it
deems necessary to implement the foregoing.

With respect the vesting of an Award other than an Option, if the Participant does not make an
arrangement with Company and his or her employer for satisfaction of the applicable income and
withholding requirements or social security requirements in advance of the vesting date, the
Company shall retain the number of Shares (that otherwise would have been payable to the
Participant) having a value equal to the amount necessary to satisfy any withholding requirements.
Calculation of the number of such Shares shall be as described above.

	G.	 	Successors. This Statement of Terms and Conditions and the Award
Agreements shall be binding upon and inure to the benefit of any
successor or successors of the Company. “Participant” as used herein
shall include the Participant’s Beneficiary.
	 
	H.	 	Governing Law. The interpretation, performance, and enforcement of
this Statement of Terms and Conditions and all Award Agreements shall
be governed by the laws of the State of Delaware.

660442.03-New
York Server 5A - MSW

11

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