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	 	EXHIBIT 10.5

EXECUTIVE EMPLOYMENT AGREEMENT

THIS EXECUTIVE EMPLOYMENT AGREEMENT (“Agreement”) is effective July 12, 2005, by and between George
B. Sundby (“Executive”) and ABM Industries Incorporated (“ABM”) for itself and on behalf of its
subsidiary corporations as applicable herein.

WHEREAS, the subsidiaries of ABM are engaged in the building maintenance and related service
businesses, and

WHEREAS, Executive is experienced in the administration, finance, marketing, and/or operation of
such services, and

WHEREAS, ABM and its subsidiaries have invested significant time and money to develop proprietary
trade secrets and other confidential business information, as well as invaluable goodwill among its
customers, sales prospects and employees, and

WHEREAS, ABM and its subsidiaries have disclosed or will disclose to Executive such proprietary
trade secrets and other confidential business information which Executive will utilize in the
performance of his duties and responsibilities as Executive Vice President & Chief Financial
Officer and under this Agreement; and

WHEREAS, Executive wishes to, or has been and desires to remain employed by ABM, and to utilize
such proprietary trade secrets, other confidential business information and goodwill in connection
with his employment;

NOW THEREFORE, Executive and ABM agree as follows:

	1.	 	EMPLOYMENT. ABM hereby agrees to employ Executive, and Executive hereby accepts such
employment, on the terms and conditions set forth in this Agreement.
	 
	2.	 	TITLE. Executive’s title shall be Executive Vice President & Chief Financial Officer of ABM,
subject to modification as determined by ABM’s Board of Directors.
	 
	3.	 	DEFINITIONS. The capitalized terms used in this agreement shall have the following
definitions:

	 	A.	 	“AAA” means the American Arbitration Association.
	 
	 	B.	 	“ABM” means ABM Industries Incorporated and its successors and assigns.
	 
	 	C.	 	“Base Salary” means the salary paid under Paragraph 7A for the applicable
Fiscal Year.
	 
	 	D.	 	“Board” means the Board of Directors of ABM.

 

 

			
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	E.	 	“Bonus” means a performance-based bonus payable under Paragraph 7B of this
Agreement.
	 
	F.	 	“Chief Executive Officer” means the Chief Executive Officer of ABM.
	 
	G.	 	“Company” means ABM, its subsidiaries, successors, and assigns.
	 
	H.	 	“Compensation Committee” means the Compensation Committee of the Board.
	 
	I.	 	“EPS” means earnings per share for the applicable Fiscal Year as reported by
ABM in its Annual Report on Form 10-K.
	 
	J.	 	“Executive” means George B. Sundby.
	 
	K.	 	“Extended Term” means the period for which this agreement is extended under
Paragraph 15 of this Agreement.
	 
	L.	 	“Fiscal Year” means the period beginning on November 1 of a calendar year and
ending on October 31 of the following calendar year or such other period as shall be
designated by the Board as ABM’s fiscal year.
	 
	M.	 	“Initial Term” is the period beginning on July 12, 2005 and ending October 31,
2007, unless sooner terminated under Paragraph 16 of this Agreement.
	 
	N.	 	“Insurance Contribution” means ABM’s contribution to provide group health and
life insurance for Executive and excludes any payment by Executive for such coverage.
	 
	O.	 	“Just Cause” means (i) theft or dishonesty, (ii) more than one instance of
neglect or failure to perform employment duties, (iii) more than one instance of
inability or unwillingness to perform employment duties, (iv) insubordination, (v)
abuse of alcohol or other drugs or substances affecting Executive’s performance of his
employment duties, (vi) material and willful breach of this Agreement, (vii) other
misconduct, unethical or unlawful activity, (viii) a conviction of or plea of “guilty”
or “no contest” to a felony under the laws of the United States or any state thereof,
or (ix) a conviction of or plea of “guilty” or “no contest” to a misdemeanor involving
a crime of moral turpitude under the laws of the United States or any state thereof.
	 
	P.	 	“Modification Period” means the remainder of the Initial or the then current
Extended Term, as applicable, of this Agreement, following the change in Executive’s
employment status from that of a full-time employee to that of a part-time employee
under Paragraph 14 of this Agreement.

 

 

			
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	 	Q.	 	“Performance Assessment” means the Chief Executive Officer’s annual assessment
of Executive’s performance against the Performance Criteria.
	 
	 	R.	 	“Performance Criteria” means the performance criteria for Executive established
annually by the Chief Executive Officer in accordance with Paragraph 7B of this
Agreement.
	 
	 	S.	 	“Proprietary Information” means Company’s proprietary trade secrets and other
confidential information not in the public domain, including but not limited to
specific customer data such as: (i) the identity of Company’s customers and sales
prospects, (ii) the nature, extent, frequency, methodology, cost, price and profit
associated with services and products purchased from Company, (iii) any particular
needs or preferences regarding its service or supply requirements, (iv) the names,
office hours, telephone numbers and street addresses of its purchasing agents or other
buyers, (v) its billing procedures, (vi) its credit limits and payment practices, and
(vii) its organization structure.
	 
	 	T.	 	“Section 162(m)” means Section 162(m) of the Internal Revenue Code of 1986, as
amended, or any successor statute.
	 
	 	U.	 	“Significant Transaction” means Company’s acquisition or disposition of a
business or assets which ABM is required to report under Item 2.01 of Form 8-K under
the rules and regulations issued by the Securities and Exchange Commission.
	 
	 	V.	 	“State of Employment” means California.
	 
	 	W.	 	“Target Bonus” means 40% of Executive’s Base Salary.
	 
	 	X.	 	“Total Disability” means Executive’s inability to perform his duties under this
Agreement and shall be deemed to occur on the 91st consecutive or non-consecutive
calendar day within any 12 month period that Executive is unable to perform his duties
under this Agreement because of any physical or mental illness or disability.
	 
	 	Y.	 	“WTC Related Gain” means the total amount of all items of income included in
ABM’s audited consolidated financial statements for any Fiscal Year that result from
ABM’s receipt of insurance proceeds or other compensation or damages due to ABM’s loss
of property, business or profits as a result of the destruction of the World Trade
Center on September 11, 2001.

	4.	 	DUTIES & RESPONSIBILITIES. Executive shall assume and perform such executive or managerial
duties and responsibilities as are assigned from time-to-time by the Chief Executive Officer
or such other officer designated by the Chief Executive Officer, to whom Executive shall
report and be accountable.

 

 

			
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	5.	 	TERM OF AGREEMENT. This agreement shall end on October 31, 2007, unless sooner terminated
pursuant to Paragraph 16 or later extended to an Extended Term under Paragraph 15 of this
Agreement.
	 
	6.	 	PRINCIPAL OFFICE. During the Initial Term and any Extended Term, as applicable, of this
Agreement, Executive shall be based at an ABM office located in the State of Employment or
such other location as shall be mutually agreed upon by ABM and Executive.
	 
	7.	 	COMPENSATION. ABM agrees to compensate Executive, and Executive agrees to accept as
compensation in full, for Executive’s assumption and performance of duties and
responsibilities pursuant to this Agreement:

	 	A.	 	SALARY. A salary paid in equal installments no less frequently than
semi-monthly at the annual rate of $350,000. Executive shall be eligible, at the sole
discretion of the Compensation Committee, to receive a merit increase based on
Executive’s job performance or for any other reason deemed appropriate by the
Compensation Committee.
	 
	 	B.	 	BONUS. Subject to subparagraphs (iii), (iv) and (v) below, Executive shall be
entitled to a Bonus for each Fiscal Year, as follows:

	 	i.	 	Executive’s Bonus may range from 0% to 150% of the Target Bonus
and shall be based on the Performance Assessment of Executive for the
applicable Fiscal Year evaluated on the basis of the Performance Criteria.
Performance Criteria may include both ABM and individual objectives, may be
both qualitative and quantitative in nature and shall be established by the
Chief Executive Officer, reviewed by the Compensation Committee, and
communicated to Executive within 90 days after the beginning of the Fiscal Year
for which they apply. The 2005 Performance Criteria are attached as Exhibit A
to this Agreement. The Performance Assessment for each Fiscal Year shall be
the responsibility of the Chief Executive Officer, who shall submit the
Performance Assessment to the Compensation Committee on the Calculation
Worksheet attached as Exhibit B to this Agreement. The determination of the
Bonus amount for each Fiscal Year shall be determined by the Compensation
Committee based upon the Performance Assessment and the recommendation of the
Chief Executive Officer.
	 
	 	ii.	 	The Compensation Committee reserves the right at any time to
adjust the Performance Criteria in the event of a Significant Transaction
and/or for any unanticipated and material events that are beyond the control of
ABM, including but not limited to acts of god, nature, war or terrorism, or
changes in the rules for financial reporting set forth by the Financial
Accounting Standards Board, the Securities and Exchange Commission,

 

 

			
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	 	 	 	rules of the New York Stock Exchange and/or for any other reason which the
Compensation Committee determines, in good faith, to be appropriate.
	 
	 	iii.	 	ABM shall pay Executive the Bonus for each Fiscal Year
following completion of the audit of ABM’s financial statements for such Fiscal
Year and within 10 days after determination of the Bonus by the Compensation
Committee. In the event of modification of employment under Paragraph 14 or
termination of employment hereunder other than (a) a termination under
Paragraph 16B, (b) a termination under Paragraph 16C for reasons other than
Executive’s health, or (c) Executive’s retiring at age 65 or more with no less
than 10 years of employment at Company, ABM shall pay Executive, within 75 days
thereafter, a prorated portion of the Target Bonus based on the fraction of the
Fiscal Year that has been completed prior to the date of modification or
termination.
	 
	 	iv.	 	Absent bad faith or material error, any conclusions of the
Chief Executive Officer with respect to the Performance Assessment or the
Compensation Committee with respect to the Performance Criteria or the Bonus
shall be final and binding upon Executive and ABM.
	 
	 	v.	 	No Bonus for any Fiscal Year of ABM (other than the payment of
a prorated portion of the Target Bonus under Paragraph 7B(iii) following a
modification or termination of employment) shall be payable unless ABM’s EPS
for the Fiscal Year then ending is equal to or greater than 80% of ABM’s EPS
for the previous Fiscal Year of ABM, in each case excluding any gains and
losses from sales of discontinued operations and any WTC Related Gain.
	 
	 	vi.	 	Notwithstanding any other provision of this Agreement, the
Compensation Committee may, prior to the beginning of any Fiscal Year, approve
and notify the Executive of a modification to the Target Bonus or the bonus
range set forth in subparagraph (i) above. The Compensation Committee’s
decision in this regard shall be deemed final and binding on Executive. In
addition, the Compensation Committee may grant a discretionary incentive bonus
to Executive at any time in its sole discretion.

	 	C.	 	FRINGE BENEFITS. Executive shall receive the then current fringe benefits
generally provided by ABM to its executives. Such benefits may include but not be
limited to the use of an ABM-leased car or a car allowance, group health benefits,
long-term disability benefits, group life insurance, sick leave and vacation. Each of
these fringe benefits is subject to the applicable ABM policy at all times. Executive
expressly agrees that should he terminate employment with ABM for the purpose of being
re-employed by an ABM subsidiary or affiliate, he shall “carry-over” any previously
accrued but unused vacation balance to the books of the affiliate. ABM reserves the
right to add, increase, reduce or eliminate any fringe benefit at any time, but no such
benefit or benefits shall be

 

 

			
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	 	 	 	reduced or eliminated as
to Executive unless generally reduced or eliminated as to senior executives at ABM.
	 
	 	D.	 	LIMIT. To the extent that any compensation to be paid to Executive under
this Agreement would cause compensation payable to Executive to be non-deductible by
ABM as a result of the $1 million compensation limit provisions of Section 162(m),
Executive agrees that any such amount in excess of $1 million shall not be paid out to
Executive but shall be deferred by Executive under the ABM Deferred Compensation Plan.
The distribution of such deferred amounts will be made only after Executive is no
longer considered a “covered employee” as defined in Section 162(m). Amounts deferred
by Executive will be credited with interest or gains and losses in accordance with the
ABM Deferred Compensation Plan.

	8.	 	PAYMENT OR REIMBURSEMENT OF BUSINESS EXPENSES. ABM shall pay directly or reimburse Executive
for reasonable business expenses of ABM incurred by Executive in connection with ABM business
in accordance with the ABM Travel & Entertainment Policy. 
	 
	9.	 	BUSINESS CONDUCT. Executive shall comply with all applicable laws pertaining to the
performance of this Agreement, and with all lawful and ethical rules, regulations, policies,
codes of conduct, procedures and instructions of Company, including but not limited to the
following:

	 	A.	 	GOOD FAITH. Executive shall not act in any way contrary to the best interest
of Company.
	 
	 	B.	 	BEST EFFORTS. During all full-time employment hereunder, Executive shall
devote full working time and attention to ABM.
	 
	 	C.	 	VERACITY. Executive shall make no claims or promises to any employee,
supplier, contractor, customer or sales prospect of Company that are unauthorized by
Company or are in any way untrue.
	 
	 	D.	 	POSSIBLE CHANGE OF CONTROL. Executive agrees that if he is approached by any
person to discuss a possible acquisition or other transaction that could result in a
change of control of ABM, Executive will immediately advise the Chief Executive
Officer, ABM’s General Counsel and the Chair of the Governance Committee of the Board.
	 
	 	E.	 	CODE OF BUSINESS CONDUCT. Executive agrees to fully comply with and
annually execute a certification of compliance with ABM’s Code of Business Conduct.
	 
	 	F.	 	OTHER LAWS. Executive agrees to fully comply with the other laws and
regulations that govern his performance and receipt of compensation under this

 

 

			
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	 	 	 	Agreement, including but not limited to the provisions of Section 304 of the
Sarbanes-Oxley Act of 2002.

	10.	 	NO CONFLICT. Executive represents to ABM that Executive is not bound by any contract with a
previous employer or with any other business that might prevent Executive from entering into
this Agreement. Executive further represents that he is not bound by any other contracts or
covenants that in any way restrict or limit Executive’s activities in relation to his or her
employment with ABM that have not been fully disclosed to ABM prior to the signing of this
Agreement.
	 
	11.	 	COMPANY PROPERTY. ABM shall, from time to time, entrust to the care, custody and control of
Executive certain of Company’s property, such as motor vehicles, equipment, supplies,
passwords and electronic and paper documents. Such documents may include, but shall not be
limited to, customer lists, financial statements, cost data, price lists, invoices, forms,
electronic files and media, mailing lists, contracts, reports, manuals, personnel files or
directories, correspondence, business cards, copies or notes made from Company documents and
documents compiled or prepared by Executive for Executive’s use in connection with Company
business. Executive specifically acknowledges that all such items, including passwords and
documents, are the property of Company, notwithstanding their preparation, care, custody,
control or possession by Executive at any time(s) whatsoever.
	 
	12.	 	GOODWILL & PROPRIETARY INFORMATION. In connection with Executive’s employment hereunder:

	 	A.	 	PROPRIETARY INFORMATION. Executive agrees to utilize and further Company’s
goodwill among its customers, sales prospects and employees, and acknowledges that
Company may disclose to Executive and Executive may disclose to Company Proprietary
Information.
	 
	 	B.	 	DUTY OF LOYALTY. Executive agrees that the Proprietary Information and
Company’s goodwill have unique value to Company, are not generally known or readily
available to Company’s competitors, and could only be developed by others after
investing significant time and money. ABM makes the Proprietary Information and
Company’s goodwill available to Executive in reliance on Executive’s agreement to hold
the Proprietary Information and Company’s goodwill in trust and confidence. Executive
hereby acknowledges that to use this Proprietary Information and Company’s goodwill
other than for the benefit of Company would be a breach of such trust and confidence
and a violation of Executive’s duty of loyalty to Company.

	13.	 	RESTRICTIVE COVENANTS. In recognition of Paragraph 12 above, Executive hereby agrees that
during the term of this Agreement and thereafter as specifically agreed herein:

 

 

			
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	 	A.	 	NON-SOLICITATION OF EMPLOYEES. While employed by ABM and for a period of one
year following Executive’s termination of employment, Executive shall at no time
directly or indirectly solicit or otherwise encourage or arrange for any employee to
terminate employment with Company except in the proper performance of this Agreement.
	 
	 	B.	 	NON-DISCLOSURE. Except in the proper performance of this Agreement, Executive
shall not directly or indirectly disclose or deliver to any other person or business,
any Proprietary Information obtained directly or indirectly by Executive from, or for,
Company.
	 
	 	C.	 	NON-SOLICITATION OF CUSTOMERS. Executive agrees that for a reasonable time
after the termination of this Agreement, which Executive and ABM hereby agree to be one
year, Executive shall not directly or indirectly, for Executive or for any other person
or business, seek, solicit, divert, take away, obtain or accept any customer account or
sales prospect with which Executive had direct business involvement on behalf of
Company within one year prior to termination of this Agreement. In addition, Executive
agrees that at all times after the termination of this Agreement, Executive shall not
seek, solicit, divert, take away, obtain or accept the patronage of any customer or
sales prospect of Company through the direct or indirect use of any Proprietary
Information or by any other unfair or unlawful business practice.
	 
	 	D.	 	NON-DISPARAGEMENT. During Executive’s employment with ABM and for a period of
two years following termination of employment (whether voluntary or involuntary),
Executive agrees not to make any comment or take any action which disparages, defames,
or places in a negative light Company, its past and present officers, directors, and
employees. ABM agrees that during this same period, its officers and directors shall
refrain from making any comment or taking any action to disparage, defame, or place
Executive in a negative public light.
	 
	 	E.	 	COOPERATION. Upon termination of employment hereunder, Executive shall
cooperate with Company in its defense or prosecution of any current or future matter in
any forum, including but not limited to lawsuits, federal, state or local agency
claims, audits and investigations, and internal and external investigations concerning
any matter in which he was involved during his employment with ABM or about which he
has or should have knowledge and information. Executive’s cooperation shall include,
but is not limited to, meeting with ABM’s in-house and/or outside attorneys,
communicating his knowledge of relevant facts to ABM’s attorneys, experts, consultants,
investigators, executives, management and human resources employees and other
representatives, reviewing and commenting on any relevant documents, preparing any
requested documentation and testifying at depositions, hearings, arbitrations, trials
and any other forum at which Executive’s participation and testimony is requested by
ABM. In performing the tasks outlined in this Paragraph 13E, Executive shall be bound
by the covenants of good faith and veracity set forth in Paragraph 9 of this

 

 

			
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	 	 	 	Agreement and as outlined
in ABM’s Code of Business Conduct and Ethics. In performing responsibilities under
this Paragraph 13E, Executive shall be compensated for his time at an hourly rate of
$250 per hour.
	 
	 	F.	 	LIMITATIONS. Nothing in this Agreement shall be binding upon the parties to
the extent it is void or unenforceable for any reason in the State of Employment,
including, without limitation, as a result of any law regulating competition or
proscribing unlawful business practices.

	14.	 	MODIFICATION OF EMPLOYMENT. At any time during the then current Initial or Extended Term, as
applicable, of this Agreement, upon approval of a majority of the non-management directors of
the Board, the Board shall have the absolute right, with or without cause and without
terminating this Agreement or Executive’s employment hereunder, to remove Executive as Chief
Financial Officer or from any other position in which Executive is then serving and to modify
the nature of Executive’s employment for the remainder of the then current Initial or Extended
Term, as applicable, from that of a full-time employee to that of a part-time employee. The
Modification Period shall commence immediately upon ABM giving Executive written notice of
such change.

	 	A.	 	MODIFICATION ACTIONS. Upon commencement of the Modification Period: (i)
Executive shall immediately resign as an officer and/or director of ABM and of any ABM
subsidiaries, as applicable, (ii) Executive shall promptly return all Company property
in Executive’s possession to Company, including but not limited to any motor vehicles,
equipment, supplies and documents set forth in Paragraph 11 of this Agreement, and
(iii) ABM shall pay Executive when due any and all previously earned, but as yet
unpaid, salary, Bonus pursuant to Paragraph 7B(iii), or other contingent compensation,
reimbursement of business expenses and fringe benefits.
	 
	 	B.	 	MODIFICATION OBLIGATIONS. During the Modification Period: (i) Executive shall
be deemed a part-time employee and not a full-time employee of ABM, (ii) Executive
shall provide ABM with such occasional executive or managerial services as reasonably
requested by the person(s) designated by the Chief Executive Officer, except that
failure to render such services by reason of any physical or mental illness or
disability other than Total Disability or death, or unavailability because of absence
from the State of Employment, shall not affect Executive’s right to receive payments
under subparagraph 14B(iii), (iii) ABM shall continue to pay Executive’s monthly salary
pursuant to Paragraph 7A of this Agreement and shall pay directly to Executive a
monthly amount equal to the Insurance Contribution immediately prior to the beginning
of the Modification Period, (iv) Executive shall not be eligible or entitled to receive
a Bonus with respect to the Modification Period or participate in any bonus or fringe
benefits other than the ABM Employee Stock Purchase Plan and 401(k) plan provided that
Executive continues to qualify under the terms of such plans, (v) Executive may
exercise rights under COBRA to obtain medical insurance coverage as may be available to
Executive, and (vi) ABM shall pay directly or reimburse Executive in

 

 

			
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	 	 	 	accordance with the provisions of Paragraph 8 of this Agreement for reasonable
business expenses of ABM incurred by Executive in connection with such services
requested by the person(s) designated by the Board.
	 
	 	C.	 	MODIFICATION PERIOD. The Modification Period shall continue until the earlier
of: (i) Total Disability or death, (ii) termination of this Agreement by ABM for Just
Cause, (iii) Executive accepts employment or receives any other compensation from
operating, assisting or otherwise being involved or associated with any business that
is similar to or competitive with any business in which Company is engaged on the
commencement date of the Modification Period, or (iv) expiration of the then current
Initial or Extended Term, as applicable, of this Agreement.

	15.	 	EXTENSION OF EMPLOYMENT.

	 	A.	 	RENEWAL. Absent at least 90 days written notice of termination of employment
or notice of non-renewal from ABM to Executive prior to expiration of the then current
Initial or Extended Term, as applicable, of this Agreement, employment hereunder shall
continue for an Extended Term (or another Extended Term, as applicable) of one year.
	 
	 	B.	 	NOTICE OF NON-RENEWAL. In the event that notice of non-renewal is given 90
days prior to the expiration of the then Initial or Extended Term, as applicable, of
this Agreement, employment shall continue on an “at will” basis following the
expiration of such Initial or Extended Term. In such event, ABM shall have the right
to terminate Executive’s employment or to change the terms and conditions of
Executive’s employment, including but not limited to Executive’s position and/or
compensation .

	16.	 	TERMINATION OF EMPLOYMENT.

	 	A.	 	TERMINATION UPON EXPIRATION OF TERM. Subject to at least 90 days
prior written notice of termination of employment, Executive’s employment shall
terminate, with or without cause, at the expiration of the then current Initial or
Extended Term. ABM has the option, without terminating this Agreement, of placing
Executive on a leave of absence at the full compensation set forth in Paragraph 7 of
this Agreement, for any or all of such notice period.
	 
	 	B.	 	TERMINATION FOR CAUSE. ABM may terminate Executive’s employment
hereunder at any time during the then current Initial or Extended Term, as applicable,
of this Agreement, without notice subject only to a good faith determination by a
majority of the Board of Just Cause.
	 
	 	C.	 	VOLUNTARY TERMINATION BY EXECUTIVE. At any time during the
then current Initial or Extended Term, as applicable, of this Agreement and with or

 

 

			
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	 	 	 	without cause, Executive may terminate employment hereunder by giving ABM 90 days
prior written notice.
	 
	 	D.	 	DISABILITY OR DEATH. Employment hereunder shall automatically terminate upon
the Total Disability or death of Executive. ABM shall pay when due to Executive or,
upon death, Executive’s designated beneficiary or estate, as applicable, any and all
previously earned, but as yet unpaid, salary, Bonus, other contingent compensation,
reimbursement of business expenses and fringe benefits which would have otherwise been
payable to Executive under this Agreement, through the end of the month in which Total
Disability or death occurs.
	 
	 	E.	 	ACTIONS UPON TERMINATION. Upon termination of employment hereunder, Executive
shall immediately resign as an officer and/or director of ABM and of any ABM
subsidiaries or affiliates, as applicable. Executive shall promptly return and release
all Company property in Executive’s possession to Company, including but not limited
to, any motor vehicles, equipment, supplies, passwords and documents set forth in
Paragraph 11 of this Agreement. ABM shall pay Executive when due any and all
previously earned, but as yet unpaid, salary, Bonus, other contingent compensation,
reimbursement of business expenses and fringe benefits.

	17.	 	GOVERNING LAW. This Agreement shall be interpreted and enforced in accordance with the laws
of the State of Employment.
	 
	18.	 	DISPUTE RESOLUTION.

	 	A.	 	ARBITRATION. Except as provided in Paragraph 18B below, any claim or dispute
related to or arising from this Agreement (whether based in contract, statute or tort,
in law or equity) including, but not limited to, claims or disputes between Executive
and Company or its directors, officers, employees and agents regarding Executive’s
employment or termination of employment hereunder, or any other business of Company,
shall be resolved by binding arbitration in accordance with the following procedures:

	 	i.	 	The arbitration shall be administered by AAA.
	 
	 	ii.	 	Except as modified herein, the arbitration proceeding shall be
administered pursuant to AAA’s Commercial Rules.
	 
	 	iii.	 	The parties will mutually agree upon two neutral arbitrators
who shall be respectively designated the “Pre-hearing Arbitrator” and the
“Hearing Arbitrator.” The Pre-hearing Arbitrator shall preside over all issues
or disputes arising prior to the hearing on the merits, including discovery
issues and pre-hearing motions. The Hearing Arbitrator shall preside over the
formal hearing on the merits and shall have the sole authority to issue a final
and binding award in the matter.

 

 

			
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	 	iv.	 	The parties may conduct the following discovery as a matter of
right: (a) two depositions per side, (b) 35 non-compound interrogatories per
side, which shall be answered under penalty of perjury by the responding party,
(c) 35 non-compound document requests, which shall be answered under penalty of
perjury by the responding party. Any additional discovery shall only take
place as stipulated by the parties, as provided by the AAA’s Commercial Rules,
or as ordered by the Pre-hearing Arbitrator.
	 
	 	v.	 	The Pre-hearing Arbitrator shall hear and rule upon such
motions for summary judgment or summary adjudication as might be made by either
party. Upon receipt of such a motion, the Pre-hearing Arbitrator shall consult
with the parties and establish both a hearing date and a briefing schedule
which allows an opposition and reply submission prior to the hearing.
	 
	 	vi.	 	The cost of such arbitration shall be borne by ABM.
	 
	 	vii.	 	Any such arbitration must be requested in writing within one
year from the date the party initiating the arbitration knew or should have
known about the claim or dispute, or all claims arising from that dispute are
forever waived.
	 
	 	viii.	 	Any such arbitration shall be held in the city and/or county
of employment hereunder. Judgment upon the award rendered through such
arbitration may be entered and enforced in any court having proper
jurisdiction.

	 	B.	 	LITIGATION / COURT ACTION. Disputes involving the threatened or actual breach
of obligations set forth in Paragraphs 12 and 13 of this Agreement shall not be subject
to arbitration. Rather, any such disputes shall be resolved through civil litigation,
which may be filed in any court of competent jurisdiction.

	19.	 	REMEDIES & DAMAGES.

	 	A.	 	INJUNCTIVE RELIEF. The parties agree that compliance with Paragraphs 12 and 13
of this Agreement is necessary to protect the business and goodwill of Company, and
that any breach of such Paragraphs will result in irreparable and continuing harm to
Company, for which monetary damages may not provide adequate relief. Accordingly, in
the event of any actual or threatened breach of Paragraphs 12 and 13 of this Agreement
by Executive, ABM and Executive agree that ABM shall be entitled to all appropriate
remedies, including temporary restraining orders and injunctions enjoining or
restraining such actual or threatened breach. Executive hereby consents to the
issuance thereof forthwith by any court of competent jurisdiction.

 

 

			
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	 	B.	 	WITHHOLDING AUTHORIZATION. To the fullest extent permitted under the laws of
the State of Employment hereunder, Executive authorizes ABM to
withhold from any severance payments otherwise due to Executive and from any other
funds held for Executive’s benefit by ABM, any damages or losses sustained by
Company as a result of any material breach or other material violation of this
Agreement by Executive, pending resolution of the underlying dispute as provided in
Paragraph 18 above.

	20.	 	NO WAIVER. Failure by either party to enforce any term or condition of this Agreement at any
time shall not preclude that party from enforcing that provision, or any other provision of
this Agreement, at any later time.
	 
	21.	 	SEVERABILITY. The provisions of this Agreement are severable. If any arbitrator (or court
as applicable hereunder) rules that any portion of this Agreement is invalid or unenforceable,
the arbitrator’s or court’s ruling shall not affect the validity and enforceability of other
provisions of this Agreement. It is the intent of the parties that if any provision of this
Agreement is ruled to be overly broad, the arbitrator or court shall interpret such provision
with as much permissible breadth as is allowable under law rather than consider such provision
void.
	 
	22.	 	SURVIVAL. All terms and conditions of this Agreement which by reasonable implication are
meant to survive the termination of this Agreement, including but not limited to the
provisions of Paragraphs 13 and 18 of this Agreement, shall remain in full force and effect
after the termination of this Agreement.
	 
	23.	 	REPRESENTATIONS. Executive represents and agrees that he has carefully read and fully
understands all of the provisions of this Agreement, that he is voluntarily entering into this
Agreement and has been given an opportunity to review all aspects of this Agreement with an
attorney, if he chooses to do so.
	 
	24.	 	NOTICES.

	 	A.	 	ADDRESSES. Any notice required or permitted to be given pursuant to this
Agreement shall be in writing and delivered in person, or sent prepaid by certified
mail, bonded messenger or overnight express, to the party named at the address set
forth below or at such other address as either party may hereafter designate in writing
to the other party:

	 	 	 	 	 
	 

	 	Executive:
	 	George B. Sundby
	 

	 	 	 	90 Cedro Avenue
	 

	 	 	 	San Francisco, CA 94127
	 
	 	 	 	 
	 

	 	ABM:
	 	ABM Industries Incorporated
	 

	 	 	 	160 Pacific Avenue, Suite 222
	 

	 	 	 	San Francisco, CA 94111
	 

	 	 	 	Attention: Chief Executive Officer

 

 

			
	Page 14 of 14
	 	 

	 	 	 	 	 
	 

	 	Copy:
	 	ABM Industries Incorporated
	 

	 	 	 	160 Pacific Avenue, Suite 222
	 

	 	 	 	San Francisco, CA 94111
	 

	 	 	 	Attention: General Counsel

	 	B.	 	RECEIPT. Any such notice shall be assumed to have been received when delivered
in person or 48 hours after being sent in the manner specified above.

	23.	 	ENTIRE AGREEMENT. Unless otherwise specified herein, this Agreement sets forth every
contract, understanding and arrangement as to the employment relationship between Executive
and ABM, and may only be changed by a written amendment signed by both Executive and ABM.

	 	A.	 	NO EXTERNAL EVIDENCE. The parties intend that this Agreement speak for itself,
and that no evidence with respect to its terms and conditions other than this Agreement
itself may be introduced in any arbitration or judicial proceeding to interpret or
enforce this Agreement.
	 
	 	B.	 	SUPERSEDES OTHER AGREEMENTS. It is specifically understood and accepted that
this Agreement supersedes all oral and written employment agreements between Executive
and ABM prior to the date of this Agreement as well as all conflicting provisions of
Company’s Human Resources Manual, including but not limited to the termination,
discipline and discharge provisions contained therein.
	 
	 	C.	 	AMENDMENTS. This Agreement may not be amended except in a writing approved by
the Board and signed by the Executive and the Chief Executive Officer.

IN WITNESS WHEREOF, Executive and the Chief Executive Officer have executed this Agreement
as of the date set forth above.

	 	 	 	 	 	 	 
	 	 	Executive: George B. Sundby
	 
	 	 	 	 	 	 
	 

	 	 	 	Signature:
	 	/s/George B. Sundby
	 

	 	 	 	Date:
	 	July 12, 2005
	 
	 	 	 	 	 	 
	 	 	ABM: ABM Industries Incorporated
	 
	 	 	 	 	 	 
	 

	 	 	 	Signature:
	 	/s/ Henrik C. Slipsager
	 

	 	 	 	 	 	Henrik C. Slipsager
	 

	 	 	 	Title:
	 	Chief Executive Officer
	 

	 	 	 	Date:
	 	July 12, 2005

 

 

EXHIBIT A

2005 EXECUTIVE PERFORMANCE PEFORMANCE CRITERIA

ABM CORPORATE EXECUTIVE OFFICERS

	I.	 	FINANCIAL PERFORMANCE: Represents 50% of Target Bonus
	 
	 	 	(Actual earnings as published in Company’s Form 10-K as filed with the Securities and Exchange
Commission must exceed 80% of the 2005 budget, as approved by the ABM Board of Directors and
adjusted for acquisitions, for Executive to receive a Financial Performance Bonus.)
	 
	 	 	Develops, obtains approval for, and effectively communicates realistic and GAAP compliant
financial budgets and forecasts consistent with the approved Company and business unit
strategy. Develops and ensures compliance with internal financial controls. Ensures that key
financial goals are aggressively pursued. Contributes directly to the achievement of
financial goals for Company and one’s area(s) of responsibility. Ensures, to the extent
possible, that performance of Company and one’s area(s) of responsibility meets or exceeds
budget in all key financial categories, including revenue, expense, and capital management.
Effectively manages costs and, where appropriate, vendors and receivables.
	 
	 	 	Indicators: Timely development and approval of realistic financial goals and plans;
understanding and acceptance of financial goals throughout the organization and one’s direct
span of control; existence of and compliance with effective internal financial controls.
Company and business unit performance against budget.
	 
	II.	 	OTHER CATEGORIES: Represents 50% of Target Bonus
	 
	 	 	STRATEGIC LEADERSHIP
	 
	 	 	Contributes materially to the development, approval, implementation and ongoing evolution of a
sound business strategy for Company and/or one’s area(s) of responsibility. Researches
concepts and presents new ideas designed to optimize growth, profitability and shareholder
value. Effectively communicates the approved strategy both internally and externally, as
appropriate, and provides guidance to ensure that the approved strategy is carried out.
	 
	 	 	Indicators: Agreement among management and approval by the Board of Directors of a defined
business strategy; effective translation and communication of the approved strategy to one’s
area of responsibility and other internal and external constituents, as appropriate; proactive
revision of strategy to reflect changing situations; depth of knowledge of one’s market,
competitors, and trends.

 

 

	 	 	EMPLOYEE LEADERSHIP

	 	1.	 	Employee Relations
	 
	 	 	 	Maintains sound relationships with superiors, peers, subordinates and, as appropriate, the
Board of Directors. Commands respect and trust while being considered fair and open in
dealings with others.
	 
	 	 	 	Indicators: Employee complaints; perception among supervisors, peers, subordinates and
the Board of Directors.
	 
	 	2.	 	Staff Development
	 
	 	 	 	Actively contributes to the development of staff under one’s span of control. Provides
guidance to subordinates on key issues and makes time to help others. Establishes and
communicates goals and expectations. Provides open and honest feedback. Identifies and
develops potential successors to key roles.
	 
	 	 	 	Indicators: Proactive individual goal-setting and ongoing review process; demonstrated
development/improvement of subordinates; effective succession planning.
	 
	 	3.	 	Recruitment, Retention and Motivation
	 
	 	 	 	Generates enthusiasm among superiors, subordinates and peers. Directly contributes to
creating a performance oriented culture. Identifies and distinguishes top performers.
Retains key employees and assists in identifying and recruiting top external talent as
needed.
	 
	 	 	 	Indicators: Employee retention; positive morale; success in recruiting new talent.
	 
	 	4.	 	Teamwork
	 
	 	 	 	Practices open, effective and inclusive communication within one’s own span of control and
across Company. Actively seeks ways to build links across Company with the objective of
capitalizing on and sharing “best practices.”
	 
	 	 	 	Indicators: Development and implementation of procedures and processes that promote the
application of “best practices” across Company and within one’s span of control.
Perception as a “team player.”

	 	 	COMPLIANCE AND ADMINISTRATION
	 
	 	 	Ensures compliance with all external regulations and internal guidelines and policies
associated with Safety, Employee/Labor Relations and other areas pertaining to Company’s
various businesses. Ensures management policies and reports effectively address key issues.
Provides for open channels of communication to ensure that appropriate individuals, both
internally and externally, are notified in a timely manner in the event of compliance or other
related issues. Achieves certification of Internal Controls for Sarbanes-Oxley Section 404.
	 
	 	 	Indicators: Volume and severity of labor/employee relations or other compliance issues;
effective handling of such issues as they arise; timely and proper reporting of such issues.exv10w6

 

	 	 	 
	Page 1 of 14

	 	EXHIBIT 10.6

EXECUTIVE EMPLOYMENT AGREEMENT

THIS EXECUTIVE EMPLOYMENT AGREEMENT (“Agreement”) is effective July 12, 2005, by and between Steven
M. Zaccagnini (“Executive”) and ABM Industries Incorporated (“ABM”) for itself and on behalf of its
subsidiary corporations as applicable herein.

WHEREAS, the subsidiaries of ABM are engaged in the building maintenance and related service
businesses, and

WHEREAS, Executive is experienced in the administration, finance, marketing, and/or operation of
such services, and

WHEREAS, ABM and its subsidiaries have invested significant time and money to develop proprietary
trade secrets and other confidential business information, as well as invaluable goodwill among its
customers, sales prospects and employees, and

WHEREAS, ABM and its subsidiaries have disclosed or will disclose to Executive such proprietary
trade secrets and other confidential business information which Executive will utilize in the
performance of his duties and responsibilities as Senior Vice President of ABM and President of ABM
Facility Services and under this Agreement; and

WHEREAS, Executive wishes to, or has been and desires to remain employed by ABM, and to utilize
such proprietary trade secrets, other confidential business information and goodwill in connection
with his employment;

NOW THEREFORE, Executive and ABM agree as follows:

	1.	 	EMPLOYMENT. ABM hereby agrees to employ Executive, and Executive hereby accepts such
employment, on the terms and conditions set forth in this Agreement.
	 
	2.	 	TITLE. Executive’s title shall be Senior Vice President of ABM and President of ABM Facility
Services, subject to modification as determined by ABM’s Board of Directors.

	 
	3.	 	DEFINITIONS. The capitalized terms used in this agreement shall have the following
definitions:

	 	A.	 	“AAA” means the American Arbitration Association.
	 
	 	B.	 	“ABM” means ABM Industries Incorporated and its successors and assigns.
	 
	 	C.	 	“Base Salary” means the salary paid under Paragraph 7A for the applicable
Fiscal Year.
	 
	 	D.	 	“Board” means the Board of Directors of ABM.

 

 

	 	 	 
	Page 2 of 14

	 	 

	 	E.	 	“Bonus” means a performance-based bonus payable under Paragraph 7B of this
Agreement.
	 
	 	F.	 	“Chief Executive Officer” means the Chief Executive Officer of ABM.
	 
	 	G.	 	“Company” means ABM, its subsidiaries, successors, and assigns.
	 
	 	H.	 	“Compensation Committee” means the Compensation Committee of the Board.
	 
	 	I.	 	“EPS” means earnings per share for the applicable Fiscal Year as reported by
ABM in its Annual Report on Form 10-K.
	 
	 	J.	 	“Executive” means Steven M. Zaccagnini.
	 
	 	K.	 	“Extended Term” means the period for which this agreement is extended under
Paragraph 15 of this Agreement.
	 
	 	L.	 	“Fiscal Year” means the period beginning on November 1 of a calendar year and
ending on October 31 of the following calendar year or such other period as shall be
designated by the Board as ABM’s fiscal year.
	 
	 	M.	 	“Initial Term” is the period beginning on July 12, 2005 and ending October 31,
2007, unless sooner terminated under Paragraph 16 of this Agreement.
	 
	 	N.	 	“Insurance Contribution” means ABM’s contribution to provide group health and
life insurance for Executive and excludes any payment by Executive for such coverage.
	 
	 	O.	 	“Just Cause” means (i) theft or dishonesty, (ii) more than one instance of
neglect or failure to perform employment duties, (iii) more than one instance of
inability or unwillingness to perform employment duties, (iv) insubordination, (v)
abuse of alcohol or other drugs or substances affecting Executive’s performance of his
employment duties, (vi) material and willful breach of this Agreement, (vii) other
misconduct, unethical or unlawful activity, (viii) a conviction of or plea of “guilty”
or “no contest” to a felony under the laws of the United States or any state thereof,
or (ix) a conviction of or plea of “guilty” or “no contest” to a misdemeanor involving
a crime of moral turpitude under the laws of the United States or any state thereof.
	 
	 	P.	 	“Modification Period” means the remainder of the Initial or the then current
Extended Term, as applicable, of this Agreement, following the change in Executive’s
employment status from that of a full-time employee to that of a part-time employee
under Paragraph 14 of this Agreement.

 

 

	 	 	 
	Page 3 of 14

	 	 

	 	Q.	 	“Performance Assessment” means the Chief Executive Officer’s annual assessment
of Executive’s performance against the Performance Criteria.
	 
	 	R.	 	“Performance Criteria” means the performance criteria for Executive established
annually by the Chief Executive Officer in accordance with Paragraph 7B of this
Agreement.
	 
	 	S.	 	“Proprietary Information” means Company’s proprietary trade secrets and other
confidential information not in the public domain, including but not limited to
specific customer data such as: (i) the identity of Company’s customers and sales
prospects, (ii) the nature, extent, frequency, methodology, cost, price and profit
associated with services and products purchased from Company, (iii) any particular
needs or preferences regarding its service or supply requirements, (iv) the names,
office hours, telephone numbers and street addresses of its purchasing agents or other
buyers, (v) its billing procedures, (vi) its credit limits and payment practices, and
(vii) its organization structure.
	 
	 	T.	 	“Section 162(m)” means Section 162(m) of the Internal Revenue Code of 1986, as
amended, or any successor statute.
	 
	 	U.	 	“Significant Transaction” means Company’s acquisition or disposition of a
business or assets which ABM is required to report under Item 2.01 of Form 8-K under
the rules and regulations issued by the Securities and Exchange Commission.
	 
	 	V.	 	“State of Employment” means California.
	 
	 	W.	 	“Target Bonus” means 33.3% of Executive’s Base Salary.
	 
	 	X.	 	“Total Disability” means Executive’s inability to perform his duties under this
Agreement and shall be deemed to occur on the 91st consecutive or non-consecutive
calendar day within any 12 month period that Executive is unable to perform his duties
under this Agreement because of any physical or mental illness or disability.
	 
	 	Y.	 	“WTC Related Gain” means the total amount of all items of income included in
ABM’s audited consolidated financial statements for any Fiscal Year that result from
ABM’s receipt of insurance proceeds or other compensation or damages due to ABM’s loss
of property, business or profits as a result of the destruction of the World Trade
Center on September 11, 2001.

	4.	 	DUTIES & RESPONSIBILITIES. Executive shall assume and perform such executive or managerial
duties and responsibilities as are assigned from time-to-time by the Chief Executive Officer
or such other officer designated by the Chief Executive Officer, to whom Executive shall
report and be accountable.

 

 

	 	 	 
	Page 4 of 14

	 	 

	5.	 	TERM OF AGREEMENT. This agreement shall end on October 31, 2007, unless sooner terminated
pursuant to Paragraph 16 or later extended to an Extended Term under Paragraph 15 of this
Agreement.
	 
	6.	 	PRINCIPAL OFFICE. During the Initial Term and any Extended Term, as applicable, of this
Agreement, Executive shall be based at an ABM office located in the State of Employment or
such other location as shall be mutually agreed upon by ABM and Executive.
	 
	7.	 	COMPENSATION. ABM agrees to compensate Executive, and Executive agrees to accept as
compensation in full, for Executive’s assumption and performance of duties and
responsibilities pursuant to this Agreement:

	 	A.	 	SALARY. A salary paid in equal installments no less frequently than
semi-monthly at the annual rate of $319,815. Executive shall be eligible, at the sole
discretion of the Compensation Committee, to receive a merit increase based on
Executive’s job performance or for any other reason deemed appropriate by the
Compensation Committee.
	 
	 	B.	 	BONUS. Subject to subparagraphs (iii), (iv) and (v) below, Executive shall be
entitled to a Bonus for each Fiscal Year, as follows:

	 	i.	 	Executive’s Bonus may range from 0% to 150% of the Target Bonus
and shall be based on the Performance Assessment of Executive for the
applicable Fiscal Year evaluated on the basis of the Performance Criteria.
Performance Criteria may include both ABM and individual objectives, may be
both qualitative and quantitative in nature and shall be established by
the Chief Executive Officer, reviewed by the Compensation Committee, and
communicated to Executive within 90 days after the beginning of the Fiscal Year
for which they apply. The 2005 Performance Criteria are attached as Exhibit A
to this Agreement. The Performance Assessment for each Fiscal Year shall be
the responsibility of the Chief Executive Officer, who shall submit the
Performance Assessment to the Compensation Committee on the Calculation
Worksheet attached as Exhibit B to this Agreement. The determination of the
Bonus amount for each Fiscal Year shall be determined by the Compensation
Committee based upon the Performance Assessment and the recommendation of the
Chief Executive Officer.
	 
	 	ii.	 	The Compensation Committee reserves the right at any time to
adjust the Performance Criteria in the event of a Significant Transaction
and/or for any unanticipated and material events that are beyond the control of
ABM, including but not limited to acts of god, nature, war or terrorism, or
changes in the rules for financial reporting set forth by the Financial
Accounting Standards Board, the Securities and Exchange Commission,

 

 

	 	 	 
	Page 5 of 14

	 	 

	 	 	 	rules of the New York Stock Exchange and/or for any other reason which the
Compensation Committee determines, in good faith, to be appropriate.
	 
	 	iii.	 	ABM shall pay Executive the Bonus for each Fiscal Year
following completion of the audit of ABM’s financial statements for such Fiscal
Year and within 10 days after determination of the Bonus by the Compensation
Committee. In the event of modification of employment under Paragraph 14 or
termination of employment hereunder other than (a) a termination under
Paragraph 16B, (b) a termination under Paragraph 16C for reasons other than
Executive’s health, or (c) Executive’s retiring at age 65 or more with no less
than 10 years of employment at Company, ABM shall pay Executive, within 75 days
thereafter, a prorated portion of the Target Bonus based on the fraction of the
Fiscal Year that has been completed prior to the date of modification or
termination.
	 
	 	iv.	 	Absent bad faith or material error, any conclusions of the
Chief Executive Officer with respect to the Performance Assessment or the
Compensation Committee with respect to the Performance Criteria or the Bonus
shall be final and binding upon Executive and ABM.
	 
	 	v.	 	No Bonus for any Fiscal Year of ABM (other than the payment of
a prorated portion of the Target Bonus under Paragraph 7B(iii) following a
modification or termination of employment) shall be payable unless ABM’s EPS
for the Fiscal Year then ending is equal to or greater than 80% of ABM’s EPS
for the previous Fiscal Year of ABM, in each case excluding any gains and
losses from sales of discontinued operations and any WTC Related Gain.
	 
	 	vi.	 	Notwithstanding any other provision of this Agreement, the
Compensation Committee may, prior to the beginning of any Fiscal Year, approve
and notify the Executive of a modification to the Target Bonus or the bonus
range set forth in subparagraph (i) above. The Compensation Committee’s
decision in this regard shall be deemed final and binding on Executive. In
addition, the Compensation Committee may grant a discretionary incentive bonus
to Executive at any time in its sole discretion.

	 	C.	 	FRINGE BENEFITS. Executive shall receive the then current fringe benefits
generally provided by ABM to its executives. Such benefits may include but not be
limited to the use of an ABM-leased car or a car allowance, group health benefits,
long-term disability benefits, group life insurance, sick leave and vacation. Each of
these fringe benefits is subject to the applicable ABM policy at all times. Executive
expressly agrees that should he terminate employment with ABM for the purpose of being
re-employed by an ABM subsidiary or affiliate, he shall “carry-over” any previously
accrued but unused vacation balance to the books of the affiliate. ABM reserves the
right to add, increase, reduce or eliminate any fringe benefit at any time, but no such
benefit or benefits shall be

 

 

	 	 	 
	Page 6 of 14

	 	 

	 	 	 	reduced or eliminated as to Executive unless generally reduced or eliminated as to
senior executives at ABM.
	 
	 	D.	 	LIMIT. To the extent that any compensation to be paid to Executive under
this Agreement would cause compensation payable to Executive to be non-deductible by
ABM as a result of the $1 million compensation limit provisions of Section 162(m),
Executive agrees that any such amount in excess of $1 million shall not be paid out to
Executive but shall be deferred by Executive under the ABM Deferred Compensation Plan.
The distribution of such deferred amounts will be made only after Executive is no
longer considered a “covered employee” as defined in Section 162(m). Amounts deferred
by Executive will be credited with interest or gains and losses in accordance with the
ABM Deferred Compensation Plan.

	8.	 	PAYMENT OR REIMBURSEMENT OF BUSINESS EXPENSES. ABM shall pay directly or reimburse Executive
for reasonable business expenses of ABM incurred by Executive in connection with ABM business
in accordance with the ABM Travel & Entertainment Policy. 
	 
	9.	 	BUSINESS CONDUCT. Executive shall comply with all applicable laws pertaining to the
performance of this Agreement, and with all lawful and ethical rules, regulations, policies,
codes of conduct, procedures and instructions of Company, including but not limited to the
following:

	 	A.	 	GOOD FAITH. Executive shall not act in any way contrary to the best interest
of Company.
	 
	 	B.	 	BEST EFFORTS. During all full-time employment hereunder, Executive shall
devote full working time and attention to ABM.
	 
	 	C.	 	VERACITY. Executive shall make no claims or promises to any employee,
supplier, contractor, customer or sales prospect of Company that are unauthorized by
Company or are in any way untrue.
	 
	 	D.	 	POSSIBLE CHANGE OF CONTROL. Executive agrees that if he is approached by any
person to discuss a possible acquisition or other transaction that could result in a
change of control of ABM, Executive will immediately advise the Chief Executive
Officer, ABM’s General Counsel and the Chair of the Governance Committee of the Board.
	 
	 	E.	 	CODE OF BUSINESS CONDUCT. Executive agrees to fully comply with and
annually execute a certification of compliance with ABM’s Code of Business Conduct.
	 
	 	F.	 	OTHER LAWS. Executive agrees to fully comply with the other laws and
regulations that govern his performance and receipt of compensation under this
Agreement.

 

 

	 	 	 
	Page 7 of 14

	 	 

	10.	 	NO CONFLICT. Executive represents to ABM that Executive is not bound by any contract with a
previous employer or with any other business that might prevent Executive from entering into
this Agreement. Executive further represents that he is not bound by any other contracts or
covenants that in any way restrict or limit Executive’s activities in relation to his or her
employment with ABM that have not been fully disclosed to ABM prior to the signing of this
Agreement.
	 
	11.	 	COMPANY PROPERTY. ABM shall, from time to time, entrust to the care, custody and control of
Executive certain of Company’s property, such as motor vehicles, equipment, supplies,
passwords and electronic and paper documents. Such documents may include, but shall not be
limited to, customer lists, financial statements, cost data, price lists, invoices, forms,
electronic files and media, mailing lists, contracts, reports, manuals, personnel files or
directories, correspondence, business cards, copies or notes made from Company documents and
documents compiled or prepared by Executive for Executive’s use in connection with Company
business. Executive specifically acknowledges that all such items, including passwords and
documents, are the property of Company, notwithstanding their preparation, care, custody,
control or possession by Executive at any time(s) whatsoever.
	 
	12.	 	GOODWILL & PROPRIETARY INFORMATION. In connection with Executive’s employment hereunder:

	 	A.	 	PROPRIETARY INFORMATION. Executive agrees to utilize and further Company’s
goodwill among its customers, sales prospects and employees, and acknowledges that
Company may disclose to Executive and Executive may disclose to Company Proprietary
Information.
	 
	 	B.	 	DUTY OF LOYALTY. Executive agrees that the Proprietary Information and
Company’s goodwill have unique value to Company, are not generally known or readily
available to Company’s competitors, and could only be developed by others after
investing significant time and money. ABM makes the Proprietary Information and
Company’s goodwill available to Executive in reliance on Executive’s agreement to hold
the Proprietary Information and Company’s goodwill in trust and confidence. Executive
hereby acknowledges that to use this Proprietary Information and Company’s goodwill
other than for the benefit of Company would be a breach of such trust and confidence
and a violation of Executive’s duty of loyalty to Company.

	13.	 	RESTRICTIVE COVENANTS. In recognition of Paragraph 12 above, Executive hereby agrees that
during the term of this Agreement and thereafter as specifically agreed herein:

	 	A.	 	NON-SOLICITATION OF EMPLOYEES. While employed by ABM and for a period of one
year following Executive’s termination of employment, Executive shall at no time
directly or indirectly solicit or otherwise encourage or arrange for

 

 

	 	 	 
	Page 8 of 14

	 	 

	 	 	 	any employee to terminate employment with Company except in the proper performance
of this Agreement.
	 
	 	B.	 	NON-DISCLOSURE. Except in the proper performance of this Agreement, Executive
shall not directly or indirectly disclose or deliver to any other person or business,
any Proprietary Information obtained directly or indirectly by Executive from, or for,
Company.
	 
	 	C.	 	NON-SOLICITATION OF CUSTOMERS. Executive agrees that for a reasonable time
after the termination of this Agreement, which Executive and ABM hereby agree to be one
year, Executive shall not directly or indirectly, for Executive or for any other person
or business, seek, solicit, divert, take away, obtain or accept any customer account or
sales prospect with which Executive had direct business involvement on behalf of
Company within one year prior to termination of this Agreement. In addition, Executive
agrees that at all times after the termination of this Agreement, Executive shall not
seek, solicit, divert, take away, obtain or accept the patronage of any customer or
sales prospect of Company through the direct or indirect use of any Proprietary
Information or by any other unfair or unlawful business practice.
	 
	 	D.	 	NON-DISPARAGEMENT. During Executive’s employment with ABM and for a period of
two years following termination of employment (whether voluntary or involuntary),
Executive agrees not to make any comment or take any action which disparages, defames,
or places in a negative light Company, its past and present officers, directors, and
employees. ABM agrees that during this same period, its officers and directors shall
refrain from making any comment or taking any action to disparage, defame, or place
Executive in a negative public light.
	 
	 	E.	 	COOPERATION. Upon termination of employment hereunder, Executive shall
cooperate with Company in its defense or prosecution of any current or future matter in
any forum, including but not limited to lawsuits, federal, state or local agency
claims, audits and investigations, and internal and external investigations concerning
any matter in which he was involved during his employment with ABM or about which he
has or should have knowledge and information. Executive’s cooperation shall include,
but is not limited to, meeting with ABM’s in-house and/or outside attorneys,
communicating his knowledge of relevant facts to ABM’s attorneys, experts, consultants,
investigators, executives, management and human resources employees and other
representatives, reviewing and commenting on any relevant documents, preparing any
requested documentation and testifying at depositions, hearings, arbitrations, trials
and any other forum at which Executive’s participation and testimony is requested by
ABM. In performing the tasks outlined in this Paragraph 13E, Executive shall be bound
by the covenants of good faith and veracity set forth in Paragraph 9 of this Agreement
and as outlined in ABM’s Code of Business Conduct and Ethics. In performing
responsibilities under this Paragraph 13E, Executive shall be compensated for his time
at an hourly rate of $250 per hour.

 

 

	 	 	 
	Page 9 of 14

	 	 

	 	F.	 	LIMITATIONS. Nothing in this Agreement shall be binding upon the parties to
the extent it is void or unenforceable for any reason in the State of Employment,
including, without limitation, as a result of any law regulating competition or
proscribing unlawful business practices.

	14.	 	MODIFICATION OF EMPLOYMENT. At any time during the then current Initial or Extended Term, as
applicable, of this Agreement, upon approval of a majority of the non-management directors of
the Board, the Board shall have the absolute right, with or without cause and without
terminating this Agreement or Executive’s employment hereunder, to remove Executive as Senior
Vice President of ABM and President of ABM Facility Services or from any other position in
which Executive is then serving and to modify the nature of Executive’s employment for the
remainder of the then current Initial or Extended Term, as applicable, from that of a
full-time employee to that of a part-time employee. The Modification Period shall commence
immediately upon ABM giving Executive written notice of such change.

	 	A.	 	MODIFICATION ACTIONS. Upon commencement of the Modification Period: (i)
Executive shall immediately resign as an officer and/or director of ABM and of any ABM
subsidiaries, as applicable, (ii) Executive shall promptly return all Company property
in Executive’s possession to Company, including but not limited to any motor vehicles,
equipment, supplies and documents set forth in Paragraph 11 of this Agreement, and
(iii) ABM shall pay Executive when due any and all previously earned, but as yet
unpaid, salary, Bonus pursuant to Paragraph 7B(iii), or other contingent compensation,
reimbursement of business expenses and fringe benefits.
	 
	 	B.	 	MODIFICATION OBLIGATIONS. During the Modification Period: (i) Executive shall
be deemed a part-time employee and not a full-time employee of ABM, (ii) Executive
shall provide ABM with such occasional executive or managerial services as reasonably
requested by the person(s) designated by the Chief Executive Officer, except that
failure to render such services by reason of any physical or mental illness or
disability other than Total Disability or death, or unavailability because of absence
from the State of Employment, shall not affect Executive’s right to receive payments
under subparagraph 14B(iii), (iii) ABM shall continue to pay Executive’s monthly salary
pursuant to Paragraph 7A of this Agreement and shall pay directly to Executive a
monthly amount equal to the Insurance Contribution immediately prior to the beginning
of the Modification Period, (iv) Executive shall not be eligible or entitled to receive
a Bonus with respect to the Modification Period or participate in any bonus or fringe
benefits other than the ABM Employee Stock Purchase Plan and 401(k) plan provided that
Executive continues to qualify under the terms of such plans, (v) Executive may
exercise rights under COBRA to obtain medical insurance coverage as may be available to
Executive, and (vi) ABM shall pay directly or reimburse Executive in accordance with
the provisions of Paragraph 8 of this Agreement for reasonable

 

 

	 	 	 
	Page 10 of 14

	 	 

	 	 	 	business expenses of ABM incurred by Executive in connection with such services
requested by the person(s) designated by the Board.
	 
	 	C.	 	MODIFICATION PERIOD. The Modification Period shall continue until the earlier
of: (i) Total Disability or death, (ii) termination of this Agreement by ABM for Just
Cause, (iii) Executive accepts employment or receives any other compensation from
operating, assisting or otherwise being involved or associated with any business that
is similar to or competitive with any business in which Company is engaged on the
commencement date of the Modification Period, or (iv) expiration of the then current
Initial or Extended Term, as applicable, of this Agreement.

	15.	 	EXTENSION OF EMPLOYMENT.

	 	A.	 	RENEWAL. Absent at least 90 days written notice of termination of employment
or notice of non-renewal from ABM to Executive prior to expiration of the then current
Initial or Extended Term, as applicable, of this Agreement, employment hereunder shall
continue for an Extended Term (or another Extended Term, as applicable) of one year.
	 
	 	B.	 	NOTICE OF NON-RENEWAL. In the event that notice of non-renewal is given 90
days prior to the expiration of the then Initial or Extended Term, as applicable, of
this Agreement, employment shall continue on an “at will” basis following the
expiration of such Initial or Extended Term. In such event, ABM shall have the right
to terminate Executive’s employment or to change the terms and conditions of
Executive’s employment, including but not limited to Executive’s position and/or
compensation .

	16.	 	TERMINATION OF EMPLOYMENT.

	 	A.	 	TERMINATION UPON EXPIRATION OF TERM. Subject to at least 90 days
prior written notice of termination of employment, Executive’s employment shall
terminate, with or without cause, at the expiration of the then current Initial or
Extended Term. ABM has the option, without terminating this Agreement, of placing
Executive on a leave of absence at the full compensation set forth in Paragraph 7 of
this Agreement, for any or all of such notice period.
	 
	 	B.	 	TERMINATION FOR CAUSE. ABM may terminate Executive’s employment
hereunder at any time during the then current Initial or Extended Term, as applicable,
of this Agreement, without notice subject only to a good faith determination by a
majority of the Board of Just Cause.
	 
	 	C.	 	VOLUNTARY TERMINATION BY EXECUTIVE. At any time during the
then current Initial or Extended Term, as applicable, of this Agreement and with or
without cause, Executive may terminate employment hereunder by giving ABM 90 days prior
written notice.

 

 

	 	 	 
	Page 11 of 14

	 	 

	 	D.	 	DISABILITY OR DEATH. Employment hereunder shall automatically terminate upon
the Total Disability or death of Executive. ABM shall pay when due to Executive or,
upon death, Executive’s designated beneficiary or estate, as applicable, any and all
previously earned, but as yet unpaid, salary, Bonus, other contingent compensation,
reimbursement of business expenses and fringe benefits which would have otherwise been
payable to Executive under this Agreement, through the end of the month in which Total
Disability or death occurs.
	 
	 	E.	 	ACTIONS UPON TERMINATION. Upon termination of employment hereunder, Executive
shall immediately resign as an officer and/or director of ABM and of any ABM
subsidiaries or affiliates, as applicable. Executive shall promptly return and release
all Company property in Executive’s possession to Company, including but not limited
to, any motor vehicles, equipment, supplies, passwords and documents set forth in
Paragraph 11 of this Agreement. ABM shall pay Executive when due any and all
previously earned, but as yet unpaid, salary, Bonus, other contingent compensation,
reimbursement of business expenses and fringe benefits.

	17.	 	GOVERNING LAW. This Agreement shall be interpreted and enforced in accordance with the laws
of the State of Employment.
	 
	18.	 	DISPUTE RESOLUTION.

	 	A.	 	ARBITRATION. Except as provided in Paragraph 18B below, any claim or dispute
related to or arising from this Agreement (whether based in contract, statute or tort,
in law or equity) including, but not limited to, claims or disputes between Executive
and Company or its directors, officers, employees and agents regarding Executive’s
employment or termination of employment hereunder, or any other business of Company,
shall be resolved by binding arbitration in accordance with the following procedures:

	 	i.	 	The arbitration shall be administered by AAA.
	 
	 	ii.	 	Except as modified herein, the arbitration proceeding shall be
administered pursuant to AAA’s Commercial Rules.
	 
	 	iii.	 	The parties will mutually agree upon two neutral arbitrators
who shall be respectively designated the “Pre-hearing Arbitrator” and the
“Hearing Arbitrator.” The Pre-hearing Arbitrator shall preside over all issues
or disputes arising prior to the hearing on the merits, including discovery
issues and pre-hearing motions. The Hearing Arbitrator shall preside over the
formal hearing on the merits and shall have the sole authority to issue a final
and binding award in the matter.

 

 

	 	 	 
	Page 12 of 14

	 	 

	 	iv.	 	 The parties may conduct the following discovery as a matter of
right: (a) two depositions per side, (b) 35 non-compound interrogatories per
side, which shall be answered under penalty of perjury by the responding party,
(c) 35 non-compound document requests, which shall be answered under penalty of
perjury by the responding party. Any additional discovery shall only take
place as stipulated by the parties, as provided by the AAA’s Commercial Rules,
or as ordered by the Pre-hearing Arbitrator.
	 
	 	v.	 	The Pre-hearing Arbitrator shall hear and rule upon such
motions for summary judgment or summary adjudication as might be made by either
party. Upon receipt of such a motion, the Pre-hearing Arbitrator shall consult
with the parties and establish both a hearing date and a briefing schedule
which allows an opposition and reply submission prior to the hearing.
	 
	 	vi.	 	The cost of such arbitration shall be borne by ABM.
	 
	 	vii.	 	Any such arbitration must be requested in writing within one
year from the date the party initiating the arbitration knew or should have
known about the claim or dispute, or all claims arising from that dispute are
forever waived.
	 
	 	viii.	 	Any such arbitration shall be held in the city and/or county
of employment hereunder. Judgment upon the award rendered through such
arbitration may be entered and enforced in any court having proper
jurisdiction.

	 	B.	 	LITIGATION / COURT ACTION. Disputes involving the threatened or actual breach
of obligations set forth in Paragraphs 12 and 13 of this Agreement shall not be subject
to arbitration. Rather, any such disputes shall be resolved through civil litigation,
which may be filed in any court of competent jurisdiction.

	19.	 	REMEDIES & DAMAGES.

	 	A.	 	INJUNCTIVE RELIEF. The parties agree that compliance with Paragraphs 12 and 13
of this Agreement is necessary to protect the business and goodwill of Company, and
that any breach of such Paragraphs will result in irreparable and continuing harm to
Company, for which monetary damages may not provide adequate relief. Accordingly, in
the event of any actual or threatened breach of Paragraphs 12 and 13 of this Agreement
by Executive, ABM and Executive agree that ABM shall be entitled to all appropriate
remedies, including temporary restraining orders and injunctions enjoining or
restraining such actual or threatened breach. Executive hereby consents to the
issuance thereof forthwith by any court of competent jurisdiction.
	 
	 	B.	 	WITHHOLDING AUTHORIZATION. To the fullest extent permitted under the laws of
the State of Employment hereunder, Executive authorizes ABM to

 

 

	 	 	 
	Page 13 of 14

	 	 

	 	 	 	withhold from any severance payments otherwise due to Executive and from any other
funds held for Executive’s benefit by ABM, any damages or losses sustained by
Company as a result of any material breach or other material violation of this
Agreement by Executive, pending resolution of the underlying dispute as provided in
Paragraph 18 above.

	20.	 	NO WAIVER. Failure by either party to enforce any term or condition of this Agreement at any
time shall not preclude that party from enforcing that provision, or any other provision of
this Agreement, at any later time.
	 
	21.	 	SEVERABILITY. The provisions of this Agreement are severable. If any arbitrator (or court
as applicable hereunder) rules that any portion of this Agreement is invalid or unenforceable,
the arbitrator’s or court’s ruling shall not affect the validity and enforceability of other
provisions of this Agreement. It is the intent of the parties that if any provision of this
Agreement is ruled to be overly broad, the arbitrator or court shall interpret such provision
with as much permissible breadth as is allowable under law rather than consider such provision
void.
	 
	22.	 	SURVIVAL. All terms and conditions of this Agreement which by reasonable implication are
meant to survive the termination of this Agreement, including but not limited to the
provisions of Paragraphs 13 and 18 of this Agreement, shall remain in full force and effect
after the termination of this Agreement.
	 
	23.	 	REPRESENTATIONS. Executive represents and agrees that he has carefully read and fully
understands all of the provisions of this Agreement, that he is voluntarily entering into this
Agreement and has been given an opportunity to review all aspects of this Agreement with an
attorney, if he chooses to do so.
	 
	24.	 	NOTICES.

	 	A.	 	ADDRESSES. Any notice required or permitted to be given pursuant to this
Agreement shall be in writing and delivered in person, or sent prepaid by certified
mail, bonded messenger or overnight express, to the party named at the address set
forth below or at such other address as either party may hereafter designate in writing
to the other party:

	 	 	 	 	 
	 

	 	Executive:
	 	Steven M. Zaccagnini
	 

	 	 	 	26 Mountain Laurel
	 

	 	 	 	Dove Canyon, CA 92679
	 
	 	 	 	 
	 

	 	ABM:
	 	ABM Industries Incorporated
	 

	 	 	 	160 Pacific Avenue, Suite 222
	 

	 	 	 	San Francisco, CA 94111
	 

	 	 	 	Attention: Chief Executive Officer

 

 

	 	 	 
	Page 14 of 14

	 	 

	 	 	 	 	 
	 

	 	Copy:
	 	ABM Industries Incorporated
	 

	 	 	 	160 Pacific Avenue, Suite 222
	 

	 	 	 	San Francisco, CA 94111
	 

	 	 	 	Attention: General Counsel

	 	B.	 	RECEIPT. Any such notice shall be assumed to have been received when delivered
in person or 48 hours after being sent in the manner specified above.

	23.	 	ENTIRE AGREEMENT. Unless otherwise specified herein, this Agreement sets forth every
contract, understanding and arrangement as to the employment relationship between Executive
and ABM, and may only be changed by a written amendment signed by both Executive and ABM.

	 	A.	 	NO EXTERNAL EVIDENCE. The parties intend that this Agreement speak for itself,
and that no evidence with respect to its terms and conditions other than this Agreement
itself may be introduced in any arbitration or judicial proceeding to interpret or
enforce this Agreement.
	 
	 	B.	 	SUPERSEDES OTHER AGREEMENTS. It is specifically understood and accepted that
this Agreement supersedes all oral and written employment agreements between Executive
and ABM prior to the date of this Agreement as well as all conflicting provisions of
Company’s Human Resources Manual, including but not limited to the termination,
discipline and discharge provisions contained therein.
	 
	 	C.	 	AMENDMENTS. This Agreement may not be amended except in a writing approved by
the Board and signed by the Executive and the Chief Executive Officer.

	 	 	IN WITNESS WHEREOF, Executive and the Chief Executive Officer have executed this Agreement
as of the date set forth above.

	 	 	 	 	 	 	 
	 	 	Executive:	 	Steven M. Zaccagnini
	 
	 	 	 	 	 	 
	 

	 	 	 	Signature:
	 	/s/ Steven M. Zaccagnini
	 

	 	 	 	Date:
	 	July 12, 2005
	 
	 	 	 	 	 	 
	 	 	ABM: ABM Industries Incorporated
	 
	 	 	 	 	 	 
	 

	 	 	 	Signature:
	 	/s/ Henrik C. Slipsager
	 

	 	 	 	 	 	Henrik C. Slipsager
	 

	 	 	 	Title:
	 	Chief Executive Officer
	 

	 	 	 	Date:
	 	July 12, 2005

 

 

EXHIBIT A

2005 EXECUTIVE PERFORMANCE PEFORMANCE CRITERIA

ABM CORPORATE EXECUTIVE OFFICERS

	I.	 	FINANCIAL PERFORMANCE: Represents 50% of Target Bonus
	 
	 	 	(Actual earnings as published in Company’s Form 10-K as filed with the Securities and Exchange
Commission must exceed 80% of the 2005 budget, as approved by the ABM Board of Directors and
adjusted for acquisitions, for Executive to receive a Financial Performance Bonus.)
	 
	 	 	Develops, obtains approval for, and effectively communicates realistic and GAAP compliant
financial budgets and forecasts consistent with the approved Company and business unit
strategy. Develops and ensures compliance with internal financial controls. Ensures that key
financial goals are aggressively pursued. Contributes directly to the achievement of
financial goals for Company and one’s area(s) of responsibility. Ensures, to the extent
possible, that performance of Company and one’s area(s) of responsibility meets or exceeds
budget in all key financial categories, including revenue, expense, and capital management.
Effectively manages costs and, where appropriate, vendors and receivables.
	 
	 	 	Indicators: Timely development and approval of realistic financial goals and plans;
understanding and acceptance of financial goals throughout the organization and one’s direct
span of control; existence of and compliance with effective internal financial controls.
Company and business unit performance against budget.
	 
	II.	 	OTHER CATEGORIES: Represents 50% of Target Bonus
	 
	 	 	STRATEGIC LEADERSHIP
	 
	 	 	Contributes materially to the development, approval, implementation and ongoing evolution of a
sound business strategy for Company and/or one’s area(s) of responsibility. Researches
concepts and presents new ideas designed to optimize growth, profitability and shareholder
value. Effectively communicates the approved strategy both internally and externally, as
appropriate, and provides guidance to ensure that the approved strategy is carried out.
	 
	 	 	Indicators: Agreement among management and approval by the Board of Directors of a defined
business strategy; effective translation and communication of the approved strategy to one’s
area of responsibility and other internal and external constituents, as appropriate; proactive
revision of strategy to reflect changing situations; depth of knowledge of one’s market,
competitors, and trends.

 

 

EMPLOYEE LEADERSHIP

	1.	 	Employee Relations
	 
	 	 	Maintains sound relationships with superiors, peers, subordinates and, as appropriate, the
Board of Directors. Commands respect and trust while being considered fair and open in
dealings with others.
	 
	 	 	Indicators: Employee complaints; perception among supervisors, peers, subordinates and
the Board of Directors.
	 
	2.	 	Staff Development
	 
	 	 	Actively contributes to the development of staff under one’s span of control. Provides
guidance to subordinates on key issues and makes time to help others. Establishes and
communicates goals and expectations. Provides open and honest feedback. Identifies and
develops potential successors to key roles.
	 
	 	 	Indicators: Proactive individual goal-setting and ongoing review process; demonstrated
development/improvement of subordinates; effective succession planning.
	 
	3.	 	Recruitment, Retention and Motivation
	 
	 	 	Generates enthusiasm among superiors, subordinates and peers. Directly contributes to
creating a performance oriented culture. Identifies and distinguishes top performers.
Retains key employees and assists in identifying and recruiting top external talent as
needed.
	 
	 	 	Indicators: Employee retention; positive morale; success in recruiting new talent.
	 
	4.	 	Teamwork
	 
	 	 	Practices open, effective and inclusive communication within one’s own span of control and
across Company. Actively seeks ways to build links across Company with the objective of
capitalizing on and sharing “best practices.”
	 
	 	 	Indicators: Development and implementation of procedures and processes that promote the
application of “best practices” across Company and within one’s span of control.
Perception as a “team player.”

COMPLIANCE AND ADMINISTRATION

Ensures compliance with all external regulations and internal guidelines and policies
associated with Safety, Employee/Labor Relations and other areas pertaining to Company’s
various businesses. Ensures management policies and reports effectively address key issues.
Provides for open channels of communication to ensure that appropriate individuals, both
internally and externally, are notified in a timely manner in the event of compliance or other
related issues. Achieves certification of Internal Controls for Sarbanes-Oxley Section 404.

Indicators: Volume and severity of labor/employee relations or other compliance issues;
effective handling of such issues as they arise; timely and proper reporting of such issues.

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